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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Intrinsic Val. | LSE:IV. | London | Ordinary Share | GB0007449555 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
To: City Editors 2 April 2004
For immediate release
INTRINSIC VALUE PLC
Proposals for the winding-up of the Company
The Board of Intrinsic Value has today posted a Circular to Shareholders
setting out the Board's Proposals for the future of the Company. The Circular
sets out the Board's Proposals for placing the Company into members' voluntary
liquidation and convenes the two Extraordinary General Meetings needed to
implement the Proposals. These meetings will be held on 26 April 2004 and 10
June 2004.
The Board believes the Proposals will accommodate those Shareholders who have
expressed a wish to exit from the Company for cash whilst allowing those
Shareholders who wish to remain invested in the small cap sector to do so.
Shareholders will therefore have the option of receiving Units in the award
winning Marlborough Special Situations Fund or of receiving cash, or a
combination of the two. Shareholders are expected to receive the first
distribution of Units and/or cash in the week commencing 14 June 2004.
Enquiries
Intrinsic Value
James West
Chairman 020 7767 1000
ING Investment Banking
Nicholas Gold
William Marle 020 7767 1000
INTRINSIC VALUE PLC
Introduction
The Board of Intrinsic Value intends to put to Shareholders proposals for the
winding-up of the Company. Under the Proposals, which are subject to
Shareholder approval, the Company will be wound up and Shareholders will have
the option of receiving Units in Marlborough Special Situations Fund and/or
cash.
A Circular explaining the Proposals and the actions which are required in order
for them to be implementedand convening Shareholder Meetings to approve the
Proposals was posted today.
Background
As was stated in the Requisition Circular, the Board and its advisers have had
discussions with Shareholders holding a substantial proportion of the Company's
Shares regarding the future of the Company. Many of these Shareholders
indicated that they wish to exit from the Company for cash. Accordingly, given
the relatively small size of the Company and the illiquid nature of its
portfolio, the Board concluded that it was not feasible to combine the
opportunity for a cash exit with the opportunity for Shareholders to remain
invested in an investment vehicle managed by the Investment Manager. However,
the Board has arranged for Shareholders who wish to remain invested in a
similar vehicle to have the opportunity to roll over their investment into
Units in an open ended fund, Marlborough Special Situations Fund.
The Scheme and details of the Proposals
The Proposals provide for the Company to be put into members' voluntary
liquidation and for the transfer of the Company's assets (after taking account
of, inter alia, the expenses of the Scheme and the assets to be retained by the
Liquidators to meet the liabilities of the Company) into two pools, the Cash
Option Pool and the Unit Option Pool.
Following the passing of the special resolution to be proposed at the First
Extraordinary General Meeting the assets of the Company will be split into two
pools, the Cash Option Pool and the Unit Option Pool. The division will be pro
rata to the number of Shares whose holders have elected, or have been deemed to
have elected, for each Pool.
The investment portfolios of the two Pools will then be reorganised in the
period leading up to the Effective Date so that theCash Option Pool will
represent assets required to discharge the Cash Option and the Unit Option Pool
comprises securities of a type that are eligible for transfer into the
Marlborough Special Situations Fund. The costs of these reorganisations and the
liabilities of the Company will be borne by the relevant Pool.
Under the Proposals, Shareholders will be able to roll over their investment in
the Company into Marlborough Special Situations Fund, and/or to elect for cash.
Under the Proposals, and following the Second EGM, the Company will be placed
in members' voluntary liquidation and pursuant to the Transfer Agreement, the
Liquidators will transfer the Unit Option Pool to Marlborough Special
Situations Fund. The Liquidators will also make the first distribution from the
Cash Option Pool to Shareholders who so elected. The Liquidators will retain
however, the Company's unquoted securities portfolio, together with cash and
other assets which they consider sufficient to provide for all outstanding
liabilities of the Company, including the expenses of the Company in relation
to the Proposals, and any other contingencies and creditors. These assets will
be held in the Liquidation Fund and will be drawn, in the case of assets
required to meet liabilities attributable to a Pool, from that Pool, or
otherwise from each of the Pools pro rata to the number of Shares in issue
whose holders have, or have been deemed to have, elected for each Pool.
To the extent that the aggregate of the proceeds from sales of any investments
in the Liquidation Fund (including the proceeds of sale of unquoted securities
which are unlikely to have been realised prior to the Effective Date) and the
amount set aside for contingencies is not required, any cash balance remaining
in the hands of the Liquidators on the termination of the liquidation of the
Company (including the proceeds of sale of the unquoted securities) will be
distributed amongst the Pools pro rata to the elections of the Shareholders.
