Proposed Merger and Offers
PROPOSED MERGER AND OFFERS
| Albion Venture Capital Trust
PLC |
("AAVC") |
LEI Code
213800JKELS32V2OK421 |
| Albion Technology & General
VCT PLC |
("AATG") |
LEI Code
213800TKJUY376H3KN16 |
| Albion Development VCT PLC |
("AADV") |
LEI Code
213800FDDMBD9QLHLB38 |
| Albion Crown VCT PLC |
("CRWN") |
LEI Code
213800SYIQPA3L3T1Q68 |
| Albion Enterprise VCT PLC |
("AAEV") |
LEI Code
213800OVSRDHRJBMO720 |
| Albion KAY VCT PLC |
("KAY") |
LEI Code
213800DK8H27QY3J5R45 |
| (together the
"Albion VCTs" or "Companies " and
individually "Company") |
12 November 2024
RECOMMENDED PROPOSALS RELATING
TO:
· merger of the Companies from
six into three;
· offers for subscription by
AAEV, AATG and CRWN;
· related party transactions
with Albion Capital; and
· related matters.
THE MERGERS
Summary
On 24 July 2024, the board of directors of the
Albion VCTs ("Boards") announced that they had entered into
discussions regarding the possibility of merging the six Albion
VCTs into three (“Mergers”) to achieve, amongst
other things, cost savings, administration efficiency and
simplicity. The Boards stated that they would, subject to agreement
in principle to implement the Mergers by all six Boards, put
proposals to their respective shareholders so as to be able to
implement these Mergers. Agreement in principle has now been
reached.
The Companies have today issued a joint circular
("Circular") setting out proposals for, amongst
other things, the Mergers, alongside a prospectus being published
by AAEV, AATG and CRWN ("Prospectus") in respect
of proposed offers for subscription ("Offers" and
each an "Offer"). The Circular includes notices of
general meetings of the Companies to be convened on 11 December
2024 and 19 December 2024 ("General
Meetings" and each a "General
Meeting").
If Shareholders approve these Mergers and the
Mergers proceed, AADV will be merged into AAEV, KAY will be merged
into AATG and AAVC will be merged into CRWN (AAEV, AATG and CRWN
being the “Acquirer VCTs” and AADV, KAY and AAVC
being the “Target VCTs”). The Mergers will be
effected pursuant to schemes of reconstruction under section 110 of
IA 1986 whereby the assets and liabilities of the relevant Target
VCT will be transferred to its relevant Acquirer VCT in exchange
for new Shares in that Acquirer VCT which will be issued to the
Target VCT's Shareholders (“Schemes”). A merger on
this basis will be outside the provisions of the Takeover Code. In
the case of the AAEV/AADV Scheme and the AATG/KAY Scheme the number
of new Shares to be issued in that Acquirer VCT
(“Consideration Shares”) will be calculated by
reference to the respective net asset values of that Acquirer VCT
and the relevant Target VCT, so as to avoid any dilution to either
Acquirer or Target VCT Shareholders. In the case of the CRWN/AAVC
Scheme, it is proposed that AAVC Shareholders will be issued a new
class of shares in CRWN ("New CRWN Shares"), which
will encompass the existing AAVC portfolio (with one New CRWN Share
being issued for each AAVC Share that an AAVC Shareholder holds).
This new share class will then convert into CRWN Shares in
accordance with the New CRWN Articles by reference to the
respective net asset values of the CRWN Share class and the New
CRWN Share class as at 30 June 2026. It is expected that conversion
of the New CRWN Shares will complete in November 2026. Given that
CRWN has greater exposure to the more mature technology investments
within the Albion portfolio, the purpose of the different approach
in the case of the CRWN/AAVC Scheme is to allow the maturity
profile of both portfolios to converge before the conversion is
effected. The Merger of each of AAEV and AADV, AATG and KAY and
CRWN and AAVC are not conditional on any of the other Mergers
proceeding.
