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Perpetual Inc&Growth (PLI)

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Friday 14 May, 2010

Perpetual Inc&Growth

Placing and Offer for Subscription of B Shares


THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN, OR INTO 
ANY STATE OF THE UNITED STATES OR ANY STATE, PROVINCE OR TERRITORY OF AUSTRALIA
, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA.

Perpetual Income and Growth Investment Trust plc

Placing and Offer for Subscription of up to £150 million of B Shares

Introduction

The Board is pleased to announce a Placing and Offer for Subscription of B
Shares. The Company intends to raise up to £150 million (before expenses)
through the Issue. Application will be made for the B Shares to be admitted to
the Official List and to trading on the Main Market subject to the approval of
Ordinary Shareholders and Subscription Shareholders at separate Class Meetings
and at an EGM. A prospectus containing notices of the Class Meetings and EGM
has been posted to shareholders today.

The Proposals

Outline

The Company is proposing to create and issue a new class of share, namely B
Shares. The B Shares will be identical in all material respects to the
Company's existing Ordinary Shares, save for the fact that holders of B Shares
will not receive dividends from the Company; they will instead receive capital
returns. A capital return will be made to the holder of a B Share at the same
time as any dividend is paid to the holder of an Ordinary Share, and will be in
an amount equal to any such dividend. For certain Shareholders, there will be
tax and other advantages in receiving a capital return rather than a dividend.

Capital returns will be paid to holders of B Shares from the Capital Repayment
Reserve which will be created from the proposed cancellation of the amount
standing to the credit of the Company's share premium account which is
referable to the Issue. The Capital Repayment Reserve will be an amount equal
to the aggregate Issue Price of the B Shares less the nominal value of 10p per
B Share and the expenses of the Issue. The B Shares will convert into Ordinary
Shares once the Capital Repayment Reserve has been fully paid out.

In order to maintain fairness between the Ordinary Shareholders and the B
Shareholders, the Issue Price will be the NAV per Ordinary Share as at the
close of business on the Reference Date, plus the expenses of the Issue (being
2 per cent. of the Gross Proceeds). The Reference Date is expected to be 3 June
2010, being the latest practicable date prior to the Issue. At the time of
application therefore, investors must indicate the cash value which they wish
to invest pursuant to the Issue. Applicants will be notified of the number of B
Shares they have been allotted at the Issue Price following Admission.

B Shares with a value of £150 million at the Issue Price are available for
subscription under the Issue, of which £50 million in value of B Shares at the
Issue Price has been reserved for the Placing and £100 million in value of B
Shares at the Issue Price has been reserved for the Offer for Subscription.

Under the Offer for Subscription, £80 million in value of B Shares at the Issue
Price has been reserved for existing Shareholders (including Subscription
Shareholders) and £20 million in value of B Shares at the Issue Price has been
reserved for new investors.

Existing Shareholders can apply for any number of B Shares under the Offer for
Subscription but such applications will be subject to scaling back provisions.
Applications under the Offer for Subscription must be for the minimum
subscription amount of £1,000 and thereafter in whole pounds.

Life of the B Shares

It is intended that the B Shares will continue in existence for as long as
there are sufficient monies within the Capital Repayment Reserve to make
capital returns to B Shareholders.

Once the Capital Repayment Reserve has been exhausted such that any amount in
the Capital Repayment Reserve is insufficient to match any dividend paid to
Ordinary Shareholders, a dividend will be paid to B Shareholders to supplement
their final capital return in an amount equal to any such shortfall, following
which the B Shares will automatically convert into Ordinary Shares on a NAV for
NAV basis. The Company may, in its discretion, put forward alternative
reorganisation proposals for Shareholder approval in advance of that conversion
date. The precise length of time for which the Capital Repayment Reserve will
have sufficient monies available cannot be definitively determined at the date
of this announcement as it will in turn depend upon the level of dividends paid
to Ordinary Shareholders, and hence the level of capital returns made to B
Shareholders, in coming years. The level of dividends paid to Ordinary
Shareholders will depend upon a number of factors, including: the amount of
monies raised pursuant to the Issue, the performance of the Investment
Portfolio, the level of gearing employed by the Company and the extent to which
revenue reserves are built up for the proper and efficient management of future
dividend payments. However, if the Company's historic rate of dividend growth
were to be maintained, it is anticipated that the B Shares will have a life of
between eleven and fourteen years.

