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Gartmore Growth Opps (GGOR)

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Monday 27 September, 2010

Gartmore Growth Opps

Statement re Reconstruction of the Company


Reconstruction of the Company and suspension of redemption facility

Further to the announcement on 13 September 2010 in relation to the strategic
review of the Company's management arrangements, the Board has received
proposals from fourteen investment managers, including Gartmore Investment
Limited ("Gartmore"), for the future management of the Company's assets.

Following discussions with a majority of the Company's shareholders, the Board
is pleased to announce that it has reached agreement in principle with Artemis
Alpha Trust plc ("ATS") for a merger of the assets of the two companies to be
effected through a scheme of reconstruction and winding up of the Company (the
"Proposals").

Overview of the Proposals

Under the Proposals, which are to be recommended by the respective Boards of
both companies, the Company's shareholders will be offered a choice between:-

  * continuing their investment in a tax efficient manner in a strong
    performing UK domiciled investment trust managed by Artemis Investment
    Management Limited ("Artemis"), by receiving such number of ordinary shares
    in ATS as shall equal 98.5% of the Formula Asset Value ("FAV") of the
    shares in the Company which are rolled over; and
   
  * an immediate cash exit at 95% of FAV on the approval of the Proposals, for
    up to 30% of the Company's issued share capital as at the effective date of
    the Proposals (the "Cash Option"). Elections by shareholders to receive in
    excess of 30% of their holdings for cash will be accepted to the extent
    that other shareholders have not made any elections for cash or have made
    elections for cash for less than 30% of their respective holdings. The
    record date for Shareholders to be entitled to elect for the Cash Option is
    the close of business on 24 September 2010.
   
The Cash Option will be funded through the voluntary early exercise of all the
ATS manager warrants held by the Artemis's fund managers in the share capital
of ATS (the "ATS Manager Warrants"), raising approximately £8 million, with the
balance funded from existing cash resources, augmented as required by a short
term debt facility. Following the exercise of the ATS Manager Warrants Artemis
will own circa 23.9% of ATSs share capital immediately prior to the
implementation of the Proposals.

Under the Proposals, new shares in ATS issued to shareholders of the Company
electing to rollover their investment into ATS will rank pari passu with
existing ATS shares, save for the interim dividend in respect of the six months
to 31 October 2010.

Bonus issue of subscription sharesby ATS

Shareholders electing to rollover into ATS, together with existing ATS
shareholders, will receive one subscription share in ATS for every seven ATS
shares held or issued pursuant to the Proposals. It is currently envisaged that
each ATS subscription share will confer the right (but not the obligation) to
subscribe for one ATS ordinary share upon exercise of such ATS subscription
share and on payment of a conversion price which is expected to be at a 10%
premium to the NAV of an ATS ordinary share immediately following
implementation of the Proposals. It is currently intended that the ATS
subscription shares will have a seven year life and will be traded on the
London Stock Exchange.

Key benefits of the Proposals for all Shareholders

  * the Proposals offer choice;
   
  * the Proposals prevent the need for a realisation of the Company's mainly
    small cap investment portfolio which will be transferred to ATS;
   
  * a tax efficient rollover into ATS which through its investment policy
    provides its highly rated management team with flexibility; and
   
  * a cash exit for up to 30% and potentially more of their shares, at a 5%
    discount to FAV and in a short timeframe.
   
For shareholders who elect to rollover into ATS:

  * a high conviction UK growth investment company with a strong track record
    of delivering shareholder value and a consistently strong share price
    rating relative to its peers;
   
  * strong alignment between shareholders' and management's interests through
    the substantial holdings in ATS of the Artemis fund managers; and
   
  * added value through the bonus issue of subscription shares on a one for
    seven basis.
   
