Tender Offer

RNS Number : 3051L

Edinburgh Dragon Trust plc

21 December 2018

 

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND AND THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MAY RESULT IN THE CONTRAVENTION OF ANY REGISTRATION OR OTHER LEGAL REQUIREMENT OF SUCH JURISDICTION

21 December 2018

Edinburgh Dragon Trust plc

(LEI: 549300W4KB0D75D1N730)

Publication of Tender Offer Circular

Edinburgh Dragon Trust plc (the "Company") has today published a circular (the "Circular") in connection with a tender offer to purchase up to 30 per cent. of the issued share capital of the Company.

Shareholders should note however that they are not obliged to tender any shares. The Directors will not tender any of their own Shares under the Tender Offer.

Background to the Tender Offer

On 10 October 2018, the Board announced that it had undertaken a shareholder consultation exercise ahead of the Continuation Vote to be proposed at the Annual General Meeting. The Board noted at that time, that if the Continuation Vote was passed by Shareholders, it intended to undertake a tender offer for up to 30 per cent. of the Shares in issue at a tender price equal to 98 per cent. of the prevailing Net Asset Value (less the costs of implementing the tender offer) (the "Tender Offer").

Reasons for the Tender Offer

The Continuation Vote was passed at the Annual General Meeting and, as such, the Board has resolved to implement the Tender Offer. This will enable Shareholders to retain their investment in the Company whilst offering those Shareholders who wish to realise their investment, either in part or potentially in whole, a chance to do so.

The Board believes that this proposal is in the interests of Shareholders. It ensures that Shareholders who do not tender any shares are protected against the costs of the Tender Offer and receive benefit from a modest uplift in their Net Asset Value. It also provides an exit mechanism for the Shareholders who have asked for one.

The Company's largest Shareholder, City of London Investment Management, has provided an irrevocable undertaking to vote in favour of the Tender Offer.

The decision to proceed with the Tender Offer was taken following discussions about the future of the Company held with major Shareholders, Winterflood Securities Limited ("Winterflood") and the Investment Manager. The Board believes that many Shareholders will wish to continue with their investment in the Company unchanged, but in order to provide those Shareholders who have so requested with an opportunity to exit, the Board proposes that:  

·      for Shareholders wishing to retain their investment in the Company:  the Company will continue to be managed by the Investment Manager, subject to the Board being satisfied that continued appointment of the Investment Manager is in the best interests of the Company;  the Board may seek to limit discount volatility through the prudent use of Share buybacks; and a further continuation vote will be put to Shareholders on or around the time of the 2021 annual general meeting of the Company.

·      those Shareholders wishing to realise part or all of their investment in the Company will have a chance to do so through the Tender Offer for up to 30 per cent. of the Shares in issue as at the Record Date at the Tender Price. Shareholders tendering in excess of 30 per cent. of their shareholding may be able to realise those Shares through the Tender Offer to the extent that other Shareholders do not tender any of their Shares or tender less than their Basic Entitlement.

The Board is satisfied that, following the Tender Offer, the Company will remain an attractive size with sufficient liquidity.

Overseas Shareholders and Restricted Shareholders

The Tender Offer is not being made to Shareholders who are resident in, or citizens of, Australia, Canada, Japan, New Zealand and the Republic of South Africa (the "Restricted Jurisdictions"). Restricted Shareholders are being excluded from the Tender Offer in order to avoid offending applicable local laws relating to the implementation of the Tender Offer. Accordingly, copies of the Tender Form and the Savings Scheme Tender Form are not being and must not be mailed or otherwise distributed in or into Restricted Jurisdictions.

Notice for US Shareholders

The Tender Offer relates to securities in a non-US company which is registered in England and Wales and is subject to the disclosure requirements, rules and practices applicable to companies listed in the United Kingdom, which differ from those of the United States in certain material respects. The Circular has been prepared in accordance with UK style and practice for the purpose of complying with English law and the rules of the London Stock Exchange, and US Shareholders should read the entire Circular, including the "Taxation" section of the Circular. The financial information relating to the Company included in the Circular has not been prepared in accordance with generally accepted accounting principles in the United States and thus may not be comparable to financial information relating to US companies. The Tender Offer is not subject to the disclosure and other procedural requirements of Regulation 14D under the US Securities and Exchange Act of 1934, as amended (the "US Exchange Act"). The Tender Offer will be made in the United States in accordance with the requirements of Regulation 14E under the US Exchange Act to the extent applicable. Certain provisions of Regulation 14E under the US Exchange Act are not applicable to the Tender Offer by virtue of Rule 14d-1(d) under the US Exchange Act. US Shareholders should note that the Company is not listed on a US securities exchange, subject to the periodic reporting requirements of the US Exchange Act or required to, and does not, file any reports with the SEC thereunder.

It may be difficult for US Shareholders to enforce certain rights and claims arising in connection with the Tender Offer under US federal securities laws since the Company is located outside the United States and most of its officers and directors may reside outside the United States. It may not be possible to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. It also may not be possible to compel a non-US company or its affiliates to subject themselves to a US court's judgment.

