REG - Baillie Gifford Shin - Baillie Gifford Shin Nippon Trust Tender Offer

Baillie Gifford Shin NipponAnnouncement

Tue 07:00

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RNS Number : 7342K  Baillie Gifford Shin Nippon PLC  09 December 2025

The information communicated in this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018, as amended (the Market Abuse Regulation). The person responsible for
arranging for the release of this announcement on behalf of the Baillie
Gifford Shin Nippon PLC is Baillie Gifford & Co Limited acting as company
secretary. Upon the publication of this announcement, this information is
considered to be in the public domain.

 

Baillie Gifford Shin Nippon PLC (BGS)

(the Company)

Legal Entity Identifier: X5XCIPCJQCSUF8H1FU83

 

9 December 2025

Amended tender offer arrangements

In the interim report of Baillie Gifford Shin Nippon PLC (the "Company") the
Chairman welcomed Jared Anderson as deputy portfolio manager working alongside
Brian Lum, who took over lead portfolio manager duties from Praveen Kumar.
While remaining committed to their long-term investment approach, Brian and
Jared have made a number of changes to the portfolio during the quarter.
These changes reflect their views of the best growth companies in Japan and
take advantage of non-material changes made to the Company's investment policy
earlier this year, which broadened the investable universe to reflect better
the opportunity set. Since 31 May 2025, there have been three positions
initiated in companies with market capitalisation in excess of ¥150 billion
(the upper restriction prior to the changes to the investment policy) and ten
complete exits, including Moneytree, which was an unquoted holding.

It is far too early to assess the impact of such changes, although the Board
believes in the potential for the portfolio to outperform over the longer
term.  However, the Company's recent performance has continued to be impacted
by the ongoing underperformance of small cap growth-focused companies in Japan
and the Board has been considering what steps it should take in response.

The Board has recently undertaken a consultation exercise with shareholders
representing in excess of 43% of the Company's share capital.  While
shareholders share the Board's frustration with the continued poor
performance, many recognise the unique opportunity offered by the Company,
being the only investment trust offering dedicated growth exposure to small
cap companies in Japan, and are supportive of the mandate continuing to be
pursued.  They also believe the portfolio managers should be given an
appropriate amount of time to demonstrate the efficacy of the changes they
have made to the portfolio.

To that end, the Company's current three year performance triggered tender
offer, which runs to 31 January 2027 (the "2027 Conditional Tender Offer"),
provides insufficient time to assess the portfolio managers' performance, with
only 14 months left in the measurement period and the Company currently being
29.2% behind the benchmark as at 5 December 2025. While a reasonable
proportion of those consulted did not wish to see the Company shrink now,
other shareholders considered an immediate tender offer as being necessary if
the 2027 Conditional Tender Offer was to be removed or the measurement period
reset. Further, the Board recognises that shareholders may have had certain
expectations or assumptions for the 2027 Conditional Tender Offer if they
bought shares during the period since it was introduced in 2024.

Consequently, and looking to balance the desires of different shareholders,
the Board intends to seek shareholder approval for the following proposals
(the "Proposals"):

1.         to undertake a tender offer for up to 15% of issued share
capital (excluding shares held in treasury) in Q1 2026 (the "Tender Offer");

2.         to remove the 2027 Conditional Tender Offer;

3.         to introduce a performance triggered tender offer for up to
100% of issued share capital, which will be undertaken if the Company's NAV
per Share total return does not equal or exceed the total return on the MSCI
Japan Small Cap Index (in sterling terms) over a five year period from 31
December 2025 to 31 December 2030; and

4.         to put a one-off continuation vote to shareholders in 2028.

Each element of the Proposals will be inter-conditional on each other.

The Tender Offer would be undertaken at a price representing NAV per Share
less the costs of the Tender Offer less a 2% discount

The Company intends to publish a tender offer circular (the "Circular") early
in Q1 2026 setting out full details of the Proposals and convening a general
meeting to seek shareholder approval for the Proposals.

Given the small cap nature of the Company's portfolio, and its modest holdings
in unquoted securities, it may be necessary to implement the Tender Offer
using a pooling approach.  Further details will be provided in the Circular
once this has been considered fully.

The Board remains committed to using buybacks to address imbalances in supply
and demand and to reduce the volatility of the discount and intends to
continue buying back shares when it is in shareholders' best interests to do
so.

 

For further information please contact:

 

Jamie Skinner, Chairman, Via Baillie Gifford
crtallenquiries@bailliegifford.com

 

Neil Morgan and Innes Urquhart, Winterflood Securities       +44 (0) 20
3100 0000

 

Anzelm Cydzik, Baillie Gifford & Co Ltd
crtallenquiries@bailliegifford.com

 

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