Full details of the Mergers are set out in the
Circular available for download from each Company's website
referred to below and the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Benefits of the Merger
The Mergers are expected to bring a number of
benefits for Shareholders, as follows:
- Aggregate annual
cost savings of approximately £1.5 million (£746,000 in respect of
AAEV/AADV, £443,000 in respect of AATG/KAY and £315,000 in respect
of CRWN/AAVC). Of this saving, £452,000 relates to a reduction in
the management and administration fees payable to Albion
Capital.
- Simplicity for
Shareholders, many of whom are invested across more than one of the
six Albion VCTs.
- A payback period
of between 15 to 24 months based on the estimated Merger costs and
annual cost savings post-Merger.
- The Mergers
should result in a more stable and resilient base for providing
long-term returns to Shareholders.
- Both Albion
Capital and the Boards believe the amalgamation of the Companies'
portfolios and operations will result in more efficient management
and administration processes, which in turn should increase Albion
Capital's ability to focus on investment and portfolio
management.
- The Enlarged
Acquirer VCTs should be in a better position to meet regulatory
requirements, providing more flexibility when considering
investment realisations (which, together with the reduced cost base
as a result of being larger VCTs, should support dividend payments
to Shareholders).
- The Mergers
should result in a standardised product offering that will reduce
the complexity for existing and new Shareholders and their advisers
in understanding the current structure of the Albion VCTs.
OFFERS
As the Acquirer VCTs are required to prepare a
prospectus in connection with the Merger, the opportunity has been
taken to also include offers for subscription in respect of the
Acquirer VCTs. This will provide Shareholders and new investors
with the opportunity to invest in the Acquirer VCTs and benefit
from the VCT tax reliefs available to qualifying investors.
Investors (whether Shareholders or new investors) should note that
following the Chancellor's Autumn Statement on 22 November 2023 the
VCT scheme has now been extended and will continue until at least
April 2035.
The amount sought under the Offers is:
- AAEV
Offer: up to £10 million, with an over-allotment facility
for raise up to a further £10 million;
- AATG
Offer: up to £20 million, with an over-allotment facility
for raise up to a further £10 million; and
- CRWN
Offer*: up to £20 million, with an over-allotment facility
for raise up to a further £10 million.
*
under the CRWN
Offer, an investor's subscription will be into the existing CRWN
Share class – and not into the New CRWN Shares (which will only be
issued pursuant to the CRWN/AAVC Scheme)
The Offers will open on 6 January 2025 and will
close to applications on 4 April 2025 (unless an Offer is closed
earlier or extended by the relevant Enlarged Acquirer VCT's Board).
Each Offer is not conditional on completion of the relevant
Acquirer VCT's Merger.
RELATED PARTY TRANSACTIONS
It is proposed that, following the Mergers, AAEV
and CRWN's arrangements with its investment manager, Albion
Capital, will be amended. As well as other changes to AAEV's
management and administration fees, the AAEV and CRWN Boards
propose to introduce revised performance incentive arrangements to
bring the current arrangements into line with those that apply to
AATG. AATG's performance incentive arrangements were recently
amended, with Shareholder approval, in May 2022 with the purpose of
aligning Albion Capital’s remuneration more closely with the
outcomes delivered to Shareholders. Following reviews by their
respective Boards, each of AAEV and CRWN believe that AATG's
performance incentive arrangements are the most appropriate
arrangements for its own Company and Shareholders. Further details
are set out in the Circular.
The arrangements to change the management,
performance and administration fees (as applicable) of AAEV and
CRWN, and for each of those Acquirer VCTs to pay a promoter fee to
Albion Capital in respect of its Offer, constitute 'relevant
related party transactions' for each of AAEV and CRWN under the
Listing Rules ("Relevant Related Party
Transactions"). This is because Albion Capital, as
investment manager, is considered a related party of each Acquirer
VCT for the purposes of the Listing Rules. In the case of AAEV and
CRWN, these 'relevant related party transactions' require the
approval of the relevant Acquirer VCT's Shareholders under the
Listing Rules.
