TIDMBDV

RNS Number : 4082F

Baronsmead VCT PLC

11 November 2015

Baronsmead VCT plc

Proposed merger between Baronsmead VCT plc and Baronsmead VCT 2 plc (the "Companies") and Fundraising intentions

Introduction

Changes to the limits on the amount of funding which investee companies can receive from VCTs have removed the commercial advantage of having multiple Baronsmead VCTs. In addition, the amount of stamp duty that would be payable as a result of a merger has reduced significantly over the past 18 months. As a consequence, the boards of directors of the Companies announce that they have entered into discussions regarding a possible merger of the Companies (the "Merger"). It is intended that the Merger will be effected on a NAV for NAV basis by way of a scheme of reconstruction under the Insolvency Act 1986.

Benefits to shareholders

The boards of the Companies believe that the Merger would be in the best interests of the shareholders of both Companies for the following reasons.

   -- It would result in estimated annual costs savings for the merged company of around GBP300,000 per annum. 
 
   -- It would remove the duplication of communication with the many shareholders that are common to both Companies and 
      the administrative burden for them of managing multiple holdings. 
 
   -- It would create a larger merged company with net assets of approximately GBP170 million which would potentially 
      make it more attractive to private client wealth managers and should enhance the liquidity of the shares in the 
      secondary market.

In addition the Merger would significantly reduce the administration burden of managing two separate companies at a time when regulation is becoming increasingly complex.

The proposal

It is proposed that the merger will be effected by way of a scheme of reconstruction and the winding up of Baronsmead VCT plc under section 110 of the Insolvency Act 1986 (the "Scheme"). Under the terms of the Scheme the assets of Baronsmead VCT plc would be transferred to Baronsmead VCT 2 plc (the "Merged Company") in exchange for the issue of new shares in the Merged Company to the shareholders of Baronsmead VCT plc on a NAV for NAV basis.

Timing

The Boards expect to write to their respective shareholders with further details on the terms of the proposed merger in January 2016. It is currently intended that, subject to shareholder approval, the Merger will become effective in early February 2016.

Fundraising

Subject to shareholder approval of the Merger, it is proposed to launch an offer for subscription that would provide the Companies' existing shareholders with the opportunity, on a priority basis, to subscribe for new shares in the Merged Company in the 2015/16 tax year.

For further information, please contact:

Michael Probin Investor Relations

Livingbridge VC LLP: 020 7506 5796

This information is provided by RNS

The company news service from the London Stock Exchange

END

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November 11, 2015 11:00 ET (16:00 GMT)

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