TIDMCAEL
RNS Number : 9585G
Cazenove Absolute Equity Limited
04 July 2012
Cazenove Absolute Equity Limited
4 July 2012
Notice of AGM including proposals regarding the future of the
fund
Cazenove Absolute Equity Limited Limited (the "Company") has
today published a shareholder circular that includes notice of a
Class Meeting and the Annual General Meeting of the Company, to be
held at 10.00 a.m. and 10.05 a.m., respectively, on 31 July 2012 at
Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL.
Key extracts from the Circular are set out below. Shareholders
will be sent a full copy of the Circular and additional copies will
be available on the Manager's website www.cazenovecapital.com.
A copy of the Circular will also be submitted to the National
Storage Mechanism and will be available for inspection at:
www.hemscott.com/nsm.do.
Enquiries:
Corporate Broker
David Benda/Nathan Brown - Numis Securities Limited
Tel: 020 7260 1000
Company Secretary
Northern Trust International Fund Administration Services
(Guernsey) Limited
Tel: 01481 745381
Key Extracts from the Circular
Introduction, the Continuation Resolution and the Liquidation
Procedure Resolution
1. Introduction
In addition to those Resolutions that would be considered to be
standard business at the Company's AGM, further resolutions will be
proposed as follows:
(a) a Continuation Resolution in relation to the continuation of
the Company in accordance with the Articles of Incorporation (which
the Board recommends not be approved); and
(b) a Liquidation Procedure Resolution to approve amendments to
the Articles of Incorporation such that proposals for the
reconstruction and winding up of the Company can be both proposed
and voted upon at the same AGM at which the Continuation Resolution
is proposed; and
(c) the Reconstruction Resolution to approve the proposed
reconstruction and winding up of the Company.
These Proposals are subject to Shareholder approval at the
Meetings to be held on 31 July 2012.
2. The Continuation Resolution
Background
The Articles of Incorporation require that, the Company must
propose a continuation resolution as an ordinary resolution at the
next annual general meeting to be held after the Company's fifth
anniversary of incorporation for the continuation of the Company as
an investment company.
If the Continuation Resolution is not approved, the Directors
will submit the Proposals to Shareholders in relation to the
reconstruction and winding up of the Company.
Last year the Board set out in the circular accompanying the
notice of the 2011 Annual General Meeting ("2011 AGM") proposals
which included an amendment to the investment policy and the
introduction of discretionary tender offers with the overall
objective of improving the marketability of the Shares thereby
reducing the discount at which the Shares trade relative to their
net asset value. At the 2011 AGM Shareholders approved the adoption
of these proposals together with the continuation of the
Company.
While the implementation of these proposals and the ongoing
delivery of consistent returns with low levels of volatility in
line with the stated investment objective have caused the discount
to narrow, the Company's Shares have continued to trade at a
discount persistently wider than that which the Board believes to
be acceptable. Having considered this background and having
consulted with certain major Shareholders that the Board intends to
put forward proposals at the forthcoming AGM regarding continuation
of the Company.
The Board is recommending that Shareholders vote against
continuation and, subject to such resolution being defeated, vote
in favour of managed winding up proposals which will be put to the
same meeting. Accordingly, the Board is recommending that
Shareholders do not approve the Continuation Resolution.
3. The Liquidation Procedure Resolution
Background
The current procedural provisions in the Articles of
Incorporation in relation to the winding up of the Company
following any meeting at which a continuation resolution is not
passed require that proposals as to the future of the Company are
tabled at a separate meeting to that at which the Continuation
Resolution is proposed.
Proposal
Resolution 7 in the Notice of AGM provides for the Articles of
Incorporation to be amended such that proposals relating to the
winding up of the Company can be proposed and voted on at the very
same AGM at which a continuation resolution is proposed, but not
approved. This is intended to streamline the winding up process and
remove unnecessary procedural hurdles.
Proposed Reconstruction and Voluntary Winding up
1. Introduction
The Company announced on 14 May 2012 and 30 May 2012 that the
Board was reviewing options in relation to the future of the
Company ahead of its planned continuation vote at its forthcoming
AGM. Further to this, the Company has today announced details of
proposals for the reconstruction and voluntary winding up of the
Company (the "Proposals").
