TIDMAOF
4 February 2009
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN OR INTO AUSTRALIA,
CANADA, JAPAN OR THE UNITED STATES
Africa Opportunity Fund Limited
Tender Offer
Africa Opportunity Fund Limited, a closed-end investment company
traded on the AIM Market of the London Stock Exchange and listed on
the Channel Islands Stock Exchange, is offering, conditional upon
Shareholder approval at an extraordinary general meeting, each
Shareholder the right to tender some or all of the Ordinary Shares
held by such Shareholder.
Notice of the Tender Offer EGM is set out in the Circular (a copy of
which will shortly be available from the Company's website
www.africaopportunityfund.com and will be posted to Shareholders
today). The Board consider that the Tender Offer is in the best
interests of Shareholders as a whole and unanimously recommends that
Shareholders vote in favour of the Tender Offer Resolution.
Summary of the proposal
* Proposed Tender Offer to allow Shareholders to realise
their investment in the Company. Price paid per Exit Share linked
to net asset amount realised from prorate share of Company's
investment portfolio.
* The Company's assets and liabilities will be split, so far
as possible, in accordance with the level of successful tenders
into a Tender Offer Pool and a Continuing Pool.
* The assets in the Tender Offer Pool will be realised and
net cash proceeds paid to Exiting Shareholders.
* Shareholders who do not tender their Ordinary Shares will
remain as Shareholders. The Continuing Pool will continue to be
invested in accordance with the Company's existing investment
objective and investment policy.
* Shareholders are not required to tender any Ordinary
Shares in the Tender Offer if they do not wish to.
* The Company's CISX listing will be cancelled whether or
not the Tender Offer is approved or implemented.
For further information please contact:
Africa Opportunity Fund Limited
Francis Daniels Tel: +2711 684 1528
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett Tel: +44 207 383
5100
INTRODUCTION
After discussions with major Shareholders, the Company and its
investment manager, Africa Opportunity Partners Limited, have
determined to implement the Tender Offer to allow all Shareholders an
opportunity to realise their investment in the Company.
The Company and the Investment Manager remain fully committed to the
Company's investment policy of seeking to achieve consistent capital
growth and income through investment in value, arbitrage and special
situations opportunities derived from the continent of Africa.
Current market conditions, while difficult and while producing
investment losses to date, at the same time have produced valuations
and investment opportunities that are, in the view of Directors,
exceptionally attractive. More than ever, the Directors believe that
the Company presents an attractive investment opportunity.
The Directors do not intend to tender in the Tender Offer any of the
10,775,827 Ordinary Shares (representing in aggregate approximately
9.33 per cent. of the existing issued share capital of the Company)
in which they are interested. The Directors and the Investment
Manager intend that the Company's securities will continue to be
admitted to trading on AIM, to the extent possible, following the
completion of the Tender Offer. However, regardless of the outcome of
the Tender Offer the Company intends to seek a delisting from the
CISX for reasons detailed below.
The price that will be paid to Shareholders who decide to tender
Ordinary Shares will be linked to the net amount actually realised
from a pro rata share of the Company's investment portfolio. This sum
may be different from the Company's announced Net Asset Value per
Ordinary Share.
In addition, to compensate the Investment Manager for the fact that,
relatively early in the life of the Company, it will be losing funds
under management on which it would otherwise have earned management
fees and to compensate Continuing Shareholders for the fact that they
will inevitably be bearing a higher proportion of fixed costs on an
ongoing basis, it is proposed that certain sums will be deducted from
the Tender Offer Pool to compensate the Investment Manager for the
accelerated loss of funds under management and the Continuing
Shareholders for the heavier burden of fixed costs they will carry in
the future. Further details of these arrangements are detailed in the
"Costs and Expenses" paragraph below.
