Tender Offer for up to 24.99% of ordinary shares

RNS Number : 9297O

JPMorgan Asian Investment Tst PLC

17 October 2012

 



 

NOT FOR RELEASE INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN

JPMORGAN ASIAN INVESTMENT TRUST PLC

LONDON STOCK EXCHANGE ANNOUNCEMENT

17th October 2012

Investment management agreement changes, tender offer for up to 24.99 per cent. of the Ordinary shares in issue, further conditional semi-annual tender offers and continuation vote at the AGM in January 2013

The board of Directors (the "Board") of JPMorgan Asian Investment Trust PLC (the "Company") has conducted a review, at a series of recent strategy meetings, of the capabilities of JP Morgan Asset Management (the "Manager" or "JPMAM") and examined the measures taken by the Manager to improve its investment performance. These measures include changes to key personnel and enhancements to the Manager's investment and risk management processes.  The Board has also undertaken extensive consultations with shareholders.

Following these shareholder consultations and the recent strategy meetings, the Board has concluded that the continuing appointment of the Manager is in the interests of shareholders as a whole and announces the following proposals:

i)          Investment management agreement changes;

ii)         Implementation of a tender offer for up to 24.99 per cent. of the Ordinary shares in issue;

iii)        Further conditional semi-annual tender offers; and

iv)        A continuation vote at the Annual General Meeting in 2013.

The tender offers and the continuation vote will be subject to shareholder approval.  The Board will be recommending that shareholders vote in favour of the resolutions which will be put to shareholders at an extraordinary general meeting of shareholders in November 2012 (the "EGM") and the forthcoming Annual General Meeting (the "AGM") on 31^st January 2013.

Investment management agreement

Based on its Manager review conducted at recent strategy meetings, the Board has concluded that the continuing appointment of the Manager is in the interests of shareholders as a whole.  The Manager has significant experience and resources in managing Asian equities across a range of regional and single country portfolios and has over $44 billion under management in the region. The named investment manager, Jeffrey Roskell, who was appointed with effect from the beginning of 2012, will be visiting major shareholders ahead of the AGM in order to present the measures taken by the Manager to improve performance.

JPMAM is currently paid a management fee based on the Company's market capitalisation. This fee uses the average of the Company's closing middle market share price for the last five business days of the relevant month, calculated monthly and paid quarterly at a rate of 0.75 per cent. per annum, based on the average of the preceding three month end market capitalisations.  Investments in funds on which JPMAM charges a management fee are excluded from this calculation. JPMAM has agreed to reduce this management fee to 0.60 per cent. per annum, and, in order to defray a part of the costs that were incurred in the portfolio management transition earlier in the year, and cover other administration expenses, to make an additional one-off contribution to the Company's expenses in the amount of 0.35 per cent. of the value of the Company's total assets less current liabilities on 1st October 2012 (being an amount equal to over £1.135 million).  These changes will be subject to the passing of the continuation vote at the next AGM, at which time they will be applied as if having taken effect on 1^st October 2012.  There is no change to the performance fee arrangements.

The Board and the Manager have agreed, with immediate effect, that the notice period for termination by the Company of the investment management agreement as a result of the Manager's poor investment performance will be reduced from six months to three months and that the notice period for termination without cause will also be shortened from 12 months to six months.

Tender Offer to purchase up to 24.99 per cent. of the Company's Ordinary shares in issue

The Company currently has in place shareholder approval to conduct a tender offer for up to 5 per cent. of the Company's Ordinary shares in issue, at a 2 per cent. discount to diluted cum income Net Asset Value, less the costs of effecting such a tender offer, if the Company's Ordinary shares have traded at an average daily discount of more than 9 per cent. relative to their diluted cum income Net Asset Value in the period between 1st April 2012 and 30th September 2012. 

During that period, the Company's Ordinary shares traded at an average daily discount of 12.6 per cent. relative to their diluted cum income Net Asset Value. The Board has decided to use its discretion to propose a tender offer (the "Tender Offer") on enhanced terms for shareholders whereby:

i)          the size of the tender offer will be increased to up to 24.99 per cent. of the Company's Ordinary shares in issue;

ii)         tender proceeds will be returned to shareholders by the end of 2012, which is within a shorter period than that envisaged under previous tender offers; and

iii)        the tender price will be the fully diluted cum income Net Asset Value per Ordinary share (inclusive of undistributed revenue reserves) on the calculation date, less the direct costs and expenses of the Tender Offer (including stamp duty and portfolio realisation costs) (the "Tender Price").

The Tender Offer will enable shareholders to tender all or part of their Ordinary shares for cash, including Subscription shares in issue on 18th October 2012 and where a valid request for Subscription shares to be converted into Ordinary shares has been exercised by 31st October 2012. The maximum amount of Ordinary shares permitted to be tendered will be 24.99 per cent. of all the Company's Ordinary shares in issue.  The record date for participation in the Tender Offer is 18th October 2012. 

