Tender Offer

RNS Number : 7429U

Qatar Investment Fund PLC

05 December 2013

 

5 December 2013

Qatar Investment Fund PLC 

("QIF" or the "Company")

Tender Offer to purchase up to 10 per cent. of the Company's issued share capital

A circular explaining the terms of a Tender Offer for up to 10 per cent. of the issued Share Capital of the Company and a notice of an Extraordinary General Meeting to be held on 23 December 2013 has today been posted to Shareholders.

1.    Introduction

As set out in the Company's circular to Shareholders dated 17 October 2012, the Directors have decided, subject to Shareholder approval and the Company satisfying the distributable profits requirements under Isle of Man law, to implement a tender offer in the fourth quarter of 2013, on similar terms to the 2012 Tender Offer, for up to 10 per cent. of the Company's issued Share Capital at the Record Date (excluding treasury shares) in the event that the average discount to NAV per Share at which the Shares trade in the twelve month period from the 2012 Calculation Date to 28 November 2013 has been greater than 10 per cent. 

Notwithstanding the improvement in the NAV per Share performance of the Company during 2013, the average discount to NAV per Share at which the Shares traded in the period from 4 December 2012 to 28 November 2013 has been 13.3 per cent., and has therefore exceeded 10 per cent.

Accordingly, the Directors have put forward to Shareholders a tender offer for up to 10 per cent. of the Company's issued Share Capital (excluding treasury shares) at a discount of 1 per cent. to Formula Asset Value on the Calculation Date. The total number of Shares to be purchased under the Tender Offer will not exceed 17,357,728 Shares, representing 10 per cent. of the Company's issued Share Capital as at 4 December 2013 (being the latest practicable date prior to the publication of the Circular).

2.    The Company's Performance and Prospects

The Company is a closed-ended investment company which was incorporated in the Isle of Man in 2007.  The investment objective of the Company is to invest primarily in Qatari equities and in listed companies in other GCC countries.

As at 4 December 2013, being the latest practicable date prior to the publication of the Circular, the unaudited Net Asset Value per Ordinary Share was US$1.2649 and the closing mid-market Share price was US$1.1375.

The Company's NAV per Share has improved from US$1.0022 at 31 December 2012 to US$1.2649 at 28 November 2013. This compares to the 24.1 per cent. increase in the QE Index over the same period.

During this period, Shareholders also received a dividend of 3.0 cents per Share which was paid in January 2013, and the Directors have declared a dividend for the 2013 financial year of 3.2 cents per Share payable in January 2014.

Qatar's economy continues to grow with real GDP increasing 6.0 per cent. in the April - June quarter of 2013 compared to the April - June quarter of 2012. However, real GDP growth was marginally lower than the 6.1 per cent. increase in the January - March quarter of 2013. The non-oil sector increased 10 per cent. offsetting the 1 per cent. increase in energy output. The construction and financial services (including finance, insurance, real estate and business services) sectors reported growth of 11.4 per cent. and 15.4 per cent., respectively, in the April - June quarter of  2013 largely driven by the recent uptick in infrastructure projects. When compared to the previous quarter, the real GDP growth stood at 0.6 per cent. Quarter on quarter the non-hydrocarbon sector grew 1.4 per cent., while the hydrocarbon sector contracted 0.5 per cent. EFG Hermes estimates Qatar's real GDP will grow 6.3 per cent. in 2013, and 7.8 per cent. in 2014, largely driven by non-hydrocarbon sectors.

Population growth in Qatar has been healthy in recent years. In September 2013, Qatar's population stood at 2.04 million, a growth of 10.3 per cent. from September 2012 and 10.8 per cent. higher than December 2012. Growth in population is a long term positive for the Qatari economy and should benefit the non-oil sector.

The near term catalysts for the Qatari market include the upcoming earnings season, the recent upgrade to the MSCI Emerging Market index and upcoming IPO activity against a background of attractive valuations. The Investment Adviser believes that Qatar and the Qatari listed companies are well positioned for future growth and believes that large cap companies are likely to distribute higher dividends to their shareholders.

3.    The Tender Offer

Introduction

The Board is aware that the Shares are tightly held and that therefore the liquidity in the Shares can at times be limited. The Tender Offer is designed to enable those Shareholders (other than Restricted Shareholders) who wish to realise a portion of their holding of Shares the opportunity to do so.

Details of the Tender Offer

Under the terms of the Tender Offer, Shareholders (other than Restricted Shareholders) will be entitled to have up to 10 per cent. of the Shares they hold as at the Record Date purchased under the Tender Offer (and also the option to tender additional Shares which may be purchased if other Shareholders tender less than their Basic Entitlement).

The Tender Price will be an amount equal to a discount of 1 per cent. to Formula Asset Value per share (Formula Asset Value being Net Asset Value on the Calculation Date less the costs of undertaking the tender offer).

Continuing Shareholders should receive an uplift to their NAV per Share as the Tender Price is being calculated to a discount of 1 per cent. to Formula Asset Value (which includes the costs of the Tender Offer (including the costs of associated portfolio realisations)).