THE TENDER OFFER
The Company is seeking to address the needs of Shareholders who would
like to achieve some liquidity by offering to each Shareholder the
right to tender some or all of the Ordinary Shares held by such
Shareholder on the Record Date for immediate repurchase and
cancellation by the Company for the right to receive payments over
time of a price based on a proportionate share of the aggregate
Tender Consideration, being the aggregate amount of the net proceeds
actually received by the Company in USD on the full disposition of
each investment in the Tender Offer Pool less applicable costs and
expenses allocated to the Tender Offer Pool.
The Tender Offer will close at 5.00 p.m. (Coordinated Universal Time)
on 18 February 2009 and the results of the Tender Offer are expected
to be announced following completion of the EGM on 26 February 2009.
The division of the Company's assets and liabilities into the Tender
Offer Pool and the Continuing Pool will take place on the Calculation
Date which is currently anticipated to be 27 February 2009. Ordinary
Shares successfully tendered will be treated as purchased and
cancelled on the Calculation Date with applicable Tender
Consideration left outstanding as a deferred liability of the
Company. Following the Calculation Date, Exiting Shareholders will
cease to have any rights as Shareholders but will become unsecured
creditors of the Company (each with a proportionate right to the
Tender Consideration) until the payment of the Tender Consideration
has been completed. Thereafter the Tender Consideration will be paid
to Exiting Shareholders (in one or more payments) as and when the
Company is able to realise the investments in the Tender Offer
Portfolio.
Shareholders do not have to tender any Ordinary Shares in the Tender
Offer if they do not wish to do so.
The Tender Offer is conditional upon Shareholders passing the Tender
Offer Resolution to approve its implementation.
Tender Offer Pool
Save as set out below, all of the Company's assets and liabilities
will, on the Calculation Date, so far as possible, be split in
accordance with the level of successful tenders into a Tender Offer
Pool and a Continuing Pool. As the Company will continue to undertake
investment activity in the ordinary course of business the assets and
liabilities of the Company as at the Calculation Date may differ from
the assets and liabilities existing at the date of the Circular. The
assets in the Tender Offer Pool will be realised and the net cash
proceeds (after deductions of the costs and expenses outlined below)
will be paid as Tender Consideration to Exiting Shareholders who
successfully tendered their Ordinary Shares.
Notwithstanding the foregoing, since the DiamondCorp PLC bond is a
private loan which cannot, therefore, be divided or sold in portions,
and the loan will, at the option of the Investment Manager either (i)
be retained by the Continuing Pool, with a cash payment made to the
Tender Offer Pool according to the loan's fair value, or (ii) sold in
its entirety and the cash consideration allocated pro rata to the
Tender Offer Pool and the Continuing Pool.
For the avoidance of doubt, following the Calculation Date, Exiting
Shareholders will have no interest in, or entitlement to, the
Continuing Pool.
Costs and Expenses
The costs and expenses of implementing the Tender Offer will together
be borne by Exiting Shareholders and Continuing Shareholders. The
costs and expenses of realising the assets in the Tender Offer Pool
(to include selling commissions and any other applicable fees and
expenses) will be borne by the Tender Offer Pool.
In order to compensate the Investment Manager for the fact that,
relatively early in the life of a Company, it will be losing funds
under management on which it would otherwise have earned management
fees and to compensate Continuing Shareholders for the fact that they
will inevitably be bearing a higher proportion of fixed costs on an
ongoing basis it has been agreed that the following additional
deductions will be made from the net amounts realised from the
Tender Offer Pool:
On realisations of investments in the 10 per cent. of the net
Tender Offer Pool where the applicable amounts realised.
settlement date is on or prior to 30 June
2009:
On realisations of investments in the 5 per cent. of the net
Tender Offer Pool where the applicable amounts realised.
settlement date is after 30 June 2009:
In each case the deductions made will be split equally between the
Investment Manager and for the benefit of the Continuing Pool. The
amounts reallocated to the Continuing Pool will be available for
reinvestment.
The Independent Directors, having consulted with the Company's
nominated adviser, believe the proposed payment of the distribution
fees relating to the Investment Manager are fair and reasonable
insofar as Shareholders are concerned.