The Reconstruction Resolution will not be proposed if the
Continuation Resolution is approved or if the Liquidation Procedure
Resolution is not approved or if the Resolution to be proposed at
the Class Meeting is not approved.
2. The Proposals
Under the Proposals, the Company will be wound up by means of a
voluntary winding up and
Shareholders (other than Restricted Persons) will have their
holding in the Company rolled over in a tax-efficient manner into
the Cazenove Absolute UK Dynamic Fund (the "UK Dynamic Fund") (a
sub-fund of Cazenove Absolute Return Fund Company, an unlisted
open-ended umbrella limited liability investment company
incorporated in England and Wales and authorised under UCITS)
unless they elect to have their holding (or a part thereof)
realised and returned in cash.
Each Shareholder (other than any Restricted Person) will be
deemed to have elected for UK Dynamic Shares unless such
Shareholder elects to receive cash instead.
Restricted Persons will be treated as described in the section
headed "Entitlements of Restricted Persons" below.
Provided that the Resolution to be proposed at the Class Meeting
is passed, and the Continuation Resolution is not approved and both
the Liquidation Procedure Resolution and the Reconstruction
Resolution to be proposed at the AGM are passed, under the Scheme,
Shareholders will have their Shares reclassified as:
* Shares with A Rights in respect of Elections made or deemed to
have been made for UK Dynamic Shares under the Rollover Option;
or
* Shares with B Rights in respect of Elections made or deemed to
have been made for the Cash Option.
Rollover Option
The assets comprising the A Fund will be allocated to the
Transfer Portfolio.
The Transfer Portfolio will be transferred to the UK Dynamic
Fund in consideration for the issue of UK Dynamic Shares by the UK
Dynamic Fund at the Rollover Price and with no preliminary charge
to Shareholders with A Rights.
Cash Option
Assets in proportion to Elections validly made (or deemed to
have been made) for the Cash Option will be allocated to the
Liquidation Fund. The Joint Liquidators will make cash
distributions from the Liquidation Fund to those Shareholders that
have made, or are deemed to have made, Elections for the Cash
Option.
Cancellation of Listing and Reclassified Shares
The Shares are currently listed on the Official List of the UK
Listing Authority and the Official List of the CISX and traded on
the main market of the London Stock Exchange.
So that the Proposals may be implemented, the Company will make
an application to the UK Listing Authority and to the CISX
requesting a suspension of the listing of the Shares with effect
from 31 July 2012. As the Proposals contemplate the winding up of
the Company, the Board shall also put forward, as part of the
Reconstruction Resolution a proposal for cancellation of listing of
the Shares on the Official List of the UK Listing Authority and the
Official List of the CISX and admission of the Shares to trading on
the main market of the London Stock Exchange subject to the
Reconstruction Resolution being passed, the Company will make an
application to the UK Listing Authority and to the CISX requesting
the cancellation of the listing of the Shares with effect from 8.00
a.m. on 31 August 2012.
If the Proposals are not approved, the listing of the Shares
will not be cancelled and the Company will make a request to the UK
Listing Authority and to the CISX for the suspension of the listing
of the Shares to be removed.
3. The Cazenove Absolute UK Dynamic Fund
Since the Company's 2011 AGM, at which the investment policy of
the Company was amended, the Company has only been invested in two
underlying funds, one of which is the UK Dynamic Fund (the other
being Cazenove UK Dynamic Absolute Return Fund Limited, an
open-ended multi-class exempted company incorporated with limited
liability in the Cayman Islands). Shareholders are already thus
significantly exposed to the UK Dynamic Fund.
The UK Dynamic Fund is one of two sub-funds of Cazenove Absolute
Return Fund Company which is an open-ended umbrella limited
liability investment company incorporated in England and Wales and
authorised under UCITS. The UK Dynamic Fund was authorised by the
Financial Services Authority on 3 September 2009. The UK Dynamic
Fund is not listed on the London Stock Exchange or on any other
stock exchange. As at 31 May 2012, the UK Dynamic Fund had an asset
value of approximately GBP248.6 million.