The Tender Price will be paid to Shareholders in US Dollars and will be effected by the despatch of cheques drawn on an account of a branch of a United Kingdom clearing bank, or the crediting of CREST accounts as appropriate.

The Tender Offer is being made by Panmure Gordon who, as principal, will purchase at the Tender Price the Shares validly tendered (subject to the overall limits of the Tender Offer) and, following the completion of all those purchases, sell the relevant Shares on to the Company at the Tender Price by way of an on-market transaction, in accordance with the terms of Repurchase Agreement. All transactions will be carried out on the London Stock Exchange.

Shareholders are not obliged to tender any Shares and, if they do not wish to participate in the Tender Offer, Shareholders should not complete or return their Tender Form.

Conditions

The Tender Offer is conditional, inter alia, upon: (i) the Company obtaining the necessary Shareholders' authority to implement the Tender Offer at the Extraordinary General Meeting; (ii) the Company satisfying the distributable profits requirements under Isle of Man law; and (iii) the Repurchase Agreement becoming unconditional in all respects (save in respect of any condition relating to the Tender Offer becoming unconditional).

Implementation of the Tender Offer will require approval by Shareholders at the Extraordinary General Meeting, which is to be held at 10.30 a.m. on 23 December 2013. The Tender Offer is also conditional upon Panmure Gordon being satisfied that the Company has sufficient funds available to meet its obligations under the Repurchase Agreement. In addition, the Tender Offer may be postponed or terminated in certain other circumstances.

Subsequent tender offer

A further tender offer will also be implemented, subject to Shareholder approval and the Company satisfying the distributable profits requirements under Isle of Man law, on the same terms as the 2012 Tender Offer, if the average discount to NAV per Share at which the Shares trade in the subsequent twelve month period to 27 November 2014 is greater than 10 per cent.

4.    Restricted Shareholders and other Overseas Shareholders

The Tender Offer is not being made to Restricted Shareholders. In particular, the Tender Offer is not being made, directly or indirectly, in or into or by the use of mails by any means or instrumentality (including, without limitation, facsimile transmission, internet, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange of the United States, nor is it being made directly or indirectly in or into Canada, Australia, Republic of South Africa or Japan and the Tender Offer cannot be accepted by any such use, means, instrumentality or facility or from within the United States, Canada, Australia, Republic of South Africa or Japan.

It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal or regulatory requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such Overseas Shareholders to participate in the Tender Offer.

5.    General Meeting

The Proposal set out in this document is subject to Shareholder approval at the Extraordinary General Meeting that has been convened for 10.30 a.m. on 23 December 2013, to be held at the offices of Galileo Fund Services Limited, Millennium House, 46 Athol Street, Douglas, Isle of Man IM1 1JB. The Resolution to be proposed is to authorise the Company to make market purchases of its Shares pursuant to the Tender Offer on the terms set out in this document.

6.    Recommendation

The Board considers that the Proposal is in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting, as those Directors who hold beneficial interests in Shares intend to do in respect of their own beneficial holdings of Shares which, in aggregate, amount to 78,985 Shares representing approximately 0.05 per cent. of the issued share capital of the Company.

The Board makes no recommendation to Shareholders as to whether or not they should tender their Shares. Whether or not Shareholders decide to tender any of their Shares will depend, among other things, on their individual circumstances including their tax position and on their view of the Company's prospects. Shareholders in any doubt as to the action they should take should consult an appropriately qualified independent financial adviser, authorised under the Financial Services and Market Act 2000, without delay.

7.    Expected Timetable of Principal Events

The expected timetable for the Tender Offer is as follows:

Record Date for participation in the Tender Offer	5.30 p.m. on 9 December 2013
Latest time and date for receipt of Tender Forms or for settlement of TTE Instructions in respect of the Tender Offer	1.00 p.m. on 18 December 2013
Latest time and date for receipt of Forms of Proxy in respect of the Extraordinary General Meeting	10.30 a.m. on 19 December 2013
Extraordinary General Meeting	10.30 a.m. on 23 December 2013
Extraordinary General Meeting results and total number of Shares tendered announced	23 December 2013
Calculation Date	5.30 p.m. on 7 January 2014
Tender Price announced	10 January 2014
Settlement date: cheques despatched and CREST accounts credited with proceeds in respect of successfully tendered Shares	17 January 2014
Balancing certificates despatched and CREST accounts credited in respect of unsold Shares	from 17 January 2014

Capitalised terms and expressions shall have the same meanings as those attributed to them in the Circular.

A copy of the Circular will shortly be available for inspection on the National Storage Mechanism at www.hemscott.com/nsm.do and is available for download from the Company's website www.qatarinvestmentfund.com/publications.

For further information:

Qatar Investment Fund Plc [phone]

Leonard O'Brien

Panmure Gordon [phone]

Richard Gray / Andrew Potts / Atholl Tweedie

Maitland [phone]

William Clutterbuck / Robbie Hynes

Galileo Fund Services Limited [phone]

Ian Dungate

 

END

 

 

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