TIDMARTL
RNS Number : 1056D
Alpha Real Trust Limited
05 October 2018
5 October 2018
LEI: 213800BMY95CP6CYXK69
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Alpha Real Trust Limited
("ARTL" or the "Company")
Tender Offer for up to 5,000,000 Ordinary Shares at 138p per
Ordinary Share
A circular explaining the terms of a Tender Offer for up to
5,000,000 Ordinary Shares at 138 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
On 5 January 2018, Ordinary Shareholders and Class A
Shareholders approved the Share Purchase Resolution to enable the
Company to buy back up to 17,117,376 Ordinary Shares, representing
a maximum of 24.99 per cent. of the Voting Share Capital as at the
latest practicable date prior to the publication of the 2017
Circular, being 11 December 2017.
The Share Purchase Authority was expressed to be conditional on
the approval given by the Panel Waiver Resolution which was also
passed on 5 January 2018 and so therefore has the benefit of the
Panel Waiver (see paragraph 2.4 of the Circular for further
details).
Subsequent to 5 January 2018, whilst the Company has not
realised any significant disposals, it has maintained a strong cash
position and remains cautious in the deployment of funds in new
investments. Since 5 January 2018, the Company has bought back a
total of 10,000 Ordinary Shares under its share buyback programme.
Given this position, 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 138 pence
per Ordinary Share, being the Tender Offer Price which represents a
premium of 5.2 per cent. to the average closing price of an
Ordinary Share for the 30 days prior to the Latest Practicable Date
and a discount of 21.1 per cent. to the unaudited NAV per Ordinary
Share as at 30 June 2018 of 174.8 pence. The Tender Price is also
equal to the highest closing price for the Company's Ordinary
Shares in the past 12 months prior to the Latest Practicable Date
(source: Datastream).
On 4 October 2018 the Company announced that additional planning
consent had been obtained in respect of the Company's private
rented sector development at Monk Bridge in Central Leeds (the Monk
Bridge Asset) and consequently that it has been advised that this
additional planning consent will result in a material increase in
the carrying value of the Monk Bridge Asset. This updated valuation
will be reflected in the NAV per Ordinary Share for the period
ending 30 September 2018 which is expected to be announced on or
around 16 November 2018.
2. Background
In light of the fact that the Company's Ordinary Shares are
currently trading at a discount to the unaudited net asset value of
the Company (such discount being approximately 22.8 per cent. as at
the Latest Practicable Date, based on the unaudited NAV per
Ordinary Share as at 30 June 2018 of 174.8 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 5,000,000 Ordinary Shares, representing approximately 7.3 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 17,117,376 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.
As referred to above, the Company is authorised to buy back up
to 17,117,376 Ordinary Shares pursuant to the Share Purchase
Authority which was approved by Shareholders on 5 January 2018 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 5 January 2018. Since 5 January 2018,
the Company has bought back a total of 10,000 Ordinary Shares under
its share buyback programme.
The Tender Offer will be financed from the Company's existing
cash resources. As at 3 October 2018, the Company had cash and
units in Freehold Income Authorised Fund (which offers a monthly
redemption facility) totalling GBP21 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, your Board 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 and, in the case of Ordinary Shares held in certificated
form, on the Tender Form.
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 the Ordinary Shares
arising on conversion of the Class A Shares) held by them on the
Record Date.
Qualifying Shareholders can choose whether they wish 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 5,000,000 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.
-- 5,000,000 Ordinary Shares represent approximately 7.3 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
5,000,000 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 5,000,000, 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 October 2018. 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 16 October 2018;
- 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 October
2018; 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.
Full details of the Tender Offer, including the terms and
conditions on which it is made, are set out in Part 4 of the
Circular.
4. Status of the Class A Shares
The Company's investment in Romulus High Income Trust plc
(Romulus) was acquired as part the Company's acquisition of the
Property Investment Portfolio plc (PIP) portfolio in 2012. The
Company 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.
Romulus was put into liquidation on 12 February 2018 and the
liquidation is ongoing. The Company expects to receive a further
sum from the liquidators in respect of its investment in
Romulus.
A further distribution is therefore currently anticipated. Based
on the current number of Class A Shares this distribution is
expected to be less than 1 pence per Class A Share.
In view of the above the Board does not intend to exercise its
right to give a Compulsory Conversion Notice in accordance with the
Articles, which would convert some or 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 a final
distribution is made.
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 this Part 1.
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 approximately 39.26
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 Practicable In the event the Tender
Date Offer is fully taken
up
Shareholder Number of % of Voting Number of % of Voting
Ordinary Share Capital Ordinary Share Capital
Shares Shares of the Company
------------- ---------------- ----------- ----------------
ARC 22,550,000 32.93 22,550,000 35.52
------------- ---------------- ----------- ----------------
ARC Concert
Parties 4,340,731 6.34 4,340,731 6.84
------------- ---------------- ----------- ----------------
Total 26,890,731 39.26 26,890,731 42.36
------------- ---------------- ----------- ----------------
The Panel agreed in December 2017 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 5 January 2018. 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 some or 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 nor ARC nor any of the ARC Concert Parties
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 receipt 5.00 p.m. on 16 October 2018
of Conversion Notices, 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 into 25 October 2018
Ordinary Shares in respect of which
a Conversion Notice has been given
Admission to the SFS of Ordinary 8.00 a.m. on 26 October 2018
Shares arising on conversion of
Class A Shares in respect of which
a Conversion Notice has been given
Latest time and date for receipt 3.00 p.m. on 26 October 2018
of Tender Forms or for settlement
of TTE Instructions in respect of
the Tender Offer
Record Date for participation in 6.00 p.m. on 26 October 2018
the Tender Offer
Results of the Tender Offer announced 29 October 2018
Settlement date: cheques despatched from 5 November 2018
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 12 November
and CREST accounts credited in respect 2018
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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