REG - Witan Inv Tst PLC - Publication of Circular

Witan Investment TrustAnnouncement

12/09/2024 15:00

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RNS Number : 0086E  Witan Investment Trust PLC  12 September 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN
OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND
POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA),
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, IN ANY
MEMBER STATE OF THE EEA OR IN ANY OTHER JURISDICTION IN WHICH THE 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.

12 September 2024

Witan Investment Trust plc

 

Legal Entity Identifier: 213800XMW68XFT6D1X59

Publication of Circular in connection with the recommended proposals for the
voluntary winding-up of the Company and combination with Alliance Trust PLC
(to be renamed Alliance Witan PLC)

Introduction

The Board of Witan Investment Trust plc (the "Company" or "WTAN") announces
that it has today published a shareholder circular (the "Circular") setting
out proposals for the recommended winding-up of the Company and combination
with Alliance Trust PLC ("ATST") (the "Transaction"). Defined terms used in
this announcement shall, unless the context requires otherwise, have the
meanings ascribed to them in the Circular.

The Board announced on 26 June 2024 that it had entered into heads of terms
with ATST for a combination of the two companies to form an enlarged company
("Enlarged ATST"), proposed to be renamed Alliance Witan PLC, by means of a
scheme of reconstruction and winding-up of the Company under section 110 of
the Insolvency Act 1986 (the "Scheme").

The Scheme comprises a members' voluntary liquidation and a scheme of
reconstruction of the Company under which, subject to the conditions to the
Transaction described below, Ordinary Shareholders will be entitled to elect
to receive in respect of some or all of their Ordinary Shares:

(a)   New ATST Shares (the "Rollover Option"); and/or

(b)   cash (subject to an overall limit of 17.5 per cent. of the Ordinary
Shares (excluding Ordinary Shares held in treasury) in issue) (the "Cash
Option").

The Cash Option will be offered at a discount of 2.5 per cent. to the WTAN NAV
per Share as at the Calculation Date.

Ordinary Shareholders can make different Elections in respect of different
parts of their holdings. Ordinary Shareholders (other than Excluded
Shareholders) who make no Election (or no valid Election) will be deemed to
have elected for the default option, being the Rollover Option, in respect of
their entire holding of Ordinary Shares.

Each Excluded Shareholder will be deemed to have elected for the Cash Option
in respect of 100 per cent. of their holding of Ordinary Shares. Excluded
Shareholders should refer to the section entitled "Excluded Shareholders"
below.

The choice between the options available under the Transaction will be a
matter for each Shareholder to decide and will be influenced by their
investment objectives and by their personal, financial and tax circumstances.
Accordingly, Ordinary Shareholders should, before making any Election, read
carefully all the information in the Circular and in the ATST Prospectus and
take financial advice where required.

 

The purpose of the Circular is to provide Shareholders with further details of
the Transaction, including the background to and rationale for the Transaction
and the actions required to be taken by Shareholders in order for it to be
implemented, and to convene a meeting of the Ordinary Shareholders (the
"Ordinary Shareholders' Class Meeting") and two general meetings of
Shareholders (the "General Meetings") (notices of which are set out at the end
of the Circular) to seek approval from Shareholders to implement the
Transaction. Details of the Resolutions to be proposed at the Ordinary
Shareholders' Class Meeting and the General Meetings are set out in the
Circular. The expected timetable associated with the Transaction is provided
at the end of this announcement.

 

Background to and rationale for the Transaction

 

As announced on 18 March 2024, the Board had been informed by the Company's
CEO, Andrew Bell, that he intended to retire. As a consequence, the Board
decided to conduct a comprehensive review of the Company's investment
management arrangements and invited proposals for the future management of the
Company's portfolio. The Board received a large number of very high-quality
proposals, but was unanimous in concluding that a combination with ATST was
the best proposal received.

 

The Board believes that the Transaction will enable those Ordinary
Shareholders rolling over into ATST to enjoy, among other things, continued
exposure to a successful multi-manager strategy led by one of the leading
global investment managers, and also the benefits of scale that are expected
to result from the enlarged asset base of ATST following the Transaction,
including cost efficiencies and greater liquidity in the ATST Shares. The
investment proposition seeks to reduce relative risk and volatility, meaning
investors are not left vulnerable to the underperformance risk concomitant
with a single manager at the top of its performance cycle.

 

Both the Company and ATST invest for capital growth and income in diversified
portfolios of global equities, and there is a similarity of overall approach
stemming from their respective multi-manager strategies.

 

Benefits of the Transaction

The Board notes a number of attractions to a combination with ATST:

·      Best-in-class investment management: The enlarged portfolio will
be invested in WTW's successful multi-manager strategy, providing access to
best-in-class 1  (#_ftn1) managers globally, many of whom are not otherwise
readily accessible by UK retail investors. The investment proposition seeks to
reduce risk and volatility relative to the MSCI All Country World Index
(ATST's comparative benchmark index (the "Benchmark") in the near term,
compared to an individual manager strategy, meaning investors should not be
left vulnerable to the underperformance risk concomitant with a single manager
at the top of its performance cycle. As at 6 September 2024, the ATST
portfolio consisted of selections by 10 Stock Pickers and centrally held cash
or cash equivalents.

