Following recent announcements by the Board regarding the future of the Company, the Board is pleased to confirm that it has agreed in principle to proposals that it believes will achieve the Board's objective of offering an attractive continuing vehicle and a cash exit for shareholders (the "Proposals").
The Company's existing manager is to be acquired by Phoenix Asset Management Partners Limited ("Phoenix"). It is then intended that the Company's investment policy and strategy will reflect the successful investment style adopted by Phoenix since its establishment in 1998. Phoenix aims to deliver excellent long term returns investing in UK listed equities by identifying great companies managed by honest and aligned managers and buying them when they trade at attractive prices. Phoenix takes a long term view and ignores interim market volatility. Phoenix intends to build a portfolio consisting of 15 to 20 holdings with a concentration in the top holdings.
Since its founding in 1998, the Phoenix UK Fund has risen by 438.6% (10.2% per annum) compared to 116.5% (4.6% per annum) for the FTSE All Share including dividends. Phoenix currently manages approximately £570m.
It is also intended that a new investment management agreement will be entered into under which Phoenix will receive no base management fee but will be entitled to a performance fee based on annual outperformance of the FTSE All Share Total Return, payable in new shares, and subject to a high watermark and annual cap.
The Board also intends to implement a tender offer for all shareholders at a 2% discount to the net asset value per share after associated expenses following the introduction of the new investment strategy and the portfolio realignment.
Following the tender offer, the Board and Phoenix believe that the Company will be an attractive investment opportunity for many new investors and intend to grow the Company over time through the issue of shares at a premium to net asset value. Clients of Phoenix already own approximately 22% of the Company's issued shares and will not tender their shares under the tender offer.
The Proposals remain subject to the negotiation of appropriate agreements. The Proposals are subject to the approval in a general meeting of the Company's shareholders. The Board intends to publish a shareholder circular with further details on the Proposals in the forthcoming weeks. It is expected that the change of manager and new investment policy will be implemented by the end of November 2015 and the tender offer will be completed no later than the end of January 2016.
Posted on 24 September 2015