THIS ANNOUNCEMENT AND THE INFORMATION
CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN OR INTO, THE
UNITED STATES, AUSTRALIA,
CANADA, JAPAN, NEW
ZEALAND OR THE REPUBLIC OF SOUTH
AFRICA.
12 October
2020
Perpetual Income
and Growth Investment Trust plc
Publication of
Circular
On 29 July 2020, the Board of
Perpetual Income and Growth Investment Trust plc (“PLI” or the
“Company”) announced that it had concluded its comprehensive search
for a new manager with the credentials and capacity to deliver
capital growth and real growth in dividends over the medium to
longer term mainly from UK equities. Having considered a
large number of proposals, the Board agreed heads of terms for a
combination of the assets of the Company with Murray Income Trust
plc (“Murray Income” or "MUT") by means of a scheme of
reconstruction and winding up of the Company under section 110 of
the Insolvency Act 1986 (the “Proposals”).
The Board is pleased to announce that the Company has today
published a circular to the Company’s shareholders ("Shareholders")
in connection with the Proposals (the “Circular”).
The Proposals
Under the Proposals, Shareholders will be entitled to elect to
receive in respect of some or all of their Shares:
(a) New MUT Shares
(the “Rollover Option”); and/or
(b) cash (the “Cash
Option”).
Shareholders can make different elections in respect of
different parts of their holdings. The Cash Option is limited to 20
per cent. of the Company’s shares in issue (excluding shares held
in treasury) (the “Shares”). Should total elections for the Cash
Option exceed 20 per cent. of the Shares, excess elections for the
Cash Option will be scaled back into New MUT Shares on a pro rata
basis.
In order to effect the Scheme and the proposed amendments to the
Company’s articles of association in relation to the Scheme,
Shareholder approval is required at the First General Meeting. If
the Scheme is approved at the First General Meeting, Shareholder
approval is required at the Second General Meeting to wind up the
Company voluntarily and to appoint and grant authority to the
Liquidators to implement the Scheme.
Benefits of the Proposals
The Board believes that the Proposals will have the following
benefits for Shareholders:
-
continued investment exposure to UK equities via one of the
largest investment trusts in the UK Equity Income sector which,
upon completion, is expected to have in excess of £1 billion of
assets and greater secondary market liquidity;
-
integration into a trust with an aligned investment philosophy
and a narrower discount than the Company's over recent years;
-
access to the extensive resource and experience within the UK
Equities team at ASI, with Charles
Luke as lead portfolio manager;
-
investment in an AIC Dividend Hero investment trust with both
the credentials and capacity to deliver capital growth as well as
real growth in dividends, which has a dividend yield (as at
8 October 2020) of 4.5 per cent and a
47 year track record of dividend increase;
-
a significant reduction in costs, with Murray Income having one
of the lowest weighted average management fees (0.38 per cent. per
annum) and ongoing charges ratio (0.50 per cent. per annum) in the
sector following the completion; and
-
the opportunity to exit the Company at close to NAV.
The Proposals are also expected to result in an uplift in the
valuation of Shareholders' investments due to the narrower discount
to net asset value at which the MUT Shares have historically traded
compared with the Shares. Over the 12 months ended 8 October 2020, the shares of the Company and of
Murray Income traded at average discounts to cum-income net asset
value of 12.8 per cent. and 4.9 per cent. respectively.
Summary information on Murray
Income
Murray Income’s investment objective is to aim for a high and
growing income combined with capital growth through investment in a
portfolio of principally UK equities, which is very similar to the
Company's current objective.
In pursuit of its investment objective,
Murray Income invests principally in UK equities to deliver to
investors a high and growing income combined with capital growth.
The MUT Investment Manager’s philosophy is that markets are not
always efficient. It believes that superior investment returns are
therefore attainable by identifying good companies with attractive
valuations, defined in terms of the fundamentals that, in the MUT
Investment Manager’s opinion, drive share prices over the long
term. The MUT Investment Manager undertakes substantial due
diligence before initiating any investment, including company
visits, in order to be assured of the quality of the prospective
investment. Murray Income makes use of borrowing facilities to
enhance shareholder returns when appropriate.
