TIDMOXT
JOINT ANNOUNCEMENT
18 MAY 2022
OXFORD TECHNOLOGY 2 VCT PLC ("OT2" or "COMPANY") LEI:
2138002COY2EXJDHWB30
OXFORD TECHNOLOGY VCT PLC ("OT1") LEI: 213800HI61VDMTDOAX43
OXFORD TECHNOLOGY 3 VCT PLC ("OT3") LEI:
2138008W5QZKMHHWRY76
OXFORD TECHNOLOGY 4 VCT PLC ("OT4") LEI:
213800O9M2EQZD452H80
(TOGETHER, THE "COMPANIES" AND OT1, OT3 AND OT4 TOGETHER THE
"TARGET VCTS" AND EACH A "TARGET VCT")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN
OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF
ANY SUCH JURISDICTION.
RECOMMED PROPOSALS FOR
A MERGER OF THE COMPANIES TO BE COMPLETED BY WAY OF SCHEMES OF
RECONSTRUCTION UNDER SECTION 110 OF THE INSOLVENCY ACT 1986
("MERGER");
A CHANGE TO THE COMPANY'S INVESTMENT POLICY; AND
AN OFFER FOR SUBSCRIPTION TO RAISE UP TO GBP10 MILLION WITH AN
OVER-ALLOTMENT FACILITY FOR A FURTHER GBP10 MILLION THROUGH THE
ISSUE OF LEISURE SHARES ("OFFER")
On 4 March 2022 the boards of the Companies (together the
"Boards" and each a "Board") announced that they had entered into
discussions regarding the Merger and, concurrently with the Merger,
the Company intends to issue a new class of "leisure" ordinary
share ("Leisure Shares") by way of an offer for subscription to
raise up to GBP10 million to invest in investments focussed on
leisure (with an over-allotment facility of GBP10 million). The
Company also announced that it intended to engage Edition Capital
Investments Limited ("Edition") to be investment manager with
responsibility for this new share class.
The Boards are now pleased to announce that they have reached
agreement on recommended proposals for the Merger to create a
single enlarged VCT. The Merger is intended to be effected by the
Target VCTs being placed into members' voluntary liquidation
pursuant to schemes of reconstruction under section 110 of the
Insolvency Act 1986 ("Schemes"). The Merger and the Offer are
conditional upon, inter alia, the approval of existing shareholders
of OT2 ("OT2 Shareholders") at the general meeting to be held on 20
June 2022 ("OT2 General Meeting") and the Merger is also
conditional upon, inter alia, the approval of the shareholders of
the Target VCTs ("Target VCT Shareholders" and, together with the
OT2 Shareholders, the "Shareholders") at the Target VCTs general
meetings to be held on 20 June 2022 ("Target VCTs First General
Meeting") and 30 June 2022 ("Target VCTs Second General Meeting"
and, together with the Target VCTs First General Meeting, the
"Target VCT General Meetings"). The Merger and the Offer are not,
however, conditional on each other and the Schemes (which form part
of the Merger) are also not conditional on each other.
The Board has arranged a webinar at 10am on Tuesday 7 June 2022,
to give Shareholders the chance to hear from the existing manager
(Oxford Technology Management Ltd ("OTM")), Edition as the proposed
new investment manager responsible for the new class of Leisure
Shares and the Board, and provide an opportunity for them to ask
questions. In order to register for this event please visit
https://www.globenewswire.com/Tracker?data=biwxfRLjiy8nI0icQQY3sMCEjV0zsnmJIhFlzVnq-CI6vVxDgdgkIAfIZza9YHUNBqVjnmjlJFIg7sPUo3jsXLLWCYoPh91WZ4ujjWQdI0oS5eWz0rIJeYa2p4y-iZT2
https://tinyurl.com/mtu6s8cf.
Full details are set out in the circulars being posted to the
Companies' respective shareholders shortly following this
announcement ("Circulars") alongside a prospectus published by OT2
in connection with, amongst other things, the Merger and the Offer
(the "Prospectus").