Calculation of the Tender Consideration
On the Calculation Date the assets and liabilities of the Company
will, subject as set out below, be allocated on a pro rata basis in
accordance with the successful tenders, between a Tender Pool and a
Continuing Pool. In effecting the allocation:
* subject to the paragraph below, all liabilities recognised
in the Company's accounting records and all debtors and other
receivables will be allocated pro rata between the Tender Offer
Pool and the Continuing Pool by reference to the respective values
of each pool;
* a pro rata proportion (representing the period from 1
January 2009 to and including the Calculation Date) of the
instalment of the annual management fee for the quarter commencing
1 January 2009 (the "Q1 Management Fee") shall be allocated pro
rata between the Tender Offer Pool and the Continuing Pool by
reference to the respective values of each pool. The remaining
amount of the Q1 Management Fee shall be allocated to and payable
by the Continuing Pool;
* any investment whose listing has been suspended and any
other assets which the Directors consider it would be inappropriate
to transfer to the Tender Offer Pool (e.g. stocks subject to
corporate action) will be allocated to the Continuing Pool at the
value reflected in the accounting records (which will reflect the
Director's assessment of fair value);
* all quoted investments, other than those mentioned in the
above bullet point, will be allocated pro rata between the Tender
Offer Pool and the Continuing Pool by reference to the respective
values of each pool. For such purposes the calculations will be
rounded down to the nearest whole number of securities for each
security;
* the loans related to the DiamondCorp PLC transaction will,
at the option of the Investment Manager, either (i) be allocated in
full to the Continuing Pool with the proportion of the loans
related to the DiamondCorp PLC transaction otherwise attributable
to the Tender Offer Pool being purchased (at fair value) for cash
by the Continuing Pool, or (ii) sold in their entirety and the cash
consideration allocated pro rata to the Tender Offer Pool and the
Continuing Pool; and
* all cash and near cash assets, other than as set out in
the paragraph above, will be allocated pro rata between the Tender
Offer Pool and the Continuing Pool by reference to the respective
values of each pool.
In allocating and/or valuing assets and liabilities pursuant to the
bullet points above the Directors, after consultation with the Expert
(as defined below), shall be entitled (in any case where the proper
allocation of an asset or liability in accordance with any of the
above provisions is, in the opinion of the Directors, incorrect or
unfair) to adopt an alternative basis of allocation or method of
valuation (as the case may be).
The Investment Manager will prepare or procure the preparation of the
calculation necessary to determine the Tender Offer Pool and the
Continuing Pool. Such calculation will be reviewed by the Expert.
The "Expert" shall be either the Company's administrator, a reputable
firm of accountants or investment bank or other similar financial
services organisation selected by agreement between the Company and
the Investment Manager. Such Expert will act as expert and not as an
arbitrator.
Settlement and calculation formula of tender offer price
Unless terminated in accordance with the provisions as detailed in
this announcement, the Tender Offer will close at 5.00 p.m.
(Coordinated Universal Time) on 18 February 2009 and it is expected
that on 26 February 2009 the Company will make a public announcement
of the EGM results and (if the Tender Offer Resolution is passed) the
total number of Ordinary Shares tendered pursuant to the Tender
Offer.
Ordinary Shares successfully tendered will be treated as purchased
and cancelled on the Calculation Date which it is currently expected
will be 27 February 2009 at the Formula Tender Price per Ordinary
Share.
The Formula Tender Price per Ordinary Share shall be an amount
(rounded down to the nearest whole US cent) equal to ((A - B) divided
by C) where:
A = the aggregate amount of the net proceeds actually received by the
Company in USD on the full disposition of each investment in the
Tender Offer Pool (and including any allocated free USD cash);
B = the costs and deductions chargeable to the Tender Offer Pool; and
C = the total number of Exit Shares.
