RNS Number:9048L
Pennine AIM VCT PLC
05 May 2005
For Immediate Release - 5 May 2005
Not for release, distribution or publication, in whole or in part, in or into
the United States, Canada, Australia or Japan
Recommended offer by
Howard Kennedy
on behalf of
Pennine AIM VCT plc ("P1")
for
Pennine AIM VCT II plc ("P2")
1. Introduction
P1 and P2 announce the terms of a recommended offer to be made by Howard
Kennedy on behalf of P1 of the entire issued share capital of P2 ("Offer").
P1 has received irrevocable undertakings from the directors of P2 to accept
the Offer in respect of 32,250 P2 Shares, representing approximately 0.8 per
cent. of P2's issued ordinary share capital. Further details of the
irrevocable undertakings to accept the Offer are set out below.
The Offer is subject, inter alia, to the approval of P1 Shareholders at an
Extraordinary General Meeting. The P1 Directors have undertaken to vote in
favour of the Resolutions in respect of their beneficial holdings of, in
aggregate, 55,579 P1 Shares (representing 0.4 per cent. of P1's issued
ordinary share capital).
2. The Offer
On behalf of P1, Howard Kennedy offer to acquire all the P2 Shares, subject
to the terms and conditions set out below and in Appendix I to this
announcement and to be set out in Offer Document and in the Form of
Acceptance, on the following basis:
For every 1,000 P2 Shares 666 P1 Shares
and so in proportion for any other number of P2 Shares held. Entitlements to
Consideration Shares will be rounded down to the nearest whole number and
fractional entitlement will be ignored and not issued.
The basis of the Offer has been calculated as follows:
Pence Pence
P2 audited NAV per share at 31 January 2005 * 55.6 P2 audited NAV per share at 31 January 2005* 72.2
Less: Special Dividend (5.0)
Less: Discount (5%) (2.5)
Adjusted NAV per share (as basis for Offer) 48.1 P1 NAV per share at 31 January 2005 72.2
* The figures for audited NAV are extracted from the full financial
information of each of P1 and P2 set out in the Listing Particulars to be
dated on or around 5 May 2005 relating, inter alia, to the Offer.
This table shows that the adjusted net asset value ("NAV") for a P2 Share of
48.1p represents 66.6 per cent. of the net asset value for a P1 Share of
72.2p and, consequently, P1 is offering 666 new P1 Shares for every 1,000 P2
Shares held.
On or as soon as practicable after the day on which the Offer becomes or is
declared wholly unconditional as to acceptances P2 will pay a Special
Interim Dividend of 5p per P2 Share to all P2 Shareholders on the register
of members of the Company as at a record date of close of business on the
day immediately preceding the Unconditional Date.
The Offer extends to all P2 Shares in issue or unconditionally allotted on
the date of the Offer or which are allotted during the course of the Offer.
New P1 Shares will rank pari passu with existing P1 Shares and be entitled
to dividends declared, paid or made in respect of periods ended after the
date on which the Offer becomes or is declared wholly unconditional.
Application will be made for the new P1 Shares to be admitted to trading on
the Official List and for trading on the main market of the London Stock
Exchange.
The Offer values the whole of the current issued ordinary share capital of
P2 at approximately #1.8 million, based upon the Closing Price of P1 Shares
on 4 May 2005 (being the latest Dealing Day prior to the publication of this
announcement), a discount of 1.6 per cent. over the Closing Price of P2
Shares on 4 May 2005, the latest Dealing Day immediately prior to the
publication of this announcement.
Based on the Closing Price of existing P1 Shares as at 4 May 2005 being
57.5p, the date immediately prior to the announcement of the Offer, and on
the basis that no further shares in the capital of P2 are allotted or issued
while the Offer remains open for acceptance, the Offer values each P2 Share
at 43.3p (including the Special Dividend). The Closing Price of a P2 Share
as at 4 May 2005, being the date immediately prior to the announcement of
the Offer, was 44.0p.
It is expected that the listing will become effective and that dealings in
the Consideration Shares will commence on the London Stock Exchange on the
first Dealing Day following the date on which the Offer becomes or is
declared unconditional in all respects (save for any condition relating to
admission to the Official List).
The Offer extends to all P2 Shares unconditionally allotted or issued on the
date hereof and any further P2 Shares unconditionally allotted or issued
while the Offer remains open for acceptance.
The P2 Shares to be acquired by P1 pursuant to the Offer will be acquired
fully paid and free from all liens, equities, charges, encumbrances, rights
of pre-emption and other third party rights and interests of any nature
whatsoever and together with all rights now or hereafter attaching thereto,
including the right to receive and retain all dividends and other
distributions (if any) declared, paid or made on or after the date of this
announcement, other than the Special Dividend.
