TIDMDDIT
STAKEHOLDERS' MOMENTUM IVESTMENT TRUST PLC
(FORMALLY THE DIRECTORS' DEALING INVESTMENT TRUST PLC)
Valuation as at 16th April 2010
Stakeholders' Momentum Investment Trust PLC ("SMIT" or the "Company") announces
that the Net Asset Value as at 16th April 2010 (including current period
revenue) was 369.3p. The fully diluted net asset value per share was 363.9p.
It is important to consider notes 9 and 10 of the Interim Results announcement
released on 26 February 2010 when considering the fully diluted net asset value
per share.
Manchester & London Investment Trust PLC announced a possible offer for SMIT on
26 March 2010. Under the terms of the Offer being discussed, accepting SMIT
Shareholders would receive new MLIT Shares, the number of which would be
determined by reference to a formula based on net assets per share.
The Formula Asset Value ("FAV") per share for SMIT as at 16th April 2010,
calculated in accordance with the proposed formula which is attached to this
announcement below, was 319.8p.
It is emphasised that it is possible that no offer will be made for SMIT and
that if an Offer is made on the basis of the FAV formula described below, the
FAV will be calculated using the net asset values and numbers of securities in
issue as and when the offer may be declared unconditional by which time they
are expected to have changed. Accordingly the FAV of 319.8p per SMIT share
shown in this paragraph is for illustrative purposes only and the actual FAV
per SMIT share on the calculation date applicable to an offer may be higher or
lower than this amount. The wording of the FAV attached to the announcement on
26 March 2010 has been amended in relation to the provision relating to certain
disputes (paragraph B (xiii)) and was previously fixed. This provision is now
partially variable to reflect the fact that the value of certain disputed
management warrants is variable and consequently the amount of the FAV of a
SMIT Share may go up or down due to changes in the amount of this provision as
well as a result of changes in the value of SMIT's other assets and liabilities
or in the number of SMIT securities in issue.
The company's investment portfolio consisted of the following as at 16th April
2010:
Capital allocated to Legacy Portfolio: GBP 1.3m
Capital allocated to General Portfolio, Cash and Working Capital: GBP 19.8m
The persons responsible for this announcement are the directors of
Stakeholders' Momentum Investment Trust plc. To the best of the knowledge and
belief of the directors (who have taken all reasonable care to ensure that such
is the case) the information contained in this announcement is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
For enquiries:
Midas Investment Management Limited - 0161 228 1709
CALCULATION OF THE FORMULA ASSET VALUES
For the purpose of this document, each of SMIT and MLIT is, unless the context
otherwise requires, referred to as the "Relevant Company". Each of the FAV per
SMIT Share and the FAV per MLIT Share shall be calculated as at the close of
business on the Calculation Date (being the date on which the Offer becomes or
is declared unconditional as to acceptances) and shall be the amount in pence
which is the result of the following formula, rounded to four decimal places
(with 0.00005p being rounded upwards):
FAV per share of the Relevant Company = A - B
C
where
"A" is the aggregate of:
i. the value of those investments of the Relevant Company which are listed,
traded, quoted or dealt in on a recognised stock exchange or on AIM,
calculated by reference to the bid quotations or, if not available, prices
or the last trade prices for those investments as at the close of business
on the Calculation Date as derived from the relevant exchange's recognised
method of publication of prices for such investments (any CFD accounts
containing cash and positions to be valued using the statement from the
independent CFD administrator as at the close of business on the
Calculation Date);
ii. the value of those investments of the Relevant Company which are dealt in
or traded on any publicly-available exchange or market (including any "over
the counter" market but excluding any exchange or market referred to in
sub-paragraph A(i) above), calculated by reference to the average of the
daily average of the prices marked for such investments on each of the five
business days up to and including the Calculation Date on which there were
dealings or trading in such investments as derived from the relevant
market's recognised method of publication of prices for such investments;
iii. the value of those investments of the Relevant Company which are units in
unit trusts or shares in open-ended investment companies, calculated by
reference to the prices or, in the case of units or shares in respect of
which cancellation and bid prices are quoted, the lower of the cancellation
and bid prices quoted as at the close of business on the Calculation Date
by the manager of the relevant unit trust or open-ended investment company
for holdings of the size held by the Relevant Company (and, for the
avoidance of doubt, any such investments which are listed, traded, quoted
or dealt in on a recognised stock exchange shall be valued under this
sub-paragraph (iii) and not under sub-paragraph A(i) above);
iv. the value of those traded uncovered options and futures contracts to which
the Relevant Company is a party as at the close of business on the
Calculation Date which are traded on a stock, commodities, financial
