Baronsmead VCT 5 PLC Merger Update (7500M)
October 17 2016 - 11:50AM
UK Regulatory
TIDMBAV
RNS Number : 7500M
Baronsmead VCT 5 PLC
17 October 2016
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH
AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.
THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF
SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN THE UNITED
STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA
Baronsmead VCT 5 plc
Baronsmead Second Venture Trust plc
17 October 2016
Publication of a Prospectus and Circulars in connection with
recommended proposals for the merger of Baronsmead VCT 5 plc and
Baronsmead Second Venture Trust plc (the "Companies" and each a
"Company")
The boards of the Companies (the "Boards") announced on 11
August 2016 that they had entered into discussions regarding a
possible merger of the Companies (the "Merger"). The Boards are
pleased to announce that they have reached agreement in respect of
the Merger and that the Companies have today issued circulars to
set out the proposals for the Merger for consideration by their
respective shareholders (the "Circulars"). Both of the Companies
are managed by Livingbridge VC LLP ("Livingbridge").
The Merger will be completed pursuant to a scheme of
reconstruction and winding up of Baronsmead VCT 5 plc ("BVCT5")
under section 110 of the Insolvency Act 1986 (the "Scheme"). The
Scheme provides for the undertaking, assets and liabilities of
BVCT5 to be transferred to Baronsmead Second Venture Trust plc
("BSVT") in consideration for the issue of new shares in BSVT (the
"New Shares") of an equivalent value to BVCT5 shareholders ("BVCT5
Shareholders"). The Scheme is subject to, amongst other conditions,
approval by the shareholders of the Companies. The Merger will
create a larger merged company with net assets of GBP180 million
(the "Enlarged Company").
Background to and reasons for the Scheme
Prior to April 2012, the VCT rules restricted the amount a VCT
could invest in a portfolio company to GBP1 million per annum. This
led to investment managers, such as Livingbridge, establishing
numerous VCTs that pursued the same investment strategy allowing
larger investments to be made in VCT qualifying companies. With
effect from 6 April 2012, the VCT rules were amended and the annual
investment limit was increased to GBP5 million per investee
company. As a result there is no longer as significant an advantage
in having multiple VCTs pursuing the same investment strategy.
Since 2012 Livingbridge have been reviewing the merits of
merging the Baronsmead VCTs. In April 2014 changes to the stamp
duty rules significantly reduced the overall cost of a merger. As a
result, the Board believes that there is a compelling argument for
the merger of BSVT and BVCT5 from a cost savings point of view,
with Shareholders and BVCT5 Shareholders benefiting from estimated
aggregate costs savings of the Enlarged Company of approximately
GBP345,000 per annum. In addition, the directors of the Companies
believe that the size of the Enlarged Company could mean that the
shares would become more widely available on investment platforms
and potentially make the Enlarged Company more attractive to
private client wealth managers, which may enhance the liquidity of
the shares in the secondary market. For these reasons, the
directors of the Companies believe that their respective
shareholders' interests will be best served by the Merger of the
Companies.
The Scheme
The number of New Shares to be issued to BVCT5 Shareholders
under the Scheme will be based on the adjusted net asset value of
an ordinary share in BSVT (the "FAV per BSVT Share") and the
adjusted net asset value of an ordinary share in BVCT5 (the "FAV
per BVCT5 Share"). The FAV per BSVT Share and the FAV per BVCT5
Share will be calculated as at 28 November 2016 (the "Calculation
Date") using each Company's respective accounting policies (which
are identical). The investments held by the Companies which are
listed, quoted or traded on either AIM or a recognised stock
exchange will be valued by reference to the bid price on the
principal stock exchange where the relevant investment is listed,
quoted or dealt. Unquoted investments held by the Companies will be
valued at their fair value as at the Calculation Date as determined
by the Boards respectively.
