Threadneedle UK Select Trust Ltd Notice of Extraordinary General Meeting (6156G)

TIDMUKT

RNS Number : 6156G

Threadneedle UK Select Trust Ltd

30 May 2017

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION, INCLUDING IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA

Threadneedle UK Select Trust Limited (the "Company" or "UKT")

Publication of Circular including Notice of Extraordinary General Meeting

30 May 2017

Further to its announcement of 17 March 2017, the Board of Threadneedle UK Select Trust Limited announces that it has today published a circular (the "Circular"), including a Notice of Extraordinary General Meeting, setting out further details of the recommended proposals for the reconstruction and voluntary winding up of the Company under the laws of the island of Guernsey (the "Scheme") and convening an extraordinary general meeting of the Company (the "EGM") scheduled to be convened on 28 June 2017 at which Shareholders will be asked to approve the Proposals.

The Proposals, which are unanimously recommended by the Board, comprise a voluntary winding up and a scheme of reconstruction of the Company pursuant to which UKT Shareholders will have the opportunity to rollover all or part of their investment in the Company into Henderson High Income Trust plc ("HHIT").

Under the Scheme, eligible UKT Shareholders will be entitled, in respect of their shareholdings, to elect to receive:

-- New HHIT Ordinary Shares for nil premium to the HHIT FAV (the "Rollover Option"); and/or

-- cash (the "Cash Option").

UKT Shareholders can make different elections in respect of different parts of their holdings. There will be no restriction on UKT Shareholders' ability to elect for the Cash Option. UKT Shareholders who fail to make an election will be deemed to have elected for the Rollover Option. Overseas Holders (i.e. Shareholders who have a registered address outside or who are resident in, or citizens, residents or nationals of, jurisdictions outside the United Kingdom, the Channel Islands and the Isle of Man) will receive cash in respect of their shareholdings.

The Scheme is subject to, amongst other conditions, approval by the shareholders of both companies.

Background to and reasons for the Scheme

With a continuation vote due at the 2017 annual general meeting, the Board decided to conduct an extensive review of the options available as regards the future of the Company. In particular, the Board reviewed the options available to grow the Company to a credible and sustainable size and to reduce the discount at which the Company's shares have traded. For the 12 months immediately preceding announcement of the Proposals, the Company's shares traded at an average discount of 13.0 per cent. and, for the three years immediately preceding, at an average discount of 8.7 per cent. In particular, as part of this review, the Board considered whether any steps could be taken to resolve the discount at which the Company's shares trade without adversely affecting the viability of the Company given its relatively small size.

As a consequence of the review, the Board concluded that it was not in the interests of Shareholders for the Company to continue in existence as a listed company given its modest market capitalisation, relatively high ongoing charges ratio and the lack of liquidity in the Company's shares.

Having reached the above conclusion, the Board then considered if an orderly wind down of the Company was most appropriate or whether it was preferable to seek the alternative of rolling over into a larger, more liquid closed ended company thus offering Shareholders a choice. After considering a number of potential rollover candidates and following a beauty parade process with a shortlist of suitable candidates, the Board concluded that HHIT offered a solution which would be attractive to Shareholders and an alternative to electing to receive cash.

Benefits of the Proposals

The Board considers that the Proposals should have the following benefits for Shareholders.

-- HHIT has a market capitalisation in excess of GBP215 million, thereby offering considerably greater liquidity than exists in the Company's Shares.

-- They provide Shareholders with a cost effective opportunity to invest in a company with a strong long-term performance track record, an attractive dividend yield and shares that consistently trade at a premium to net asset value. Over the past 12 months, HHIT has issued 675,000 new shares at an average premium to NAV of 3.3 per cent. Under the Proposals, Shareholders will have the opportunity to acquire New HHIT Ordinary Shares at nil premium to the HHIT FAV by virtue of the Henderson cost contribution set out below.

-- They offer Shareholders access to a leading, highly experienced investment trust manager, with specialist capabilities in relation to UK equity income and a dedicated 18-strong investment trust team.

-- HHIT has a significantly lower ongoing charges ratio than the Company due to its increased scale.

-- The cash exit will be available to all Shareholders at close to net asset value compared to the average discount of approximately 11 per cent. over the past 12 months.

-- They offer Shareholders the opportunity to roll over their investments in a tax ef cient manner (without incurring an immediate liability to UK capital gains tax) into HHIT Ordinary Shares.

The Scheme

The number of New HHIT Ordinary Shares to be issued to UKT Shareholders under the Scheme will be based on the adjusted net asset value of an ordinary share in HHIT (the "HHIT FAV per Share") and the adjusted net asset value of an ordinary share in UKT (the "UKT FAV per Share"). The HHIT FAV per Share and the UKT FAV per Share will be calculated as at 26 June 2017 (the "Calculation Date") using each Company's respective accounting policies. The investments held by the Companies which are listed, quoted or traded on a recognised stock exchange will be valued by reference to the bid price on the principal stock exchange where the relevant investment is listed, quoted or traded. Unquoted investments held by the Companies will be valued at their fair value as at the Calculation Date as determined by the respective board of the companies.

