Foresight 3 VCT PLC Foresight 3 Vct Plc : Statement Re Possible Merger With Foresight 4 Vct Plc

 
TIDMFTD 
 
 
   Foresight 3 VCT plc 
 
   Statement re Possible  Merger with Foresight 4 VCT plc 
 
   The Board announces that, further to its discussions with Foresight 4 
VCT plc ('Foresight 4'), the principal details of a potential merger, 
should it proceed and be approved by Shareholders, are set out below. 
 
   Potential Merger with Foresight 4 
 
   With respect to a potential merger with Foresight 4, the Board wishes to 
seek Shareholders' views 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 4 
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 
      payback 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 from 2.25% to 2.0% of net 
      assets; 
 
   -- A portfolio of over 25 companies, many of which are making good progress 
      and are profitable and which have delivered the recent improvements in 
      NAV in the Company; 
 
   -- A reduction in the annual expenses cap from 3.5% to 2.95% of net assets; 
 
   -- 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 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 3 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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