REG - Herald Inv Trust PLC - AGM Circular and Notice of Meeting

Herald Investment TrustAnnouncement

20/02/2025 07:15

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RNS Number : 7735X  Herald Investment Trust PLC  20 February 2025

20 February 2025

 

Herald Investment Trust plc

 

LEI: 213800U7G1ROCTJYRR70

Notice of Annual General Meeting and unanimous recommendation of the Board to
VOTE IN FAVOUR of each of the Resolutions, including the Continuation
Resolution

 

Introduction

 

Herald Investment Trust plc (the "Company", "Herald") has today published the
notice of the Company's forthcoming annual general meeting ("AGM"), which will
be held at 2.00 p.m. on 24 March 2025 at 10-11 Charterhouse Square, London
EC1M 6EE.

 

In accordance with best practice and as set out in the Company's articles of
association (the "Articles"), Shareholders have the right to vote on the
continuation of the Company every three years and the next triennial vote will
be held at the forthcoming AGM.

 

At the requisitioned general meeting of the Company held on 22 January 2025
(the "Requisitioned General Meeting"), Shareholders voted overwhelmingly to
continue with Herald's unique and highly successful strategy. However, as the
Requisitioned Resolutions to remove the Directors and appoint two
Saba-nominated directors were not passed at the Requisitioned General Meeting,
the Board believes that Saba may vote against the Continuation Resolution in
order to trigger a potential winding-up of the Company.

 

Given Saba's large interest in the Company's Shares (29.1 per cent. as at 15
January 2025, being the date of Saba's latest publicly disclosed holding prior
to the publication of this announcement), the Board believes that other
Shareholders representing at least 30 per cent of the Company's issued share
capital may be required to vote in favour of the Continuation Resolution in
order to ensure the Company continues in its current form.

 

The Board strongly believes that the continuation of the Company is in the
best interests of Shareholders as a whole.

 

The Board thanks Shareholders for their substantial engagement in connection
with the Requisitioned General Meeting, and for the support shown by
Shareholders, small and large, for the Board and the Manager. The voting
turnout at the Requisitioned General Meeting was remarkable by historic
standards, including from those who hold their Shares through "platforms", and
the Board hopes to see similar engagement for the AGM.

 

GIVEN SABA'S LARGE HOLDING THERE IS A RISK THAT THE CONTINUATION RESOLUTION IS
BLOCKED BY JUST ONE SHAREHOLDER. SHAREHOLDERS SHOULD VOTE IN FAVOUR NOW TO
DEFEND THEIR INVESTMENT IN THE COMPANY AGAINST A POTENTIAL WINDING-UP.

 

Shareholders are strongly encouraged to VOTE IN FAVOUR of each of the
resolutions to be proposed at the AGM (the "Resolutions") including, in
particular, the Continuation Resolution and the Director Re-Election
Resolutions.

 

Continuation of the Company

 

Shareholders voted overwhelmingly to continue with Herald's unique and highly
successful strategy at the Requisitioned General Meeting, which was a meeting
called by Saba (a US activist hedge fund manager). However, in accordance with
best practice and as required by the Articles the Directors are also putting
the Company's triennial continuation vote to Shareholders at the forthcoming
AGM.

 

If the Continuation Resolution is not passed, the Directors are required under
the Articles to draw up proposals for the voluntary liquidation, unitisation
or other reorganisation of the Company for submission to Shareholders by no
later than the date of the next annual general meeting of the Company (being,
if the Continuation Resolution is not passed at the forthcoming AGM, the 2026
AGM).

 

Whilst the Directors have not received any feedback from any major
Shareholders that would indicate there is opposition to the Company's
continuation, the Board and the Manager again call upon Shareholders to
exercise their right to vote in order to ensure that the Company's
continuation is not blocked by one Shareholder. Shareholders should vote again
to make their views heard.

 

In addition, as required by the Articles and in line with customary practice
for investment trusts, each of the Directors retire at the Company's annual
general meeting and those wishing to be re-appointed offer themselves for
election or re-election (as applicable). Notwithstanding the support shown for
the current Board by independent Shareholders at the Requisitioned General
Meeting, your Board believes there is a risk that the Directors' re-elections
may be targeted at the AGM by any Shareholder aiming to cause disruption in
order to assist with other strategic goals.