For a period of 3 months (excluding "close periods" during which the Company
may not deal in its shares) following the closing of the Offer (or if later
7 days after the despatch of share certificates in respect of the
Consideration Shares allotted pursuant to those acceptances which have been
received by P1 by the date on which the Offer becomes or is declared wholly
unconditional), P1 will apply #550,000 of its cash resources for the purpose
of buying back its shares, including the Consideration Shares, in the market
at a 10 per cent. discount to its last published NAV. This limited buy-back
facility will be available to existing P1 Shareholders and P2 Shareholders
who have accepted the Offer in time on a first come, first served basis.
If all P2 Shareholders accept the Offer, they will hold approximately 18 per
cent. of the enlarged issued share capital of P1.
The Offer is conditional on P1 shareholders passing the resolutions to
approve the Offer. An Extraordinary General Meeting of P1 will be convened
in due course to consider this and other resolutions, further details of
which will be set out in the Listing Particulars and Circular to be sent to
P1 shareholders. The P1 Directors intend to vote in favour of the
resolutions relating to the Offer in respect of their beneficial holdings
amounting to, in aggregate, 55,579 P1 shares (representing 0.4 per cent. of
the issued share capital of P1).
3. Background to and reasons for the Offer
As at 31 January 2005 P2 had Net Assets of #2.3 million and last year its
investment management and administrative costs totalled 5.7 per cent. of the
Net Assets. The P2 board considers this proportion to be too high to allow
the Company to provide good value to P2 Shareholders. Additionally, as P2 is
almost fully invested, it has proved difficult to take advantage of new
investment opportunities including the participation in new flotations on
AIM. The P2 board has for some time been looking at various options to
resolve these problems, including both merger and liquidation. Recent
changes in regulations concerning the merger and liquidation of VCTs allow
us to preserve the CGT deferral relief of P2 Shareholders if we merge with
another VCT. If the Offer becomes or is declared unconditional the P2 board
estimates that P2 shareholders will, as shareholders of an enlarged group,
enjoy a reduction of approximately 2 per cent. of net asset value per annum
in running costs (see Note 1 below). In addition to lower running costs,
shareholders should, your Board believes, benefit from holding an investment
in a larger company with greater flexibility to take advantage of new
investment opportunities as they may arise. Whilst all the Pennine AIM VCTs,
including P2, have outperformed the FTSE AIM Index, P2's Shareholders might
also be encouraged to learn that the 1996 ordinary share issue of P1 has
achieved the highest total return of all AIM VCTs launched to date (source:
Allenbridge Group plc, 15 April 2005).
By agreement with P1, conditional on the Offer becoming or being declared
wholly unconditional, the P2 board will pay a special interim dividend of 5p
per P2 share to all P2 Shareholders on the register of members of P2 as at
close of business on the day immediately preceding the Unconditional Date.
Since their inception in 1996, it has been a feature of VCTs that there is
little liquidity in their shares. This is partly because the legislation
only allowed income tax relief on the original investment to be retained if
the shares were held for three years (initially five years), and partly
because the shares were unattractive to new investors who could not get the
initial income tax relief. On occasions in the past, the P2 board has made
arrangements to purchase a limited number of shares at a discount of 15 per
cent. to NAV, which allowed some shareholders to exit. The board of P1 has
also agreed that, within a period of three months from the closing of the
Offer, P1 will apply #550,000 of its cash resources for the purpose of
buying back its own shares, including the Consideration Shares, at a 10 per
cent. discount to the last published NAV.
If all P2 Shareholders accept the Offer, they will hold approximately 18 per
cent. of the enlarged issued share capital of P1.
If the Offer is declared unconditional, John Goldschmidt will be invited to
join the board of P1 and the other directors of P2 will resign from the
board of P2.
Note 1: This statement of estimated cost savings relates to future actions
and circumstances which by their nature involve risk, uncertainties and
other factors. Because of this, the cost savings referred to may not be
achieved,or those achieved could be materially different from those
estimated.
4. Considerations for P2 Shareholders
In forming their view to recommend the Offer to P2 Shareholders, the P2
board has considered, inter alia, the following factors:
* P1 and P2 have the same investment manager and a substantial
overlap in their respective portfolios.
* The acquisition by P1 will create a more viably sized VCT with
greater flexibility to take advantage of new investment opportunities.
* The merger will achieve management and administration cost savings
(see Note 2 below).
* P2 Shareholders will receive a tax-free Special Interim Dividend
of 5p per share upon the Offer becoming or being declared wholly
unconditional.
* The combined value of the Offer and the Special Interim Dividend
represents a discount of 0.7p to the Closing Price of P2 on the latest
Dealing Day prior to the release of this announcement.
* P2 Shareholders who receive new P1 Shares under the Offer should
retain their full entitlement to VCT tax relief following the acquisition as
if they still held their original shares.
