MATE Jpmorgan Multi-asset Growth & Income 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 (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY MEMBER STATE OF THE EEA 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.

23 February 2024

JPMorgan Multi-Asset Growth & Income plc

Legal Entity Identifier: 549300C0UCY8X2QXW762

Publication of circular in connection with the recommended proposals for the winding up of the Company and combination with JPMorgan Global Growth & Income plc

Introduction

The Board of JPMorgan Multi-Asset Growth & Income plc ("MATE" or the "Company") announces that it has today published a shareholder circular (the "Circular") setting out the proposals for the voluntary winding up of the Company and combination with JPMorgan Global Growth & Income plc ("JGGI").

If the Scheme becomes effective, MATE Shareholders will, subject to the terms and conditions set out in the Circular, roll over their holdings of MATE Shares into New JGGI Shares.

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

Background

On 24 January 2024, the board of MATE (the "Board") announced that it had agreed heads of terms with the board of JGGI (the "JGGI Board") for a combination of the assets of the Company with JGGI. If approved, the combination will be implemented by way of a scheme of reconstruction and members' voluntary winding up of the Company under section 110 of the Insolvency Act 1986 (the "Scheme") and the associated transfer of the Company's cash, assets and undertaking to JGGI in exchange for the issue of New JGGI Shares to MATE Shareholders (the "Issue"). The Scheme and the Issue are together referred to as the "Proposals".

The Board recognises that the size of the Company limits its appeal to investors and believes that the Proposals provide the most attractive option for MATE Shareholders, in particular taking into account the strong performance, improved share rating, significantly greater economies of scale and secondary market liquidity that will result from a shareholding in JGGI.

The Proposals are conditional upon, amongst other things, the approval of MATE Shareholders at the General Meetings and the approval by JGGI Shareholders of the Issue. MATE Shareholder approval for the Scheme is required at the First General Meeting; and if such approval is forthcoming, MATE Shareholder approval is required at the Second General Meeting in order to take the formal steps of winding up the Company voluntarily, appointing the Liquidators to implement the Scheme and applying for the cancellation of the listing of the MATE Shares on the Official List. In accordance with the Scheme, MATE Shareholders will be allotted New JGGI Shares at the same point at which the Company enters liquidation.

The purpose of the Circular is to explain the Proposals and the actions required to be taken in order for them to be implemented and to convene the General Meetings of the Company, notices of which are set out at the end of the Circular. Further details of the Resolutions to be proposed at the General Meetings are set out below. The expected timetable associated with the Proposals is set out below.

JPMorgan Global Growth & Income plc

If the Scheme becomes effective, MATE Shareholders will roll over their holdings of MATE Shares into New JGGI Shares. Following implementation of the Scheme, JGGI will continue to be managed by JPMorgan Fund Managers Limited ("JPMF") and JPMorgan Asset Management (UK) Limited ("JPMAM"), in accordance with its existing investment objective: namely to achieve superior total returns from world stock markets. Management of JGGI's portfolio will continue to be led by Helge Skibeli, James Cook and Tim Woodhouse.

For comparative purposes, the cumulative NAV total return of each of JGGI, the Company and the JGGI Benchmark over various time periods to 31 January 2024 is set out below.

Cumulative NAV Total Return (%)

Dividend Policy

The JGGI Board's current intention is to pay quarterly dividends over the course of each financial year which, in aggregate, total at least 4 per cent. of the net asset value of JGGI as at the end of the preceding financial year. Accordingly, at the start of each financial year the JGGI Board announces the distribution it intends to pay to shareholders in the forthcoming year in four equal instalments. The JGGI Board has discretion to set the dividend at a different level more in-line with the wider market and other global income trusts and funds if it considers it appropriate. JGGI has the ability to pay dividends out of capital and does currently pay its dividends, in part, out of its realised capital profits.

JGGI declared dividends totalling 17.0 pence per JGGI Share in respect of the financial year commencing 1 July 2022, which represented an annual dividend equivalent to 4.23 per cent. of JGGI's unaudited net asset value (cum income with debt at fair value) as at 30 June 2022.

JGGI has announced that in relation to the year commencing 1 July 2023, JGGI intends to pay dividends totalling 18.44 pence per JGGI Share (being 4.61 pence per JGGI Share per quarter), which represents an 8.5 per cent. increase from JGGI's total dividend in respect of the preceding financial year. This would represent an annual dividend equivalent to 3.52 per cent. of JGGI's unaudited net asset value (cum income with debt at fair value) as at 20 February 2024.

