Response to the PIGIT Offer
Securities Trust of Scotland PLC
08 April 2005
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND OR JAPAN.
Securities Trust of Scotland plc
Response to the Revised PIGIT Offer announcement
The Board of Securities Trust of Scotland plc ('Securities Trust') notes the
revised Offer announcement made by Perpetual Income and Growth Investment Trust
plc ('PIGIT'). PIGIT approached Securities Trust with an outline of the
proposed terms of its revised Offer (the 'Revised PIGIT Offer') in advance of
their public announcement.
Since this approach, the Board has considered carefully the terms of the Revised
PIGIT Offer which have also been the subject of a detailed analysis by its
advisers. However, the Board, which has been so advised by JPMorgan Cazenove,
has concluded that the Revised PIGIT Offer is not in the best interests of
shareholders as a whole and remains strongly of the view that the Board's
Proposals are superior and better for Shareholders.
In reaching this decision, the Board has concluded that the Revised PIGIT Offer:
• Does not offer as much choice as the Board's proposals
• Does not offer a full cash alternative at 100% of FAV, which the
Board's proposals do. The value of the cash alternative is greater under the
Board's proposals than under the Revised PIGIT Offer.
• Does not offer the choice of shares in a successor to Securities
Trust, which aims to provide an increase in annual income for Shareholders and
substantially more income than under the Revised PIGIT Offer
• Does not offer the option of shares in Lowland, a better performing,
better rated trust which has grown its dividend significantly faster than PIGIT.
Furthermore, the Revised PIGIT Offer:
• would result in a reduction in income of up to 34.8% for Securities
Trust shareholders
• does not adjust for the effects of future dilution of the PIGIT net
asset value if the new subscription securities ('warrants') PIGIT proposes to
issue are exercised
• uses, for calculation purposes, share prices and discount / premium
levels that have arisen as a result of short term market considerations in
connection with the Offer rather than proven averages taken over the longer
term
• introduces a degree of undue complexity and uncertainty for Securities
Trust shareholders.
The Board reiterates its unanimous recommendation to Shareholders to support the
Board's proposals and to reject the Revised PIGIT Offer.
The Board will be writing to Shareholders shortly with full details of its
response.
Chairman designate, Neil Donaldson said
'We have carefully reviewed these revised terms, in advance of their
announcement, and our advisers have been engaged with PIGIT's advisers. We are
committed to achieving the best possible result for our shareholders, and for no
one else. The PIGIT offer ignores the fundamental pillars of our proposition of
free choice, higher income, a 100% cash exit and better performance all of which
are embedded in our proposals. Against these, PIGIT is offering restricted
choice, only a partial cash exit, a substantial reduction in income, shares in a
trust which has not performed as well as Lowland and an overly complex
structure.
The Board's proposals are clear, definitive, deliverable and have been
structured with the views of shareholders in mind. Supporting the Board's
proposals remains the clear best choice for shareholders'
Enquiries:
Neil Donaldson / Anita Frew
Securities Trust of Scotland plc via 020 7353 4200
Angus Gordon Lennox
JPMorgan Cazenove Limited 07768 503516
Kirstie Hamilton / Kate Inverarity
Tulchan Communications 020 7353 4200
JPMorgan Cazenove Limited is acting for Securities Trust in relation to the
matters referred to in this announcement and no one else and will not be
responsible to anyone other than Securities Trust for providing the protections
offered to clients of JPMorgan Cazenove Limited nor for providing advice in
relation to the matters referred to in this announcement.
JPMorgan Cazenove Limited of 20 Moorgate, London EC2R 6DA, which is authorised
and regulated by the Financial Services Authority, has approved the contents of
this announcement for the purposes of Section 21 of the Financial Services and
Markets Act 2000.
Appendix I
Definitions
Board or Directors the directors of the Company from time to time
JPMorgan Cazenove JPMorgan Cazenove Limited
Lowland Lowland Investment Company plc
PIGIT Perpetual Income and Growth Investment Trust plc
PIGIT Offer or Offer the formal offer made by Intelli Corporate
Finance Limited on behalf of PIGIT on 10 March
2005 for the entire issued and to be issued share
capital of the Company
Proposals the Board's proposals as described in the
circular dispatched to Shareholders dated 23
March 2005
Securities Trust or Company Securities Trust of Scotland plc
Shareholders holders of Securities Trust Shares
US or the United States the United States of America, its territories and
possessions, any state of the United States of
America and the District of Columbia and all
other areas subject to the jurisdiction of the
United States of America
END
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