REG - JPMorgan Multi-Asset - Publication of Circular
23/02/2024 10:15
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RNS Number : 2794E JPMorgan Multi-Asset Grwth & Income 23 February 2024
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
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SAME WOULD BE UNLAWFUL.
This announcement is not an offer to sell, or a solicitation of an offer to
acquire, securities in the United States or in any other jurisdiction in
which the same would be unlawful. Neither this announcement nor any part of it
shall form the basis of, or be relied on in connection with, or act as an
inducement to enter into, any contract or commitment whatsoever.
23 February 2024
JPMorgan Multi-Asset Growth & Income plc
Legal Entity Identifier: 549300C0UCY8X2QXW762
Publication of circular in connection with the recommended proposals for the
winding up of the Company and combination with JPMorgan Global Growth &
Income plc
Introduction
The Board of JPMorgan Multi-Asset Growth & Income plc ("MATE" or the
"Company") announces that it has today published a shareholder circular (the
"Circular") setting out the proposals for the voluntary winding up of the
Company and combination with JPMorgan Global Growth & Income plc ("JGGI").
If the Scheme becomes effective, MATE Shareholders will, subject to the terms
and conditions set out in the Circular, roll over their holdings of MATE
Shares into New JGGI Shares.
Defined terms used in this announcement have the meanings ascribed to them in
the Circular unless the context otherwise requires.
Background
On 24 January 2024, the board of MATE (the "Board") announced that it had
agreed heads of terms with the board of JGGI (the "JGGI Board") for a
combination of the assets of the Company with JGGI. If approved, the
combination will be implemented by way of a scheme of reconstruction and
members' voluntary winding up of the Company under section 110 of the
Insolvency Act 1986 (the "Scheme") and the associated transfer of the
Company's cash, assets and undertaking to JGGI in exchange for the issue of
New JGGI Shares to MATE Shareholders (the "Issue"). The Scheme and the Issue
are together referred to as the "Proposals".
The Board recognises that the size of the Company limits its appeal to
investors and believes that the Proposals provide the most attractive option
for MATE Shareholders, in particular taking into account the strong
performance, improved share rating, significantly greater economies of scale
and secondary market liquidity that will result from a shareholding in JGGI.
The Proposals are conditional upon, amongst other things, the approval of MATE
Shareholders at the General Meetings and the approval by JGGI Shareholders of
the Issue. MATE Shareholder approval for the Scheme is required at the First
General Meeting; and if such approval is forthcoming, MATE Shareholder
approval is required at the Second General Meeting in order to take the formal
steps of winding up the Company voluntarily, appointing the Liquidators to
implement the Scheme and applying for the cancellation of the listing of the
MATE Shares on the Official List. In accordance with the Scheme, MATE
Shareholders will be allotted New JGGI Shares at the same point at which the
Company enters liquidation.
The purpose of the Circular is to explain the Proposals and the actions
required to be taken in order for them to be implemented and to convene the
General Meetings of the Company, notices of which are set out at the end of
the Circular. Further details of the Resolutions to be proposed at the General
Meetings are set out below. The expected timetable associated with the
Proposals is set out below.
JPMorgan Global Growth & Income plc
If the Scheme becomes effective, MATE Shareholders will roll over their
holdings of MATE Shares into New JGGI Shares. Following implementation of the
Scheme, JGGI will continue to be managed by JPMorgan Fund Managers Limited
("JPMF") and JPMorgan Asset Management (UK) Limited ("JPMAM"), in accordance
with its existing investment objective: namely to achieve superior total
returns from world stock markets. Management of JGGI's portfolio will continue
to be led by Helge Skibeli, James Cook and Tim Woodhouse.
For comparative purposes, the cumulative NAV total return of each of JGGI, the
Company and the JGGI Benchmark over various time periods to 31 January 2024 is
set out below.
Cumulative NAV Total Return (%)
Over Over Over Over
1 year
3 years
5 years
10 years
JPMorgan Global Growth & Income plc 16.1% 55.0% 107.0% 260.4%
JPMorgan Multi-Asset Growth & Income plc 7.9% 14.0% 24.6% N/A
MSCI All Country World Index (Sterling) 10.9% 28.8% 67.6% 189.9%
-----
Source: Morningstar, as at 31 January 2024. Past performance is not a guide to
current and future performance. The value of investments and any income from
them may fall as well as rise and you may not get back the full amount
invested.