* Accepting P2 Shareholders should be able to participate in the
proposed limited buy back exercise by P1 following the successful outcome of
the Offer.
* If the Offer does not proceed, shareholders in P2 will remain
invested in a small VCT with less investment flexibility and relatively
higher overheads.
* If P2 becomes a subsidiary of P1 and its stock exchange listing is
cancelled, P2 will lose its VCT status and certain P2 shareholders who do
not accept the Offer may thereby incur substantial tax liabilities.
Note 2: This statement of estimated cost savings relates to future actions
and circumstances which by their nature involve risk, uncertainties and
other factors. Because of this, the cost savings referred to may not be
achieved, or those achieved could be materially different from those
estimated.
5. Irrevocable Undertakings to accept the Offer
P1 has received irrevocable undertakings from the directors of P2 to accept
the Offer in respect of the P2 Shares held by them, amounting in total to
32,250 (representing approximately 0.8 per cent. of the current issued share
capital of P2). The undertakings will only cease to be binding if the Offer
lapses or is withdrawn.
6. Recommendation
The P2 board, having been so advised by Beaumont Cornish, considers the
terms of the Offer to be fair and reasonable. In providing advice to the
Board of P2, Beaumont Cornish has taken into account the commercial
assessment of your Board.
Accordingly, the P2 board intends to recommend to P2 Shareholders to accept
the Offer. Those P2 Directors who are also shareholders of P2 intend to
accept the Offer in respect of their holdings which total 32,250 Shares (0.8
per cent. of the issued share capital).
7. Information on P1
In respect of the year ended 31 January 2005, the audited revenue return on
ordinary activities after taxation of P1 amounted to #18,000. Equity
shareholders' funds as at that date amounted to #9,041,000 and net asset
value per share was 72.2p.
8. Information on P2
In respect of the period ended 31 January 2005, the audited revenue loss on
ordinary activities after taxation of P2 amounted to #46,000. Equity
shareholders' funds as at that date amounted to #2,317,000 and net asset
value per share was 55.6p.
9. Management and employees
Upon the Offer becoming or being declared wholly unconditional the directors
of P2 (other than John Goldschmidt) will resign as Directors of P2 and their
letters of engagement will be terminated without compensation, with the
intention that Hugh Gillespie joins the board of P2. John Goldschmidt will
join the board of P1 as a non-executive director.
10. Inducement fee
P1 and P2 have entered into an inducement fee arrangement dated 27 April
2005, pursuant to which P2 has agreed to pay to P1 an inducement fee of
#8,000 (including any applicable VCT) in the event that:
(a) a competing offer for P2 is announced before the Offer lapses or is
withdrawn and such competing offer subsequently becomes or is declared
unconditional in all respects or is otherwise completed or implemented; and
(b) the directors of P2 withdraw or adversely modify their recommendation of
the Offer,
provided always that the inducement fee shall not be payable to the extent
that it is not lawful for P2 to make such payment or should the reason that
the directors of P2 withdraw or adversely modify their recommendation be due
to P1 not satisfying certain conditions referred to in Appendix I of this
announcement.
11. De-listing and compulsory acquisition
If the Offer becomes or is declared wholly unconditional, P1 intends to
procure the making of an application by P2 to the UKLA for the cancellation
of the listing of P2 Shares on the Official List of the UKLA and to the
London Stock Exchange for the cancellation of trading in P2 Shares on its
market for listed securities. It is anticipated that such cancellation will
take effect no earlier than 20 business days after the date on which the
Offer becomes or is declared wholly unconditional. The cancellation of
listing and trading would significantly reduce the liquidity and
marketability of any P2 Shares in respect of which valid acceptances of the
Offer are not received.
If sufficient acceptances under the Offer are received, and assuming all the
other conditions of the Offer have been satisfied or waived, P1 intends to
exercise its rights pursuant to the provisions of sections 428 to 430F of
the Act to acquire compulsorily the remaining P2 Shares to which the Offer
relates.
It is further intended that, following the Offer becoming or being declared
wholly unconditional and following the cancellation of listing and trading
referred to above, P2 will be re-registered as a private company under the
relevant provisions of the Act.
The attention of P2 Shareholders who are citizens or residents of
jurisdictions outside the UK or who are holding P2 Shares on behalf of such
citizens, residents or nationals and any person (including, without
limitation, any custodian or trustee) who may have a contractual or legal
obligation to forward any document in connection with the Offer outside the
UK, is drawn to paragraph 6 of Part B of Appendix I to the Offer Document
when received and to the relevant provisions of the Form of Acceptance. The
Offer is not being made, directly or indirectly, in or into or from the
United States, Canada, Australia or Japan. Accordingly, any accepting P2
Shareholder who is unable to give the representations and warranties set out
in paragraph 6(b) of Part B of Appendix I to the Offer Document when
received will be deemed not to have validly accepted the Offer.