Murray Income is an AIC dividend hero having grown its dividend
for 47 consecutive years. As at 8 October
2020, the dividend yield on MUT's shares was 4.5 per cent..
Over the five years ended 31 August
2020, Murray Income has delivered cumulative NAV growth of
36.3 per cent., against the return of the FTSE All Share of 17.3
per cent., representing outperformance of 19 per cent..
The Proposals, if implemented, will result in Murray Income
being one of the largest investment trusts in the UK Equity Income
sector, with gross assets expected to be in excess of £1
billion.
Murray Income’s alternative investment fund manager for the
purposes of the AIFM Directive is Aberdeen Standard Fund Managers
Limited (the "ASFML"), which has delegated the day-to-day
management of the portfolio to Aberdeen Asset Managers Limited
("AAML" or "MUT Investment Manager"). In particular, Charles Luke as lead portfolio manager,
supported by the ASI UK Equities team, is responsible for the
management of MUT’s portfolio. Charles
Luke has managed the MUT portfolio since 2006.
Further details on Murray Income, including details of its
performance track record, are set out in Part 2 of the Circular and
in the accompanying MUT prospectus dated 12
October 2020 (the “MUT Prospectus”).
Dividends
It is expected that Shareholders will see a reduction in their
dividend yield given that MUT has a lower, but still attractive,
current dividend yield than PLI. Over the five years ending
31 August 2020, MUT’s dividend has
grown at a compound annual growth rate of 1.85 per cent. per annum.
MUT also has an unbroken record of 47 years of dividend growth.
Partly in recognition of the reduction in absolute dividends
that a PLI Shareholder would be expected to receive following the
implementation of the Scheme, the Board has declared a
pre-liquidation final interim dividend of 13
pence per Share to reflect a distribution of its accumulated
revenue reserve (including current year net income to date), which
will be paid to PLI Shareholders prior to the Effective Date.
PLI Shareholders receiving New MUT shares under the Scheme will
rank fully for all dividends declared by MUT with a record date
falling after the date of the issue of those New MUT Shares to
them.
Costs of implementing the Scheme
The Company and Murray Income have agreed to each bear their own
costs in relation to the Scheme.
In the event that MUT Shareholders resolve not to proceed to
implement the Scheme (including if MUT Shareholders do not approve
any resolution required to implement the Scheme) then Murray Income
will bear the abort costs of both parties.
In the event that the PLI Shareholders resolve not to proceed to
implement the Scheme (including if Shareholders do not approve any
resolution required to implement the Scheme) then the Company will
bear the abort costs of both parties.
In the event that both of the parties resolve not to proceed to
implement the Scheme (including if both PLI Shareholders and the
MUT Shareholders do not approve any resolutions required to
implement the Scheme) then each party will bear its own abort
costs.
ASFML has agreed to waive the management fee payable by MUT in
respect of the net assets transferred to MUT under the Scheme for
the first 182 days following the completion of the Scheme, which
will be for the benefit of the shareholders of the enlarged MUT,
including those PLI shareholders who elect for the Rollover
Option.
PLI Notes
On the Effective Date, the PLI Notes will be novated to MUT and
MUT will accept the obligations of the Company in respect of the
PLI Notes. The Company will bear all interest under the PLI Notes
up to the Calculation Date. The PLI Notes will rank equally with
the existing secured notes issued by MUT. Further details on
the PLI Notes and the MUT Notes are set out in the MUT
Prospectus.
General Meetings
The Proposals are conditional, inter alia, upon Shareholders’
approval of the resolutions to be proposed at the First General
Meeting and the Second General Meeting (the “Resolutions”). Both
General Meetings will be held at the offices of Dickson Minto W.S., 17 Charlotte Square,
Edinburgh EH2 4DF.
First General Meeting
The First General Meeting will be held on 9 November 2020 at 11.00
a.m.
