Octopus AIM VCT Concludes Merger Talks With Octopus Phoenix

9th Jul 2010 15:16

LONDON (Dow Jones)--Octopus AIM VCT PLC (OPHX.LN) said Friday the merger discussions between the boards of AIM VCT and Phoenix VCT, as announced on Jan. 13, have concluded and the board's are setting out the Proposals to their respective shareholders for consideration. MAIN FACTS: -The Proposals will, if approved, result in a restructuring of the share capital of AIM VCT, the merger of the companies and the fundraising by AIM VCT, creating an Enlarged Company with net assets of over GBP40 million (assuming full subscription under the Offer). -The AIM VCT board of directors proposes to restructure the share capital of AIM VCT to result in a share class having a nominal value of 1 pence. -The AIM VCT Restructuring will be effected by each existing ordinary share of 50 pence being subdivided into one ordinary share of 1 pence and one AIM VCT Deferred Share of 49 pence. -The AIM VCT Deferred Shares will have no economic value and will be bought back by AIM VCT for an aggregate amount of 1 pence and cancelled as issued. -The AIM VCT Restructuring will result in a simplification of the share capital of AIM VCT, whilst also creating capital redemption reserves from the repurchase of the AIM VCT Deferred Shares and an increased share premium on the issue of New AIM VCT Shares (pursuant both to the Scheme and to the Offer) which can subsequently be cancelled, subject to the sanction of the Court, creating distributable reserves to assist in the payment of dividends, the ability to make market purchases of shares and for other corporate purposes. -Phoenix VCT will be placed into members' voluntary liquidation pursuant to a scheme of reconstruction under Section 110 IA 1986; and -all of the assets and liabilities of Phoenix VCT will be transferred to AIM VCT in consideration for the issue of New AIM VCT Shares (which will be issued directly to shareholders of Phoenix VCT). -Following the transfer, the listing of the Phoenix VCT Shares will be cancelled and Phoenix VCT will be wound up. -Annual running costs, excluding management fees, for AIM VCT and Phoenix VCT are GBP171,000 and GBP197,000 respectively or GBP368,000 in total. -These costs represent 0.71% of the AIM VCT's unaudited net asset value and 2.8% of Phoenix VCT's unaudited net asset value, in each case as at May 31. -Both boards consider that this level of continued administrative annual running costs can be materially reduced through the merger resulting in benefits to both groups of shareholders. -The aggregate anticipated cost of undertaking the merger is GBP199,000, including VAT, legal and professional fees, stamp duty and the costs of winding up Phoenix VCT. The costs of the merger will be split proportionately between AIM VCT and Phoenix VCT by reference to their respective merger NAVs. -Agreed that the existing AIM VCT board will continue in its current form (Stephen Hazell-Smith being regarded as the Phoenix VCT representative retained on the AIM VCT board for these purposes). -Shares at 1414 GMT unchanged at 32.5 pence. -By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; [email protected] (END) Dow Jones Newswires July 09, 2010 10:16 ET (14:16 GMT)