Dividend Policy
The JGGI Board's current intention is to pay quarterly dividends over the
course of each financial year which, in aggregate, total at least 4 per cent.
of the net asset value of JGGI as at the end of the preceding financial year.
Accordingly, at the start of each financial year the JGGI Board announces the
distribution it intends to pay to shareholders in the forthcoming year in four
equal instalments. The JGGI Board has discretion to set the dividend at a
different level more in-line with the wider market and other global income
trusts and funds if it considers it appropriate. JGGI has the ability to pay
dividends out of capital and does currently pay its dividends, in part, out of
its realised capital profits.
JGGI declared dividends totalling 17.0 pence per JGGI Share in respect of the
financial year commencing 1 July 2022, which represented an annual dividend
equivalent to 4.23 per cent. of JGGI's unaudited net asset value (cum income
with debt at fair value) as at 30 June 2022.
JGGI has announced that in relation to the year commencing 1 July 2023, JGGI
intends to pay dividends totalling 18.44 pence per JGGI Share (being 4.61
pence per JGGI Share per quarter), which represents an 8.5 per cent. increase
from JGGI's total dividend in respect of the preceding financial year. This
would represent an annual dividend equivalent to 3.52 per cent. of JGGI's
unaudited net asset value (cum income with debt at fair value) as at 20
February 2024.
Further information on JGGI, including details of its investment strategy and
key characteristics of its portfolio as at the date of the Circular, are set
out in Part 2 of the Circular.
Benefits of the Proposals
The Board believes that the Proposals have a strong rationale, which includes
the following benefits for MATE Shareholders:
Strong historic investment performance: Over the year ended 31 January 2024,
the NAV total return of JGGI's Shares was 16.1 per cent. compared to that of
MATE's Shares of 7.9 per cent. Over the five years ended 31 January 2024, the
NAV total return of JGGI's Shares was 107 per cent. compared to 67.6 per cent.
for the JGGI Benchmark.
Improved share rating: JGGI's Share price currently trades at a premium to NAV
and has averaged a 1.3 per cent. premium over the 12 months to 31 January 2024
compared to MATE's 3.3 per cent. average discount over the same period.
Scale: The enlarged JGGI is expected to have net assets in excess of £2.3
billion, solidifying its position as the largest investment trust in the AIC
Global Equity Income sector whilst delivering an attractive dividend yield and
total return. The scale of the enlarged JGGI should improve secondary market
liquidity for MATE Shareholders and result in cost efficiencies.
Dividends: JGGI's dividend policy is to make quarterly distributions with the
intention to pay dividends totalling at least 4 per cent. of its NAV as at the
end of the preceding financial year.
Contribution to costs: As described below, JPMF has agreed to pay all the
direct corporate costs incurred by the Company in connection with the
Proposals.
Reduced management fee for MATE Shareholders: Following implementation of the
Scheme, MATE Shareholders will benefit from significantly lower management
fees as a result of a shareholding in the enlarged JGGI. The incremental
management fee payable by the enlarged JGGI will be 0.30 per cent. per annum
(the JGGI management fee is tiered with 0.55 per cent. per annum on JGGI's net
assets up to £750 million, 0.40 per cent. per annum between £750 million and
£1.5 billion and 0.30 per cent. per annum thereafter), resulting in an
expected weighted average management fee of 0.41 per cent. per annum on the
net assets of JGGI as enlarged.
Lower ongoing charges: MATE Shareholders in the enlarged JGGI are expected to
benefit from an ongoing charges ratio of approximately 0.5 per cent.,
considerably lower than the Company's ongoing charges ratio of 1.1 per cent.
for the last financial year.
Portfolio: Exposure to a diversified portfolio of global companies managed by
JPMAM. As at the date of the Circular there is an approximately 50 per cent.
overlap between the holdings in the MATE and JGGI portfolios.
Track record of consolidating investment trusts: JGGI has an established track
record of combining investment trusts. It completed the merger with The
Scottish Investment Trust in August 2022 and JPMorgan Elect in December 2022.
Dividends
The Board has announced a pre-liquidation interim dividend of 1.2 pence per
Share which, subject to the Resolution to be proposed at the First General
Meeting being passed, will be paid to MATE Shareholders prior to the Effective
Date.
MATE Shareholders receiving New JGGI Shares under the Scheme will rank fully
for all dividends declared by JGGI with a record date falling after the date
of the issue of those New JGGI Shares to them.
