Proposed combination with BH Global Limited
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR TO ANY US PERSON, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, ANY EUROPEAN ECONOMIC AREA STATE OR ANY OTHER JURISDICTION IN WHICH ITS DISTRIBUTION MAY BE UNLAWFUL.
This announcement is an advertisement and not a prospectus for the purposes of the Prospectus Regulation Rules of the Financial Conduct Authority ("FCA") or otherwise. Investors should not subscribe for or purchase any securities referred to in this announcement except solely on the basis of the information contained in the prospectus of BH Macro Limited (together with any supplementary prospectus, if relevant) including the risk factors set out therein. A copy of the prospectus will be available for inspection at BH Macro Limited’s registered office and website at www.bhmacro.com (subject to certain access restrictions) and at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION
BH MACRO LIMITED
(a closed-ended investment company incorporated in Guernsey with registration number 46235)
LEI: 549300ZOFF0Z2CM87C29
30 June 2021
Proposed combination with BH Global Limited
The Board of BH Macro Limited (the “Company” and “BHMG”) is pleased to announce that it has today published a prospectus (the “Prospectus”) in connection with the issue of shares of the Company (the “Shares” and the “Issue”) pursuant to the proposed combination with BH Global Limited (“BHGG” and the “Combination”) announced on 28 May 2021 and to be effected by way of a scheme of reconstruction of BHGG (the “Scheme”).
BHGG has also today published a circular (the “Circular”) to its shareholders (the “BHGG Shareholders”) in respect of the Scheme.
The Scheme is subject to BHGG Shareholder approval at an extraordinary general meeting and class meetings of BHGG scheduled to be held on 19 July 2021 (the “Scheme Meetings”).
Pursuant to the Scheme, BHGG Shareholders will be able to elect to receive in exchange for their existing shareholdings in BHGG either:
· shares of the Company of the same currency class and with the same value as their holding of BHGG shares on the basis of the net asset value per share of the relevant class of the Company and the residual net asset value per share of the relevant class of BHGG as at close of business on 31 July 2021 (the “Shares Option”); or
· a cash amount equal to 97.8% of the residual net asset value per share of each BHGG share held as at close of business on 31 July 2021 plus an additional amount per share to offset the impact of the increase of the BHGG management fee effective from 1 July 2021 (the “Cash Option”).
The Company’s net asset value figures used for these purposes will not include any uplift that may otherwise have been created by the Company’s own share tender offer commenced on 2 June 2021 (the “Tender Offer”).
As set out more specifically in the Circular, the residual net asset value of each class of shares of BHGG will be the net asset value per share of the relevant class as at 31 July 2021 adjusted downwards to take account of any liabilities or provisions that were not otherwise included in the calculation of the net asset value, including any retention made by the liquidators of BHGG in respect of any unknown or unascertainable liabilities of BHGG.
The Issue is conditional upon:
· the passing of the resolutions to be proposed at the Scheme Meetings (or any adjournment thereof) and all conditions to those resolutions (excluding any condition relating to the passing of any other resolution) being fulfilled;
· the BHGG directors not resolving to abandon the Scheme; and
· the FCA having agreed to admit the Shares to be issued pursuant to the Scheme to the premium segment of the Official List and the London Stock Exchange having agreed to admit the Shares to trading on the main market for listed securities of the London Stock Exchange.
Assuming that the Scheme is approved by BHGG Shareholders and the other conditions to the Issue are met, it is anticipated that the Shares will be issued or sold from treasury to the BHGG Shareholders electing for the Share Option on or around 26 August 2021, following publication of the final net asset values per share for each of BHMG and BHGG as at 31 July 2021.
Only BHGG Shareholders who are resident in, or have a registered address in, the United Kingdom, Guernsey or Jersey and certain Swiss investors, in each case who are not US Persons (as defined below), are entitled to elect for the Share Option, and will be deemed to have elected for the Share Option if they do not elect for the Cash Option. All other BHGG Shareholders will receive the Cash Option. Elections must be made by BHGG Shareholders by 14 July 2021.
Assuming that the Scheme is approved, the assets of BHGG attributable to shares for which Share Option elections are made will be transferred to the Company for investment in Brevan Howard Master Fund Limited, effective 2 August 2021. Any other assets of BHGG remaining after payment of the Cash Option and the liabilities and costs of the liquidation of BHGG (including BHGG’s costs in respect of the Scheme) will also be transferred to the Company, subject to the retention made by the liquidators of BHGG in respect of any unknown or unascertainable liabilities of BHGG.
