Acorn Income Fund Ld
25 May 2006
Acorn Income Fund Limited
(the 'Company')
Notice of Annual General Meeting
Introduction
The Company has today sent a circular to shareholders of the Company convening
the Annual General Meeting of the Company to be held at No. 1 Le Truchot, St
Peter Port, Guernsey GY1 4AE at 10.00 a.m. on 26 June 2006. As part of the
business of the Annual General Meeting, Shareholders will be asked to vote on
the Special Resolution in respect of the continuation of the Company.
The following text comprises a summary of the Chairman's letter to Shareholders
in the Circular.
Special Resolution
The life of the Company is presently unlimited but the Articles require the
Board to procure that at the Annual General Meeting of the Company to be held in
2006, a Special Resolution be proposed to the effect that the Company ceases to
continue as an investment company. To be carried, the Special Resolution would
require that at least 75% of all the votes cast to be in favour of cessation.
If the Special Resolution is passed, the Board is then required to formulate
proposals to be put to Shareholders to reorganise, unitise, reconstruct or to
wind up the Company. If the Special Resolution is not passed, a similar
resolution will be proposed at every fifth annual general meeting thereafter.
If the Special Resolution is passed, it is the intention of the Board to convene
an extraordinary general meeting by the end of September 2006 to consider
reconstruction proposals which may involve the winding up of the Company.
Following approaches from certain Shareholders and subsequent discussions, the
Board announced on 21 February 2006 that, notwithstanding the above provisions,
if a simple majority of those Shareholders actually voting on the Special
Resolution vote in favour of the Special Resolution (i.e. vote in favour of
cessation), the Board would put forward proposals shortly thereafter to
Shareholders which would include the opportunity for those Shareholders that do
not wish to continue with the Company to receive cash at close to net asset
value. Accordingly, if a simple majority of Shareholders vote in favour of the
Special Resolution, it is the intention of the Board to convene such an
extraordinary general meeting by the end of September 2006.
The price of the Company's Shares has increased from 100p at launch in February
1999 to 186.75p as at 23 May 2006 (mid-market price on the latest practicable
date prior to the printing of this document). The net asset value per Ordinary
Share has increased from 96p at launch to 191.3p as at 23 May 2006. In
addition, dividends totalling 72.5p per Share have been paid to shareholders
since launch. The total return since launch has been 174.8% by comparison the
Hoare Govett Smaller Companies Index and the FTSE All-Share Index have produced
returns of 122.7% and 32.5% respectively over the same period
During 2006, the net asset value per share has increased by 15.3p, after
distributing 2.0p per share, and achieved a total return of 17.3p (as at 23 May
2006).
The Company's investment advisers believe that the Smaller Companies Portfolio
(which represented some 78% of the Company's investment portfolio as at 23 May
2006) is very well positioned in the current market to deliver growth for
shareholders and that returns from the High Income Portfolio will meet the
Company's objectives. Overall, the Board believes that the outlook for the
Company appears positive and that the Company could, therefore, continue to be
an attractive investment vehicle for many investors.
Recommendation
The Board recognises that individual Shareholders may have different views and
considerations when deciding whether the Company should continue, and those
Shareholders should therefore vote accordingly. However, on balance, the Board
believes that it is in the best interests of Shareholders as a whole to vote
against the Special Resolution and for the Company to continue in being as an
investment company. Accordingly, your Board recommends that you vote against
the Special Resolution to be proposed at the Annual General Meeting.
--Ends--
Enquiries to: Collins Stewart Fund Management Limited
No 1 Le Truchot
St Peter Port
Guernsey GY1 4AE
Tel 01481 731987
25 May 2006
The definitions used in this announcement are as set out in the Circular to
Shareholders dated 25 May 2006.
A copy of the Circular is available for inspection at the UKLA's Document
Viewing Facility at 25 The North Colonnade, Canary Wharf, London E14 5HS.
This information is provided by RNS
The company news service from the London Stock Exchange
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