·      Robust investment performance track record: Since the appointment
of WTW (and its predecessor, Towers Watson Investment Management (Ireland)
Limited) as manager of ATST at the beginning of April 2017 to 30 August 2024,
ATST's NAV total return was 102.2 per cent. against 101.7 per cent. for the
Benchmark. Over the past three years to the same date, its NAV total return
was 23.1 per cent., against 23.9 per cent. for the Benchmark. 2  (#_ftn2)

·      Attractive and progressive dividend policy: As at 6 September
2024, ATST's dividend yield was 2.25 per cent. ATST intends to increase its
third and fourth interim dividends for the financial year ending 31 December
2024 so that they are commensurate with the Company's first interim dividend
payment to Ordinary Shareholders of 1.51 pence per Ordinary Share. This is
currently estimated to represent an increase of 1.66 per cent. on the first
ATST interim dividend of the current financial year and a 6.15 per cent.
increase on the fourth ATST interim dividend for the year ended 31 December
2023. Furthermore, it is expected that ATST's dividend for the financial year
ending 31 December 2025 will be increased compared with the prior financial
year so that an Ordinary Shareholder who rolls over into ATST will continue to
see a progression in their income in both 2024 and 2025.

·      Greater scale and prospect of FTSE 100 inclusion: ATST is
expected to have net assets of c. £4.8 billion on completion of the
Transaction (based on the last published net asset values of the two companies
as at 6 September 2024). The Enlarged ATST may also be eligible for inclusion
in the FTSE 100 Index in due course and should benefit from improved profile,
which should help to attract new investors to the Enlarged ATST, and secondary
market liquidity.

·      Lower management fees: WTW has agreed a new management fee
structure for the Enlarged ATST (see further the section entitled "Management
fees and ongoing expenses" in Part 2 of the Circular) which will result in a
more competitive blended fee rate for the Enlarged ATST and its shareholders
than is currently enjoyed by the Company's and ATST's respective shareholders.

·      Lower ongoing charges: The new management fee structure and the
economies of scale which the combination will bring is expected to allow the
Enlarged ATST to target an ongoing charges ratio in the high 50s (in basis
points terms) in future financial years, an improvement on both the Company's
and ATST's current ongoing charge ratios, which are 76bps and 62bps,
respectively.

·      Significant contribution to costs from WTW: WTW has agreed to
make a significant contribution to the costs of the Transaction. The value of
the WTW Contribution will be applied initially to offset ATST Implementation
Costs, with any excess applied firstly to offset any remaining Company
Implementation Costs, and then accruing for the benefit of shareholders in the
Enlarged ATST. This contribution, when combined with the benefit of the
discount on the cash exit, means that Ordinary Shareholders who roll over into
ATST are therefore expected to suffer minimal or no dilution, depending upon
the level of take-up of the Cash Option. See further the section entitled "WTW
Contribution" below.

·      Improved rating: Over the three-year period to 6 September 2024,
ATST Shares traded at an average 5.6 per cent. discount to their underlying
NAV, compared with the Company's Ordinary Shares which traded at an average
8.2 per cent. discount to NAV. As well as benefiting from an improved average
rating, to the extent that ATST Shares continue to trade at a tighter discount
to NAV as at the Effective Date, Ordinary Shareholders who roll over into the
Enlarged ATST should benefit from this narrower discount.

·      Liquidity opportunity: Ordinary Shareholders also have the
opportunity to elect for a cash exit at a price close to NAV per Ordinary
Share, for some or all of their holding, as part of the Scheme. The benefit of
the discount on the cash exit will be applied first to the Company
Implementation Costs, and any amount remaining thereafter will be for the
benefit of all shareholders in the Enlarged ATST. Ordinary Shareholders who
roll over into ATST are therefore expected to suffer minimal or no NAV
dilution, depending upon the level of take-up of the Cash Option and any
residual benefit flowing from the WTW Contribution.

·      Realisation opportunity for Preference Shareholders: The
Transaction will give Preference Shareholders the ability to realise at par
their investment in an illiquid stock with no fixed redemption date that has
typically traded at a material discount to par.

 

The Scheme

 

Subject to the passing of the Resolutions (and satisfaction of the other
conditions of the Scheme, full details of which are set out in the section
entitled "Conditions to the Transaction" in Part 1 and paragraph 14 of Part 4
of the Circular), the Company will be placed into members' voluntary
liquidation and the Scheme will take effect from the Effective Date (which is
expected to be 9 October 2024). On the Effective Date, the cash, undertaking
and other assets of the Company (consisting of investments which are in
accordance with ATST's current investment policy, including investment company
holdings as well as futures, cash, cash equivalents and other appropriate
securities (including assets corresponding to the liabilities under the WTAN
Secured Notes)) and certain of its liabilities will be transferred to ATST
pursuant to the Transfer Agreement and the Novation Documents. In
consideration for the transfer of the Rollover Pool to ATST under the Transfer
Agreement: (a) the relevant number of New ATST Shares will be allotted to the
Liquidators, who will renounce the New ATST Shares in favour of the Ordinary
Shareholders who elect (or are deemed to have elected) for the Rollover Option
(save for any Excluded Shareholders); and (b) ATST will assume the obligations
under the WTAN Secured Notes pursuant to the Novation.

