TIDMARTL
RNS Number : 5993P
Alpha Real Trust Limited
01 September 2017
1 September 2017
Alpha Real Trust Limited ("ARTL" or the "Company")
Tender Offer for up to 10,000,000 Ordinary Shares at 123.1p per
Ordinary Share
A circular explaining the terms of a Tender Offer for up to
10,000,000 Ordinary Shares at 123.1 pence per Ordinary Share has
today been posted to Shareholders (the "Circular").
Capitalised terms and expressions shall have the same meanings
as those attributed to them in the Circular.
1. Introduction
The Company has recently realised a number of investments,
including Industrial Multi Property Trust ("IMPT") and the partial
sale of the H2O shopping centre in Madrid ("H2O"). Given these
realisations, the Board believes a return of capital by way of
tender offer is appropriate.
The Tender Offer will be conducted at a fixed price of 123.1
pence per Ordinary Share, being the Tender Offer Price which
represents the average middle market closing price of an Ordinary
Share for the 20 days prior to the Latest Practicable Date and a
discount of 22.5 per cent. to the NAV per Ordinary Share as at the
Latest Practicable Date.
2. Background
Following completion of the disposal of the Company's interest
in 70% of H2O and its interests in IMPT, the Company has received a
total of GBP46.2m in proceeds from these two disposals.
In light of the fact that the Company's Ordinary Shares are
currently trading at a discount to the audited net asset value of
the Company (such discount being approximately 19.8 per cent. as at
the Latest Practicable Date, based on the NAV per Ordinary Share as
at 31 March 2017 of 158.9 pence), the Board believes that it is in
the Company's interests, and in the interest of Shareholders, to
provide Qualifying Shareholders who wish to realise part or all of
their investment in the Company with an opportunity to access
liquidity which might otherwise not be available in the market.
The Board therefore wishes the Company to make a return of
capital to Qualifying Shareholders by way of a tender offer for up
to 10,000,000 Ordinary Shares, representing approximately 14.4 per
cent. of the Voting Share Capital.
The Board has sought to ensure that as many Shareholders as
possible can participate in the return of capital whilst allowing
Shareholders individually to choose whether to participate in the
Tender Offer or not (without incurring disproportionate costs in
making the Tender Offer to persons other than Qualifying
Shareholders). Qualifying Shareholders can decide whether to tender
all or any of their Ordinary Shares under the Tender Offer or to
continue to hold them.
The terms of the Share Purchase Authority permits the purchase
by the Company of up to 17,323,871 Ordinary Shares pursuant to one
or more market acquisitions (within the meaning of section 316 of
the Companies Law). As the Class A Shares are unlisted and are not
traded on a recognised investment exchange, it is not possible for
the Class A Shares to be tendered under the Tender Offer and
subsequently repurchased by the Company pursuant to the Repurchase
Agreement.
However, Qualifying Class A Shareholders who wish to participate
in the Tender Offer may do so if they convert some or all of their
Class A Shares into Ordinary Shares prior to the Record Date.
Ordinary Shares arising on conversion of any Class A Shares prior
to the Record Date may be tendered by Qualifying Class A
Shareholder under the Tender Offer on the same basis as the
existing Ordinary Shares. Further details of the action to be taken
by Qualifying Class A Shareholders who wish to participate in the
Tender Offer are set out under the paragraph headed "Action to be
taken" in Part 1 of the Circular.
Qualifying Shareholders tendering all of their Ordinary Shares
(including any Ordinary Shares arising on conversion of Class A
Shares) may be subject to scaling back (but not below their Basic
Entitlement) and in this event they will still retain Ordinary
Shares in the Company.
The Company is authorised to buy back up to 17,323,871 Ordinary
Shares pursuant to the Share Purchase Authority which was approved
by Shareholders on 1 April 2016 and any purchases made by the
Company pursuant to that authority will benefit from the Panel
Waiver which was also approved by the Independent Shareholders on 1
April 2016. Although the Share Purchase Authority will expire on 4
September 2017, in accordance with its terms, it will continue to
apply to the Company's purchase of any tendered Ordinary Shares
(including Ordinary Shares arising on conversion of the Class A
Shares) from Panmure Gordon pursuant to the Repurchase Agreement as
that agreement has been entered into prior to the expiry of the
Share Purchase Authority. Accordingly, such purchases by the
Company will also continue to benefit from the Panel Waiver.
