Tender Offer
09 Octubre 2007 - 9:10AM
UK Regulatory
Tender Offer
Third Advance Value Realisation Company Limited
Proposed Tender Offer
Further to the announcement of 13 September 2007, the Company today
announces details of a Tender Offer by Marshall Securities Limited.
� The Tender Offer, assuming take-up in full by
Shareholders, will return between �9.0 million and �11.0 million of
cash to Shareholders. At current values the Tender Offer, if
approved, will provide Shareholders with an opportunity to realise at
least one third of their shareholding at net asset value less the
costs of the Tender Offer.
� The Company also announces that it has accepted a
proposal from the Manager to reduce the basic management fee payable
from 1 per cent. per annum to 0.5 per cent. per annum with effect
from 1 December 2007.
A circular describing the proposals convening an extraordinary
general meeting of the Company to approve the Tender Offer.
For further information please contact:
Progressive Value Management Limited 020 7566 5550
Robert Legget/Ross Courtier
Marshall Securities Limited 020 7490 3788
Robert Luetchford/John Webb
Marshall Securities Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for the Company in connection with the Tender Offer and
will not be responsible to, any other person for providing the
protections afforded to customers of Marshall Securities Limited nor
for advising any such person in relation to the Tender Offer.
Unless the context otherwise requires, the definitions contained in
the Circular apply in this announcement.
9 October 2007
Third Advance Value Realisation Company Limited (the "Company")
Proposed Tender Offer to purchase Ordinary Shares for an aggregate
consideration of at least �9.0 million
Following the preliminary announcement on 13 September 2007, the
Board is pleased to announce a Tender Offer which, assuming take-up
in full by Shareholders, will return between �9.0 million and �11.0
million of cash to Shareholders, depending on the funds available to
the Company to finance the Tender Offer. At current values the Tender
Offer, if approved, will provide Shareholders with an opportunity to
realise at least one third of their holding of Ordinary Shares at net
asset value less the costs of the Tender Offer. Shareholders may
offer any number or all of their Ordinary Shares for purchase in the
Tender Offer, subject to scaling back depending on the level of
tenders received from other Shareholders.
The Board also announced a change to the management fees payable by
the Company to the Manager. This change follows an initiative from
the Manager in order to reflect the current portfolio composition and
anticipated realisation profile. The basic management fee will be
reduced by 50 per cent. with effect from 1 December 2007,
irrespective of the outcome of the Tender Offer.
A circular setting out details of these proposals and convening an
Extraordinary General Meeting to approve the Tender Offer is being
sent to Shareholders.
Background to and reasons for the proposals
The Company was launched in November 2005 and acquired a portfolio of
predominantly listed securities with an initial market value of �76.1
million in exchange for the issue of Ordinary Shares and redeemable
preference shares. The Company's investment objective is to create
value and liquidity for shareholders. Realisation of the portfolio
was initially anticipated to take place over a three year period.
Since launch the Company has returned �54.0 million through purchases
and redemptions of redeemable preference shares and purchases of
Ordinary Shares. At 28 September 2007 the Company had net assets of
�26.6 million and the net asset value per Ordinary Share was 120.34p.
The announcement of 13 September 2007 stated that at least �9.0
million would be available for return to Shareholders through the
Tender Offer. The Company had cash and cash equivalents of �9.5
million at 28 September 2007. Based on that amount the Board has set
a minimum amount available for the Tender Offer of �9.0 million. This
amount will be increased to reflect any realisation proceeds
generated from the sale of investments in the period up to the close
of the Tender Offer up to an aggregate maximum of �11.0 million. The
figures in this paragraph are taken from the audited accounts for the
period ended 30 November 2006, the unaudited interim accounts for the
six months ended 31 May 2007 and the unaudited management accounts of
the Company.
The Tender Offer, if approved, will permit the return of a
significantly greater amount of cash to Shareholders over a shorter
period than the use of other share purchase procedures. As the
Company moves closer to the achievement of its objective, the Board
believes that it is appropriate that all Shareholders (other than
certain Overseas Shareholders) should be given the opportunity to
realise a proportion of their investment at a price close to the net
asset value per share. The Board believes that this is best achieved
by a tender offer where all Shareholders (other than certain Overseas
Shareholders) may tender the same proportion of their Ordinary Shares
at the same time and for the same price per Ordinary Share.
Benefits of the Tender Offer
The Directors believe that the Tender Offer is in the best interests
of Shareholders as a whole and that, based on the NAV at 28 September
2007, if implemented, it will enable all Shareholders to realise at
least one third of their Ordinary Shares at a price close to NAV and
provide a sound base for the next stage of realisation of the
portfolio.
