Foresight 4 VCT PLC : PROPOSALS TO MERGE FORESI...

JOINT ANNOUNCEMENT

FORESIGHT 4 VCT PLC ("FORESIGHT 4")
FORESIGHT 5 VCT PLC ("FORESIGHT 5")
ACUITY VCT 3 PLC ("ACUITY 3")
FORESIGHT CLEARWATER VCT PLC ("FORESIGHT CLEARWATER")


22 DECEMBER 2011

RECOMMENDED  PROPOSALS TO MERGE FORESIGHT 4, FORESIGHT 5, ACUITY 3 AND FORESIGHT
CLEARWATER  (TOGETHER THE  "COMPANIES" AND  EACH A  "COMPANY") (TO  BE COMPLETED
PURSUANT TO SECTION 110 OF THE INSOLVENCY ACT 1986 ("IA 1986")

SUMMARY

The  boards  of  Foresight  4, Foresight  5, Acuity  3 and  Foresight Clearwater
(together the "Boards" and each a "Board") announced on 7 October 2011 that they
had  agreed  terms  in  principle  to  merge  each  of Foresight 5, Acuity 3 and
Foresight  Clearwater (together the "Target  VCTs") into Foresight 4. The Boards
are  pleased to advise  that discussions have  now concluded and  they are today
writing  to set  out the  merger proposals  to their respective shareholders for
consideration.  All of  the Companies  are managed  by, and  will continue to be
managed by Foresight Group CI Limited ("Foresight").

The  merger  will  be  effected  by  each  of  the Target VCTs being placed into
members'  voluntary  liquidation  pursuant  to  a scheme of reconstruction under
Section  110 of  the  Insolvency  Act  1986 ("Schemes"  and  each  a  "Scheme").
Shareholders  should note that the merger by  way of the Schemes will be outside
the  provisions of the  City Code on  Takeovers and Mergers.  The merger will be
completed  on a relative net asset value basis (unaudited net assets as at close
of  business on  the day  immediately preceding  the Effective  Date (as defined
below)) and the benefits shared by all sets of shareholders.

Each  Scheme is conditional on the approval  of the shareholders of the relevant
Company  however, each Scheme is  not conditional on the  other Schemes being so
approved  and  will,  therefore,  proceed  independently and irrespective of the
other Schemes.

Foresight  5 and Acuity 3 (which  have substantially common  portfolios) will be
merged  into a new separate C Shares fund within Foresight 4 with an opening NAV
of  £1 per  share. The  Foresight 4 C  Shares will  be managed separately to the
existing  Foresight  4 Ordinary  Shares  fund  for approximately three years, at
which  point  the  Foresight  4 C  Shares  will  be merged with the Foresight 4
Ordinary  Shares fund on a relative net  asset value basis using the audited net
asset values of each fund as at 31 March 2015.

Foresight  Clearwater, as its assets materially comprise cash or near cash, will
be  merged directly into the Foresight 4 Ordinary  Shares fund on a relative net
asset value basis.

The merger will, if effected, result in an enlarged company ("Enlarged Company")
with  net assets of over £60 million. Based on the estimated costs of the merger
and  the expected normalised  annual cost savings  for the Enlarged Company, the
Boards believe that the costs of the merger would be recovered within 12 months.

Proposals  will also be put to Foresight 4 shareholders to change the investment
policy  of Foresight 4, amend the  articles of association to  provide for a new
class of Foresight 4 C Shares, issue shares pursuant to the Schemes, renew share
issue and buy back authorise and to cancel reserves.

BACKGROUND

Foresight  4 was launched in 1998 and was  originally managed by Advent Limited.
Foresight  Group  LLP  took  over  the  management  of  Foresight  4 in 2004 (as
subsequently  novated to  Foresight). As  at 30 September  2011, Foresight 4 had
unaudited net assets of £40,006,672 (109.6p per Foresight 4 Ordinary Share) and,
in  aggregate, venture capital investments in 29 companies with a carrying value
of £33.1 million.

