ARR Aurora Uk Alpha Plc

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM, THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA (THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of, or be relied on in connection with, or act as an inducement to enter into, any contract or commitment whatsoever.

This announcement contains inside information for the purposes of Article 7 of Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. The person responsible for arranging for the release of this announcement on behalf of Aurora Investment Trust plc is Frostrow Capital LLP, the Company Secretary.

Aurora Investment Trust plc

LEI: 2138007OUWIZFMAGO575

Publication of Prospectus and Circular in connection with the proposed combination of the Company with Artemis Alpha Trust plc and announcement of Aurora Interim Dividend

24 October 2024

Introduction

The Board of Aurora Investment Trust plc (the "Company") announced on 2 September 2024 that it had agreed terms with the Board of Artemis Alpha Trust plc ("Artemis Alpha") in respect of a proposed combination of the assets of the Company with the assets of Artemis Alpha. The combination, if approved by Existing Aurora Shareholders and Artemis Alpha Shareholders, will be effected by way of a scheme of reconstruction and members' voluntary winding up of Artemis Alpha under section 110 of the Insolvency Act (the "Scheme") and the associated transfer of part of the cash, assets and undertaking of Artemis Alpha to the Company in exchange for the issue of new ordinary shares of 25 pence each in the capital of the Company (the "New Shares") to Artemis Alpha Shareholders who are deemed to have elected for the Rollover Option (the "Issue") (together, the "Proposals").

The Board announces that the Company has today published a prospectus (the "Prospectus") in relation to the Issue, together with a circular to provide Shareholders with further details of the Proposals and to convene a general meeting of the Company (the "General Meeting") to seek approval from Shareholders for the implementation of the Proposals (the "Circular").

Following implementation of the Proposals, it is intended that the Enlarged Company will continue to be managed on the same basis as it is currently. In particular, the Company's investment objective and investment policy will not change as a result of the implementation of the Proposals, and the Portfolio will continue to be managed by the Phoenix Partners Asset Management Limited (the "AIFM" or "Phoenix"), with Gary Channon continuing as lead portfolio manager. However, the Board intends to change the name of the Company to "Aurora UK Alpha plc" as soon as practicable following the Effective Date.

Aurora Interim Dividend

In the light of the Scheme, the Board has decided to pay an interim dividend of 3.00 pence per Share in respect of the period to 30 September 2024, which is expected to be paid on 6 December 2024 to Shareholders on the Register as at close of business on 1 November 2024 (the "Aurora Interim Dividend"). Shares will go ex-dividend on 31 October 2024, and the last day for elections under the dividend re-investment plan operated by the Registrar will be 15 November 2024. The Aurora Interim Dividend is being paid so as to ensure that Existing Aurora Shareholders do not suffer a dilution to the level of income that would be distributed in respect of the period from 31 December 2023 to 30 September 2024 as a result of the Scheme. Artemis Alpha Shareholders receiving New Shares in connection with the Scheme will not be entitled to receive the Aurora Interim Dividend in respect of their New Shares. However, such Artemis Alpha Shareholders will be entitled to participate in any dividends declared by the Company with a record date after the date of the issue of New Shares to them.

The Scheme

As noted above, the Proposals will be effected by way of a scheme of reconstruction of Artemis Alpha under section 110 of the Insolvency Act, resulting in the members' voluntary winding up of Artemis Alpha and the transfer of part of Artemis Alpha's cash, assets and undertaking (the "Rollover Pool") to the Company in return for the issue of New Shares in the Company on a formula asset value ("FAV") for FAV basis. That is to say, Eligible Artemis Alpha Shareholders will be issued New Shares on the basis of the ratio of the ATS Rollover FAV per Share to the Aurora FAV per Share.

The Scheme is conditional on, among other things, approval of the Resolution at the General Meeting and the approval of the Artemis Alpha Resolutions by Artemis Alpha Shareholders at the Artemis Alpha General Meetings. Further details of the conditions attaching to the Scheme are set out below.

Under the Scheme, Eligible Artemis Alpha Shareholders will be deemed, by default, to have elected to receive New Shares (the "Rollover Option") to the extent they do not make a valid election to receive cash in respect of some or all of the Artemis Alpha Shares they own (the "Cash Option") or to the extent that their elections for the Cash Option are scaled back in accordance with the Scheme.

