TIDMBSRT
RNS Number : 4409Y
Baker Steel Resources Trust Ltd
09 May 2019
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH
AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
This announcement has been determined to contain inside
information for the purposes of the Market Abuse Regulation (EU)
No. 596/2014
9 May 2019
Baker Steel Resources Trust Limited
(the "Company" or "BSRT")
(a closed-ended investment company incorporated in Guernsey with
registration number 51576 and registered office address of Arnold
House, St. Julian's Avenue, St. Peter Port, Guernsey, GY1 3NF)
Tender Offer
Following on from the Tender Offer announced in the Company's
Annual Report, published on 10 April 2019, Baker Steel Resources
Trust Limited announces a tender offer for up to 9,677,498 Shares
(representing approximately one Share for every 12 of the Company's
issued Shares as at the date of this announcement) at a Tender
Price of 51 pence per share (the "Tender Offer"). The Tender Price
represents a premium of 10.9 per cent. to the closing bid price of
an Ordinary Share on 7 May 2019 and a discount of 10.2 per cent. to
the unaudited NAV per Share as at 30 April 2019.
The Company will shortly publish a Circular providing details of
the Tender Offer and the notice of the 2019 AGM.
The implementation of the Tender Offer is conditional upon the
passing of Resolution 9 which will be proposed as a special
resolution at the 2019 AGM, convened for 28 May 2019.
Key details from the Circular:
Introduction
As included in the Company's annual report and accounts for the
financial year ended 31 December 2018, the Company announces today
a tender offer for up to 9,677,498 Shares (representing
approximately one Share for every 12 of the Company's issued Shares
as at the date of this announcement) as a means of implementing the
first return of capital by the Company in accordance with the
capital returns policy introduced in 2015.
The Tender Offer will be conducted at a fixed price of 51 pence
per Share, which represents a premium of 10.9per cent. to the
closing bid price of an Ordinary Share on the Latest Practicable
Date and a discount of 10.2per cent. to the unaudited NAV per Share
as at 30 April 2019 (the "Tender NAV").
The implementation of the Tender Offer is conditional upon the
passing of Resolution 9 which will be proposed as a special
resolution at the 2019 AGM. The notice convening the 2019 AGM which
is to be held at 12 noon on Tuesday, 28 May 2019 accompanies the
Circular document.
The purposes of the Circular are to set out the background to
and reasons for the Tender Offer and why the Board recommends
shareholders vote in favour of Resolution 9 to be proposed at the
2019 AGM. The Circular also contains the terms and conditions of
the Tender Offer, together with details of how Qualifying
Shareholders can tender Shares for purchase, if they wish to do
so.
The Circular is not a recommendation for Qualifying Shareholders
to tender any Shares under the Tender Offer. Whether or not
Qualifying Shareholders tender any Shares will depend on, among
other things, their view of the Company's prospects and their own
individual circumstances, including their tax position, on which
they should seek their own independent advice.
Background to and reasons for the Tender Offer
Notwithstanding that the current mining market environment is
attractive for investing in new mining opportunities, in 2015 the
Board introduced a capital returns policy whereby it will allocate
cash for distributions to shareholders in an amount being no less
than 15 per cent. of the aggregate audited net realised cash gains
generated in the previous financial year.
The sale of the majority of the Company's interest in the
Prognoz silver project provides the first opportunity to deliver on
this policy. Although the majority of the proceeds are still held
in Polymetal International plc shares, the Board considers these to
be sufficiently liquid as to be considered as cash for the purposes
of the policy.
Having considered the alternatives, the Board believes that the
appropriate way to implement its capital returns policy is through
one or more tender offers. The Tender Offer described in the
Circular will enable the Company to return approximately 25 per
cent. of the net realised gains generated on Prognoz during the
last financial year.
It is hoped that the opportunity to receive a direct share of
the proceeds of successful realisations will encourage existing
shareholders to maintain their commitment to the Company and
attract new investors appreciative of the clear visibility of
likely future returns from its investment activities, which in turn
may help reduce the discount and improve share liquidity.
Summary information on the Tender Offer
Full details of the Tender Offer, including the terms and
conditions on which it is being made, are set out in Part III of
the Circular and, in the case of Shares held in certificated form,
on the Tender Form.
The Tender Offer is only available to Qualifying Shareholders on
the register of members of the Company on the Record Date in
respect of the Ordinary Shares and Management Ordinary Shares held
by them on the Record Date.
Qualifying Shareholders can choose whether they wish to tender
any of their Shares under the Tender Offer. Qualifying Shareholders
are not obliged to tender any of their Shares if they do not wish
to do so.