The issue of New ATST Shares under the Rollover Option will be effected on a
formula asset value for formula asset value ("FAV") basis as at the
Calculation Date, as described in Part 4 of the Circular. Shareholders who
elect (or are deemed to elect) for the Rollover Option will be entitled to
receive New ATST Shares on the basis of the ratio of the WTAN FAV per Share to
the ATST FAV per Share, multiplied by the number of Shares so elected.

The New ATST Shares will rank fully pari passu with the existing ATST Shares
for all dividends declared by ATST on or after the date of their issue
(expected to be 10 October 2024), but will not qualify for the second interim
dividend declared by ATST on 25 July 2024.

The Cash Option

Under the Scheme, Shareholders may elect to receive cash instead of New ATST
Shares in respect of some or all of their holdings of Ordinary Shares. The
maximum number of Ordinary Shares that can be elected for the Cash Option is
17.5 per cent. of the total number of Ordinary Shares (excluding Ordinary
Shares held in treasury) in issue as at the Calculation Date. Ordinary
Shareholders are entitled to elect for the Cash Option in respect of more than
17.5 per cent. of their individual holdings of Ordinary Shares (the "Basic
Entitlement", such excess amount being an "Excess Application"). However, if
aggregate Elections have been made for the Cash Option which exceed 17.5 per
cent. of the issued Ordinary Shares (excluding Ordinary Shares held in
treasury), Ordinary Shareholders who have made an Election for the Cash Option
in excess of their Basic Entitlement shall have their Excess Applications
scaled back in a manner which is, as near as practicable, pari passu and pro
rata among all Ordinary Shareholders who have made such Excess Applications.
Ordinary Shareholders (including Excluded Shareholders) will be deemed to have
made an Election for the Rollover Option in respect of any Ordinary Shares
held by them in respect of which their Excess Applications are scaled back.

Shareholders who elect (or are deemed to elect) for the Cash Option will
receive an amount of cash equal to the WTAN NAV per Share less a 2.5 per cent.
discount (the "Cash Option Discount") multiplied by the number of Ordinary
Shares so elected (calculated to six decimal places), less the costs and
expenses of realising the assets appropriated to the Cash Pool (and subject to
any changes in value after the Calculation Date). The value arising from the
application of the Cash Option Discount (the "Cash Uplift") will be applied
initially to offset the Company Implementation Costs, with any part of the
Cash Uplift not required to offset the Company Implementation Costs accruing
for the benefit of shareholders in Enlarged ATST (including those Ordinary
Shareholders who elect or are deemed to have elected for the Rollover Option
and receive New ATST Shares pursuant to the Scheme).

It is expected that in the week commencing 14 October 2024, the Liquidators
shall distribute via the Company's Registrar to Ordinary Shareholders who have
elected (or are deemed to have elected) for the Cash Option for all or part of
their holding their Cash Entitlements (being an amount equal to such
Shareholder's proportional entitlement to the net realisation proceeds of the
Cash Pool pursuant to the Scheme, rounded down to the nearest penny).

Illustrative entitlements

For illustrative purposes only, had the Calculation Date been 6 September 2024
and assuming full participation by Ordinary Shareholders under the Cash Option
and no Dissenting Shareholders, taking into account the repayment of the
nominal amount of, and the dividend entitlement to the Effective Date on, the
Preference Shares, the Company's pre-liquidation dividend (described below) of
1.75 pence per Ordinary Share, and any expected costs not currently accrued in
the WTAN NAV or ATST NAV, the WTAN FAV per Share would have been 275.928856
pence and the ATST FAV per Share would have been 1,228.070474 pence.

On the basis of the above figures, the Rollover Option would have produced a
conversion ratio of 0.224684 and, in aggregate, 110,459,662 New ATST Shares
would have been issued to Ordinary Shareholders in respect of 491,622,286
Ordinary Shares under the Scheme, representing approximately 28.2 per cent. of
the issued ordinary share capital of the Enlarged ATST.

The above figures are for illustrative purposes only and do not represent
forecasts. The WTAN FAV per Share, ATST FAV per Share and Shareholders'
entitlements under the Scheme may change materially up to the Effective Date
as a result of, among other things, changes in the value of the Company's or
ATST's investments.

 

Summary information on ATST

 

As noted above, if the Scheme becomes effective, Ordinary Shareholders will
roll over some or all of their holdings of Ordinary Shares into New ATST
Shares. Further details on ATST are set out in Part 2 of the Circular and in
the ATST Prospectus (which will be available on or around 12 September 2024 at
https://www.alliancetrust.co.uk (https://www.alliancetrust.co.uk) ).

ATST is a closed-ended public limited company incorporated on 21 April 1888 in
Scotland with registered number SC001731. The ATST Shares are listed on the
closed-ended investment funds listing category of the Official List and traded
on the Main Market. As at 6 September 2024, ATST had a net asset value of
approximately £3.5 billion.

A shareholder meeting of ATST has been convened for 1 October 2024 at which
authority will be sought to allot the New ATST Shares.

Subject to the successful completion of the Transaction and to the passing of
the relevant resolution by the ATST Shareholders to be proposed at the
shareholder meeting on 1 October 2024, the ATST Board will resolve to rename
the Enlarged ATST as Alliance Witan PLC.