Any cash balance remaining in the Cash Option Pool will be paid, in due course,
to Shareholders on the register of members on the Effective Date as a final
distribution. In addition, if the Liquidators consider it appropriate, one or
more interim distributions may be made.
Any further distribution to the Unit Option Pool will be transferred to
Marlborough Special Situations Fund and further Units will be issued to
Shareholders who elected for the Unit Option.
The terms of the Scheme, a summary of the Transfer Agreement and details of the
estimated costs of the Proposals are set out in the Circular.
On 27 April 2004 the Shares will commence trading as Reclassified Shares with
"A" Rights and Reclassified Shares with "B" Rights. The last day for dealings
on the London Stock Exchange in Reclassified Shares will be 28 April 2004 and
the Reclassified Shares will be suspended from 29 April 2004.
Approval and implementation of the Proposals
The Proposals are conditional, inter alia, on the passing by Shareholders of
the special resolutions to be proposed at the Shareholder Meetings as set out
in the notices of meeting in the Circular. The Scheme which will implement the
Proposals is set out in the Circular.
Entitlement of Shareholders under the Proposals
Shareholders may elect to receive cash or Units in Marlborough Special
Situations Fund in any combination desired. However, no receipt of Units in
whole value of less than £500 per Shareholder will be permitted (subject to
Marlborough Fund Managers' discretion). Shareholders who elect, or who would
otherwise be deemed to have elected, for Units in whole value of less than £500
will therefore be deemed to have elected for the Cash Option. In addition,
Marlborough Fund Managers, the managers of the Marlborough Special Situations
Fund, retain the right to refuse to issue Units to any Shareholder.
Shareholders who are refused Units will be deemed to have elected for the Cash
Option.
Overseas Shareholders will be deemed to have elected for the Cash Option in
respect of their holdings unless they are able to satisfy Marlborough Fund
Managers that they are legally entitled to receive and hold Units (see the
paragraph headed "Overseas Shareholders" in the Circular).
The number of Units to which Shareholders will be entitled will be calculated
by dividing the aggregate value of the Unit Option Pool (on the basis of the
bid price of the securities comprised in the Unit Option Pool plus any cash in
the Unit Option Pool calculated in accordance with the method set out in the
Circular) on the Effective Date, calculated pro rata in respect of all
shareholdings in respect of which elections have been made or are deemed to
have been made for Units, by the creation price of Units at 10.00 am on the
Effective Date.
Shareholders who elect for the Cash Option will receive their entitlement per
Share in cash on the winding up of the Company calculated by dividing the
aggregate amount of the Cash Option Pool on the Effective Date by the aggregate
number of Shares inrespect of which elections have been made or deemed to have
been made for the Cash Option.
Cheques in respect of cash amounts due to Shareholders are expected to be
despatched in the week commencing 14 June 2004 or as soon as practicable
thereafter. Any shareholder who wishes to receive payment by CHAPS should
complete his details in the relevant section on the Form of Election. CHAPS
payments will only be made in respect of sums equal to or greater than £
100,000.
Statements for Shareholders who elect for the Unit Option are expected to be
despatched in or by the week commencing 14 June or as soon as practicable
thereafter. Shareholders should note that Unit certificates will not be issued
and the register of unitholders will be evidence of title.
Marlborough Special Situations Fund
Marlborough Special Situations Fund's objective is to provide investors with
capital growth by following a speculative policy investing in smaller
companies, new issues and companies going through a difficult period with good
recovery prospects. It is the intention of Marlborough Fund Managers that the
assets will be managed in such a way that Units in the trust will qualify for
maximum investment in both an ISA and a PEP. Permitted investments include
securities listed on the official list of the UK Listing Authority and
securities dealt in on the Alternative Investment Market of the London Stock
Exchange.
Marlborough Special Situations Fund has outperformed its sector average, the
Standard & Poor's Unit Trust Smaller Companies UK universe, over one, three and
five years as at 22 March 2004.
Its performance against its peers is demonstrated by the following data
compiled by Standard & Poor's and published weekly by Investment Week magazine.
UK Smaller Companies universe (as at 22 March 2004)
Three month One year Three year Five year
Growth Rank Growth Rank Growth Rank Growth Rank
Marlborough Special 17.5% 5 121.3% 1 63.0% 1 301.4% 2
Sit's Fund
Average 11.3% 64.8% -0.1% 51.5%
Number of peers 65 65 59 55
Further information on Marlborough Special Situations Fund is set out in the
Circular.