The availability of the Offer to persons not resident in the United Kingdom
may be affected by laws of the relevant jurisdiction. Shareholders who are
not resident in the United Kingdom should inform themselves about, and
observe, any applicable legal or regulatory requirements. If you are in any
doubt about your position, you should consult your professional adviser in
the relevant territory without delay.
12 General
The conditions of the Offer are set out in Appendix I to this announcement.
Sources of information and bases of calculation used in the announcement are
given in Appendix II to this announcement. The financial effects of
acceptance are set out in Appendix III. The definitions of certain terms
used in this announcement are contained in Appendix IV to this announcement.
Howard Kennedy, on behalf of P1, intend to despatch the Offer Document,
setting out full details of the Offer later today.
This announcement does not constitute an offer or an invitation to purchase
or subscribe for any securities.
The Offer will be made solely by the Offer Document and the Forms of
Acceptance, which will contain the full terms and conditions of the Offer,
including details of how the Offer may be accepted.
The laws of the relevant jurisdictions may affect the availability of the
Offer to persons not resident in the UK. Persons who are not resident in the
UK, or who are subject to the laws of any jurisdiction other than the UK,
should inform themselves about, and observe, any applicable requirements.
Further details in relation to overseas shareholders will be contained in
the Offer Document.
The Offer will not be made, directly or indirectly, in or into the United
States, Canada, Australia or Japan and the Offer Document and the Form of
Acceptance will not be, and should not be, mailed or otherwise distributed
or sent in or into the United States, Canada, Australia or Japan or any
other jurisdiction if, in the latter case, to do so would constitute a
violation of the relevant laws in such jurisdiction.
The Consideration Shares have not been, and will not be, registered under
the United States Securities Act of 1933 (as amended) or under any relevant
securities laws of any state or jurisdiction of the United States, Canada,
Australia or Japan and no regulatory clearances in respect of the
Consideration Shares have been, or will be, applied for in any jurisdiction.
Accordingly, unless an exemption under the United States Securities Act of
1933 (as amended) or other relevant securities laws is applicable, the
Consideration Shares will not be, and may not be, offered, sold, resold,
delivered or distributed, directly or indirectly, in or into the United
States, Canada, Australia or Japan or to, or for the account or benefit of,
any United States person or person resident in Canada, Australia or Japan.
The P1 Directors accept responsibility for the information contained in this
announcement other than that relating to P2 and the P2 Directors and their
connected persons and persons acting in concert with, and associates of, P2.
To the best of the knowledge and belief of the P1 Directors (who have taken
all reasonable care to ensure that such is the case), the information
contained in this announcement for which they are responsible is in
accordance with the facts and does not omit anything likely to affect the
import of such information.
The P2 Directors accept responsibility for the information contained in this
announcement relating to P2 and the P2 Directors and their connected persons
and persons acting in concert with, and associates of, P2. To the best of
the knowledge and belief of the P2 Directors (who have taken all reasonable
care to ensure that such is the case), the information contained in this
announcement for which they are responsible is in accordance with the facts
and does not omit anything likely to affect the import of such information.
13. Board Change
The P1 board also announces that James Leek has resigned as a Director of P1
with effect from 4 May 2005. James agreed to step down from the P1 board in
order that he can properly represent P2 shareholders as an independent
director of P2 during the Offer period and in order to concentrate on his
other business activities following the Offer, including his roles as
chairman and non-executive director of a number of other VCTs. Hugh
Gillespie, Chairman of P1, thanked James for his valuable contribution as a
P1 non-executive director since the Company's launch in 1996.
14. Holdings in P2
Colin Macnab, a director of P1, holds 10,000 shares in P2.
15. Rule 2.10 Disclosure
In accordance with Rule 2.10 of The City Code on Takeovers and Mergers, P1
and P2 confirm that they have in issue the following number of shares with
the following International Securities Identification Numbers ("ISINs"):
Shares ISIN
Company
12,530,076 ordinary shares of 10p each GB0006803505
Pennine AIM VCT plc
4,166,200 ordinary shares of 10p each GB0006803612
Pennine AIM VCT II plc
Pennine AIM VCT plc
Tel: 07836 718 537
Hugh Gillespie - Chairman
Pennine AIM VCT II plc
Tel: 07771 707581
John Goldschmidt - Chairman
Howard Kennedy (financial adviser to P1)
Tel: 020 7636 1616
Keith Lassman
Beaumont Cornish (financial adviser to P2)
Tel: 0207 628 3396
Roland Cornish
This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities.
The Offer will be made solely by the Offer Document and the Form of Acceptance,
which will contain the full terms and conditions of the Offer, including details
of how the Offer may be accepted.