Costs of implementing the Proposals and JPMF Cost Contribution
The costs incurred by the Company include both direct costs, being the costs
necessary for the implementation of the Scheme, and indirect costs, being the
costs associated with the realignment of the Company's portfolio.
JPMF has agreed a cost contribution in respect of the Proposals equal in
amount to all the direct costs incurred by both the Company and JGGI in
respect of the Proposals (the "JPMF Cost Contribution"). The JPMF Cost
Contribution will be provided by means of a fee waiver of JPMF's management
fee on the enlarged JGGI's NAV following completion of the Scheme. However,
the JPMF Cost Contribution will be for the benefit of the shareholders of each
of MATE and JGGI by means of an adjustment in their respective FAVs equal to
the direct costs paid or accrued, for the purposes of calculating entitlements
under the Scheme. Accordingly, MATE Shareholders will not bear any direct
costs in connection with the Proposals.
For the avoidance of doubt, any costs of realignment or realisation of the
MATE portfolio prior to the Scheme becoming effective will be borne by the
Company. Any stamp duty, stamp duty reserve tax or other transaction tax, or
investment costs incurred by JGGI for the acquisition of the MATE portfolio or
the deployment of the cash therein upon receipt will be borne by the enlarged
JGGI. In addition, JGGI as enlarged will also bear London Stock Exchange
admission fees payable in respect of the Admission of the New JGGI Shares.
In addition, in anticipation of the Scheme becoming effective, JPMF has
undertaken to waive, in full, the period of notice to which it is
contractually entitled under the MATE Management Agreement and has agreed that
no compensation will be payable by the Company to JPMF or JPMAM in respect of
such waiver, provided that the Scheme is implemented.
In the event that the Scheme is not implemented, each party will bear its own
costs in respect of the Proposals and JPMorgan will not make any contribution
towards such costs.
Liquidators' Retention
The Liquidators' Retention is estimated at £100,000 and will be retained by
the Liquidators to meet any unknown or unascertained liabilities of the
Company. To the extent some or all of the Liquidators' Retention remains when
the Liquidators are in a position to close the liquidation, this will be
returned to MATE Shareholders on the Register as at the Effective Date
(excluding Dissenting Shareholders), together with any other funds remaining
in the Liquidation Pool, pro rata to the number of MATE Shares held by them on
such date. If, however, any such amount payable to any MATE Shareholder is
less than £5.00, it shall not be paid to the MATE Shareholder but instead
shall be paid by the Liquidators to the Nominated Charity.
Management of the Company's portfolio prior to implementation of the Scheme
The Board has instructed the Company's AIFM and Investment Manager to consider
the potential realignment of the Company's investment portfolio so that by the
Effective Date it contains assets that are suitable for transfer to JGGI and
also to ensure that the Company has sufficient cash to meet any remaining
liabilities. It is expected that the majority of such realignment and any
realisations will occur after the First General Meeting.
Further details of the Scheme
Entitlements under the Scheme
Under the Scheme, each MATE Shareholder on the Register on the Record Date
will receive such number of New JGGI Shares as have a value (at the JGGI FAV
per Share) equal to the proportion of the Rollover Pool attributable to the
number of MATE Shares held. Fractions of New JGGI Shares will not be issued
under the Scheme and entitlements to such New JGGI Shares will be rounded down
to the nearest whole number.
The attention of Overseas Shareholders is drawn to the paragraph headed
"Overseas Shareholders" below.
Under the Scheme, in order to ensure the Company can meet all known and
unknown liabilities of the Company and other contingencies during the course
of the liquidation, including the entitlements of any Dissenting Shareholders,
the Liquidators' Retention and other assets will be appropriated to the
Liquidation Pool. As noted above, any remaining balance in the Liquidation
Pool after the discharge of the Company's liabilities, including the
Liquidators' Retention, will be distributed in cash to the MATE Shareholders
on the Register on the Effective Date.
After the appropriation to the Liquidation Pool described above, there shall
be appropriated to the Rollover Pool the remaining assets of the Company in
the manner described in paragraph 3.2 of Part 4 of the Circular.
The issue of New JGGI Shares under the Scheme will be effected on a formula
asset value ("FAV") for FAV basis based on valuations as at the Calculation
Date as described in detail in Part 4 of the Circular. The Calculation Date
for determining the value of the Rollover Pool is expected to be market close
on 21 March 2024. The Record Date for the basis of determining MATE
Shareholders' entitlements under the Scheme is 6.00 p.m. on 22 March 2024.