To the extent permitted by applicable law and in accordance with normal UK practice, the Company, Winterflood, or any of their affiliates, may make certain purchases of, or arrangements to purchase, Shares outside the United States during the period in which the Tender Offer remains open for acceptance, including sales and purchases of Shares effected by Winterflood acting as market maker in the Shares. These purchases, or other arrangements, may occur either in the open market at prevailing prices or in private transactions at negotiated prices. In order to be excepted from the requirements of Rule 14e-5 under the US Exchange Act by virtue of Rule 14e-5(b)(12) thereunder, such purchases, or arrangements to purchase, must comply with applicable English law and regulation, including the listing rules of the Financial Conduct Authority, and the relevant provisions of the US Exchange Act. Any information about such purchases will be disclosed as required in the UK and the United States and, if required, will be reported via the Regulatory Information Service of the London Stock Exchange and available on the London Stock Exchange website at http://www.londonstockexchange.com.

General Meeting

The proposed Tender Offer is subject to Shareholder approval at the General Meeting which is to be held at the offices of Aberdeen Standard Investments, 1 George Street, Edinburgh EH2 2LL on Wednesday, 16 January 2019 at 12 noon. At this meeting, at which Shareholders may attend, speak and vote, a special resolution will be proposed to approve the Tender Offer on the terms set out in the Circular and to give the Company authority to make market purchases pursuant to the Tender Offer. Should the resolution fail to be passed, the Tender Offer will not proceed. 

Expected Timetable

	2018
Publication of the Circular and Tender Offer opens	21 December
	2019
Latest time and date for receipt of Voting Direction Forms from Aberdeen Standard Savings Scheme Participants	5.00 p.m. on 7 January
Latest time and date for receipt of Forms of Proxy from Shareholders	12 noon on 14 January
Latest time and date for receipt of Savings Scheme Tender Forms from Aberdeen Standard Savings Scheme Participants	5.00 p.m. on 15 January
General Meeting	12 noon on 16 January
Results of General Meeting announced	16 January
Latest time and date for receipt of Tender Forms and submission of TTE Instructions from Shareholders	1.00 p.m. on 22 January
Record Date and time for the Tender Offer	6.00 p.m. on 22 January
Calculation Date	close of business on 24 January
Results of Tender Offer elections and Tender Price announced	28 January
CREST Settlement Date: payments through CREST made and CREST accounts settled	30 January
Balancing share certificates and cheques despatched to certificated Shareholders	4 February

All references are to London time unless otherwise stated.

The dates set out in the expected timetable above may be adjusted by Winterflood, with the consent of the Company, in which event details of the new dates will be notified to Shareholders by an announcement made by the Company through a Regulatory Information Service.

Defined terms used in this announcement have the meanings given in the Circular unless the context otherwise requires

Enquiries:

Aberdeen Standard Fund Managers Limited William Hemmings	020 7463 6000
Winterflood Securities Limited Joe Winkley/Neil Morgan	020 3100 0000

Important Information

The content of this announcement has been prepared by, and is the sole responsibility of, Edinburgh Dragon Trust plc. The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement.

The making of the Tender Offer in, or to persons who are citizens or nationals of, or resident in, jurisdictions outside of the United Kingdom or to custodians, nominees or trustees for citizens, nationals or residents of jurisdictions outside the United Kingdom may be prohibited or affected by the laws of the relevant overseas jurisdiction. Persons who are not resident in the United Kingdom should read the paragraph headed "Overseas Shareholders and Restricted Shareholders" set out in Part 1 of the Circular and should inform themselves about, and observe, any applicable legal requirements.

This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe for any Shares nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The Tender Offer is made only pursuant to the Circular and the related Tender Form and/or Savings Scheme Tender Form with respect to the Shares. The Tender Offer is not being made to holders of Shares residing in any jurisdiction in which the making of the Tender Offer would not be in compliance with the laws of that jurisdiction. 

The full terms and conditions of the Tender Offer are set out in the Circular, which should be read in full in conjunction with this announcement.

Winterflood, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Tender Offer and the contents of the Circular and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Winterflood or for providing advice in relation to the Tender Offer and the contents of the Circular or any matter referred to herein. Nothing in this paragraph shall serve to exclude or limit any responsibilities which Winterflood may have under FSMA or the regulatory regime established thereunder.

Apart from the responsibilities and liabilities, if any, which may be imposed on Winterflood by FSMA or the regulatory regime established thereunder, Winterflood does not make any representation, express or implied, in relation to, nor accepts any responsibility whatsoever for, the contents of the Circular or any other statement made or purported to be made by it or on its behalf in connection with the Company or the Tender Offer. Winterflood (and its affiliates) accordingly, to the fullest extent permissible by law, disclaims all and any responsibility or liability (save for statutory liability), whether arising in tort, contract or otherwise which it might otherwise have in respect of the contents of the Circular or any other statement made or purported to be made by it or on its behalf in connection with the Company or the Tender Offer.

This announcement contains (or may contain) certain forward-looking statements with respect to the Company's current expectations and projections about future events. These statements, which sometimes use, but are not limited to, words such as 'anticipate', 'believe', 'intend', 'estimate', 'expect' and words of similar meaning, reflect the Directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward looking statement. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company nor Winterflood assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

 

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