Publication of Circular
Summary by AI BETAClose X
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in any jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.
6 November 2026
JPMorgan US Smaller Companies Investment Trust plc
Legal Entity Identifier: 549300MDD7SOXDMBN667
Proposed Combination with Brown Advisory US Smaller Companies PLC
Publication of Circular
The Board of JPMorgan US Smaller Companies Investment Trust plc ("JUSC" or the "Company") announced on 7 October 2026 that it had agreed heads of terms with the Board of Brown Advisory US Smaller Companies PLC ("BASC") in respect of a combination of the two companies, to be effected by way of a scheme of reconstruction and members' voluntary liquidation of BASC pursuant to section 110 of the Insolvency Act 1986 (the "Scheme").
The Board announces that the Company has today published a circular to provide the Company's shareholders (the "JUSC Shareholders") with further details of the Scheme and associated proposals (the "Proposals"), and to convene a general meeting of the Company (the "General Meeting") to seek approval from JUSC Shareholders for the implementation of the Proposals (the "Circular").
The Proposals, which are set out in further detail below, are expected to enhance JUSC's position to deliver attractive long-term returns to shareholders. The increased scale of the enlarged JUSC should also improve secondary market liquidity for JUSC's shareholders, enhance the profile of the Company and deliver further cost efficiencies. Furthermore, a significant contribution from JPMorgan Funds Limited ("JPMF") allows such benefits to be provided on a cost-effective basis.
The Circular will shortly be available for inspection at the National Storage Mechanism which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at www.jpmussmallercompanies.co.uk.
JUSC has also published an information document containing a summary of the Proposals and further information on JUSC for the benefit of BASC Shareholders, which will shortly be available on the Company's website at www.jpmussmallercompanies.co.uk.
Benefits of the Proposals
The Proposals are expected to result in the following benefits for Shareholders:
- Create a stronger investment trust positioned to deliver attractive long-term returns from US smaller companies: As the only two dedicated UK-listed US smaller companies trusts, the boards of both BASC and JUSC believe that the investment trust structure provides significant advantages when investing in this asset class. This is an opportunity to create a strengthened proposition for the benefit of both companies’ long-term shareholders and for future cohorts of investors.
- Scale: Post transaction, the increased scale of JUSC should offer improved secondary market liquidity in the enlarged JUSC and result in cost efficiencies. As part of the Scheme and conditional upon the Scheme completing, the Manager has agreed to reduce the enlarged JUSC's management fee to 0.65 per cent. on the first £200 million of net assets, and 0.60 per cent. on net assets thereafter (currently 0.70 per cent. on net assets up to £300 million, and 0.60 per cent. thereafter). JUSC has a current ongoing charges ratio of 0.95 per cent., and this is expected to reduce as a result of the transaction.
- Discount management: Post transaction, JUSC would continue to operate a robust discount management policy through share buybacks and its regular 5-yearly continuation votes. As part of the Proposals, JUSC will supplement this policy by introducing a 5-yearly conditional tender offer from 1 January 2027 for 30 per cent. of its own shares occurring at a 2 per cent. discount to NAV, triggered if two conditions are both met: if JUSC underperforms the Russell 2000 Index total return with net dividends reinvested, expressed in sterling (the “Benchmark”) over the trailing five-year period; and if the average share price discount to NAV over the preceding twelve months is wider than 5 per cent.
- JPMorgan’s extensive resources and commitment: JPMorgan is highly supportive of its investment trust business and has a dedicated client team of over 40 individuals responsible for the servicing of its investment trust clients. JPMorgan has agreed to make a substantial financial contribution, equivalent to a minimum of 12 months’ management fee on the net assets transferred to the enlarged JUSC by BASC in order to insulate JUSC Shareholders from the costs of the Transaction. In addition, the Manager is making a separate contribution, post-transaction, to the enlarged JUSC’s marketing and promotional activities, which will benefit all shareholders of the enlarged JUSC.
Overview of the Scheme
The Scheme, if approved by BASC Shareholders, will be implemented by way of a scheme of reconstruction and members’ liquidation of BASC pursuant to section 110 of the Insolvency Act.