Further information on JGGI, including details of its investment strategy and key characteristics of its portfolio as at the date of the Circular, are set out in Part 2 of the Circular.

Benefits of the Proposals

The Board believes that the Proposals have a strong rationale, which includes the following benefits for MATE Shareholders:

Strong historic investment performance: Over the year ended 31 January 2024, the NAV total return of JGGI's Shares was 16.1 per cent. compared to that of MATE's Shares of 7.9 per cent. Over the five years ended 31 January 2024, the NAV total return of JGGI's Shares was 107 per cent. compared to 67.6 per cent. for the JGGI Benchmark.

Improved share rating: JGGI's Share price currently trades at a premium to NAV and has averaged a 1.3 per cent. premium over the 12 months to 31 January 2024 compared to MATE's 3.3 per cent. average discount over the same period.

Scale: The enlarged JGGI is expected to have net assets in excess of £2.3 billion, solidifying its position as the largest investment trust in the AIC Global Equity Income sector whilst delivering an attractive dividend yield and total return. The scale of the enlarged JGGI should improve secondary market liquidity for MATE Shareholders and result in cost efficiencies.

Dividends: JGGI's dividend policy is to make quarterly distributions with the intention to pay dividends totalling at least 4 per cent. of its NAV as at the end of the preceding financial year.

Contribution to costs: As described below, JPMF has agreed to pay all the direct corporate costs incurred by the Company in connection with the Proposals.

Reduced management fee for MATE Shareholders: Following implementation of the Scheme, MATE Shareholders will benefit from significantly lower management fees as a result of a shareholding in the enlarged JGGI. The incremental management fee payable by the enlarged JGGI will be 0.30 per cent. per annum (the JGGI management fee is tiered with 0.55 per cent. per annum on JGGI's net assets up to £750 million, 0.40 per cent. per annum between £750 million and £1.5 billion and 0.30 per cent. per annum thereafter), resulting in an expected weighted average management fee of 0.41 per cent. per annum on the net assets of JGGI as enlarged.

Lower ongoing charges: MATE Shareholders in the enlarged JGGI are expected to benefit from an ongoing charges ratio of approximately 0.5 per cent., considerably lower than the Company's ongoing charges ratio of 1.1 per cent. for the last financial year.

Portfolio: Exposure to a diversified portfolio of global companies managed by JPMAM.  As at the date of the Circular there is an approximately 50 per cent. overlap between the holdings in the MATE and JGGI portfolios.

Track record of consolidating investment trusts: JGGI has an established track record of combining investment trusts. It completed the merger with The Scottish Investment Trust in August 2022 and JPMorgan Elect in December 2022.

Dividends

The Board has announced a pre-liquidation interim dividend of 1.2 pence per Share which, subject to the Resolution to be proposed at the First General Meeting being passed, will be paid to MATE Shareholders prior to the Effective Date.

MATE Shareholders receiving New JGGI Shares under the Scheme will rank fully for all dividends declared by JGGI with a record date falling after the date of the issue of those New JGGI Shares to them.

Costs of implementing the Proposals and JPMF Cost Contribution

The costs incurred by the Company include both direct costs, being the costs necessary for the implementation of the Scheme, and indirect costs, being the costs associated with the realignment of the Company's portfolio.

JPMF has agreed a cost contribution in respect of the Proposals equal in amount to all the direct costs incurred by both the Company and JGGI in respect of the Proposals (the "JPMF Cost Contribution"). The JPMF Cost Contribution will be provided by means of a fee waiver of JPMF's management fee on the enlarged JGGI's NAV following completion of the Scheme. However, the JPMF Cost Contribution will be for the benefit of the shareholders of each of MATE and JGGI by means of an adjustment in their respective FAVs equal to the direct costs paid or accrued, for the purposes of calculating entitlements under the Scheme. Accordingly, MATE Shareholders will not bear any direct costs in connection with the Proposals.

For the avoidance of doubt, any costs of realignment or realisation of the MATE portfolio prior to the Scheme becoming effective will be borne by the Company. Any stamp duty, stamp duty reserve tax or other transaction tax, or investment costs incurred by JGGI for the acquisition of the MATE portfolio or the deployment of the cash therein upon receipt will be borne by the enlarged JGGI. In addition, JGGI as enlarged will also bear London Stock Exchange admission fees payable in respect of the Admission of the New JGGI Shares.