Foresight  5 (formerly Acuity Growth  VCT plc) was  launched in 2004 and has two
classes  of  shares  (Foresight  5 Ordinary  Shares  and  Foresight 5 C Shares).
Foresight took over the management of Foresight 5 from Acuity Capital Management
Limited  in March this  year. A full  review and assessment  of the Foresight 5
investment  portfolio  was  carried  out  by Foresight following its appointment
resulting in a substantial reduction in the net assets of Foresight 5 to reflect
the  performance and funding requirements of  the portfolio as announced in June
2011. Peter  Dicks was appointed  a director of  Foresight 5 in August this year
(following  the completion of a top-up offer  which closed in the same month and
raised  £761,530,  before  costs).  As  at  30 September  2011, Foresight  5 had
unaudited  net assets of  £10,852,222 (17.4p per  Foresight 5 Ordinary Share and
60.7p per Foresight 5 C Share) and, in aggregate, venture capital investments in
11 companies with a carrying value of £10.2 million.

Acuity  3 was launched in 2005. Foresight took  over the management of Acuity 3
from Acuity Capital Management Limited in March this year. As with Foresight 5,
Foresight  has  carried  out  a  full  review  and  assessment  of the Acuity 3
investment  portfolio  following  its  appointment,  resulting  in a substantial
reduction  in the net assets of Acuity  3 to reflect the performance and funding
requirements  of the  portfolio as  announced in  June 2011. As  at 30 September
2011, Acuity 3 had unaudited net assets of £7,801,500 (22.7p per Acuity 3 Share)
and,  in aggregate, venture capital investments  in 10 companies with a carrying
value of £7.7 million.

Foresight  Clearwater  is  a  new  VCT  launched in 2010, the original offer for
subscription  having closed on 12 December this year raising £1.7 million. Peter
Dicks  has been a  director of Foresight  Clearwater since launch. The Foresight
Clearwater Board believes that, at this level of subscription, the merger at the
current  time presents  a better  opportunity to  pursue the original investment
strategy than if it were to remain as a standalone VCT.

VCTs  are required  to be  listed on  the premium  segment of the Official List,
which  involves a significant level of listing  costs as well as related fees to
ensure  they comply with all relevant legislation. A larger VCT should be better
placed  to  spread  such  running  costs  across a larger asset base, facilitate
better liquidity management and, as a result, may be able to maximize investment
opportunities and pay a higher level of dividends to shareholders over its life.

In  September 2004, regulations were introduced allowing VCTs to be acquired by,
or  merge with, each other  without prejudicing the VCT  tax reliefs obtained by
their  shareholders. A number of VCTs  have taken advantage of these regulations
to  create larger VCTs for economic  and administration efficiencies, as well as
to improve portfolio diversification.

With the above in mind, the Boards have been considering merger opportunities to
create  a single,  larger VCT.  The aim  of the  Boards is  to achieve long-term
strategic benefits and reductions in the annual running costs for shareholders.

CHANGE TO THE INVESTMENT POLICY OF FORESIGHT 4

It  is proposed to change the investment  policy of Foresight 4 to provide for a
more  generic policy of  investing in unquoted  companies and to remove specific
VCT  investment requirements which are continually changing. The proposed change
to  the investment policy  will also better  encompass the investments which are
intended  to be acquired  by Foresight 4 from  the Target VCTs  and Foresight 4
having two classes of shares following the merger. Each Scheme is conditional on
Foresight 4 shareholders approving the proposed change to the investment policy.

THE MERGER PURSUANT TO THE SCHEME

The mechanism by which the merger will be completed is as follows:

·    each Target VCT will be placed into members' voluntary liquidation pursuant
to a scheme of reconstruction under Section 110 IA 1986; and

·    all of the assets and liabilities of each Target VCT will be transferred to
Foresight  4 in consideration for the issue of  new shares (which will be issued
directly to the shareholders of the relevant Target VCT).