BHGG will meet its costs of the Scheme out of those of its assets representing the difference between the payments made by BHGG in respect of Cash Option elections and the residual net asset value of the shares in respect of which those elections were made. Assuming that the Scheme is approved by BHGG’s shareholders, the Company has agreed to make a contribution to BHGG of up to £750,000 to cover any shortfall if such assets prove insufficient to meet BHGG’s costs of the Scheme (which will depend upon the extent of Cash Option elections made by BHGG’s shareholders).
The costs of the Issue and, if relevant, any contribution made by the Company towards BHGG’s costs of the Scheme, will be borne by the Company up to an amount equal to the aggregate of (a) the amount by which the price paid by the Company to acquire Shares in the Tender Offer is less than the net asset value attributable to those Shares and (b) the amount of any assets transferred by BHGG to the Company in addition to those attributable to shares for which Share Option elections are made.
To the extent that the costs of the Issue and any contribution made by the Company towards BHGG’s costs of the Scheme exceeds this aggregate amount (which will depend on the number of Shares validly tendered in the Tender Offer and the number of elections for the Cash Option), Brevan Howard Capital Management LP, the Company’s manager, has agreed to pay the excess, up to a maximum of £5 million (inclusive of any value added tax).
Accordingly, the Scheme and the Issue should be neutral (and may be accretive) on a NAV per share basis for BHMG shareholders owning Shares following completion of the Tender Offer and the Issue. To the extent that Shares are issued (or sold from treasury) to satisfy elections for the Share Option pursuant to the Scheme, BHMG shareholders should benefit from the spreading of the Company’s fixed costs over a wider asset base and potentially greater liquidity in the Shares.
A copy of the Prospectus will available for inspection at BH Macro Limited’s registered office and website at www.bhmacro.com (subject to certain access restrictions) and at the National Storage Mechanism via https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Enquiries:
Richard Horlick
Chairman
William Simmonds
J.P. Morgan Cazenove
020 7742 4000
Edward Berry / Josh Sarson
FTI Consulting
07703 330 199 / 0755 499 1072
Important notices
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.
Any decision to elect for the Shares Option should be made solely on the basis of information contained in the Prospectus. Before electing for the Shares Option, persons viewing this announcement should ensure that they fully understand and accept the risks set out in the Prospectus. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. Nothing in this announcement shall form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.
BHGG Shareholders should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Shares. The value of shares can decrease as well as increase. BHGG Shareholders should consult a professional advisor as to the suitability of the Shares Option for the person concerned.
Nothing contained herein constitutes or should be construed as (i) investment, tax, financial, accounting or legal advice (ii) a representation that any investment or strategy is suitable or appropriate to individual circumstances or (iii) a personal recommendation.
J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Combination and the Issue and will not be responsible to anyone other than the Company for providing the protections afforded to customers of J.P. Morgan Cazenove or for providing advice in relation to the Combination, the Issue or any other matter referred to herein.
This announcement does not constitute an offer or solicitation to acquire or sell any securities in the Company. This announcement is not for distribution in or into the United States or to any US Person, Australia, Canada, Japan, New Zealand, the Republic of South Africa, any European Economic Area state or any other jurisdiction in which its distribution may be unlawful. A “US Person“ is any person who is not a “Non-United States Person” as defined in US Commodity Futures Trading Commission Rule 4.7. This announcement is not an offer of securities for sale in the United States or elsewhere. The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration. The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended, and investors are not entitled to the benefits of that Act. There has not been and there will be no public offering of the Company's securities in the United States.
Information to Distributors
Solely for the purposes of the product governance requirements contained within (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“Directive 2014/65/EU”), (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU, (c) local implementing measures or (d) (where applicable to UK investors or UK firms) the relevant provisions of the UK MiFID Laws (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares to be issued pursuant to the Issue are (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Directive 2014/65/EU or the UK MiFID Laws (as applicable) and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU or the UK MiFID Laws, as applicable (the “Target Market Assessment”).
Notwithstanding the Target Market Assessment, distributors should note that the price of the Shares may decline and investors could lose all or part of their investment, the Shares offer no guaranteed income and no capital protection, and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue.
For the avoidance of doubt, the Target Market Assessment does not constitute (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU, or the UK MiFID Laws, as applicable or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Shares and determining appropriate distribution channels.
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