In addition, in anticipation of the Scheme becoming effective, JPMF has undertaken to waive, in full, the period of notice to which it is contractually entitled under the MATE Management Agreement and has agreed that no compensation will be payable by the Company to JPMF or JPMAM in respect of such waiver, provided that the Scheme is implemented.

In the event that the Scheme is not implemented, each party will bear its own costs in respect of the Proposals and JPMorgan will not make any contribution towards such costs.

Liquidators' Retention

The Liquidators' Retention is estimated at £100,000 and will be retained by the Liquidators to meet any unknown or unascertained liabilities of the Company. To the extent some or all of the Liquidators' Retention remains when the Liquidators are in a position to close the liquidation, this will be returned to MATE Shareholders on the Register as at the Effective Date (excluding Dissenting Shareholders), together with any other funds remaining in the Liquidation Pool, pro rata to the number of MATE Shares held by them on such date. If, however, any such amount payable to any MATE Shareholder is less than £5.00, it shall not be paid to the MATE Shareholder but instead shall be paid by the Liquidators to the Nominated Charity.

Management of the Company's portfolio prior to implementation of the Scheme

The Board has instructed the Company's AIFM and Investment Manager to consider the potential realignment of the Company's investment portfolio so that by the Effective Date it contains assets that are suitable for transfer to JGGI and also to ensure that the Company has sufficient cash to meet any remaining liabilities. It is expected that the majority of such realignment and any realisations will occur after the First General Meeting.

Further details of the Scheme

Entitlements under the Scheme

Under the Scheme, each MATE Shareholder on the Register on the Record Date will receive such number of New JGGI Shares as have a value (at the JGGI FAV per Share) equal to the proportion of the Rollover Pool attributable to the number of MATE Shares held. Fractions of New JGGI Shares will not be issued under the Scheme and entitlements to such New JGGI Shares will be rounded down to the nearest whole number.

The attention of Overseas Shareholders is drawn to the paragraph headed "Overseas Shareholders" below.

Under the Scheme, in order to ensure the Company can meet all known and unknown liabilities of the Company and other contingencies during the course of the liquidation, including the entitlements of any Dissenting Shareholders, the Liquidators' Retention and other assets will be appropriated to the Liquidation Pool. As noted above, any remaining balance in the Liquidation Pool after the discharge of the Company's liabilities, including the Liquidators' Retention, will be distributed in cash to the MATE Shareholders on the Register on the Effective Date.

After the appropriation to the Liquidation Pool described above, there shall be appropriated to the Rollover Pool the remaining assets of the Company in the manner described in paragraph 3.2 of Part 4 of the Circular.

The issue of New JGGI Shares under the Scheme will be effected on a formula asset value ("FAV") for FAV basis based on valuations as at the Calculation Date as described in detail in Part 4 of the Circular. The Calculation Date for determining the value of the Rollover Pool is expected to be market close on 21 March 2024. The Record Date for the basis of determining MATE Shareholders' entitlements under the Scheme is 6.00 p.m. on 22 March 2024.

Illustrative entitlements

For illustrative purposes only, had the Calculation Date been market close on 20 February 2024 and assuming that there are no Dissenting Shareholders, after deduction of the pre-liquidation interim dividend of 1.2 pence per MATE Share, the MATE FAV per Share would have been 100.52 pence. The MATE FAV per Share may be compared with the Company's Share price and cum-income NAV per Share as at 20 February 2024 which, when adjusted on a pro forma basis for the deduction of the pre-liquidation interim dividend of 1.2 pence per Share, were 97.80 pence and 100.84 pence respectively.

For illustrative purposes only and on the basis of the assumptions above, the JGGI FAV per Share would have been 524.14 pence, which would have produced a conversion ratio of 0.191790, and, in aggregate, 13,783,641 New JGGI Shares would have been issued to MATE Shareholders under the Scheme, representing approximately 3.09 per cent. of the issued ordinary share capital of JGGI, as enlarged, immediately following completion of the Scheme. The JGGI FAV per Share may be compared with JGGI's Share price and cum-income NAV per JGGI Share as at 20 February 2024 which were 531.00 pence and 524.14 pence respectively.

Conditions of the Proposals

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

·      the passing of the Resolution to be proposed at the First General Meeting and the Resolution to be proposed at the Second General Meeting, or any adjournment of those meetings, and any conditions of such Resolutions being fulfilled;

·      the JGGI Resolution being passed and becoming unconditional in all respects;

·      MATE obtaining the requested tax clearance and confirmations relating to the Scheme from HMRC;

·      the approval of the Financial Conduct Authority and the London Stock Exchange to the Admission of the New JGGI Shares to the premium listing category of the Official List and to trading on the Main Market of the London Stock Exchange, respectively, subject only to allotment; and

·      the Directors and the JGGI Directors resolving to proceed with the Scheme.