Costs of the proposals

The Company will pay its own costs for implementing the Proposals (including
the fee payable on the early termination of the management agreement with
Gartmore). As it is intended that the entire portfolio of the Company will be
transferred to ATS under the Proposals, all shareholders in the Company,
including those electing for the Cash Option (for part or all of their
holding), will not incur any realisation costs on the disposal of the Company's
investments upon successful implementation of the Proposals.

ATS will meet its own costs associated with the Proposals.

Artemis Alpha Trust plc

ATS is a leading investment company in the UK growth sector and Artemis's
flagship closed end fund. As at 24 September 2010, ATS had net assets of circa
£90.1 million.

The investment objective of ATS is to achieve above average rates of total
return over the longer term and to achieve a growing dividend stream through
investment in mainly UK and selected international equities, with the potential
for investment in limited liability hedge funds, cash and bonds, unquoted
investments, derivative instruments and other investments and securities, as
appropriate. As at 31 August 2010, 74% of its investment portfolio was invested
in small cap stocks.

ATS's core strategy is to focus on small cap companies but its wide investment
remit allows it the flexibility to hold a wide range of securities where its
fund managers see value.

ATS has a strong track record evidenced by its net asset value which has
outperformed the FTSE SmallCap Index (ex-ICs) as well as the wider UK market as
measured by the FTSE All Share Index over one, three, and five year periods to
24 September 2010 on a total return basis. Since Artemis was appointed manager
of ATS in June 2003, it has generated total returns for shareholders on a net
asset value basis of 307.7% compared to 89.1% for the FTSE All Share Index.

The Board of ATS believes that it is in the best interests of shareholders in
ATS to maintain a stable discount through the management of the supply and
demand for ATS shares. Whilst no specific targets are set, the Board of ATS has
empowered Artemis to exercise ATS's authority to buy back its own shares from
time to time to address any imbalances between the supply and demand of the ATS
shares and to achieve a stable level of discount. Over the 12 month period to
24 September 2010, ATS shares have traded at an average discount of 5.9% (as
compared with 5.1% over the same period for the Company) (source: Morningstar).

Artemis fund managers' currently own circa £5.6 million by value of ATS
ordinary shares (based on the closing price of the ordinary shares of ATS on 24
September 2010). It is expected that this will increase to circa £22 million
(based on the closing price of the ordinary shares of ATS on 24 September 2010)
following the exercise of the ATS Manager Warrants outlined above (representing
approximately 23.9% of ATS's share capital immediately prior to implementation
of the Proposals).

In view of this it is envisaged that ATS will introduce a performance related
fee element to its management arrangements which continues to align the
interests of Artemis with those of ATS shareholders.

The ATS website is http://www.artemisonline.co.uk/investor/products/artemis-alpha-trust-plc

Suspension of the Redemption Facility

The Company's Articles of Association incorporate provisions enabling
shareholders to redeem their shares on a quarterly basis, subject to the Board
not exercising their discretion to suspend or limit the extent of the
redemption facility. In view of the impending implementation of the Proposals,
which will enable shareholders to elect for a cash exit in respect of part or
all of their shares, subject to the 30% limit described above, the Board has
decided to exercise its discretion not to offer shareholders the opportunity to
redeem their shares in the Company until further notice. Accordingly, the
October 2010 redemption facility will not be available to shareholders.

Expected Timetable

The Company expects to post a circular to shareholders providing full details
of the Proposals during November 2010 so as to enable shareholders' approval to
be obtained in December 2010, with a view to the Proposals being completed
shortly thereafter, conditional on shareholder approval and requisite
regulatory approvals and tax clearances.

The Board also intends to declare an interim dividend prior to the
implementation of the Proposals.

Contact details

Ian Dighe                                                Tel: 07785 703 261
Gartmore Growth Opportunities plc

Will Rogers                                              Tel: 020 7397 1920
Cenkos Securities plc

Simon Miller                                             Tel: 07768 794 182
Artemis Alpha Trust plc

Gordon Neilly                                            Tel: 020 7050 6778
Canaccord Genuity Limited


                                                                                        

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