As at the date of this document there are four share classes in
the UK Dynamic Fund in issue: (i) the Class P1 Sterling
Accumulation Shares; (ii) the Class P1 Euro Hedged Accumulation
Shares; (iii) the Class P2 Sterling Accumulation Shares (the "UK
Dynamic Shares"); and (iv) the Class P2 Euro Hedged Accumulation
Shares.
The UK Dynamic Fund publishes net asset valuations for each of
its share classes on a daily basis. Holders of UK Dynamic Shares
wishing to sell any part of their investment are able to submit
instructions by the relevant dealing deadline for the sale of their
UK Dynamic Shares at the prevailing net asset value of the relevant
share class as at the relevant dealing date. There are daily
dealings in UK Dynamic Shares. The settlement of redemptions will
be subject to any applicable anti-money laundering checks and other
due diligence requirements of the UK Dynamic Fund being satisfied
by such redeeming holders.
The investment objective of the UK Dynamic fund is to achieve
absolute returns through targeted investment strategies independent
of UK market conditions or indices.
The UK Dynamic Fund seeks to achieve its investment objective by
investing in a concentrated portfolio of companies (usually between
30 to 80 companies both on the long side and the short side of the
portfolio) predominantly incorporated in the United Kingdom or in
companies which derive a significant proportion of their revenues
or profits from this country or which are primarily operating in
this jurisdiction.
Investments are made primarily in companies which are
constituents of the FTSE All-Share Index or listed on the
Alternative Investment Market, with a bias towards medium sized and
smaller companies. The UK Dynamic Fund also invests in equity
related transferable securities, such as preferred shares,
debentures, warrants (warrants may not exceed more than 5 per cent.
of the total assets of the UK Dynamic Fund) and convertible
securities or in derivatives thereof. As the UK Dynamic Fund has an
absolute return objective it will not be managed against any
index.
Whilst the UK Dynamic Fund mainly invests in equities, it may
also invest in debt securities (such as bonds and notes of any
maturity which are transferable securities), where this is deemed
appropriate in the market conditions prevailing at that time. Any
such securities will be rated investment grade by Moody's or
S&P or, if not rated, deemed by the investment manager to have
at least an equivalent rating and will be issued by the UK
government or companies incorporated in the UK or in companies
which derive a predominant proportion of their revenues or profits
from the UK or which are principally operating in that
jurisdiction. The UK Dynamic Fund may also invest in short-term
securities which are rated investment grade (such as certificates
of deposit, bankers' acceptances and commercial paper) for
temporary defensive purposes.
The investment objectives of the Company and the UK Dynamic Fund
are almost identical: to seek absolute returns. The fundamental
difference between the investment policy of the Company and that of
the UK Dynamic Fund is that the latter is not a fund of funds.
The Company seeks to achieve its investment objective through a
policy of investing in underlying long/short equity strategy funds
and seeks to achieve consistent returns with low levels of
volatility. The Company's investment policy states that it "will
invest in funds managed by Cazenove Capital following Alpha
strategies such as the Cazenove UK Dynamic Absolute Return Fund
Limited, a Cayman domiciled fund, or Cazenove Absolute UK Dynamic,
a UCITS fund or any other such fund managed by Cazenove Capital
Management Limited with an Alpha strategy and with the flexibility
to exploit a wide range of long/short equity investment
opportunities".
The Company, however, is currently invested in only two
underlying funds. As at 31 May 2012, 37.8 per cent. of the
Company's NAV was invested in the UK Dynamic Fund. The rest of the
Company's assets are invested in Cazenove UK Dynamic Absolute
Return Fund Limited. Following the implementation of the Scheme,
the main difference for Rollover Shareholders will therefore be
that they will no longer have exposure to Cazenove UK Dynamic
Absolute Return Fund Limited and its portfolio of underlying funds.
Indeed, the UK Dynamic Fund, not being a fund of funds, seeks to
achieve its investment objective as described above and will not
have any material exposure to other funds managed by the Manager or
its affiliates.
