Publication of Prospectus and Circular

RNS Number : 7594Z

Standard Life UK Small.Co's Tst PLC

04 September 2018

 

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, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION WHICH THE SAME COULD BE UNLAWFUL.

4 September 2018

Standard Life UK Smaller Companies Trust plc

(Legal Entity Identifier: 213800UUKA68SHSJBE37)

Publication of Prospectus and Circular

Standard Life UK Smaller Companies Trust plc (the "Company") announced on 21 June 2018 that the Board had reached an agreement with Dunedin Smaller Companies Investment Trust PLC ("Dunedin") in respect of a recommended merger of the Company and Dunedin (the "Proposals") pursuant to a scheme of reconstruction and winding-up of Dunedin under section 110 of the Insolvency Act 1986 (the "Scheme").

The Board announces that the Company has today published a prospectus (the "Prospectus") in relation to the issue of new Ordinary Shares in the Company pursuant to the Scheme ("New Shares"), together with a circular to provide the Company's shareholders (the "Shareholders") with further details of the Proposals and to convene a general meeting of the Company (the "General Meeting") to seek approval from Shareholders for the implementation of the Proposals (the "Circular").

Under the Proposals, a shareholder resolution is required to approve the issue of New Shares under the Scheme (the "Resolution"). The Proposals are therefore conditional upon, amongst other things, the approval of Shareholders at the General Meeting and, separately, the approval of Dunedin's shareholders.

Details of the Proposals

The Board of Dunedin announced on 21 June 2018 that it had undertaken a strategic review of Dunedin and its position in the UK smaller companies sector.  The Dunedin Directors concluded that Dunedin's size and secondary market liquidity in its shares made it challenging to attract new investors.  In addition, the recent merger of Dunedin's manager Aberdeen Asset Management PLC with Standard Life plc resulted in Dunedin being managed alongside the Company which has a very similar UK smaller companies mandate.  Having considered a number of options and following consultation with Dunedin's largest shareholders, the Board of Dunedin believed that Dunedin's shareholders, as a whole, still wished to retain exposure to UK smaller companies via an investment trust with a similar mandate managed by Aberdeen Standard Investments.  Consequently, Dunedin and the Company agreed, in principle, the terms of a merger of the two companies (the "Merger").

Had the Scheme become effective on 30 August 2018, being the latest practicable date prior to the publication of this document, the net assets of the Company would have increased by approximately £155 million, increasing the assets of the Company to over £550 million. Since the announcement of the proposed Merger on 21 June 2018 Standard Life Investments Limited (the "Investment Manager") has been aligning the Dunedin Portfolio with the Company's portfolio and is now of the view that the two portfolios are materially aligned. Following the Merger the enlarged portfolio will continue to be managed by the Investment Manager in line with the investment process that has been used by Harry Nimmo and his team to manage the Portfolio since 2003. In particular, the Aberdeen Standard Investments Smaller Companies team, led by Harry Nimmo and supported principally by Abby Glennie, will continue to be responsible for the day-to-day management of the portfolio.

The Scheme provides for the cash, undertaking and other assets of Dunedin to be transferred to the Company in consideration for the issue of New Shares of an equivalent value.  The Scheme will be effected on an adjusted NAV for NAV basis as at the Calculation Date (being 5.00 p.m. on 4 October 2018). For the purposes of the Scheme the NAV of Dunedin will be adjusted to take account of all the costs associated with the Proposals not already accrued by Dunedin. The New Shares issued under the Scheme will rank equally in all respects with the existing Ordinary Shares in the Company.

Further details of the Proposals are set out in the Additional Information section of the Circular.

Benefits of the Scheme to the Company

The Board believes that the Merger has the following benefits to Shareholders:

·     it will result in reduced ongoing costs; and

·     the increased Net Asset Value of the enlarged Company should mean that the Ordinary Shares have enhanced liquidity in the secondary market.

Costs and expenses of the Scheme

In the event that the Scheme is implemented, Dunedin shall bear all its own costs and the costs of the Company associated with the Scheme, such costs estimated to be approximately £1.8 million (including irrecoverable VAT and stamp duty) and the Company's existing Shareholders will bear no costs in connection with the Proposals.

If Dunedin resolves to implement the Scheme but the Company does not (including if Shareholders do not approve the Resolution required to implement the Scheme) then the Company shall bear the abort costs of both parties (estimated at £410,000 in respect of the Company and £325,000 in respect of Dunedin).

If the Company resolves to implement the Scheme but Dunedin does not (including if Dunedin's shareholders do not approve any resolution required to implement the Scheme) then Dunedin shall bear the abort costs of both parties, as estimated above.

If both of the parties resolve not to proceed to implement the Scheme on the terms described in this document (including if both Shareholders and the Dunedin's shareholders do not approve any resolutions required to implement the Scheme) then each party will bear its own abort costs.

Proposed Board Changes

It is Carol Ferguson's intention that she will retire from the Board at the Company's AGM to be held on 25 October 2018. Tim Scholefield will assume the role of Senior Independent Director following Carol's retirement. If the Scheme becomes effective, it is intended that Alexa Henderson (currently a director of Dunedin) will join the Board on the effective date of the Scheme. Alexa Henderson will be a non-executive director and is independent of the AIFM and the Investment Manager. Further details of the Board changes are provided in the Circular.

The General Meeting

The Proposals are conditional on the approval of Shareholders. Set out at the end of the Circular is a notice convening the General Meeting at which Shareholders will be asked to consider and, if thought fit, approve the Proposals. The Resolution to be passed at the General Meeting will be proposed as a special resolution.

All Shareholders are entitled to attend and vote at the General Meeting. In accordance with the Company's articles of association, all Shareholders entitled to vote and present in person or by proxy at the General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of every Ordinary Share held. 

Expected Timetable

	2018
Latest time and date for receipt of Forms of Direction	2.00 p.m. on 26 September
Latest time and date for receipt of Forms of Proxy	2.00 p.m. on 1 October
General Meeting	2.00 p.m. on 3 October
Calculation Date in relation to the Scheme	5.00 p.m. on 4 October
Effective date for implementation of the Scheme	8 October
Dealings in New Shares commence	8.00 a.m. on 10 October

Terms used and not defined in this announcement have the meanings given in the Circular unless the context otherwise requires.

Enquiries

Standard Life UK Smaller Companies Trust plc	Allister Langlands	T: 0141 206 0124
Winterflood Securities	Joe Winkley Neil Morgan	T: 020 3100 0000
Aberdeen Standard Investments	Evan Bruce-Gardyne	T: 0131 245 0571

 

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