TIDMJGGI
RNS Number : 1158H
JPMorgan Global Growth & Income PLC
21 November 2022
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES OF AMERICA
(INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED
STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF South Africa, In any Member State of the EEA OR IN 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.
Legal Entity Identifier: 5493007C3I0O5PJKR078
21 November 2022
JPMorgan Global Growth & Income plc
Proposed combination with JPMorgan Elect plc
Publication of Prospectus and Circular
On 27 October 2022, the Board of JPMorgan Global Growth &
Income plc (the "Company" or "JGGI") announced that it had agreed
heads of terms for a combination of the Company with JPMorgan Elect
plc ("JPE") (the "Transaction"), to be implemented through a scheme
of reconstruction (the "Scheme") of JPE pursuant to section 110 of
the Insolvency Act 1986 (the "Proposals").
The Board announces that the Company has today published a
prospectus (the "Prospectus") in relation to the issue of new
ordinary shares and C Shares in the capital of Company (the
"Issue") pursuant to the Scheme together with a circular to provide
the Company's shareholders (the "JGGI Shareholders") with further
details of the Proposals and to convene a general meeting of the
Company (the "General Meeting") to seek approval from JGGI
Shareholders for the implementation of the Proposals (the
"Circular").
The Prospectus has been approved by the Financial Conduct
Authority and the Prospectus and Circular will shortly be available
for inspection at the National Storage Mechanism which is located
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on
the Company's website at http://www.jpmglobalgrowthandincome.co.uk
.
Details of the Proposals
The Transaction, if approved by the shareholders of each of the
Company and JPE, will be implemented through a scheme of
reconstruction under section 110 of the Insolvency Act, resulting
in the voluntary liquidation of JPE and the rollover of its assets
into the Company in exchange for the issue of Scheme Ordinary
Shares and Scheme C Shares ("Scheme Shares") to Eligible JPE
Shareholders and to the Liquidators of JPE for sale in the market
for the benefit of Overseas Excluded JPE Shareholders.
Subject to the passing of the Allotment Resolution, the Articles
Amendment Resolution and the JPE Resolutions, and satisfaction of
the other conditions of the Scheme (which are outlined below), the
Scheme will take effect on 19 December 2022 (the "Effective
Date").
Under the Scheme, JPE will be put into liquidation and its
assets split into the following pools:
(i) the pool of cash, undertaking and other assets attributable
to the JPE Cash Shares to be established under the Scheme and to be
transferred to the Company pursuant to the Transfer Agreement in
consideration for the issue of Scheme Ordinary Shares to Eligible
JPE Cash Shareholders and to the Liquidators for sale in the market
for the benefit of Overseas Excluded JPE Shareholders (the "JPE
Cash Rollover Pool");
(ii) the pool of cash, undertaking and other assets (which will
be the same, or predominantly the same, as those in the JPE Growth
Portfolio) attributable to the JPE Growth Shares to be established
under the Scheme and to be transferred to the Company pursuant to
the Transfer Agreement in consideration for the issue of Scheme C
Shares to Eligible JPE Growth Shareholders and to the Liquidators
for sale in the market for the benefit of Overseas Excluded JPE
Shareholders (the "JPE Growth Rollover Pool");
(iii) the pool of cash, undertaking and other assets
attributable to the JPE Income Shares to be established under the
Scheme and to be transferred to the Company pursuant to the
Transfer Agreement in consideration for the issue of Scheme
Ordinary Shares to Eligible JPE Income Shareholders and to the
Liquidators for sale in the market for the benefit of Overseas
Excluded JPE Shareholders (the "JPE Income Rollover Pool"); and
(iv) the pool of cash and other assets to be retained by the
Liquidators to meet all known and unknown liabilities of JPE and
other contingencies (the "Liquidation Pool").
