TIDMADMF
RNS Number : 2692I
Advance Developing Markets Fund Ltd
29 May 2014
Advance Developing Markets Fund Limited (the "Company")
Tender Offer for up to 10 per cent. of Shares in issue and
publication of circular
Introduction
Further to the Company's announcement on 2 May 2014, a circular
explaining the terms of a Tender Offer for up to 10 per cent. of
the Shares in issue (the "Circular") will today be posted to
Shareholders. A copy of the Circular will be submitted to the
National Storage Mechanism and will shortly be available at:
http://www.morningstar.co.uk/uk/NSM and on the Company's website:
www.advance-emerging.com.
The Chairman's Letter in respect of the Tender Offer, as
contained in the Circular, is set out below.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular to be published today.
Chairman's Letter
"Dear Shareholder,
Tender Offer for up to 10 per cent. of the Shares in issue
1. Introduction
At the extraordinary general meeting of the Company held on 15
March 2013, shareholders approved proposals for two conditional
tender offers for up to 10 per cent. of the Company's Shares in
issue (excluding treasury shares) at 6 monthly intervals over the
12 month period to 30 April 2014.
As announced to the market on 2 May 2014, in the six months
measurement period ended 30 April 2014, the Company's Shares traded
at an average discount of 11.0 per cent. and the Company's
performance over the same period, as measured by its net asset
value total return, was 0.2 per cent. below that of the MSCI
Emerging Markets Total Return Index (net) in Sterling terms.
Consequently, the Board will be implementing a tender offer for up
to 10 per cent. of the Company's Shares in issue (excluding
treasury shares) at a Tender Price equal to a 1 per cent. discount
to the Formula Asset Value per Tendered Share.
The purpose of this document is to set out the mechanics and the
terms and conditions of the Tender Offer and to explain how
Shareholders (other than Excluded Shareholders) may tender their
Shares in the Tender Offer should they wish to do so.
This letter is not a recommendation for Shareholders to tender
their Shares under the Tender Offer. Whether or not Shareholders
tender their Shares will depend on, among other things, their view
of the Company's prospects and their own individual circumstances,
including their tax position, on which they should seek their own
independent advice.
2. The Tender Offer
The Board proposes to make available a Tender Offer for up to 10
per cent. of the Shares in issue (excluding treasury shares) on the
Record Date to enable those Shareholders (other than Excluded
Shareholders) who wish to realise a portion of their holding of
Eligible Shares to do so.
The Tender Price will be an amount equal to a discount of 1 per
cent. to the Formula Asset Value per
Tendered Share as at the close of business on 13 June 2014,
calculated in accordance with paragraph 4 of Part III of this
document. The Tender Price, being equal to a 1 per cent. discount
to the Formula Asset Value per Tendered Share, allows Shareholders
who wish to realise a portion of their holding of Eligible Shares
to do so at a price close to NAV per Share whilst providing for a
small uplift to NAV per Share for continuing Shareholders.
The Record Date for the Tender Offer is the close of business on
7 May 2014.
Under the terms of the Tender Offer, Shareholders (other than
Excluded Shareholders) will be entitled to tender up to their Basic
Entitlement, being 10 per cent. of the Eligible Shares they held as
at the Record Date. Shareholders may also be able to tender
additional Eligible Shares, but any such excess tenders above the
Basic Entitlement will only be satisfied, on a pro rata basis, to
the extent that other Shareholders tender less than their aggregate
Basic Entitlement. Tender applications will be rounded down to the
nearest whole number of Shares.
The results of the Tender Offer are expected to be announced on
17 June 2014.
Further details of the Tender Offer
Shareholders (other than Excluded Shareholders) on the Register
on the Record Date are invited to tender for sale some or all of
their Eligible Shares (subject to the overall limits of the Tender
Offer) to Westhouse Securities who, as principal, will purchase at
the Tender Price the Eligible Shares validly tendered (subject to
the overall limits of the Tender Offer) and, following the
completion of all those purchases, sell the relevant Eligible
Shares on to the Company at the Tender Price by way of an on-market
transaction, in accordance with the terms of the Repurchase
Agreement. All transactions will be carried out on the London Stock
Exchange. Any Shares purchased by the Company pursuant to the
Tender Offer will be cancelled.
The Tender Offer is conditional upon Westhouse Securities having
received payment from the Company in respect of the purchase price
for the Repurchased Shares in accordance with the Repurchase
Agreement and may be terminated in certain circumstances as set out
in paragraph 3 of Part III of this document. Further details of the
calculation of the Tender Price are set out in paragraph 4 of Part
III of this document. Shareholders' attention is drawn to the
letter from Westhouse Securities set out in Part II of this
document and, for Shareholders who hold their Shares in
certificated form, to the Tender Form which together constitute the
terms and conditions of the Tender Offer.
Details of how to tender Eligible Shares can be found in
paragraph 5 of Part III of this document. Shareholders should note
that, once tendered, Eligible Shares may not be sold, transferred,
charged or otherwise disposed of other than in accordance with the
Tender Offer.
Shareholders are not obliged to tender any Shares and, if they
do not wish to participate in the Tender Offer, Shareholders should
not complete or return their Tender Form or send a TTE Instruction.