Risks of investing in Marlborough Special Situations Fund
Investment in unit trusts is subject to stock market fluctuations and other
risks inherent in all investments where market prices can change. There can be
no assurance that appreciation will occur. The value of investments and the
income from them may go down as well as up and an investor may not be able to
realise the full amount of the original investment. Changes in exchange rates
or currencies may also cause the value of the investment to increase or
diminish. Past performance is not necessarily a guide to future performance.
Failure to make an election
Where Shareholders make no election and the Proposals are approved,
Shareholders will be deemed to have elected for the Unit Option. Shareholders
who do not complete and return a valid Form of Election which is correct in all
respects will be treated as having failed to make an election. This is subject
to the terms of the Scheme, details of the qualifications to which are set out
in the Circular.
The Board has chosen the Unit Option as the default option for the following
reasons. Firstly, given the similar investment objectives of the Company and
Marlborough Special Situations Fund, the Board believes that a transfer from
the former to the latter will minimise the impact of liquidation on the
investment portfolios of Shareholders. Secondly, as Marlborough Special
Situations Fund is an open-ended vehicle, Shareholders will be able to exit
their investment for cash when required by redeeming their Units. Finally, the
Unit Option is likely to have a less significant taxation impact for
Shareholders.
Management of the reorganisation and liquidation of the portfolio
The Board believes that the Company's Investment Manager is the most
appropriate party to dispose of the Company's portfolio, particularly given its
knowledge of the portfolio and its relationships with many of the companies in
which the Company is invested, many of which represent significant holdings in
such companies' capital.
The Board has therefore agreed a revision to the Investment Management
Agreement, conditional upon the Company being placed into liquidation at the
Second Extraordinary General Meeting. The terms of this revision are designed
to incentivise the Investment Manager to maximise the liquidation proceeds and
undertake thedisposal in a timely fashion.
Under the Revised Investment Management Agreement, during the liquidation
period the Investment Manager will receive a reduced fixed management fee of £
10,000 per month for the first six months after the Second EGM, reducing
further to £5,000 per month for the second six months. In addition, during the
first six months after the Second EGM, where disposals of unquoted assets are
achieved at a price higher than the market value prevailing at the Second EGM,
the Investment Manager will earn an incentive fee equal to ten per cent. of
this excess. In the second six months this fee reduces to five per cent.
Compensation for early termination of the Investment Management Agreement would
be payable on the appointment of the Liquidators, but the Investment Manager
has agreed to vary the terms of this and to defer payment until Shareholders
have received the full liquidation proceeds. This may also include a reduction
in the amount of compensation payable.
Further information on the Revised Investment Management Agreement is set out
in the Circular.
Taxation
The information below relates to UK taxation applicable to the Company and its
Shareholders and is based on current legislation and what is understood to be
current Inland Revenue practice. The statements below relate to persons who are
absolute beneficial owners of the Shares and may not apply to certain classes
of persons, such as dealers in securities. Such statements are given by way of
general summary only and do not constitute legal or tax advice to any
Shareholder.
i. The Company
The Company has been approved as an investment trust under Section 842 of the
Taxes Act for the year ended 30 June 2003. The Directors consider that the
Company has conducted its affairs since that date, and will continue to do so,
to enable it to be so approved for the period ending with the date of its
liquidation. The Directors have been advised that the manner in which it is
proposed to carry out the liquidation of the Company is such that the Company
should remain eligible for approval as an investment trust for the period which
includes the date on which its assets are transferred by the Liquidators
pursuant to the Transfer Agreement and, accordingly, that such transfer of
assets should not give rise to United Kingdom capital gains tax.
ii. Shareholders
Advance clearance has been requested from the Inland Revenue under TCGA Section
138 that TCGA Section 136 will not be prevented from applying to the issueof
the Units. The Directors are advised that implementation of the Proposals
should not, save as mentioned below, be treated of itself as constituting a
disposal by Shareholders for the purposes of United Kingdom capital gains tax
and, accordingly, to that extent any gain on Shares will be rolled over into
Units issued in respect of such Shares under the Proposals.
Any realisation of the Units (whether by redemption or sale), and any
distribution in the winding up of the Company, will constitute (inthe absence
of special circumstances, including a realisation as part of the future
reorganisation for tax purposes of the entity concerned) a disposal for United
Kingdom capital gains tax purposes of those Units and may give rise to a
liability to United Kingdom capital gains tax depending on the particular
circumstances of the Shareholder concerned.