In connection with the Scheme, BASC Shareholders will be offered the opportunity to elect for a cash exit opportunity (the "Cash Option"). BASC Shareholders who do not elect for the Cash Option will be deemed, under the terms of the Scheme, to have elected to receive the New JUSC Shares (the "Rollover Option"), subject to the separate arrangements for Excluded Shareholders detailed in the section titled "Overseas BASC Shareholders" below.
Pursuant to the Scheme, BASC will be put into liquidation and its assets split into three separate pools comprising: (i) the interests of continuing BASC Shareholders who wish to roll over into JUSC (the "Rollover Pool"), (ii) cash to satisfy the Cash Option (the "Cash Pool") and (iii) cash, assets and undertakings (including any assets not suitable to be transferred to JUSC) that the proposed liquidators consider sufficient to meet the current and future, actual and contingent liabilities of, and any other amounts payable by, BASC, including any Transaction Costs not already paid (in each case, including any VAT in respect thereof), together with a retention for the proposed liquidators to provide for any unascertained, unknown or contingent liabilities of BASC (such amount not expected to exceed £100,000 in aggregate) (the "Liquidators' Retention") (the "Liquidation Pool").
The issue of New JUSC Shares will be calculated on a formula asset value ("FAV”) to FAV basis. FAVs for the purposes of the Scheme will be calculated in accordance with BASC's and JUSC's normal accounting policies and will take into account the adjustments outlined below.
The Residual NAV shall be equal to the NAV of BASC (as determined in accordance with BASC's normal accounting policies), less the value of the cash, assets and undertakings appropriated to the Liquidation Pool together with the Liquidators' Retention.
Cash entitlements under the Cash Option will be calculated on the basis of the Cash FAV, which will be calculated as the Residual NAV multiplied by the percentage of BASC Shares that are elected or deemed elected, for the Cash Option, less a discount of 0.75 per cent. of such amount (the “Cash Option Discount”).
The Cash FAV per BASC Share shall equal the Cash FAV divided by the total number of BASC Shares in respect of which BASC Shareholders are elected or deemed elected, for the Cash Option.
The Rollover Pool FAV shall be equal to the Residual NAV multiplied by the percentage of BASC Shares that deemed to have elected for the Rollover Option, plus the benefit of the relevant part of the Cash Option Discount and the relevant part, if any, of the Management Fee Waiver (to the extent applicable to the Rollover Pool FAV).
The Rollover Pool FAV per Share shall be calculated as the Rollover Pool FAV divided by the number of BASC Shares that are deemed to have elected for the Rollover Option.
The JUSC FAV shall be equal to the JUSC NAV (as determined in accordance with JUSC's normal accounting policies) as at the Calculation Date less the JUSC Transaction Costs not already reflected in the JUSC NAV, plus the benefit of the relevant part of the Management Fee Waiver and the relevant part, if any, of the Cash Option Discount (in each case to the extent applicable to the JUSC FAV).
The JUSC FAV per Share shall be equal to the JUSC FAV divided by JUSC's issued share capital (excluding any Shares held in treasury) as at the Calculation Date.
BASC Shareholders who are deemed to have elected for the Rollover Option shall have New JUSC Shares issued to them based on the ratio of the Rollover Pool FAV per Share to the JUSC FAV per Share, multiplied by the number of BASC Shares that are deemed to have elected for the Rollover Option.
The Rollover Pool FAV per Share, the Cash FAV per BASC Share and the JUSC FAV per Share, together with the total number of New JUSC Shares to be issued under the Scheme is expected to be announced on 15 December 2026.
Overseas BASC Shareholders
An Overseas BASC Shareholder (being a BASC Shareholder who has a registered address outside, or who is resident in, or a citizen or national of, a jurisdiction outside, the United Kingdom or New Zealand) will not be entitled to receive New JUSC Shares under the Scheme unless they have satisfied JUSC and the Liquidators (taking appropriate advice), that they are entitled to receive and hold New JUSC Shares without breaching any relevant securities laws and without the need for compliance on the part of JUSC and/or JPMF with any overseas laws, regulations, filing requirements or the equivalent (to which none of JUSC or JPMF, as applicable, would be subject but for the issue of New JUSC Shares to such Overseas BASC Shareholder). If an Overseas BASC Shareholder does not satisfy JUSC and the Liquidators as set out above, such Overseas BASC Shareholder will be an "Excluded Shareholder".