ATST strategy and investment team

ATST aims to be a core equity holding for investors that delivers a real
return over the long term through a combination of capital growth and a rising
dividend. ATST invests primarily in global equities across a wide range of
industries and sectors to achieve its objective.

WTW has appointed a number of Stock Pickers with different styles, each of
whom is unconstrained by the Benchmark (the MSCI All Country World Index) and
only buys a limited number of stocks in which they have strong conviction.

WTW has overall responsibility for managing ATST's portfolio, researching,
selecting and monitoring the Stock Pickers, and constructing the portfolio of
ATST to ensure it is diversified and well balanced in terms of risk exposures.
WTW blends Stock Pickers with complementary investment approaches or styles,
which can be expected to perform differently in different market conditions.
This is intended to smooth out the peaks and troughs of performance associated
with concentrated single-manager strategies.

As at 6 September 2024 (being the latest practicable date before publication
of the Circular), the Stock Pickers were ARGA Investment Management LP, Black
Creek Investment Management Inc., Dalton Investments Inc., GQG Partners LLC,
Lyrical Asset Management LP, Metropolis Capital Limited, Sands Capital
Management LLC, Sustainable Growth Advisers LP, Veritas Asset Management LLP
and Vulcan Value Partners LLC.

ATST's performance track record

ATST has achieved robust returns, outperforming the Benchmark over the long
term net of fees. In recent years, stock markets have become more concentrated
in larger capitalisation, faster growing companies, with index returns
dominated, in particular, by a small number of technology giants. This was a
challenging environment for active management and more diversified strategies
like ATST's. Despite this headwind ATST has delivered good outcomes for the
ATST Shareholders with the total ATST Shareholder return outperforming the
Benchmark over the long term and delivering robust returns versus peers.

ATST's cumulative performance to 30 August 2024 over various time periods is
set out in the following table.

 Cumulative performance to 30 August 2024 (%)  Since 01/04/2017(1)  5 Years  3 Years  1 Year  Year to Date
 Total Shareholder Return                      102.9                67.2     24.0     17.0    9.1
 NAV Total Return(2)                           102.2                67.3     23.1     16.7    9.5
 MSCI ACWI Total Return(3)                     101.7                64.3     23.9     19.0    12.5

Source: WTW, Juniper Partners, Morningstar and MSCI Inc. Past performance does
not predict future returns and the value of shares and the income from them
can rise and fall, so investors may not get back the amount originally
invested.

1.     1 April 2017 was the date on which WTW's predecessor, Towers Watson
Investment Management (Ireland) Limited, was appointed investment manager of
ATST. Please see paragraph 11.1 of Part 7 of the ATST Prospectus for further
information on the transfer of management functions from the Towers Watson
Investment Management (Ireland) Limited to WTW.

2.     NAV total return is based on NAV including income with debt at fair
value, after all manager fees (including WTW's fees) and allows for any tax
reclaims when they are achieved.

3.     MSCI All Country World Index Net Dividends Reinvested.

 

ATST dividends

For the year ended 31 December 2023, ATST declared dividends totalling 25.2
pence per ATST Share, which represented 2.14 per cent. of the NAV per ATST
Share as at 31 December 2023.

On 25 July 2024, ATST declared a second interim dividend of 6.62 pence per
ATST Share for its shareholders for the year ending 31 December 2024 (the
"ATST Second Interim Dividend"). The record date of 30 August 2024 for the
ATST Second Interim Dividend falls prior to the date upon which the Scheme
becomes effective and the New ATST Shares are issued to Shareholders.
Shareholders therefore will not qualify for the ATST Second Interim Dividend,
but the New ATST Shares will rank fully pari passu with the existing ATST
Shares for all dividends declared by ATST on or after the date of their issue
(expected to be 10 October 2024).

Conditions to the Transaction

 

Implementation of the Transaction is subject to a number of conditions,
including:

 

a)   the passing of the Resolutions to be proposed at the Ordinary
Shareholders' Class Meeting and the General Meetings, or any adjournment of
those meetings, and any conditions of such Resolutions being fulfilled;

b)   the ATST Resolution being passed and becoming unconditional in all
respects;

c)   the unconditional approval of the ATST Board and the ATST Noteholders
to the entering into of the Novation Documents, the entering into of the
Novation Documents by the parties thereto and the Novation Documents becoming
unconditional in all respects other than any condition relating to the Scheme
becoming effective and other ancillary conditions precedent thereunder;

d)   the FCA and the London Stock Exchange having acknowledged the
applications for the Admission of the New ATST Shares to the Official List
and to trading on the Main Market of the London Stock Exchange, respectively;
and

e)   the Directors resolving to proceed with the Scheme. If Shareholders
holding more than 10 per cent. in aggregate of the issued Ordinary Share
capital of the Company as at the Calculation Date validly exercise their
rights under section 111(2) of the Insolvency Act to dissent to the Scheme,
the Directors have discretion to decide that the Scheme should not proceed.

Unless each condition is satisfied, the Transaction will not become
effective, the Company will not proceed with the liquidation and instead the
Company will continue in existence managed in accordance with its current
investment policy. In such circumstances, the Directors would reassess the
options available to the Company at that time.