Before the Effective Date, JPE will, to the extent practicable,
seek to realign the JPE Portfolios so that, immediately prior to
the Scheme taking effect, JPE will hold, in addition to assets
destined to become the Liquidation Pool, investments which are
suitable to be held by the Company in accordance with the Ordinary
Share Investment Policy. Given the less liquid nature of some of
the investments in the JPE Growth Portfolio, however, it is
expected that a significant proportion of such investments will not
be disposed of prior to the Effective Date but will instead simply
transfer to the Company under the Transfer Agreement to be managed
within the C Share Portfolio in accordance with the C Share
Investment Policy.
Under the Scheme:
-- each Eligible JPE Cash Shareholder will receive such number
of Scheme Ordinary Shares as have a value (at the formula asset
value ("FAV") per JGGI Ordinary Share) equal to the proportion of
the JPE Cash Rollover Pool attributable to the number of JPE Cash
Shares they hold;
-- each Eligible JPE Growth Shareholder will receive one Scheme
C Share for each JPE Growth Share they hold; and
-- each Eligible JPE Income Shareholder will receive such number
of Scheme Ordinary Shares as have a value (at the FAV per JGGI
Ordinary Share) equal to the proportion of the JPE Income Rollover
Pool attributable to the number of JPE Income Shares they hold.
Benefits of the Proposals
The Board believes that the Proposals may have the following
benefits for JGGI Shareholders:
-- the enlarged Company will have net assets in excess of GBP1.7
billion (based on valuations as at 10 November 2022), which should
improve secondary market liquidity for the Shareholders;
-- following implementation of the Scheme, the Company will
benefit from its tiered Management Fee structure, as the enlarged
asset base will have the effect of reducing the initial weighted
average Management Fee;
-- Existing JGGI Shareholders and new JGGI Shareholders will
benefit from a lower ongoing expense ratio with the Company's fixed
costs spread over a larger asset base, in addition to the lower
Management Fee;
-- the Company's shareholder base will become further
diversified, having introduced a number of new long-term JPE
investors to the register; and
-- the Manager has agreed to make the Manager's Contribution in
respect of the Scheme, reducing the effective implementation costs
for the Company.
Conditions of the Scheme
The Scheme is conditional on, among other things:
-- approval of the Allotment Resolution and the Articles
Amendment Resolution by JGGI Shareholders at the General Meeting of
the Company and such Resolutions becoming unconditional in all
respects;
-- the passing of the JPE Resolution to be proposed at the First
JPE General Meeting, the JPE Resolution to be proposed at the
Second JPE General Meeting and the JPE Resolutions to be proposed
at the JPE Class Meetings or any adjournment of those meetings and
any conditions of such JPE Resolutions being ful lled;
-- the approval of the FCA and the London Stock Exchange in
relation to the Admission of the Scheme Ordinary Shares and Scheme
C Shares to listing on the premium listing category of the Official
List and to trading on the Main Market of the London Stock
Exchange, respectively, occurring before 31 December 2022, or such
other date as may be agreed between the Company and the
Sponsor;
-- tax clearances in respect of the Scheme being received by JPE; and
-- the Board and the JPE Board resolving to proceed with the Scheme.
Board structure
It is intended that, following completion of the Scheme, one
current director of JPE, being Steve Bates, the chair of JPE, will
be appointed as a non-executive Director of the Company. The Board
will then consist of seven Directors, comprising six Directors from
the current Board and one director from the board of JPE. Steve
Bates is independent of the Manager and the Investment Manager.
Costs and Expenses of the Proposals
Costs of the Company
The costs incurred by the Company, prior to the Effective Date
in connection with the implementation of the Transaction (which
include legal fees, financial advisory fees, other professional
advisory fees, printing costs and other applicable expenses, but
exclude for the avoidance of doubt, any JGGI Acquisition Costs)
will be borne by Existing JGGI Shareholders (the "JGGI
Implementation Costs"). The JGGI Implementation Costs are estimated
(after taking into account the Manager's Contribution as detailed
below) to be equivalent to 0.06 per cent. of the Company's Net
Asset Value as at 10 November 2022 .