In the event that there is any change in UK tax law and practice such that the
holders of the B Shares are, in the reasonable opinion of the Directors,
materially adversely affected, the Directors will be required to put forward
proposals to B Shareholders for an accelerated conversion of all the B Shares
into Ordinary Shares, again on a NAV for NAV basis, subject solely to the
approval of the B Shareholders at a separate class meeting.

Further issues of B Shares

It is highly unlikely that further B Shares of the same class will be issued in
future following the Issue, whether through a formal fundraising or by way of
tap issue, as it would be impractical to do so from an accounting and
administrative perspective.

Cancellation of share premium account and the creation of the CapitalRepayment
Reserve

The Company has proposed a special resolution at the EGM resolving to cancel
the amount standing to the credit of its share premium account which is
referable to the issue of the B Shares. The Directors intend to apply to the
Court immediately following Admission for an order confirming such cancellation
and the creation of the Capital Repayment Reserve. Subject to the approval of
the Court, it is intended that the Capital Repayment Reserve will be used
solely for the purpose of paying capital returns to B Shareholders. If the
Company does not obtain the approval of the Court by 31 December 2010, the
Company will put forward a Tender Offer to B Shareholders to enable the Company
to return an amount representing the Net Asset Value of the B Shares, inclusive
of any amounts which would have been paid out to B Shareholders as capital
returns at the time of dividend payments to Ordinary Shareholders, but which
were not paid out at such time due to the absence of Court approval. In the
event that any holders of B Shares do not tender their B Shares, such B Shares
will automatically convert into Ordinary Shares following implementation of the
Tender Offer on a NAV for NAV basis (with the NAV of the B Shares being
inclusive of any amounts which would have been paid out to B Shareholders as
capital returns at the time of dividend payments to Ordinary Shareholders, but
which were not paid out due to the absence of Court approval). Shareholders are
being requested at the EGM to approve the authority for the Company to put
forward a Tender Offer to the B Shareholders in the event that the Company does
not obtain the approval of the Court by 31 December 2010.

Investment Objective, Policy and Strategy

The creation of the B Shares will not involve any change to the Company's
investment objective or policy, nor will it mark a change in the investment or
gearing strategy employed by Invesco Perpetual. Invesco Perpetual will continue
to operate the Investment Portfolio as a single pool of assets. As noted below,
the Ordinary Shares and the B Shares will have identical NAVs at all times.

Use of Proceeds

If the maximum amount is raised pursuant to the Issue, the Company will receive
net proceeds of £147 million. The Company intends to invest the net proceeds of
the Issue as soon as practicable following Admission. The funds will be
invested in accordance with the Company's investment policy and, where
appropriate, will be applied in increasing holdings in the Investment
Portfolio.

Effects for existing Shareholders

The issue of B Shares will increase the size of the Investment Portfolio, and
therefore it is anticipated that the Investment Portfolio will generate more
income than it would previously have done. As the B Shares will carry no right
to dividends, and will instead receive capital returns from the Capital
Repayment Reserve, this additional revenue will be available for distribution
by way of dividend solely to holders of Ordinary Shares. The Company is
required to retain no more than 15 per cent. of its eligible investment income
in order to maintain its investment trust status and this is likely to result
in a higher increase in the dividend for Ordinary Shares for the year ending 31
March 2011 than would be the case if the B Shares were not issued. A more
detailed explanation of the effect of the B Shares upon the Company's dividend
policy is set out further below. If existing Shareholders do not subscribe for
B Shares, their economic position will be unchanged in all material respects.
In particular, they will bear none of the costs of the Issue, since the B
Shares are being issued at a premium to their NAV.