The Formula Tender Price per Ordinary Share will be payable by the
Company to the Exiting Shareholders in applicable tranches ("Payment
Tranches") in USD following the full or partial disposition of each
investment in the Tender Offer Pool which shall take place from time
to time in accordance with the Company's ordinary course of business.
The Formula Tender Price per Ordinary Share will be satisfied in full
following the complete disposition of the last investment in the
Tender Offer Pool and the settlement of the final Payment Tranche
relating to such investment (the "Payment Satisfaction Date"). On and
following the Payment Satisfaction Date the Exiting Shareholders
shall have no further right to receive further Payment Tranches from
the Company.
Realisation of the Tender Offer Pool
Given the nature of the assets in the Company's portfolio which
mainly comprise securities listed or quoted on the stock exchanges of
various emerging markets, together with certain unquoted securities,
it may be difficult and time consuming to realise the assets in the
Tender Offer Pool. Distributions of tranches of the Tender
Consideration will, therefore, be made as and when the Investment
Manager believes it to be appropriate given the amounts realised.
None of the assets in the Tender Offer Pool will be disposed of to a
Related Party (as such term is defined in the AIM Rules) without the
prior approval of the Board and subject always to the provisions of
the AIM Rules.
TERMINATION OF THE TENDER OFFER
If the Company (acting through the Directors) is of the opinion that:
* in its absolute discretion, the Tender Offer would no
longer be in the best interests of the Company and/or the
Shareholders as a whole; or
* as a result of any change in national or international
financial, economic, political or market conditions, the Tender
Offer or the cost of realisation of assets to fund the Tender Offer
has become significantly more expensive since the date of the
Circular; or
* in its reasonable opinion the completion of the purchase
of Ordinary Shares in the Tender Offer could have unexpected
adverse fiscal or other consequences (whether by reason of a change
in legislation or practice or otherwise) for the Company or its
Shareholders if the Tender Offer were to proceed,
the Company shall be entitled at its complete discretion by a public
announcement and subsequent written notice to Shareholders to
withdraw the Tender Offer and in such event the Tender Offer shall
cease and terminate absolutely.
RESTRICTED SHAREHOLDERS AND SHAREHOLDERS GENERALLY
The attention of shareholders who are not citizens or nationals of,
or resident in, the United Kingdom is drawn to paragraph 3 of Part I
of the Circular.
TAXATION
Shareholders who sell Ordinary Shares in the Tender Offer may,
depending on their individual circumstances, incur a tax liability.
Following the proposed delisting of the Company from the CISX (please
see below) Ordinary Shares will no longer be eligible to be held in
the stocks and shares component of an UK Individual Savings Account
(ISA) or an UK Self Invested Personal Pension (SIPP).
Shareholders who are in doubt as to their tax position should consult
an appropriate professional adviser.
RISK FACTORS
The attention of Shareholders is drawn to the Risk Factors set out in
Part II of the Circular.
CANCELLATION OF CISX LISTING
Shortly after the Company's admission to AIM, application was also
made and granted for the issued share capital of the Company to be
dual listed on the CISX. It was anticipated that a CISX listing would
broaden the appeal of the Company particularly as it would enable UK
retail investors to invest in the Company via certain individual tax
efficient investment accounts. Unfortunately these benefits have
failed to materialise to the extent anticipated and accordingly,
whether or not the Tender Offer is approved and implemented, the
Company has concluded that the expense of maintaining the CISX
listing is no longer justified. Consequently, with effect from 4
March 2009 the admission of the Ordinary Shares to trading on the
CISX will be cancelled.
INVESTMENT OBJECTIVE AND POLICY
The Board confirms that the assets in the Continuing Pool will
continue to be invested in accordance with the Company's existing
investment objective and investment policy of providing Shareholders
with consistent capital growth and income through value, arbitrage
and special situation investments in the Continent of Africa.
Portfolio investments will include equity, debt and other interests
in both listed and unlisted assets.
