Polar Capital Holdings plc
12
November 2024
Crystallisation of Business Units and Issue of
Shares
Polar Capital Holdings plc ("Polar
Capital" or the "Company") announces the crystallisation of
Preference Shares held by David Keetley, the lead manager of the
Global Convertible Bond Fund.
These crystallisations are expected
to be immediately earnings enhancing for shareholders. Based on the
results for the financial year ended 31 March 2024, the combined
impact of the crystallisation would have been an earnings
enhancement of around 0.1p per share1.
Background
As set out at the time of the
Company's admission to AIM, Polar Capital has structured its fund
management operations in such a way that the fund management teams
are placed in separate business units. Each business unit is
a separate profit centre and the fund managers responsible receive
each year a payment which comprises a share of their unit's core
operating profit (operating profit before performance fees and
related distributions) and performance fees.
In addition to the remuneration
structure described above, certain fund managers and their teams
are offered the prospect of an interest in the capital of the
Company through the purchase of an individual class of preference
shares in Polar Capital Partners Limited, a wholly owned subsidiary
of the Company. These preference shares have been structured
in such a way as to become convertible upon the occurrence of
certain events, known as crystallisation events, into cash or, at
the option of the Company, ordinary shares at a ratio that is
intended to be earnings enhancing for the Group. At the
election of the holders of the preference shares, they may
crystallise all or part of their preference shares, or retain the
balance, if any, for a further crystallising event at a subsequent
date.
From the effective date of
crystallisation, the fund managers concerned cease to be eligible
to receive their share (or the relevant proportion in the case of a
partial crystallisation) of the business unit's core operating
profit which has been crystallised and simultaneously going forward
will receive a reduced interest in their performance
fees.
Global Convertible Bond Fund
unit
Mr David Keetley has elected to
crystallise the remaining one-third of his preference shares in
relation to this Fund.
Under the terms of the preference
shares the crystallisation value is calculated as at 31 March 2024
and either satisfied in cash, or at the option of the Company, by
issue of new ordinary shares. The Company has elected to satisfy
the consideration for both crystallisations by the issue of new
ordinary shares.
The crystallisations are in relation
to the crystallisation period ended 31 March 2024. The initial
crystallisation value in respect of the partial crystallisation of
the Global Convertible Fund unit is to be satisfied by the issue of
up to 114,716 new ordinary shares. The new ordinary shares will be
issued in tranches as described below.
The crystallisation value is
re-calculated at each of the first, second, and third anniversaries
of 31 March 2024, based on the profits of the business unit in the
12 months ended on the respective anniversary. If the result of the
re-calculation provides for a smaller cash or share consideration,
then the amounts paid or shares issued to the owners of the
preference shares are adjusted accordingly. The effect of such
re-calculation is to adjust downwards any consideration and there
can never be an increase in the crystallisation value. In return
for this delivery of new ordinary shares, the Convertible bond team
will be forfeiting their interests (or the
relevant proportion in the case of a partial crystallisation) in
their core operating profit in relation to the Polar Global
Convertible Bond Fund for the financial year ended 31 March
2024.
Under the terms of the preference
shares 10 percent of the new ordinary shares are issued immediately
with the balance of 30 percent of the new ordinary shares due
(subject to the re-calculation described above) on or as soon as
practicable after each crystallisation anniversary.
As a result, the Company will issue
a total of 11,471 (the initial 10%) new ordinary shares in respect
of this crystallisation. The new ordinary shares will rank
pari passu with the Company's existing ordinary shares at the time
of issue.
The Company's current issued share
capital is 101,548,934 ordinary shares and following admission of
the new ordinary shares the total ordinary shares in issue will be
101,560,405.
Note 1
Presented for illustrative purposes based on the
year end results for 31 March 2024 and assuming the crystallisation
occurred as at 31 March 2024.
For further information please
contact:
Polar
Capital +44
(0)20 7227 2700
Gavin Rochussen (Chief
Executive)
Samir
Ayub
(Chief Financial Officer)
Numis
Securities Limited - Nomad and Joint Broker
+44 (0)20 7260 1000
Giles Rolls (QE)
Charles Farquhar
Peel
Hunt LLP - Joint
Broker
+44 (0)20 3597 8680
Andrew Buchanan
Oliver Jackson
Camarco
+44 (0)20 7357 4980
Ed Gascoigne-Pees
Jennifer Renwick
Phoebe Pugh