The Tender Offer will be financed from the Company's existing
cash resources. As at 30 August 2017, the Company had cash
available in an amount of GBP38.5 million. The Tender Offer is
conditional upon the Directors being satisfied that the Company
will satisfy the solvency test as prescribed by the Companies Law.
The solvency test will be satisfied if, immediately after the
completion of the Tender Offer:
-- the Company will be able to pay its debts as they become due;
-- the value of the Company's assets is greater than the value of its liabilities; and
-- the Company satisfies any other requirements as to solvency imposed pursuant to its authorisation as an authorised closed-ended collective investment scheme.
Following the proposed Tender Offer, the Board of ARTL believes
that the Company will remain in a net cash position with a strong
balance sheet.
3. Summary information on the Tender Offer
Full details of the Tender Offer, including the terms and
conditions on which it is being made, are set out in Part 4 of the
Circular.
The Tender Offer is only available to Qualifying Shareholders on
the register of members of the Company on the Record Date in
respect of the Ordinary Shares (including any Ordinary Shares
arising on conversion of the Class A Shares) held by them on the
Record Date.
Qualifying Shareholders can choose whether they want to tender
all or any of their Ordinary Shares under the Tender Offer.
Qualifying Shareholders are not obliged to tender any of their
Ordinary Shares if they do not wish to do so. Qualifying Class A
Shareholders who wish to participate in the Tender Offer may do so,
if and to the extent that they convert some or all of their Class A
Shares into Ordinary Shares prior to the Record Date. In accordance
with the Articles, Class A Shares will convert into Ordinary Shares
on a "one for one" basis.
The Tender Offer involves the following:
-- Panmure Gordon, acting as principal, has irrevocably
committed to purchase up to 10,000,000 Ordinary Shares (including
any Ordinary Shares arising on conversion of Class A Shares) at the
Tender Offer Price on and subject to the terms and conditions of
the Tender Offer and to sell such tendered Ordinary Shares to the
Company pursuant to the Repurchase Agreement.
-- the Company will acquire all of the tendered Ordinary Shares
(including any Ordinary Shares arising on conversion of Class A
Shares) from Panmure Gordon pursuant to the existing Share Purchase
Authority and such Ordinary Shares will then be cancelled.
-- 10,000,000 Ordinary Shares represent approximately 14.4 per
cent. of the current Voting Share Capital of the Company (excluding
Ordinary Shares held in treasury).
-- All Qualifying Shareholders (including Qualifying Class A
Shareholders who choose to convert some or all of their Class A
Shares into Ordinary Shares prior to the Record Date) are being
given the opportunity to participate in the Tender Offer.
-- Qualifying Shareholders may tender such number of Ordinary
Shares (including Ordinary Shares arising on conversion of the
Class A Shares) under the Tender Offer as they choose.
-- Qualifying Shareholders do not have to tender any of their
Ordinary Shares if they do not wish to do so.
-- All Ordinary Shares (including any Ordinary Shares arising on
conversion of Class A Shares) tendered by any Qualifying
Shareholder up to their Basic Entitlement (which represents such
Qualifying Shareholder's pro rata share of the maximum number of
Ordinary Shares to be acquired under the Tender Offer) will be
accepted in full on and subject to the terms and conditions of the
Tender Offer set out in Part 4 of the Circular and, in the case of
Ordinary Shares held in certificated form, the Tender Form.
-- Each Qualifying Shareholder's Basic Entitlement will be
calculated by the Registrars as at the Record Date by reference to
the Qualifying Shareholder's holding of Ordinary Shares as at that
date.
-- If the number of Ordinary Shares (including any Ordinary
Shares arising on conversion of Class A Shares) validly tendered is
10,000,000 or less, all such Ordinary Shares (including any
Ordinary Shares arising on conversion of Class A Shares) will be
purchased under the Tender Offer on and subject to the terms and
conditions of the Tender Offer set out in Part 4 of the
Circular.