Transfer Agreement

If the resolution to be proposed at the Second General Meeting is passed, the
Company will enter into the Transfer Agreement on the Effective Date, pursuant
to which the Liquidators will procure the transfer of the cash, undertaking
and other assets of the Company comprising the Rollover Pool (including, in
relation to the Novation of the obligations under the WTAN Secured Notes to
ATST, assets equal to the fair value of the WTAN Secured Notes, together with
interest accrued up to and including the Calculation Date on the WTAN Secured
Notes and a further amount in respect of the period to the Effective Date) to
ATST (or its nominee), in consideration for: (a) the allotment of New ATST
Shares to the Liquidators (as nominees for the Shareholders entitled to them),
such allotments to be renounced by the Liquidators in favour of the
Shareholders who have elected (or are deemed to have elected) for the Rollover
Option, and (b) the assumption by ATST of the obligations under the WTAN
Secured Notes pursuant to the Novation.

WTAN Secured Notes

The WTAN Secured Notes (being the Company's (i) 3.29 per cent. secured notes
due 2035, (ii) 3.47 per cent. secured notes due 2045, (iii) 2.39 per cent.
secured notes due 2051 and (iv) 2.74 per cent. secured notes due 2054) are
secured by floating charges over the assets of the Company held by M&G
Trustee Company Limited (formerly known as Prudential Trustee Company Limited)
("M&G") in favour of the WTAN Noteholders and have a total principal
amount of £155 million. Under the Transaction, the current floating charges
held by M&G will be released, the WTAN Secured Notes will be novated to
ATST and ATST will be substituted as the issuer and sole debtor of the WTAN
Secured Notes in place of the Company. The WTAN Secured Notes shall be secured
following the Novation by a new English floating charge and Scottish floating
charge granted in favour of The Law Debenture Trust Corporation P.L.C. as
security trustee for the WTAN Noteholders and the existing ATST secured
creditors. On 11 September 2024, the WTAN Noteholders entered into the WTAN
Deeds of Novation, Amendment and Restatement approving, among other matters,
the Novation to occur on completion of the Transaction. Pursuant to the
Substitution, the Company and the existing security trustee will enter into a
deed of release in connection with the release of the existing floating
charges securing the WTAN Secured Notes, and ATST and the new security trustee
will enter into the New ATST Floating Charges.

WTAN Preference Shares

Preference Shareholders will not participate in the Scheme but will instead
receive their entitlements under the Company's Articles of Association in cash
under the winding-up of the Company and accordingly will not receive a Form of
Election.

On a winding-up, the Preference Shareholders have the right to have net assets
of the Company available for distribution paid to them in priority to the
Ordinary Shareholders in repaying the nominal amount of Preference Shares
outstanding together with any arrears of dividend on the Preference Shares up
to the date of repayment (being the Effective Date).

By way of illustration, if the Effective Date were 9 October 2024, the amount
of assets required to satisfy the entitlements of the Preference Shares in
full would be equal to £2,575,388, representing the aggregate of £2,555,000
(being the amount of Preference Shares outstanding) and £20,388 (being the
accrued dividend for the period from the last Preference Share dividend
payment date in each case to the Effective Date).

WTAN dividends

 

The Board has announced a pre-liquidation dividend of 1.75 pence per Ordinary
Share which will be paid to Ordinary Shareholders prior to the Effective Date
in lieu of a normal second interim dividend for the year ending 31 December
2024. The pre-liquidation dividend will be paid in cash. It is not anticipated
that there will be any further dividends paid by the Company in relation to
the current financial period or for the period up to the liquidation of the
Company.

Shareholders receiving New ATST Shares under the Scheme will rank fully for
all dividends declared by ATST with a record date falling after the date of
the issue of those New ATST Shares to them. Assuming the Scheme becomes
effective on or before the relevant record date (which is expected to be in
late November 2024), Shareholders rolling over into ATST will be entitled to
receive ATST's third interim dividend for the year ending 31 December 2024,
which is expected to be payable in late December 2024.

Costs of implementing the Scheme

Costs of the Company

The costs incurred by the Company in relation to the Transaction include both
direct costs, being the costs necessary for the implementation of the
Transaction, and indirect costs in disposing of certain investments in the
Company's portfolio in order to raise portfolio liquidity.

Direct costs

The costs directly incurred (or to be incurred) by the Company in implementing
the Transaction primarily comprise corporate finance, broking and financial
advisory fees, legal fees, Liquidators' fees, employment costs and costs
incurred in relation to the Novation of the WTAN Secured Notes, in each case
including any related VAT and disbursements (the "Company Implementation
Costs"). The Company Implementation Costs include the Liquidators' Retention
of £100,000 to cover unknown or unascertained liabilities.

The Company Implementation Costs will be payable by the Company and are
estimated to be approximately £6.0 million (including irrecoverable VAT),
prior to taking into account:

·      the application of the Cash Uplift described above and in the
section of the Circular entitled "Cash Option", assuming full participation by
Ordinary Shareholders under the Cash Option and no Dissenting Shareholders;
and

·      the application of the WTW Contribution described below and in
the section of the Circular entitled "WTW Contribution".

However, the net Company Implementation Costs payable by the Company are
expected to be nil after taking into account the estimated Cash Uplift
(assuming full participation by Shareholders under the Cash Option and no
Dissenting Shareholders).

