BlackRock Emerging Europe Tender Offer

 
TIDMBEEP 
 
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR 
INDIRECTLY, IN OR INTO, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF 
SOUTH AFRICA AND THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO MAY 
RESULT IN THE CONTRAVENTION OF ANY REGISTRATION OR OTHER LEGAL REQUIREMENT OF 
SUCH JURISDICTION 
 
 23 May 2018 
 
                         BlackRock Emerging Europe plc 
 
                          (LEI: 549300OGTQA24Y3KMI14) 
 
                     Publication of Tender Offer Circular 
 
BlackRock Emerging Europe plc (the "Company") has today published a circular 
(the "Circular") in connection with a tender offer to purchase up to 100 per 
cent. of the Company's ordinary shares (the "Tender Offer"). 
 
Shareholders should note however that they are not obliged to tender any 
ordinary shares. The Directors will not tender any of their own ordinary shares 
under the Tender Offer. 
 
Background 
 
In June 2013, the Company committed to submit proposals to the Company's 
shareholders (the "Shareholders") prior to 21 June 2018 to provide an 
opportunity for Shareholders to realise the value of their investment in the 
Company at net asset value ("Net Asset Value" or "NAV") less applicable costs 
should they no longer wish to remain fully invested in the Company. 
 
In the Company's 2018 annual report, the Board stated that it believes the most 
appropriate method to enable those Shareholders that may wish to exit all or 
part of their investment, is to allow Shareholders to tender up to 100 per 
cent. of their ordinary shares.  Accordingly, Company has today published the 
Circular containing proposals to implement the Tender Offer. 
 
The Board has also taken the opportunity to consult with Shareholders and its 
advisers on the Company's ongoing discount control measures and dividend 
policy. 
 
The Company has enjoyed narrower discounts than its emerging market peers since 
implementing its current discount control measures and, following discussions 
with Shareholders, the Board has determined to continue with the current 
discount control policy of: (i) allowing Shareholders the opportunity to exit 
for cash at five year intervals, together with a performance based tender offer 
in the interim period; and (ii) share buybacks by which the Board seeks to 
maintain the share price discount to NAV at below 10 per cent. in normal market 
conditions. Furthermore, to demonstrate confidence in its proposals, the Board 
intends to move from triennial continuation votes to annual continuation votes. 
 
Additionally, following discussions with Shareholders, the Board has determined 
to continue with the Company's existing dividend policy which is to retain no 
more than 15 per cent. of eligible investment income and to only pay dividends 
to the extent that revenue is available for this purpose. The Board will 
keep the dividend policy under review. 
 
Background to the Tender Offer 
 
The Board is of the view that the Company's mandate remains relevant and in 
particular the unconstrained, focused approach of the Investment Manager, as 
approved by Shareholders in June 2013, has assisted performance. Since the 
introduction of the revised investment policy, absolute performance has been 
somewhat volatile but relative performance has been very strong: the NAV total 
return has exceeded the benchmark index, the MSCI Emerging Europe 10-40 Index, 
in the period since the change of investment policy on 21 June 2013 to 18 May 
2018 (the latest practicable date prior to the publication of the Circular) by 
24.3 per cent.. In particular, more recently, Shareholders have benefitted from 
very strong absolute performance: since the start of the Company's 2016 
financial year (being 1 February 2016) to 18 May 2018 (the latest practicable 
date prior to the publication of the Circular), the Company has delivered NAV 
total return of 58.0 per cent. and share price total return of 76.7 per cent. 
against the benchmark total return of 47.0 per cent. (all performance data in 
US Dollar terms). 
 
Further, the Board, as advised by the Investment Manager, remains convinced 
that stock markets in the region covered by the Company's investment policy can 
continue to provide attractive opportunities for active investors. Although the 
region has now made up part of the ground lost against developed markets over 
the last decade, there still remains considerable potential for growth. 
Further, company valuations are approximately half those of their western 
peers; dividend yields are higher, supported by strong free cash flow; the 
region has experienced strong earnings growth; and the correlation of the 
benchmark countries with global markets is low, helping to diversify 
portfolios. 
 