The Tender Offer involves the following:
-- Numis, acting as principal, will purchase up to 9,677,498
Shares at the Tender Price on and subject to the terms and
conditions of the Tender Offer and will sell such tendered Shares
to the Company pursuant to the Repurchase Agreement.
-- 9,677,498 Shares represent approximately one Share for every
12 of the Company's issued Shares as at the date of the Circular
(equivalent to 8.333 per cent. of the current issued Shares
excluding Ordinary Shares held in treasury).
-- The Tender Price, being 51 pence per Share represents a
10.9per cent premium to the closing bid price of an Ordinary Share
on the Latest Practicable Date and a 10.2 per cent. discount to the
Tender NAV.
-- The Tendered Shares will be acquired by the Company from
Numis and such Shares will then be cancelled.
-- All Shares tendered by any Qualifying Shareholder up to their
Basic Entitlement (which represents such Qualifying Shareholder's
pro rata share of the maximum number of Shares to be acquired under
the Tender Offer) will be accepted in full on and subject to the
terms and conditions of the Tender Offer set out in Part III of the
Circular and, in the case of Shares held in certificated form, the
Tender Form.
-- Each Qualifying Shareholder's Basic Entitlement will be
calculated by the Registrars as at the Record Date by reference to
the Qualifying Shareholder's holding of Ordinary Shares and/or
Management Ordinary Shares as at that date.
-- If the number of Shares validly tendered is 9,677,498 or
less, all such Shares will be purchased under the Tender Offer on
and subject to the terms and conditions of the Tender Offer set out
in Part III of the circular.
-- If the number of Shares validly tendered is more than
9,677,498, tenders will be accepted in the order set out below:
- all Shares tendered by Qualifying Shareholders up to their
Basic Entitlement will be accepted in full; and
- tenders of Shares in excess of the Qualifying Shareholders'
Basic Entitlements will be satisfied pro rata in proportion to the
amount tendered in excess of Basic Entitlements (rounded down to
the nearest whole number of Shares) or otherwise at the discretion
of Numis, in consultation with the Board.
-- Qualifying Shareholders are able to tender their Shares until
1.00 p.m. on the Tender Closing Date, which is 24 May 2019. In
order to participate in the Tender Offer:
- Qualifying Shareholders holding Shares in certificated form as
at the Record Date must return the accompanying personalised Tender
Form together with any share certificate(s) and/or other
document(s) of title in accordance with the instructions set out on
the Tender Form by 1.00 p.m. on 24 May 2019; and
- Qualifying Shareholders holding Shares in uncertificated form
(that is, in CREST) are directed to paragraph 3.2 of Part III of
the Circular which details specific procedures for those
holders.
Qualifying Shareholders who choose not to participate in the
Tender Offer and who therefore do not tender their Shares will not
receive any cash proceeds in respect of their Shares under the
Tender Offer but will benefit from an uplift to the Company's NAV
(estimated to be 0.7 per cent.) owing to the Tender Price being at
a discount to the NAV per share. Further, non-participating
Qualifying Shareholders will benefit by owning a greater percentage
of the Company as there will be fewer Shares in issue after
completion of the Tender Offer.
Ordinary Shares may be traded in the normal way during the
period in which the Tender Offer remains open, but Qualifying
Shareholders should note that, once tendered, their Shares may not
be sold, transferred, charged or otherwise disposed of other than
in accordance with the Tender Offer.
The purchase from Qualifying Shareholders and the subsequent
sale of the tendered Ordinary Shares to the Company will be
effected by Numis, as principal, "On Exchange" in accordance with
the Rules of the London Stock Exchange, except for any Management
Ordinary Shares which will be acquired by Numis, as principal,
off-market since the Management Ordinary Shares are not admitted to
trading on the London Stock Exchange.
The Tender Offer is only available to Qualifying Shareholders
and is not available to Shareholders in the United States,
Australia, Canada, Japan, the Republic of South Africa or to
Shareholders who are otherwise within a Restricted Territory.
Any rights of Qualifying Shareholders who choose not to tender
their Shares will be unaffected by the Tender Offer.
Irrevocable undertakings to accept the Tender Offer from the
Deemed Concert Party
The Takeover Code applies to the Company and governs, inter
alia, transactions which may result in a change of control of the
Company. Under Rule 9 of the Takeover Code, any person who
acquires, whether by a series of transactions over a period of time
or not, an interest (as defined in the Takeover Code) in shares
which, taken together with shares in which he is already interested
or in which persons acting in concert with him are interested,
carry 30 per cent. or more of the voting rights of a company which
is the subject to the Takeover Code, is normally required to make a
general offer to all the remaining shareholders to acquire their
shares.