Other material differences between the Company's and UK Dynamic
Limited's investment policies include:
* The Company may invest in unlisted securities and is not
restricted in the percentage of its portfolio which may be
allocated to such unlisted investments. Under the requirements of
UCITS, the UK Dynamic Fund may invest no more than 10 per cent. of
its net asset value in aggregate in securities which are unlisted
or in unregulated collective investment schemes;
* The Company has the ability to borrow up to 20 per cent. of
its adjusted total of capital and reserves for short term or
temporary purposes. The UK Dynamic Fund may borrow up to 10 per
cent. of its net asset value on a temporary basis;
* The Company may not invest more than 10 per cent., in
aggregate, of the value of the total assets of the Company at the
time an investment is made in other listed closed-ended investment
funds, except where those funds have published investment policies
which permit them to invest no more than 15 per cent. of their
total assets in other listed closed-ended investment funds. The UK
Dynamic Fund may not invest more than 10 per cent. of its net asset
value in units or shares of collective investment schemes. Any
collective investment scheme into which the UK Dynamic Fund buys
units or shares must have terms that prohibit more than 10 per
cent. in value of the property of that scheme consisting of units
or shares in collective investment schemes; and
* The Company complies with investment restrictions as required
by the Listing Rules of the UK Financial Services Authority from
time to time. The UK Dynamic Fund is subject to investment
restrictions as are required under UCITS from time to time and is
regulated by the UK's Financial Services Authority. Shareholders
are also advised to read the enclosed CARFCO Prospectus and UK
Dynamic Fund KIID. If Shareholders are in any doubt as to the
contents of this document or as to what action to take, they should
immediately seek their own personal financial advice from an
appropriately qualified independent adviser.
4. Advantages of the Proposals
The Board believes that the Proposals are in the best interests
of Shareholders as a whole because they offer:
* the ability for the Shareholders that elect (or are deemed to
elect) to roll over into the UK Dynamic Fund to value their
resulting holding of UK Dynamic Shares at net asset value. By
contrast, as at 31 May 2012 the discount at which the Company's
Shares traded to their prevailing net asset value was 3.1 per
cent.;
* the choice and flexibility for Shareholders to benefit from
the liquidity offered by the UK Dynamic Fund which permits holders
of UK Dynamic Shares to deal in their UK Dynamic Shares at the
prevailing dealing price based on the net asset value on a daily
basis (settlement of redemptions by Shareholders being subject to
any applicable anti-money laundering checks and other due diligence
requirements of the UK Dynamic Fund being satisfied by such
redeeming holders). Investors in the UK Dynamic Fund are not
currently charged for redemptions;
* the opportunity for Shareholders to continue their investment
within a UCITS structure under the investment management of
Cazenove Investment Fund Management Limited with an almost
identical investment objective and which provides for both daily
dealing and daily switching between share classes of different
currencies (the two currencies being Sterling and Euros) within the
UK Dynamic Fund and also between the share classes of the UK
Dynamic Fund and the Cazenove UK Absolute Target Fund (the latter
being the other sub-fund within the Cazenove Absolute Return Fund
Company, the UCITS umbrella company); and
* for those Shareholders that elect to exit into cash and for
Restricted Persons, the certainty of a realisation for cash (after
taking into account the applicable costs of the Proposal including
the Retention) as soon as practicable following the implementation
of the Proposals.
5. Entitlements under the Proposals
Rollover Option
The number of UK Dynamic Shares to which each Rollover
Shareholder shall be entitled under the Scheme will be calculated
by allocating the value of the Transfer Portfolio to the
subscription of UK Dynamic Shares at the Rollover Price and
dividing such UK Dynamic Shares pro rata among the holders of
Rollover Shares.
The value of the Transfer Portfolio will be based on the
Terminal Asset Value of the Rollover Shares although the exact
value of the Transfer Portfolio as at the Transfer Date may be
higher or lower than that as a result of fluctuations in the net
asset values of the underlying investments between the TAV
Calculation Date and the Transfer Date.