The HHIT FAV per Share will be the net asset value of an ordinary share in HHIT adjusted to exclude any dividends announced but that will not have been paid prior to the Effective Date and to exclude any costs incurred in connection with the Proposals. UKT shareholders will not qualify for any HHIT dividends announced prior to the Scheme becoming effective, in particular the second quarterly dividend announced on 9 May 2017.

The UKT FAV per Share will be the net asset value of an ordinary share in UKT adjusted to take account of the costs and expenses of the Scheme (including any costs contribution from Henderson as set out below) and a liquidator's retention.

For the avoidance of doubt, UKT shareholders who elect (or who are deemed to elect) for the Rollover Option will therefore receive New HHIT Ordinary Shares based on the ratio of the respective adjusted NAVs rather than the respective share prices.

Costs and expenses of the Scheme

Under the Proposals, the Company will bear all of its own and costs in relation to the Proposals, net of any contribution from Henderson as set out below.

Henderson Investment Funds Limited ("Henderson") has agreed to make a contribution to the costs of HHIT participating in the Scheme, equating to a sum that is equivalent to 18 months base management fee of the total assets that rollover from UKT into HHIT. The financial value of this amount will first be credited against the proportion of the costs incurred by HHIT in respect of the Proposals represented by the new HHIT Ordinary Shares issued to UKT Shareholders and the balance (if any) will be paid to UKT. Henderson has further agreed to underwrite all such costs to the extent not covered by the 18 months base management fee equivalent contribution described above.

It is estimated that the costs of the Scheme (excluding the liquidator's retention and any portfolio disposal costs), which will be borne by all UKT shareholders, will be approximately GBP310,000.

Conditions to implementation of the Scheme

The Scheme is conditional on:

-- the passing of both Resolutions to be proposed at the EGM;

-- the passing of the HHIT Resolution;

-- the Admission Condition being satisfied; and

-- the Directors not having resolved to abandon the Scheme.

Expected Scheme timetable

 
                                                                   2017 
 Latest time and date for receipt                         11.00 a.m. on 
  of Forms of Proxy                                             26 June 
 Latest time and date for receipt                          1.00 p.m. on 
  of Forms of Election or TTE instructions                      26 June 
  from Shareholders 
 Record Date for the Scheme                                6.00 p.m. on 
                                                                26 June 
 Calculation Date                                     Close of business 
                                                             on 26 June 
 Ordinary Shares disabled in CREST                              27 June 
 EGM                                                      11.00 a.m. on 
                                                                28 June 
 Effective Date for implementation                              28 June 
  of the Proposals and commencement 
  of the voluntary winding up of 
  the Company 
 Admission to listing of the New                           8.00 a.m. on 
  HHIT Ordinary Shares to be issued                             29 June 
  pursuant to the Scheme 
 New HHIT Ordinary Shares issued                                29 June 
  in uncerti cated form credited 
  to CREST accounts of Shareholders 

  under the Scheme 
 CREST payments made in respect                                 29 June 
  of cash entitlements of Shareholders 
  under the Scheme 
 Cheques despatched to Shareholders                         w/c 10 July 
  in respect of cash entitlements 
  under the Scheme 
 De nitive certi cates in respect                           w/c 10 July 
  of New HHIT Ordinary Shares issued 
  in certi cated form pursuant 
  to the Scheme despatched to Shareholders 
  entitled thereto 
 Notes: 
 (1) The above times and/or dates may be subject 
  to change and, in the event of such change, 
  the revised times and/or dates will be notified 
  to Shareholders by an announcement through a 
  Regulatory Information Service. 
 (2) All references to times in this 
  document are to London times. 
 
 

EGM

The implementation of the Proposals will require an extraordinary general meeting of the Company. The notice convening the EGM (to be held at 11.00 a.m. on 28 June 2017) is set out in the Circular. The EGM will be held at Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT.

Definitions

Defined terms used in this announcement have the meanings given in the Circular unless the context otherwise requires.

This announcement does not contain all the information which is contained in the Circular and Shareholders should read the Circular to make an informed election under the Proposals.

A copy of the Circular and the HHIT Prospectus published in connection with the Proposals will shortly be available for inspection at the National Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm.do. The documentation will also shortly be available in electronic format on the Company's website at http://www.columbiathreadneedle.co.uk/funds/investment-trusts/threadneedle-uk-select-trust-limited/.

General Enquiries:

David Warr

Tel: + 44 (0) 7911 751 054

Dickson Minto W.S.

Douglas Armstrong

Tel: + (0) 20 7649 6823

Administrative Enquiries

JTC Fund Solutions (Guernsey) Limited

Secretary

Tel: + 44 (0) 1481 702400

Notes

This announcement is for information purposes only and does not purport to be full or complete and any decision regarding the Proposals should be made only on the basis of the Circular and the HHIT Prospectus.

This announcement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investment in any jurisdiction, nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract therefor.

The issue and the distribution of this announcement, the Circular and/or the HHIT Prospectus in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to this announcement, the Circular and/or the HHIT Prospectus comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 30, 2017 12:30 ET (16:30 GMT)