The  relative net  asset values  will be  the unaudited  net asset values of the
relevant  share classes of the Companies as  at the Calculation Date (this being
3 February  2012), adjusted to take into consideration that fund's allocation of
the  estimated merger costs. Foresight and  Foresight Group LLP (the manager and
administrator  respectively) have  agreed, subject  to the  Foresight Clearwater
Scheme  becoming effective, to make a contribution to Foresight Clearwater so as
to  bring its NAV to 94.5p per share immediately prior to the calculation of its
roll-over  value. This contribution will be in the form of a waiver of fees and,
if required, a cash payment commitment.

The  merger will result in the creation of an Enlarged Company and should result
in savings in running costs and simpler administration. As all of the Companies,
subject  to the change to the investment policy of Foresight 4 being approved by
Foresight  4 shareholders, will have similar investment policies and are managed
by  Foresight, this is  achievable without material  disruption to the Companies
and their combined portfolio of investments.

The  Boards consider  that this  merger will  bring a  number of benefits to all
shareholders through:

·   a reduction in annual running costs for the Enlarged Company compared to the
aggregate annual running costs of the separate companies;

·    the creation of a  single VCT of a more  economically efficient size with a
greater capital base over which to spread annual running costs;

·     amalgamation  of  the  Foresight  5 and  Acuity  3 portfolios,  which  are
substantially the same, for efficient management and administration;

·    participation  in a  larger VCT  with the  longer term potential for a more
diversified  portfolio  thereby  spreading  the  portfolio risk across a broader
range  of investments  and creating  an increased  ability to  support follow-on
investments and new investments; and

·   the potential to enhance the ability to pay dividends and buy back shares in
the  future due to the increased size  and reduced running costs of the Enlarged
Company,  as well as improve liquidity in the  secondary market as it is hoped a
larger vehicle will attract increased interest.

The  aggregate  anticipated  cost  of  undertaking  the  merger is approximately
£462,000,  including VAT, legal and professional  fees, stamp duty and the costs
of  winding up the  Target VCTs. The  costs of the  merger will be  split in the
following  proportions:  40% for  Foresight  4; 30% for  Foresight  5 (allocated
between  the Foresight 5 Ordinary  Shares fund and  Foresight 5 C Shares fund in
accordance  with  their  respective  roll-over  values  ignoring costs); 20% for
Acuity  3; and 10% for Foresight Clearwater (this being what the Boards consider
to  be a fair allocation of merger costs reflecting the underlying net assets of
the company and the rational for each company to undertake such a merger).

On  the assumption  that immediately  after the  merger the  NAV of the Ordinary
Shares  fund will remain the same (including the contribution from Foresight and
Foresight   LLP  (the  manager  and  administrator  respectively)  to  Foresight
Clearwater  so as to bring its NAV  to 94.5p per Foresight Clearwater Share) and
continues  to  be  £1  in  respect  of  the  C Shares fund, the reduction in the
normalised  annual costs for the  Enlarged Company are estimated  to be at least
£475,000  per annum.  This would  represent 0.8% per  annum of  the expected net
assets  of the Enlarged Company.  On this basis, and  assuming that no new funds
are  raised or investments realised to  meet annual costs, the Foresight 4 Board
believes that the costs of the merger would, be recovered within 12 months.

The  Boards believe  that the  Schemes provide  an efficient  way of merging the
Companies  with  a  lower  level  of  costs  compared  with other merger routes.
Foresight  4 was selected as the acquirer being the largest of the Companies and
being the most mature.

