Neptune-Calculus Income &Growth VCT Statement re Recommended Proposals for Merger (3923I)
June 19 2017 - 1:00AM
UK Regulatory
TIDMNEP TIDMTTM TIDMCLC
RNS Number : 3923I
Neptune-Calculus Income &Growth VCT
19 June 2017
NEPTUNE-CALCULUS INCOME AND GROWTH VCT PLC - Recommended
Proposals for Merger
19 June 2017
NEPTUNE-CALCULUS INCOME AND GROWTH VCT PLC ("The Company")
CALCULUS VCT PLC ("Calculus VCT")
(Together the "Companies")
TIDM: NEP
RECOMMENDED PROPOSALS FOR A SPECIAL DIVIDEND OF 10.5p PER SHARE
AND MERGER BETWEEN THE COMPANY AND CALCULUS VCT
SUMMARY
At the time of announcing the results for 2016, we stated that
your Board was considering strategic options for the Company which
might lead to proposals involving a significant return of capital
to shareholders. Your Board is pleased to announce that it has
agreed in principle with the board of Calculus VCT to merge the two
VCTs on a relative net asset basis. Both Companies are managed by
Calculus Capital Limited ("Calculus Capital").
Your board believes there will be significant benefits for all
shareholders arising from the proposed merger with Calculus VCT
which are set out below. The merger, which will follow the
methodology used in the majority of VCT mergers, will be effected
by means of placing the Company into members' voluntary liquidation
pursuant to Section 110 of IA 1986 and the acquisition by Calculus
VCT of all the Company's assets and liabilities in consideration
for the issue of Shares in Calculus VCT, forming an enlarged VCT
(the "Enlarged Company").
The Merger will be conditional upon certain conditions being
satisfied which will be set out in the circulars to be posted in
due course to the Companies' respective shareholders together with
a prospectus in connection with the Merger (the "Prospectus").
Conditional upon the Merger being approved by shareholders, the
Company intends to pay a special dividend of 10.5p per share to
shareholders prior to completion of the Merger. This special
dividend will be in addition to the 2 pence annual dividend
declared at the time of publishing the 2016 results which is due
for payment on 30 June 2017, subject to approval at the Company's
upcoming Annual General Meeting.
In addition, conditional upon the Merger taking place, the
Enlarged Company intends to seek further investment by way of an
offer of new equity of up to GBP5 million to be allotted in the
2017/18 and 2018/19 tax years with an over-allotment option of up
to a further GBP5 million (the "Offer").
If the Merger is effected, the Enlarged Company should have net
assets in excess of GBP10 million, prior to any shares being issued
in the Offer.
BENEFITS ANTICIPATED FROM THE MERGER
The Merger should result in the following benefits for
Shareholders:
-- a reduction in the expected annual running costs for
Shareholders due to operational expenses being spread over a larger
base;
-- the opportunity for future buy backs, particularly for
Shareholders who have held their shares for more than 5 years;
-- a larger pool of distributable reserves to support future dividend payments; and
-- exposure to a more diversified portfolio.
Additional attractive features of the Merger include:
-- the Company's venture capital investment manager, Calculus
Capital has agreed to contribute 33% of the costs of the Merger,
meaning that the costs will be split evenly between Calculus
Capital, the Company and Calculus VCT;
-- no impact on the tax position of Shareholders, and
-- existing VCT tax reliefs carry over and attach to the
post-Merger shares for Shareholders and shareholders in Calculus
VCT.
A reduction in the cost cap and expected annual running
costs
Subject to the Merger taking place, Calculus Capital has agreed
to increase its potential contribution to the running costs of the
Enlarged Company by reducing the cost cap (excluding irrecoverable
VAT, annual trail commission and performance incentive fees) to 3%
of the net assets of the Enlarged Company at each financial year
end. This compares to the current cost cap for Neptune shareholders
of 3.5% of the net asset value of the Company at each financial
year end.
THE ENLARGED COMPANY BOARD
It was announced on 25 April 2017 that Diane Seymour-Williams
would be appointed as Non-Executive Chairman of the Company
immediately following its AGM on 22 June 2017. It is proposed that,
if the Merger is approved, Diane Seymour-Williams will join the
Board of the Enlarged Company, which should then be:
-- Michael O'Higgins;
-- Arthur John Glencross;
-- Kate Cornish-Bowden
-- Steven Meeks; and
-- Diane Seymour-Williams.
TIMETABLE
It was announced in Calculus VCT's Report and Accounts on 12 May
2017, that the merger of Calculus VCT's Ordinary, C and D Share
classes was expected to take place on a date as soon as possible
after 30 May 2017 when HMRC clearance for the share class merger is
received. HMRC clearance is expected imminently and it is expected
that that the Calculus VCT share class merger will take place as
soon as possible thereafter.
Following the merger of the Calculus VCT share classes, it is
expected that shareholder circulars seeking approval for the Merger
and other related matters, together with the Prospectus, will be
posted to the shareholders of the Company and Calculus VCT as soon
as possible thereafter.
Subject to shareholders' approvals, it is expected that the
Merger can be completed within 6 weeks of the date of posting.
Lesley Watkins
Company Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
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