Special Dividend
In view of the Company's need to maintain investment trust status under Section
842 of the Taxes Act for the current financial year,the Board will review
whether it is appropriate or necessary for the Company to declare and pay a
dividend ahead of the Second EGM in the period following the First EGM. A
further announcement will be made in due course, shortly before the Second EGM.
Extraordinary General Meetings
The First Extraordinary General Meeting is being convened for 11.00 am on 26
April 2004. At this meeting, a special resolution will be proposed which, if
passed, will amend the Articles of Association for the purposes ofthe Scheme
by reclassifying the Shares into the Reclassified Shares with "A" Rights and
"B" Rights respectively, depending on the elections made by Shareholders (the
required amendments to the Articles of Association are set out in the Notice of
the First EGM) and which will approve the implementation of the Scheme. The
resolution will require the approval of 75 per cent. of those Shareholders
voting in person or by proxy.
The Second Extraordinary General Meeting is being convened for 11.00 am on 10
June 2004. At this meeting resolutions will be proposed to wind up the Company,
appoint the Liquidators and to change the name of the Company, thus permitting
the Company's existing name to be used by any new investment fund launched by
the Investment Manager in the future. The resolution will require the approval
of 75 per cent. of those Shareholders voting in person or by proxy.
Overseas Shareholders
Overseas Shareholders will not receive a Form of Election and will receive cash
in respect of their entire holding unless they have satisfied the Directors
that it is lawful for Marlborough Special Situations Fund to issue Units to
them under the relevant overseas laws and regulations.
Investment considerations
In considering what option Shareholders should take they should carefully
consider the section above entitled "Risks of Investing in Marlborough Special
Situations Fund" and the information on Marlborough Special Situations Fund set
out in the Circular. If Shareholders are in any doubt as to the action they
should take they should seek advice immediately from an independent financial
adviser authorised under the Financial Services and Markets Act 2000.
Shareholders are reminded that, for the reasons set out in the section entitled
"Failure to make an election" above, if they make no election they shall be
deemed to have elected to receive Units in Marlborough Special Situations Fund.
The Directors have arranged for Shareholders to have the option to elect to
receive Units in Marlborough Special Situations Fund. However, Shareholders
should note that neither the Directors nor ING Investment Banking are otherwise
endorsing or recommending Marlborough Special Situations Fund and cannot be
held responsible to Shareholders in terms of the future performance of
Marlborough Special Situations Fund.
Recommendation
Since the choice between the options available to Shareholders will depend upon
each Shareholder's individual circumstances, the Directors cannot and do not
offer any recommendation as to which option(s) Shareholders should elect for.
The Directors, who have been advised by ING Investment Banking, believe that
the Proposals set out in the Circular are in the best interests of the Company
and of Shareholders as a whole andrecommend Shareholders to vote in favour of
all the resolutions being proposed at the Shareholder Meetings. In providing
its advice, ING Investment Banking has taken into account the Directors'
commercial assessments.
The Directors intend to vote in favour of all the resolutions in respect of
their own beneficial holdings amounting in aggregate to 90,000 Shares,
representing 0.36 per cent. of the Company's Shares outstanding.
Enquiries
Intrinsic Value
James West
Chairman 020 7767 1000
ING Investment Banking
Nicholas Gold
William Marle 020 7767 1000
A copy of the Circular has been submitted to the UK Listing Authority and is
available for inspection at the UK Listing Authority's Document Viewing
Facility, which is situated at:-
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
EXPECTED TIMETABLE
2004
Record Date 5.30 pm 23 April
Latest time and date for receiptof forms 11.00 am 24 April
of proxy for the First Extraordinary
General Meeting
Latest time and date for receipt of Forms 11.00 am 26 April
of Election
First Extraordinary General Meeting 11.00 am 26 April
Reclassification of Shares 8.00 am 27 April
Suspension of Reclassified Shares 8.00 am 29 April
Latest time for receipt of forms of proxy 11.00 am 8 June
for the Second Extraordinary General
Meeting
Second Extraordinary General Meeting 11.00 am 10 June
Effective Date 10 June
Expected date for first liquidation cash week commencing 14 June
payment
Statements despatched for Units week commencing 14 June
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
"Articles" the articles of association of the Company;
"Board" or "Directors" the directors of the Company;
"Business Day" any day (except Saturdays and Sundays) on
which banks and the principal recognised
exchanges in London are open for business;
"Calculation Date" the time and date to be determined by the
Directors but expected to be close of business
on 9 June 2004 at which the value of the
Company's assets will be calculated for the
purposes of the Scheme;
"Cash Option" the right to elect to receive cash as
described in the Circular;
"Cash Option Pool" a pool of assets representing the assets of
the Company required to meet the entitlements
of Shareholders who have elected, or are
deemed to have elected, for the Cash Option;
"Circular" the circular to Shareholders dated 2 April
2004 setting out the Proposals;
"Company" or "Intrinsic Value" Intrinsic Value plc;
"Effective Date" the date on which the Scheme becomes
effective, which is expected to be 10 June
2004;
"Form of Election" the form of election accompanying the
Circular;
"First Extraordinary General the extraordinary general meeting of the
Meeting" or "First EGM" Company convened for 11.00 am on 26 April 2004
(and including any adjournment thereof),
notice of which is set out in the Circular;
"ING Investment Banking" the investment banking division of ING Bank
N.V., London Branch;
"Investment Manager" as the context requires, Ghaliston Limited or
its representatives, Mr. Mark Horrocks and Mr.