The maximum number of Artemis Alpha Shares that can be elected (or be deemed to have been elected) for the Cash Option is, in aggregate, 25 per cent. of the total number of Artemis Alpha Shares in issue (excluding Artemis Alpha shares held in treasury) as at the Calculation Date (the "Maximum Cash Option Shares"). Eligible Artemis Alpha Shareholders are entitled to elect for the Cash Option in respect of more than 25 per cent. of their individual holdings of Artemis Alpha Shares (the "Basic Entitlement", such excess amount being an "Excess Application"). However, should total elections and deemed elections for the Cash Option exceed 25 per cent. of the Artemis Alpha Shares in issue (excluding Artemis Alpha Shares held in treasury) as at the Calculation Date, Excess Applications for the Cash Option will be scaled back in a manner which is, as near as practicable, pari passu and pro rata among all Eligible Artemis Alpha Shareholders who have made such Excess Applications such that the aggregate number of Artemis Alpha Shares elected (or deemed to have been elected) for the Cash Option shall equal the Maximum Cash Option Shares.

Cash entitlements under the Cash Opti on will be calculated on the basis of the ATS Cash Pool FAV. The ATS Cash Pool FAV will be calculated as the ATS Residual Net Asset Value multiplied by the percentage of Artemis Alpha Shares in respect of which valid elections have, or are deemed to have, been made for the Cash Option (following any required scaling back in accordance with the Scheme) (the "Cash Exit Percentage"), less:

§ a discount of 2 per cent. of such amount (the "Cash Option Discount"); and

§ a further discount equal to 20 per cent. of the aggregate value of the Unquoted Holdings that form part of the Rollover Pool multiplied by the Cash Exit Percentage (the "Cash Pool Liquidity Adjustment" and together with the Cash Option Discount the "Cash Option Adjustments").

The Cash Pool Liquidity Adjustment reflects, for those Artemis Alpha Shareholders who elect (or are deemed to elect) for the Cash Option, the benefit of being able to exit their holdings without immediately triggering a requirement upon Artemis Alpha to sell assets that may not be readily realisable within the timeframe of the Proposals. The Cash Pool Liquidity Adjustment will be calculated as at the Calculation Date on the value of the Unquoted Holdings transferring to the Company pursuant to the Scheme.

The value arising from the application of the Cash Option Adjustments will be allocated to the Rollover Pool. The benefit of the Cash Option Adjustments will be allocated to Artemis Alpha Shareholders that are deemed to elect for the Rollover Option pursuant to the Scheme up to an amount equal to the proportion of Artemis Alpha's Scheme costs that are attributable to the Rollover Pool. In the event the value arising from the application of the Cash Option Adjustments exceeds this amount, the surplus will not be taken into account in the calculation of the respective FAVs, and will be credited to the Enlarged Company.

Conditions of the Proposals

Implementation of the Proposals is subject to a number of conditions, including:

§ the recommendation of the Board and the Artemis Alpha Board to proceed with the Proposals, which may be withdrawn at any time;

§ the passing of the Artemis Alpha Resolutions to approve the Scheme and the winding up of Artemis Alpha at the Artemis Alpha General Meetings and the Scheme becoming unconditional in all respects (including the Transfer Agreement becoming unconditional in all respects);

§ the passing of the Resolution by Shareholders to approve the Issue at the General Meeting and such Resolution becoming unconditional in all respects; and

§ the FCA having acknowledged to the Company or its agents (and such acknowledgement not having been withdrawn) that the application for the admission of the New Shares to the Official List has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as notice of admission to the Official List has been issued by the FCA and any listing conditions having been satisfied and the London Stock Exchange having acknowledged to the Company or its agents (and such acknowledgement not having been withdrawn) that the New Shares will be admitted to trading on the Main Market, subject only to allotments.

Unless the conditions referred to above have been satisfied or, to the extent permitted, waived by both the Company and Artemis Alpha on or before 31 March 2025 no part of the Proposals will become effective and no New Shares will be issued.

Benefits of the Proposals

The Board believes that, if implemented, the Proposals will offer Shareholders the following benefits:

§ Enhanced scale and liquidity: The scale of the Enlarged Company is expected to improve secondary market liquidity for Existing Aurora Shareholders.

§ Lower ongoing charges ratio: The economies of scale that the combination will bring is expected to result in a decrease in the Company's ongoing charges ratio as a result of the Company's fixed costs being spread over a larger asset base.