-- If the number of Ordinary Shares (including any Ordinary
Shares arising on conversion of Class A Shares) validly tendered is
more than 10,000,000, tenders will be accepted in the order set out
below:
a. all Ordinary Shares (including any Ordinary Shares arising on
conversion of Class A Shares) tendered by Qualifying Shareholders
up to their Basic Entitlement will be accepted in full; and
b. tenders of Ordinary Shares (including any Ordinary Shares
arising on conversion of Class A Shares) in excess of the
Qualifying Shareholders' Basic Entitlements will be satisfied pro
rata in proportion to the amount tendered in excess of Basic
Entitlements (rounded down to the nearest whole number of Ordinary
Shares) or otherwise at the discretion of Panmure Gordon, in
consultation with the Board.
-- Ordinary Shares (including any Ordinary Shares arising on
conversion of Class A Shares) will be purchased without commissions
and dealing charges.
-- Qualifying Shareholders are able to tender their Ordinary
Shares until 3.00 p.m. on the closing date of the Tender Offer,
which is 26 September 2017. In order to participate in the Tender
Offer:
- Qualifying Class A Shareholders who wish to participate in the
Tender Offer must convert some or all of their Class A Shares into
Ordinary Shares prior to the Record Date by completing and
returning a Conversion Notice, together with any share
certificate(s) and/or other document(s) of title in respect of the
Class A Shares to be converted in accordance with the instructions
printed thereon by no later than 5.00 p.m. on 14 September
2017;
- Qualifying Shareholders (including Qualifying Class A
Shareholders who have submitted a Conversion Notice as described
above) holding Ordinary Shares in certificated form as at the
Record Date must return the accompanying personalised Tender Form
together, except in the case of Qualifying Class A Shareholders who
have submitted a Conversion Notice, with any share certificate(s)
and/or other document(s) of title in accordance with the
instructions set out on the Tender Form by 3.00 p.m. on 26
September 2017; and
- Qualifying Shareholders holding Ordinary Shares in
uncertificated form (that is, in CREST) are directed to paragraph
3.2 of Part 4 of the Circular which details specific procedures for
those holders.
Qualifying Shareholders who choose not to participate in the
Tender Offer and who therefore do not tender their Ordinary Shares
(including any Ordinary Shares arising on conversion of Class A
Shares) will not receive any cash proceeds in respect of their
Ordinary Shares under the Tender Offer but will benefit from owning
a greater percentage of the Voting Share Capital as there will be
fewer Shares in issue after completion of the Tender Offer and the
subsequent repurchase of the tendered Ordinary Shares by the
Company pursuant to the Repurchase Agreement.
Ordinary Shares may be traded in the normal way during the
period in which the Tender Offer remains open, but Qualifying
Shareholders should note that, once tendered, their Ordinary Shares
(including any Ordinary Shares arising on conversion of Class A
Shares) may not be sold, transferred, charged or otherwise disposed
of other than in accordance with the Tender Offer.
The purchase from Qualifying Shareholders and the subsequent
sale of the tendered Ordinary Shares to the Company will be
effected by Panmure Gordon, as principal, "On Exchange" in
accordance with the Rules of the London Stock Exchange.
The Tender Offer is only available to Qualifying Shareholders
and is not available to Shareholders in Australia, Canada, Japan,
the Republic of South Africa or the United States of America or to
Shareholders who are otherwise within a Restricted Territory.
Any rights of Qualifying Shareholders who choose not to tender
their Ordinary Shares, and Class A Shareholders who choose not to
convert any of their Class A Shares in order to participate in the
Tender Offer, will be unaffected by the Tender Offer.
The Directors reserve the right, at any time prior to the
announcement that the Tender Offer has become unconditional in all
respects, to decline from proceeding with the Tender Offer if they
conclude that its implementation is no longer in the interests of
the Company and/or Shareholders as a whole.
4. Status of the Class A Shares
On 15 June 2017, the Company announced that it had received
proceeds from its investment in Romulus High Income Trust plc
("Romulus") and so paid a special dividend of 4.3346p per Class A
Shares to all Class A Shareholders on 7 July 2017.
