Proposed Merger

 
TIDMPNV5 
 
THE AIM DISTRIBUTION TRUST PLC 
PENNINE AIM VCT 5 PLC 
PENNINE AIM VCT 6 PLC 
 
26 FEBRUARY 2010 
 
RECOMMENDED PROPOSALS FOR A MERGER ("Merger") BETWEEN THE AIM DISTRIBUTION TRUST 
PLC  ("AIMDIT" or "the  Company"), PENNINE AIM  VCT 5 PLC ("P5") AND PENNINE AIM 
VCT  6 PLC ("P5") TO BE  COMPLETED BY PLACING P5  AND P6 INTO MEMBERS' VOLUNTARY 
LIQUIDATION  PURSUANT TO SECTION 110 OF THE INSOLVENCY ACT 1986 AND THE TRANSFER 
BY  P5 AND P6 OF ALL OF THEIR  ASSETS AND LIABILITIES TO AIMDIT IN CONSIDERATION 
FOR  NEW ORDINARY SHARES OF 1 PENCE EACH IN AIMDIT ("NEW AIMDIT SHARES") AND THE 
CANCELLATION OF THE LISTING OF THE ORDINARY SHARES OF P5 AND P6 AND AN OFFER FOR 
SUBSCRIPTION BY AIMDIT TO RAISE UP TO  GBP15M 
 
SUMMARY 
The  boards of  AIMDIT, P5  AND P6  announced on  30 November 2009 that they had 
agreed,  in principle and subject to shareholder approval, terms with each other 
with a view to merging the three companies together to create one larger entity. 
 The  boards of  each company  are now  writing to their respective shareholders 
with proposals for consideration of the proposed mergers ("the Schemes"). 
 
The  Schemes will be effected by P5  and P6 being placed into members' voluntary 
liquidation  pursuant  to  schemes  of  reconstruction  under Section 110 of the 
Insolvency  Act 1986.  All of  the assets and  liabilities of P5  and P6 will be 
transferred  to AIMDIT in exchange  for New AIMDIT Shares  (which will be issued 
directly  to the shareholders of  P5 and P6). The  merger will be completed on a 
relative net asset basis. 
 
The  effective date for the transfer of the  assets and liabilities of P5 and P6 
and  the issue of New AIMDIT Shares pursuant to the Schemes is expected to be 1 
April  2010 ("the Effective Date"), following which the listing of the P5 and P6 
will be cancelled and P5 and P6 will be wound up. 
 
The  Schemes are conditional, inter  alia, on the approval  of resolutions to be 
proposed  to shareholders of AIMDIT, P5 and P6 at general meetings to be held on 
24 March  2010 (for each of AIMDIT  ("AIMDIT GM") and P5  ("P5 GM1") and P6 ("P6 
GM1"))  and 1 April 2010 (for P5  ("P5 GM2") and P6  ("P6 GM2")) and dissent not 
having  been expressed by shareholders of P5 an P6 holding more than 5 per cent. 
of the issued P5 or P6 share capital. 
 
Along  with the  Merger proposals,  a number  of further  plans and proposals in 
respect  of AIMDIT are set out in  the documentation sent to shareholders, which 
are summarised as follows: 
  * Adoption  of a revised investment policy  with a reduced focus on AIM-quoted 
    investments   and  appointment  of  Downing  Corporate  Finance  Limited  as 
    investment manager 
  * Change of name to "Downing Distribution VCT 1 plc" 
  * Consolidation  of AIMDIT Shares prior to completion of the Schemes such that 
    the net asset value of each new AIMDIT Share will be  GBP1.00. 
  * An  Offer for Subscription  seeking to raise  up to  GBP15  million.  The Share 
    Offer  in  respect  of  the  tax  year  ending  5 April  2010 will close for 
    subscriptions  on 5 April 2010.  The Share Offer  in respect of the tax year 
    ending 5 April 2011 will close for subscriptions on 31 May 2010. 
 
 
BACKGROUND 
The  Boards of  each of  AIMDIT, P5  and P6  have been reviewing options for the 
future of each VCT in view of the fact that each VCT is now quite small. 
 