Illustrative entitlements
For illustrative purposes only, had the Calculation Date been market close on
20 February 2024 and assuming that there are no Dissenting Shareholders, after
deduction of the pre-liquidation interim dividend of 1.2 pence per MATE Share,
the MATE FAV per Share would have been 100.52 pence. The MATE FAV per Share
may be compared with the Company's Share price and cum-income NAV per Share as
at 20 February 2024 which, when adjusted on a pro forma basis for the
deduction of the pre-liquidation interim dividend of 1.2 pence per Share, were
97.80 pence and 100.84 pence respectively.
For illustrative purposes only and on the basis of the assumptions above, the
JGGI FAV per Share would have been 524.14 pence, which would have produced a
conversion ratio of 0.191790, and, in aggregate, 13,783,641 New JGGI Shares
would have been issued to MATE Shareholders under the Scheme, representing
approximately 3.09 per cent. of the issued ordinary share capital of JGGI, as
enlarged, immediately following completion of the Scheme. The JGGI FAV per
Share may be compared with JGGI's Share price and cum-income NAV per JGGI
Share as at 20 February 2024 which were 531.00 pence and 524.14 pence
respectively.
Conditions of the Proposals
Implementation of the Proposals is subject to a number of conditions,
including:
· the passing of the Resolution to be proposed at the First General
Meeting and the Resolution to be proposed at the Second General Meeting, or
any adjournment of those meetings, and any conditions of such Resolutions
being fulfilled;
· the JGGI Resolution being passed and becoming unconditional in
all respects;
· MATE obtaining the requested tax clearance and confirmations
relating to the Scheme from HMRC;
· the approval of the Financial Conduct Authority and the London
Stock Exchange to the Admission of the New JGGI Shares to the premium listing
category of the Official List and to trading on the Main Market of the London
Stock Exchange, respectively, subject only to allotment; and
· the Directors and the JGGI Directors resolving to proceed with
the Scheme.
If any condition is not satisfied, the Proposals will not become effective,
the Company will not proceed with the members' voluntary winding up and
instead the Company will continue in existence managed in accordance with its
current investment policy. In such circumstances, the Directors will reassess
the options available to the Company at that time.
General Meetings
As noted above, the Proposals are conditional upon, amongst other things, MATE
Shareholders' approval of the Resolutions to be proposed at the First General
Meeting and the Second General Meeting. Both General Meetings will be held at
60 Victoria Embankment, London, EC4Y 0JP.
First General Meeting
The First General Meeting will be held on 18 March 2024 at 11.00 a.m.
The Resolution to be considered at the First General Meeting (which will be
proposed as a special resolution) will, if passed, approve the terms of the
Scheme set out in Part 4 of the Circular, amend the Articles to give effect to
the Scheme, and authorise the Liquidators to enter into and give effect to the
Transfer Agreement with JGGI, to distribute New JGGI Shares to MATE
Shareholders in accordance with the Scheme, to purchase the interests of any
Dissenting Shareholders and to apply to cancel the listing of the Shares with
effect from such date as the Liquidators may determine. The Resolution will
require at least 75 per cent. of the votes cast in respect of it, whether in
person or by proxy, to be voted in favour to be passed. The Scheme will not
become effective unless and until, amongst other things, the Resolution to be
proposed at the Second General Meeting has also been passed.
Second General Meeting
The Second General Meeting will be held on 26 March 2024 at 11.00 a.m.
At the Second General Meeting, a special resolution will be proposed which, if
passed, will place the Company into liquidation, appoint the Liquidators and
agree the basis of their remuneration, instruct the Company Secretary to hold
the books to the Liquidators' order, and provide the Liquidators with
appropriate powers to carry into effect the amendments to the Articles made at
the First General Meeting. The Resolution to be proposed at the Second General
Meeting is conditional, amongst other things, upon the passing of the
Resolution at the First General Meeting and the JGGI Resolution being passed
and becoming unconditional in all respects. The Resolution will require at
least 75 per cent. of the votes cast in respect of it, whether in person or by
proxy, to be voted in favour to be passed at the Second General Meeting.