Subscription Shareholders

The Company is putting forward an extraordinary resolution at a Class Meeting
of the Subscription Shareholders to obtain their consent to the Proposals.
Subscription Shareholders will be entitled to subscribe for B Shares in the
Offer for Subscription and will be given priority over applicants who are not
Shareholders in the event of any scaling back as a result of over-subscription,
in the same manner as existing Shareholders. For the purposes of any scaling
back, any calculations will be made on the basis that such Subscription
Shareholders had exercised their Subscription Shares on the date immediately
preceding the closing date for applications under the Offer for Subscription,
giving them the same entitlement as Ordinary Shareholders.

Costs of the Proposals

The Company's expenses in connection with the Proposals will be equal to two
per cent. of the Gross Proceeds raised from the Issue. The costs of the
Proposals will be borne solely by subscribers for B Shares.

Dividend policy

The Directors intend to maintain their existing policy of providing Ordinary
Shareholders with real growth in dividends over the medium term. Subject to the
likelihood of a more pronounced rise in the dividend solely in respect of the
current financial year (as further described below), it is anticipated that the
historic rate of dividend growth will continue to be targeted.

Quarterly dividends

Dividends will, going forward, be paid to Shareholders on a quarterly, rather
than a semi-annual, basis. Quarterly dividends will be paid to Ordinary
Shareholders at the end of March, June, September and December of each calendar
year, with the first quarterly dividend to be paid in September 2010 in respect
of the period 1 April 2010 to 30 June 2010.

Effect of the Issue of the B Shares on the dividends of the Ordinary Shares

Any additional revenue arising on the Company's enlarged Investment Portfolio
following the B Share Issue will be available for distribution by way of
dividend solely to Ordinary Shareholders. This is likely to result in a higher
rate of dividend growth for Ordinary Shares for the year ending 31st March 2011
than would be the case if the B Shares were not issued.

The actual level of dividend to be paid out in the forthcoming financial year
cannot be forecast with any accuracy as it will depend upon a number of
factors, including: the amount of monies raised pursuant to the Issue, the
performance of the Investment Portfolio, the level of gearing employed by the
Company and the extent to which revenue reserves are built up for the proper
and efficient management of future dividend payments. For indicative purposes,
if the percentage level of gearing employed by the Company remains at its
present level, and all other factors remain the same, earnings per Ordinary
Share will increase by approximately the same proportion as that by which the
Company's net assets increase as a result of the issue of the B Shares. The
Board will then determine how much of that increase in earnings per Ordinary
Share should be paid out in the form of additional dividend, and how much
should be retained within the Company's revenue reserves (having regard at all
times for the requirement that the Company should retain no more than 15 per
cent. of its income in any financial year in order for the Company to maintain
its investment trust status).

Ordinary Shareholders should note that any increase in the level of dividend
paid on Ordinary Shares as a result of the issue of the B Shares does not
result in a total investment return (i.e. dividends and NAV entitlement)
greater in size than the investment return which would have arisen if no B
Shares had been issued. Ordinary Shareholders are instead receiving a greater
proportion of that total investment return in the form of a dividend
distribution.

It should also be noted that the conversion of the B Shares at the end of their
life will lead to an increased number of Ordinary Shares in issue and
accordingly the earnings per Ordinary Share will thereafter be lower than they
would have been if the B Shares had not so converted. The adverse effect, if
any, of this upon the Company's dividend level and/or growth will depend upon a
number of factors including the extent to which revenue reserves have been
built up for future dividend payments and the prevailing level of its net
income.

NAV entitlement for the Ordinary Shares and the B Shares

Invesco Perpetual will continue to manage and account for the Investment
Portfolio as a single pool of assets, and will maintain its current accounting
policy and methodology in calculating the Company's total net assets.