CURRENT FINANCIAL POSITION
For information on the Company's Net Asset Value position please see
the most recent Net Asset Value announcement on the Company's website
www.africaopportunityfund.com. A further updated Net Asset Value
announcement will be made in accordance with the Company's Net Asset
Value reporting policy during the period of the Tender Offer.
EXTRAORDINARY GENERAL MEETING
The Company is convening an Extraordinary General Meeting for 1.00
p.m. (Coordinated Universal Time) on 26 February 2009 to consider
and, if thought fit, pass the Proposals (further details of which are
set out in the Circular).
RECOMMENDATION
The Board considers that the Tender Offer is in the best interests
of Shareholders as a whole. Accordingly, the Board recommends
unanimously that Shareholders vote in favour of the Tender Offer
Resolution as they intend to do so in respect of their beneficial
holdings of Ordinary Shares which, in aggregate amount to 10,775,827
Ordinary Shares representing approximately 9.33 per cent. of the
issued share capital of the Company.
The Directors continue to have faith in, and remain fully committed
to, the Investment Manager. Current market conditions, while
difficult and while producing investment losses to date, at the same
time have produced valuations and investment opportunities that are,
in the view of the Directors, exceptionally attractive. More than
ever, the Directors believe that the Company presents an attractive
investment opportunity. Accordingly, none of the Directors intend to
tender any of their beneficial holdings of Ordinary Shares.
The Directors make no recommendation in terms of whether or not
Shareholders should tender Ordinary Shares in the Tender Offer.
Shareholders should make their own decision in light of their own
individual circumstances and investment objectives both with respect
to their individual investments in the Company and in light of their
investment portfolios as a whole.
EXPECTED TIMETABLE*
Record Date for the Tender Offer 8.00 a.m. (Coordinated Universal
Time) on 5 February 2009
Closing Date: latest time and date 5.00 p.m. (Coordinated Universal
for receipt of Tender Forms Time) on 18 February 2009
Latest time and date for receipt of 1.00 p.m. (Coordinated Universal
Proxy Forms Time) on 24 February 2009
Extraordinary General Meeting 1.00 p.m. (Coordinated Universal
Time) on 26 February 2009
Results of the EGM and the Tender 26 February 2009
Offer announced on
Calculation Date 27 February 2009
Date of cancellation of CISX listing 4 March 2009
*The above times and/or dates may be subject to change and, in the
event of such change, the revised times and/or dates will be notified
to Shareholders by an announcement through a Regulatory Information
Service of the London Stock Exchange and to the CISX.
DEFINITIONS
The following definitions apply throughout this announcement unless
the context otherwise requires:
"Admission Document" the Company's AIM admission document
dated 18 July 2007;
"AIM" the market of that name operated by the
London Stock Exchange;
"AIM Rules" the AIM Rules for Companies, as
published by the London Stock Exchange
from time to time;
"Articles of Association" the articles of association of the
Company;
"Board" or "Directors" the directors of the Company;
"Business Day" any day other than a Saturday, Sunday or
public holiday in London;
"Calculation Date" the date on which the Company will
create (and/or procure the creation of )
the Tender Offer Pool and the Continuing
Pool and formally purchase and cancel
Ordinary Shares validly tendered and
accepted pursuant to the Tender Offer in
accordance with the terms and conditions
of the Tender Offer currently expected
to be 27 February 2009;
"certificated" or "in not in uncertificated form;
certificated form"
"Circular" the circular sent to shareholders on 4
February 2009;
"CISX" or "Channel Islands the Channel Islands Stock Exchange, LBG;
Stock Exchange"
"Clearstream" the system of paperless settlement of
trades and the holdings of shares
without share certificates administered
by Clearstream Banking SA;
"Closing Date" 5.00 p.m. (Coordinated Universal Time)
on 18 February 2009;
"Companies Law" the Companies Law (2007 Revision) of the
Cayman Islands (as amended);
"Company" Africa Opportunity Fund Limited (and,
for the purposes of this announcement,
references to the assets and liabilities
and investment portfolio of the Company
shall together include the assets and
liabilities and investment portfolio of
the Company, the Limited Partnership and
Africa Opportunity Fund (GP) Limited);
"Conditions" the Conditions to the Tender Offer as
defined in paragraph 2.1 of Part III of
the Circular;
"Continuing Pool" the pool of securities, cash and assets
to be created in accordance with the
Tender Offer for the benefit of the
Continuing Shareholders;
"Continuing Shareholders" Shareholders who retain Ordinary Shares
after the Calculation Date;
"EGM" the extraordinary general meeting of the
Company convened for 1.00 p.m.