Approval of the Relevant Related Party
Transactions is being sought at the General Meetings of the
relevant Acquirer VCTs. As a result, each of the Relevant Related
Party Transactions with the relevant Acquirer VCT has been entered
into conditional on Shareholder approval at the relevant Acquirer
VCT General Meeting.
The Board of the relevant Acquirer VCT considers
the Relevant Related Party Transactions between their Company and
Albion Capital to be fair and reasonable so far as their
Shareholders as a whole are concerned and, in coming to this view,
those Directors have been so advised by Howard Kennedy Corporate
Services ("Howard Kennedy") in its role as sponsor
to that Company. In providing this advice, Howard Kennedy has taken
into account the relevant Board's commercial assessment of the
Relevant Related Party Transaction.
In relation to the AATG Offer, and pursuant to
an offer agreement dated 12 November 2024 relating to the Offers
between, among others, Albion Technology & General VCT PLC and
Albion Capital, Albion Capital will receive a promoter fee of an
amount equal to 3% of the gross proceeds of the AATG Offer in
consideration for procuring subscribers under that
offer. As the investment manager of the Company, Albion
Capital is a related party of the Albion Technology & General
VCT PLC and the payment of such a fee by that company to Albion
Capital is also a Relevant Related Party Transaction. When
aggregated with the promoter fee paid to Albion Capital by Albion
Technology & General VCT PLC under an offer agreement dated 15
December 2023 (together the "Transaction"), the
Transaction is of a size such that UKLR 8.2.1R and 8.2.2R apply.
The Board of the Company considers this Transaction is fair and
reasonable as far as the shareholders of the Company are concerned
and have been provided with written confirmation of this by the
Company's sponsor, Howard Kennedy Corporate Services LLP.
EXPECTED TIMETABLES
MERGER OF AAEV AND AADV
Expected timetable for
AAEV*
|
Latest time for receipt of forms of proxy for the AAEV General
Meeting |
10 a.m. on 9 December 2024 |
|
AAEV General Meeting |
10 a.m. on 11 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
Effective Date for the transfer of AADV assets and liabilities to
AAEV and the issue of Consideration Shares pursuant to the
AAEV/AADV Scheme*** |
19 December 2024 |
|
Announcement of the results of the AAEV/AADV Scheme |
19 December 2024 |
|
Admission of and dealings in Consideration Shares issued pursuant
to the AAEV/AADV Scheme to commence |
8 a.m. on 20 December 2024 |
|
CREST accounts credited with Consideration Shares issued pursuant
to the AAEV/AADV Scheme |
20 December 2024 |
|
Certificates for Consideration Shares issued pursuant to the
AAEV/AADV Scheme dispatched |
8 January 2025 |
Expected timetable for
AADV*
|
Date from which it is advised that dealings in AADV Shares should
only be for cash settlement and immediate delivery of documents of
title |
5 December 2024 |
|
Latest time for receipt of forms of proxy for the AADV First
General Meeting |
12 noon on 9 December 2024 |
|
AADV First General Meeting |
12 noon on 11 December 2024 |
|
Latest time for receipt of forms of proxy for the AADV Second
General Meeting |
10 a.m. on 17 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
AADV register of members closed and Record Date for AADV
Shareholders' entitlements under the AAEV/AADV Scheme |
5 p.m. on 18 December 2024 |
|
Dealings in AADV Shares suspended |
7.30 a.m. on 19 December 2024 |
|
AADV Second General Meeting |
10 a.m. on 19 December 2024 |
|
Effective Date for the transfer of the assets and liabilities of
AADV to AAEV and the issue of Consideration Shares pursuant to the
AAEV/AADV Scheme** |
19 December 2024 |
|
Announcement of the results of the AAEV/AADV Scheme |
19 December 2024 |
|
Cancellation of the AADV Shares' listing |
8 a.m. on 20 December 2024 |
* The dates set
out above in relation to implementation of the AAEV/AADV Scheme may
be adjusted by AAEV and AADV, in which case details of the revised
dates will be notified through a Regulatory Information Service
provider.