While some Shareholders may decide to exit some or all of their investment for 
cash, in light of the Company's strong performance and the attractive medium to 
long-term outlook for the region, the Board and the Investment Manager believe 
that the long-term prospects of the Company remain compelling and that the 
Company will remain a viable entity following the Tender Offer. However, if the 
number of ordinary shares tendered is such that the Board is of the view that 
the continuance of the Company is not in the best interests of Shareholders, it 
reserves the right to terminate the Tender Offer.   It is the Board's intention 
to withdraw the Tender Offer if the assets of the Company were to fall below 
approximately GBP75 million. If the Board exercises this right it will put 
forward revised proposals as soon as practicable, which will include a full 
cash exit at Net Asset Value less applicable costs. 
 
Key Points of the Tender Offer 
 
The key points of the Tender Offer are as follows: 
 
  * the Tender Offer is for up to 100 per cent. of the Company's issued 
    ordinary share capital (excluding any shares held in treasury) as at the 
    Record Date; 
 
  * Shareholders (other than Restricted Shareholders) will be able to decide 
    whether to tender none, some or all of their ordinary shares; 
 
  * after accounting for the realisation of the Tender Pool, Tendering 
    Shareholders shall receive the Tender Price in cash in consideration of the 
    purchase of ordinary shares tendered by them; and 
 
  * the Tender Price shall be the Final Tender Offer Asset Value of the Tender 
    Pool divided by the total number of Exit Shares expressed in Sterling, 
    rounded down to two decimal places. 
 
Shareholders (other than Restricted Shareholders) on the Company's register on 
the Record Date will be invited to tender for sale some or all of their 
ordinary shares held on the Record Date to Winterflood Securities 
("Winterflood") who will, as principal, purchase at the Tender Price the 
ordinary shares validly tendered. 
 
Shareholders should note that, once tendered, ordinary shares may not be sold, 
transferred, charged or otherwise disposed of other than in accordance with the 
Tender Offer. 
 
Tender Pool 
 
Save as set out below, all of the Company's assets and liabilities will, 
following valuation on the Calculation Date, be allocated between the 
Continuing Pool and the Tender Pool on the basis set out under paragraph 10 of 
Part 1 of the Circular. The net value of the assets and liabilities allocated 
on the establishment of the Tender Pool will equal the Tender Offer FAV 
(calculated in accordance with paragraph 8 of Part 1 of the Circular). The 
Tender Pool assets (other than cash) will be realised and the liabilities 
settled and the net cash proceeds paid to Shareholders who successfully 
tendered their ordinary shares in satisfaction of the Tender Price. 
 
The Tender Pool will bear the costs of implementing the Tender Offer and 
realising the assets in the Tender Pool and the amount of stamp duty or stamp 
duty reserve tax payable on the repurchase by the Company of the ordinary 
shares acquired from Winterflood. Shareholders who successfully tender their 
ordinary shares will receive a pro rata share of the net proceeds of the Tender 
Pool. The assets of the Tender Pool will be fully realised as soon as 
practicable after the commencement of the realisation of the Tender Pool such 
that final cash payments can be made to the tendering Shareholders as soon as 
practicable thereafter. The Board may at its discretion make interim 
distributions from the Tender Pool. However, under the Tender Offer the Company 
reserves the right to defer the Tender Pool realisations and/or cash payments 
if the Board believes this to be in the best interests of Shareholders as a 
whole. 
 
Shareholders shall note that the Tender Price will only be determined finally 
once all the assets of the Tender Pool have been realised. 
 
The Board retains the discretion to allocate only cash and near cash assets of 
the Company to the Tender Pool. In such circumstances there will be no or 
minimal costs of realising the assets in the Tender Pool. It is the Board's 
current intention only to exercise such discretion where the number of ordinary 
shares that the Company is required to repurchase pursuant to the Tender Offer 
is such that allocating only cash and near cash to the Tender Pool is in the 
best interests of Shareholders as a whole. 
 
