Proposed Merger
08 April 2010 - 4:01AM
UK Regulatory
TIDMPND
JOINT ANNOUNCEMENT
PENNINE AIM VCT PLC
PENNINE DOWNING AIM VCT 2 PLC
PROPOSED MERGER
7 April 2010
RECOMMENDED PROPOSALS FOR A MERGER ("Merger") BETWEEN PENNINE AIM VCT PLC
("Pennine 1" or "the Company") AND PENNINE DOWNING AIM VCT 2 PLC ("PDA2") TO BE
COMPLETED BY PLACING PDA2 INTO MEMBERS' VOLUNTARY LIQUIDATION PURSUANT TO
SECTION 110 OF THE INSOLVENCY ACT 1986 AND THE TRANSFER BY PDA2 OF ALL OF THEIR
ASSETS AND LIABILITIES TO PENNINE 1 CONSIDERATION FOR NEW ORDINARY SHARES OF 1
PENCE EACH IN PENNINE 1 ("NEW PENNINE 1 SHARES") AND THE CANCELLATION OF THE
LISTING OF THE ORDINARY SHARES OF PDA2 AND AN OFFER FOR SUBSCRIPTION BY PENNINE
1 TO RAISE UP TO GBP15M
SUMMARY
The boards of Pennine 1 and PDA2 announced on 30 November 2009 that they had
agreed, in principle and subject to shareholder approval, terms with each other
with a view to merging the companies together to create one larger entity. The
board of PDA2 is now writing to its shareholders with proposals for
consideration of the proposed merger ("the Scheme").
The Scheme will be effected by PDA2 being placed into members' voluntary
liquidation pursuant to scheme of reconstruction under Section 110 of the
Insolvency Act 1986. All of the assets and liabilities of PDA2 will be
transferred to Pennine 1 in exchange for New Pennine 1 Shares (which will be
issued directly to the shareholders of PDA2). The merger will be completed on a
relative net asset basis.
The effective date for the transfer of the assets and liabilities of PDA2 and
the issue of New Pennine 1 Shares pursuant to the Schemes is expected to be 4
May April 2010 ("the Effective Date"), following which the listing of the PDA2
will be cancelled and PDA2 will be wound up.
The Scheme is conditional, inter alia, on the approval of resolutions to be
proposed to shareholders of Pennine 1 and PDA2 at general meetings to be held on
4 May 2010 (for Pennine 1 ("Pennine 1 GM") and PDA2 ("PDA2 GM1") and 12 May
2010 (for PDA2 ("PDA2 GM2") and dissent not having been expressed by
shareholders of PDA2 holding more than 5 per cent. of the issued PDA2 share
capital.
Along with the Merger proposals, a number of further plans and proposals in
respect of Pennine 1 are set out in the documentation sent to shareholders,
which are summarised as follows:
* Adoption of a revised investment policy with a reduced focus on AIM-quoted
investments and appointment of Downing Corporate Finance Limited as
investment manager
* Change of name to "Downing Distribution VCT 2 plc"
* Consolidation of Pennine 1 Shares prior to completion of the Schemes such
that the net asset value of each new Pennine 1 Share will be GBP1.00.
* An Offer for Subscription in respect of the tax year 2010/2011 seeking to
raise up to GBP15 million. The Share Offer will close for subscriptions on
30 June 2010.
The Pennine 1 D Shares will not be within the scope of the Merger and will
continue as a separate pool following completion of the Scheme.
BACKGROUND
The Boards of each of Pennine 1 and PDA2 have been reviewing options for the
future of each VCT in view of the fact that each VCT is now quite small.
The Boards have now agreed proposals for the VCTs to merge to create one larger
and more commercially viable fund and, at the same time, providing cost benefits
to shareholders of each company.
The key benefits of merging the three VCTs are as follows:
* the creation of a single VCT of a more economically efficient size with a
greater capital base over which to spread administration, regulatory and
management costs producing a reduction in the annual running costs of the
Enlarged Company compared to the total annual running costs of the separate
companies;
* participation in a larger VCT which is able to build more significant stakes
in its investee companies;
* an enhanced ability to pay dividends and the operation of a strong share
buyback policy due to the increased size and the reduced running costs of
the Enlarged Company; and
* an increased flexibility in continuing to meet the various requirements of
the VCT Rules.
Shareholders should note that the Mergers will be outside the provisions of the
City Code on Takeovers and Mergers.
EXPECTED TIMETABLE
Offer for Subscription open 7 April 2010
Latest time for receipt of forms of proxy for 2:30 pm on 30 April 2010
the General Meeting
Pennine 1 GM 2:30 pm on 30 April 2010
PDA2 GM1 2:45 pm on 30 April 2010
Record Date for the Share Consolidation 11 May 2010
Calculation Date after 5.00 pm on 11 May 2010
PDA2 GM2 2:30 pm on 12 May 2010
Effective Date for the Share Consolidation and 12 May 2010
the transfer of the assets and liabilities of
PDA2 to the Company and the issue of
Consideration Shares to PDA2 Shareholders*
Announcement of the results of the Schemes 12 May 2010
Admission of and dealings in the New Shares (in 13 May 2010
respect of the Share Consolidation and/or the
Schemes) to commence
CREST accounts credited with the New Shares (in 13 May 2010
respect of the Share Consolidation and/or the
Schemes)
Cancellation of the PDA2 Shares' listing 8.00 am on 13 May 2010
Certificates for the New Shares dispatched (in 19 May 2010
respect of the Share Consolidation and/or the
Schemes)
Closing date for 20010/11 Offer for Subscription 30 June 2010
and allotment of shares
(*this will, therefore, be the final expected date of trading of the ordinary
shares of 5p each in the capital of the Company)
BACKGROUND TO Pennine 1 AND PDA2
Pennine 1 was incorporated in January 1996 and, during 1996, raised
approximately GBP4.4 million (after issue costs). During 2003, Pennine 1 raised a
further GBP5.9 million (after issue costs). The funds were used to build an
investment portfolio predominantly comprising AIM-quoted investments. In June
2005, Pennine 1 acquired another VCT, Pennine AIM VCT II plc. In 2007, Pennine
1 raised a further GBP2.7 million (net of issue costs) under a D Share issue.
