REG - Alpha Real Tst Ltd - Delisting, Tender Offer, New Arts & Notice of EGM

Alpha Real TrustAnnouncement

06/12/2024 07:00

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RNS Number : 0272P  Alpha Real Trust Limited  06 December 2024

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PROHIBITED BY APPLICABLE LAW.

 

6 December 2024

LEI: 213800BMY95CP6CYXK69

 

This announcement contains inside information for the purposes of the Article
7 of the Market Abuse Regulation (EU) 596/2014 (including as it forms part of
the laws of the United Kingdom by virtue of the European Union (Withdrawal)
Act 2018, as amended from time to time). Upon the publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.

 

ALPHA REAL TRUST LIMITED ("ART" OR THE "COMPANY")

 

Proposed Cancellation of Admission to Trading on the SFS

Tender Offer for up to 7,264,918 Shares at 208.8p per Share

Adoption of New Articles of Incorporation

Publication of Circular and Notice of Extraordinary General Meeting

 

ART announces the proposed cancellation of trading of its Shares on the
Specialist Fund Segment ("Cancellation"), the proposed adoption of new
articles of incorporation (the "New Articles"), and the implementation of a
conditional tender offer to provide Shareholders who do not wish to remain as
Shareholders after the Cancellation has taken place with an opportunity to
realise their investment in the Company by tendering their Shares (the "Tender
Offer" and, together with the proposed Cancellation and adoption of New
Articles, the "Proposals").

A circular will be published today on the Company's website,
www.alpharealtrustlimited.com and will today be posted to shareholders (the
"Circular"), setting out the background to and reasons for the Proposals and
explaining the terms of the Tender Offer. Extracts from the Circular are
included in Appendix I of this announcement and Shareholders are recommended
to read the Circular as a whole.

There is no formal requirement for Shareholder approval of the Cancellation.
However, the Company is seeking approval of Shareholders for the Cancellation
at an extraordinary general meeting of the Company to be convened at 10.00
a.m. on 20 December 2024 at  Floor 2, Trafalgar Court, Les Banques, St Peter
Port, Guernsey, GY1 4LY (the "Extraordinary General Meeting").

All Shareholders will be eligible to vote on the Cancellation Resolution.
However, the Company has received irrevocable undertakings from Alpha Global
Property Securities Fund Pte. Limited ("Alpha Global"), the Company's largest
individual shareholder, and persons presumed, under the City Code, to be
acting in concert with Alpha Global (the "Concert Parties"), to abstain from
voting on the Cancellation Resolution in order to ensure that the Company has
the support of Independent Shareholders to proceed with the Cancellation.

The Directors are aware that certain Shareholders (including those
Shareholders who hold their Shares through an investment platform) may be
unable or unwilling to continuing holding the Shares in the event that the
Cancellation is approved and becomes effective. Accordingly, conditional upon
the Cancellation Resolution being approved by Shareholders at the
Extraordinary General Meeting, the Company intends to give Shareholders (if
they are Qualifying Shareholders) an opportunity to dispose of or reduce their
interest in the Company by way of the Tender Offer representing approximately
12 per cent. of the Voting Share Capital as at 4 December 2024. The Tender
Offer will be funded through existing cash resources of the Company.

If the Cancellation Resolution is passed at the Extraordinary General Meeting,
it is anticipated that Cancellation will become effective at 8.00 a.m. on 23
January 2025.

Capitalised terms and expressions herein shall have the same meanings as those
attributed to them in the Circular.

 

For further information please contact:

 

 Alpha Real Trust Limited

 William Simpson, Chairman, Alpha Real Trust        +44 (0) 1481 231 100

 Brad Bauman, Joint Fund Manager, Alpha Real Trust  +44 (0) 20 7391 4700

 Panmure Liberum, Broker to the Company

 Atholl Tweedie                                     +44 (0) 20 7886 2500

 

 

APPENDIX I

Proposals for:

Cancellation of Admission to Trading on the SFS

Tender Offer for up to 7,264,918 Shares at 208.8p per Share

Adoption of New Articles of Incorporation

and

Notice of Extraordinary General Meeting

 

1.     Introduction

After an extensive review of the benefits and drawbacks to the Company of
retaining its admission to trading on the Specialist Fund Segment, the
Directors have concluded that it is in the best interests of the Company and
its Shareholders as a whole to seek Shareholder approval for the proposed
cancellation of trading of the Shares on the Specialist Fund Segment and
provide Shareholders who do not wish to remain as Shareholders after the
Cancellation has taken place with an opportunity to realise their investment
in the Company by tendering their Shares pursuant to the Tender Offer.