ILLUSTRATIVE TERMS

As  an illustration,  had the  merger been  completed on  30 September 2011, the
following  number  of  shares  in  the  Target  VCTs would effectively have been
exchanged  for such number  of new Foresight  4 Ordinary Shares or Foresight 4 C
Shares as follows:

+----------------------+----------------------+----------------------------+
|                      | Number of New Shares |       Class of Share       |
+----------------------+----------------------+----------------------------+
| F5 Ordinary Share    |       0.173550       |    Foresight 4 C Share     |
+----------------------+----------------------+----------------------------+
| F5 C Share           |       0.605360       |    Foresight 4 C Share     |
+----------------------+----------------------+----------------------------+
| Acuity 3             |       0.227057       |    Foresight 4 C Share     |
+----------------------+----------------------+----------------------------+
| Foresight Clearwater |       0.825433       | Foresight 4 Ordinary Share |
+----------------------+----------------------+----------------------------+

The actual merger ratio will be calculated on the Calculation Date in accordance
with the merger terms.

THE FORESIGHT 4 BOARD

The Foresight 4 Board will continue in its current form (Peter Dicks, a director
of  Foresight 4, is also a director of Foresight 5 and Foresight Clearwater and,
therefore,  will bring recent knowledge and  experience of these Targets VCTs to
the Enlarged Company).

FORESIGHT 4 SHARE ISSUE AND BUY BACK AUTHORITIES

Foresight  4 also proposes to renew and increase its authorities to issue shares
(having  disapplied  pre-emption  rights)  for  general purposes and make market
purchases  of  shares  reflecting  the  increased  share capital of Foresight 4
following  the  merger  and  the  two  separate share classes. These are general
annual authorities taken each year for the purposes of the dividend reinvestment
scheme, small top up offers and the buyback policy.

CANCELLATION OF THE SHARE PREMIUM ACCOUNT AND THE CAPITAL REDEMPTION RESERVE

Cancelling  share premium  and capital  redemption reserves  allows a company to
create  a special  reserve that  can assist  in writing  off losses,  which will
enhance  the  ability  to  make  distributions.  It also facilitates a company's
ability, where required, to implement share buybacks. Foresight 4 has previously
cancelled share premium for these purposes but the issue of Foresight 4 Ordinary
Shares  and Foresight  4 C Shares  pursuant to  the Schemes  will result  in the
creation of further share premium. In addition, Foresight 4 has existing capital
redemption reserves resulting from buybacks undertaken by the Company.

The  Foresight  4 Board,  therefore,  also  proposes  to  seek  the  approval of
Foresight  4 shareholders to  cancel the  amounts standing  to the credit of the
share  premium  account  and  the  capital  redemption  reserve,  subject to the
sanction of the Court.

EXPECTED TIMETABLE

Foresight 4 First General Meeting       10.00 a.m. on 26 January 2012

Foresight 5 First General Meeting       10.30 a.m. on 26 January 2012

Foresight Clearwater First General Meeting     11.00 a.m. on 26 January 2012

Acuity 3 First General Meeting       5.00 p.m. on 26 January 2012

Target VCTs' register of members closed     5.00 p.m. on 3 February 2012

Calculation date for the Schemes       after 5.00 pm 3 February 2012

Suspension of listing of Target VCTs' shares     7.30 am 6 February 2012

Foresight 5 Second General Meeting     10.00 a.m. on 6 February 2012

Acuity 3 Second General Meeting       10.30 a.m. on 6 February 2012

Foresight Clearwater Second General Meeting   11.00 a.m. on 6 February 2012

Effective Date for the transfer of assets     6 February 2012
and liabilities of the Target VCTs to Foresight 4
and the issue of Foresight 4 new shares

Announcement of results of the Schemes     6 February 2012

Admission of and dealings in the Foresight 4     7 February 2012
new shares issued pursuant to the Schemes to
commence

Certificates for New Shares issued pursuant     14 February 2012
to the Schemes dispatched

Cancellation of the Target VCTs' share listing   8.00 a.m. 6 March 2012

DOCUMENTS AND APPROVALS

Foresight  4 shareholders  will  receive  a  copy  of  a  circular convening the
Foresight  4 general meeting  to be  held on  26 January 2012 (together with the
Foresight  4 prospectus) at  which Foresight  4 shareholders will  be invited to
approve  resolutions in connection with the change to the investment policy, the
Schemes,  the  creation  of  and  authority  to  issue Foresight 4 C Shares, the
renewal  and increase of the general  authorities to issue and repurchase shares
and to cancel the share premium account and capital redemption reserve.

