Neptune-Calculus Income &Growth VCT Statement re Recommended Proposals for Merger (3923I)

TIDMNEP TIDMTTM TIDMCLC

RNS Number : 3923I

Neptune-Calculus Income &Growth VCT

19 June 2017

NEPTUNE-CALCULUS INCOME AND GROWTH VCT PLC - Recommended Proposals for Merger

19 June 2017

NEPTUNE-CALCULUS INCOME AND GROWTH VCT PLC ("The Company")

CALCULUS VCT PLC ("Calculus VCT")

(Together the "Companies")

TIDM: NEP

RECOMMENDED PROPOSALS FOR A SPECIAL DIVIDEND OF 10.5p PER SHARE AND MERGER BETWEEN THE COMPANY AND CALCULUS VCT

SUMMARY

At the time of announcing the results for 2016, we stated that your Board was considering strategic options for the Company which might lead to proposals involving a significant return of capital to shareholders. Your Board is pleased to announce that it has agreed in principle with the board of Calculus VCT to merge the two VCTs on a relative net asset basis. Both Companies are managed by Calculus Capital Limited ("Calculus Capital").

Your board believes there will be significant benefits for all shareholders arising from the proposed merger with Calculus VCT which are set out below. The merger, which will follow the methodology used in the majority of VCT mergers, will be effected by means of placing the Company into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by Calculus VCT of all the Company's assets and liabilities in consideration for the issue of Shares in Calculus VCT, forming an enlarged VCT (the "Enlarged Company").

The Merger will be conditional upon certain conditions being satisfied which will be set out in the circulars to be posted in due course to the Companies' respective shareholders together with a prospectus in connection with the Merger (the "Prospectus").

Conditional upon the Merger being approved by shareholders, the Company intends to pay a special dividend of 10.5p per share to shareholders prior to completion of the Merger. This special dividend will be in addition to the 2 pence annual dividend declared at the time of publishing the 2016 results which is due for payment on 30 June 2017, subject to approval at the Company's upcoming Annual General Meeting.

In addition, conditional upon the Merger taking place, the Enlarged Company intends to seek further investment by way of an offer of new equity of up to GBP5 million to be allotted in the 2017/18 and 2018/19 tax years with an over-allotment option of up to a further GBP5 million (the "Offer").

If the Merger is effected, the Enlarged Company should have net assets in excess of GBP10 million, prior to any shares being issued in the Offer.

BENEFITS ANTICIPATED FROM THE MERGER

The Merger should result in the following benefits for Shareholders:

-- a reduction in the expected annual running costs for Shareholders due to operational expenses being spread over a larger base;

-- the opportunity for future buy backs, particularly for Shareholders who have held their shares for more than 5 years;

   --     a larger pool of distributable reserves to support future dividend payments; and 
   --     exposure to a more diversified portfolio. 

Additional attractive features of the Merger include:

-- the Company's venture capital investment manager, Calculus Capital has agreed to contribute 33% of the costs of the Merger, meaning that the costs will be split evenly between Calculus Capital, the Company and Calculus VCT;

   --    no impact on the tax position of Shareholders, and 

-- existing VCT tax reliefs carry over and attach to the post-Merger shares for Shareholders and shareholders in Calculus VCT.

A reduction in the cost cap and expected annual running costs

Subject to the Merger taking place, Calculus Capital has agreed to increase its potential contribution to the running costs of the Enlarged Company by reducing the cost cap (excluding irrecoverable VAT, annual trail commission and performance incentive fees) to 3% of the net assets of the Enlarged Company at each financial year end. This compares to the current cost cap for Neptune shareholders of 3.5% of the net asset value of the Company at each financial year end.

THE ENLARGED COMPANY BOARD

It was announced on 25 April 2017 that Diane Seymour-Williams would be appointed as Non-Executive Chairman of the Company immediately following its AGM on 22 June 2017. It is proposed that, if the Merger is approved, Diane Seymour-Williams will join the Board of the Enlarged Company, which should then be:

   --     Michael O'Higgins; 
   --     Arthur John Glencross; 
   --     Kate Cornish-Bowden 
   --     Steven Meeks; and 
   --     Diane Seymour-Williams. 

TIMETABLE

It was announced in Calculus VCT's Report and Accounts on 12 May 2017, that the merger of Calculus VCT's Ordinary, C and D Share classes was expected to take place on a date as soon as possible after 30 May 2017 when HMRC clearance for the share class merger is received. HMRC clearance is expected imminently and it is expected that that the Calculus VCT share class merger will take place as soon as possible thereafter.

Following the merger of the Calculus VCT share classes, it is expected that shareholder circulars seeking approval for the Merger and other related matters, together with the Prospectus, will be posted to the shareholders of the Company and Calculus VCT as soon as possible thereafter.

Subject to shareholders' approvals, it is expected that the Merger can be completed within 6 weeks of the date of posting.

Lesley Watkins

Company Secretary

This information is provided by RNS

The company news service from the London Stock Exchange

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June 19, 2017 02:00 ET (06:00 GMT)