There is no formal requirement for Shareholder approval of the Cancellation.
However, the Company is seeking approval of Shareholders for the Cancellation
at the Extraordinary General Meeting by way of an ordinary resolution
(requiring a simple majority of the votes cast in person or by proxy on the
Cancellation Resolution). All Shareholders will be eligible to vote on the
Cancellation Resolution, including members of the Concert Party, however the
Company has received irrevocable undertakings from all members of the Concert
Party to abstain from voting on the Cancellation Resolution in order to ensure
that the Company has support from the Independent Shareholders to proceed with
the Cancellation. The Directors are aware that certain Shareholders (including
those Shareholders who hold their Shares through an investment platform) may
be unable or unwilling to continuing holding the Shares in the event that the
Cancellation is approved and becomes effective.

Accordingly, conditional upon the Cancellation Resolution being approved by
Shareholders at the Extraordinary General Meeting, the Company intends to give
Shareholders (if they are Qualifying Shareholders) an opportunity to dispose
of or reduce their interest in the Company by way of the Tender Offer
representing approximately 12 per cent. of the Voting Share Capital as at 4
December 2024. The Tender Offer will be funded through existing cash resources
of the Company.

The Company has also received irrevocable undertakings from all members of the
Concert Party not to tender any Shares under the Tender Offer in respect of,
in aggregate, 53,488,139 Shares, representing approximately 88.0 per cent. of
the Voting Share Capital.

The Tender Offer will be conducted at a fixed price of 208.8 pence per Share,
being the Tender Offer Price which represents a premium of 78 per cent. to the
average middle market closing price of a Share for the 30 days prior to the
Latest Practicable Date and equals the NAV per Share as at 30 September 2024.

As all members of the Concert Party have undertaken that they will not tender
any Shares under the proposed Tender Offer, it is expected that all
Independent Shareholders who tender all or any of their Shares under the
Tender Offer will have their tenders accepted in full and their tenders will
not be subject to any scaling back.

Those Qualifying Shareholders who wish to continue holding Shares following
the Cancellation may do so, but there would no longer be a formal market
mechanism enabling Shareholders to trade their Shares.

The Tender Offer is conditional upon the Cancellation Resolution being passed
and therefore the Tender Offer will lapse and will not complete if the
Cancellation Resolution is not approved at the Extraordinary General Meeting.

The Cancellation will only take place following completion of the Tender
Offer.

The Board is also putting forward proposals and seeking Shareholder approval
at the Extraordinary General Meeting to adopt the New Articles which, in light
of the findings of the 2023 Thematic Review undertaken by the Guernsey
Financial Services Commission, will contain provisions providing for the
possible conversion and compulsory redemption of Shares in circumstances where
a Shareholder fails to comply with any request for the provision of KYC
information made in accordance with the New Articles.

The Circular contains details of the Tender Offer and details of the
Resolutions required to be passed by Shareholders at the Extraordinary General
Meeting to effect the Cancellation and the adoption of the New Articles. The
purpose of the Circular is to provide information on the background to and
reasons for the Proposals, provide details of the Tender Offer, explain the
consequences of the Resolutions and seek Shareholder approval for the
Resolutions. The Circular also provides the reasons why the Directors
unanimously consider the Resolutions to be in the best interests of the
Company and its Shareholders as a whole.

The Tender Offer and the Resolutions to be proposed in connection with the
Extraordinary General Meeting are subject to the Takeover Code. However, with
the agreement of the Independent Directors, the Panel has granted certain
dispensations such that this document does not comply with all the
requirements of a typical offer document. The Company is also not regarded by
the Panel as being in an offer period as contemplated under the Takeover Code.

This letter is not a recommendation for Qualifying Shareholders to tender any
Shares under the Tender Offer. Whether or not Qualifying Shareholders tender
any Shares will depend on, among other things, their view of the Company's
prospects and their own individual circumstances, including their tax
position, on which they should seek their own independent advice.

2.     Background to and reasons for the proposed Cancellation

The Company is an authorised closed ended investment company incorporated in
Guernsey and the Shares are listed on the Specialist Fund Segment of the
London Stock Exchange. The Shares were admitted to trading on the Specialist
Fund Segment on 23 March 2012. The Company is advised by Alpha Real Capital
LLP ("ARC") which acts as its investment manager. The Company is not regulated
as a collective investment scheme by the FCA.

The Company targets investment, development, financing and other opportunities
in real estate, real estate operating companies and securities, real estate
services, infrastructure, infrastructure services, other asset-backed
businesses and related operations and services businesses that offer
attractive risk-adjusted total returns.

