B Share Final Conversion Proposals
MURRAY INTERNATIONAL TRUST PLC ("the Company")
B SHARE FINAL CONVERSION RECOMMENDED PROPOSALS
As reported in the Company's Annual Financial Report announcement for the year to 31 December 2015 being released today, the Board is putting forward recommended proposals for the conversion of the Company's existing B Ordinary shares ("B Shares") to new Ordinary Shares in the Company. The Proposals would allow the Board to simplify the Company's share capital structure and to save some ongoing expense.
The Proposals will be put to Shareholders in the form of Special Resolutions at: the Annual General Meeting of the Company; an Ordinary Shareholders Class Meeting; and a B Shareholders Class Meeting; all to be held on 26 April 2016.
Background to the Proposals
The Company has both Ordinary Shares and B Shares currently in issue. As at 10 March 2016, there were 127,000,789 Ordinary Shares and 922,172 B Shares in issue representing 99.3 per cent. and 0.7 per cent. respectively of the total issued capital of the Company.
The Ordinary Shares and B Shares rank equally with each other save for the treatment of dividends. Cash dividends are paid to Ordinary Shareholders reflecting the net income attributable to the Ordinary Shares. Whenever a cash dividend is paid on the Ordinary Shares, the net income attributable to the B Shares is not distributed and instead the Directors make a corresponding capitalisation issue of new B Shares to B Shareholders for an amount reflecting the value of the dividend.
Both the cash dividend and the Capitalisation Issue are subject to income tax and, accordingly, there is now no tax advantage for UK private investors holding B Shares instead of Ordinary Shares. In addition, the estimated costs of the Capitalisation Issues, which are approximately £60,000 per annum, are borne by both share classes on a pro rata basis which in practical terms means that the majority of the costs of this process are being borne by Ordinary Shareholders.
Since there are significantly fewer B Shares in issue compared to the number of Ordinary Shares in issue, this can result in there being less liquidity in the B Shares and can result in the B Shares trading at a wider discount than the Ordinary Shares despite having the same underlying net asset value. Over the past 12 months as at the date of this document, the closing mid-market price of the B Shares has represented an average discount of 6.2 per cent. The closing mid-market price of the Ordinary Shares has represented an average premium of 0.1 per cent over the same period.
The Proposals
Your Board believes that the B Shares serve a limited purpose and has therefore resolved to recommend to Shareholders that the existing B Shares are converted into Ordinary Shares. The Board is currently entitled to compulsorily convert the B Shares into Ordinary Shares on a one for one basis only when there are fewer than 400,000 B Shares in issue. However, the Board is now proposing to amend the Company's articles of association to provide the Directors with the right to require conversion of the existing B Shares to Ordinary Shares regardless of the number of B Shares in issue.
As the Proposals involve a change to the B Shareholders rights, the Board is proposing to offer B Shareholders 101 Ordinary Shares for every 100 B Shares currently held at the Record Date (i.e. a one per cent. premium above the existing one for one conversion ratio). The additional New Ordinary Shares will be issued to B Shareholders at the time of the B Share Conversion by way of a bonus issue which will be approved at the Annual General Meeting. No fractions of Ordinary Shares will be issued and B Shareholders entitlements will be rounded down to the nearest whole number of Ordinary Shares.
If the Proposals are approved, it is expected that B Shareholders will have their B Shares compulsorily converted to Ordinary Shares at the discretion of the Board on or around 1 July 2016 following payment of the final dividend for the year ended 31 December 2015.
As part of the Proposals, the Articles will also be amended to reflect recent legislative changes.
Further details of the Proposals will be set out in a circular to shareholders (the "Circular"), containing Notices of the Annual General Meeting of the Company, of an Ordinary Shareholders Class Meeting, and of a B Shareholders Class Meeting, to be published and sent to Shareholders in due course (along with the Company's full Annual Report).
Benefits of the Proposals
The Board believes that the Proposals benefit all Shareholders for the following reasons:
· The B Share Conversion will remove the continuing costs of the Capitalisation Issue to the Ordinary Shareholders and simplify the capital structure of the Company.
· B Shareholders should see an uplift in the market value and an improvement in the liquidity of their investment.
B Shareholders can continue to reinvest their dividends in Ordinary Shares through the Company's dividend reinvestment programme (subject to the payment of stamp duty and applicable commissions on the purchase of existing Ordinary Shares in the market by the Registrar).
Expected timetable
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2016 |
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Latest time and date for receipt of Letters of Direction for the Annual General Meeting |
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5.00 p.m. on 19 April |
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Latest time and date for receipt of Letters of Direction for the Ordinary Shareholders Class Meeting |
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5.00 p.m. on 19 April |
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Latest time and date for receipt of Forms of Proxy for the Annual General Meeting |
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12.30 p.m. on 22 April |
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Latest time and date for receipt of Forms of Proxy for the Ordinary Shareholders Class Meeting |
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12.50 p.m. on 22 April |
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Latest time and date for receipt of Forms of Proxy for the B Shareholders Class Meeting |
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12.55 p.m. on 22 April |
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Annual General Meeting |
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12.30 p.m. on 26 April |
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Ordinary Shareholders Class Meeting |
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12.50 p.m. on 26 April |
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B Shareholders Class Meeting |
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12.55 p.m. on 26 April |
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Payment of final dividend for the year to 31 December 2015 |
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18 May |
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Record Date for B Share Conversion (the date on which B Shareholders entitlement to Ordinary Shares will be assessed) |
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close of business on 30 June |
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Effective Date for the B Share Conversion |
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1 July |
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Cancellation of listing of B Shares |
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8.00 a.m. on 1 July |
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Admission and dealings commence in New Ordinary Shares and CREST accounts credited in respect of New Ordinary Shares issued in uncertificated form |
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8.00 a.m. on 1 July |
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Certificates for New Ordinary Shares issued in certificated form despatched |
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week commencing 11 July |
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Notes |
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1. The dates and times set out in the expected timetable above may be adjusted by the Board, in which event the new dates will be notified to the UK Listing Authority and the London Stock Exchange and an announcement will be made through a Regulatory Information Service |
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2. All references in the expected timetable are to London time (unless otherwise stated). |
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Defined terms used in this announcement shall (unless the context otherwise requires) have the same meaning as set out in the Circular.
Applications will be made to the UK Listing Authority for the New Ordinary Shares arising on the B Share Conversion to be listed on the Official List and to the London Stock Exchange for those Ordinary Shares to be admitted to trading on the main market.
For further information please contact:
William Hemmings, Aberdeen Asset Managers Limited, 020 7463 6000
This information is provided by RNS
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