Shareholders who are in any doubt as to the contents of this
document or as to the action to be taken should immediately consult
their stockbroker, bank manager, solicitor, accountant or other
independent professional adviser authorised under the Financial
Services and Markets Act 2000 or other appropriately qualified
independent adviser.
3. Discount control
The Tender Offer concludes the tender proposals which were put
in place at the time of the Company's continuation vote in 2013
following a consultation exercise with Shareholders. Such
proposals, which were linked to the Company's discount to Net Asset
Value and performance, have resulted in a significant return of
capital to Shareholders by way of three tender offers at a price
very close to the then prevailing Net Asset Value per Share. It is
not currently planned to put in place further tender proposals
although the Board intends to continue to focus on management of
the discount, through its stated discount control policy, and a
regular review of the Company's performance at each Board
meeting.
The Board seeks authority annually from Shareholders to buy back
Shares and Shares may be repurchased when, in the opinion of the
Board and taking into account factors such as market conditions and
the discounts of comparable funds, the Company's discount is higher
than desired and Shares are available to purchase in the market.
The Board believes that, in normal market conditions, the Shares
should trade at a price which on average represents a discount of
less than 10 per cent. to Net Asset Value.
4. Expenses
The fixed costs and expenses payable by the Company in
connection with the Tender Offer are estimated to amount to
approximately GBP70,000. This amount does not include portfolio
realisation costs and commission payable to Westhouse Securities
(being 0.2 per cent. of the amount equal to the Tender Price
multiplied by the number of successfully tendered Eligible Shares).
All costs and expenses in relation to the Tender Offer will be
borne by Shareholders participating in the Tender Offer.
5. Taxation
Shareholders who sell Eligible Shares in the Tender Offer may,
depending on their individual circumstances and subject to the
availability of any exemption or relief, incur a liability to
taxation. UK resident Shareholders should be aware that HMRC may
seek to treat the disposal proceeds of their Eligible Shares as
income. The attention of Shareholders is drawn to Part IV of this
document, which sets out a general guide and is not exhaustive.
Shareholders should seek advice in relation to their own specific
circumstances.
Shareholders who are in any doubt as to their tax position
should seek advice from an appropriately qualified
professional.
6. Overseas Shareholders and Excluded Shareholders
Before participating in the Tender Offer, Shareholders with an
address outside the United Kingdom or who are resident outside the
United Kingdom should satisfy themselves that they are lawfully
entitled to participate in the Tender Offer and should ensure full
observance of the laws of any relevant territory in connection
therewith (including obtaining any requisite consents, observing
any other applicable formalities and paying any taxes required to
be paid in such territory). Tender Forms will not be sent to
Excluded Shareholders and the Tender Offer may not be accepted from
within any of the Restricted Territories.
Shareholders with registered or mailing addresses overseas or
who are citizens of, or nationals of, or residents in, an overseas
jurisdiction should read paragraph 10 of Part III of this
document.
7. Action to be taken
Shareholders who hold their Eligible Shares in certificated form
and who wish to participate in the Tender Offer should complete the
Tender Form in accordance with the instructions set out therein and
return the completed Tender Form by post or hand (during normal
business hours only) to the Receiving Agent, Capita Asset Services,
Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent
BR3 4TU, by no later than 1.00 p.m. on 13 June 2014, and they
should also return the valid share certificate(s) and/or other
document(s) of title in respect of the Eligible Shares tendered. A
reply-paid envelope (for use within the UK only) is enclosed for
your convenience.
Shareholders who hold their Eligible Shares in uncertificated
form (that is, in CREST) and who wish to
participate in the Tender Offer should take the appropriate
action in CREST to tender their Eligible Shares and should arrange
for the relevant Eligible Shares to be transferred to escrow by no
later than 1.00 p.m. on 13 June 2014, as described in paragraph 5.3
of Part III of this document.
Shareholders who wish to continue with their existing investment
in the Company should not return a Tender Form or tender their
Eligible Shares through CREST.
8. Recommendation
The Board makes no recommendation to Shareholders as to whether
or not they should tender their Eligible Shares in the Tender
Offer. The Directors do not intend to tender any of their own
Shares. Whether or not Shareholders decide to tender their Eligible
Shares will depend, amongst other factors, on their view of the
Company's prospects and their own individual circumstances,
including their own tax position.
Yours faithfully
Richard Bonsor
Chairman"
Expected Timetable
Record Date for Tender Offer Close of business on 7 May 2014
Posting of the circular and Tender 29 May 2014
Form
Latest time and date for receipt 1.00 p.m. on 13 June 2014
of Tender Forms and TTE Instructions
(Closing Date)
Calculation Date Close of business on 13 June
2014
Announcement of results of Tender 17 June 2014
Offer and Tender Price
Distribution of sale price of Week commencing 23 June 2014
Repurchased Shares and crediting
of CREST accounts and despatch
of cheques
Despatch of balancing Share certificates Week commencing 23 June 2014
and TFE messages in respect of
any unpurchased Eligible Shares
All times are UK times. Times and dates are subject to
change.
Enquiries
Westhouse Securities Limited
Financial adviser and broker
Alastair Moreton 020 7601 6118
Hannah Young
Darren Vickers
This information is provided by RNS
The company news service from the London Stock Exchange
END
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