 

Your Board continues to believe that the continuation of the Company with its
current strategy is in the best interests of Shareholders as a whole. In
addition, the Directors firmly believe that the independent Board continues to
play an important role in defending Shareholders' interests. Accordingly, your
Board strongly recommends that you support your Company by VOTING FOR the
Continuation Resolution, and the Director Re-Election Resolutions, for the
following reasons:

 

·      Herald's investment performance: Herald is a specialist
investment company that has delivered outstanding long-term investment
performance for its Shareholders, as set out in the table below. Further
details of your Company's investment performance are set out in the 2024
Annual Report and the Requisitioned General Meeting Circular, copies of which
are available on the Company's page of the Manager's website at:
www.heralduk.com (http://www.heralduk.com) .

 

                                                                             5 years (%)  10 years (%)  Since the Company's inception on 16 February 1994 (%)
 Herald's NAV total return                                                   49.4         209.8         2,743.5 ((1))
 Herald's Share price total return                                           56.8         244.9         2,693.2 ((2))
 Deutsche Numis Smaller Companies plus AIM (ex. investment companies) index  9.0          59.2          627.7
 total return
 Russell 2000(®) Technology Index (small cap) total return                   64.9         292.4         785.2 ((3))

 

Source: LSEG Datastream. Data to 18 February 2025 (being the latest
practicable date for this data). Total return calculations assume dividend
reinvestment as at the ex-dividend date. All figures are unaudited. Past
performance is not a reliable indicator of future results.

(1)    Herald's NAV total return based on 98.7 pence per Share (100 pence
subscription price less launch costs of 1.3 pence) invested at inception,
excluding warrants.

(2)    Herald's Share price total return based on 90.9 pence per Share, the
capital gains tax base subscription price for Shareholders adjusted for
warrants, which were issued on a 1 for 5 basis.

(3)    Russell 2000(®) Technology Index (small cap) total return
performance since 31 March 1996 (the date that the Company began investing
globally).

 

·      Herald's investment outlook and unique offering: As set out in
the Chairman's statement and the Manager's report contained in the 2024 Annual
Report (please refer to pages 8 to 9 and 10 to 14 of the 2024 Annual Report,
respectively), your Board and the Manager believes that the technology sector
is experiencing a particularly dynamic phase. Furthermore, the Directors
believe that Herald has a unique offering in the UK listed investment company
sector: it gives Shareholders access to parts of listed markets with high
growth potential which are difficult for individual shareholders access by
other methods. The Manager believes Herald's strategy could not be replicated
effectively in an open-ended investment company structure. You should VOTE IN
FAVOUR of the Continuation Resolution to remain invested in the Company's
distinctive strategy.

 

·      Herald's strong, independent Board and high standards of
corporate governance: Your Board is committed to maintaining the current
safeguards for Shareholders, as described on pages 10 to 12 of the
Requisitioned General Meeting Circular and the 2024 Annual Report. The
Directors believe that it is important to maintain a fully independent Board
in order to protect against third parties seizing control of your Company
against Shareholders' interests. You should VOTE IN FAVOUR of the Director
Re-Election Resolutions in order to ensure that your Company retains its fully
independent Board that is focused on protecting Shareholders' interests.

 

For these reasons, and those set out in the Notice of AGM, your Board
recommends unanimously that all Shareholders VOTE IN FAVOUR of the
Continuation Resolution and the Director Re-Election Resolutions.

 

Details of the AGM

 

The AGM will be held at 10-11 Charterhouse Square, London EC1M 6EE on 24 March
2025 at 2.00 p.m.

 

Resolutions 1 to 11 (inclusive) will be proposed as ordinary resolutions and
in order to be passed will each require more than 50 per cent. of the votes
cast in person or by proxy on the relevant Resolution to be voted in favour of
it. As required by the Articles, the Continuation Resolution (which is
Resolution 11) will be proposed as an ordinary resolution.