Whilst the exact Terminal Asset Value of the Rollover Shares
cannot be calculated until the TAV Calculation Date, the example
below illustrates the number of UK Dynamic Shares which Rollover
Shareholders would receive had the Company been wound up on 31 May
2012 and assuming that the UK Dynamic Fund had issued the UK
Dynamic Shares at their prevailing net asset value on that
date.
It should be noted that these figures are given for illustrative
purposes only and should not be regarded as a forecast of the
actual number of UK Dynamic Shares which Shareholders would receive
under the Proposals.
For every 1,000 Rollover Shares held at a Terminal Asset Value
of 130.67 pence per Share as at 31 May 2012, the number of UK
Dynamic Shares issued at a price of 120.22 per share would be:
1,086.936.
The Cash Option
The amount of cash Shareholders will be entitled to if they
elect or are deemed to elect for the Cash Option will be calculated
by multiplying the number of Shares in respect of which they have
made or are deemed to have made such Election by the Terminal Asset
Value per Share as calculated on the TAV Calculation Date, although
the exact amount of cash received by such holders may be higher or
lower than that if the ultimate proceeds of the realisation of the
Company's investments do not equate to the Terminal Asset Value as
a result of fluctuations in the net asset values of the underlying
investments between the TAV Calculation Date and the date the
underlying investments are actually realised.
It is intended that the Joint Liquidators will make an initial
distribution to Shareholders electing for the Cash Option in the
week commencing 20 August 2012.
Any interest accruing to the Company following the TAV
Calculation Date in respect of cash held by the Company prior to
its distribution to Shareholders will accrue to the Liquidation
Fund.
Entitlements of Restricted Persons
"Restricted Persons" means:
(i) Overseas Holders, being any Shareholder whose registered
address is in a territory outside the United Kingdom, the Channel
Islands, the Isle of Man; and
(ii) any Shareholder whom the Board reasonably believes to be
holding Shares for or on behalf of an Overseas Holder,
subject always to the Board's sole discretion to determine
otherwise in any particular case.
The UK Dynamic Fund will not issue any UK Dynamic Shares due
under the Proposals to Restricted Persons. The Circular is being
sent to Restricted Persons, where it is lawful for the Company to
do so, solely in order to enable them to vote on the Proposals.
Restricted Persons will be deemed to have elected for the Cash
Option in respect of their entire holding in the Company. The
amount of cash Restricted Persons will be entitled to will be
determined in the same way as it is for the other Shareholders that
elect or are deemed to have elected for the Cash Option.
Shareholders who are in any doubt as to whether they may be a
Restricted Person should immediately seek their own personal
financial advice from an appropriately qualified independent
adviser.
6. Cash payments out of the Liquidation Fund
In the event that the Proposals are approved, the Joint
Liquidators will set aside sufficient assets in the Liquidation
Fund of the Company to meet its liabilities (actual and contingent)
including the estimated unpaid expenses of the Scheme. The Joint
Liquidators will also provide in the Liquidation Fund for a
Retention which they consider sufficient to meet any unascertained
or unknown liabilities of the Company. The Retention is currently
expected to amount to approximately GBP100,000, but may be subject
to increase prior to the TAV Calculation Date.
To the extent that there is any amount remaining in the
Liquidation Fund after all payments required to be made of out of
the Liquidation Fund have been made, including payments to meet the
Company's liabilities, to those Shareholders who have elected or
are deemed to have elected for the Cash Option, any such balance
remaining in the hands of the Joint Liquidators will be paid as one
or more liquidation distributions to Shareholders on the Register
at the close of business on the date of commencement of the winding
up (as amended for any transfers of Shares after that date that the
Joint Liquidators have sanctioned) on a pari passu basis pro rata
to their respective holdings of Shares, provided that if any such
amount otherwise payable to a Shareholder is less than GBP5.00, it
shall not be paid to such Shareholder but will be donated by the
Joint Liquidators in equal amounts to each of Starlight Foundation
(registered charity number 296058) and Les Bourgs Hospice,
Guernsey.