In addition, the enlarged Company, and therefore all
Shareholders following implementation of the Scheme, will bear any
stamp duty, SDRT or other transaction tax, or investment costs it
incurs in connection with the acquisition of the assets comprised
in the Rollover Pools or the deployment of the cash therein upon
receipt (the "JGGI Acquisition Costs"). The enlarged JGGI Ordinary
Share class will bear the JGGI Acquisition Costs associated with
the transfer of the JPE Cash Rollover Pool and the JPE Income
Rollover Pool. The Scheme C Share class will bear the JGGI
Acquisition Costs associated with the transfer of the JPE Growth
Rollover Pool.
After the Scheme becomes effective, the Scheme C Share class
will also incur a number of costs in disposing of the investments
in the JPE Growth Rollover Pool transferred to the Company pursuant
to the Transfer Agreement and thereafter comprising the C Share
Portfolio and realigning such investments in a portfolio of
investments consistent with the Ordinary Share Investment Policy
(the "JGGI C Share Portfolio Realignment Costs"). The JGGI C Share
Portfolio Realignment Costs will be attributed to the Scheme C
Shares and will therefore be borne indirectly by JPE Growth
Shareholders who acquire Scheme C Shares pursuant to the
Scheme.
The enlarged Company will also bear the London Stock Exchange
fees in respect of the admission of Scheme Shares which are
estimated to be GBP0.14 million in respect of the Scheme Ordinary
Shares (to be borne by the enlarged JGGI Ordinary Share class) and
GBP0.27 million in respect of the Scheme C Shares (to be borne by
the Scheme C Share class).
Costs of JPE
The costs to be borne by JPE Shareholders, after taking account
of the Manager's Contribution and excluding the Liquidators'
Retention, are estimated to be equivalent to 0.2 per cent. of JPE's
Net Asset Value as at 10 November 2022. Such costs will be
allocated amongst the JPE share classes pro rata based on the
respective net asset value of each share class, other than JPE
Portfolio Realignment Costs which shall be allocated to the share
class in respect of which they were incurred.
Manager Contribution
The Manager has agreed to make the Manager's Contribution to the
costs of the Transaction by way of a waiver of part of the ongoing
management fee payable by the Company. The Manager's Contribution
will be an amount equal to 8 months of the Company's prevailing
management fee calculated on the value of the net assets
transferred to the Company by JPE pursuant to the Scheme. The
nancial value of the Manager's Contribution is estimated at
approximately GBP0.8 million based on the estimated net asset value
of the assets to be transferred to JGGI as at 10 November 2022 (and
assuming that no JPE Shares are repurchased pursuant to the JPE
Repurchase Facility on 30 November 2022).
35 per cent. of the Manager's Contribution will be allocated to
benefit Existing JGGI Shareholders and 65 per cent. will be
allocated to benefit JPE Shareholders, with the latter being
further allocated to benefit holders of JPE Cash Shares, JPE Growth
Shares and JPE Income Shares pro rata to the respective net asset
value of each class as at the Calculation Date.
Future dividends
JPE Shareholders receiving New JGGI Ordinary Shares under the
Scheme or upon conversion of the Scheme C Shares will not be
entitled to receive the second interim dividend in respect of the
JGGI Ordinary Shares, declared on 3 November 2022 and to be paid in
January 2023. JPE Growth Shareholders who are issued Scheme C
Shares may be paid a dividend based on the net income of that share
class prior to Conversion should the Directors resolve to pay any
such dividend.
Details of the Issue
The number of Scheme Ordinary Shares to be issued to Eligible
JPE Cash Shareholders and Eligible JPE Income Shareholders, and to
the Liquidators appointed in respect of Overseas Excluded JPE
Shareholders, will be based on the JGGI FAV and the relevant FAV
per JPE Share. The FAVs will be calculated as at the Calculation
Date based on the NAV (cum income, debt at fair value, if
applicable) of each of the Company and JPE. The FAV per JGGI
Ordinary Share and the FAVs per JPE Share will be calculated to six
decimal places (with 0.0000005 rounded down) in accordance with
each company's respective normal accounting policies and will be
reviewed by an independent accountant.
