TIDMUKT
RNS Number : 7876Z
Threadneedle UK Select Trust Ltd
17 March 2017
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INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF
SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN THE UNITED
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Threadneedle UK Select Trust Limited (the "Company" or
"UKT")
Proposed winding up and roll-over into Henderson High Income
Trust plc
17 March 2017
Background to the Proposals
In the light of the continuation vote at the forthcoming annual
general meeting, the Board has been reviewing the options available
to grow the Company to a credible and sustainable size and to
reduce the discount at which the Company's shares have traded.
Having undertaken a thorough review of the options, the Board
reached the conclusion that the Company, in its current form, is
not able to continue. Accordingly, the Board undertook a review of
potential merger candidates and following a beauty parade process
with a shortlist of suitable candidates has decided to recommend a
merger with Henderson High Income Trust plc ("HHI").
The Board has agreed heads of terms with the Board of HHI and
Henderson Investment Funds Limited ("Henderson") in respect of a
future merger with HHI to be effected by way of a reconstruction
and winding up of the Company (the "Proposals"). Shareholders will
also be offered the opportunity to exit their investment for cash
at close to net asset value.
The Proposals will be subject to approval by the shareholders of
both companies in addition to required regulatory and tax
approvals.
The benefits of the Proposals
For the past twelve months, the Company's shares have traded at
an average discount of 13.0 per cent. and, for the past three
years, at an average discount of 8.7 per cent. Given the size of
the Company, the Board has been unable to take any steps to resolve
this discount without adversely affecting the viability of the
Company.
The focus of HHI is on investing in a prudently diversified
selection of both well known and smaller companies to provide
investors with a high dividend income stream while also maintaining
the prospect of capital growth. Over the past five years, HHI has
generated an annualised total return for its shareholders of 12.9
per cent. and, as at 15 March 2017, has a dividend yield of 4.9 per
cent. Over the past three years, the shares have traded at an
average premium to the HHI net asset value (cum income, debt at par
value) (the "HHI NAV") of 1.95 per cent and, over the past twelve
months, have traded at an average premium to the HHI NAV of 0.86
per cent. HHI's shares are currently trading at a premium of
approximately one per cent. to the HHI NAV. HHI recently won the UK
Equity and Bond Income category at the 2016 Investment Company of
the Year Awards.
Through a payment equal to 18 months of base management fee on
assets rolled over, Henderson is making a significant contribution
to the costs of the Proposals, which will enable the Company's
shareholders to roll-over their investment without the payment of
any premium to the HHI NAV on the new shares.
The Board believes that the Proposals are in the best interests
of shareholders as a whole for the following reasons.
-- HHI has a market capitalisation in excess of GBP210 million,
thereby offering considerably greater liquidity than exists in the
Company's shares.
-- They provide shareholders with a cost effective opportunity
to invest in a company with a strong long-term performance track
record, an attractive dividend yield and shares that are trading at
a premium to net asset value.
-- The Proposals offer shareholders access to a leading, highly
experienced investment trust manager, with specialist capabilities
in relation to UK equity income and a dedicated 18-strong
investment trust team.
-- HHI has a significantly lower ongoing charge ratio than the
Company due to its increased scale.
-- The cash exit will be available to all shareholders at close
to net asset value compared to the average discount of 13.0 per
cent. over the past twelve months.
The Scheme
Under the heads of terms agreed by the Board, the scheme of
reconstruction will involve the roll-over of part of the assets and
undertaking of UKT to HHI by way of a members' voluntary solvent
scheme of reconstruction (under the laws of Guernsey) of UKT (the
"Scheme").
Under the Scheme, eligible UKT shareholders will be entitled to
elect to receive ordinary shares to be issued by HHI for nil
premium to the HHI NAV (the "Rollover Option") and/or to receive
cash distributions (the "Cash Option").
There will be no restriction on UKT shareholders' ability to
elect for the Cash Option. UKT shareholders who fail to make an
election will be deemed to have elected for the Rollover
Option.
For the purposes of the Scheme, UKT's net asset value (cum
income, debt at fair value) (the "UKT NAV") and the HHI NAV will
both be calculated in accordance with the respective company's
normal accounting policies, taking into account certain adjustments
in respect of Scheme costs and dividends. UKT shareholders will not
qualify for any HHI dividends declared prior to the Scheme becoming
effective.
For the avoidance of doubt, UKT shareholders who elect (or who
are deemed to elect) for the Rollover Option will therefore receive
new HHI ordinary shares based on the ratio of the respective
adjusted NAVs rather than the respective share prices.
Each party intends to bear its own costs (including in the event
that the Proposals do not become effective), net of any
contribution from Henderson or its group to UKT and HHI as set out
below.
Further details of the Scheme will be set out in the circular to
be posted to UKT shareholders in due course.
Costs
Henderson has proposed a contribution to the costs of the
Proposals equating to a sum that is equivalent to 18 months' of the
HHI base management fee (being 0.5 per cent. per annum) of the
total assets that rollover into HHI. The financial value of this
amount will be credited against the proportion of the HHI
prospectus costs represented by the shares issued to UKT
shareholders in order that no issue premium to the HHI NAV will be
paid by such UKT shareholders and the balance, if any, will be paid
to UKT and credited against the UKT NAV for the purposes of the
Scheme.
It is estimated that the costs of the Scheme (excluding the
liquidator's retention and any portfolio disposal costs), which
will be borne by all UKT shareholders, will be approximately equal
to 0.5 per cent. of the UKT NAV.
Expected timetable
It is currently envisaged that a circular and notice of the
general meeting setting out details of the Scheme and seeking
shareholder approval will be sent to shareholders in May 2017. The
relevant general meetings are expected to be convened to be held in
June 2017 and the Scheme is expected to become effective by the end
of June 2017.
Conditions
The Scheme will be conditional on, amongst other things, the
recommendation of the Boards of both companies, the necessary
shareholder approvals of both companies and the appropriate
regulatory and tax approvals in due course.
The Chairman of Threadneedle UK Select Trust Limited, David
Warr, said:
"Having undertaken a thorough review of the options available to
the Company, we are pleased to be able to recommend a merger with
Henderson High Income Trust plc. Whilst the Board has been
satisfied with the investment performance of the Company over
recent years, we recognise the importance for shareholders of scale
and liquidity for their investment and the appeal of an investment
in a successor trust that offers an attractive dividend yield and a
premium to NAV.
The Board would like to thank the Company's investment manager,
Chris Kinder, for his contribution to the trust and strong
performance since his appointment in September 2014."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
Enquiries:
JTC Fund Solutions (Guernsey) Limited
Secretary
Tel: + 44 (0) 1481 702400
This information is provided by RNS
The company news service from the London Stock Exchange
END
STREAXDXFSXXEEF
(END) Dow Jones Newswires
March 17, 2017 04:00 ET (08:00 GMT)
Grafico Azioni Uk Select Trust (LSE:UKT)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Uk Select Trust (LSE:UKT)
Storico
Da Gen 2024 a Gen 2025