Costs of the Proposals
Costs of BASC
The costs directly incurred (or to be incurred) by BASC in connection with the implementation of the Scheme primarily comprise legal fees, financial advisory fees, termination fees (including FundRock, Brown Advisory and third-party service providers), the remuneration payable to the Liquidators and other professional advisory fees (the "BASC Transaction Costs").
The BASC Transaction Costs are expected to be approximately £880,000, inclusive of VAT which is assumed to be irrecoverable, where applicable. The estimate of the BASC Transaction Costs excludes the Liquidators' retention to cover unknown liabilities of BASC (estimated at £100,000). The Liquidators' retention will be retained by the Liquidators to meet any unascertained, unknown or contingent liabilities of BASC. To the extent that some or all of the Liquidators' retention remains when the Liquidators decide to close the liquidation, this will be returned to BASC Shareholders that were on the register of members of BASC as at the Record Date, provided that if any such amount payable to any BASC Shareholder is less than £5.00, it shall not be paid to the BASC Shareholder but instead shall be retained by BASC and paid by the Liquidators to BASC's nominated charity.
Costs of JUSC
The costs directly incurred (or to be incurred) by JUSC in connection with the implementation of the Proposals primarily comprise legal fees, financial advisory fees and other professional advisory fees (the “JUSC Transaction Costs”). The JUSC Transaction Costs are expected to be approximately £750,000, inclusive of VAT, where applicable and not recoverable. The JUSC Transaction Costs are expected to be fully mitigated by the JPMF Contribution and the allocation of the Cash Option Discount (as applicable)
Any liability for transfer taxes, including stamp duty, in respect of the transfer of assets in the Rollover Pool to JUSC and any listing fees incurred in connection with the Proposals will be borne by the enlarged Company.
Allocation of Cash Option Discount
In calculating the Rollover Pool FAV and the JUSC FAV, the benefit arising from the Cash Option Discount shall be applied in the following order until it has been used up:
- first, to offset the Rollover Proportion of the BASC Transaction Costs in determining the Rollover Pool FAV;
- secondly, to the extent that any JUSC Transaction Costs remain after allocation of the relevant part of the Management Fee Waiver, to offset such remaining JUSC Transaction Costs in determining the JUSC FAV;
- thirdly, to pay the LSE listing and admission fees payable in connection with the issue of New JUSC Shares to BASC Shareholders;
- fourthly, to reduce the Management Fee Waiver (not below 12 months);
- finally, to be transferred to JUSC on completion of the Scheme and for the benefit of all shareholders in the enlarged JUSC.
JPMF Contribution
JPMF, as alternative investment fund manager of JUSC, has agreed to contribute the following amounts (the "JPMF Contribution"), calculated by reference to the revised JUSC management fee at the relevant marginal management fee rate on the value of the assets rolling into JUSC (the "Incremental Management Fees"), comprising:
- an amount equivalent to a minimum of 12 months Incremental Management Fees (the "Management Fee Waiver"), the exact period (which for the avoidance of doubt may include a fraction of a month) being such period that will prevent NAV dilution from the Scheme for all ongoing shareholders in the enlarged JUSC, determined in accordance with the remainder of this paragraph, to be applied first to offset the JUSC Transaction Costs in determining the JUSC FAV, then, to the extent that any of the Rollover Proportion of the BASC Transaction Costs remain after allocation of the relevant part of the Cash Option Discount in accordance with "Allocation of Cash Option Discount" above, to offset such remaining Rollover Proportion of the BASC Transaction Costs in determining the Rollover Pool FAV, and then to meet any remaining amount of the LSE listing and admission fees payable in connection with the issue of New JUSC Shares to BASC Shareholders after the application of the Cash Option Discount referred to above. To the extent that the above operation uses up less than 12 months Incremental Management Fees, the Management Fee Waiver shall be exactly 12 months Incremental Management Fees and any part of the Management Fee Waiver in excess of that which, when taken together with the relevant part of the Cash Option Discount, is not needed to meet the JUSC Transaction Costs or the Rollover Proportion of the BASC Transaction Costs would be for the benefit of all shareholders in the enlarged JUSC; and
- a contribution post-Scheme to the enlarged JUSC marketing expenses equal to an amount equivalent to three months of Incremental Management Fees for the benefit of all shareholders in the enlarged JUSC.