Under the terms of the Tender Offer, which will be made by Cenkos Securities plc, the Company's corporate broker, shareholders (other than Restricted Shareholders, as defined below) will be entitled to tender up to their basic entitlement of 24.99 per cent. of the Ordinary shares they hold as at the Record Date, including for these purposes any Subscription shares which they hold as at the Record Date and validly request to convert into Ordinary shares by 31st October 2012 (their "Basic Entitlement") and to tender additional Ordinary shares. However, any such excess tenders above the Basic Entitlement will only be satisfied to the extent that other shareholders tender less than their aggregate Basic Entitlement and will be satisfied on a pro rata basis. Tender applications will be rounded down to the nearest whole number of Ordinary shares.

The deadline for applications to participate in the Tender Offer is expected to be 20th November 2012 and the Tender Offer calculation date is expected to be 26th November 2012.

The Tender Offer will not be made to those shareholders who are resident in, or citizens of, a Restricted Territory (these being Australia, Canada, Japan and the United States) (the "Restricted Shareholders"). Restricted Shareholders are being excluded from the Tender Offer to avoid breaching applicable local laws relating to the implementation of the Tender Offer.

The Tender Offer will be subject to shareholder approval at the EGM, expected to be held on 22nd November 2012.  A circular containing the details of the Tender Offer and the procedure for tendering Ordinary shares is expected to be dispatched to shareholders in early November 2012.

Discount control policy

The Board continues closely to monitor the level of discount at which the Company's Ordinary shares trade relative to their Net Asset Value.  Subject to market conditions, theBoard will buy back Ordinary shares with the objective of stabilising the discount between 8 and 10 per cent. relative to their diluted cum income Net Asset Value, thereby providing an uplift in Net Asset Value per Ordinary share for continuing investors (as a result of those shares being acquired at a discount to their Net Asset Value).In the year ended 30th September 2012, 14.1 million Ordinary shares were acquired through buy backs.

Subject to receiving the necessary shareholder approval at the forthcoming AGM, the Board intends to conduct, semi-annually, further tenders on the same terms as the conditional tender offers approved at the AGM which was held in 2012 (in other words, if the Company's Ordinary shares trade at an average daily discount of more than 9 per cent. relative to their diluted cum income Net Asset Value over the period between 1st October 2012 and 31st March 2013 and the period between 1st April 2013 and 30th September 2013, to conduct a tender offer for up to 5 per cent. of the Company's Ordinary shares in issue at a 2 per cent. discount to fully diluted cum income Net Asset Value, less the costs of effecting such a tender offer).  Shareholders should note that these tender offers will, however, remain at the discretion of the Board and be subject to prevailing market conditions at the time, so they should place no expectation on these tender offers being implemented.

Continuation Vote

The Board has also resolved that it will put forward a continuation vote at the Annual General Meeting to be held in January 2013 in order to allow shareholders an opportunity to vote on the future of the Company.

Expected key dates*:

Record date for the Tender Offer                                            18th October 2012

Deadline by which valid requests for Subscription shares

to be converted into Ordinary shares to be received in

order to qualify for the Tender Offer                                      31st October 2012

Shareholder circular and EGM notice posted                          Early November 2012

Deadline for Tender Offer applications                                  20th November 2012

Deadline for proxy forms for the EGM                                   20th November 2012

Extraordinary General Meeting                                               22nd November 2012

Tender Offer calculation date                                                 26th November 2012

Results of Tender Offer and Tender Price announced            27th November 2012

Report and Accounts dispatched to shareholders                    December 2012

Annual General Meeting                                                         31st January 2013

* Please note that these dates may be subject to change

For further information please contact:

JP Morgan Asian Investment Trust plc, Chairman

James M. Long             020 7742 3408

JP Morgan Asset Management (UK) Limited

David Barron               020 7742 6000

Simon Crinage             020 7742 3445

Cenkos Securities plc, Corporate Broker and Financial Adviser

Will Rogers                  020 7397 1920

Sapna Shah                  020 7397 1922

Important Information

The information related to the Company included in this statement is provided for information purposes only and does not constitute an invitation or offer to subscribe for, purchase or dispose of shares in the Company. This material is not intended to provide a sufficient basis on which to make an investment decision. All investments are subject to risk. An investment in the Company should be regarded as long term in nature and is suitable only for sophisticated investors, investment professionals, high net worth individuals, unincorporated associations and partnerships and trustees of high value trusts, in each case, who can bear the economic risk of a substantial or entire loss of their investment. Before tendering any shares, investors should refer to the full and complete terms and conditions of the Tender Offer as contained in the circular which is expected to be published and posted to shareholders in early November 2012. Investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.

 

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