Indirect costs

The Company will also incur indirect costs in disposing of certain investments
in the Company's portfolio (the "Portfolio Realisation Costs") in order to
raise portfolio liquidity, including to pay the Cash Entitlements of Ordinary
Shareholders who elect (or are deemed to have elected) for the Cash Option.
The Portfolio Realisation Costs will be borne by the Company (including those
Ordinary Shareholders who elect or are deemed to have elected for the Rollover
Option and receive New ATST Shares pursuant to the Scheme).

Costs of ATST

Direct costs

The costs incurred (or to be incurred) by ATST in implementing the Transaction
primarily comprise legal fees, financial advisory fees, costs incurred in
relation to documentation of the Novation of the WTAN Secured Notes, other
professional advisory fees, printing costs and other applicable expenses, in
each case including any related VAT and disbursements (the "ATST
Implementation Costs").

The ATST Implementation Costs will be borne by existing ATST Shareholders.
However, the ATST Implementation Costs payable by ATST are expected to be nil,
after taking into account the WTW Contribution (which shall be applied
initially to offset the ATST Implementation Costs, as described below in the
section entitled "WTW Contribution"), based on ATST's and the Company's
respective net asset values as at 6 September 2024.

Acquisition costs

The Enlarged ATST (including those Ordinary Shareholders who elect or are
deemed to have elected for the Rollover Option and receive New ATST Shares
pursuant to the Scheme) will bear:

·      any stamp duty, stamp duty reserve tax or other transaction tax,
or investment costs incurred by ATST for the acquisition of the Rollover Pool
or the deployment of the cash in the Rollover Pool upon receipt; and

·      any London Stock Exchange listing or admission fees payable in
respect of the New ATST Shares,

(together, the "ATST Acquisition Costs").

In the event that the Transaction does not complete, each party will bear its
own costs in respect of the Transaction.

WTW Contribution

WTW has agreed to make a contribution (the "WTW Contribution") to the costs of
the Transaction by way of a waiver of part of the ongoing management fee
payable by ATST, equal to 0.52375 per cent. of the assets to be transferred by
the Company to ATST under the Scheme (excluding the value attributable to the
WTW Contribution). The financial value of the WTW Contribution will be
satisfied by WTW by means of a partial waiver of its fees payable by the
Enlarged ATST over a period of no more than 12 months following completion of
the Scheme.

The financial value of the WTW Contribution is estimated at approximately
£7.1 million based on the estimated unaudited net asset value of the assets
to be transferred to ATST as at 6 September 2024 (being the latest practicable
date before publication of the Circular) assuming full participation by
Ordinary Shareholders under the Cash Option and no Dissenting Shareholders.

The WTW Contribution will be applied initially to offset the ATST
Implementation Costs (or, if those costs exceed the amount of the WTW
Contribution, the WTW Contribution will be included in full), and any amount
of the WTW Contribution remaining thereafter will be applied first towards
offsetting any of the Company Implementation Costs which have not been covered
by the Cash Uplift on the basis described above, and then for the benefit of
shareholders in the Enlarged ATST. Since the WTW Contribution is a fee waiver
within the Enlarged ATST rather than a cash payment, any benefit of the WTW
Contribution accruing to the Company will be reflected in an upwards
adjustment to the WTAN FAV.

The WTW Contribution is subject to a clawback provision such that, in the
event of the termination of WTW's appointment as AIFM and investment manager
to Enlarged ATST on a no-fault basis within 36 months of the Effective Date,
WTW will be entitled to claim back some or all of the WTW Contribution from
the Enlarged ATST. All of the WTW Contribution will be subject to clawback in
the event of such termination occurring within 12 months of the Effective
Date; two thirds of the WTW Contribution will be subject to clawback in the
event of such termination occurring between 12 and 24 months of the Effective
Date; and one third of the WTW Contribution will be subject to clawback in the
event of such termination occurring after more than 24 months (but less than
36 months) of the Effective Date.

Liquidation Pool and Liquidators' Retention

Under the Scheme, the Company will be wound up by means of a members'
voluntary liquidation. In consultation with the Liquidators, the Directors
will set aside sufficient assets in the Liquidation Pool to meet all estimated
liabilities and contingencies, including the costs of implementing the Scheme
and the prior entitlements on a liquidation of the Preference Shares.

The Directors will also provide in the Liquidation Pool for a Liquidators'
Retention which they, together with the Liquidators, consider sufficient to
meet any contingent and unknown or unascertained liabilities of the Company.
The Liquidators' Retention is estimated at £100,000 (which represents 0.01
per cent. of the Company's unaudited NAV as at 6 September 2024)

The Liquidation Pool (including the Liquidators' Retention) will be applied by
the Liquidators in discharging all current and future actual and contingent
liabilities of the Company. To the extent that some or all of the Liquidation
Pool remains when the Liquidators are in a position to close the liquidation,
such amount will be returned to Ordinary Shareholders on the Register as at
the Effective Date. If, however, any such amount payable to any Ordinary
Shareholder is less than £5.00 (after taking into account any expenses
associated with making the distribution), it will not be paid to the Ordinary
Shareholders but instead will be paid by the Liquidators to the Nominated
Charity (The Royal Marsden Cancer Charity).