The investments and other assets and liabilities of the Shares are managed as a
separate pool to those of the D Shares. The D Share pool will continue to be
managed separately after the proposed Merger.
As at 31 July 2009 (the date of Pennine 1's most recently published Half-Yearly
Report), Pennine 1's unaudited NAV was 39.5p per Share. Since incorporation
Pennine 1 has paid a total of 88.05p per Share in dividends.
PDA2 raised some GBP12.5 million in 2001. In 2008, PDA2 acquired the assets and
liabilities of two other VCTs, Pennine Downing AIM VCT plc and The Ethical AIM
VCT plc. PDA2 now holds a portfolio comprising investments in some 39
companies. As at 31 August 2009 (the date to which the most recent unaudited
half yearly report on PDA2 has been drawn up), PDA2's unaudited NAV was GBP7.0
million. As at 28 February 2010, the unaudited NAV of PDA2 was GBP6.8 million.
The directors of each of Pennine 1 and PDA2 have considered the Board's
requirements following the proposed Merger. Nicholas Lewis (who was a director
of Pennine 1 and PDA2) and Tony McGing (who was a director of PDA2) resigned as
directors of the respective companies immediately prior to the publication of
the documentation to avoid any potential conflicts of interest. Colin Macnab,
John Goldschmidt (directors of Pennine 1) and Chad Murrin (a director of PDA2)
have agreed not to seek a place on the Board of the Enlarged Company. Andrew
Griffiths and Andrew Davison, both directors of PDA2, will join the Board on
completion of the Scheme. Michael Cunningham (see above) will also join the
Board. Following completion of the Scheme, Hugh Gillespie has agreed to step
down as Chairman in favour of Andrew Griffiths.
DOCUMENTS AND APPROVALS
Pennine 1 shareholders will also receive a copy of a circular convening the
Pennine 1 GM to be held on 4 May 2010 (together with the Pennine 1 prospectus)
at which Pennine 1 shareholders will be invited to approve resolutions in
connection with the Schemes, to consolidate the Company's share capital, to
authorise the directors to allot shares, to approve the acquisition of the
assets and liabilities of PDA2 pursuant to the Schemes, to change the name of
Pennine 1 to "Downing Distribution VCT 2 plc", to amend the Company's
Investment Policy, to adopt new Articles of Association, to cancel the share
premium account, to cancel the capital redemption reserve and to renew share
issue and share repurchase authorities.
PDA2 shareholders will receive a circular convening the PDA2 GM1 on 4 May 2010
and PDA2 GM2 on 12 May 2010 (together with the Pennine 1 prospectus) at which
PDA2 shareholders will be invited to approve resolutions in connection with the
Schemes.
Copies of the prospectus and the circulars for Pennine 1 and PDA2 have been
submitted to the UK Listing Authority and will be shortly available for
inspection at the UK Listing Authority's Document Viewing Facility which is
situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone: 0207 066 1000
Company Secretary for Pennine 1 and PDA2
Grant Whitehouse
Telephone: 020 7416 7780
Sponsor to Pennine 1
Howard Kennedy
Keith Lassman
Telephone: 0207 636 1616
The directors and proposed director of Pennine 1 accept responsibility for the
information relating to Pennine 1 and its directors contained in this
announcement. To the best of the knowledge and belief of such directors (who
have taken all reasonable care to ensure that such is the case), the information
relating to Pennine 1 and its directors contained in this announcement, for
which they are solely responsible, is in accordance with the facts and does not
omit anything likely to affect the import of such information.
The directors of PDA2 accept responsibility for the information relating to PDA2
and its directors contained in this announcement. To the best of the knowledge
and belief of such directors (who have taken all reasonable care to ensure that
such is the case), the information relating to PDA2 and its directors contained
in this document, for which they are solely responsible, is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
Howard Kennedy, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting as sponsor for Pennine 1 and no-one else
and will not be responsible to any other person for providing the protections
afforded to customers of Howard Kennedy (subject to the responsibilities and
liabilities imposed by FSMA and the regulatory regime established thereunder) or
for providing advice in relation to any matters referred to herein.
[HUG#1401272]
Penn.Down.Aim 2 (LSE:PND)
Historical Stock Chart
From May 2024 to Jun 2024
Penn.Down.Aim 2 (LSE:PND)
Historical Stock Chart
From Jun 2023 to Jun 2024
Real-Time news about Penn.Down.Aim 2 (London Stock Exchange): 0 recent articles
More Pennine Downing Aim Vct News Articles