Issue of Equity

RNS Number : 6578P

BB Healthcare Trust PLC

04 September 2017

 

4 September 2017

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM) OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE SECTION ENTITLED "DISCLAIMER" TOWARDS THE END OF THIS ANNOUNCEMENT.

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the updated prospectus to be published by BB Healthcare Trust plc in due course (the "Prospectus") and not in reliance on this announcement. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

THE SHARES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. ADDITIONALLY, THE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER SECURITIES COMMISSION OR REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PROPOSED FUNDRAISING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

BB Healthcare Trust plc: Issue of Equity

Announcement of Placing, Offer for Subscription and Intermediaries Offer

Further to its announcement on 27 June 2017, the Board of Directors (the "Directors") of BB Healthcare Trust plc (the "Company" or "BB Healthcare") announces the proposed issue of further ordinary shares ("Ordinary Shares") in the Company (the "Second Issue") further to the share issuance programme set out in the prospectus published in November 2016 ahead of its initial public offering (the "Share Issuance Programme"). The Second Issue will comprise a Placing, Offer for Subscription and Intermediaries Offer.

To facilitate the Offer for Subscription and Intermediaries Offer, which are public offers, the prospectus published ahead of the Company's initial public offering on 10 November 2016 (the "IPO Prospectus"), and containing details of the on-going Share Issuance Programme, will be updated by way of a new Summary and Securities Note, both of which are expected to be published in due course and the latter will contain the terms and conditions applicable to the Second Issue. The new Summary and Securities Note, together with the Registration Document dated 10 November 2016, form the prospectus in relation to the Second Issue (the "Prospectus"). Terms not otherwise defined in this announcement have the meanings given to them in the Prospectus.

The IPO Prospectus is available on the Company's website (via www.bbhealthcaretrust.com), subject to certain access restrictions, for inspection at the Company's registered office at Mermaid House, 2 Puddle Dock, London EC4V 3DB, and at the National Storage Mechanism via www.morningstar.co.uk/uk/NSM and the new Summary and Securities Note are expected to be made available in the same way in due course.

Background

BB Healthcare has performed strongly since it listed on 2 December 2016, with its net asset value ("NAV") per Ordinary Share (cum income) increasing by 18.2% from an initial reported NAV of 98.28 pence per Ordinary Share to 116.13 pence per Ordinary Share (at close on 31 August 2017) and the Company's Ordinary Shares have risen by 17% over this period. The Company's shares have traded at an average premium of approximately 2.3% to NAV over this period. As announced in the Company's half yearly financial report published on 20 July 2017, an interim dividend of 1.75 pence per Ordinary Share has been paid (and the Company has a target minimum total dividend per Ordinary Share of 3.5 pence in the financial period to 30 November 2017).

Reasons for the Second Issue

The Directors, and Bellevue Asset Management AG (the "Portfolio Manager" or "Bellevue"), are encouraged by the investment performance of the Company since IPO and continue to see an attractive investment opportunity in global healthcare equities. The Portfolio Manager has identified a strong pipeline of investment opportunities, with the potential for further investment in both the existing portfolio companies and in stocks that are not currently held by the Company.

Since IPO the Company has issued a further 46,687,221 ordinary shares pursuant to its Share Issuance Programme, raising gross proceeds of approximately £52.9 million, giving a total net asset value of approximately £223m (at close on 31 August 2017). The Directors seek to grow the Company further and, as announced on 27 June 2017, have planned to utilise the Company's existing Share Issuance Programme in the second half of the Company's current financial period. The Directors believe that an increase in the size of the Company should improve liquidity and enhance the marketability of the Company, resulting in a broader investor base which should enable the Company to grow further, thereby spreading fixed costs over a larger capital base and reducing on-going charges per share.

Details of the Second Issue

The Ordinary Shares will be issued under the Company's existing general authority to issue up to 200 million shares on a non pre-emptive basis following the first issue of Ordinary Shares on IPO and pursuant to the Share Issuance Programme.

Ordinary Shares issued in the Second Issue will be issued subject to the terms and conditions set out in the new Securities Note. When issued, they will rank pari passu with the existing Ordinary Shares in issue, including the right to receive any final dividend declared for the financial period to 30 November 2017.

The issue price per Ordinary Share of any shares issued pursuant to the Second Issue will be at a premium of 1.5% to the unaudited NAV per Ordinary Share (cum income) published on the day that the Placing closes.

Applications will be made to the UK Listing Authority and to the London Stock Exchange for admission of the Ordinary Shares in the Company to be issued pursuant to the Second Issue to the Official List and to trading on the London Stock Exchange's main market for listed securities ("Admission"). It is expected that Admission will become effective in late September 2017.