Ordinary Shareholders' Class Meeting and General Meetings

The implementation of the Transaction will require approval of the
Shareholders at a separate class meeting of Ordinary Shareholders and two
General Meetings of the Company. The Ordinary Shareholders' Class Meeting and
the General Meetings will be held at the offices of Herbert Smith Freehills
LLP, Exchange House, Primrose Street, London EC2A 2EG.

Only Ordinary Shareholders are entitled to attend and vote at the Ordinary
Shareholders' Class Meeting, which will be held at 11.00 a.m. on 30 September
2024.

All Shareholders are entitled to attend the First General Meeting, which will
be held at 11.30 a.m. on 30 September 2024, but only Ordinary Shareholders are
entitled to vote.

All Shareholders are entitled to attend and vote at the Second General
Meeting, which will be held at 9.30 a.m. on 9 October 2024.

Notices of the Ordinary Shareholders' Class Meeting and the General Meetings,
and the Resolutions to be proposed at the meetings, are set out at the end of
the Circular. The Scheme will not become effective unless and until, amongst
other things, the Resolution to be proposed at the Second General Meeting has
been passed.

ACTION TO BE TAKEN

Before taking any action, Shareholders are recommended to read the further
information set out in the Circular and in the ATST Prospectus.

Elections

A Form of Election (which has been personalised) accompanies the Circular for
Ordinary Shareholders who hold their Ordinary Shares in certificated form.

Shareholders who wish to receive cash in respect of all or part of their
holding of Ordinary Shares must either complete and return the personalised
Form of Election (for Ordinary Shares in certificated form) or submit a TTE
Instruction (for Ordinary Shares in uncertificated form) in respect of the
number of Ordinary Shares for which they wish to receive cash, so that the
Form of Election or TTE Instruction is received no later than 1.00 p.m. on 30
September 2024. Shareholders will be deemed to have elected to receive New
ATST Shares in respect of the remainder of their holding.

Shareholders who wish to receive New ATST Shares in respect of all of their
Ordinary Shares do not need to return a Form of Election or submit a TTE
Instruction. The default option for Ordinary Shareholders under the Scheme
(other than for Excluded Shareholders) is to receive New ATST Shares, meaning
that Ordinary Shareholders who, in respect of all or part of their holding of
Ordinary Shares, do not make a valid Election will be deemed to have elected
for New ATST Shares in respect of the entirety of their holding.

Voting

Shareholders are encouraged to vote in favour of the Resolutions to be
proposed at the Ordinary Shareholders' Class Meeting and the General Meetings
(as applicable) and, if their Shares are not held directly, to arrange for
their nominee to vote on their behalf.

Shareholders are requested to complete and return proxy appointments (as
applicable) to the Registrar by one of the following means:

i.          by logging on to www.investorcente.co.uk/eproxy
(http://www.investorcente.co.uk/eproxy) and following the instructions; or

ii.         by completing and signing:

a.   the GREEN Form of Proxy for use in relation to the Ordinary
Shareholders' Class Meeting;

b.   the BLUE Form of Proxy for use in relation to the First General
Meeting; and

c.   the PINK Form of Proxy for use by Ordinary Shareholders or the YELLOW
Form of Proxy for use by Preference Shareholders (as relevant) in relation to
the Second General Meeting,

in each case in accordance with the instructions printed thereon and returning
by post, by courier or by hand; or

iii.         in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with the procedures set out
in the notes to the respective notice of the Ordinary Shareholders' Class
Meeting or General Meeting (as relevant).

In each case, the proxy appointments must be received by the Company as soon
as possible and, in any event, so as to arrive by no later than 48 hours
(excluding non-working days) before the time of the relevant meeting. To be
valid, the relevant proxy appointment should be completed in accordance with
the instructions accompanying it and lodged with the Registrar by the relevant
time.

Appointment of a proxy will not prevent Shareholders from attending and voting
in person at the Ordinary Shareholders' Class Meeting or the General Meetings
should they wish to do so.

Excluded Shareholders

Each Excluded Shareholder (i.e. Sanctions Restriction Shareholders and
Overseas Excluded Shareholders) will be deemed to have elected for the Cash
Option in respect of 100 per cent. of their holding of Ordinary Shares. Such
deemed elections will be subject to scaling back in accordance with paragraph
2.1 of Part 4 of the Circular.

However, Excluded Shareholders will not receive New ATST Shares pursuant to
the Scheme. To the extent that an Excluded Shareholder is due to receive New
ATST Shares under the Scheme (i.e. to the extent that the Excluded
Shareholder's deemed election for the Cash Option is scaled back), then such
New ATST Shares will instead be issued to the Liquidators (as nominee on
behalf of such Excluded Shareholder) and then sold in the market (which will
be done by the Liquidators without regard to the personal circumstances of the
relevant Excluded Shareholder or the value of the Ordinary Shares held by the
relevant Excluded Shareholder). The net proceeds of such sale (after deduction
of any costs incurred in effecting such sale) may be paid to Excluded
Shareholders as described in the Circular.

The attention of Excluded Shareholders is drawn to the section entitled
"Excluded Shareholders" in Part 1 of the Circular.

Taxation

Shareholders are advised to read carefully the section entitled "Taxation" in
Part 3 of the Circular which sets out a general guide to certain aspects of
current UK tax law and HMRC published practice.

Shareholders who are in any doubt as to their tax position, or who may be
subject to tax in any jurisdiction other than the UK, are strongly advised to
consult their own professional advisers.