** This
will be the final expected date of trading of the AADV Shares. If
the AAEV/AADV Scheme becomes effective in accordance with the above
expected timetable, it is anticipated that the listing of the
Shares will be cancelled on 20 December 2024.
*** The
Consideration Shares issued to AADV Shareholders under the
AAEV/AADV Scheme will rank pari passu with the existing AAEV Shares
and will be listed on the Official List and admitted for trading on
the main market of the London Stock Exchange
MERGER OF AATG AND KAY
Expected timetable for
AATG*
|
Latest time for receipt of forms of proxy for the AATG General
Meeting |
11 a.m. on 9 December 2024 |
|
AATG General Meeting |
11 a.m. on 11 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
Effective Date for the transfer of KAY assets and liabilities to
AATG and the issue of Consideration Shares pursuant to the AATG/KAY
Scheme*** |
19 December 2024 |
|
Announcement of the results of the AATG/KAY Scheme |
19 December 2024 |
|
Admission of and dealings in Consideration Shares issued pursuant
to the AATG/KAY Scheme to commence |
8 a.m. on 20 December 2024 |
|
CREST accounts credited with Consideration Shares issued pursuant
to the AATG/KAY Scheme |
20 December 2024 |
|
Certificates for Consideration Shares issued pursuant to the
AATG/KAY Scheme dispatched |
8 January 2025 |
Expected timetable for KAY*
|
Date from which it is advised that dealings in KAY Shares should
only be for cash settlement and immediate delivery of documents of
title |
5 December 2024 |
|
Latest time for receipt of forms of proxy for the KAY First General
Meeting |
1 p.m. on 9 December 2024 |
|
KAY First General Meeting |
1 p.m. on 11 December 2024 |
|
Latest time for receipt of forms of proxy for the KAY Second
General Meeting |
11 a.m. on 17 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
KAY register of members closed and Record Date for KAY
Shareholders' entitlements under the AATG/KAY Scheme |
5 p.m. on 18 December 2024 |
|
Dealings in KAY Shares suspended |
7.30 a.m. on 19 December 2024 |
|
KAY Second General Meeting |
11 a.m. on 19 December 2024 |
|
Effective Date for the transfer of the assets and liabilities of
KAY to AATG and the issue of Consideration Shares pursuant to the
AATG/KAY Scheme** |
19 December 2024 |
|
Announcement of the results of the AATG/KAY Scheme |
19 December 2024 |
|
Cancellation of the KAY Shares' listing |
8 a.m. on 20 December 2024 |
* The
dates set out above in relation to implementation of the AATG/KAY
Scheme may be adjusted by AATG and KAY, in which case details of
the revised dates will be notified through a Regulatory Information
Service provider.
** This
will be the final expected date of trading of the KAY Shares. If
the AATG/KAY Scheme becomes effective in accordance with the above
expected timetable, it is anticipated that the listing of the
Shares will be cancelled on 20 December 2024.
*** The
Consideration Shares issued to KAY Shareholders under the AATG/KAY
Scheme will rank pari passu with the existing AATG Shares and will
be listed on the Official List and admitted for trading on the main
market of the London Stock Exchange.