Similarly, Rule 9 of the Takeover Code also provides that when
any person, together with persons acting in concert with him, is
interested in shares which, in aggregate, carry more than 30 per
cent. of the voting rights of such company, but does not hold
shares carrying 50 per cent, or more of such voting rights, a
general offer will normally be required if any further interest in
shares is acquired by any such person.
An offer under Rule 9 must be in cash and at the highest price
paid within the twelve months prior to the announcement of the
offer for any interest in shares in the Company by the person
required to make the offer or any person acting in concert with
him.
Baker Steel Capital Managers LLP which acts as the Company's
investment manager was co-founded by Trevor Steel and David Baker
in 2001. David Baker and Trevor Steel exercise majority management
control over Baker Steel Capital Managers LLP. Both Trevor Steel
and David Baker are considered to be acting in concert for the
purposes of the Takeover Code and certain other Shareholders of the
Company are considered to be acting in concert as a result of their
relationships with Trevor Steel, David Baker and/or the Investment
Manager (the "Deemed Concert Party"). Full details of the Deemed
Concert Party are set out in paragraph 4 to Part VI of the
Circular.
The Deemed Concert Party originally acquired an aggregate
interest of more than 30 per cent. in the Company's voting rights
in connection with the acquisition by the Company of a portfolio of
additional investments from Genus Natural Resources Fund and Genus
Natural Resources Master Fund for which a waiver from the
obligation to make a general offer to the Shareholders pursuant to
Rule 9 of the Takeover Code was obtained from the Panel that was
approved by the Company's independent shareholders at a general
meeting held on 23 February 2015.
The aggregate shareholding of the Deemed Concert Party in the
Company as at the Latest Practicable Date was 36,910,436 Shares
(including 10,000 Management Ordinary Shares), representing
approximately 31.78 per cent. of the voting share capital of the
Company.
In order to ensure that the aggregate shareholding of the Deemed
Concert Party does not increase as a result of the Tender Offer,
all members of the Deemed Concert Party have irrevocably undertaken
to take up at least their Basic Entitlement under the Tender
Offer.
Expenses
The costs relating to the Tender Offer, and assuming the Tender
Offer is fully subscribed, are expected to be approximately
GBP116,000. The Tender Price represents a 10.2 per cent. discount
to the Tender NAV and assuming that the Tender Offer is fully
subscribed, the costs of the Tender Offer are expected to be
approximately 2.0 per cent. of the Tender NAV, and therefore
continuing Shareholders should expect to receive an uplift to the
NAV per Share.
Taxation
A guide to certain UK tax consequences of the Tender Offer for
Shareholders under UK law and HMRC practice is set out in Part V of
the Circular.
Qualifying Shareholders who are in any doubt as to their tax
position or who are subject to tax in a jurisdiction other than the
United Kingdom should consult a professional adviser.
Overseas Shareholders
The attention of Shareholders who are not resident in the United
Kingdom is drawn to paragraph 9 of Part III of the Circular headed
"Restricted Shareholders and other Overseas Shareholders".
2019 AGM and Tender Offer Authority
In addition to the usual annual buy-back authority which enables
the Company to make market purchases of Ordinary Shares
representing up to 14.99 per cent. of the Company's issued Ordinary
Shares in accordance with and subject to the requirements of the
Listing Rules, to enable the Company to implement its capital
returns policy, the Directors are also seeking Shareholders'
authority to purchase up to 30,000,000 Ordinary Shares and
Management Ordinary Shares (representing approximately 25.8 per
cent of the Company's ordinary share capital) in connection with
one or more tender offers for the Shares, the first of which is the
Tender Offer described in the Circular, (the Tender Offer
Authority). The Board intends to seek renewal of the Tender Offer
Authority at each annual general meeting held after the 2019
AGM.
Accordingly, the proposed Tender Offer requires Shareholders'
approval of the Tender Offer Authority and is conditional on the
passing of Resolution 9 set out in the 2019 AGM Notice which
accompanies the Circular. The Tender Offer Authority which will be
proposed as a special resolution requires at least 75 per cent. of
the votes cast to be in favour of it.
Action to be taken
To vote at the 2019 AGM to approve the tender offer
authority
Whether or not Shareholders propose to attend the 2019 AGM in
person, they are requested either to complete the accompanying Form
of Proxy and return it to Link Asset Services at the Registry,
34Beckenham Road, Beckenham, Kent BR3 4TU in accordance with the
instructions printed on it, or, if Shareholders hold their Ordinary
Shares in CREST, to utilise the CREST electronic proxy appointment
service in accordance with the procedures set out on the Form of
Proxy. In each case, proxy votes should be returned as soon as
possible, but in any event not later than 48 hours before the time
appointed for the 2019 AGM or any adjournment of that meeting.
