Dunedin Smaller Cos Inv Tst PLC Corporate Action (0617S)
21 Giugno 2018 - 8:00AM
UK Regulatory
TIDMDNDL
RNS Number : 0617S
Dunedin Smaller Cos Inv Tst PLC
21 June 2018
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LEI: 213800CI43OQT8KBKE03
21 june 2018
DUNEDIN SMALLER companies INVESTMENT trust plc
Result of Strategic Review
The Board of Dunedin Smaller Companies Investment Trust plc (the
"Company") has undertaken a strategic review of the Company and its
position in the UK smaller companies sector. The Board is aware
that the Company's size and the secondary market liquidity in its
shares make it challenging to attract new investors in the Company.
The Board also believes that these factors have contributed to the
discount at which the Company's shares trade. In addition, the
recent merger of the Company's manager Aberdeen Asset Management
PLC with Standard Life plc has resulted in the Company being
managed alongside a company with a very similar UK smaller
companies mandate. As a consequence of these factors, the Board
decided to undertake the strategic review.
Having considered a number of options and following consultation
with the Company's largest shareholders, the Board believes that
shareholders, as a whole, still wish to retain exposure to UK
smaller companies via an investment trust with a similar mandate
managed by the Company's manager, Aberdeen Standard Investments(1)
. Consequently, the Company has agreed, in principle, the terms of
a merger with Standard Life UK Smaller Companies Trust plc
("SLS").
The Board believes that the merger of the Company and SLS would
provide the Company's shareholders with an investment in a
significantly larger investment trust, with a strong investment
track record, a stronger rating, a robust discount control
mechanism and substantially greater secondary market liquidity, all
of which should appeal to a broader range of investors. In
particular, the Board believes that a merger would result in a
significant increase in the valuation of the Company's
shareholders' investment (over the 12 months ended 19 June 2018,
the shares of the Company and of SLS traded at average discounts of
-17.4% and -3.8% respectively(2) ).
The merger would be effected by way of a scheme of
reconstruction of the Company under section 110 of the Insolvency
Act 1986 resulting in the voluntary liquidation of the Company and
shareholders rolling over their investment in the Company into SLS
on the basis of an all-share, nil premium (to NAV) merger, save
that the aggregate costs of the Company and SLS would be borne by
the Company's shareholders. In accordance with customary practice
for such transactions involving investment trusts, the City Code on
Takeovers and Mergers will not apply to the transaction. The merger
of the Company and SLS would be subject to, inter alia, approval by
the shareholders of each of the Company and SLS
The Directors expect to declare, pre-merger, a final interim
dividend. Although the merger of the Company and SLS is expected to
result in a reduction in the aggregate annual dividends received by
the Company's shareholders in the medium term, the final interim
dividend is expected to be at least equivalent to the aggregate
reduction for the 12 months following the merger(3) .
James Barnes, the Company's chairman, said: "Dunedin Smaller
Companies Trust's size and the secondary market liquidity in its
shares makes it challenging to attract new investors. The proposed
merger with Standard Life UK Smaller Companies Trust will resolve
these issues, creating a merged trust with assets of over GBP550m
and substantially greater secondary market liquidity. As Standard
Life UK Smaller Companies Trust has consistently had a
substantially stronger rating than the Company, the Board believes
that the merger will result in the Company's shareholders
benefiting from a significant increase in the market value of their
investment."
A circular convening a general meeting to approve the
transaction is expected to be sent to the Company's shareholders in
due course, together with a prospectus issued by SLS containing
details of the SLS shares that the Company's shareholders will
receive in exchange for their shares in the Company pursuant to the
proposed merger.
Notes: (1) Aberdeen Standard Investments is a brand of the
investment businesses of Aberdeen Asset Management and Standard
Life Investments. (2) Discounts are based on the respective net
asset values (cum-income, with debt at fair value) and share prices
of the Company and SLS over the 12 months ended 19 June 2018. (3)
Based on the dividends declared by the Company and SLS respectively
during the 12 months prior to and ending on 19 June 2018.
Enquiries
Dunedin Smaller Companies Investment Trust plc James Barnes T: +44 (0) 131 528 4287
Cantor Fitzgerald Europe Sue Inglis T: +44 (0) 20 7894 8016
Aberdeen Standard Investments Maria Allen T: +44 (0) 20 7463 6000
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END
JVEBIGDLBBDBGIG
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June 21, 2018 02:00 ET (06:00 GMT)
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