Publication of Circular

RNS Number : 7521K

Highbridge Multi-Strategy Fd Ltd £

26 September 2016

 

Highbridge Multi-Strategy Fund Limited (the "Company")

Publication of Circular

This announcement contains inside information

The Company is today posting a circular to Shareholders in connection with a tender offer (the "Circular").  The full text of the Circular may be found at http://www.rns-pdf.londonstockexchange.com/rns/7521K_-2016-9-25.pdf or alternatively via the Company's website, https://www.highbridgemsfltd.co.uk.

Full details of the Tender Offer are set out in the Circular which should be read carefully by Shareholders.

Background 

As approved by Shareholders in February 2016, the directors have the power to offer Shareholders a quarterly cash exit opportunity at NAV (less costs) with respect to up to 20 per cent. of the Shares in issue.  The Board is pleased to announce that the first such opportunity will take place by way of a Tender Offer in October 2016 with tendering Shareholders receiving most of the cash consideration in February 2017.

The Board hold a strong view that Highbridge Capital Management have performed well since their appointment as investment manager, particularly over recent months, by delivering a steady and consistent return within the underlying fund. Since the appointment of Highbridge Capital Management, LLC as investment manager of the Company on 29 February 2016, the Company's NAV per Share (excluding the impact of the Residual Assets) has increased 4.91 per cent. during a time of considerable market volatility¹. Conversations with a large range of Shareholders confirm that many believe that the Company is a useful and important investment holding and many would welcome the Company growing in size, with the attendant benefits of reduced costs and greater liquidity.  It is, therefore, the Directors' aim to increase the size of the Company as soon as practicable. 

The Board hopes that Shareholders share its view, can see the benefits of remaining invested in the Company for the longer term and value the potential for the multi-strategy approach to deliver positive returns even in volatile markets.

The Board believes it has demonstrated its credentials in regard to buying-back Shares to seek to address the discount since 2012. This has been continued over the summer of 2016 and the Board is very alert to the desire of Shareholders regarding the stability of the discount to NAV. Shareholders should note, however, that any future buy-backs, should they take place, may not be successful in addressing the discount.

As at 22 September 2016, the Shares were trading at approximately a 7 per cent. discount. As a result, the Board has decided to provide a tender for up to 20 per cent of the Shares in issue. This will provide Shareholders with an opportunity to realise a proportion of their investment in the Company (in whole or in part, subject to tenders from other Shareholders) whilst enabling the Company to hold Tendered Shares in treasury with the view to placing those Tendered Shares in the future.

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¹  Data presented from 1 March 2016 through to 16 September 2016. Past performance is not indicative of future performance or returns and there can be no assurance that the Company’s return objectives will be realised or that the Company will not experience losses. 

Tender Offer

Under the terms of the Tender Offer, which is being made by the Company, Eligible Shareholders on the Register on the Record Date will be entitled to tender some or all of their Shares for purchase by the Company at the Tender Price (as described below), less the costs of implementing the Tender Offer.  The number of Shares which will be repurchased by the Company pursuant to the Tender Offer (both generally and in respect of any individual Shareholder) will be subject to the limits described below.

All Tendered Shares will be purchased off-market by the Company pursuant to the terms of an Off-Market Purchase Agreement between the Company and the Tendering Shareholders which shall be constituted by the Circular and the Tender Form (or, in the case of Shares held in uncertificated form, the CREST Holder Form) (together, the "Off-Market Purchase Agreement") and held in treasury (to the extent permitted by any applicable legal or regulatory requirements) until sold or cancelled by the Company.

The Tender Offer is conditional upon the terms of the Off-Market Purchase Agreement and may be suspended or terminated in certain circumstances as set out in paragraph 6 in Part II of the Circular. The Tender Offer is also subject to certain conditions as set out in paragraph 2 in Part II of the Circular.

General Information

The Company is proposing a Tender Offer to be made for up to 20 per cent. of the Shares in issue on the Record Date (excluding Shares held in treasury) at the Tender Price. The Tender Offer is being proposed to enable those Shareholders who wish to realise their investment in the Company to do so (in whole or in part, subject to tenders from other Shareholders), whilst enabling the Company to hold Tendered Shares in treasury with the view to placing those Tendered Shares in the future.

Accordingly, Eligible Shareholders on the Register on the Record Date are invited to tender for sale some or all of their Shares to the Company.  All Tendered Shares will be purchased off-market by the Company pursuant to the terms of the Off-Market Purchase Agreement and held in treasury (to the extent permitted by any applicable legal or regulatory requirements) until sold or cancelled by the Company.