Outlook
The Directors are pleased with the progress made to date in realising
the portfolio and returning cash to Shareholders. Since 30 November
2006 the Company has returned in aggregate �9.9 million through a
combination of redemptions and repurchases of all the redeemable
preference shares outstanding at that date and repurchases of
Ordinary Shares. At 28 September 2007 the Company had net assets of
�26.6 million which comprised 18 investments with an aggregate market
value (at bid price) of �17.8 million, cash and cash equivalents of
�9.5 million and sundry net current liabilities of �0.7 million.
Following completion of the Tender Offer, and assuming no further
investments are realised prior to its completion, the Company will
have a relatively concentrated portfolio of 18 investments which at
28 September 2007 had an aggregate value of �17.8 million, with the
largest investment having a market value of �6.4 million,
representing 36 per cent. of the market value of the portfolio. The
figures in this paragraph are taken from the unaudited interim
accounts for the six months ended 31 May 2007 and the unaudited
management accounts of the Company.
Despite the recent turbulence in the world financial markets, the
Directors and the Manager have observed continued corporate activity
and liquidity in certain stocks in the Company's investment universe.
In these circumstances the Board expects that realisation of the
portfolio will be completed during 2008 in line with the anticipated
profile described at launch. However, there can be no guarantee that
market conditions and liquidity will continue generally or
specifically in respect of the investee companies.
The Tender Offer
Shareholders (other than certain Overseas Shareholders) are being
invited by Marshall to tender Ordinary Shares to Marshall who will,
as principal, purchase Ordinary Shares tendered at the Tender Price
and then sell them to the Company at the same price by way of an
on-market transaction on the terms of the Repurchase Agreement. Those
Ordinary Shares which the Company acquires from Marshall will be
cancelled on acquisition. All transactions will be carried out on the
London Stock Exchange.
The key points of the Tender Offer are as follows:
� between �9.0 million and �11.0 million will be available to
purchase Ordinary Shares pursuant to the Tender Offer (the
"Repurchase Monies"). The exact amount available will depend on the
extent that additional realisation proceeds are generated in the
period up to the close of the Tender Offer;
� Ordinary Shares will be acquired at the Tender Price, being
the unaudited Net Asset Value per Ordinary Share as at the
Calculation Date, adjusted for the costs and expenses of the Tender
Offer;
� Shareholders will be entitled to have a percentage of their
shareholdings purchased pursuant to the Tender Offer (their "Basic
Entitlement");
� Shareholders have the opportunity to tender additional
Ordinary Shares for purchase to the extent that not all Shareholders
tender their entire Basic Entitlements. Such excess tenders will be
satisfied pro rata in proportion to the amount tendered by each such
Shareholder in excess of his Basic Entitlement to the extent that
Repurchase Monies are available because not all Shareholders have
tendered their respective entitlement;
� the percentage of Ordinary Shares which will comprise each
Shareholder's Basic Entitlement will depend upon the amount of the
available Repurchase Monies and the Net Asset Value per Ordinary
Share as at the Calculation Date;
� the maximum aggregate number of Ordinary Shares to be
acquired in the Tender Offer is 21,008,765.
� the Tender Offer is conditional, inter alia, on the Company
receiving valid tenders in respect of no less than 1 per cent. of the
Ordinary Shares in issue; and
� the Tender Offer is conditional, inter alia, on the passing
of the resolution set out in the Notice of Extraordinary General
Meeting at the end of this Circular.
A summary of the calculation of the Tender Price and the Basic
Entitlement is set out below.
Assuming that the amount available as Repurchase Monies is �9.0
million, if the calculations of the Tender Price and the Basic
Entitlement for the Tender Offer had been effected as at 28 September
2007 (the latest practicable date prior to the publication of this
Circular) the Tender Price would have been 120.02p and the Basic
Entitlement would have been equal to approximately 33.9 per cent. of
each Shareholders' shareholding. These figures are for illustrative
purposes only and should not be taken as a guide to the actual Tender
Price and Basic Entitlement.
The Tender Price payable to Shareholders in respect of each Ordinary
Share repurchased under the Tender Offer will be derived from the
unaudited Net Asset Value of the Company and the corresponding Net
Asset Value per Ordinary Share as at the Calculation Date in
accordance with the formula set out in the Circular. Adjustments to
the Net Asset Value as at the Calculation Date will be made to
reflect the costs and expenses of the Tender Offer which in total are
anticipated to be approximately �70,000 inclusive of VAT.
