Nippon Active Value Fund PLC Rollover from Atlantis Japan Growth Fund Limited (0039J)

TIDMNAVF TIDMAJG

RNS Number : 0039J

Nippon Active Value Fund PLC

11 August 2023

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, SINGAPORE OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.

The information communicated in this announcement is deemed to constitute inside information as stipulated under the UK Version of Market Abuse Regulation (EU) No. 596/2014 (as incorporated into UK Law by virtue of the European Union (Withdrawal) Act 2018, and as subsequently amended ("MAR"). Upon the publication of this announcement, this information is considered to be in the public domain.

11 August 2023

Nippon Active Value Fund plc

LEI: 213800JOFEGZJYS21P75

Rollover from Atlantis Japan Growth Fund Limited

The Board of Nippon Active Value Fund plc (the "Company" or "NAVF") is pleased to announce that heads of terms have been agreed for a proposed rollover of the assets of Atlantis Japan Growth Fund Limited ("AJGF") into the Company.

AJGF is an Investment Trust listed on the Official List of the London Stock Exchange which was launched in 1996. It invests in companies quoted on the Japanese Stock Exchange and has net assets of GBP 80 m as at 31 July 2023. Following a review of AJGF's future by its Board of Directors in light of its upcoming continuation vote, AJGF has agreed terms to rollover its assets into the Company.

The combination, if approved by each company's shareholders, will be implemented through a scheme of reconstruction pursuant to section 391(1)(b) of the Companies (Guernsey) Law, 2008, resulting in the reconstruction and members' voluntary liquidation of AJGF. This would result in the rollover of AJGF's assets into the Company in exchange for the issue of new NAVF shares to AJGF shareholders who elect to roll their investment into the enlarged fund. AJGF shareholders will be offered the option of a cash exit for up to 25 per cent. of AJGF's shares in issue, providing AJGF shareholders with the ability to realise part (or potentially all) of their investment at a 2 per cent. discount to formula asset value ("FAV") per share (the "Transaction").

The Transaction is in addition to the previously announced proposed rollover of abrdn Japan Investment Trust plc assets into the Company (the "AJIT Combination"). The Transaction is not conditional upon the AJIT Combination successfully completing, and the AJIT Combination is not conditional on the Transaction completing.

New NAVF shares issued to AJGF's shareholders will be issued on a FAV-to-FAV basis. FAVs will be calculated using the respective net asset values of each company, adjusted for any dividends and distributions declared by each party which have a record date prior to the effective date of the rollover of AJGF's assets into NAVF.

Following completion of the Transaction, it is expected that a director from the Board of AJGF will join the Board of NAVF.

Rising Sun Management Limited ("RSM") (the Investment Adviser to NAVF) has offered to pay for AJGF's costs to implement the Transaction up to a cap of GBP800,000.

Benefits of the Transaction

Similarly to the AJIT Scheme, the Transaction would result in the Company becoming larger with more shareholders and greater assets and is expected to improve liquidity in the Company's shares as well as spreading the fixed costs of the Company over a larger pool of assets. The Company also expects an inflow of capital into the NAVF portfolio which will enhance the Company's ability to discover undervalued Japanese listed companies and enable active engagement to deliver returns for shareholders.

Approvals

Implementation of the Transaction is subject to the approval, inter alia, of the AJGF Shareholders as well as upon receiving regulatory and tax approvals. NAVF intends to implement the Transaction under the same prospectus to be issued by NAVF in connection with the AJIT Combination. It is anticipated that NAVF and AJGF will each publish a circular setting out details of the Transaction in early September. As noted above, the Transaction is not conditional on implementation of the AJIT Combination.

Joh. Berenberg, Gossler & Co KG, London Branch ("Berenberg") has been appointed as Sponsor and Financial Adviser to the Company in relation to the Transaction.

City Code

In accordance with customary practice for schemes of reconstruction, The Panel on Takeover and Mergers has confirmed that the City Code on Takeovers and Mergers is not expected to apply to the combination of the Company and AJGF.

Update on AJIT Combination

Further to the announcement on 18 May 2023 regarding the AJIT Combination the formal documentation for the implementation of the combination of the AJIT and the Company is now well advanced and the Board expects to announce its publication by early September.

Rosemary Morgan, Chair of the Company commented:

"We are pleased to have reached agreement with AJGF's Board in relation to the proposed combination. The proposed transaction will offer AJGF shareholders the opportunity to continue to have exposure to Japanese equities but now with the active management approach which provides the potential to unlock greater value in the Japanese market, whilst being part of a larger vehicle. We look forward to the transaction progressing and welcoming the AJGF shareholders to our company together with the AJIT shareholders, subject to successful completion."

Enquiries

Berenberg

Gillian Martin / Dan Gee-Summons / Natasha Ninkov

Tel: +44 (0)20 3207 7800

Company Secretary

Sylvanus Cofie / Maria Matheou

Tel: +44 (0) 20 3327 9720

Important information relating to Sponsor and Financial Adviser

Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") which is authorised and regulated by the German Federal Financial Supervisory Authority and deemed authorised and subject to limited regulation in the United Kingdom by the FCA, is acting solely as sponsor and financial adviser to the Company and for no one else in relation to the proposed transaction, and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Berenberg or for providing advice in relation to the proposed transaction, the contents of this document or any other matters described in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Berenberg by FSMA or the regulatory regime established thereunder, Berenberg does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including as to its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the proposed transaction, whether as to the past or future.

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August 11, 2023 02:00 ET (06:00 GMT)

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