BASC Shareholder Support
Prior to the announcement of the heads of terms having been agreed, Saba Capital Management LP provided BASC with an irrevocable undertaking to, amongst other things, vote, or procure a vote, in favour of the Scheme in respect of the BASC Shares beneficially owned by Saba Capital Management LP and to elect, or procure an election, for the Cash Option in respect of its entire beneficial holding of BASC Shares representing approximately 16 per cent. of BASC's issued share capital.
In addition, Saba Capital Management LP, BASC and JUSC have signed a standstill agreement whereby Saba has given a number of undertakings including that it will not put forward proposals to JUSC Shareholders or requisition a general meeting of JUSC, such undertakings to expire on 7 October 2027. Saba (together with its managed funds and clients) does not currently hold any interest in JUSC.
Admission and Dealings
Application will be made by the Company to the London Stock Exchange for the New JUSC Shares to be admitted to trading on the Main Market. If the Scheme becomes effective, it is expected that dealings in the New JUSC Shares on the Main Market will commence, on 16 December 2026. The results of the Issue will be announced on or around 16 December 2026 via a RIS announcement.
General Meeting
The implementation of the Proposals requires a general meeting of the Company to be held. The notice convening the General Meeting (to be held at 2.00 p.m. on 2 December 2026) is set out at the end of this document.
The Resolutions to be proposed at the General Meeting, on which all Shareholders may vote, are as follows:
- Resolution 1 – to approve the allotment of the New JUSC Shares pursuant to the Issue, which will be proposed as an ordinary resolution;
- Resolution 2 – to approve the cancellation of the amount standing to the credit of the Company's share premium account following the issuance of the New JUSC Shares, which will be proposed as a special resolution;
- Resolution 3 – to refresh the Company's general allotment authority by reference to the issued share capital of the enlarged Company following completion of the Scheme, which will be proposed as an ordinary resolution;
- Resolution 4 – to permit the Directors to allot JUSC Shares pursuant to Resolution 3 on a non-pre-emptive basis, which will be proposed as a special resolution; and
- Resolution 5 – to permit the Directors to buy back up to 12,993,829 Shares or, if lower, 14.99 per cent. of the Company's issued share capital (excluding any Shares held in treasury, if any) as at the Effective Date, which will be proposed as a special resolution.
An ordinary resolution requires a majority of the votes cast in respect of it, whether in person or by proxy, to be voted in favour in order for it to be passed. A special resolution requires at least 75 per cent. of the votes cast in respect of it, whether in person or by proxy, to be voted in favour in order for it to be passed.
Recommendation
The Board considers the Proposals and the Resolutions to be proposed at the General Meeting to be in the best interests of Shareholders as a whole.
Accordingly, the Board unanimously recommends Shareholders to vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings, which total 22,940 Shares (representing approximately 0.05 per cent. of the Company’s total voting rights) as at the Latest Practicable Date.