Alpha Global Property Securities Fund Pte. Limited ("Alpha Global") (a company
owned directly by partners in ARC (the investment manager to the Company))
holds 26,661,075 Shares representing approximately 43.9 per cent. of the
Voting Share Capital of the Company and, under the Takeover Code, is deemed to
be acting in concert with the partners in ARC and the shareholders in Alpha
Global who hold approximately 44.2 per cent. of the Voting Share Capital
(together the "Concert Parties"). The aggregate shareholding of Alpha Global
and the other Concert Parties in the Company as at the date of this document
is approximately 88.0 per cent.

The Board has carefully considered the benefits and drawbacks to the Company
retaining its listing on the Specialist Fund Segment. Whilst the Board is
aware that the admission of the Shares to trading on the Specialist Fund
Segment provides some liquidity for Shareholders, albeit at a modest level,
the Board has concluded that the Cancellation is in the best interests of the
Company and its Shareholders as a whole.

In reaching this conclusion, the Board has considered the following key
factors:

·      the cost savings to be achieved by the Cancellation. The costs of
maintaining the SFS Listing are significant relative to the earnings of the
Company and there are identifiable costs savings that can be achieved by the
Cancellation. These costs include the fees paid to the Company's accountants,
corporate broker, registrars, lawyers and annual fees paid to the London Stock
Exchange;

·      trading in the Shares provides only a modest level of liquidity
contributing to a significant share price discount to NAV. In the opinion of
the Board, the proposed Tender Offer will represent a near term opportunity
for the Independent Shareholders to realise their investment in the Company
for cash at a price at or around the prevailing NAV per Share;

·      in the opinion of the Board, the level of free float in the
Shares is not of a scale to attract sufficient interest from institutional and
other investors and therefore it is difficult to create a more liquid market
for the Shares to effectively or economically make use of the Company's SFS
Listing;

·      the Concert Parties together currently hold approximately 88.0
per cent. of the Company's Voting Share Capital which is expected to increase
further following any future share buybacks and/or tender offers (including
the Tender Offer assuming this becomes unconditional). As a result, the free
float and liquidity of the Shares is limited and is likely to be further
reduced;

·      in light of the limited trading in the Shares, with an average
daily volume over the past 12 months of approximately 5,280 Shares
(representing 0.01 per cent. of the Voting Share Capital), the costs
associated with maintaining the SFS Listing are considered by the Directors to
be significant relative to the benefits of such a listing; and

·      the Company has not used its SFS Listing to raise fresh capital
or issue paper consideration to fund acquisitions since 2012 and is currently
unlikely to benefit from any new institutional investors or additional analyst
interest in the secondary market; and

·      the management time and the legal and regulatory burden
associated with maintaining the SFS Listing is, in the opinion of the
Directors, significant relative to the benefits to the Company.

If the Cancellation Resolution is not approved by Shareholders the Company
will remain liable for ongoing professional and associated costs associated
with maintaining the SFS Listing whilst it remains eligible to do so.

3.     Details of the Cancellation

Shareholder considerations

The principal effects of the Cancellation will be that:

·      there will no public market for the Shares and therefore no
formal market mechanism enabling the Shareholders to trade Shares;

·      whilst the Shares will remain freely transferrable, it is
expected that the liquidity and marketability of the Shares will in the future
be more constrained than at present;

·      in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their investment
in the Company at any given time, although a NAV will continue to be published
in the Company's accounts;

·      the corporate governance, regulatory and financial reporting
regime applicable to companies whose shares are admitted to trading on the
Specialist Fund Segment will no longer apply, including the LSE Admission and
Disclosure Standards;

·      the Company will no longer be subject to the Market Abuse
Regulation, regulating, inter alia, inside information;

·      certain institutional investor guidelines (such as those issued
by the Investment Association, the Pensions and Lifetime Savings Association
and the Pre-Emption Group), which give guidance on issues such as executive
compensation and share-based remuneration, corporate governance, share capital
management and the allotment and issue of shares on a pre-emptive or
non-pre-emptive basis, will not apply to the Company as the shares will no
longer be admitted to trading on the Specialist Fund Segment;

·      Panmure Liberum will cease to be the Company's broker and the
Company will cease to have a broker;

·      whilst the Company's CREST facility will remain in place
following the Cancellation, the Company's CREST facility may be cancelled in
the future. Although the Shares will remain transferable, they may cease to be
transferable through CREST. In this instance, Shareholders who currently hold
Shares in uncertificated form (i.e. in CREST) will receive share certificates
and subsequently hold their Shares in certificated form;

·      the Shares will no longer constitute "qualifying investments" and
be eligible to be held within a stocks and shares component of an Individual
Savings Account; and

·      the Cancellation may or may not have personal taxation
consequences for Shareholders depending on their individual circumstances.
Shareholders who are in any doubt about their tax position should consult
their own professional independent tax adviser.