MERGER AND MERGER COSTS
The Merger is expected to complete on 30 June 2022 and is
intended to be effected by each Target VCT being placed into
members' voluntary liquidation and all the assets and liabilities
of each Target VCT will then be transferred to the Company in
exchange for the issue of Consideration Shares to the Target VCT
Shareholders with each Target VCT Shareholder receiving a
Consideration Share of the corresponding class on a "one for one"
basis for each Target VCT Share held as set out in the table
below:
Pre-Merger Share Classes of Target Post-Merger Share Classes of the
VCTs Company relating to the Target
VCTs (together the "Consideration
Shares")
---------------------------------- ----------------------------------
OT1 Shares New OT1 Ordinary Shares
---------------------------------- ----------------------------------
OT3 Shares New OT3 Ordinary Shares
---------------------------------- ----------------------------------
OT4 Shares New OT4 Ordinary Shares
---------------------------------- ----------------------------------
The Merger is expected, in time, to deliver cost savings and
other benefits to all of the Companies' shareholders which the
boards of each of the Companies believe is in line with the
strategy to expand the size of their respective net asset bases and
be better positioned to improve shareholder value. The Boards have
estimated the payback period will be between 9 and 36 months, based
on the estimated Merger costs and annual cost savings post Merger
(which varies depending on whether and when Leisure Shares are
first issued and how many of the Schemes proceed).
The Board also believes that, in time, there will be other
benefits for Shareholders arising from participating in a larger
company with an increased net asset base, including simplifying the
process for the Companies to ensure compliance with the VCT Rules
and a reduced need to maintain liquid assets allowing the Company
to consider making additional returns to Shareholders.
Each Scheme is conditional upon:
-- the passing of resolutions 1 (relating to the Scheme for
OT1), 2 (relating to the Scheme for OT3), 3 (relating to the Scheme
for OT4), 5, 6 and 8 to be proposed at the OT2 General Meeting;
-- the passing of each of the resolutions to be proposed at the
Target VCTs General Meetings;
-- notice of dissent under section 111 of Insolvency Act 1986
not having been received from shareholders of the relevant Target
VCT who hold more than 10% in nominal value of that Target VCT's
issued share capital (this condition may be waived by the Board of
the relevant Target VCT and the OT2 Board);
-- each Target VCT confirming to the Company that, in each case,
it has not received any notice of any claims, proceedings or
actions of whatever nature threatened or commenced, as relevant,
against the Target VCT which the OT2 Board regard as material;
and
-- each Target VCT and the Company maintaining VCT status.
If not all of the conditions set out above have been satisfied
by 30 September 2022, it is possible that none of the Schemes shall
become effective and the Company may continue in its current
form.
The Schemes are not conditional upon each other and any Scheme
that is approved will proceed and become effective immediately
after the passing of the special resolution for the winding up of
the relevant Target VCT (in each case expected to be 30 June
2022).
OFFER
The OT2 Board has decided to take the opportunity to raise
further funds through an offer for subscription. This will provide
all Shareholders and new investors with the opportunity to invest
in the Company and benefit from the tax reliefs available to
qualifying investors in a VCT.
The Board believes that there are attractive opportunities to
make further growth investments in order to generate returns for
investors as Edition (which is to be appointed as investment
manager of the Company in respect of the new class of Leisure
Shares) continues to experience strong deal flow and is seeing a
significant number of high quality private equity investment
opportunities. Funds raised under the Offer will allow the Company
to take advantage of the continuing flow of investment
opportunities being received by Edition and further increase the
net assets of the Company and portfolio diversification in line
with the current strategy of the Company. Funds raised will also be
used in due course to fund payment of dividends and market
purchases of shares and to meet annual running costs.
Full details of the Offer are set out in the Prospectus. The
Offer opens today and will close on 16 May 2023 (unless closed
earlier or extended by the OT2 Board).
INVESTMENT POLICY
In light of the multiple new share classes in the Company being
required as a result of the Merger and the Offer, it will be
necessary for the Company to amend its existing investment policy.
Accordingly, the Company will seek approval to change its
investment policy at the OT2 General Meeting.