About BB Healthcare

BB Healthcare differs from other listed healthcare investment trusts. BB Healthcare is a high conviction, long-only investment trust invested in listed or quoted global healthcare equities. It is unconstrained and able to invest regardless of market cap, sub sector or region, and the portfolio is concentrated with a maximum of 35 holdings. The target annual dividend in the first financial period is 3.5 pence per Ordinary Share (to be paid mostly out of capital) and in subsequent financial years will be set at 3.5 per cent. of net asset value at the end of the preceding financial year (to be paid mostly out of capital) (this is a target only and not a profit forecast and there can be no assurance that it will be met). BB Healthcare has an annual redemption option in order to assist with discount control and directors' fees (for UK-based directors) are paid in shares. BB Healthcare is managed by Bellevue Asset Management AG which has built a successful track record in this sector.

Highlights

·      Offers a new way for investors to have exposure to the healthcare sector and access the experience and track record of Bellevue.

·      Provides an opportunity to invest in global healthcare equities at a time when, given current valuations, Bellevue considers there to be potential for long-term structural growth of the market for healthcare, and when macro uncertainties are impacting equity markets.

·      Bellevue believes that healthcare is an attractive long-term growth sector as the world gets richer, as there is increased healthcare demand from an ageing global population and as GDP growth fuels healthcare spending.

·      BB Healthcare offers investors the potential for income with a targeted total dividend in its initial financial period of 3.5 pence per ordinary share, to be paid mostly from capital (this is a target only and not a profit forecast and there can be no assurance that it will be met). A  dividend of 1.75p per share has been paid for the period to 31 May 2017.

·      BB Healthcare is managed by Bellevue, which manages BB Biotech AG (ticker: BION SW), a leading European biotech investment trust with a primary listing on the SIX Swiss Exchange and net assets of approximately £2.7bn.

·      BB Healthcare uses Bellevue's fundamental, bottom up, best companies approach but applied to the broader healthcare market (compared with BB Biotech AG's narrower focus on the biotech sub-sector).

·      High conviction portfolio: maximum of 35 investments versus 60+ for peers' current portfolios.

·      Unconstrained portfolio: no market cap, sub-sector or geographical restrictions; truly multi-cap.

·      Fees: annual management fee of 0.95% based on the Company's market capitalisation; no performance fee.

·      The UK based directors receive their annual fees in BB Healthcare shares (such shares subject to a 3 year lock in from the date of acquisition by the directors).

·      Robust discount control (annual redemption option at approximately NAV).

Commenting on the Second Issue, Chairman of BB Healthcare Trust plc, Justin Stebbing, said:

"BB Healthcare has delivered well for investors since the IPO.  The structural growth trends in healthcare remain very much in place and Bellevue's investment approach has fulfilled our expectations.  By growing the Company with this placing and retail offer there is the potential to increase liquidity and marketability, as well as broadening the investor base."

Expected timetable

Publication of the new Summary and Securities Note	Mid September 2017
Publication of the results of the Second Issue	Late September 2017
Admission of and dealings in Ordinary Shares	Late September 2017

Peel Hunt LLP ("Peel Hunt") is acting as sole sponsor, broker, placing agent and intermediaries offer adviser to the Company.

For further information please contact:

Bellevue Advisors Limited Claude Mikkelsen Telephone: [phone] Mobile: [phone] Peel Hunt LLP Luke Simpson (Corporate Broking) Mark Thompson (Sales) Kathy Boate (Intermediaries) Telephone: [phone] Maitland - Financial PR William Clutterbuck Georgia Lewis Telephone: [phone]

About Bellevue Asset Management AG

The Company, through Mirabella Financial Services LLP (acting as the AIFM), has appointed Bellevue as the Company's portfolio manager pursuant to a delegated portfolio management agreement. The Portfolio Manager is an asset management company incorporated in Switzerland, specialising in the healthcare sector, and part of the Bellevue Group.

The Portfolio Manager is an authorised asset manager subject to regulation by the Swiss Financial Market Supervisory Authority, FINMA. It is also the investment manager of BB Biotech AG, a Swiss investment company listed on the SIX Swiss Exchange, the Frankfurt Stock Exchange and the Stock Exchange in Milan, and is responsible for the management operations of Bellevue Funds (Lux) SICAV, as well as a number of other investment funds and mandates.

The Portfolio Manager has appointed Bellevue Advisors Limited, its UK subsidiary, to provide investment advisory services to it in relation to the Company and its portfolio.

The investment team is comprised of Dr Daniel Koller, Paul Major and Brett Darke; they also have access to members of the wider Bellevue team.