Recommendation

The Board, which has received financial advice from J.P. Morgan Cazenove
("JPMC"), considers the Transaction and the Resolutions to be proposed at the
Ordinary Shareholders' Class Meeting and the General Meetings to be in the
best interests of the Company and of its Shareholders as a whole. In providing
advice to the Board, JPMC has relied on the Board's commercial assessment of
the Transaction.

Accordingly, the Board unanimously recommends that Shareholders vote in favour
of the Resolutions to be proposed at the Ordinary Shareholders' Class Meeting
and the General Meetings, as the Directors intend to do in respect of their
own beneficial holdings of Ordinary Shares, which in aggregate amount to
1,357,295 Ordinary Shares (representing approximately 0.23 per cent. of the
Company's voting rights as at 6 September 2024). The Directors intend to roll
over their entire beneficial holdings of Ordinary Shares into New ATST Shares.

The Board cannot, and does not, give any advice or recommendation to Ordinary
Shareholders as to whether, or as to what extent, they should elect for any of
the options under the Scheme. The choice between the options available under
the Scheme will be a matter for each Ordinary Shareholder to decide and will
be influenced by their individual investment objectives and by their personal,
financial and tax circumstances. Accordingly, Ordinary Shareholders should,
before deciding what action to take, read carefully all the information in the
Circular and in the ATST Prospectus. Ordinary Shareholders who are in any
doubt as to the contents of the Circular or the ATST Prospectus or as to the
action to be taken by them should consult their stockbroker, bank manager,
solicitor, accountant or other financial adviser authorised under FSMA without
delay.

Expected Timetable

 

 Ex-dividend date for the pre-liquidation dividend to Ordinary Shareholders      22 August 2024
 Record date for the pre-liquidation dividend to Ordinary Shareholders           23 August 2024
 Publication date of ATST Prospectus                                             12 September 2024
 Payment date for the pre-liquidation dividend                                   13 September 2024
 Latest time and date for receipt of Forms of Proxy in respect of the Ordinary   11.00 a.m. on 26 September 2024
 Shareholders' Class Meeting
 Latest time and date for receipt of Forms of Proxy in respect of the First      11.30 a.m. on 26 September 2024
 General Meeting
 Ordinary Shareholders' Class Meeting                                            11.00 a.m. on 30 September 2024
 First General Meeting                                                           11.30 a.m. on 30 September 2024
 Latest time and date for receipt of Forms of Election and TTE Instructions      1.00 p.m. on 30 September 2024
 Record Date for entitlements under the Scheme                                   6.00 p.m. on 30 September 2024
 Ordinary Shares disabled in CREST for settlement                                6.00 p.m. on 30 September 2024
 Trading in the Ordinary Shares on the London Stock Exchange suspended           7.30 a.m. on 1 October 2024
 ATST General Meeting                                                            11.00 a.m. on 1 October 2024
 Reclassification of the Ordinary Shares                                         8.00 a.m. on 3 October 2024
 Calculation Date                                                                3 October 2024
 Latest time and date for receipt of Forms of Proxy in respect of the Second     9.30 a.m. on 7 October 2024
 General Meeting
 Suspension of listing of the Reclassified Shares and Company's Register closes  7.30 a.m. on 9 October 2024
 Second General Meeting                                                          9.30 a.m. on 9 October 2024
 Appointment of the Liquidators                                                  9 October 2024
 Effective Date and Transfer Agreement executed and implemented                  9 October 2024
 Announcement of the results of Elections, WTAN FAV per Share, the Cash Pool     9 October 2024
 NAV per Share and the ATST FAV per Share
 Admission and dealings in New ATST Shares commence                              8.00 a.m. on 10 October 2024
 CREST accounts credited in respect of New ATST Shares in uncertificated form    as soon as is reasonably practicable on 10 October 2024
 CREST accounts credited with cash / cheques despatched or BACS payments issued  week commencing 14 October 2024
 to Shareholders who elect for the Cash Option, in accordance with their
 entitlements
 Share certificates despatched in respect of New ATST Shares in certificated      week commencing 14 October 2024
 form
 CREST accounts credited / cheques despatched or BACS payments issued to         week commencing 14 October 2024
 Preference Shareholders
 Cancellation of listing of Reclassified Shares                                  as soon as practicable after the Effective Date
 Note: All references to time in this Circular are to UK time. Each of the
 times and dates in the above expected timetable (other than in relation to the
 Ordinary Shareholders' Class Meeting and 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.

 

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.witan.com/investor-information/alliance-witan
(http://www.witan.com/investor-information/alliance-witan) . The ATST
Prospectus will also shortly be available on ATST's website at
https://www.alliancetrust.co.uk (https://www.alliancetrust.co.uk) .

 For further information please contact:
 Witan Investment Trust plc  Via J.P. Morgan Cazenove
 Andrew Ross (Chair)
 J.P. Morgan Cazenove        +44 (0) 20 3493 8000
 William Simmonds

 Rupert Budge

 

 1  (#_ftnref1)        As rated by WTW.

 2  (#_ftnref2)        Source: WTW. NAV total returns calculated with
debt valued at fair value. Total return calculations assume dividend
reinvestment as at the ex-dividend date. Past performance is not a reliable
indicator of future results.

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