Target  VCTs' shareholders will receive a circular convening the relevant Target
VCTs'  first general  meeting on  26 January 2012 and  the relevant Target VCTs'
second  general  meeting  on  6 February  2012 (together  with  the Foresight 4
prospectus)  at  which  relevant  Target  VCTs'  shareholders will be invited to
approve resolutions in connection with the relevant Schemes.

Copies  of  the  Foresight  4 prospectus  and  the  circulars  for Foresight 4,
Foresight  5, Acuity 3 and  Foresight Clearwater  have been  submitted to the UK
Listing  Authority  and  will  be  shortly  available  for  download  both  from
Foresight's  website (www.foresightgroup.eu) and  the national storage mechanism
(www.hemscott/nsm.do).

Company Secretary for the Companies
Foresight Fund Managers Limited
Gary Fraser
Telephone: [phone]

Solicitors to the Companies
SGH Martineau LLP
Kavita Patel
Telephone: [phone]

Sponsor to Foresight 4
BDO LLP
Susan Brice
Telephone: [phone]

The  directors of Foresight 4 accept responsibility for the information relating
to  Foresight 4 and its directors contained in this announcement. To the best of
the  knowledge and belief of such directors  (who have taken all reasonable care
to  ensure that such is  the case), the information  relating to Foresight 4 and
its  directors  contained  in  this  announcement,  for  which  they  are solely
responsible,  is in accordance with the facts  and does not omit anything likely
to affect the import of such information.

The  directors of Foresight 5 accept responsibility for the information relating
to  Foresight 5 and its directors contained in this announcement. To the best of
the  knowledge and belief of such directors  (who have taken all reasonable care
to  ensure that such is  the case), the information  relating to Foresight 5 and
its  directors  contained  in  this  announcement,  for  which  they  are solely
responsible,  is in accordance with the facts  and does not omit anything likely
to affect the import of such information.

The  directors of Acuity 3 accept responsibility for the information relating to
Acuity  3 and its directors contained  in this announcement. To  the best of the
knowledge  and belief of such  directors (who have taken  all reasonable care to
ensure  that such  is the  case), the  information relating  to Acuity 3 and its
directors contained in this announcement, for which they are solely responsible,
is  in accordance with the facts and does not omit anything likely to affect the
import of such information.

The  directors of Foresight Clearwater accept responsibility for the information
relating   to   Foresight   Clearwater  and  its  directors  contained  in  this
announcement.  To the best  of the knowledge  and belief of  such directors (who
have taken all reasonable care to ensure that such is the case), the information
relating   to   Foresight   Clearwater  and  its  directors  contained  in  this
announcement,  for which they are solely  responsible, is in accordance with the
facts  and  does  not  omit  anything  likely  to  affect  the  import  of  such
information.

SGH  Martineau LLP are acting  as legal adviser to  the Companies and for no one
else in connection with the matters described herein and will not be responsible
to  anyone other  than the  Companies for  providing the protections afforded to
clients  of  Martineau  or  for  providing  advice  in  relation  to the matters
described herein.

BDO  LLP,  which  is  authorised  and  regulated  in  the  United Kingdom by the
Financial  Services Authority, is  acting as sponsor  for Foresight 4 and no one
else  and  will  not  be  responsible  to  any  other  person  for providing the
protections afforded to customers of BDO LLP or for providing advice in relation
to any matters referred to herein.













This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
    
Source: Foresight 4 VCT PLC via Thomson Reuters ONE

[HUG#1573502]