Howard Kennedy, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Pennine AIM VCT plc and
no one else in connection with the Offer and will not be responsible to anyone
other than Pennine AIM VCT plc for providing the protections afforded to
customers of Howard Kennedy nor for providing advice in relation to the Offer or
any other matter referred to herein.
Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Pennine
AIM VCT II plc and no one else in connection with the Offer and will not be
responsible to anyone other than Pennine AIM VCT II plc for providing the
protections afforded to customers of Beaumont Cornish Limited nor for providing
advice in relation to the Offer or any other matter referred to herein.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
Part A : Conditions of the Offer
The Offer is subject to the following conditions:
1. valid acceptances being received (and not, where permitted, withdrawn) by
3.00 p.m. on 9 June 2005 (or such later time(s) and/or date(s) as P1 and
Howard Kennedy may, subject to the City Code, agree) which, together with
the P2 Shares already held by P1, carry in aggregate not less than 90 per
cent. (or such lower percentage, being in excess of 50 per cent. as P1 and
Howard Kennedy may agree) of the voting rights then normally exercisable at
general meetings of P2, provided that this condition shall not be satisfied
unless P1 shall have acquired or agreed to acquire, whether or not subject
to conditions and whether pursuant to the Offer or otherwise, P2 Shares
carrying, in aggregate, more than 50 per cent. of the voting rights then
normally exercisable at general meetings of P2 attributable to P2 Shares,
including for this purpose (except to the extent otherwise agreed with the
Panel) any such voting rights attaching to any P2 Shares unconditionally
allotted or issued before the Offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any outstanding
conversions or subscription rights or otherwise; and for this purpose, (i)
the expression P2 Shares to which the Offer relates shall be construed in
accordance with sections 428 - 430F of the Act and (ii) shares which have
been unconditionally allotted shall be deemed to carry the voting rights
which they carry upon issue;
2. the passing by the shareholders of P1 of the resolutions relating to the
Offer to be proposed at the EGM;
3. no relevant authority having intervened or acted or omitted or declined to
act in any way which might or would:
(a) make the Offer, its implementation or the acquisition or proposed
acquisition of any P2 Shares by P1 void, unenforceable or illegal or
otherwise directly or indirectly restrain, prohibit, restrict, delay,
frustrate or otherwise interfere with the implementation of, or impose
additional constraints or obligations with respect to, or otherwise
challenge, the Offer or the acquisition of any shares in, or control of, P2
by P1 including, without limitation, taking any steps which would entitle P2
or the P2 Directors to require P1 to dispose of some or all of its P2
Shares; or
(b) result in a material delay in the ability of P1, or render P1 unable, to
acquire some or all of the P2 Shares; or
(c) require or prevent the divestiture by P2 or P1 of any material part of
their respective businesses, assets or property, or impose any limitation on
the ability of any of them to conduct their respective businesses in any
material respect or to own a material part of their respective assets or
property; or
(d) impose any limitation on the ability of P1 to acquire or to hold or to
exercise effectively, directly or indirectly, any rights of ownership of P2
Shares or management control of P2; or
(e) otherwise materially adversely affect the business, profits or prospects
of P2 or of P1;
and all applicable waiting and other time periods during which any relevant
authority could intervene having expired, lapsed or terminated;
4. approval for, or in respect of, the Offer and its implementation having been
obtained in terms and in a form reasonably satisfactory to P1 and P2 from
the Inland Revenue, and such approval, remaining in full force and effect,
and there being no notice or intimation of any intention to revoke, or not
to renew, such approval;
5. save as disclosed in writing by P2 to P1 prior to the date of announcement of
the Offer, there being no provision of any arrangement, agreement, licence
or other instrument to which P2 is a party or by or to which P2 or any of
its assets may be bound, entitled or subject which, in consequence of making
the Offer or the proposed acquisition by P1 of any P2 Shares, would or
might, to an extent which is material to P2, result in:
(a) any monies borrowed by, or other indebtedness (actual or contingent) of,
P2 being or becoming repayable or capable of being declared repayable
immediately prior to its stated maturity or the ability of P2 to borrow
monies or incur any indebtedness being withdrawn or inhibited; or
(b) the creation of any security interest over the whole or any part of the
business, property or assets of P2 or any such security interest (whenever
arising or having arisen) becoming enforceable; or
(c) any such arrangement, agreement, licence or instrument being terminated
or modified, or any action being taken or any obligation arising thereunder;
or
(d) any interests or business of P2 in or with any firm or body or person,
or any arrangements relating to such interest or business, being terminated,
modified or affected; or
(e) P2 ceasing to be able to carry on business under any name under which it
presently does; or
(f) any assets of P2 being or falling to be disposed of or charged or any
right arising under which any such asset could be required to be disposed of
or charged, in any case otherwise than in the ordinary course of business;
or
(g) the value of P2 or its financial or trading position or prospects being
prejudiced or otherwise modified or adversely affected in each case to any
material extent;
and no event having occurred which, under the provisions of any arrangement,
agreement, licence, or other instrument to which P2 is a party or to which
any of its assets are bound or subject, could result in any of the
circumstances referred to in (a) to (g) inclusive of this paragraph 5;
6. save as disclosed in writing by P1 to P2 prior to the date of announcement of
the Offer, there being no provision of any arrangement, agreement, licence
or other instrument to which P1 is a party or by or to which P1 or any of
its assets may be bound, entitled or subject which, in consequence of making
the Offer or the proposed acquisition by P1 of any P2 Shares, would or
might, to an extent which is material to P1, result in:
(a) any monies borrowed by, or other indebtedness (actual or contingent) of,
P1 being or becoming repayable or capable of being declared repayable
immediately prior to its stated maturity or the ability of P1 to borrow
monies or incur any indebtedness being withdrawn or inhibited; or
(b) the creation of any security interest over the whole or any part of the
business, property or assets of P1 or any such security interest (whenever
arising or having arisen) becoming enforceable; or
(c) any such arrangement, agreement, licence or instrument being terminated
or modified, or any action being taken or any obligation arising thereunder;
or
(d) any interests or business of P1 in or with any firm or body or person,
or any arrangements relating to such interest or business, being terminated,
modified or affected; or
(e) P1 ceasing to be able to carry on business under any name under which it
presently does so; or
(f) any assets of P1 being or falling to be disposed of or charged or any
right arising under which any such asset could be required to be disposed of
or charged, in any case otherwise than in the ordinary course of business;
or
(g) the value of P1 or its financial or trading position or prospects being
prejudiced or otherwise modified or adversely affected in each case to any
material extent;
and no event having occurred which, under the provisions of any arrangement,
agreement, licence, or other instrument to which P1 is a party or to which
any of its assets are bound or subject, could result in any of the
circumstances referred to in (a) to (g) inclusive of this paragraph 6;
7. except as publicly announced by P2 or P1 or disclosed in writing between P2
and P1 prior to the date of announcement of the Offer, P2 and P1 not having
since 31 January 2005:
(a) issued or authorised or proposed the issue of additional shares of any
class, or of securities convertible into, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible securities; or
(b) without the prior agreement of P2 or P1 (as the case may be ) declared,
paid, made or proposed to declare, pay or make, any bonus, dividend, or
other distribution; or
(c) redeemed or purchased any of its own shares or made any change in its
share capital; or
(d) issued, agreed or proposed the issue of any debentures or made any
change in its loan capital or incurred any indebtedness or become subject to
any contingent liability; or
(e) in so far as material in the context of P2 or P1 (as the case may be )
entered into any contract, transaction, arrangement or commitment (whether
in respect of capital expenditure or otherwise) other than in the ordinary
course of business) which is of a long term, onerous or unusual nature or
which involves or could involve an obligation of a nature or magnitude which
is material; or
(f) authorized or proposed or announced its intention to propose any
material merger (other than the Offer), acquisition or disposal of assets,
demerger, reconstruction, amalgamation or change in its capitalization;
(g) entered into any agreement which consents to the material restriction of
the scope of the business of P2 or P1 (as the case may be); or
(h) other than in the ordinary course of business, disposed of or
transferred or created any security interest over any material assets or any
right, title or interest in any such assets; or
(i) other than in the ordinary course of business, waived or compromised any
claim which is material; or
(j) entered into or varied any service agreement with any of the P2
Directors; or
(k) entered into any agreement or commitment or passed any resolution with
respect to, or announced an intention to, or a proposal to, effect any of
the transactions or events referred to in this paragraph 7;
8. since 31 January 2005, in so far as material in the context of P2 and except
as publicly announced by P2 or disclosed in writing by P2 to P1 prior to the
date of announcement of the Offer:
(a) there having been no material adverse change or deterioration in the
business, financial or trading position or profits or prospects of P2;
(b) no litigation, arbitration proceedings, prosecution or other legal
proceedings or investigations having been instituted or threatened by or
against or remaining outstanding in respect of P2 or to which P2 is a party
(whether as plaintiff or defendant or otherwise) and which in any such case
is material; and
(c) no contingent or actual liability having arisen or accrued which might
be likely materially or adversely to affect P2;
9. since 31 January 2005 , in so far as material in the context of P1 and except
as publicly announced by P1 or disclosed in writing by P1 to P2 prior to the
date of announcement of the Offer:
(a) there having been no material adverse change or deterioration in the
business, financial or trading position or profits or prospects of P1;
(b) no litigation, arbitration proceedings, prosecution or other legal
proceedings or investigations having been instituted or threatened by or
against or remaining outstanding in respect of P1 or to which P1 is a party
(whether as plaintiff or defendant or otherwise) and which in any such case
is material; and
(c) no contingent or actual liability having arisen or accrued which
might be likely materially or adversely to affect P1;
10. P1 not having discovered that:
(a) any financial or business information concerning P2 contained in
information publicly disclosed at any time by P2 either contains a
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein not misleading; or
(b) P2 is subject to any liability, contingent or otherwise, which is not
disclosed in the audited accounts of P2 for the period ended 31 January
2005;
and which is material;
11. P2 not having discovered that:
(a) any financial or business information concerning P1 contained in
information publicly disclosed at any time by P1 either contains a
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein not misleading; or
(b) P1 is subject to any liability, contingent or otherwise, which is not
disclosed in the interim accounts of P1 for the period ended 31 January
2005;
and which is material; and
12. the UK Listing Authority agreeing to admit to the Official List the
Consideration Shares and such admission becoming effective in accordance
with paragraph 7.1 of the Listing Rules (as may be amended or replaced) or
(if determined by P1 and subject to the consent of the Panel) agreeing to
admit such shares to the Official List subject only to the allotment of such
shares and/or the Offer becoming or being declared unconditional in all
respects and the London Stock Exchange agreeing to admit the Consideration
Shares to trading.