Harry Stevenson;
"Investment Management the investment management agreement dated 7
Agreement" July 1999 as amended by agreements dated 23
August 2000 and 7 November 2002 which was
novated to the Investment Manager by way of a
novation agreement dated 6 January 2004;
"Liquidation Fund" the fund to be established by the Liquidators
under the Scheme to meet the outstanding
liabilities of the Company as described in
paragraph 5.1.1 of the Scheme in the Circular;
"Liquidators" the liquidators (jointly and severally) of the
Companyto be appointed at the Second
Extraordinary General Meeting;
"Marlborough Special Situations Marlborough Special Situations Fund, a unit
Fund" trust authorised by the Financial Services
Authority;
"Marlborough Fund Managers" Marlborough Fund Managers Ltd;
"Net Asset Value" or "NAV" the value of the capital assets of the Company
(excluding current period interest and
dividends) after deduction of all liabilities;
"Overseas Shareholders" save as otherwise determined by the Board
pursuant to paragraph 10 of the Scheme,
Shareholders who are resident in, or citizens,
residents or nationals of, jurisdictions
outside the United Kingdom, the Channel
Islands and the Isle of Man;
"Pool" or "Pools" the Cash Option Pool and/or the Unit Option
Pool as the context so requires;
"Proposals" the proposals for the winding-up of the
Company which will enable Shareholders to
receive cash or Units by way ofthe Scheme and
reclassification of the Company's Shares
through a change in the Articles, the
appointment of the Liquidators, and the change
of the Company's name;
"Proxy Forms" the forms of proxy for use in connection with
the Shareholder Meetings;
"Reclassified Shares" the Shares with "A" Rights and "B" Rights
arising pursuant to the Proposals;
"Record Date" close of business on 23 April 2004 being the
record date for the entitlements of
Shareholders to make elections under the
Scheme;
"Register" the register of members of the Company;
"Requisition Circular" the circular of the Company dated 4 February
2004;
"Revised Investment Management the Investment Management Agreement as
Agreement" amended by an agreement dated 2 April 2004;
"Scheme" the proposed scheme of arrangement under
Section 110 of the Insolvency Act 1986 and
under the Articles set out in the Circular;
"Second ExtraordinaryGeneral the extraordinary general meeting of the
Meeting" or "Second EGM" Company convened for 11.00 am on 10 June 2004
(or any adjournment thereof) notice of which
is set out in the Circular;
"Share" and "Shares" ordinary shares of 1p each in the capital of
the Company;
"Share with "A" Rights" a Reclassified Share the subject of a valid
election or deemed electionfor the Cash
Option;
"Share with "B" Rights" a Reclassified Share the subject of a valid
election or deemed election for the Unit
Option;
"Shareholders" holders of Shares;
"Shareholder Meetings" the First Extraordinary General Meeting and/or
the Second Extraordinary General Meeting as
the context so requires;
"Taxes Act" Income and Corporation Taxes Act 1988;
"TCGA" Taxation of Chargeable Gains Act 1992;
"Transfer Agreement" the agreement to be entered into between the
Company and Marlborough Fund Managers and HSBC
Bank plc, as described inthe Circular;
"Units" units in Marlborough Special Situations Fund;
"Unit Option" the right to elect to receive Units as
described in the Circular;
"Unit Option Pool" a pool of assets representing the assets of
the Company required to meet the entitlements
of Shareholders who have elected, or are
deemed to have elected, for the Unit Option.
PAGE 10
END
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