For the purposes of calculating the undiluted net asset value of the Ordinary
Shares and the B Shares, the total net assets of the Company will be divided by
the aggregate number of Ordinary Shares and B Shares in issue; equally, the
diluted Net Asset Value will be calculated by dividing the total net assets of
the Company (which in such circumstances would include the subscription monies
which would be received by the Company upon exercise of the Subscription
Shares) by the aggregate number of Ordinary Shares, B Shares and Subscription
Shares in issue. Furthermore, the declaration by the Company of a dividend in
favour of Ordinary Shareholders will, for the purposes of calculating the NAV
entitlement, be regarded as creating a liability to Ordinary Shareholders in
the amount of that dividend; and will simultaneously create a corresponding
liability to B Shareholders in respect of the matching capital return.
Accordingly, the Ordinary Shares and the B Shares will have identical net asset
values at all times (whether on an undiluted or diluted, or a cum-income or
ex-income, basis).

Benefits of the Proposals

The Directors believe that the issue of a new class of B Shares will be
beneficial for the Company for a number of reasons.

- Existing Ordinary Shareholders (and Subscription Shareholders on conversion)
will enjoy the following benefits:

  * the income derived from investment of the net proceeds of the Issue will be
    available to be distributed by way of dividend only to the holders of
    Ordinary Shares. The B Shares will therefore enhance revenue earnings per
    Ordinary Share until they convert into Ordinary Shares;
   
  * an opportunity to increase their investment which may offer advantages and
    flexibility for tax planning;
   
  * the potential for an improved rating for their existing Ordinary Shares as
    the market recognises the potential for increased dividends; and
   
  * a reduction in the dilutive effect of the Company's outstanding
    Subscription Shares as a result of the wider shareholder base.
   
- The Issue has the potential to increase overall market liquidity as
tax-neutral investors will be able to switch between the classes of Shares to
exploit any market anomalies that may arise.

- The Issue will not dilute the Net Asset Value as all costs associated with
the Issue will be borne by subscribers for the B Shares.

- The Issue will modestly reduce the total expense ratio of the Company.

Benefits of an investment in the B Shares

For those investors who are seeking capital growth with a higher than average
income from investment mainly in the UK equity market, the Board believes that
a shareholding in the Company provides exposure to a portfolio with a strong
performance track record and which benefits from the proven expertise of
Invesco Perpetual. Investors who have determined that an investment in the
Company is suitable for them may consider that the B Shares, while having the
same economic return as Ordinary Shares. constitute the most appropriate form
of making such an investment having regard to the advantages and flexibility
which the B Shares provide from the perspective of tax planning. In particular,
the B Shares benefit from the following tax benefits:

  * Deferral of capital gains tax: capital distributions made to B Shareholders
    are expected to constitute small capital distributions for UK tax purposes
    and on that basis will not attract any tax liability at the time at which
    any such distribution is made. Any such capital distributions are
    aggregated, with the total sum subtracted from the base cost of a B Share
    at the time at which any disposal of the B Share is made. In this way
    capital gains tax liability may be deferred until a point in time more
    suitable to an investor, rather than arising on each occasion on which a
    capital return is paid in respect of the B Share.
   
  * CGT allowances: as any capital gains tax on capital returns paid in respect
    of B Shares is deferred, holders of B Shares may, to the extent it has not
    otherwise been utilised, make use of their annual allowance in order to
    minimise their liability to capital gains tax and to plan their affairs in
    the most tax-efficient manner possible.
   
  * Differential between CGT and income tax rates: to the extent that the
    applicable rate of UK capital gains tax at the time of a disposal of the B
    Shares is lower than the higher rates of UK income tax on dividends
    prevailing while the B Shares are held, the B Shares present an especially
    attractive opportunity for investors subject to those higher rates of
    income tax.
   
Articles of Association

The Company proposes to adopt New Articles (subject to the passing of
Resolution 1 at the EGM) which will provide for the rights attached to the B
Shares.

The New Articles will also incorporate amendments to the current articles of
association to reflect the changes in company law brought about by the
Companies Act which came into effect on 1 October 2009 and also changes made to
the Companies Act in August 2009 to implement the EU Shareholder Rights
Directive in the UK, as well as some minor technical or clarifying changes.

Information on the Issue

The Issue is not underwritten and will close at noon on 3 June 2010.