The proposed change will provide for a more generic policy of
investing in unquoted companies. The proposed change to the
investment policy will also better encompass the investments which
are intended to be acquired from the Target VCTs as part of the
Merger. It will also cover the various different share class funds
which will exist going forwards (each of which will be managed in
accordance with the revised investment policy). This proposed
change to the investment policy is not expected to adversely impact
on the risk profile of the Company and/or its investments, nor
change anything regarding the portfolios of the existing
shareholders of each of the Companies.
RELATED PARTY TRANSACTIONS:
Investment Manager Details
OT2's existing investment manager is OT2 Managers Ltd ("OT2M"),
which subcontracts services to OTM as investment adviser. Subject
to, and conditional upon, the Merger becoming unconditional and the
approval of OT2 Shareholders, an amended Investment Management
Agreement ("Amended IMA") between the Company and OT2M shall come
into effect. Pursuant to the Amended IMA, OT2M shall continue in
its capacity as investment manager for an interim period pending
the first admission of Leisure Shares to the premium segment of the
Official List of the Financial Conduct Authority and to trading on
the London Stock Exchange's main market for listed securities
("Admission"). With effect from the first Admission of Leisure
Shares, Edition will replace OT2M as the Company's investment
manager under a new investment management agreement (the "Edition
IMA").
OT2M is regarded as a related party of the Company under the
Listing Rules and entry into the Amended IMA constitutes a related
party transaction for the purpose of the Listing Rules and requires
the approval of the existing OT2 Shareholders. Subject to the
approval of resolution 6 at the OT2 General Meeting, under the
terms of the Amended IMA, OT2M will be entitled to an annual
management fee (payable monthly in arrears), consistent with the
Companies' current annual management fees which are payable, in an
amount equal to:
- 1% of the net asset value of the pool of assets and
liabilities attributed to the existing OT2 Ordinary Shares, New OT3
Ordinary Shares and New OT4 Ordinary Shares; and
- 0.5% of the net asset value of the pool of assets and
liabilities attributed to the New OT1 Ordinary Shares,
in each case such net asset value being measured as at 28
February 2022 (in the first year of the Amended IMA) and at the end
of the preceding accounting year of the Company (in each subsequent
year while the Amended IMA remains in force). This annual
management fee will continue to be passed on to OTM through the
applicable sub-contracting arrangements until such time as the
Amended IMA is terminated and replaced by the Edition IMA.
Subject to implementation of each of the Schemes and the first
Admission of Leisure Shares pursuant to the Offer, the Company will
be renamed Edition VCT Plc. It will have five listed share classes,
each having its own separate portfolio of assets and liabilities,
managed on a stand-alone basis pursuant to the Company's revised
investment policy, with Edition as investment manager. Given its
knowledge of the existing portfolios and sectors in which the
Company and the Target VCTs have invested, OTM (the current
investment adviser for the Company and each of the Target VCTs)
will be retained by the Company and Edition as portfolio monitor in
respect of the assets and liabilities comprised in each of the
share classes, other than the Leisure Shares. Pursuant to its
appointment as portfolio monitor under a new agreement (which will
come into effect from first Admission of the Leisure Shares), the
fees currently payable to OTM will be halved to reflect the
transfer of administrative activities to Edition.
Directors' Remuneration
Each of the Directors has also entered into a new letter of
appointment with the Company (each dated 18 May 2022), which shall
replace their existing letter of appointment and which shall come
into effect on the earlier of (i) the date of first Admission of
Leisure Shares and (ii) the date the Merger is approved.
1. Under the terms of their new letters of appointment, with effect from 1
March 2023 each Director shall be entitled to a fee per annum as more
particularly detailed below (the increased amounts payable to Richard
Roth being in recognition of his role as chairman of the Company and as
chairman of the Company's Audit Committee and to Robin Goodfellow being
in recognition of his role as a member of the Company's Audit Committee).
2.
Remuneration with effect from 1
Director March 2023 (GBP)
Richard Roth 27,000
Alex Starling 14,000
David Livesley 14,000
Robin Goodfellow 18,000
In addition to the above fees (and subject to the Schemes being
approved), the Directors will continue to be entitled to
participate in the performance fee incentive arrangements as
currently exist for them in respect of the Companies (as described
in more detail in the Prospectus).
