CPE Charter Euro.

TIDMCPE

RNS Number : 0097U

Charter European Trust plc

15 December 2011

CHARTER EUROPEAN TRUST PLC (the "Company")

Proposals for the reconstruction of the Company

15 December 2011

Since the General Meeting held on 8 November 2011, the Board has undertaken a further review of the options available in respect of the future of the Company.

The Board is pleased to announce that it is now in a position to put forward proposals to the Company's shareholders which will, if approved, enable shareholders to roll over their investment in the Company in a tax efficient manner into the European-focused investment trust, BlackRock Greater Europe Investment Trust plc ("BRGE"), (the "Scheme"). Unlike the proposals which would have involved a Jupiter European OEIC as a rollover option, the Scheme has the support of the Company's major shareholder, Midas Investment Management Limited which, through funds under its management, controls 26 per cent. of the Company's issued share capital. Midas has given an irrevocable undertaking to vote in favour of the Scheme. The Scheme will be subject, amongst other things, to the approval of the Company's and BRGE's shareholders at respective general meetings.

BRGE's investment objective is to achieve capital growth through investment in a focused portfolio constructed from a combination of the securities of large, mid and small cap European companies with some investment in the developing markets of Europe. BRGE has a market capitalisation of approximately GBP160m and, over the last year, BRGE's ordinary shares have traded at an average discount to NAV of 1.4 per cent. against a sector average discount of 11.0 per cent. (source: Morningstar). Since its launch on 20 September 2004 to 30 November 2011, BRGE has returned 95.6 per cent. versus 59.8 per cent. for the FTSE World Europe ex UK (both with income reinvested).

The Company will undergo a scheme of reconstruction and its business and assets will be transferred to BRGE. The Company's shareholders will be given a tax efficient rollover into BRGE: all of the Company's shareholders will, subject to clearance from HMRC, be issued with such number of the BRGE Shares which, at their undiluted net asset value (as at the calculation date under the Scheme (the "Calculation Date")) equals the formula asset value ("FAV") of their holding of shares in the Company. In addition, shareholders will receive subscription shares in BRGE to be issued in the same ratio as the ratio of BRGE Shares (excluding treasury shares) to subscription shares in issue on the Calculation Date. These subscription shares will rank pari passu with the existing subscription shares which have an exercise price of 183 pence per share.

Whilst the Company's shareholders will not be offered an immediate cash exit under the Scheme, the Board of BRGE has confirmed that it will implement a tender offer in May 2012 (the "Tender Offer"). The Tender Offer will enable shareholders to tender all or part of their holding of BRGE Shares for cash, subject to a maximum of 20 per cent. in aggregate of the BRGE Shares then in issue being tendered (excluding treasury shares) at the relevant time. The Tender Offer calculation date will be 31 May 2012, and the tender price will be 98 per cent. of the fully diluted net asset value per Share. Shareholders (other than those in restricted territories) will be entitled to have up to 20 per cent. of their respective holdings purchased under the Tender Offer. Such Shareholders will be able to tender additional Shares, but such tenders will only be satisfied, on a pro rata basis, in proportion to the excess over the basic entitlement tendered, to the extent that other shareholders tender less than their basic entitlement. Under the most recent Tender Offer made by BRGE in November 2011, only 1.55 per cent. of the Shares were tendered. However, there is no guarantee that shareholders will be able to realise more than 20 per cent. of their holding in BRGE through the Tender Offer.

The Board of BRGE intends to post a circular to its shareholders in April 2012 containing details of the Tender Offer and the procedure for tendering Shares. It is envisaged that the Scheme will have been completed before this Tender Offer is implemented.

Whilst the advisory, legal and other administrative costs of the Scheme, including those of BRGE, will be borne by the Company, they are expected to be approximately 1.5 per cent. of the Company's net asset value as at 13 December 2011 (net of a contribution of GBP120,000 by BlackRock Investment Management (UK) Limited). The FAV will be calculated by deducting the costs of the Scheme from the Company's NAV on the Calculation Date.

The Board believes that shareholders will benefit from the increased size and liquidity of BRGE, and the resultant lower total expense ratio that comes with the fixed costs of BRGE being spread over a larger asset base. In addition, shareholders should benefit from the six monthly tender offers which the board of directors of BRGE has the discretion to implement and the resultant reduction in the discount to NAV at which the BRGE Shares trade.

Expected timetable

   January 2012               Prospectus/Circular posted to shareholders 
   February 2012             General meetings to approve merger / proposals implemented 
   April 2012                    BRGE Tender Offer process commences 

Contacts:

   Giles Weaver (Chairman)                                                       020 7523 8000 
   Collins Stewart Europe Limited                                            020 7523 8000 

Robbie Robertson

Andrew Zychowski

Lucy Lewis

Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as adviser to Charter European Trust plc and is acting for no-one else in connection with the contents of this announcement, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Collins Stewart Europe Limited nor for providing advice in connection with the contents of this announcement or any other matter referred to herein. Collins Stewart Europe Limited is not responsible for the contents of this announcement. This does not exclude or limit any responsibilities which Collins Stewart Europe Limited may have under the Financial Services and Markets Act 2000 or the regulatory regime established thereunder.

This information is provided by RNS

The company news service from the London Stock Exchange

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