§ Significant contribution to costs from Phoenix: Phoenix has agreed to make a significant contribution to the costs of the Proposals of an amount equal to £750,000 (the "Phoenix Costs Contribution"). The Phoenix Costs Contribution will be allocated first to pay the Company Fixed Implementation Costs up to a cap of £500,000, with the balance of the Phoenix Costs Contribution allocated to pay Artemis Alpha's direct fixed costs in connection with the Proposals.

Transfer Agreement

If the resolution to be proposed at the Second Artemis Alpha General Meeting is passed, the Company, Artemis Alpha and the Liquidators will enter into the Transfer Agreement on or around the Effective Date, which is expected to be 29 November 2024, pursuant to which the cash, undertaking and assets of Artemis Alpha comprising the Rollover Pool will be transferred to the Company in consideration for the issue by the Company of the New Shares to the Liquidators as nominees for Eligible Artemis Alpha Shareholders who are deemed to have elected for the Rollover Option, which the Liquidators have agreed to renounce in favour of such Eligible Artemis Alpha Shareholders (or otherwise continue to hold as nominees for Excluded Artemis Alpha Shareholders in accordance with the terms of the Scheme).

The parties to the Transfer Agreement have entered into irrevocable undertakings to enter into the Transfer Agreement on the Effective Date in the event that all of the conditions to the Scheme are satisfied in full.

Completion of the transfer of the cash, undertaking and assets of Artemis Alpha comprised in the Rollover Pool will take place on the date of satisfaction of the Scheme Conditions or as soon as practicable thereafter.

Costs and expenses of the Proposals

Save as noted below, each of the Company and Artemis Alpha will bear its own costs in respect of the Proposals irrespective of whether the Proposals proceed. The costs incurred (or to be incurred) by the Company in implementing the Proposals primarily comprise financial advisory fees, legal fees, other professional advisory fees, printing costs and other applicable expenses, in each case including any related VAT and disbursements (the "Company Fixed Implementation Costs").

Any costs of the realignment and/or realisation of the Artemis Alpha Portfolio prior to the Scheme becoming effective will be borne by Artemis Alpha. Any: (i) sales or acquisition costs (including any commissions, taxes (including stamp duty), transaction charges and/or market charges) associated with the transfer of the Rollover Pool from Artemis Alpha to the Company, or the deployment of the cash therein upon receipt; and (ii) London Stock Exchange admission fees payable in respect of the admission of the New Shares to trading on the Main Market, will be borne by the Enlarged Company and will not be reflected in the ATS Rollover FAV or the Aurora FAV. 

Phoenix has agreed to make a contribution of an amount equal to £750,000 towards the direct fixed costs to be incurred by the Company and Artemis Alpha in connection with the Proposals. The Phoenix Costs Contribution will be allocated first to pay the Company Fixed Implementation Costs up to a cap of £500,000 (with such amount being credited to the Aurora FAV), with the balance of the Phoenix Costs Contribution (being at least £250,000) allocated to pay Artemis Alpha's direct fixed costs in connection with the Proposals (with such amount being credited to the ATS Residual Net Asset Value). The exact allocation of the benefit of the Phoenix Costs Contribution between the Company and Artemis Alpha will be calculated as at the Calculation Date and reflected in the calculation of the ATS Rollover FAV and the Aurora FAV accordingly.

The Phoenix Costs Contribution will be effected through a waiver of the performance fees that would otherwise be payable by the Enlarged Company to Phoenix, up to the financial value of £750,000, in respect of each of the financial years ending 31 December 2024, 31 December 2025 and 31 December 2026 (the "Relevant Periods"). In the event that the aggregate performance fees payable in respect of the Relevant Periods is less than £750,000, Phoenix will satisfy any shortfall by transferring Shares it holds to the Enlarged Company or in cash (in either case net of any costs of making such transfer or payment and without the Enlarged Company making any payment to Phoenix). For the avoidance of doubt, any Shares transferred in settlement of any shortfall in the Phoenix Costs Contribution would be in addition to any Shares that may or may not be transferred by Phoenix to the Enlarged Company under the clawback element of the performance fee methodology.

The Phoenix Costs Contribution is subject to a clawback provision such that, in the event of the termination of Phoenix's appointment as AIFM and investment manager to the Enlarged Company on a no-fault basis: (i) on or prior to 31 December 2025, Phoenix will be entitled to claim back 100 per cent. of the Phoenix Costs Contribution; and (ii) between 1 January 2026 and 31 December 2026 (inclusive), 50 per cent. of the Phoenix Costs Contribution.

