TIDMAUKT
RNS Number : 6655Y
Aberdeen UK Tracker Trust plc
06 March 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH
AFRICA OR ANY JURISDICTION IN WHICH THE SAME COULD BE UNLAWFUL. THE
INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF
SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN THE UNITED
STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA
Aberdeen UK Tracker Trust plc (the "Company" or "AUKT")
Recommended Proposals for the Reconstruction and Winding-Up of
the Company
06 March 2017
On 30 November 2016, the Company announced that the Board had
undertaken a review of the Company's investment mandate, market
position and prospects for growth and that it had agreed heads of
terms with Aberdeen Diversified Income and Growth Trust plc
("ADIGT") (formerly BlackRock Income Strategies Trust plc), in
respect of a merger with ADIGT to be effected by way of a scheme of
reconstruction of the Company under Section 110 of the Insolvency
Act 1986 ("the Scheme").
The Company is today sending a circular to Shareholders in
connection with the Proposals (the "Circular").
The Proposals, which are unanimously recommended by the Board,
comprise a members' voluntary liquidation (solvent liquidation) and
a scheme of reconstruction of the Company pursuant to which
Shareholders will be entitled, in respect of their shareholdings,
to:
(a) elect to receive ADIGT New Ordinary Shares (the "Rollover
Option"); and/or
(b) elect to receive cash (the "Cash Option").
Shareholders can make different Elections in respect of
different parts of their holdings. The Cash Option is limited to 60
per cent. of the Cash NAV (which, for the avoidance of doubt, is
subject to a discount of 2.75 per cent.). Should total Elections
for the Cash Option exceed 60 per cent. of the Cash NAV, aggregate
excess elections will be scaled back into ADIGT New Ordinary Shares
on a pro rata basis. The enhancement from the Discount will be
applied to the Rollover Pool and will be for the benefit of those
Shareholders who have elected for the Rollover Option
Background to and rationale for the Proposals
The Board has carried out a strategic review of the current
investment mandate and determined that investors seeking exposure
to a liquid UK equity index are today more likely to look to gain
such exposure via ETFs, which take a passive investment management
approach and are associated with lower ongoing charges than can be
provided within the investment company structure. Increasing
regulatory costs have limited the scope for overall cost reductions
to enable the Company to compete with an ever-increasing range of
global tracker products.
The reducing appetite for an index tracking mandate in a
closed-end form, which the Board has seen, has contributed to the
Company's shares trading at a persistent discount to their Net
Asset Value despite continued share buybacks. Indeed, this was
exacerbated when it became clear that the Company's largest, and
long-term, shareholder was seeking an exit, and such an exit would
have had significant further knock-on consequences upon the size of
the Company.
The Board has previously reviewed the issues facing the Company
and has undertaken varied promotional initiatives in association
with the Manager to increase the investing community's awareness of
the Company and therefore demand for its shares. Despite
consistently achieving its investment objective, the Company's
trading experience demonstrates that index tracking is not
attracting sufficient new demand in an investment company
structure, for the reasons outlined above.
As part of its review, the Board considered all options open to
the Company, and concluded that, especially with the changes
witnessed in the pension and savings market in recent years,
existing Shareholders who do not seek to realise their shares for
cash under the Scheme will be well served with the new investment
objective being proposed by ADIGT, which will aim to target
consistent total returns with lower volatility than equities and an
attractive target dividend yield. Indeed, this is a policy that the
Board had under active consideration for the Company before the
possibility of a rollover into ADIGT became clear.
The focus of ADIGT will be on delivering greater capital
stability over the medium term than a long-only equity strategy
(like that of the Company) and with volatility significantly less
than that of equities.
The Board believes that a closed ended vehicle with the ability
to allocate capital in a very flexible, unconstrained approach
across the entire asset class spectrum should be an appealing
proposition to a wide range of investors. A growing number of
investors are seeking exposure to diversified multi-asset
investment mandates as witnessed by the growth over the last ten
years in the Investment Association's 'Mixed Asset' sector with
funds under management growing from GBP66.3 billion (2007) to
GBP171.9 billion (December 2016) (source: Investment
Association)
The Board believes that ADIGT should provide to shareholders the
benefit of such a strategy allowing for investment in a highly
diversified, multi-asset approach to generating long-term income
and capital returns with lower volatility than equity markets.
ADIGT's portfolio will include, but will not be limited to, listed
equities, property, social and renewable infrastructure, emerging
market bonds, loans, asset-backed securities, insurance linked
securities, private equity, farmland and aircraft leasing.