Corporate structure

The Company's investment objective will not change following the Cancellation.
Following the Cancellation, the Company will continue to review the structure
and composition of the business, the Board and the investment management team,
to ensure the optimal corporate structure is in place to support the long-term
success of the Company.

The Company will continue to be bound by the Companies Law (which requires
Shareholder approval for certain matters, such as, for example, the buyback of
shares) following the Cancellation and the Company will operate in accordance
with its Articles. Any future changes to the Articles (and also certain other
general corporate matters affecting the Company in accordance with the
Articles and the Companies Law) will be subject to approval by Shareholders.

Governance

If Shareholders approve the Cancellation, the Directors' present intention is
to operate the Company's corporate governance in substantially the same manner
as at present.

Financial reporting

The Company will continue to produce an annual report and accounts following
the Cancellation. On the basis that the Cancellation, if approved by
Shareholders, will take place following completion of the proposed Tender
Offer, it is expected that the annual report and accounts for the financial
year ended 31 March 2025 will be published no later than 4 July 2025 and laid
before the annual general meeting to be convened in 2025.

The Board intends to continue to report the Net Asset Value of the Company in
line with its current accounting methodology and report on an audited basis
for each financial year ending 31 March in the annual report and accounts but
will no longer publish quarterly trading statements.

The above considerations are not exhaustive, and Shareholders should seek
their own independent advice when assessing the likely impact of the
Cancellation on them.

Share dealings following the Cancellation

Conditional upon (i) the Cancellation Resolution being passed and (ii)
completion of the Tender Offer, the Company will notify the LSE of the
Cancellation. The Company must inform the LSE of the Cancellation no later
than 20 Business Days before the date of the Cancellation and must announce
the intended Cancellation through a Regulatory Information Service, as
required by the LSE Admission and Disclosure Standards.

It is anticipated that the last day of dealings in the Shares on the
Specialist Fund Segment will be on or around 22 January 2025 and that
Cancellation will take place at 8.00 a.m. on 23 January 2025.

If a Shareholder retains their Shares following completion of the Tender Offer
and the implementation of the Cancellation, although the Shares will remain
freely tradeable, they will no longer be tradeable on the Specialist Fund
Segment.

If the Cancellation Resolution is not approved by Shareholders, the Board
currently intends for the Company to retain its listing on the Specialist Fund
Segment whilst it remains eligible to do so. The Company will remain liable
for ongoing professional and associated costs associated with maintaining the
SFS Listing.

4.     Tender Offer

Background

In view of the proposed Cancellation, the Board believes that it is in the
Company's interests, and in the interest of Shareholders, to provide
Qualifying Shareholders who wish to realise part or all of their investment in
the Company prior to implementation of the Cancellation a means to do so. This
will provide such Qualifying Shareholders with an opportunity to access
liquidity which might otherwise not be available in the market or following
the Cancellation taking place.

The Board therefore wishes the Company to make a return of capital to
Qualifying Shareholders and intends to proceed by way of the Tender Offer for
up to 7,264,918 Shares, representing approximately 12 per cent. of the Voting
Share Capital.

The Tender Offer is conditional upon the Cancellation Resolution being passed
and therefore the Tender Offer will lapse and not complete if the Cancellation
Resolution is not approved at the Extraordinary General Meeting.

As set out above, the aggregate shareholding of Alpha Global and the other
Concert Parties in the Company as at the date of this document is
approximately 88.0 per cent.

As all members of the Concert Party have undertaken that they will not tender
any Shares under the proposed Tender Offer, it is expected that all
Independent Shareholders who tender all or any of their Shares under the
Tender Offer will have their tenders accepted in full and their tenders will
not be subject to any scaling back.

On completion of the Tender Offer the aggregate percentage holding of the
Concert Parties will increase to up to approximately 100 per cent. of the
issued share capital (assuming that all Independent Shareholders tender all of
their Shares).

The Board has sought to ensure that all Independent Shareholders who are
Qualifying Shareholders can participate in the return of capital in respect of
their entire holding of Shares whilst allowing such Shareholders individually
to choose whether or not to participate in the Tender Offer (without incurring
disproportionate costs in making the Tender Offer to persons other than
Qualifying Shareholders). Qualifying Shareholders can decide whether to tender
all or any of their Shares under the Tender Offer or to continue to hold them.

The Cancellation (if approved by Shareholders) will result in there no longer
being a public market for trading the Shares and the Company would expect to
report financial information in the manner set out above.