The Basic Entitlement of each Shareholder will be calculated on the
Calculation Date by determining the percentage of the aggregate
number of Ordinary Shares in issue on the Tender Offer record date
that may be purchased at the Tender Price if the Repurchase Monies
are utilised in full. Each Shareholder's Basic Entitlement will be
rounded down to the nearest whole number of shares.
The amount of the Repurchase Monies, the Tender Price and the Basic
Entitlement expressed as a percentage will be calculated on, and as
at, the Calculation Date, and will be announced as soon as
practicable after their determination, which the Directors expect to
be on 5 November 2007.
The maximum price under the Tender Offer will be the Tender Price and
the minimum price will be 1p per Ordinary Share. Further details of
how the Tender Price and the Basic Entitlement will be determined are
set out in the Circular.
The Tender Offer is conditional on:
(a) the passing of the special resolution set out in
the notice of EGM by not later than 31 October 2007 or such later
date (not being later than 20 Business Days after 31 October 2007) as
the Company may determine;
(b) Marshall being satisfied that the Company has in
its control or holds to its order the aggregate amount payable under
the Tender Offer and the Company having paid the same into an account
in accordance with the Repurchase Agreement on or before 31 October
2007;
(c) valid and successful tenders being received in
respect of Ordinary Shares representing at least 1 per cent. of the
Ordinary Shares in issue as at the Calculation Date;
(d) the Company having sufficient distributable
reserves to repurchase all of the tendered Ordinary Shares; and
(e) the Tender Offer not having been terminated in
accordance with the provisions set out in the Circular prior to the
fulfilment of the conditions referred to in sub-paragraphs (a) to (d)
above.
The Tender Offer is not being made directly or indirectly in, into
or from the United States, Canada, Australia or Japan.
Amendment to the Management Agreement
The Board has accepted a proposal from the Manager to reduce the
basic management fee from 1 per cent. per annum of the Placing Value
to 0.5 per cent per annum of the Placing Value with effect from 1
December 2007.
Authority to purchase Ordinary Shares
At the annual general meeting of the Company held on 27 March 2007,
Shareholders authorised the Company to make market purchases of up to
14.99 per cent. of the Ordinary Shares then in issue. Following a
purchase of Ordinary Shares in July 2007, the Company may currently
purchase up to 2,700,996 Ordinary Shares under this authority which,
unless renewed, will expire at the conclusion of the next annual
general meeting of the Company. The resolution to approve the Tender
Offer will not affect this authority and no part of this authority
will be used to implement the Tender Offer. However, the Company will
limit further purchases under the authority granted on 27 March 2007
to 14.99 per cent. of the Ordinary Shares in issue immediately
following completion of the Tender Offer.
The Directors intend, following the completion or lapsing of the
Tender Offer, to continue returning capital to Shareholders by
purchasing Ordinary Shares in the market, at a discount to net asset
value for cancellation. The Directors also intend to renew the
authority to make market purchases if the Company's powers, as
limited in the manner described above, become exhausted prior to the
next annual general meeting of the Company.
Extraordinary General Meeting
An Extraordinary General Meeting has been convened for 1.00 p.m. on
31 October 2007 at the offices of Marshall Securities Limited, 145 -
157 St John Street, London EC1V 4RE, to approve the Tender Offer.
Shareholders' intentions
The Board has received written confirmation that Shareholders
representing approximately 47 per cent. of the issued share capital
of the Company intend to tender at least their Basic Entitlement
under the Tender Offer and to vote in favour of the resolution to be
proposed at the EGM.
Expected timetable
2007
Latest time and date for receipt of Forms of 1.00 p.m. on 29 October
Proxy for the EGM
Closing Date - latest time and date for 1.00 p.m. on 29 October
receipt of Tender Forms
Record date for Tender Offer the close of 29 October
business on
Extraordinary General Meeting 1.00 p.m. on 31 October
Calculation of Repurchase Monies, Tender the close of 31 October
Price and Basic Entitlement business on
Announcement of the total number of Ordinary 5 November
Shares tendered, amount of Repurchase Monies,
Tender Price and Basic Entitlement
Purchase of Ordinary Shares under the Tender 5 November
Offer
CREST accounts credited with Tender Offer 8 November
consideration and any unsold uncertificated
Ordinary Shares
Despatch of cheques for Tender Offer 8 November
consideration in respect of certificated
Ordinary Shares sold under the Tender Offer
Despatch of balance certificates in respect by 8 November
of any unsold certificated Ordinary Shares
The above times and all other times in this document refer to local
time in the UK. If any of the above times and/or dates change, the
revised time(s) and/or date(s) will be notified to Shareholders by
announcement through a Regulatory Information Service.
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