Restricted Shareholders and Other Overseas Shareholders 
 
The Tender Offer is not being made to Shareholders who are resident in, or 
citizens of, Restricted Territories. Restricted Shareholders are being excluded 
from the Tender Offer in order to avoid offending applicable local laws 
relating to the implementation of the Tender Offer. It is the responsibility of 
all Overseas Shareholders to satisfy themselves as to the observance of any 
legal requirements in their jurisdiction, including, without limitation, any 
relevant requirements in relation to the ability of such holders to participate 
in the Tender Offer. 
 
General Meeting 
 
The implementation of the Tender Offer is subject to Shareholder approval. A 
notice convening the General Meeting to be held at 12 Throgmorton Avenue, 

London EC2N 2DL on 20 June 2018 at 12.20 p.m. (or, if later, as soon as the 
annual general meeting convened for noon the same day has concluded) is set out 
at the back of the Circular. 
 
At the General Meeting, at which Shareholders may attend, speak and vote, a 
resolution will be proposed to give the Company authority to make market 
purchases pursuant to the Tender Offer. Should the Resolution fail to be 
passed, the Tender Offer will not proceed. 
 
In order to be passed, the Resolution, which is to be proposed as a special 
resolution, will require the approval of Shareholders representing at least 75 
per cent. of the votes cast at the General Meeting. The Articles provide that 
at the General Meeting each Shareholder present in person or by proxy or who 
(being a corporation) is present by a representative shall on a show of hands 
have one vote and on a poll shall have one vote for each ordinary share of 
which he is a holder. 
 
The quorum for the General Meeting shall be two persons entitled to attend and 
to vote, each being a Shareholder or a proxy of a Shareholder or a duly 
authorised representative of a corporation which is a Shareholder. In the event 
that the General Meeting is adjourned and the above-mentioned quorum is not 
present, at such adjourned General Meeting the quorum shall be one. 
 
Recommendation 
 
The Board considers that the terms of the Tender Offer are fair and reasonable 
and in the best interests of the Company and its Shareholders as a whole. 
Accordingly, the Board recommends unanimously that the Shareholders vote in 
favour of the Resolution to be proposed at the General Meeting. 
 
The Directors intend to vote in favour, or procure the vote in favour, of the 
Resolution at the General Meeting in respect of their beneficial holdings of 
ordinary shares which, in aggregate, amount to 207,492 ordinary shares 
representing approximately 0.58 per cent. of the issued ordinary share capital 
of the Company as at the date of this announcement (excluding any shares held 
in treasury). 
 
The Directors will not tender any of their own ordinary shares under the Tender 
Offer. The Directors make no recommendation to Shareholders as to whether or 
not they should tender all or any of their ordinary shares in the Tender Offer. 
Whether or not Shareholders decide to tender their ordinary shares will depend, 
amongst other factors, on their view of the Company's prospects and their own 
individual circumstances, including their own tax position. 
 
Expected Timetable 
 
Posting of the Circular, Tender Form and        as soon as practicable after 
Form of Proxy                                                    23 May 2018 
 
Tender Closing Date: latest time and date          2.00 p.m. on 13 June 2018 
for receipt of Tender Forms and TTE 
Instructions in CREST 
 
Record Date for participation in the Tender        6.00 p.m. on 13 June 2018 
Offer 
 
Latest time and date for receipt of Forms of      12.20 p.m. on 18 June 2018 
Proxy or transmission of CREST Proxy 
Instructions for the General Meeting 
 
General Meeting                                 12.20 p.m. (or, if later, as 
                                                  soon as the annual general 
                                               meeting convened for noon the 
                                               same day has concluded) on 20 
                                                                   June 2018 
 
Results of General Meeting announced                            20 June 2018 
 
Results of Tender Offer announced                 no later than 20 June 2018 
 
Calculation Date                                close of business on 20 June 
                                                                        2018 
 
Tender Offer FAV announced                        no later than 22 June 2018 
 
Establishment of Tender Pool and Continuing       no later than 22 June 2018 
Pool 
 
Realisation of the Tender Pool commences          no later than 22 June 2018 
 
Tender Price announced; final distribution      as soon as practicable after 
under the Tender Offer of assets in the                  commencement of the 
Tender Pool announced; cheques despatched     realisation of the Tender Pool 
and payments through CREST made 
 
All references are to London time unless otherwise stated. 
 