The Tender Offer will be financed from the Company's existing cash resources.
As at 30 September 2024, the Company had cash and deposits totalling £54.5
million. The Tender Offer is conditional upon the Directors being satisfied
that the Company will satisfy the solvency test as prescribed by the Companies
Law. The solvency test will be satisfied if, immediately after the completion
of the Tender Offer:

(a)      the Company will be able to pay its debts as they become due;
and

(b)      the value of the Company's assets is greater than the value of
its liabilities.

Following the proposed Tender Offer, the Board believes that the Company will
remain in a net cash position with a satisfactory balance sheet however there
is no guarantee that the Company will, following the completion of the Tender
Offer, continue to satisfy the statutory solvency test.

Summary information on the Tender Offer

Full details of the Tender Offer, including the terms and conditions on which
it is being made, are set out in Part 4 of the Circular and, in the case of
Shares held in certificated form, on the Tender Form.

The Tender Offer is only available to Qualifying Shareholders on the register
of members of the Company on the Record Date in respect of the Shares held by
them on the Record Date.

Qualifying Shareholders can choose whether they wish to tender all or any of
their Shares under the Tender Offer. Qualifying Shareholders are not obliged
to tender any of their Shares if they do not wish to do so.

The Tender Offer involves the following:

(a)      Panmure Liberum, acting as principal, will acquire the
successfully tendered Shares at the Tender Price up to a maximum of 7,264,918
Shares (representing approximately 12 per cent. of the current Voting Share
Capital of the Company (excluding Shares held in treasury)), equivalent to an
aggregate value of approximately £15.169 million) on and subject to the terms
and conditions of the Tender Offer and to sell such tendered Shares to the
Company pursuant to the Repurchase Agreement.

(b)      The Company will acquire all of the tendered Shares from Panmure
Liberum pursuant to the Company's existing share purchase authority to buy
back up to 8,966,800 Shares (representing a maximum of 14.99 per cent. of the
Voting Share Capital as at the latest practicable date prior to the date of
publication of the 2024 AGM Notice, being 28 June 2024) that was granted to
the Company at its Annual General Meeting held on 5 September 2024. All such
validly tendered Shares will then be cancelled by the Company.

(c)      All Qualifying Shareholders are being given the opportunity to
participate in the Tender Offer.

(d)      Qualifying Shareholders may tender such number of Shares under
the Tender Offer as they choose.

(e)      Qualifying Shareholders do not have to tender any of their
Shares if they do not wish to do so.

(f)      All members of the Concert Party (holding approximately 88.0 per
cent. in aggregate of the current Voting Share Capital) have undertaken not to
tender any of their Shares, thereby enabling all Shares tendered by
Independent Shareholders who are Qualifying Shareholders to be acquired,
subject to the satisfaction of all the conditions to which the Tender Offer is
subject (including the passing of the Cancellation Resolution), without the
need for any scaling back.

(g)      This effectively gives the Company the ability to offer all
Independent Shareholders who are Qualifying Shareholders the choice between
selling 100 per cent. of their Shares at the Tender Offer Price or remaining
invested in the Company (in whole or in part).

(h)      All Shares tendered by any Qualifying Shareholder will be
accepted in full on and subject to the terms and conditions of the Tender
Offer set out in Part 4 of the Circular and, in the case of Shares held in
certificated form, the Tender Form.

(i)       Shares will be purchased without commissions and dealing
charges that would otherwise be payable if Qualifying Shareholders were to
sell their shares through their broker.

(j)       Qualifying Shareholders are able to tender their Shares until
3.00 p.m. on the closing date of the Tender Offer, which is 17 January 2025.
In order to participate in the Tender Offer:

·      Qualifying Shareholders holding Shares in certificated form as at
the Record Date must return the accompanying personalised Tender Form together
with any share certificate(s) and/or other document(s) of title in accordance
with the instructions set out on the Tender Form by 3.00 p.m. on 17 January
2025; and

·      Qualifying Shareholders holding Shares in uncertificated form
(that is, in CREST) are directed to paragraph 3.2 of Part 4 of the Circular
which details specific procedures for those holders.

Shares may be traded in the normal way during the period in which the Tender
Offer remains open, but Qualifying Shareholders should note that, once
tendered, their Shares may not be sold, transferred, charged or otherwise
disposed of other than in accordance with the Tender Offer.

The purchase from Qualifying Shareholders and the subsequent sale of the
tendered Shares to the Company will be effected by Panmure Liberum, as
principal, "On Exchange" in accordance with the Rules of the London Stock
Exchange.

In the absence of any listed market to sell their Shares once the Tender Offer
closes and the Cancellation takes place, such Shareholders should balance
their desire for a cash realisation now or in the immediate foreseeable future
against the prospect of remaining Shareholders in the Company and, following
the Cancellation, the consequent impact on future marketability of the Shares.