Any payments made to Shareholders who have (or are deemed to
have) elected for the Cash Option that are unclaimed at the expiry
of six months from the date the cheque is despatched to the
Shareholder will be cancelled and such amounts will be paid in
equal amounts to each of Starlight Foundation (registered charity
number 296058) and Les Bourgs Hospice, Guernsey.
7. Resolutions to be proposed at the Class Meeting and the
Annual General Meeting in relation to the Proposals
Class Meeting
The Articles of Incorporation provide that if the share capital
of the Company is divided into different classes of shares the
rights attaching to any class may be varied with the consent in
writing of the holders of three-fourths of the issued shares of
that class or with the sanction of a special resolution of the
holders of shares of that class.
The Resolution to be proposed at the Class Meeting, therefore,
seeks the consent of holders of the Shares (which constitute a
separate share class of the Company) to the passing and the
carrying into effect of the Resolutions to be proposed at the AGM
which are necessary for the implementation of the Proposals. The
Resolution to be proposed at the Class Meeting will require
approval by at least 75 per cent. of the votes cast in person or by
proxy.
The quorum for the Class Meeting is at least two persons present
in person or by proxy holding at least one-third of the issued
Shares and any holder of Shares of the relevant class present in
person or by proxy may demand a poll.
AGM
If (i) the Continuation Resolution is not approved, (ii) the
Liquidation Procedure Resolution is approved, and (iii) the
Resolution to be proposed at the Class Meeting is approved, then
for the purposes of implementing the Proposals the Reconstruction
Resolution will be proposed at the Annual General Meeting of the
Company, to reclassify the Shares, approve the Scheme and to amend
the Articles of Incorporation of the Company for the purposes of
implementing the Scheme, to place the Company into voluntary
winding up, to instruct the Secretary to hold the books of the
Company to the Joint Liquidators' order, to appoint the proposed
Joint Liquidators and to fix the basis of the Joint Liquidators'
remuneration. The Articles of Incorporation are proposed to be
amended to provide, inter alia, for the reclassification of the
Shares into Shares with A Rights and Shares with B Rights.
The Reconstruction Resolution to be proposed at the Annual
General Meeting will, if passed, authorise the Joint Liquidators to
divide among the members the whole or any part of the assets of the
Company in accordance with the Scheme (i) in cash or (ii) in the
form of UK Dynamic Shares, as appropriate (in the event that
Shareholders approve the Proposals) and will confer appropriate
powers on the Joint Liquidators.
Shareholders are recommended to vote against the Continuation
Resolution and in favour of the other Resolutions to be proposed at
the Meetings referred to above whether or not they intend to attend
the Meetings in person, as the Proposals, in the opinion of the
Board, are in the best interests of the Company and its
Shareholders as a whole.
Shareholders are encouraged to complete and return their Forms
of Proxy, irrespective of the Election that they make (or are
deemed to have made), whether or not they intend to attend the
Meetings in person.
In the event that the Proposals are not approved at the
Meetings, the Proposals will not be implemented and the Board may
consider alternative proposals for the future of the Company to be
put to the Shareholders at an extraordinary general meeting to be
held within three months of the AGM, the implementation of which
will result in additional costs being incurred.
8. Costs and expenses
The Company's total fixed costs in connection with the
Proposals, comprising fees to third party advisors and service
providers, are estimated to be approximately GBP325,000 (inclusive
of irrecoverable VAT where applicable and exclusive of amounts
comprising the Retention) and will be borne by all
Shareholders.
The existing Management Agreement between Cazenove Capital and
the Company will be terminated on or after the Effective Date. The
Manager has agreed to waive any right to receive any termination
payment in relation to the early termination of the Management
Agreement.
All costs incurred by the UK Dynamic Fund in connection with the
Proposals will be borne by the UK Dynamic Fund.
9. Taxation
The receipt of UK Dynamic Shares under the Proposals should not,
on the basis of current legislation and published HM Revenue &
Customs practice, result in a disposal of Shares for the purposes
of capital gains tax where these Shares are held beneficially as an
investment.
To the extent that any Shareholder receives cash pursuant to a
valid Election (or deemed Election) for the Cash Option, the cash
received will constitute proceeds of a disposal for the purposes of
UK taxation of chargeable gains which may, depending on the
Shareholder's individual circumstances give rise to a liability to
UK taxation of chargeable gains.