Dates and times are indicative only and may be subject to change. Any changes 
will be notified via an RIS. 
 
Defined terms used in this announcement have the meanings given in the Circular 
unless the context otherwise requires. 
 
Enquiries: 
 
BlackRock Investment Management (UK)                          020 7743 3000 
Limited 
Simon White 
Sarah Beynsberger 
 
Winterflood Securities                                        020 3100 0000 
Joe Winkley 
Neil Langford 
 
 
Important Information 
 
The content of this announcement has been prepared by, and is the sole 
responsibility of, BlackRock Emerging Europe plc. The information contained in 
this announcement is given at the date of its publication (unless otherwise 
marked) and is subject to updating, revision and amendment from time to time. 
Neither the content of the Company's website nor any website accessible by 
hyperlinks to the Company's website is incorporated in, or forms part of, this 
announcement. 
 
The making of the Tender Offer in, or to persons who are citizens or nationals 
of, or resident in, jurisdictions outside of the United Kingdom or to 
custodians, nominees or trustees for citizens, nationals or residents of 
jurisdictions outside the United Kingdom may be prohibited or affected by the 
laws of the relevant overseas jurisdiction. Persons who are not resident in the 
United Kingdom should read the paragraph headed "Overseas Shareholders" set out 
in paragraph 9 of Part 2 of the Circular and should inform themselves about, 
and observe, any applicable legal requirements. 
 
This announcement does not constitute or form part of any offer or invitation 
to sell, or any solicitation of any offer to purchase or subscribe for any 
ordinary shares nor shall it (or any part of it) or the fact of its 
distribution, form the basis of, or be relied on in connection with, any 
contract therefore. The Tender Offer is made only pursuant to the Circular and 
the related Tender Form with respect to the ordinary shares. The Tender Offer 
is not being made to holders of ordinary shares residing in any jurisdiction in 
which the making of the Tender Offer would not be in compliance with the laws 
of that jurisdiction. 
 
The full terms and conditions of the Tender Offer are set out in the Circular, 
which should be read in full in conjunction with this announcement. 
 
Winterflood Securities Limited, which is authorised and regulated by the 
Financial Conduct Authority in the United Kingdom, acting through its division, 
Winterflood Investment Trusts ("Winterflood"), is acting exclusively for the 
Company and no-one else in connection with the Tender Offer and will not be 
responsible to anyone other than the Company for providing the protections 
afforded to customers of Winterflood or for providing advice in relation to the 
Tender Offer. Nothing in this paragraph shall serve to exclude or limit any 
responsibilities which Winterflood may have under the FSMA or the regulatory 
regime established thereunder. 
 
Apart from the responsibilities and liabilities, if any, which may be imposed 
on Winterflood by the FSMA or the regulatory regime established thereunder, 
Winterflood accepts no responsibility whatsoever for the contents of this 
announcement or for any other statement made or purported to be made by it or 
on its behalf in connection with the Company or the Tender Offer. Winterflood 
accordingly disclaims all and any liability whether arising in tort or contract 
or otherwise (save as referred to above) which it might otherwise have in 
respect of this announcement or any such statement. 
 
This announcement contains (or may contain) certain forward-looking statements 
with respect to the Company's current expectations and projections about future 
events. These statements, which sometimes use, but are not limited to, words 
such as 'anticipate', 'believe', 'intend', 'estimate', 'expect' and words of 
similar meaning, reflect the Directors' beliefs and expectations and involve a 
number of risks, uncertainties and assumptions that could cause actual results 
and performance to differ materially from any expected future results or 
performance expressed or implied by the forward looking statement. Statements 
contained in this announcement regarding past trends or activities should not 
be taken as a representation that such trends or activities will continue in 
the future. The information contained in this announcement is subject to change 
without notice and, except as required by applicable law, neither the Company 
nor Winterflood assumes any responsibility or obligation to update publicly or 
review any of the forward looking statements contained herein. You should not 
place undue reliance on forward-looking statements, which speak only as of the 
date of this announcement. 
 
 
 
END 
 

(END) Dow Jones Newswires

May 23, 2018 07:26 ET (11:26 GMT)