A summary of the principal terms of the Tender Offer is as follows:

·      The maximum number of Shares that will be repurchased by the Company under the Tender Offer is equal to 20 per cent. of the Company's issued share capital as at the Record Date (excluding Shares held in treasury);

·      All Eligible Shareholders on the Register as at the Record Date will be able to decide whether to tender some or all of their Shares to the Company.  Each Eligible Shareholder will be entitled to tender and have repurchased up to 20 per cent. of the Shares registered in such Shareholder's name on the Record Date rounded down to the nearest whole number of Shares (the "Basic Entitlement").  Each Eligible Shareholder will also be entitled to tender additional Shares held by it on the Record Date in excess of its Basic Entitlement.  To the extent that other Eligible Shareholders tender Shares in respect of less, in the aggregate, than the whole of their Basic Entitlement, any such excess tenders will, subject to the overall 20 per cent. limit on the number of Shares which may be purchased by the Company pursuant to the Tender Offer, be satisfied pro rata in proportion to the aggregate number of Shares tendered by Eligible Shareholders in excess of their Basic Entitlements (rounded down to the nearest whole number of Shares).

·      The Tender Price which will be received by each Tendering Shareholder for their Tendered Shares will be paid in tranches and be equal to the relevant Tendering Shareholder's pro rata share (based on the total number of Tendered Shares) of (i) a proportion of the cash (if any) held in the Company's portfolio attributable to the Tendered Shares; (ii) the proceeds of redeeming the portion of the Company's holding in HCC attributable to the Tendered Shares; and (iii) the realisation proceeds of the Residual Assets attributable to the Tendered Shares; less the costs of implementing the Tender Offer.

·      The Tender Offer is being made by the Company which will purchase the Shares tendered by way of an off-market acquisition, in accordance with the Companies Law.

Proceeds of the Tender Offer

Following the receipt of the Tender Forms and/or CREST Holder Forms from Eligible Shareholders, and the passing of Resolution 1, the Board will allocate to a separate account in the books of the Company (the "Repurchase Portfolio") (a) the proportion of the cash (if any) held in the Company's portfolio attributable to the Tendered Shares, (b) the proportion of the Company's holding in HCC which is attributable to the Tendered Shares, and (c) the proportion of the Residual Assets which is attributable to the Tendered Shares.

The Shares to be purchased pursuant to the Tender Offer will be purchased on the Repurchase Date. Each Shareholder selling its Shares on such date pursuant to the Tender Offer will be entitled to receive its pro rata share (based on the total number of Tendered Shares) of: (a) the cash comprised in the Repurchase Portfolio (if any) within 5 Business Days of the Repurchase Date; (b) the cash comprised in the Repurchase Portfolio within 5 Business Days following receipt by the Company of the proceeds of redeeming the relevant portion of the Company's holding in HCC (such proceeds are expected to be received by 15 February 2017 subject to any applicable redemption gate, suspension or other delay by HCC); and (c) the actual amount received by the Company from the realisation of the Residual Assets comprised in the Repurchase Portfolio as soon as practicable following receipt of such realisation proceeds by the Company (subject in each case to the Company's ability to defer the distribution of non-material sums in order to avoid undue administrative cost and burden), less the costs and expenses of implementing the Tender Offer. Tendering Shareholders should be aware that they will therefore receive the sale proceeds as a number of cash payments and that there may be considerable delay before such sale proceeds are distributed in their entirety.

The Company will make an announcement to Shareholders shortly following implementation of the Tender Offer and again when any further cash payment is to be made, which will state what proportion of the Repurchase Portfolio has been distributed to Tendering Shareholders and, to the extent known to the Company, when Tendering Shareholders can expect to receive any outstanding amounts.

The Tender Price to be paid to Tendering Shareholders will only be finally determined following the complete realisation of the assets comprised in the Repurchase Portfolio. The Company will on a monthly basis publish an unaudited estimated NAV for the Repurchase Portfolio based on information received by the Company, which Tendering Shareholders may choose to take as indicative of the potential realisation proceeds of the Repurchase Portfolio and the Tender Price they may receive. Tendering Shareholders should be aware, however, that there is no guarantee that the assets comprised in the Repurchase Portfolio will in fact be realised for the values attributed to them for the purposes of calculating such estimated NAVs. Therefore, the Tender Price received may be materially different to that indicated by the estimated NAVs of the Repurchase Portfolio published from time to time.

Terms used and not defined in this announcement will bear the meaning given to them in the Circular.

For further information contact:

JTC (Guernsey) Limited, Secretary

Tel:  [phone]

Jefferies International Limited

Gary Gould/Alex Collins

Tel:  + 44 (0) 20 7029 8000

Fidante Capital

Katie Standley

Tel:  [phone]

 

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