Benefits of the Proposals
The Directors believe that the Proposals should provide the
following benefits for Shareholders:
- Shareholders may roll their investment into ADIGT, allowing
for investment in a highly diversified, multi-asset approach to
targeting highly attractive long-term income and capital returns
with lower volatility than equity markets;
- Shareholders electing to receive shares in ADIGT in respect of
their entitlements in the liquidation should expect to receive at
least 103.59 per cent. of NAV, or at least 97.21 per cent. of NAV
if electing for cash in respect of their entitlements in the
liquidation (both on the basis of a cum income NAV per Share in the
Company of 366.70 pence on 28 February 2017);
- Shareholders who roll their investment into ADIGT will have an
investment in a larger company that may result in better liquidity
for their shares trading on the London Stock Exchange compared to
the current level of trading liquidity in the Company's shares;
- Shareholders who roll their investment into ADIGT should be
exposed to an above market target dividend yield, with dividends
being paid quarterly;
- to utilise fully the investment trust structure via investment
in certain less liquid asset classes; and
- the option to elect for cash at a tighter level than the
prevailing current discount to net asset value subject to the Cash
Pool Cap, which will be satisfied through a realisation of the
portfolio.
Illustrative financial effects of the Proposals
As at 29 November 2016, the day prior to the announcement of the
Proposals, the Company's share price was 320.75 pence, representing
a discount to the cum income NAV as at that date of 5.5 per cent.
On 28 February 2017, the latest practicable date prior to the
publication of the Circular, the Company's share price was 344.50
pence, representing a discount to cum income NAV as at that date of
6.1 per cent. and ADIGT's share price was 113.25 pence and the NAV
per ADIGT New Ordinary Share at that date was 123.71 pence.
Had the Scheme been implemented on 28 February 2017 (the latest
practicable date before the publication of the Circular) on the
basis of a AUKT FAV per Share at that date of 379.9222 pence and a
ADIGT FAV per Share (assuming there was full take up of the Tender
Offer) at that date of 123.0126 pence and assuming (for
illustrative purposes only) that: (i) the holders of 40 per cent.
of the Shares in issue elect or are deemed to elect for the
Rollover Option and the remaining Shareholders elect for the Cash
Option; and (ii) the costs of the Scheme payable by the Company
total GBP680,402 (excluding any portfolio reorganisation costs, the
costs of the Liquidator and a Liquidators' retention of
GBP100,000), a holder electing for the Rollover Option would
receive in net asset value terms 103.59 per cent. (a NAV per Share
uplift of 3.59 per cent.) and Shareholders electing for the Cash
Option would receive 97.21 per cent. of cum income NAV.
Therefore, a holder of 1,000 Ordinary Shares who elects for the
Rollover Option would receive 3,088 ADIGT New Ordinary Shares with
an aggregate net asset value of GBP3,798 and an illustrative
aggregate market value of GBP3,486. The market value is an
illustrative figure only, derived by applying ADIGT's current
discount to NAV. If a discount of 5.0 per cent., the level of
discount referred to by the ADIGT Board as part of their proposed
discount control policy, is applied then the illustrative aggregate
market value would be GBP3,608. It is noted that the actual market
value will depend on ADIGT's discount to NAV at the date of
completion. A holder of 1,000 Ordinary Shares who elects for the
Cash Option would receive GBP3,564.
It should be emphasised that the figures above are given for
illustrative purposes only and should not be regarded as a forecast
of any of the metrics referenced, all of which will be calculated
as at the Calculation Date. The market movements for both the
Company and ADIGT's investment portfolios will or could affect the
actual figures in the period up to the Calculation Date.
Proposed Interim Dividends
The Directors are intending to declare an interim dividend in
relation to the financial year ending 31 December 2016 and the
financial period ending 6 April 2017, respectively, to Shareholders
on the Register at 6.00 p.m. on 17 March 2017. This dividend will
be paid prior to, and is not dependent on, the implementation of
the Proposals. The record date for the interim dividend is 17 March
2017 and the Ordinary Shares will go ex-dividend on 16 March 2017.
A further announcement will be made shortly.
Any interim dividend paid, or declared and intended to be paid,
by ADIGT to its shareholders for the period up to the Effective
Date of the Scheme will be to the benefit of holders of ADIGT
shares only.
Conditions to the implementation of the Scheme
Implementation of the Scheme is conditional, inter alia,
upon:
(i) the passing of all Resolutions to be proposed at (a) the
First GM and (b) the Second GM (or at any adjournments thereof) and
upon any conditions of such Resolutions being fulfilled;
(ii) the ADIGT Resolution(s) becoming unconditional in all
respects;
(iii) the UKLA having acknowledged to ADIGT or its agents (and
such acknowledgement not having been withdrawn) that the
application for the admission of the ADIGT New Ordinary Shares to
be issued to Shareholders pursuant to the Scheme (i) to listing on
the premium segment of the Official List has been approved and will
become effective as soon as a dealing notice has been issued by the
FCA and any listing conditions having been satisfied; and (ii) to
trading on the main market of the London Stock Exchange having
acknowledged to the Company or its agent (and such acknowledgement
not having been withdrawn) that the ADIGT New Ordinary Shares will
be admitted to trading; and
(iv) the Directors resolving to proceed with the Scheme.
