The English & Scottish Investors investment trust, run by Gartmore, is proposing to make a tender of...
The English & Scottish Investors investment trust, run by Gartmore, is proposing to make a tender offer for up to two-thirds of its ordinary shares.
The announcement follows the decision of the trust's largest shareholder, Caledonia Investments, which owns 32.4% of the company, to release its entire investment in the company.
The tender has been restricted to two-thirds of the share capital as the board believes that many shareholders, particularly private individuals, will wish to remain invested in the company.
In order to retain post-tender gearing levels at current levels, the tender proposals involve the partial early repayment of the company's debenture stocks, subject to debenture holder approval.
If the debenture holders do accept the proposals, there will be an offered exit to all shareholders.
Under the proposals, the £20m 2014 stock will be redeemed in full and a proportion of the £50m 2023 stock will be redeemed based on the level of take-up by shareholders of the tender offer. The estimated repayment prices will be 150.5p for the 2014 stock and 137.7p for the 2023 stock.
Based on the tender being fully subscribed, on-going shareholders will benefit from an estimated uplift of 3.8p per share, equivalent to around 1.8% of NAV. With net assets of at least £100m, the trust is expected to remain in the FTSE-All Share.
Brian O'Neill manages the £385m trust and invests in a diversified portfolio of equities, split roughly 50% UK, 50% overseas. Over one year to 31 December 2001, the trust was ranked 18 out of 31 in the global growth sector, returning -15.03% on a mid-to-mid basis, compared to the sector average -13.59%. Over three years it is ranked 12, returning 20.43%, compared to the sector average 16.81%.
The EGM for debenture holders to vote on the proposals will be on 21 February 2002. The tender offer is expected to be made in late February, closing three weeks later, so cash should be received in late March 2002.
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