ISAs
The UK Dynamic Shares are eligible for inclusion in an ISA.
Shareholders who hold their Shares within an ISA should consult
their ISA plan administrator in relation to the Proposals.
10. Conditions to the Proposals
The Scheme which provides for, and which will effect, the
Proposals is conditional, inter alia, upon:
* the passing of the Resolution to be proposed at the Class
Meeting which is convened for 31 July 2012 (or at any adjournment
thereof);
* the Continuation Resolution to be proposed at the AGM which is
convened for 31 July 2012 (or at any adjournment thereof) not being
approved;
* each of the Liquidation Procedure Resolution and
Reconstruction Resolution relating to the Proposals to be proposed
at the AGM which is convened for 31 July 2012 (or at any
adjournment thereof) being approved; and
* the Directors not resolving to abandon the Scheme.
11. Certain considerations relating to the Proposals
Shareholders should be aware of the following considerations
relating to the Proposals:
* UK Dynamic Shares are not listed on the London Stock Exchange
and the UK Dynamic Fund does not provide for dealing through the
London Stock Exchange or any other investment exchange. Investors
in the UK Dynamic Fund who wish to dispose of part of all of their
investment may do so by submitting an instruction for the sale of
UK Dynamic Shares to the UK Dynamic Fund on a daily basis
(settlement of redemptions being subject to any applicable
anti-money laundering checks and other due diligence requirements
of the UK Dynamic Fund being satisfied by such redeeming holders).
Any sale will be effected at the prevailing net asset value of the
UK Dynamic Shares.
* Shareholders in the Company who currently wish to realise part
or all of their investment in the Company may do so through the
listing and trading of the Company's Shares on the main market of
the London Stock Exchange on a daily basis, although the Directors
note that there is limited liquidity in the Shares as currently
traded and Shareholders who wish to realise their investment in the
Company on the London Stock Exchange may be unable to realise their
investment at net asset value or at all depending on available
market liquidity.
* Under the Proposals, Shareholders on the Register at 5.00 p.m.
on 29 July 2012 will be entitled to UK Dynamic Shares and/or cash
in accordance with their Elections (or deemed Elections). Any
person acquiring Shares following that date will not be entitled to
receive either UK Dynamic Shares or cash from the Company under the
Proposals but will acquire the Shares ex such rights. The listing
of the Shares will be suspended with effect from 31 July 2012 and
cancelled with effect from 31 August 2012. Shareholders will have
their Shares reclassified as Reclassified Shares with effect from
the Effective Date (or, if later, the first Business Day following
the date on which this Resolution 8 is passed). No application will
be made to the UK Listing Authority and the London Stock Exchange
for the Reclassified Shares to be admitted to the Official List and
to trading on the main market of the London Stock Exchange.
Shareholders will not, therefore, be able to deal in the
Reclassified Shares if the Proposals are approved at the Meetings
and will be unable to give instructions to realise any part of
their investment ahead of the date on which UK Dynamic Shares are
issued (expected to be on or around 15 August 2012).
* The base currency of both the Company and the UK Dynamic
Shares is Sterling.
* Cazenove Absolute Return Fund Company is an unlisted open
ended investment company which has been authorised by the United
Kingdom Financial Services Authority under UCITS. Depending on the
applicable regulations in a Shareholders' jurisdiction, an
investment in the UK Dynamic Fund may be suitable for both retail
and institutional investors or just institutional investors.
* The issue of UK Dynamic Shares may be restricted in certain
jurisdictions. In particular the UK Dynamic Shares have not been,
and will not be, registered under the United States Securities Act
of 1933, as amended, and none of the UK Dynamic Shares will be
issued, directly or indirectly, in or into the United States or to
or for the account or benefit of any US Person under the Proposals.
Any re-offer or resale of any UK Dynamic Shares in or into the
United States or to or for the account or benefit of any US Person
may constitute a violation of US law. It is the responsibility of
Shareholders to inform themselves of, and to observe, all
applicable laws and regulations of relevant jurisdictions and the
laws and regulations governing their constitution, where
applicable, as regards the holding by them of UK Dynamic Shares.