If any condition is not satisfied, the Proposals will not become effective, the Company will not proceed with the members' voluntary winding up and instead the Company will continue in existence managed in accordance with its current investment policy. In such circumstances, the Directors will reassess the options available to the Company at that time.

General Meetings

As noted above, the Proposals are conditional upon, amongst other things, MATE Shareholders' approval of the Resolutions to be proposed at the First General Meeting and the Second General Meeting. Both General Meetings will be held at 60 Victoria Embankment, London, EC4Y 0JP.

First General Meeting

The First General Meeting will be held on 18 March 2024 at 11.00 a.m.

The Resolution to be considered at the First General Meeting (which will be proposed as a special resolution) will, if passed, approve the terms of the Scheme set out in Part 4 of the Circular, amend the Articles to give effect to the Scheme, and authorise the Liquidators to enter into and give effect to the Transfer Agreement with JGGI, to distribute New JGGI Shares to MATE Shareholders in accordance with the Scheme, to purchase the interests of any Dissenting Shareholders and to apply to cancel the listing of the Shares with effect from such date as the Liquidators may determine. The Resolution will require at least 75 per cent. of the votes cast in respect of it, whether in person or by proxy, to be voted in favour to be passed. The Scheme will not become effective unless and until, amongst other things, the Resolution to be proposed at the Second General Meeting has also been passed.

Second General Meeting

The Second General Meeting will be held on 26 March 2024 at 11.00 a.m.

At the Second General Meeting, a special resolution will be proposed which, if passed, will place the Company into liquidation, appoint the Liquidators and agree the basis of their remuneration, instruct the Company Secretary to hold the books to the Liquidators' order, and provide the Liquidators with appropriate powers to carry into effect the amendments to the Articles made at the First General Meeting. The Resolution to be proposed at the Second General Meeting is conditional, amongst other things, upon the passing of the Resolution at the First General Meeting and the JGGI Resolution being passed and becoming unconditional in all respects. The Resolution will require at least 75 per cent. of the votes cast in respect of it, whether in person or by proxy, to be voted in favour to be passed at the Second General Meeting.

Overseas Shareholders

Subject to certain exceptions described in the Circular, no action has been taken or will be taken in any jurisdiction other than the UK where action is required to be taken to permit the distribution of the Circular. Accordingly, the Circular may not be used for the purpose of, and does not constitute, an offer or solicitation by anyone in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.

Overseas Shareholders will not receive New JGGI Shares pursuant to the Scheme unless they have satisfied the Directors, the Liquidators and the JGGI Directors that they are entitled to receive and hold New JGGI Shares without breaching any relevant securities laws and without the need for compliance on the part of the Company or JGGI with any overseas laws, regulations, filing requirements or the equivalent.

Overseas Shareholders who wish to participate in the Scheme should contact the Company directly, by no later than 5.00 p.m. on 18 March 2024, if they are able to demonstrate, to the satisfaction of the Directors, the Liquidators and the JGGI Directors, that they can be issued New JGGI Shares without breaching any relevant securities laws and without the need for compliance on the part of the Company or JGGI with any overseas laws, regulations, filing requirements or the equivalent. Unless the Directors and the JGGI Directors are so satisfied (in their respective absolute discretions), any New JGGI Shares to which such Overseas Shareholder would otherwise be entitled under the Scheme will instead be issued to the Liquidators (as nominees on behalf of such Overseas Shareholder) who will arrange for such New JGGI Shares to be sold promptly by a market maker (which shall be done by the Liquidators without regard to the personal circumstances of the relevant Overseas Shareholder and the value of the MATE Shares held by the relevant Overseas Shareholder). The net proceeds of such sales (after deduction of any costs incurred in effecting such sales) will be paid to the relevant Overseas Shareholders entitled to them within 10 Business Days of the date of sale, save that entitlements of less than £5.00 per Overseas Shareholder will be retained in the Liquidation Pool.

Expected Timetable

This announcement does not contain all the information which is contained in the Circular and MATE Shareholders should read the Circular before deciding what action to take in respect of the Proposals.

 A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at www.jpmmultiassetgrowthandincome.com.

For further information please contact: