REG - abrdn Diversfd. I&G - Commencement of Secondary Sales Process

abrdn Diversified Income and GrowthAnnouncement

16/04/2025 07:00

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RNS Number : 1853F  abrdn Diversified Income and Growth  16 April 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION (EU) NO 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("UK MAR"). ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

16 April 2025

For Immediate Release

abrdn Diversified Income and Growth plc

Commencement of Secondary Sales Process

The Board of abrdn Diversified Income and Growth plc (the "Company") announces
its intention to appoint Campbell Lutyens & Co. Ltd ("Campbell Lutyens")
as an independent broker to market the Company's remaining portfolio of
private market assets pursuant to a secondary sales process (the "Secondary
Sales Process").

Following careful consideration of the various strategic options available to
the Company in respect of its managed wind-down (the "Managed Wind-Down"), the
Board believes that a Secondary Sales Process offers the best opportunity to
optimise the value of the Company's investments whilst progressively returning
cash to shareholders in a timely manner. In reaching this conclusion, the
Board has been particularly mindful of the expected timeline for the natural
maturity of the Company's private markets portfolio (which is expected to
occur between 2025 and 2033).

In addition to generating opportunities for timely liquidity from the
Company's portfolio, the appointment of Campbell Lutyens and commencement of
the Secondary Sales Process will enable the Company to market-test demand for
its assets. Given the diversified nature of the Company's remaining portfolio,
it is unlikely that any one buyer will be found for the entire portfolio and
therefore the process is expected to involve sales to multiple interested
parties.

Once indicative pricing has been obtained (which, for the avoidance of doubt,
the Board still expects to be at a material discount to the underlying net
asset values), the ultimate decision whether to proceed with any given
secondary sale will remain with the Board, which (together with its advisers)
will assess the pricing against the quantum and likelihood of near-term
returns expected from the relevant assets. Returns to shareholders will also
be optimised through the Company continuing to exercise near-term redemption
mechanics within the underlying fund documentation where available.

Background

As announced on 26 February 2025, the Company was previously in exclusive and
confidential discussions with a third party regarding a potential transaction
in relation to all or substantially all of the remaining portfolio (the "Third
Party Offer"). The consideration for the Third Party Offer was principally
payable in listed shares plus a cash element. The Board considered the Third
Party Offer to be credible and worthwhile for the Company to explore given the
relative certainty and deliverability that a sale of the entire portfolio
would provide for shareholders (avoiding the risks and costs of a protracted
managed wind-down process) and the indicative pricing range in the initial
offer letter. However, after careful consideration of the final terms of the
Third Party Offer, and the alternative options available to the Company, the
Board has resolved not to proceed with the Third Party Offer as it does not
consider the terms to be sufficiently attractive to merit a Board
recommendation. In particular, both elements of the consideration would have
been at a discount which the Board believes would be lower than the price that
could be achieved through a secondary market sale, whilst the share element
would also leave shareholders exposed to current market volatility and
potential liquidity issues.

Since shareholders approved the Managed Wind-Down in February 2024, the Board
has continued to assess all options on the basis of, among other things, the
quantum expected to be delivered to shareholders (on a net present value
basis), timing, relative certainty of execution and the nature of the
consideration. Whilst it is not able to recommend the Third Party Offer, the
Board believes that proceeding with an open-market sales process should
provide shareholders with more certainty than a managed wind-down process over
a longer time period.

Whilst secondary sales are still being transacted at discounts to carrying
value, the Board also notes recent improvements in secondary market conditions
(notwithstanding the current macroeconomic volatility), with secondary
fundraising momentum supporting demand. Campbell Lutyens has strong market
knowledge and experience (including in respect of private equity, private
credit and infrastructure) and has shown enthusiasm to support the Company
during its Managed Wind-Down. Campbell Lutyens has over 60 professionals
dedicated to the secondaries market and has advised on more than $135 billion
in transaction volume across over 350 secondary portfolio sales and advisory
mandates.

Next Steps

The Board and Campbell Lutyens intend to commence the Secondary Sales Process
as soon as possible with a view to obtaining indicative pricing from potential
purchasers over the next few months. That said, there can be no certainty as
to the precise quantum or timing for the completion of any realisations or
returns of capital arising out of the Secondary Sales Process at this time. In
particular, the process is not guaranteed to result in a complete solution in
respect of the Company's entire portfolio (with there being a risk that the
Company may not be able to find buyers for all of its investments at
sufficiently attractive prices).

The Company remains committed to returning the net proceeds of any
realisations to shareholders progressively in an efficient and fair manner
(which accounts for, among other things, the UK tax consequences for
shareholders and the composition of the Company's shareholder register). In
particular, following Court approval confirming the cancellation of the amount
standing to the credit of its capital redemption reserve on 28 March 2025, the
Company is well-placed to continue returning cash to shareholders
progressively, by way of its B share scheme, during the Secondary Sales
Process (subject to consideration of the Company's liabilities, any remaining
undrawn fund commitments and general working capital requirements).

The Board will provide further updates, as appropriate, in due course.

For further information, please contact:

abrdn Diversified Income and Growth plc

Davina Walter
(Chairman)
via Burson Buchanan

Dickson Minto Advisers

Douglas Armstrong / Andrew Clark / Jamie Seedhouse            +44
(0)20 7649 6823

Burson Buchanan

Helen Tarbet / Henry Wilson / Verity
Parker                              +44 (0)20
7466 5000

 
 
 ADIG@buchanancomms.co.uk

Campbell Lutyens

Ben Pearce / Alex Wimborne / Leo
Lenormand                        +44 (0)20 7439 7191

Important information

This announcement is released by the Company and the information contained
within this announcement is deemed by the Company to constitute inside
information for the purposes of Article 7 of UK MAR. Upon the publication of
this announcement via a Regulatory Information Service, such information is
now considered to be in the public domain. The person responsible for
arranging for the release of this announcement on behalf of the Company is
abrdn Holdings Limited, the Company Secretary.

For the avoidance of doubt, it is not expected that the City Code on Takeovers
and Mergers would apply to the Third Party Offer or the Secondary Sales
Process.

The Company's LEI number is 2138003QINEGCHYGW702.

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