The FAV per BSVT Share will be the net asset value of an
ordinary share in BSVT adjusted to take account of the costs and
expenses of the Merger apportioned to BSVT under the Scheme. The
FAV per BVCT5 Share will be the net asset value of an ordinary
share in BVCT5 adjusted to take account of the costs and expenses
of the Merger apportioned to BVCT5 under the Scheme. Any costs
incurred by the Companies in relation to the Merger, prior to the
Calculation Date, will be added back to the relevant Company's net
asset value prior to the apportionment of the costs of the Merger
between the Companies.
BVCT5 Shareholders will be issued such number of New Shares with
a FAV per BSVT Share equal to 100 per cent. of the FAV per BVCT5
Share of their holding of BVCT5 Shares. The New Shares issued
pursuant to the Scheme will rank equally in all respects with the
existing issued ordinary shares of BSVT.
Costs and expenses of the Merger
The aggregate costs and expenses to be incurred by the Companies
in connection with the Scheme are expected to be approximately
GBP355,000 (including VAT and stamp duty). The Boards have agreed
that the most appropriate way to split the costs of the Merger is
to allocate them on the basis of the relative ongoing cost savings
for each company. On this basis the costs of the Merger will be
split 25 per cent. to BSVT and 75 per cent. to BVCT5. This method
of splitting the costs ensures that the existing BSVT shareholders
and the BVCT5 shareholders will have the same payback period of
approximately 12 months.
In the event that the Scheme does not become effective, it is
estimated that the costs incurred by the Companies in connection
with the Scheme will be in aggregate approximately GBP215,000
(including VAT). BSVT and BVCT5 have agreed to bear these abort
costs on the same basis as the Merger costs, being 25 per cent. and
75 per cent. respectively.
Expected Scheme timetable
2016
Latest time and date for receipt of
forms of proxy for the general meeting 2.00 p.m.
of BSVT on 4 November
Latest time and date for receipt of
forms of proxy for the first general 3.00 p.m.
meeting of BVCT5 on 4 November
General meeting of BSVT 2.00 p.m.
on 8 November
First general meeting of BVCT5 3.00 p.m.
on 8 November
Time and date from which it is advised
that dealings in BVCT5 Shares should
only be for cash settlement and immediate 8.00 a.m.
delivery of documents of title on 24 November
Latest time and date for receipt of
forms of proxy for the second general 11.00 a.m.
meeting of BVCT5 on 28 November
Calculation Date 5.00 p.m.
on 28 November
Record Date for BVCT5 Shareholders' 6.00 p.m.
entitlements under the Scheme on 28 November
Dealings in BVCT5 Shares suspended 7.30 a.m.
on 30 November
Second general meeting of BVCT5 11.00 a.m.
on 30 November
Effective Date for implementation
of the Scheme and commencement of
the liquidation of BVCT5 30 November
Admission to listing and dealings
commence in the New Shares issued 8.00 a.m.
pursuant to the Scheme on 2 December
New Shares issued in uncertificated
form credited to CREST accounts of 8.00 a.m.
BVCT5 Shareholders under the Scheme on 2 December
Cancellation of listing of BVCT5 Shares
on the premium segment of the Official 8.00 a.m.
List and trading on the Main Market on 2 December
Share certificates in respect of New
Shares issued in certificated form
pursuant to the Scheme despatched week commencing
to Shareholders entitled thereto 12 December
Note: Each of the times and dates in the above expected
timetable (other than in relation to the General Meetings) may be
altered at the sole discretion of the directors of each Company
respectively. If any of the above times and/or dates change, the
revised time(s) and/or dates will be notified to shareholders by an
announcement through a Regulatory Information Service.
Copies of the Prospectus and Circulars will shortly be available
for inspection at the National Storage Mechanism, which is located
at:
http://www.hemscott.com/nsm.do
and on the website of the Companies:
http://www.baronsmeadvcts.co.uk
For additional information, please contact:
Michael Probin - VCT Investor Relations Director
Livingbridge VC LLP
Tel: 020 7506 5796
This information is provided by RNS
The company news service from the London Stock Exchange
END
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