futures or other securities exchange, calculated by reference to the
official middle-market closing prices on the Calculation Date as derived
from the relevant exchange's recognised method of publication of prices for
such traded options and futures contracts;
v. the value of call options contracts to which the Relevant Company is a
party as at the close of business on the Calculation Date which are traded
on a stock held in the portfolio of the Relevant Company shall be valued at
zero unless the premium is still due in which case the position will be
valued at the premium value due;
vi. the value of those investments of the Relevant Company which have unexpired
call options sold against a stock held in the portfolio of the Relevant
Company shall be valued at the strike price of the call if the bid price of
the investment is above the strike price as at the close of business on the
Calculation Date;
vii. the value of all other investments of the Relevant Company, calculated as
being their fair realisable values as at the close of business on the
Calculation Date as determined by agreement between the Company Secretary
of MLIT, on behalf of MLIT, and Capita Sinclair Henderson Limited
("Capita") or the SMIT Board, on behalf of SMIT (or, failing such agreement
within seven days after the Calculation Date, as determined by an
independent expert);
viii. the amount as at the close of business on the Calculation Date of any
sums due from debtors (including, for this purpose, any dividends or
distributions receivable on investments quoted ex-dividend or
ex-distribution on the Calculation Date and any interest accrued on any
debt securities as at the Calculation Date and any recoverable tax credit
in relation thereto, but excluding any dividend, distribution or interest
not yet received which has been taken into account in the value of any of
the investments referred to in sub-paragraphs A (i) to (vii) (inclusive)
above or is unlikely to be received), cash and deposits with or balances at
banks, bills receivable and any money market instruments of the Relevant
Company (together with, in each case, any accrued interest at that date
less an accrual for any associated tax) and the fair realisable value of
any other tangible assets of the Relevant Company not otherwise accounted
for in subparagraphs A (i) to (vii) (inclusive) above, less any provision
for diminution of value which may be appropriate in respect of any of
sub-paragraphs A (i) to (vii) (inclusive) above (including provisions for
bad or doubtful debts), in each case as determined by agreement between the
Company Secretary of MLIT, on behalf of MLIT, and Capita or the SMIT Board
(or, failing such agreement within seven days after the Calculation Date,
as determined by an independent expert);
ix. in the case of the FAV per MLIT Share only, the value of its Wimbledon
debentures will be valued at GBP40,483 which was the last valuation as
provided by the All England Lawn Tennis Ground plc.
"B" is the aggregate of:
i. in respect of each Relevant Company, the principal amounts as at the close
of business on the Calculation Date of any outstanding borrowings plus any
accrued but unpaid interest, commitment fees and other charges up to and
including that date and the higher of any premiums or penalties payable on
either early or final repayment if required;
ii. the cost of closing as at the close of business on the Calculation Date any
open foreign exchange or other forward purchase or sale contract to which
the Relevant Company is a party on that date (save to the extent otherwise
taken into account in calculating the FAV per share of the Relevant
Company);
iii. in the case of the FAV per SMIT Share only, the cost of termination as at
the close of business on the Calculation Date of any investment advisory
(Midas has agreed that no termination fee will be due in the event the
Offer becomes unconditional), advisory, custody, supplier and
administrative arrangements in force on that date, including, but not
limited to, any compensation or other payments to be made to any investment
manager, investment adviser, administrator, secretary, director or employee
of SMIT, such amount to include irrecoverable value added tax (where
applicable) but to exclude any tax relief;
iv. in the case of the FAV per SMIT Share only, the cost of terminating as at
the close of business on the Calculation Date any other contracts or
arrangements whatsoever in force on that date to which SMIT is a party, but
excluding, for the purpose of this sub-paragraph B (iv), any investment
management, advisory and administrative arrangements in force at the close
of business on the Calculation Date;
v. the total cost of any dividend or other distribution of the Relevant
Company declared on or before the Calculation Date, so far as not
previously paid;
vi. in the case of the FAV per SMIT Share only, the costs, expenses and fees of
any independent expert appointed in connection with determining the Formula
Asset Values (of either/or both Relevant Companies), as well as any
additional accrued but unpaid costs and expenses to the Relevant Companies
arising directly as a result of and specifically in connection with the
appointment of an independent expert and the performance of its function,
such amount to include irrecoverable value added tax (where applicable) but
to exclude any tax relief;
vii. the aggregate of the amount of any Panel fees, UKLA fees and printing
