Foresight 4 VCT Plc Foresight 4 Vct Plc : Statement Re Board Composition & Potential Merger With Foresight 3 Vct Plc

 
TIDMFTF 
 
 
   Foresight 4 VCT plc 
 
   Statement re Board Composition & Potential Merger with Foresight 3 VCT 
plc 
 
   The Board announces that following the Annual General Meeting, where a 
number of the resolutions, including that of Director re-election, were 
passed by a narrow majority, it proposes making a number of changes as 
follows: 
 
   Board Composition 
 
   The Chairman of the Board, Philip Stephens, has indicated his intention 
to retire from the Board on the earlier of a new independent chairman 
being appointed, the completion of a corporate action or 31 March 2017. 
 
   Peter Dicks has also indicated his intention to retire from the Board on 
the earlier of the completion of a corporate action or the annual 
general meeting in 2017. 
 
   A specialist recruitment firm is being engaged to assist in the process 
of identifying suitable candidates for appointment to the Board. 
 
   The intention would be to have only the independent Directors, including 
any new appointments to the Board, to consider the options available to 
the Company before any recommendations are made to Shareholders. 
 
   Potential Merger with Foresight 3 
 
   The Board has previously announced that it has been in discussions about 
a potential merger with Foresight 3 VCT plc ('Foresight 3'), which will 
be one of the options considered by the independent members of the Board, 
as noted above, before any recommendations are made to Shareholders. 
 
   In that regard, the Board wishes to seek Shareholders' views with 
respect to the potential merger with Foresight 3 before incurring any 
significant merger costs and will do so at the time of publishing the 
half-yearly report during November 2016. This will be achieved through 
an advisory vote open to all Shareholders which will be carefully 
considered by the independent Directors in addition to all other 
options. Details of how to vote will be enclosed with the half-yearly 
report. 
 
   The Board has had preliminary discussions with the board of Foresight 3 
and the benefits of a merger, should it proceed, are anticipated to be 
as follows: 
 
 
   -- A combined VCT with assets of approximately GBP70 million; 
 
   -- Based on the costs of the merger being in the region of GBP450,000, a 
      recoup period of approximately  12 months is expected; 
 
   -- A reduction in the aggregate number of Board directors from six to four, 
      possibly to three over time; 
 
   -- A reduction in the annual management fee paid to the manager from 2.25% 
      to 2.0% of net assets of the Company; 
 
   -- A portfolio of over 25 companies, many of which are making good progress 
      and are profitable and which have delivered the recent improvements in 
      the NAV of the Company; 
 
   -- A reduction in the annual expenses cap from 3.5% to 2.95% of net assets 
      of the Company; 
 
   -- An enlarged entity better positioned to raise further funds and continue 
      with the current investment strategy; and 
 
   -- The ability to consider realisations within an enlarged entity to assist 
      with creating liquidity events for Shareholders and support dividend 
      payments. 
 
 
 
   A merger should create an enlarged VCT with sufficient critical mass to 
enable it to generate sufficient income and realisations to meet an 
attractive dividend target, as well as maintaining a regular program of 
share buybacks aimed at maintaining a discount to NAV at which the 
Company's shares trade in the region of 10%. 
 
   It should be noted that a merger between Foresight VCT plc, Foresight 3 
and the Company is not possible without the divestment of significant 
holdings which, together, being over 50%, would otherwise be 
non-qualifying under the VCT rules. 
 
   The Board anticipates that the following would also be put in place for 
all shareholders of the enlarged VCT, following the completion of a 
merger: 
 
   Tender Offer post-Merger 
 
   The Board recognises that the discount to NAV at which the Company's 
shares trade has been too wide for a prolonged period of time. In that 
regard, the Board anticipates that the enlarged VCT will undertake a 
tender offer as soon as possible after a merger. 
 
   Buyback Commitment post-Merger 
 
   In addition to the proposed tender offer referred to above, over time 
the Board also expects to be in a position following a merger to 
implement a series of share buybacks to enable the enlarged VCT to 
achieve its target of a discount to NAV in the region of 10%. 
 
   Dividend post-Merger 
 
   In addition to the tender offer and share buyback objective noted above, 
the Board also expects that the enlarged VCT would be in a position to 
pay a post-merger dividend. 
 
   Following the advisory vote, and the appointment of new independent 
directors, a recommendation on the preferred option of the independent 
Directors of the Board will be sent to Shareholders for their 
consideration. 
 
   For further information please contact: 
 
   Gary Fraser, Foresight Group: 0203 667 8100 
 
 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Foresight 4 VCT PLC via Globenewswire 
 
 
  http://www.foresightgroup.eu/ 
 

(END) Dow Jones Newswires

October 20, 2016 02:01 ET (06:01 GMT)

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