Overseas Shareholders
Subject to certain exceptions described in the Circular, no action has been
taken or will be taken in any jurisdiction other than the UK where action is
required to be taken to permit the distribution of the Circular. Accordingly,
the Circular may not be used for the purpose of, and does not constitute, an
offer or solicitation by anyone in any jurisdiction or in any circumstances in
which such offer or solicitation is not authorised or to any person to whom it
is unlawful to make such offer or solicitation.
Overseas Shareholders will not receive New JGGI Shares pursuant to the Scheme
unless they have satisfied the Directors, the Liquidators and the JGGI
Directors that they are entitled to receive and hold New JGGI Shares without
breaching any relevant securities laws and without the need for compliance on
the part of the Company or JGGI with any overseas laws, regulations, filing
requirements or the equivalent.
Overseas Shareholders who wish to participate in the Scheme should contact the
Company directly, by no later than 5.00 p.m. on 18 March 2024, if they are
able to demonstrate, to the satisfaction of the Directors, the Liquidators and
the JGGI Directors, that they can be issued New JGGI Shares without breaching
any relevant securities laws and without the need for compliance on the part
of the Company or JGGI with any overseas laws, regulations, filing
requirements or the equivalent. Unless the Directors and the JGGI Directors
are so satisfied (in their respective absolute discretions), any New JGGI
Shares to which such Overseas Shareholder would otherwise be entitled under
the Scheme will instead be issued to the Liquidators (as nominees on behalf of
such Overseas Shareholder) who will arrange for such New JGGI Shares to be
sold promptly by a market maker (which shall be done by the Liquidators
without regard to the personal circumstances of the relevant Overseas
Shareholder and the value of the MATE Shares held by the relevant Overseas
Shareholder). The net proceeds of such sales (after deduction of any costs
incurred in effecting such sales) will be paid to the relevant Overseas
Shareholders entitled to them within 10 Business Days of the date of sale,
save that entitlements of less than £5.00 per Overseas Shareholder will be
retained in the Liquidation Pool.
Expected Timetable
2024
Record date for the pre-liquidation interim dividend to MATE Shareholders 23 February
Latest time and date for receipt of BLUE Forms of Proxy and CREST voting 11.00 a.m. on 14 March
instructions in respect of the First General Meeting
First General Meeting 11.00 a.m. on 18 March
Calculation Date market close on 21 March
Payment date for the pre-liquidation interim dividend 22 March
Latest time and date for receipt of PINK Forms of Proxy and CREST voting 11.00 a.m. on 22 March
instructions in respect of the Second General Meeting
Shares disabled in CREST 6.00 p.m. on 22 March
Record Date for entitlements under the Scheme 6.00 p.m. on 22 March
Suspension of trading in the Shares 7.30 a.m. on 25 March
Suspension of listing of Shares and Company's Register closes 7.30 a.m. on 26 March
Second General Meeting 11.00 a.m. on 26 March
Effective Date for implementation of the Scheme and appointment of Liquidators 26 March
Announcement of the results of the MATE FAV per Share and the JGGI FAV per 26 March
Share
CREST accounts credited with, and dealings commence in, New JGGI Shares at, or soon after, 8.00 a.m. on 27 March
Share certificates in respect of New JGGI Shares despatched not later than 10 Business Days from the Effective Date
Cancellation of listing of Shares as soon as practicable after the Effective Date
Note: All references to time in this announcement and the Circular are to UK
time, unless otherwise stated. Each of the times and dates in the above
expected timetable (other than in relation to the General Meetings) may be
extended or brought forward. If any of the above times and/or dates change,
the revised time(s) and/or date(s) will be notified to Shareholders by an
announcement through a Regulatory Information Service.
This announcement does not contain all the information which is contained in
the Circular and MATE Shareholders should read the Circular before deciding
what action to take in respect of the Proposals.
A copy of the Circular has been submitted to the National Storage Mechanism
and will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and on the
Company's website at www.jpmmultiassetgrowthandincome.com
(www.jpmmultiassetgrowthandincome.com) .
For further information please contact:
JPMorgan Multi-Asset Growth & Income Contact via Company Secretary
Sarah MacAulay, Chair
JPMorgan Funds Limited +44 (0) 20 7742 4000
Simon Crinage
JPMorgan Funds Limited (Company Secretary) +44 (0) 20 7742 4000
Panmure Gordon (UK) Limited
Alex Collins +44 (0) 20 7886 2767
Ashwin Kohli +44 (0) 20 7886 2786
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