Daniel Koller has over 17 years of experience in the healthcare sector. He joined Bellevue in 2004 and was appointed head of portfolio management for the investment company BB Biotech AG in 2010. Since becoming head, BB Biotech has returned an annualised total shareholder return of approximately 27 per cent. (in USD). Previously, he was an asset manager for equity4life Asset Management Ltd and prior to that an equity analyst at UBS Warburg, covering the biotechnology sector. Daniel has a PhD in Biotechnology from the Swiss Federal Institute of Technology (ETH) Zurich.

Paul Major has 19 years of experience in the healthcare sector on the sell-side and was top-rated by a number of institutional investment clients. He was one of the first research partners at Redburn, Europe's leading independent research firm. His work there included bespoke projects on healthcare portfolio construction for several institutions. Paul was previously an analyst and corporate financier at UBS Warburg and studied Biochemistry.

Brett Darke (joined 1 September 2017) has 11 years experience covering healthcare and the wider lifesciences sector on the buy-side at TT International, on both long-only and long/short funds. Brett previously worked for five years in healthcare corporate finance at Merrill Lynch and Bear Stearns. He holds a Masters degree in Medicine and Management studies from Cambridge University and is a CFA charterholder.

Disclaimer

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Peel Hunt solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement is an advertisement and does not constitute a prospectus and investors must  subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the updated Prospectus to be published by the Company in due course (and in any supplementary prospectus) and not in reliance on this announcement. The IPO Prospectus is currently available on the Company's website (via www.bbhealthcaretrust.com), subject to certain access restrictions, for inspection at the Company's registered office at Mermaid House, 2 Puddle Dock, London EC4V 3DB, and at the National Storage Mechanism via www.morningstar.co.uk/uk/NSM and the new Summary and Securities Note are expected to be made available in the same way in due course. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description, a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company and investors should refer to the Prospectus.

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 when the new Summary and Securities Note are published.

Peel Hunt, which is authorised and regulated by the Financial Conduct Authority, is acting for the Company only in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Peel Hunt or advice to any other person in relation to the matters contained herein.

The shares of the Company have not been, and will not be, registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold into or within the United States absent registration, except pursuant to an applicable exemption from, or in a transaction that is not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. Moreover, the shares of the Company have not been, nor will they be, registered under the applicable securities laws of Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than the United Kingdom). Further, the Company is not, and will not be, registered under the US Investment Company Act of 1940, as amended. The shares of the Company will be offered outside of the United States pursuant to the provisions of Regulation S of the Securities Act. Subject to certain exceptions, the shares of the Company may not be offered or sold in the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than the United Kingdom or to professional investors in certain EEA member states for which marketing passports have been obtained) or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, the Republic of South Africa, Japan or any member state of the EEA (other than the United Kingdom or to professional investors in certain EEA member states for which marketing passports have been obtained). The Share Issuance Programme (including the Second Issue), and the distribution of this announcement, in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Portfolio Manager and Peel Hunt expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority, the EU Market Abuse Regulation or other applicable laws, regulations or rules.

Disclaimer (Switzerland)

This document is being made to and directed only at qualified investors within Article 10 (3), 10 (3bis) and (3ter) of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006 (the "CISA") and independent asset managers as per Art. 3 (2)(c) CISA registered in Switzerland. BB Healthcare has not been and will not be registered with the Swiss Financial Market Supervisory Authority (FINMA).

The representative of BB Healthcare in Switzerland is CACEIS (Switzerland) SA, with its registered office at Route de Signy 35, 1260 Nyon, Switzerland (the "Representative"). The offering documents and annual or semi-annual reports can be obtained free of charge from the Representative. The place of performance for Shares of BB Healthcare (the "Shares") offered or distributed in or from Switzerland are the registered office of the Representative. The courts of the canton of Vaud shall have jurisdiction in relation to any disputes arising out of the duties of the Representative. Any dispute related to the distribution of Shares in and from Switzerland shall be subject to the jurisdiction of the registered office of the distributor. The paying agent in Switzerland is Caceis Bank, Paris, Nyon branch, Switzerland, with its registered office at Route de Signy 35, 1260 Nyon, Switzerland (the "Paying Agent"). The Shares may be subscribed and/or redeemed with the Paying Agent.

The Portfolio Manager has not been authorized by FINMA for public offering in or from Switzerland. Accordingly, the investment and investment activity may not be offered to the public in or from Switzerland and neither this document nor any other offering materials relating to the investment and investment activity may be distributed in connection with any such public offering. This document as well as any other material relating to the investment and investment activity does not constitute a prospectus within the meaning of Articles 652a and 1156 of the Swiss Code of Obligations.

 

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