The  Boards have now agreed proposals for the  three VCTs to merge to create one 
larger  and more commercially viable fund and,  at the same time, providing cost 
benefits to shareholders of each company. 
 
The key benefits of merging the three VCTs are as follows: 
 
  * the  creation of a single  VCT of a more  economically efficient size with a 
    greater  capital base  over which  to spread  administration, regulatory and 
    management  costs producing  a reduction in  the annual running costs of the 
    Enlarged  Company compared to the total annual running costs of the separate 
    companies; 
 
 
  * participation  in a  larger VCT  with a  more diversified  portfolio thereby 
    spreading  the  portfolio  risk  across  a  broader range of investments and 
    businesses; 
 
 
  * an  enhanced ability to  pay dividends and  the operation of  a strong share 
    buyback  policy due to the  increased size and the  reduced running costs of 
    the Enlarged Company; and 
 
 
  * an  increased flexibility in continuing to  meet the various requirements of 
    the VCT Rules. 
 
 
Shareholders  should note that the Mergers will be outside the provisions of the 
City Code on Takeovers and Mergers. 
 
EXPECTED TIMETABLE 
 
 
 Offer for Subscription open                     26 February 2010 
 
 Latest  time for receipt of  forms of proxy for 10.30 am on 22 March 2010 
 the General Meeting 
 
 AIMDIT GM                                       10.30 am on 24 March 2010 
 
 P5 GM1                                          11.10 am on 24 March 2010 
 
 P6 GM1                                          10.50 am on 24 March 2010 
 
 Record Date for the Share Consolidation         31 March 2010 
 
 Calculation Date                                after 5.00 pm on 31 March 2010 
 
 P5 GM2                                          11.00 am on 1 April 2010 
 
 P6 GM2                                          11.15 am on 1 April 2010 
 
 Effective  Date for the Share Consolidation and 1 April 2010 
 the  transfer of the  assets and liabilities of 
 P5  and  P6  to  the  Company  and the issue of 
 Consideration Shares to P5 and P6 Shareholders* 
 
 Announcement of the results of the Schemes      1 April 2010 
 
 Closing date for 2009/10 Offer for Subscription 5 April 2010 
 and allotment of shares 
 
 Admission of and dealings in the New Shares (in 6 April 2010 
 respect  of the Share  Consolidation and/or the 
 Schemes) to commence 
 
 CREST accounts credited with the New Shares (in 6 April 2010 
 respect  of the Share  Consolidation and/or the 
 Schemes) 
 
 Cancellation of the P5  and P6 Shares' listing  8.00 am on 6 April 2010 
 
 Certificates  for the New Shares dispatched (in 13 April 2010 
 respect  of the Share  Consolidation and/or the 
 Schemes) 
 
 Closing    date    for    20010/11 Offer    for 31 May 2010 
 Subscription and allotment of shares 
 
 
(*this will, therefore, be the final expected date of trading of the ordinary 
shares of 25p each in the capital of the Company) 
 
 
BACKGROUND TO AIMDIT, P5 AND P6 
 
AIMDIT  was  incorporated  in  January  1996 and,  during  1996 and 1997, raised 
approximately   GBP16 million, which  it subsequently used  to build a portfolio of 
AIM-quoted  investments. As at 30 September 2009 (the  date of the AIMDIT's most 
recently published half-yearly report), the AIMDIT's unaudited NAV was 39.5p per 
Share.  Since incorporation the AIMDIT  has paid a total  of 57.55p per Share in 
dividends. 
 
P5  raised some  GBP21.4 million in 2005 and  is now invested in some 34 companies. 
As  at 31 December 2009 (the date to which the most recent unaudited half-yearly 
report on the P5 has been drawn up), P5's unaudited NAV was  GBP6.2 million. P5 has 
paid  some  GBP6.9 million to its shareholders  as dividends and spent  GBP0.3 million 
on share buybacks since its launch.  As at 31 January 2010, the unaudited NAV of 
the Company was  GBP6.3 million. 
 