Shareholders who are in any doubt as to whether they may be a
Restricted Person should immediately seek their own personal
financial advice from an appropriately qualified independent
adviser.
* For the purposes of the Proposals, the Company's assets will
be valued as at 31 July 2012 and calculated on the TAV Calculation
Date (expected to be 10 August 2012). On the Transfer Date the
Rollover Price of the UK Dynamic Shares is expected to be
calculated based on the net value of the assets held by the UK
Dynamic Fund. Consequently any changes in the net asset value of
the Company and/or the UK Dynamic Fund between the TAV Calculation
Date and the date on which the UK Dynamic Fund will issue its
securities (expected to be the Business Day immediately following
the Transfer Date) will be taken into account in calculating the
entitlements of Rollover Shareholders to receive UK Dynamic
Shares.
* There can be no assurance that the manager of the UK Dynamic
Fund will not raise its annual management charge and/or other fees
in the future, or that there will not be any changes to key
personnel within the manager of the UK Dynamic Fund or that the
investment objective and policy of the UK Dynamic Fund will not
change.
* The information relating to the taxation law and practice
applicable to the receipt by Shareholders of UK Dynamic Shares is
given by way of general summary and does not constitute legal or
tax advice to any particular Shareholder. Statements in this
document concerning the taxation of Shareholders are based upon
current UK tax law and HMRC practice and concessions which are
subject in principle to changes that could adversely affect
Shareholders.
Shareholders are advised to read the risk factors for the UK
Dynamic Fund set out in the CARFCO Prospectus and the UK Dynamic
Fund KIID enclosed with the Circular before taking any action in
relation to the Proposals. Shareholders are also advised to read
the CARFCO Prospectus and UK Dynamic Fund KIID in full. If
Shareholders are in any doubt as to the contents of this document
or as to what action to take, they should immediately seek their
own personal financial advice from an appropriately qualified
independent adviser.
Recommendation
The Board, who have received financial advice from Numis
Securities, consider the Proposals to be in the best interests of
Shareholders taken as a whole, and recommend that Shareholders
vote:
(i) IN FAVOUR of the Resolution to be proposed at the Class
Meeting;
(ii) AGAINST the Continuation Resolution; and
(iii) IN FAVOUR of all other Resolutions to be proposed at the
AGM of the Company.
In providing its advice, Numis Securities has relied on the
Board's commercial assessment of the Proposals.
EXPECTED TIMETABLE
2012
Latest time and date for receipt of Forms 5.00 p.m. on 23
of Election July
Latest time and date for normal settlement 5.00 p.m. on 25
of dealings in Shares prior to the Record July
Date
Latest time and date for receipt of Forms 10:00 a.m. on 29
of Proxy for use at the Class Meeting July
Latest time and date for receipt of Forms 10.05 a.m. on 29
of Proxy for use at the AGM July
Record Date for participation in the Proposals 5.00 p.m. on 29
July
Dealings in Shares suspended 7.30 a.m. on 31
July
Class Meeting of the holders of Shares 10:00 a.m. on 31
July
AGM 10.05 a.m. on 31
July
Shares reclassified 31 July
Joint Liquidators appointed 31 July
Effective Date 31 July
TAV Calculation Date 5.30 p.m. on 10
August
Rollover Price determined 12.30 p.m. on 14
August
Transfer Date 14 August
UK Dynamic Shares issued and contract 15 August
notes despatched
Cheques expected to be dispatched to Shareholders Week commencing
electing for the Cash Option 20 August
CREST accounts of Shareholders electing Week commencing
for the Cash Option to be credited with 20 August
cash
Listing of Shares cancelled 8.00 a.m. on 31August
Each of the times and dates in the above expected timetable
(other than the Class Meeting and the AGM) may be extended or
brought forward without further notice. 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 provider. All references to times are to London
time unless otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOABKQDKOBKDDOK
Cazenove AB. (LSE:CAEL)
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Cazenove AB. (LSE:CAEL)
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