The Tender Offer is only available to Qualifying Shareholders and is not
available to Shareholders in Australia, Canada, Japan, the Republic of South
Africa or the United States of America or to Shareholders who are otherwise
within a Restricted Territory.

The Directors believe that the following points should be taken into account
by Qualifying Shareholders when considering whether to retain their Shares or
to tender their Shares under the Tender Offer. Shareholders are also referred
to the Risk Factors set out in Part 2 of the Circular.

Reasons why Qualifying Shareholders may want to tender Shares under the Tender
Offer:

(a)  the Company will fund the Tender Offer from its existing cash resources.
Depending on the level of take-up of the Tender Offer, the Company's balance
sheet will experience a reduction in the cash position;

(b)  following the Tender Offer, together the Concert Parties will continue
to legally and beneficially own at least 88.0 per cent. of the Voting Share
Capital in the Company. As a result they will continue to be able to pass or
defeat any ordinary or special resolution.

(c)  there can be no guarantee that after the Tender Offer closes, the Board
would be prepared to make a subsequent tender offer to acquire Shares. Nor can
there be any guarantee as to the price of any such tender offer. Furthermore,
there can be no guarantee as to the level of dividends or other distributions
which would be paid by the Company to Shareholders or if any such dividends
would be made; and

(d)  following the Cancellation, there would no longer be a public market for
the Shares and the Company would no longer be subject to the LSE Admission and
Disclosure Standards, the Market Abuse Regulation and other applicable
regulations.

However, Shareholders who anticipate greater value in the Shares in the future
whilst recognising and being willing to accept the risks inherent in remaining
invested for a prolonged period in an unlisted company controlled by members
of the Concert Party, with no ready market in the Shares, may not want to
tender Shares under the Tender Offer.

The Directors reserve the right, at any time prior to the announcement that
the Tender Offer has become unconditional in all respects, to decline from
proceeding with the Tender Offer if they conclude that its implementation is
no longer in the interests of the Company and/or Shareholders as a whole.

Full details of the Tender Offer, including the terms and conditions on which
it is made, are set out in Part 4 of the Circular.

If Qualifying Shareholders are in any doubt as to what action they should
take, they should seek their own independent professional advice.

The Takeover Code

As a company which has its registered office in Guernsey and its Shares
admitted to trading on the Specialist Fund Segment, the Company is subject to
the Takeover Code.

The Tender Offer and the Resolutions to be proposed in connection with the
Extraordinary General Meeting are subject to the Takeover Code. However, with
the agreement of the Independent Directors, the Panel has granted certain
dispensations such that this document does not comply with all the
requirements of a typical offer document. The Company is also not regarded by
the Panel as being in an offer period as contemplated under the Takeover Code.

Under Rule 9 of the Takeover Code (Rule 9) any person who acquires, whether by
a series of transactions over a period of time or not, an interest in shares
which (taken together with shares in which persons acting in concert with him
are interested) carry 30 per cent. or more of the voting rights of a company;
or any person, together with persons acting in concert with him, is interested
in shares which in the aggregate carry not less than 30 per cent. of the
voting rights of a company but does not hold shares carrying more than 50 per
cent. of such voting rights and such person, or any person acting in concert
with him, acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which he is interested, such
person shall extend offers, on the basis set out in Rules 9.3, 9.4 and 9.5 of
the Takeover Code, to the holders of any class of security whether voting or
non‑voting and also to the holders of any other class of transferable
securities carrying voting rights.

An offer under Rule 9 must be in cash and at the highest price paid within the
twelve months prior to the announcement of the offer for any interest in
shares in the Company by the person required to make the offer or any person
acting in concert with him.

Alpha Global (a company owned directly by partners in ARC, the investment
manager to the Company) owns 43.9 per cent. of the Voting Share Capital of the
Company and, under the Takeover Code, is deemed to be acting in concert with
the partners in ARC and the shareholders in Alpha Global.

The aggregate shareholding of Alpha Global and the other Concert Parties in
the Company as at the  Latest  Practicable  Date  was  53,488,139
Shares,  being  approximately 88.0 per cent. of the Voting Share Capital as
set out in the table below. The table below also sets out details of the
maximum number of Shares and the percentage of Voting Share Capital of the
Company which would be held by Alpha Global and the other Concert Parties were
the maximum number of Shares to be tendered under the Tender Offer and
subsequently repurchased by the Company from Panmure Liberum assuming that
none of Alpha Global or the other Concert Parties tenders any of their Shares
under the Tender Offer in accordance with the irrevocable undertakings they
have given.