(Coordinated Universal Time) on 26
February 2009;
"Euroclear" the system of paperless settlement of
trades and the holding of shares without
share certificates administered by
Euroclear Bank SA;
"Exiting Shareholders" those Shareholders who successfully
tender Ordinary Shares for purchase
pursuant to the Tender Offer;
"Exit Share" an Ordinary Share which has been
successfully tendered for purchase
pursuant to the Tender Offer;
"Formula Tender Price per has the meaning defined in paragraph 5.3
Ordinary Share" of Part III of the circular;
"Independent Directors" the Board excluding Robert Knapp and
Francis Daniels;
"Investment Manager" Africa Opportunity Partners Limited;
"Limited Partnership" Africa Opportunity Fund L.P., a Cayman
Islands registered exempted limited
partnership;
"London Stock Exchange" London Stock Exchange plc;
"Net Asset Value" or the total value of all of the assets of
"NAV" the Company less its liabilities as
determined by the Board and calculated
in accordance with the Company's
accounting policies;
"Net Asset Value per the Net Asset Value divided by the
Ordinary Share" number of Ordinary Shares then in issue;
"Ordinary Shares" ordinary shares of USD 0.01 each in the
capital of the Company;
"Overseas Shareholders" Shareholders who are resident in, or
citizens of, territories outside the
United Kingdom and not resident in, or
citizens of, any of the Restricted
Territories;
"Proxy Form" the proxy form for use in connection
with the EGM, and which accompanies the
Circular;
"Record Date" 8.00 a.m. (Coordinated Universal Time)
on 5 February 2009;
"Register" the Company's register of Shareholders;
"Restricted Shareholders" Shareholders who are resident in, or
citizens of, a Restricted Territory;
"Restricted Territories" any of the following territories:
Australia, Canada, Japan and the United
States;
"Shareholders" holders of Ordinary Shares (or, where
the context so requires, where Ordinary
Shares are held in Euroclear and/or
Clearstream, the persons otherwise
beneficially entitled to such Ordinary
Shares);
"Tender Consideration" the aggregate amount to be paid by the
Company to the Exiting Shareholders as
calculated and paid in accordance with
Part III of the Circular;
"Tender Form" the tender form for use in connection
with the Tender Offer and which
accompanies the Circular;
"Tender Offer" or "Offer" the conditional invitation by the
Company to Shareholders (other than
Restricted Shareholders) to tender
Ordinary Shares for purchase and
cancellation by the Company on the terms
and subject to the conditions set out in
this announcement, the Circular and in
the Tender Form;
"Tender Offer Pool" the pool of securities, cash and assets
to be created in accordance with the
Tender Offer for the benefit of the
Exiting Shareholders;
"Tender Offer Resolution" the special resolution to approve the
Tender Offer to be proposed at the EGM
notice of which is set out on page 28 of
the Circular;
"uncertificated" or "in an Ordinary Share recorded on the
uncertificated form" Register as being held in Euroclear or
Clearstream by the relevant nominee on
behalf of a Shareholder and the
beneficial title to which may be
transferred by means of Euroclear or
Clearstream (as appropriate);
"United Kingdom" or "UK" the United Kingdom of Great Britain; and
"$", "US Dollar" or "USD" United States dollars, the legal
currency of the United States.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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