Tender Offer

RNS Number : 9677T

Advance Developing Markets Fund Ltd

20 December 2012

 



20 December 2012

Advance Developing Markets Fund Limited (the "Company")

Tender offer for up to 15 per cent, further conditional tender offers and continuation vote

Introduction

In the Company's half yearly financial report for the six months to 30 April 2012 the Board stated that it intended to undertake a broad shareholder consultation in the autumn of this year, in light of the five yearly continuation vote due to take place at the Annual General Meeting to be held in 2013.  The Board has now consulted with shareholders owning over 75 per cent. of the Company's ordinary shares and appointed Mercer, an independent investment consultant, to review the Company's investment management arrangements and performance. 

As a result of these two exercises the Board will be recommending shareholders to vote in favour of the continuation resolution to be proposed at the Company's Annual General Meeting which is expected to take place in March 2013.   At that time, the Board will also put forward proposals for a tender offer for up to 15 per cent. of the ordinary shares ("Shares") in issue and further conditional tender offers for up to 10 per cent. of the Shares in issue at 6 monthly intervals over the next 12 months.

The Board expects to send a circular to shareholders in February 2013 providing further details of the terms and conditions of the proposed tender offer and the conditional tender offers, together with the Company's annual report and notice of Annual General Meeting.

Tender Offer

The Board proposes to make available a tender offer for up to 15 per cent. of the Shares in issue to enable shareholders to tender all or part of their Shares for cash at a price which will reflect a 1 per cent. discount to formula asset value, being net asset value less the costs and expenses of the tender offer ("FAV").  The record date for participation in the tender offer will be 21 December 2012.  Shares tendered above the basic entitlement of 15 per cent. of Shares held as at the record date will only be satisfied (on a pro rata basis) to the extent that other shareholders tender less than their aggregate basic entitlement.

Further Conditional Tender Offers

The Board also proposes, subject to shareholder approval, to conduct two further conditional tender offers in respect of the six month periods ending 31 October 2013 and 30 April 2014.  Such conditional tender offers would be made for up to 10 per cent. of Shares in issue at a 1 per cent. discount to FAV if either (i) the Shares trade at an average discount of more than 10 per cent. over the period from 1 May 2013 to 31 October 2013 and 1 November 2013 to 30 April 2014 or (ii) the Company's performance over those periods, as measured by its net asset value total return, is less than that of the MSCI Emerging Markets TR Index (net). 

Continuation Vote

Shareholders are given the opportunity to vote on the future of the Company every 5 years and the Board will put forward a continuation vote at the Annual General Meeting to be held in March 2013 in accordance with the Company's articles of association.

The Board appointed Mercer to review the investment management arrangements and performance of the Company's investment manager, Advance Emerging Capital Limited.  Based on the results of this review and discussions with shareholders the Board has concluded that the continuation of the Company and the continuing appointment of the investment manager is in the interests of shareholders as a whole. 

The recent consultation exercise by the Board, which covered shareholders owning over 75 per cent. of the Shares, revealed a range of views on the Company's continuation, management arrangements and appropriate measures to reduce the discount to net asset value.  The Board would like to thank all investors for the time they made available.  The Board believes that the proposals to be put forward at the time of the continuation vote strike a fair balance between those shareholders who wish to realise part of their investment in the Company at close to net asset value and those who wish to maintain their investment in the Company. 

Enquiries

Advance Developing Markets Fund Limited

Richard Bonsor, Chairman                                                                       020 7484 7484

Westhouse Securities Limited

Financial adviser and broker

Alastair Moreton                                                                                         020 7601 6118

Darren Vickers

 

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