In the event that condition (i)(a), (ii), or (iii) fails to be
satisfied, the Second GM will be adjourned indefinitely and the
Scheme will lapse.
Shareholder Meetings
The implementation of the Proposals will require two general
meetings of the Company. The notices convening the First General
Meeting (to be held at 11.00 a.m. on 29 March 2017) and the Second
General Meeting (to be held at 11.00 a.m. on 6 April 2017) are set
out on pages 55 to 60 of the Circular. Both General Meetings will
be held at Bow Bells House, 1 Bread Street, London EC4M 9HH.
Voting intentions
Aviva Investors Global Services Limited, as agent on behalf of
its underlying clients, has discretionary management control over
approximately 24.61 per cent. of the Ordinary Shares and has given
the Company a non-legally binding letter of intent to vote in
favour of any shareholder resolutions in relation to the Proposals,
should it remain a shareholder at the time of the relevant General
Meetings.
1607 Capital Partners, LLC, as agent on behalf of its underlying
clients, has discretionary management control over approximately
18.87 per cent. of the Ordinary Shares and has given the Company a
non-legally binding letter of intent to vote in favour of any
shareholder resolutions in relation to the Proposals, should it
remain a shareholder at the time of the relevant General
This announcement does not contain all the information which is
contained in the Circular and Shareholders should read the Circular
to make an informed Election under the Proposals.
Defined terms used in this announcement have the meanings given
in the Circular unless the context otherwise requires.
Timetable
Ex-dividend date for interim dividend 16 March
to Ordinary Shareholders
Record date for interim dividend 17 March
to Ordinary Shareholders
Latest time and date for receipt 1.00 p.m. on
of Savings Scheme Forms of Election 20 March
Latest time and date for receipt 11.00 a.m.
of Forms of Direction from Savings on 22 March
Scheme Participants for First General
Meeting
Latest time and date for receipt 11.00 a.m.
of Forms of Proxy from Shareholders on 27 March
for First General Meeting
Latest time and date for receipt 1.00 p.m. on
of the Forms of Election and/or 27 March
TTE Instructions from Ordinary Shareholders
Record Date for entitlement to the 6.00 p.m. on
Scheme 28 March
First General Meeting 11.00 a.m.
on 29 March
Latest time and date for receipt 11.00 a.m.
of Forms of Direction from Savings on 30 March
Scheme Participants for Second General
Meeting
Ordinary Shares disabled in CREST 7.00 a.m. on
31 March
Reclassification of the Ordinary 8.00 a.m. on
Shares (and commence dealings in 3 April
Reclassified Shares)
Latest time and date for receipt 11.00 a.m.
of Forms of Proxy from Shareholders on 4 April
for Second General Meeting
Calculation Date 5.00 p.m. on
4 April
Suspension of listing of Reclassified 7.30 a.m. on
Shares and Company's Register closes 5 April
Second General Meeting 11.00 a.m.
on 6 April
Effective Date and Transfer Agreements 6 April
executed and implemented
Announcement of the Cash Pool Cap, 6 April
results of Elections, the AUKT FAV
per Share and the ADIGT FAV per
Share
ADIGT New Ordinary Shares admitted 10 April
to trading
CREST accounts credited with ADIGT 10 April
New Ordinary Shares
Certificates despatched in respect w/c 18 April
of ADIGT New Ordinary Shares during
or as soon as practicable after
Confirmation of holdings provided w/c 18 April
to Savings Scheme Participants
Cheques despatched to Shareholders w/c 18 April
who elect for the Cash Option, and
for this cash to be paid out, in
accordance with their entitlements
and CREST accounts credited with
cash
Cancellation of listing of Reclassified w/c 18 April
Shares
The times and dates set out in the expected timetable of events
above and mentioned throughout this document may be adjusted by the
Company, in which event details of the new times and dates will be
notified, as requested, to the UK Listing Authority, the London
Stock Exchange and, where appropriate, Shareholders
All references to time in this announcement are to UK time.
Enquiries:
William Hemmings / Gary Jones
Aberdeen Fund Managers Limited
Tel: 020 7463 6000
William Simmonds
J.P. Morgan Cazenove
Tel: 020 7742 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
CIRJFMRTMBMMBMR
(END) Dow Jones Newswires
March 06, 2017 12:10 ET (17:10 GMT)
Aberdeen UK Tracker (LSE:AUKT)
Historical Stock Chart
Von Mai 2024 bis Jun 2024
Aberdeen UK Tracker (LSE:AUKT)
Historical Stock Chart
Von Jun 2023 bis Jun 2024