Expected Timetable
|
General Meeting |
|
|
Latest time and date for receipt of Forms of Proxy and CREST voting instructions for the General Meeting |
2.00 p.m. on 30 November 2026 |
|
General Meeting |
2.00 p.m. on 2 December 2026 |
|
Announcement of results of the General Meeting |
2 December 2026 |
|
Scheme |
|
|
First BASC General Meeting |
10.00 a.m. on 2 December 2026 |
|
Record Date |
6.00 p.m. on 2 December 2026 |
|
Calculation Date |
close of business on 10 December 2026 |
|
Second BASC General Meeting |
10.00 a.m. on 15 December 2026 |
|
Effective Date |
15 December 2026 |
|
Announcement of the Cash FAV per BASC Share, the Rollover Pool FAV per Share, the JUSC FAV per Share and the number of New JUSC Shares to be issued pursuant to the Scheme |
15 December 2026 |
|
CREST accounts credited with, and dealings commence in, New JUSC Shares |
As soon reasonably practicable on 16 December 2026 |
|
|
|
- ends -
For further information please contact:
JPMorgan US Smaller Companies Investment Trust plc Contact via Company Secretary
Dominic Neary (Chairman)
JPMorgan Funds Limited (Manager) 01268 444470
Simon Elliott
Neil Martin
William Talkington
JPMorgan Funds Limited (Company Secretary) 0800 20 40 20
Priyanka Vijay Anand +44 1268 4444 70
Deutsche Numis (Corporate Broker & Financial Adviser) 020 7545 8000
Nathan Brown
Matt Goss
City Code
In accordance with customary practice for such schemes of reconstruction pursuant to section 110 of the Insolvency Act 1986 involving investment companies, the City Code on Takeovers and Mergers is not expected to apply to the combination.
Important Information
The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.
The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of such jurisdictions.
The New JUSC Shares have not been, and will not be, registered under the U.S. Securities Act of 1933 (as amended) (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an exemption from registration under the Securities Act. No public offering of securities is being made in the United States. Moreover, the New JUSC Shares have not been, nor will they be, registered under the applicable securities laws of Australia, Canada, Japan, New Zealand, the Republic of South Africa, or any member state of the EEA (other than any member state of the EEA where the shares are lawfully marketed). Further, JUSC is not, and will not be, registered under the US Investment Company Act of 1940, as amended.
The value of shares and the income from them is not guaranteed and can fall as well as rise due to, inter alia, stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.
This announcement contains statements about the Company that are or may be deemed to be forward looking statements. Without limitation, any statements preceded or followed by or that includes the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance of the negative thereof, may be forward looking statements. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding financial position, strategy, plans, proposed acquisitions and objectives of BASC or the enlarged JUSC, are forward looking statements.
These forward looking statements are not guarantees of future performance. Such forward looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statement. Due to such uncertainties and risks, readers should not rely on such forward looking statements, which speak only as of the date of this announcement, except as required by applicable law. Subject to their respective legal and regulatory obligations, each of JUSC and JPMorgan expressly disclaim any obligations or undertaking to update or revise any forward looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the Listing Rules, the Prospectus Rules, the Disclosure Guidance and Transparency Rules, the Public Offers and Admission to Trading Regulations 2024 and MAR.
None of JUSC or JPMorgan or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to any of them, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Each of JUSC and JPMorgan and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.
Deutsche Bank AG is a joint stock corporation incorporated with limited liability in the Federal Republic of Germany, with its head office in Frankfurt am Main where it is registered in the Commercial Register of the District Court under number HRB 30 000. Deutsche Bank AG is authorised under German banking law. The London branch of Deutsche Bank AG is registered in the register of the companies for England and Wales (registration number BR000005) with its registered address and principal place of business at 21 Moorfields, London EC2Y 9DB. Deutsche Bank AG is authorised and regulated by the European Central Bank and the German Federal Financial Supervisory Authority (BaFin). With respect to activities undertaken in the UK, Deutsche Numis is authorised by the Prudential Regulation Authority of the Bank of England (the "PRA"). It is subject to regulation by the Financial Conduct Authority (the "FCA") and limited regulation by the PRA.
Deutsche Bank AG, London Branch (trading for these purposes as Deutsche Numis) ("Deutsche Numis"), is acting exclusively for the Company and no one else in connection with the proposal and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Deutsche Numis nor for providing advice in relation to the proposal, the contents of this announcement and the accompanying documents or any other matter referred to herein or therein. Neither Deutsche Numis nor any of its group undertakings or affiliates (nor any of its or their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this document, any matter referred to herein or otherwise. No representation or warranty, express or implied, is made by Deutsche Numis as to the contents of this document.
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