 

                        As at the Latest Practicable Date             In the event the Tender Offer is fully taken up by Qualifying Shareholders
 Shareholder            Number of Shares   % of Voting Share Capital  Number of Shares                        % of Voting Share Capital
 Alpha Global           26,661,075         43.9%                      26,661,075                              49.8%
 Other Concert Parties  26,827,064         44.2%                      26,827,064                              50.2%
 Total                  53,488,139         88.0%                      26,827,064                              100%

 

Further information on ARC, Alpha Global and the other Concert Parties can be
found in section 5 of Part 8 of the Circular.

As the aggregate shareholding of Alpha Global and the other Concert Parties
represents more than 75 per cent. of the total Voting Share Capital, they are
able to block and pass both ordinary and special resolutions of the Company;
and, for so long as they continue to be treated as acting in concert, may
increase their aggregate interest in Voting Share Capital without incurring
any obligation under Rule 9 to make a general offer. Accordingly, any increase
in the percentage of Voting Share Capital held by Alpha Global and the other
Concert Parties as a result of the implementation of the Tender Offer and the
subsequent repurchase of the tendered Shares by the Company will not require
Alpha Global and the other Concert Parties to make an offer under Rule 9.

ARC, Alpha Global and the other Concert Parties have indicated to the Company
that their current intentions are to support the Company pursuing its existing
investment strategy.

5.     Current Trading

The NAV per Ordinary Share of the Company was 208.8 pence as at 30 September
2024 (31 March 2024: 207.3 pence).

Shareholders can find further details in the Half Year Results released on 22
November 2024.

6.     Dividends

Successfully tendered Shares will be cancelled by the Company and will not
rank for any future dividends.

Shares will be purchased by Panmure Liberum "ex" dividend. The dividend record
date for the dividend of 1.0 pence per Share announced by the Board on 22
November 2024 is 6 December 2024 and therefore a person who was a registered
holder of Shares at the close of business on 5 December 2024 will be entitled
to receive the dividend in respect of those Shares regardless of whether or
not they successfully tender those Shares.

Considering the Proposals outlined above, the Board has elected that the scrip
dividend alternative will not be available to Shareholders in respect of this
dividend, notwithstanding earlier communication on this.

7.     Tax

Certain UK tax consequences of the Tender Offer for certain UK tax resident
Shareholders on the basis of current UK law and HMRC practice is set out in
Part 5 of the Circular.

Qualifying Shareholders who are in any doubt as to their tax position or who
are subject to tax in a jurisdiction other than the United Kingdom should
consult a professional adviser. It should also be noted that Shareholders who
are temporarily non resident in the UK may, under anti avoidance legislation,
still be liable to UK tax on capital gains and, therefore, should seek
professional advice.

8.     Overseas Shareholders

The attention of Shareholders who are not resident in the United Kingdom is
drawn to section 10 of Part 4 of the Circular, headed "Restricted Shareholders
and other Overseas Shareholders".

9.     Action to be taken by Qualifying Shareholders who wish to
participate in the Tender Offer

The procedure for tendering Shares depends on whether Shares are held in
certificated or uncertificated form and is summarised below.

(a)        Shares held in certificated form

Qualifying Shareholders who hold Shares in certificated form and who wish to
tender all or any of their existing holding of Shares should complete the
Tender Form in accordance with the instructions printed thereon (including a
witnessed signature) and in Part 4 of the Circular and return it to
Computershare Investor Services PLC. A prepaid envelope is enclosed for this
purpose. Qualifying Shareholders who hold their Shares in certificated form
should also return their share certificate(s) and/or other document(s) of
title in respect of the Shares tendered. Completed Tender Forms must be
received by not later than 3.00 p.m. on 17 January 2025. Further details of
the procedures for tendering and settlement are set out in Part 4 of the
Circular and in the accompanying Tender Form.

(b)        Shares held in uncertificated form

Qualifying Shareholders who hold their Shares in uncertificated form (that is,
in CREST) and who wish to tender all or any of their existing holdings of
Shares should tender electronically through CREST so that the TTE Instruction
settles by not later than 3.00 p.m. on 17 January 2025. Further details of the
procedures for tendering and settlement are set out in Part 4 of the Circular.

The CREST manual may also assist you in making a TTE Instruction.

If you have any queries regarding the procedure for tendering Shares, please
contact Computershare Investor Services PLC on 0370 707 4040 or +44 370 707
4040 if calling from outside the UK. The helpline is open from 8.30 a.m. to
5.30 p.m., Monday to Friday excluding public holidays in England and Wales.
Please note that Computershare Investor Services PLC cannot provide any
financial, legal or tax advice and calls may be recorded and monitored for
security and training purposes.

10.   Irrevocable Undertakings

The Company has consulted with members of the Concert Party in connection with
the proposed Cancellation and Tender Offer.