Admission and Dealings

Applications will be made by the Company to the FCA and to the London Stock Exchange for the New Shares to be admitted to listing on the closed-ended investment funds category of the Official List and to trading on the Main Market, respectively. It is not intended that any class of shares in the Company be admitted to listing or trading in any other jurisdiction. If the Proposals become effective, it is expected that the New Shares will be admitted to the Official List, and dealings on the Main Market will commence, on 2 December 2024.

General Meeting

The Proposals are conditional, among other things, upon Shareholders' approval of the Resolution to be proposed at the General Meeting. The General Meeting will be held at 10.30 a.m. on 22 November 2024. The Resolution will be proposed as an ordinary resolution and in order to be passed will, accordingly, require more than 50 per cent. of votes cast in person or by proxy to be voted in favour of it.

The Resolution will, if passed, authorise the Directors to allot up to 80 million New Shares to Eligible Artemis Alpha Shareholders who are deemed to have elected for the Rollover Option pursuant to the Scheme, such number being considered sufficient to satisfy the maximum number of New Shares that could be required to be issued in connection with the Scheme.

Notice of the General Meeting is set out at the end of the Circular and contains the full text of the Resolution.

Expected Timetable                                                                                                       

All references to time are to UK time. Each of the times and dates in the above expected timetable (other than in relation to the General Meeting) may be extended or brought forward. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service.

Dickson Minto Advisers LLP is acting as sponsor to the Company in connection with the Proposals.

Defined terms used in this announcement shall, unless the context requires otherwise, have the meanings ascribed to them in the Circular.

The Prospectus and Circular have been submitted to the Financial Conduct Authority and will shortly be available for inspection at the National Storage Mechanism which is located at https://data.fca.org.uk/a/nsm/nationalstoragemechanism and on the Company's website at https://www.aurorainvestmenttrust.com.

IMPORTANT NOTICES

General

This announcement is an advertisement for the purposes of the Prospectus Regulation Rules of the UK Financial Conduct Authority ("FCA") and is not a prospectus. This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to subscribe for or to acquire, any ordinary shares in the Company in any jurisdiction, including in or into Australia, Canada, Japan, New Zealand, the Republic of South Africa, the United States of America, its territories and possessions, any state of the United States and the District of Columbia (the "United States") or any member state of the EEA.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended, or any U.S. state securities laws, and may not be offered or sold in the United States, except pursuant to an applicable exemption from such registration. No public offering of securities is being made in the United States.

This announcement does not contain all the information set out in the Circular. Shareholders should read the Circular in full before deciding what action to take in respect of the Proposals.

Approval of the Prospectus by the FCA should not be understood as an endorsement of the securities that are the subject of the Prospectus. Artemis Alpha Shareholders are recommended to read the Prospectus before making a decision in order to fully understand the potential risks associated with a decision to invest in the Company's securities.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to, inter alia, stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

Forward looking statements

This announcement contains statements about the Company that are or may be deemed to be forward looking statements. Without limitation, any statements preceded or followed by or that includes the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance of the negative thereof, may be forward looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding financial position, strategy, plans, proposed acquisitions and objectives of Company or the Enlarged Company, are forward looking statements.

These forward looking statements are not guarantees of future performance. Such forward looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statement. Due to such uncertainties and risks, readers should not rely on such forward looking statements, which speak only as of the date of this announcement, except as required by applicable law. Subject to their respective legal and regulatory obligations, both the Company and Phoenix expressly disclaim any obligations or undertaking to update or revise any forward looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the UK Listing Rules, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Regulation and MAR.

None of the Company, Phoenix or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to any of them, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Each of the Company, Phoenix and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

Sponsor

Dickson Minto Advisers LLP, which is authorised and regulated by the FCA in the United Kingdom, is acting as sponsor and joint financial adviser to the Company and for no one else in connection with the matters set out in this announcement and is not, and will not be, responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in connection with the matters set out in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Dickson Minto Advisers LLP by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, neither Dickson Minto Advisers LLP nor any persons associated or affiliated with it accepts any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it or them, or on its or their behalf, the Company or the Directors in connection with the Company or the Proposals, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Dickson Minto Advisers LLP and its respective associates and affiliates accordingly disclaim, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) that it or they might otherwise have in respect of this announcement or any such statement.