Under the Issue, the Company intends to raise a maximum of £150 million (before
expenses). It is a condition of the Issue that the minimum amount of B Shares
subscribed for under the Placing and Offer for Subscription is not less than £
50 million or such lower amount as the Directors, Invesco Perpetual and Collins
Stewart may agree. In the event that this condition is not satisfied, or
waived, the Issue will not proceed and any applications for B Shares under the
Issue will be rejected. In such circumstances, application monies will be
returned (at the applicant's sole risk), without payment of interest, as soon
as possible thereafter.

The number of B Shares to be issued to each applicant under the Placing and
Offer for Subscription will be rounded down to the nearest whole number and
fractions of B Shares will not be issued. Subscription monies in respect of
such fractional entitlements will be retained for the benefit of the Company as
a whole.

Expected timetable

Date                           Action                                        
                                                                             
1.00 p.m. on Wednesday 2nd     Latest time and date for receipt of completed 
June                           Application Forms and payment in full under   
                               the Offer for Subscription                    
                                                                             
12 noon on Thursday 3rd June   Latest time and date for commitments under the
                               Placing                                       
                                                                             
Thursday 3rd June              Reference Date for the NAV to determine the   
                               Issue Price                                   
                                                                             
Tuesday 8th June               Announcement of the results of the Issue      
                                                                             
3.00 p.m. on Wednesday 9th     Class Meeting of holders of Ordinary Shares   
June                                                                         
                                                                             
3.10 p.m. on Wednesday 9th     Class Meeting of holders of Subscription      
June                           Shares                                        
                                                                             
3.20 p.m. on Wednesday 9th     Extraordinary General Meeting                 
June                                                                         
                                                                             
Friday 11th June               Admission of the B Shares to the Official List
                               and dealings in B Shares commence             
                                                                             
                               CREST stock accounts credited                 
                                                                             
                               Share certificates despatched in respect of   
                               the B Shares                                  

Document viewing

A copy of the Prospectus has been submitted to the UK Listing Authority, and
will shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility, which is situated at The Financial Services Authority, 25 The
North Colonnade, Canary Wharf, London E14 5HS. The Prospectus will also shortly
be available for viewing on Invesco Perpetual's website,
www.invescoperpetual.co.uk.

For further information , please contact:

Collins Stewart Europe Limited                                               
                                                                             
Neil Brierley                                                   020 7523 8478
                                                                             
Will Barnett                                                    020 7523 8094
                                                                             
Dominic Waters                                                  020 7523 8473
                                                                             
Robbie Robertson                                                020 7523 8474
                                                                             
Invesco Perpetual                                                            
                                                                             
Angus Pottinger                                                 020 7065 3714
                                                                             
Tim Mitchell                                                    020 7065 3182
                                                                             
Andrew Watkins                                                  020 7065 4023

All defined terms in this announcement shall have the same meaning as that
attributed to them in the prospectus issued by Perpetual Income and Growth
Investment Trust plc dated 14th May 2010.

This announcement appears as a matter of record only and does not constitute an
offer to sell or a solicitation of an offer to purchase any security.

The Company is established as a closed-ended investment trust company
incorporated under the laws of England and Wales with registration number
3156676 and registered as an investment company under section 833 of the
Companies Act 2006.

This announcement constitutes an advertisement and is not a prospectus. It does
not constitute an offer to sell or a solicitation of an offer to buy any
securities described herein in the United States or in any other jurisdiction,
nor shall it, by the fact of its distribution, form the basis if, or be relied
upon, in connection with any contract therefor. 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 for any purpose on the information
contained in this announcement or its accuracy or completeness. No offer,
invitation or inducement to acquire shares or other securities in the Company
("Shares") is being made by or in connection with this announcement. Any offer,
invitation or inducement to acquire Shares in the Company will be made solely
by means of the prospectus published on 14 May 2010 in connection with the
Issue (the "Prospectus") and any decision to buy Shares in the Company should
be made solely on the basis of the information contained in the Prospectus.
Copies of the Prospectus may, subject to any applicable law, be obtained at no
cost the registered office of the Company or from the Document Viewing
Facility, United Kingdom Listing Authority, The Financial Services Authority,
25 North Colonnade, Canary Wharf, London E14 5HS. The Prospectus supersedes all
information provided before the date of the Prospectus and any investment
decision must be made only on the basis of the information contained therein.