P6  raised some  GBP25 million in 2006 and is now invested in some 33 companies. As 
at  30 September  2009 (the  date  to  which  the  most recent audited financial 
information on P6 has been drawn up), P6's audited NAV was  GBP11.0 million. P6 has 
paid  some  GBP7.1 million to its shareholders as dividends since its launch. As at 
31 January 2010, the unaudited NAV of the Company was  GBP11.0 million. 
 
The  directors of each of AIMDIT, P5  and P6 have considered the Company's Board 
requirements  following the proposed  mergers. Andrew Davison,  a director of P5 
and  James Leek, also a director  of P5, have agreed not  to seek a place on the 
Board  of the merged entity.   Following completion of the  Schemes, it has been 
agreed  that Christopher Powell, as chairman of the largest of the three merging 
entities, will take over as Chairman and Michael Cunningham will join the Board. 
 
 
DOCUMENTS AND APPROVALS 
 
AIMDIT  shareholders will also receive a copy of a circular convening the AIMDIT 
GM  to be held on  24 March 2010 (together with the  AIMDIT prospectus) at which 
AIMDIT  shareholders will be  invited to approve  resolutions in connection with 
the  Schemes,  to  consolidate  the  Company's  share  capital, to authorise the 
directors  to  allot  shares,  to  approve  the  acquisition  of  the assets and 
liabilities  of P5 and P6 pursuant to the  Schemes, to change the name of AIMDIT 
to  "Downing Distribution VCT 1 plc", to amend the Company's  Investment Policy, 
to  adopt new Articles of  Association, to cancel the  share premium account, to 
cancel  the  capital  redemption  reserve  and  to  renew  share issue and share 
repurchase authorities. 
 
P5  shareholders will receive a circular convening  the P5 GM1 on 24 March 2010 
and  P5 GM2 on  1 April 2010 (together with  the AIMDIT prospectus)  at which P5 
shareholders  will  be  invited  to  approve  resolutions in connection with the 
Schemes. 
P6  shareholders will receive a circular convening  the P6 GM1 on 24 March 2010 
and  P6 GM2 on  1 April 2010 (together with  the AIMDIT prospectus)  at which P6 
shareholders  will  be  invited  to  approve  resolutions in connection with the 
Schemes. 
Copies  of the  prospectus and  the circulars  for AIMDIT,  P5 and  P6 have been 
submitted  to  the  UK  Listing  Authority  and  will  be  shortly 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 
Telephone: [phone] 
 
Company Secretary for AIMDIT, P5 and P6 
Grant Whitehouse 
Telephone: [phone] 
 
Sponsor to AIMDIT 
Howard Kennedy 
Keith Lassman 
Telephone: [phone] 
 
The  directors and  proposed director  of AIMDIT  accept responsibility  for the 
information relating to AIMDIT and its directors contained in this announcement. 
To  the best of the  knowledge and belief of  such directors (who have taken all 
reasonable  care to ensure that  such is the case),  the information relating to 
AIMDIT  and its  directors contained  in this  announcement, for  which they are 
solely  responsible, is in accordance with the  facts and does not omit anything 
likely to affect the import of such information. 
 
The directors of P5 accept responsibility for the information relating to P5 and 
its  directors contained in this announcement. To  the best of the knowledge and 
belief of such directors (who have taken all reasonable care to ensure that such 
is the case), the information relating to P5 and its directors contained in this 
document, for which they are solely responsible, is in accordance with the facts 
and does not omit anything likely to affect the import of such information. 
 
The directors of P6 accept responsibility for the information relating to P6 and 
its  directors contained in this announcement. To  the best of the knowledge and 
belief of such directors (who have taken all reasonable care to ensure that such 
is the case), the information relating to P6 and its directors contained in this 
document, for which they are solely responsible, is in accordance with the facts 
and does not omit anything likely to affect the import of such information. 
 
Howard  Kennedy, which is authorised and regulated  in the United Kingdom by the 
Financial  Services Authority, is  acting as sponsor  for AIMDIT and no-one else 
and  will not be responsible  to any other person  for providing the protections 
afforded  to customers  of Howard  Kennedy (subject  to the responsibilities and 
liabilities imposed by FSMA and the regulatory regime established thereunder) or 
for providing advice in relation to any matters referred to herein. 
 
 
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