 

Resolutions 12 to 14 (inclusive) will be proposed as special resolutions and
in order to be passed each will require at least 75 per cent. of the votes
cast in person or by proxy on the relevant Resolution to be voted in favour of
it.

 

The full text of the Resolutions is contained in the Notice of AGM. The Notice
of AGM is available for viewing on the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and on the Company's
website at www.heralduk.com (http://www.heralduk.com) .

 

Recommendation

 

The Board strongly recommends that Shareholders VOTE IN FAVOUR of each of the
Resolutions to be proposed at the AGM, as the Directors intend to do in
respect of their own beneficial interests in the Company's Shares

 

Action to be taken

 

All Shareholders are encouraged to VOTE IN FAVOUR of each of the Resolutions
to be proposed at the AGM and, if Shareholders do not hold their Shares
directly, to arrange for their nominee to VOTE IN FAVOUR of each of the
Resolutions on their behalf.

 

Shareholders that hold their Shares through an investment platform provider or
nominee are encouraged to contact their investment platform provider or
nominee as soon as possible to arrange for VOTES IN FAVOUR of each of the
Resolutions to be lodged on their behalf. The Association of Investment
Companies' guidance on how to vote through investment platforms can be found
on its website (https://www.theaic.co.uk/how-to-vote-your-shares
(https://www.theaic.co.uk/how-to-vote-your-shares) ).

 

You must return your form of proxy or electronic proxy appointment, at the
latest, by no later than 2.00 p.m. on 20 March 2025 (although investment
platforms will likely have earlier deadlines for Shareholders to transmit
their proxy voting instructions).

 

Expected timetable

 

 2025
 Publication of the Notice of AGM                                               20 February
 Latest time and date for lodging Forms of Proxy or submitting proxy            2.00 p.m. on 20 March
 instructions electronically (either through the Registrar's Investor Centre,
 CREST or Proxymity) in respect of the AGM
 Record time and date for entitlement to vote at the AGM                        6.00 p.m. on 20 March
 AGM                                                                            2.00 p.m. on 24 March

 

Andrew Joy, Chairman of Herald Investment Trust plc, said:

 

"The result of the recent general meeting requisitioned by Saba showed that
almost all non-Saba shareholders wished to continue with Herald's proven and
successful investment strategy. The Board strongly believes that the
continuation of the Company is in the best interests of Shareholders as a
whole. I would urge all shareholders to VOTE IN FAVOUR of all the resolutions
at the AGM in order to ensure that they continue to have access to a strategy
which has delivered 2,743.5% NAV total return since the Company's inception."

 

 

 

For further information please contact:

 

 Herald Investment Trust plc                                           via Camarco
 Andrew Joy (Chairman)

 Camarco (Media enquiries)                                             +44 (0)20 3757 4980
 Billy Clegg / Ben Woodford / Eddie Livingstone-Learmonth              Herald@camarco.co.uk (mailto:Herald@camarco.co.uk)

 J.P. Morgan Cazenove (Financial Adviser)                              +44 (0)20 3493 8000
 William Simmonds / Rupert Budge

 Singer Capital Markets (Corporate Broker)                             +44 (0)20 7496 3000
 Alan Geeves / Sam Greatrex / James Waterlow / William Gumpel (Sales)

 James Maxwell / Alaina Wong (Investment Banking)

 NSM Funds (UK) Limited (Company Secretary)                            HIT@nsm.group (mailto:HIT@nsm.group)
 Brian Smith / Shilla Pindoria

 

 

Important information

 

Capitalised terms used throughout this announcement shall have the meanings
ascribed to them on pages 13 to 15 of the circular and notice of AGM published
by the Company on 20 February 2025, unless the context otherwise requires.

 

All references to time in this announcement are to London (UK) time, unless
otherwise stated.

 

The times and dates set out in the expected timetable above and mentioned
throughout this announcement may be adjusted by the Company, in which event
details of the new times and/or dates will be notified, as required, to the
FCA and the London Stock Exchange and, where appropriate, to Shareholders and
an announcement will be made through a Regulatory Information Service.

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