Romulus was acquired as part of the Property Investment
Portfolio plc ("PIP") portfolio in 2012. ARTL ascribed no value to
Romulus for the purposes of its acquisition of the PIP portfolio,
with any realised value from Romulus being passed to former PIP
shareholders by way of the Class A Shares. Romulus represents the
final asset from the PIP portfolio in respect of which Class A
Shareholders have separate rights to Ordinary Shareholders. As
previously announced, the Company has been advised that following
this distribution Romulus will be liquidated and no further
distributions to the Class A Shareholders are currently
anticipated.
In view of the above, the Directors expect that going forwards
the Class A Shares and the Ordinary Shares will have exactly the
same rights to future dividends and distributions. However, the
Board does not intend to exercise its right to give a Compulsory
Conversion Notice in accordance with the Articles, which would
convert all the outstanding Class A Shares into Ordinary Shares on
a "one for one" basis until such time as the liquidation of Romulus
has been completed and it is certain that no further distributions
will be received from the liquidators of Romulus.
As all the Class A Shares are unlisted and do not trade on a
recognised investment exchange, the acquisition of Class A Shares
by the Company in connection with the Tender Offer and the
subsequent repurchase of such shares pursuant to the Repurchase
Agreement would not fall within the scope of the existing Share
Purchase Authority as such acquisitions would not be "market
acquisitions" as prescribed by the terms of the Share Purchase
Authority. However, Qualifying Class A Shareholders who wish to
participate in the Tender Offer may do so if they convert their
Class A Shares into Ordinary Shares on a "one for one" basis prior
to the Record Date. Qualifying Class A Shareholders who wish to do
so should complete and return a Conversion Notice specifying the
number of Class A Shares they wish to convert and submit a Tender
Form in respect of some or all of the Ordinary Shares arising on
such conversion. Further details of the action to be taken by
Qualifying Class A Shareholders who wish to participate in the
Tender Offer are set out under the paragraph headed "Action to be
taken" in Part 1 of the Circular.
5. The City Code and the Panel Rule 9 Waiver
Under Rule 9 of the City Code ("Rule 9") any person who
acquires, whether by a series of transactions over a period of time
or not, an interest in shares which (taken together with shares in
which persons acting in concert with him are interested) carry 30
per cent. or more of the voting rights of a company; or any person,
together with persons acting in concert with him, is interested in
shares which in the aggregate carry not less than 30 per cent. of
the voting rights of a company but does not hold shares carrying
more than 50 per cent. of such voting rights and such person, or
any person acting in concert with him, acquires an interest in any
other shares which increases the percentage of shares carrying
voting rights in which he is interested, such person shall extend
offers, on the basis set out in Rules 9.3, 9.4 and 9.5 of the City
Code, to the holders of any class of security whether voting or
non-voting and also to the holders of any other class of
transferable securities carrying voting rights.
An offer under Rule 9 must be in cash and at the highest price
paid within the twelve months prior to the announcement of the
offer for any interest in shares in the Company by the person
required to make the offer or any person acting in concert with
him.
Under the City Code, the partners in ARC are deemed to be acting
in concert with ARC.
The aggregate shareholding of ARC and the ARC Concert Parties in
the Company as at the Latest Practicable Date was 26,890,731
Ordinary Shares and nil Class A Shares, being 38.8 per cent. of the
Voting Share Capital as set out in the table below. The table below
also sets out details of the maximum number of Ordinary Shares and
the percentage of Voting Share Capital of the Company which would
be held by ARC and the ARC Concert Parties were the maximum number
of Ordinary Shares to be tendered under the Tender Offer and
subsequently repurchased by the Company from Panmure Gordon,
assuming that neither ARC nor any of the ARC Concert Parties tender
any of their Ordinary Shares under the Tender Offer:
As at the Latest In the event the
Practicable Date Tender Offer is
fully taken up
------------- --------------------------- ---------------------------
Shareholder Number % of Voting Number % of Voting
of Ordinary Share of Ordinary Share
Shares Capital Shares Capital
of the
Company
------------- ------------- ------------ ------------- ------------
ARC 22,550,000 32.5 22,550,000 38.0
------------- ------------- ------------ ------------- ------------
ARC Concert
Parties 4,340,731 6.3 4,340,731 7.3
------------- ------------- ------------ ------------- ------------
Total 26,890,731 38.8 26,890,731 45.3
------------- ------------- ------------ ------------- ------------
The Panel agreed in March 2016 to waive the obligation to make a
general offer that would otherwise arise as a result of any
exercise of the Share Purchase Authority, and this was approved by
the Shareholders (other than ARC and the ARC Concert Parties who,
in accordance with the City Code, did not vote on Panel Waiver
Resolution) on 1 April 2016. As referred to above, although the
Share Purchase Authority will expire on 4 September 2017, in
accordance with its terms, it will continue to apply to the
Company's purchase of any tendered Ordinary Shares (including
Ordinary Shares arising on conversion of the Class A Shares) from
Panmure Gordon pursuant to the Repurchase Agreement as that
agreement has been entered into prior to the expiry of the Share
Purchase Authority. Accordingly, any increase in the percentage of
Voting Share Capital held by ARC and the ARC Concert Parties as a
result of the implementation of the Tender Offer and the subsequent
repurchase of the tendered Ordinary Shares by the Company will not
require ARC and the ARC Concert Parties to make an offer under Rule
9 in continuing reliance on the Panel Waiver.