Eligible JPE Cash Shareholders and Eligible JPE Income
Shareholders will be issued Scheme Ordinary Shares based on the
ratio between the FAV per JGGI Ordinary Share and the FAV per share
of the JPE Cash Shares or JPE Income Shares (as applicable),
multiplied by the number of JPE Cash Shares or JPE Income Shares
owned by such Eligible JPE Cash Shareholder or Eligible JPE Income
Shareholder as at the Record Date.
Eligible JPE Growth Shareholders will be issued one Scheme C
Share for each JPE Growth Share held.
The number of Scheme Shares which will be issued is not known at
the date of this announcement as it will be calculated in
accordance with the methodology stated above at the Calculation
Date. The number of Scheme Shares to be issued will be announced
through an RIS announcement as soon as practicable following the
Calculation Date.
The procedure for Conversion of the Scheme C Shares into New
JGGI Ordinary Shares when the C Share Portfolio has been
transitioned in line with the Ordinary Share Investment Policy is
described in more detail in Part II of the Circular.
Admission and Dealings
Applications will be made by the Company to the FCA for the
Scheme Shares to be admitted to the premium listing category of the
Official List and to the London Stock Exchange for the Scheme
Shares to be admitted to trading on the premium segment of the Main
Market. If the Proposals become effective, it is expected that the
Scheme Shares will be admitted to the Official List and the first
day of dealings in such shares on the Main Market will be 20
December 2022.
The Company has published a prospectus dated 21 November 2022
(the "Prospectus") in relation to the issue of Scheme Shares to JPE
Shareholders pursuant to the Scheme, which will shortly be
available on the Company's website at
http://www.jpmglobalgrowthandincome.co.uk under "Documents", or in
hard copy on request to invtrusts.cosec@jpmorgan.com .
General Meeting
The Proposals are subject to JGGI Shareholder approval. The GM
Notice convening the General Meeting, to be held at 1:00 p.m. on 16
December 2022 at 60 Victoria Embankment, London, EC4Y 0JP, is set
out on pages 35 and 36 of the Circular. The GM Notice includes the
full text of the Resolutions.
Expected Timetable
GENERAL MEETING
Posting of Circular and Forms 22 November 2022
of Proxy for the General Meeting
Latest time and date for receipt 1:00 p.m. on 14 December
of Forms of Proxy for the General 2022
Meeting
General Meeting 1:00 p.m. on 16 December
2022
Announcement of results of the 16 December 2022
General Meeting
SCHEME
Publication of the Prospectus 21 November 2022
First JPE General Meeting 12:30 p.m. on 9 December
2022
JPE Growth Class Meeting 12:35 p.m. on 9 December
2022
JPE Income Class Meeting 12:40 p.m. on 9 December
2022
JPE Cash Class Meeting 12:45 p.m. on 9 December
2022
Calculation Date for the Scheme 5:00 p.m. on 13 December
2022
Record Date for entitlements under 6:00 p.m. on 13 December
the Scheme 2022
Second JPE General Meeting 12:30 p.m. on 19 December
2022
Effective Date for implementation 19 December 2022
of the Scheme
Announcement of results of the 19 December 2022
Scheme and respective FAVs per
share
CREST accounts credited with, 8:00 a.m. on 20 December
and dealings commence in, Scheme 2022
Shares
Certificates despatched by post By 9 January 2023 (or as
in respect of Scheme Shares soon as practicable thereafter)
Conversion of Scheme C Shares as soon as practicable after
the C Share Portfolio has
been realigned with the Ordinary
Share Investment Policy
Note: All references to time in this announcement are to
UK time. Each of the times and dates in the above expected
timetable (other than in relation to the General Meetings
or the JPE Class Meetings) 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 noti ed to Shareholders by
an announcement through a Regulatory Information Service.
Capitalised terms used but not defined in this announcement will
have the same meaning as set out in the Circular.
For further information:
JPMorgan Global Growth & Income
plc Contact via Company Secretary
Tristan Hillgarth
JPMorgan Funds Limited
Simon Crinage
Simon Elliott
Fin Bodman 020 7742 4000
JPMorgan Funds Limited (Company
Secretary)
Divya Amin 020 7742 4000
Winterflood Investment Trusts
Neil Langford
Chris Mills 020 3100 0000
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