costs to be borne equally by each Relevant Company in respect of the Offer
(including any VAT chargeable);
viii. n the case of the FAV per SMIT Share only, the amount of all stamp duty
or stamp duty reserve tax and any other costs expected to be payable in
respect of the transfer of the SMIT Shares to MLIT pursuant to the Offer or
by way of compulsory acquisition following the Offer being declared
unconditional, and the estimated costs of transferring the SMIT investment
portfolio to MLIT in order to achieve the intended merger benefits as
estimated by agreement between the Company Secretary of MLIT, on behalf of
MLIT, and Capita, or the SMIT Board (or, failing such agreement within
seven days after the Calculation Date, as determined by an independent
expert);
ix. the aggregate of the amount of all accrued but unpaid professional,
advisory, legal and other fees and other advertising costs and expenses
incurred by the Relevant Company in connection with the Offer, such amount
to include irrecoverable value added tax (where applicable) but to exclude
any tax relief including all such fees, costs and expenses relating to or
in connection with the determination of the Formula Asset Values (excluding
any amounts arising under sub-paragraph B (vi) above) and including for the
purpose of this sub-paragraph B (ix) all stamp duty, stamp duty reserve tax
and transfer out costs already provided for in accordance with
sub-paragraph B (viii) above, such amount to include irrecoverable value
added tax (where applicable) but to exclude any tax relief;
x. the aggregate of the amount of any accrued but unpaid professional,
advisory, legal and other fees and advertising and other costs and expenses
whatsoever incurred by the Relevant Company otherwise than in connection
with the Offer, such amount to include irrecoverable value added tax (where
applicable) but to exclude any tax relief;
xi. an amount which fully reflects all other liabilities and obligations of the
Relevant Company whatsoever, including a fair provision for any contingent
liabilities (including any additional liabilities to taxation, whether or
not deferred, and any liabilities arising on liquidation) or losses
(including disputed claims), as at the close of business on the Calculation
Date determined by agreement between the Company Secretary of MLIT, on
behalf of MLIT, Capita or the SMIT Board, on behalf of SMIT. (or, failing
such agreement within seven days after the Calculation Date, as determined
by an independent expert);
xii. in the case of the FAV per SMIT Share only, a liquidity adjustment equal
to 50 per cent. of the value (calculated in accordance with the principles
in A (i) and A (ii) above) of the Legacy Portfolio being the holdings in
Property Recycling Plc, Rapid Realisations Ltd and Angel Realisations Plc;
and
xiii. in the case of the FAV per SMIT Share only, a provision in respect of
management warrants issued to Knox D'Arcy Asset Management Ltd and certain
other contingent liabilities relating to KDAM, a transaction with an
insurance company associated with KDAM and VAT on fees paid to another
former investment manager, further information about which is set out in
note 9 & 10 of Unaudited Interim Results for the six months ended 31
December 2009. As the value of the warrants changes in line with movements
in the NAV per SMIT Share, had the Calculation Date been 16th April 2010
(being the date when SMIT released its Net Asset Values per share) then the
illustrative value of this provision would have been GBP1,522,836. See note
10 below for further details.
"C" is the aggregate of:
i. the number of shares in the Relevant Company in issue; and
ii. the number of shares capable of being issued on the exercise of warrants or
subscription rights;
as at the close of business on the Calculation Date.
Notes:
* For the purpose of the above calculations, the value of any investments,
other assets or liabilities denominated or valued in currencies other than
Sterling shall be converted into Sterling at the closing midpoint spot rate
of exchange between Sterling and such other currencies in London as at the
close of business on the Calculation Date as published in the Financial
Times or, failing which, as certified by Midas (acting as an expert and not
as an arbiter).
* In the case of sub-paragraphs A(i), (ii), (iii), (iv), (v) and (vi) above,
if there has been any general suspension of trading on the relevant stock,
commodities, financial futures or other securities exchange or market, or
if it was closed for business on the Calculation Date, the value of the
relevant investments, traded options or futures contracts shall be taken as
at the close of business on the immediately preceding date on which there
was trading on such exchange or market, provided that such date is not more
than seven days prior to the Calculation Date and save that, if there has
been a material adverse change in the financial position of any such
underlying investment, traded option or futures contract since the date by
reference to which its value is calculated but prior to the close of
business on the Calculation Date, a fair provision (as determined by
agreement between the Company Secretary of MLIT, on behalf of MLIT, and
Capita or the SMIT Board, on behalf of SMIT (or failing such agreement
within seven days after the Calculation Date, as determined by an
independent expert)) shall be made to take account of such adverse change
in the value of the relevant investment, traded option or futures contract.