All members of the Concert Party representing in aggregate approximately 88.0
per cent. of the Voting Share Capital have given Irrevocable Undertakings to
abstain from voting on the Cancellation Resolution.

In addition, all members of the Concert Party representing approximately 88.0
per cent. of the Company's Voting Share Capital have undertaken not to tender
any of their Shares under the Tender Offer and accordingly it is expected that
all Independent Shareholders who tender all or any of their Shares under the
Tender Offer will, subject to the satisfaction or waiver of all the conditions
relating to the Tender Offer, have their tenders accepted in full and their
tenders should not be subject to any scaling back.

11.   Adoption of New Articles

The Resolutions to be proposed at the Extraordinary General Meeting include a
resolution to approve the adoption of the New Articles which, in light of the
findings of the 2023 Thematic Review undertaken by the Guernsey Financial
Services Commission, will include provisions for the possible conversion and
compulsory redemption of a Shareholder's Shares if that Shareholder fails to
comply with KYC requests from the Company's registrar within the prescribed
period as set out in the New Articles. Further details regarding the proposed
changes to the Existing Articles through the adoption of the New Articles are
set out in ‎Part 7 of the Circular.

The adoption of the New Articles requires Shareholder approval pursuant to the
Companies Law and will be proposed as a special resolution (requiring a
majority of not less than 75 per cent. of the votes cast in person or by proxy
on the New Articles Resolution).

Following the Cancellation the administrator of the Company will be required
to ask Shareholders to provide the necessary evidence as to their identity to
satisfy KYC requirements in accordance with AML Legislation. Shareholders who
fail to comply with any requests made for such information may be liable to
have their Shares converted into redeemable shares and compulsorily redeemed
by the Company for nil consideration.

12.   Recommendation

The Independent Directors consider the Proposals to be in the best interests
of the Company and Shareholders as a whole. Accordingly, the Independent
Directors unanimously recommend that Shareholders vote in favour of the
Resolutions, as they intend to do in respect of their own beneficial holdings
which, as at the Latest Practicable Date, amount in aggregate to 56,534
Shares, representing approximately 0.09 per cent. of the Company's Voting
Share Capital.

The Independent Directors consider it appropriate that those Qualifying
Shareholders who are unable or unwilling to hold Shares following Cancellation
should be given an opportunity to realise their investment under the Tender
Offer. However, as described in more detail in the Circular, the Independent
Directors are making no recommendation to Qualifying Shareholders in relation
to participation in the Tender Offer. Whether or not Qualifying Shareholders
decide to tender all or any of their Shares will depend, among other things,
on their view of the Company's prospects and their own individual
circumstances and investment objectives, including their tax position, noting
the non-exhaustive list of risks that the Company is subject to, and the
advantages and disadvantages of tendering Shares under the Tender Offer as
outlined above. Qualifying Shareholders are recommended to consult their duly
authorised independent advisers and make their own decision.

All of the Independent Directors, the beneficial holdings of whom amount to,
in aggregate, 56,534 Shares, representing approximately 0.09 per cent. of the
Voting Share Capital as at the Latest Practicable Date, intend to tender all
of their Shares pursuant to the Tender Offer.

If you are in any doubt about the contents of the Circular or the action you
should take, you should seek your own independent financial or legal advice
immediately.

 

13.   Expected Timetable of Principal Events

The expected timetable for the Tender Offer is as follows:

 Announcement of the Proposals                                                  6 December 2024
 Publication and posting of the Circular, Forms of Proxy and Tender Forms       6 December 2024
 Tender Offer opens                                                             6 December 2024
 Latest time and date for receipt of Forms of Proxy for the Extraordinary       10.00 a.m. on 18 December 2024
 General Meeting
 Extraordinary General Meeting                                                  10.00 a.m. on 20 December 2024
 Announcement of results of Extraordinary General Meeting                       20 December 2024
 Latest time and date for receipt of Tender Forms or for settlement of TTE      3.00 p.m. on 17 January 2025
 Instructions in respect of the Tender Offer (i.e. Closing Date of the Tender
 Offer)
 Record Date for the Tender Offer                                               6.00 p.m. on 17 January 2025
 Announcement of the results of the Tender Offer                                20 January 2025
 Settlement date: cheques despatched and CREST accounts credited with proceeds  from 21 January 2025
 in respect of successfully tendered Shares
 Balancing certificates despatched and CREST accounts credited in respect of    from 21 January 2025
 unsold Shares
 Expected last day of dealing in the Shares on the SFS                          22 January 2025
 Expected date of Cancellation                                                  with effect from 7.00 a.m. on 23 January 2025

 

Capitalised terms and expressions shall have the same meanings as those
attributed to them in the Circular.

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