(b) In addition, in recognition of the additional work which has
been undertaken by certain of the Directors in connection with the
Merger and the Offer, the Company has agreed to make an additional
one-off payment in the sum of GBP30,000. Of this sum, Richard Roth
will receive GBP27,000 and David Livesley will receive GBP3,000,
both of which will be paid shortly following the Merger becoming
effective (but these payments are not conditional upon the Merger
proceeding).
The payments referred to in (a) and (b) above constitute smaller
related party transactions for the purposes of the Listing Rules
and, as such, Listing Rule 11.1.10 applies.
TIMETABLES
Further details of the expected timetables of events for each of
OT2 (in respect of the Merger and the Offer) and the Target VCTs
(in respect of the Merger) are set out in the Prospectus and
Circulars.
DOCUMENTS AND APPROVALS
The Circular issued by OT2 contains notice of the OT2 General
Meeting to be held on 20 June 2022 setting out resolutions to
approve, inter alia, the Schemes, the allotment of the
Consideration Shares and the Leisure Shares (together, the "New
Shares"), the disapplication of pre-emption rights which are
required to allot the New Shares, the adoption of new articles of
association for OT2, material changes to the Company's investment
policy (the Listing Rules require the changes to the investment
policy to be approved by existing OT2 Shareholders) and, in
addition, a resolution to approve the Amended IMA with OT2M in
relation to the Consideration Shares.
The approval of resolutions in connection with the Merger, the
Offer and related proposals will be proposed to OT2 Shareholders at
the OT2 General Meeting (to be held on 20 June 2022). The approval
of resolutions in connection with the Merger will be proposed to
Target VCT Shareholders at the Target VCTs First General Meeting
(to be held on 20 June 2022) and the Target VCTs Second General
Meeting (to be held on 30 June 2022).
The Circulars convening these general meetings at which all
shareholders will be invited to approve various resolutions in
connection with the proposals will be sent to each Companies'
shareholders shortly. The directors of each of the Companies
unanimously support the proposals and will be voting in favour of
all resolutions (where permitted to do so) at each of the meetings.
The directors also look forward to answering shareholder questions,
either at the webinar on 7 June 2022 or subsequently in writing on
the website.
Copies of the Circulars and the Prospectus have been submitted
to the FCA and shall shortly be available for download from the
following website (
https://www.globenewswire.com/Tracker?data=biwxfRLjiy8nI0icQQY3sP9C8aTgCMcOT07mHGuuuWH8HHcaQYUPfk6eDU3I3UoT1_hl6O51aCMUCE_h1FZEbMDTLt1YbPRJFJDpnsfLewHzpZC1nmZq6GYe2N4Vdl7_v4OhCE08VgDAwsCLqtFe5g==
https://www.oxfordtechnologyvct.com/) and the national storage
mechanism (
https://www.globenewswire.com/Tracker?data=biwxfRLjiy8nI0icQQY3sEDtD651_M4mE7noWsc9SnbgEoS-OhytaRkpvreyqAo1BgAEH0sGgUh3rpmSfUbQIv6F_JIQs6N-w7nsNvZ2j4P_buqy78A-o6b5GTMIRt62Mil3cleenGKGlupz4DMx8liKmfyJaLfycgfmvPdy4DwWPHSA0KvQiYwIkKs6dqdd
https://data.fca.org.uk/#/nsm/nationalstoragemechanism).
For further information, please contact:
Enquiries: Lucius Cary, Andrea Mica and Richard Roth via
https://www.globenewswire.com/Tracker?data=_m-cUvpHFCXbHq5mczUy-yNgHByvjmjw-_Aq1CNby0uh7QOTD99z7yBrU6tXJbzehgB4kqEOGQ-9GIzo_A_oa3O3RJ18W3_OlkogdkR4OMBBRQP4dMNquXijYs8osw97
vcts@oxfordtechnology.com
This announcement contains inside information as stipulated
under the UK version of the Market Abuse Regulation No 596/2014
which is part of English Law by virtue of the European (Withdrawal)
Act 2018, as amended. Upon the publication of this announcement via
a Regulatory Information Service, this information is now
considered to be in the public domain.
(END) Dow Jones Newswires
May 18, 2022 07:25 ET (11:25 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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