3 Subject to note 2 above, in the case of sub-paragraphs A (i) to (vi)
(inclusive) above:
(i) where any such investment, traded option or futures contract is subject to
restrictions on transfer or a suspension of dealings or if no such published or
quoted prices are available in respect of any such investment, traded option or
futures contract, in each case as at the close of business on the Calculation
Date, the value of such investment, traded option or futures contract will be
calculated as at the close of business on the Calculation Date in accordance
with sub-paragraph A (vii) above; and
(ii) where any such investment, traded option or futures contract is, at the
close of business on the Calculation Date, subject to any right of any person
to acquire the same or any obligation on the Relevant Company to dispose of the
same, whether as a result of the Offer being made or becoming or being declared
unconditional or otherwise, at a price more or less than would otherwise be
determined in accordance with sub-paragraphs A (i) to (vi) (inclusive) above,
such investment, traded option or futures contract shall be valued at such
greater or lesser price unless such right or obligation is unconditionally and
irrevocably waived or lapses prior to the calculation of the FAV per share of
the Relevant Company otherwise being agreed or determined.
4 Subject to note 5 below, with regard to sub-paragraphs A (vii) and (viii)
above, the Company Secretary of MLIT and Capita or the SMIT Board, and if
appointed, any independent expert, shall have regard, inter alia, to the
following when determining the value of any investment or other asset (which
shall be calculated on the basis of a notional sale by a willing seller to a
willing buyer, without regard to any additional value that might be attributed
to such investment or other asset by any special category of potential
purchaser):
(i) the existence or exercise of any pre-emption rights or obligations in
respect of such investment or other asset or any other restrictions on the
transfer or disposal of the same which may exist or which may arise as a
consequence of the proposed acquisition by MLIT of SMIT or any SMIT Shares or
of the transfer of such investment or other asset to any party or of the
winding up of SMIT;
(ii) the terms and volumes of any recent dealings in, and marketability of,
such investment or other asset; and
(iii) the amount of any bona fide offer to acquire such investment or other
asset which may be made by any person and brought to the attention of the
Company Secretary of MLIT and Capita or the SMIT Board or, if appointed, any
independent expert.
* With regard to sub-paragraphs A (vii) and (viii) above, the Company
Secretary of MLIT, Capita, the SMIT Board and, if appointed, any
independent expert shall, except in the case of debtors and tangible
assets, be bound by the actual amount of cash items and, in the case of
debtors and tangible assets, shall adopt the accounting policies used by
the Relevant Company in its latest audited financial statements.
* If any liability referred to in sub-paragraphs B(i) to (xi) (inclusive)
above has not been determined by the date on which the calculations and
adjustments otherwise necessary to determine the FAV per share of the
Relevant Company have been made, there shall be included in "B" such amount
in respect of any such liability as shall be considered to be an
appropriate estimate by the Company Secretary of MLIT.
* In agreeing any fair realisable value (in the case of sub-paragraphs A
(vii) and (viii) above) or estimating or determining the amount of any
liabilities, obligations or losses (in the case of sub-paragraphs B(viii)
or B(xi) above), or in making any determination under notes 2 and 6 above,
the Company Secretary of MLIT and Capita or the SMIT Board shall act as
experts and not as arbitrators and any such determination shall be final
and binding on all persons and neither of them shall be under any liability
to any person by reason thereof or by reason of anything done or omitted to
be done by them for the purposes thereof or in connection therewith.
* The independent expert referred to herein shall be a member of the
Association for Financial Markets in Europe (not connected with any of the
parties providing advice to SMIT or MLIT in connection with the Offer)
selected by the Company Secretary of MLIT, the SMIT Board or, in default of
such selection within 14 days after the Calculation Date, by the chairman
for the time being of the Association for Financial Markets in Europe on
the application of either the Company Secretary of MLIT or or the SMIT
Board. Such member shall act as an expert and not as an arbitrator and his
determination shall (subject to any agreement to the contrary between MLIT
and SMIT) be final and binding on all persons and such member shall not be
under any liability to any person by reason of his appointment or by
anything done or omitted to be done by him for the purposes of such
appointment or in connection therewith.
* Notwithstanding any of the above provisions, in the event that the
valuation of any investment or other asset of the Relevant Company in
accordance with any of such provisions, or the amount of any deduction made
in accordance with sub-paragraphs B (i) to (xi) (inclusive) above, is, in
the opinion of the Company Secretary of MLIT and the SMIT Board, incorrect
or unfair they may, if they so agree, adopt an alternative method of
valuation or deduction, as the case may be.
* The amount of the provision set out in sub-paragraph B (xiii) above was
shown in the announcement of the possible Offer dated 26 March 2010 as
being GBP1,520,578, using the fully diluted Net Asset Value per SMIT Share
disclosed as at 12 March 2010. The difference between these two amounts
arises from a change in the value of management warrants as a result of
movements in the Net Asset Value per SMIT Share.
END
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