The Resolutions to be considered at the First General Meeting
(which will be proposed as special resolutions) will, if passed,
approve the terms of the Scheme, amend the Articles to give effect
to the Scheme and authorise the Liquidators to implement the Scheme
should the Resolution to be proposed at the Second General Meeting
be passed. Each resolution put forward at the First General Meeting
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 First General Meeting. The Scheme will not become
effective unless and until, inter alia, 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 17 November 2020 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 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
Overseas Shareholders will not receive a copy of the MUT
Prospectus unless they have satisfied the MUT Directors that they
are entitled to receive and hold New MUT Shares without breaching
any relevant securities laws and without the need for compliance on
the part of the Company or Murray Income with any overseas laws,
regulations, filing requirements or the equivalent.
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 and/or the MUT Prospectus.
Accordingly, such documents may not be used for the purpose of, and
do 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.
To the extent that an Overseas Shareholder would otherwise
receive New MUT Shares under the Scheme, either because no Election
for the Cash Option was made or because an Excess Application for
the Cash Option is scaled back in accordance with the Scheme, then
such New MUT Shares will be sold by the Liquidators in the market
and the net proceeds paid to the relevant Overseas Shareholder.
Overseas Shareholders wishing to elect for the Cash Option must
complete and return the Form of Election accompanying the Circular
or send a TTE Instruction (as applicable).
Expected Timetable
|
2020 |
Ex-dividend date for
the final interim dividend to Shareholders |
15 October |
Record date for the
final interim dividend to Shareholders |
16 October |
Latest time and date
for receipt of Forms of Proxy for the First General Meeting |
11:00 a.m. on 5
November |
Latest time and date
for receipt of the Forms of Election and/or TTE Instructions |
11:00 a.m. on 5
November |
Record Date for
entitlements under the Scheme |
6.00 p.m. on 6
November |
First
General Meeting |
11:00
a.m. on 9 November |
Shares disabled in
CREST |
6:00 p.m. on 9
November |
Calculation Date |
5.00 p.m. on 12
November |
Payment date for the
final interim dividend |
13 November |
Latest time and date
for receipt of Forms of Proxy for Second General Meeting |
11.00 a.m. on 13
November |
Reclassification of the
Shares (and commence dealings in Reclassified Shares) |
8.00 a.m. on 16
November |
Suspension of listing
of Reclassified Shares and Company’s Register closes |
7.30 a.m. on 17
November |
Second General
Meeting |
11.00 a.m. on 17
November |
Effective Date for
implementation of the Scheme |
17 November |
Announcement of the
results of Elections, the PLI FAV per Share, the Cash NAV per Share
and the MUT FAV per Share |
17 November |
CREST accounts credited
with, and dealings commence in, New MUT Shares |
8.00 a.m. on 18
November |
Cheques despatched to
Shareholders who elect for the Cash Option in accordance with their
entitlements and CREST accounts credited with cash |
week commencing 23
November |
Share certificates in
respect of New MUT Shares despatched (or as soon as practicable
thereafter) |
week commencing 23
November |
Cancellation of listing
of Reclassified Shares |
as soon as practicable
after the Effective Date |
Note: All references to time in this document are to UK
time. Each of the times and dates in the above expected
timetable (other than in relation to the General 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 notified to
Shareholders by an announcement through a Regulatory Information
Service. |
General
This announcement
does not contain all the information which is contained in the
Circular and Shareholders should read the Circular, the MUT
Prospectus and the MUT KID 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.
A copy of the Circular has been submitted to the Financial
Conduct Authority and will 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
https://www.invesco.com/uk/en/investment-trusts/individual/perpetual-income-and-growth-investment-trust-plc.html.co.uk.
Contacts
Richard Laing, Chairman
Contact through Winterflood
Winterflood Investment Trusts (Corporate Broker)
Joe Winkley / Neil Morgan
Telephone 020 3100 0301 / 0292
Invesco Fund Managers Limited
Angus Pottinger
Telephone 020 3753 0714
Aberdeen Standard Investments
James Thorneley
Telephone 0776 855 6334
Note: The content of the Company's
web-pages and the content of any website or pages which may be
accessed through hyperlinks on the Company's web-pages, other than
the content of the document referred to above, is neither
incorporated into nor forms part of the above announcement.