Further information on ARC and the ARC Concert Parties can be
found in paragraph 3 of Part 6 of the Circular.
6. Overseas Shareholders
The attention of Shareholders who are not resident in the United
Kingdom is drawn to paragraph 9 of Part 4 of the Circular headed
"Restricted Shareholders and other Overseas Shareholders".
7. Recommendation
The Board is making no recommendation to Qualifying Shareholders
in relation to participation in the Tender Offer itself or in
relation to the conversion of any Class A Shares into Ordinary
Shares in order to participate in the Tender Offer. Whether or not
Qualifying Shareholders decide to tender all or any of their
Ordinary Shares or, in the case of Qualifying Class A Shareholders,
to convert all or any of the Class A Shares into Ordinary Shares in
order to participate in the Tender Offer, will depend, among other
things, on their view of the Company's prospects and their own
individual circumstances, including their tax position. Qualifying
Shareholders are recommended to consult their duly authorised
independent advisers and make their own decision.
None of the Directors or ARC intends to tender any of their
Ordinary Shares pursuant to the Tender Offer.
If you are in any doubt about the contents of the Circular or
the action you should take, you should seek your own independent
financial or legal advice immediately.
8. Expected Timetable of Principal Events
The expected timetable for the Tender Offer is as follows:
Latest time and date for 5.00 p.m. on 14 September
receipt of Conversion Notices, 2017
accompanied by the relevant
share certificate(s) or
other document(s) of title,
for Class A Shareholders
wishing to participate in
the Tender Offer
Conversion of Class A Shares 25 September 2017
into Ordinary Shares in
respect of which a Conversion
Notice has been given
Admission to the SFS of 8.00 a.m. on 25 September
Ordinary Shares arising 2017
on conversion of Class A
Shares in respect of which
a Conversion Notice has
been given
Latest time and date for 3.00 p.m. on 26 September
receipt of Tender Forms 2017
or for settlement of TTE
Instructions in respect
of the Tender Offer
Record Date for participation 6.00 p.m. on 26 September
in the Tender Offer 2017
Results of the Tender Offer 27 September 2017
announced
Settlement date: cheques from 2 October 2017
despatched and CREST accounts
credited with proceeds in
respect of successfully
tendered Ordinary Shares
(including Ordinary Shares
arising on conversion of
Class A Shares)
Balancing certificates despatched week commencing 9 October
and CREST accounts credited 2017
in respect of unsold Ordinary
Shares (including Ordinary
Shares arising on conversion
of Class A Shares)
Capitalised terms and expressions shall have the same meanings
as those attributed to them in the Circular.
A copy of the Circular will shortly be available for inspection
on the National Storage Mechanism at www.hemscott.com/nsm.do and is
available for download from the Company's website
http://www.alpharealtrustlimited.com/.
For further information:
Alpha Real Trust Limited
David Jeffreys, Chairman, Alpha Real Trust +44 (0) 1481 231 100
Brad Bauman, Joint Fund Manager, Alpha Real Trust +44 (0) 20 7391 4700
Panmure Gordon, Broker to the Company
Richard Gray/Andrew Potts/Atholl Tweedie +44 (0) 20 7886 2500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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