Queen's Walk Investment Limited
13 September 2007
Tender Offer Announcement
On 2 August 2007, Queen's Walk Investment Limited (the 'Company') announced that
it intended to buy back at least 10 per cent. of its existing ordinary shares in
issue ('Ordinary Shares') by means of a tender offer.
The Company has today sent a circular (the 'Tender Offer Circular') to Eligible
Shareholders (as defined in the Tender Offer Circular) detailing its proposed
tender offer to purchase up to 24.99 per cent. of its Ordinary Shares and
thereby to return a maximum of €25 million in cash to shareholders (the 'Tender
The Tender Offer will be open from 13 September to 3.00 p.m. on 27 September
2007 and is being made at a price per Ordinary Share of up to €6.30 (the '
Maximum Price'). The Maximum Price represents a premium of approximately 34 per
cent. over the middle market closing price (as derived from the Daily Official
List of the London Stock Exchange) of €4.70 per Ordinary Share on 11 September
The Tender Offer is conditional on the approval of shareholders at the
extraordinary general meeting of the Company to be held at 12.30 p.m. on 8
October 2007. The Tender Offer is only available to Eligible Shareholders in
respect of the number of Ordinary Shares registered in those shareholders' names
at 5.00 p.m. on 27 September 2007 (the 'Record Date').
Background to and reasons for the Tender Offer
The Directors recognise that, although the Ordinary Shares are traded on the
main market of the London Stock Exchange and the Company has a policy of buying
its Ordinary Shares in the market for cancellation, the Ordinary Shares have
been consistently priced at a discount to their underlying asset value.
In arriving at the maximum number and price range of Ordinary Shares to be
repurchased, the Board of the Company has taken account of current market
conditions which have increased the volatility surrounding the fair value of the
Company's portfolio. The Company remains comfortable in the cash generative
capability of its assets and believes that the cash available to the Company is
sufficient to continue with the Tender Offer within the parameters specified.
The Tender Offer
The Tender Offer Circular which contains the formal terms and conditions of the
Tender Offer, and a tender form, containing instructions to shareholders on how
to tender their Ordinary Shares should they choose to do so, were today sent to
The Company is proposing to return up to €25 million in cash through a purchase
of at least 10 per cent. and not more than 24.99 per cent. of its existing
Ordinary Shares. Once purchased, those Ordinary Shares will be cancelled and
will not be available for re-issue.
The Tender Offer is being made available to Eligible Shareholders on the
register of members at the Record Date. Eligible Shareholders may participate in
the Tender Offer by tendering all or a proportion of the Ordinary Shares held by
them at the Record Date.
The Directors who are beneficially interested in Ordinary Shares have indicated
that they will not tender Ordinary Shares pursuant to the Tender Offer.
The Company has been informed on behalf of Cheyne ABS Opportunities Fund L.P.
that, with the support of its largest investor, Cheyne Special Situations Fund
L.P., it will not be participating in the Tender Offer. Cheyne ABS Opportunities
Fund L.P. is the holder of 17,900,756 Ordinary Shares representing approximately
45 per cent. of the issued Ordinary Shares.
Tender offer opens 13 Sept
Latest time and date for receipt of Tender Forms 3 p.m. on 27 Sept
Record Date for the Tender Offer 5 p.m. on 27 Sept
Announcement of Strike Price 28 Oct
Latest time and date for receipt of the Form of Proxy 12:30 p.m. on 6 Oct
Extraordinary General Meeting 12.30 p.m. on 8 Oct
Announcement of result of Extraordinary General Meeting 8 Oct
CREST accounts credited with Tender Offer proceeds and revised 15 Oct
holdings of uncertificated Ordinary Shares
Despatch of cheques for Tender Offer proceeds for certificated 15 Oct
Despatch of balance share certificates for unsold Ordinary Shares and 15 Oct
share certificates for unsuccessful tenders (certificated holders
On 4 September 2007, the Company announced its results for the first quarter
ending 30 June 2007. The net asset value of the Company's portfolio as at 30
June 2007 was €7.01 per share. Since 30 June 2007, volatility in the European
ABS markets has increased significantly as capital has been withdrawn from the
sector. Significant market events outside of the Company's control may cause
the discount rates applied by market participants to the UK, European and SME
residuals to widen. While a widening of discount rates would not affect the
cash generative capability of the Company's residuals, this may have a material
impact on the Company's NAV in future periods.
The Company's net leverage as at 30 June 2007 was 3.0% and will increase
following the completion of the Tender Offer.
For further information please contact:
Caroline Villiers +44 (0) 20 7153 1521
About Queen's Walk
Queen's Walk Investment Limited is a Guernsey-incorporated investment company
listed on the London Stock Exchange. The Company's investment objective is to
preserve capital and to provide stable returns to shareholders in the form of
quarterly dividends. To achieve this, Queen's Walk invests primarily in a
diversified portfolio of subordinated tranches of asset backed securities,
including the unrated 'equity' or 'first loss' residual income position
typically retained by the banks or other financial institutions which have
originated the loan assets that collateralise a securitisation transaction. The
Company makes such investments where its investment manager, Cheyne Capital
Management Limited, considers the coupon or cash flows from the investment to be
attractive relative to the credit exposure of the underlying asset collateral.
The Company believes that its investment focus provides equity investors with
exposure to a relatively new investment opportunity in this asset class.
This information is provided by RNS
The company news service from the London Stock Exchange