P1 reserves the right to waive, in whole or in part, all or any of conditions A4
to A12 inclusive subject to the provisions of the City Code, provided that P1
will waive condition A4 only with the consent of P2, will waive conditions A6,
A9 and A11 only if so required by P2 and will waive condition A7 (in so far as
it relates to P1) only with the consent of P2 or if so required by P2 and for
these purposes the consent of P2 shall be deemed to have been given on the date
on which the Offer would otherwise become or be declared unconditional in all
respects unless P2 shall on or before such date have notified P1 in writing that
such consent is withheld in relation to one or more of the said conditions for
which the consent of P2 is required (but without prejudice to the right of P2 to
give such consent subsequently).
The Offer will lapse unless the conditions set out above (other than conditions
A1 and A2) are fulfilled or (if capable of waiver) waived or, where appropriate,
have been deemed by P1 in its opinion (subject to the consent or any requirement
of P2 in accordance with the proviso above) to be or to remain satisfied no
later than midnight on the 21st day after the later of the first closing date of
the Offer and the date on which the Offer becomes or is declared unconditional
as to acceptances or, in each case, such later date as the Panel may agree.
If P1 is required by the Panel to make an offer or offers for P2 Shares under
Rule 9 of the City Code, P1 may make such alterations to any of the conditions,
including condition A1, as it may wish or as are necessary to comply with that
Rule.
Part B: Further terms to the Offer
The following further terms apply, unless the context requires otherwise, to the
Offer. Except where the context requires otherwise, any reference in this Part B
and in the Form of Acceptance to:
(a) the "Offer" shall include any revision or substitution thereof or extension
thereto;
(b) "the Offer becoming unconditional" shall include the Offer being declared or
becoming unconditional;
(c) "the Offer being declared or becoming unconditional" shall be construed as a
reference to the Offer being declared or becoming unconditional as to
acceptances whether or not any other condition thereof remains to be fulfilled;
and
(d) the "Offer Period" shall mean the period from announcement date to the
latest of (i) first closing date, (ii) the date when the Offer becomes
unconditional and (iii) the date on which the Offer lapses.
APPENDIX II
Bases of calculation and sources of information
In this announcement, unless otherwise stated, or the context otherwise
requires, the following bases of calculation and sources of information have
been used:
(a) The value placed by the Offer on the existing issued ordinary share capital
of P1 is based on 12,530,076 P1 Shares in issue on 4 May 2005.
(b) the share prices of P1 and P2 are the closing middle market quotations and
are derived from the Daily Official List on the relevant dates.
APPENDIX III
Financial Effects of Acceptance
The following table sets out, for illustrative purposes only and on the basis
and assumptions set out in the notes below, the financial effects of acceptance
of the Offer as regards capital value and gross income for an accepting holder
of one P2 Share if the Offer becomes or is declared wholly unconditional.
(a) Capital Value
Value of Offer (note 2) 43.3p
Value of P2 Share (note 1) 44.0p
Decrease 0.7p
Percentage Decrease 1.6%
(b) Income
A P2 Shareholder who accepts the Offer will be entitled to receive any dividends
declared, paid or made on or after the date of this announcement (other than the
dividend declared to P1 Shareholders in respect of the year ended 31 January
2005) by P1 in respect of the year ending 31 January 2006 (provided that the
Offer is unconditional or is declared wholly unconditional by then) and
thereafter. The receipt by a P2 Shareholder of dividends declared by P1 will not
be taxed unless and to the extent that the P2 Shareholder acquired P1 Shares in
exchange for P2 Shares which, when they were acquired, represented the excess of
his holdings of VCT Shares acquired in any one tax year ending on or before 5
April 2004 for more than #100,000 or since 6 April 2004 for more than #200,000.