The distribution of this announcement and the B Share Issue in certain
jurisdictions may be restricted by law. Save for the publication of the
Prospectus, no action has been taken by the Company or Collins Stewart Europe
Limited that would permit an offering of the B Shares or possession or
distribution of this announcement or any other offering or publicity material
relating to such shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this announcement comes are required by
the Company and Collins Stewart Europe Limited to inform themselves about, and
to observe, such restrictions.

The information presented herein is not an offer for sale within the United
States of any equity shares or other securities of the Company. The Company has
not been and will not be registered under the US Investment Company Act of
1940, as amended (the "Investment Company Act"). In addition, the B Shares have
not been and will not be registered under the US Securities Act of 1933, as
amended (the "Securities Act") or any other applicable law of the United
States. Consequently, the B Shares may not be offered or sold or otherwise
transferred within the United States, or to, or for the account or benefit of,
US Persons (as defined in Regulation S under the Securities Act), except
pursuant to an exemption from the registration requirements of the Securities
Act and under circumstances which will not require the Company to register
under the Investment Company Act. No public offering of the B Shares has been
made in the United States. The B Shares may only be resold or transferred in
accordance with the restrictions set forth in the Prospectus and related
subscription documents.

This announcement should not be distributed, forwarded, transferred,
reproduced, or otherwise transmitted, directly or indirectly, to any persons
within the United States or to any US Persons unless it is lawful to do so.

This announcement is directed only at (i) persons outside the United Kingdom to
whom it is lawful to communicate it, or (ii) persons having professional
experience in matters relating to investments who fall within the definition of
"investment professionals" in Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (as amended), or (iii) high
net worth companies, unincorporated associations and partnerships and trustees
of high value trusts as described in Article 49(2) of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), each a
"Relevant Person", and persons who receive this announcement who do not fall
within (i), (ii) or (iii) above should not rely on or act upon this
announcement.

This announcement may include certain "forward-looking statements". These
statements are based on the current expectations of the Company and are
naturally subject to uncertainty and changes in certain circumstances.
Forward-looking statements typically include statements containing words such
as "intends", "expects", "anticipates", "targets", "plans", "estimates" and
words of similar import. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. There are various factors that could cause
actual results and developments to differ materially from those expressed or
implied by such forward-looking statements. These factors include, but are not
limited to, changes in economic conditions, changes in the regulatory
environment, fluctuations in value of interest and exchange rates, the outcome
of litigation and government actions. Other unknown or unpredictable factors
could cause actual results to differ materially from those in the
forward-looking statements. The Company does not undertake any obligation to
update publicly or revise forward-looking statements, whether as a result of
new information, future events or otherwise, except to the extent legally
required.

All investments are subject to risk. Past performance is no guarantee of future
returns. The value of investments may fluctuate. Results achieved in the past
are no guarantee of future results. This announcement is not intended to
constitute legal, tax or accounting advice or investment recommendations.
Prospective investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decision. Statements
contained in this announcement that are not historical facts are based on
current expectations, estimates, projections, opinions and beliefs of the
Company's investment manager. Such statements involve known and unknown risks,
uncertainties and other factors, and undue reliance should not be placed
thereon.

Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as sponsor to the
Company and is acting for no-one else in connection with the Issue or the
contents of this announcement, and will not be responsible to anyone other than
the Company for providing the protections afforded to clients of Collins
Stewart Europe Limited nor for providing advice in connection with the Issue or
the contents of this announcement or any other matter referred to herein.
Collins Stewart Europe Limited is not responsible for the contents of this
announcement. This does not exclude or limit any responsibilities which Collins
Stewart Europe Limited may have under the Financial Services and Markets Act
2000 or the regulatory regime established thereunder.


                                                                                                                                                                                                                                        

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