MERGER OF CRWN AND AAVC
Expected timetable for
CRWN*
|
Latest time for receipt of forms of proxy for the CRWN General
Meeting |
2 p.m. on 9 December 2024 |
|
CRWN General Meeting |
2 p.m. on 11 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
Effective Date for the transfer of AAVC assets and liabilities to
CRWN and the issue of Consideration Shares pursuant to the
CRWN/AAVC Scheme*** |
19 December 2024 |
|
Announcement of the results of the CRWN/AAVC Scheme |
19 December 2024 |
|
Admission of and dealings in Consideration Shares issued pursuant
to the CRWN/AAVC Scheme to commence |
8 a.m. on 20 December 2024 |
|
CREST accounts credited with Consideration Shares issued pursuant
to the CRWN/AAVC Scheme |
20 December 2024 |
|
Certificates for Consideration Shares issued pursuant to the
CRWN/AAVC Scheme dispatched |
8 January 2025 |
Expected timetable for
AAVC*
|
Date from which it is advised that dealings in AAVC Shares should
only be for cash settlement and immediate delivery of documents of
title |
5 December 2024 |
|
Latest time for receipt of forms of proxy for the AAVC First
General Meeting |
3 p.m. on 9 December 2024 |
|
AAVC First General Meeting |
3 p.m. on 11 December 2024 |
|
Latest time for receipt of forms of proxy for the AAVC Second
General Meeting |
12 noon on 17 December 2024 |
|
Calculation Date |
after 5 p.m. on 18 December 2024 |
|
AAVC register of members closed and Record Date for AAVC
Shareholders' entitlements under the CRWN/AAVC Scheme |
5 p.m. on 18 December 2024 |
|
Dealings in AAVC Shares suspended |
7.30 a.m. on 19 December 2024 |
|
AAVC Second General Meeting |
12 noon on 19 December 2024 |
|
Effective Date for the transfer of the assets and liabilities of
AAVC to CRWN and the issue of Consideration Shares pursuant to the
CRWN/AAVC Scheme** |
19 December 2024 |
|
Announcement of the results of the CRWN/AAVC Scheme |
19 December 2024 |
|
Cancellation of the AAVC Shares' listing |
8 a.m. on 20 December 2024 |
* The
dates set out above in relation to implementation of the CRWN/AAVC
Scheme may be adjusted by CRWN and AAVC, in which case details of
the revised dates will be notified through a Regulatory Information
Service provider.
** This
will be the final expected date of trading of the AAVC Shares. If
the CRWN/AAVC Scheme becomes effective in accordance with the above
expected timetable, it is anticipated that the listing of the
Shares will be cancelled on 20 December 2024.
*** The
Consideration Shares issued to AAVC Shareholders under the
CRWN/AAVC Scheme (being New CRWN Shares which will form a separate
share class from the existing CRWN Shares) will be listed on the
Official List and admitted for trading on the main market of the
London Stock Exchange.
THE OFFERS*
|
Offers open |
9 a.m. on 6 January 2025 |
|
First allotment of Offer Shares** |
21 March 2025 |
|
Closing date for Applications*** |
5.30 p.m. on 4 April 2025 |
|
Effective date for the listing of Offer Shares and commencement of
dealings |
within three business days following allotment |
|
CREST accounts credited |
within three business days following allotment |
|
Allotment notification letters to be dispatched |
within three business days following allotment |
|
Share and tax certificates to be dispatched |
within approximately 30 business days following allotment |
* The
Offers are not conditional on the implementation of the Mergers and
will open, subject to relevant Shareholder approval, on 6 January
2025.
** The
AAEV Board, the AATG Board and/or the CRWN Board (as relevant)
reserve the right to accept applications and allot and arrange for
the listing of the AAEV Offer Shares, the AATG Offer Shares or the
CRWN Offer Shares, as applicable, as it sees fit.
***
An Offer will
be closed to applications earlier than the date stated above if it
is fully subscribed or otherwise at the discretion of the AAEV
Board, the AATG Board and/or the CRWN Board (as relevant).
DOCUMENTS AND AVAILABILITY
A copy of the Circular and the Prospectus has
been submitted to the FCA and shall shortly be available for
download from the Companies' website referred to below and the
National Storage Mechanism.
Website: www.albion.capital
National Storage
Mechanism: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
FURTHER INFORMATION
For further information, please contact:
Vikash Hansrani
Operations Partner
Albion Capital Group LLP
Telephone: 020 7601 1850
Howard Kennedy Corporate Services LLP, which is
authorised and regulated in the United Kingdom by the FCA, is
acting as sponsor for the Companies (and no-one else) and will
(subject to the responsibilities and liabilities imposed by the
Financial Services and Markets Act 2000 or the regulatory regime
established thereunder) not be responsible to any other person for
providing the protections afforded to customers of Howard Kennedy
Corporate Services LLP for providing advice in connection with any
matters referred to herein.
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