Notes:
(1) The market value of P2 is derived from the Closing Price on 4 May 2005 (the
latest dealing day prior to the publication of this announcement).
(2) The value of the Offer is derived from the Closing Price on 4 May 2005 of a
P1 Share (the latest dealing day prior to the publication of this announcement)
and adding the Special Dividend.
(3) No account has been taken of any potential liability to taxation.
Accepting the Offer will enable P2 Shareholder to receive new P1 Shares.
Application will be made to admit these shares to trading on the Official List
and the main market of the London Stock Exchange. VCT Qualifying Shareholders
receiving new P1 Shares should be able to dispose of such shares without
liability to capital gains tax but will be unable to claim relief for any loss.
Other Shareholders who accept the Offer may be subject to capital gains tax upon
disposal of their New P1 Shares.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement and in the Form of
Acceptance unless the context requires otherwise:
"Act" the Companies Act 1985 (as amended)
"Beaumont Cornish" Beaumont Cornish Limited, authorised and regulated in the United Kingdom
by the Financial Services Authority
"Board" the board of directors of the Company or P2, as applicable, in each
context
"CGT" capital gains tax as deferred in TCGA
"Closing Price" the closing middle market quotation of a P2 Share or a P1 Share as the
case may be, as derived from the daily Official List of the London Stock
Exchange
"Code" the City Code on Takeovers and Mergers
"Consideration Shares" the new P1 Shares to be issued pursuant to the Offer
"Daily Official List" the daily official list of the London Stock Exchange
"Dealing Day" a day on which the London Stock Exchange is open for business in the
trading of securities admitted to the Official List
"EGM" the extraordinary general meeting of P1 to be held at 159 New Bond
Street, London W1Y 9PA at 10.35 a.m. on 9 June 2005 (or any adjournment
thereof)
"Form of Acceptance" the form of acceptance and authority relating to the Offer
"ICTA" Income and Corporation Taxes Act 1988 (as amended)
"Listing Rules" the rules and regulations made by the UK Listing Authority under Part VI
of the Financial Services and Markets Act 2000, as amended from time to
time
"London Stock Exchange" London Stock Exchange plc
"Net Assets" gross assets less all liabilities (excluding contingent liabilities)
"Offer Document" this document containing the Offer to be issued to P2 shareholders
containing the Offer
"Offer Period" has the meaning set out in Part B of Appendix I to this announcement
"Offer" the recommended offer to be made by Howard Kennedy on behalf of P1 to
acquire P2 Shares and, where the context admits, any subsequent revision,
variation, extension or renewal thereof
"Official List" the Official List of the UK Listing Authority
"P1 Directors" or "P1 Board" the directors of P1
"P1 Shareholder" a holder of shares in P1
"P1 Shares" the existing issued ordinary shares of 10p each in P1
"P1" or "Company" Pennine AIM VCT plc
"P2 Directors" or "P2 board" the directors of P2
"P2 Shareholder" a holder of shares in P2
"P2 Shares" the existing issued ordinary shares of 10p each in P2
"P2" Pennine AIM VCT II plc
"Panel" the Panel on Takeovers and Mergers
"Pennine 3" Pennine Downing AIM VCT plc
"Pennine 4" Pennine Downing AIM VCT 2 plc
"Pennine AIM VCTs" P1, P2, Pennine 3 and Pennine 4
"Qualifying Shareholder" an individual who subscribes for or acquires shares in a VCT and
satisfies the conditions for eligibility for tax relief available to
investors in a VCT
"Resolutions" the resolutions contained in the Notice of EGM dated the date of this
document save for the resolution relating to the change in the
Performance Incentive Fee
"Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"Special Interim Dividend" or "Special a special interim dividend of 5p per P2 Share to be made to P2
Dividend" Shareholders on the register of P2 on the close of business on the
business day immediately before the Unconditional Date, payable on the
date 14 days after the Unconditional Date, conditional upon the Offer
having become or being declared wholly unconditional
"TCGA" Taxation of Chargeable Gains Act 1992 (as amended)
"UKLA" or "UK Listing Authority" the Financial Services Authority in its capacity as the competent
authority for the purposes of Part VI of the Financial Services and
Markets Act 2000
"Unconditional Date" the date on which the Offer becomes or is declared wholly unconditional
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"United States" the United States of America (including any states of the United States
of America and the District of Columbia), its possessions and
territories, and all other areas subject to its jurisdiction
"VCT" A venture capital trust as defined in Section 842(AA) ICTA
All references to legislation in this document are to English legislation unless
the contrary is indicated.
Any reference to any provision of any legislation shall include any amendment,
modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.
For the purposes of this document, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings under
the Act.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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