Completion and return of Forms of Proxy will not prevent
Shareholders from attending and voting in person at the 2019 AGM
should they wish to do so.
To tender Shares under the Tender Offer
The procedure for tendering Shares depends on whether Shares are
held in certificated or uncertificated form and is summarised
below.
By Shareholders holding Shares in certificated form
Qualifying Shareholders who hold Shares in certificated form and
who wish to tender all or any of their existing holding of Shares
should complete the Tender Form in accordance with the instructions
printed thereon (including a witnessed signature) and in Part IV of
the Circular and return it to Link Asset Services in accordance
with the instructions printed on the Tender Form. A prepaid
envelope is enclosed for this purpose. Qualifying Shareholders who
hold their Shares in certificated form should also return their
share certificate(s) and/or other document(s) of title in respect
of the Shares tendered. Completed Tender Forms must be received by
not later than 1.00 p.m. on 24 May 2019. Further details of the
procedures for tendering and settlement are set out in paragraph
3.2 of Part III of the circular and in the accompanying Tender
Form.
By Shareholders holding Ordinary Shares in uncertificated
form
Qualifying Shareholders who hold Ordinary Shares in
uncertificated form (that is, in CREST) and who wish to tender all
or any of their existing holdings of Ordinary Shares should tender
electronically through CREST so that the TTE Instruction settles by
not later than 1.00 p.m. on 24 May 2019. Further details of the
procedures for tendering and settlement are set out in Part III of
the circular.
The CREST manual may also assist Shareholders in making a TTE
Instruction.
Shareholders who do not wish to tender any Shares should not
complete a Tender Form or submit a TTE Instruction.
Recommendation
The Board considers that the Tender Offer is in the best
interests of Shareholders as a whole. Accordingly, the Board
unanimously recommends that Shareholders vote in favour of
Resolution 9 to be proposed at the 2019 AGM which will authorise
the implementation of the Tender Offer.
The Directors intend to vote in favour, or procure the vote in
favour, of Resolution 9 at the 2019 AGM in respect of their own
beneficial holdings of Ordinary Shares, which in aggregate amount
to 129,198 Ordinary Shares (representing 0.1 per cent. of the
issued ordinary share capital of the Company as at the date of the
circular).
The Directors make no recommendation to Shareholders as to
whether or not they should tender all or any of their Shares in the
Tender Offer. Whether or not Shareholders decide to tender their
Shares will depend, amongst other factors, on their view of the
Company's prospects and their own individual circumstances,
including their own tax position.
If you are in any doubt about the contents of the circular or
the action you should take, you should seek your own independent
financial or legal advice immediately.
Expected timetable:
2019
Latest time and date for receipt of Forms 12 noon on 24 May
of Proxy for the 2019 AGM
Latest time and date for receipt of Tender 1.00 p.m. 24 May
Forms or for settlement of TTE Instructions
Record Date for participation in the 5.00 p.m. on 24 May
Tender Offer
Annual General Meeting 12 noon on 28 May
Results of the 2019 AGM and Tender Offer 28 May
announced
Tender Purchase Date 29 May
CREST accounts credited with Tender Offer 5 June
consideration in respect of uncertificated
Shares sold under the Tender Offer and
any unsold uncertificated Shares
Despatch of cheques for the Tender Offer 5 June
consideration in respect of certificated
Shares sold under the Tender Offer
Despatch of any balance certificates 5 June
in respect of any unsold certificated
Shares
Enquiries:
Baker Steel Resources Trust Limited +44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited +44 20 7260 1000
David Benda (Corporate)
James Glass (Sales)
HSBC Securities Services (Guernsey) Limited
Company Secretary +44 (0)1481 717 852
Important Information
Further details of the Tender Offer are set out in the circular,
which will be available on the Company's website at
www.bakersteelresourcestrust.com. A copy of the circular will be
submitted to the National Storage Mechanism and will be available
for inspection at www.morningstar.co.uk /uk/NSM.
Capitalised terms used in this announcement shall, unless the
context otherwise requires, bear the meaning given to them in the
Circular.
This announcement and the information contained herein is not
for publication, release or distribution, directly or indirectly,
in or into the United States, Australia, Canada, Japan or South
Africa or any jurisdiction in which the same would be unlawful.
This announcement is for information purposes only and does not
constitute an invitation to tender shares or otherwise acquire or
dispose of securities in the Company in any jurisdiction.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting for the Company and is acting for no-one else in
connection with any tender offer declared by the Company and will
not be responsible to anyone other than the Company for providing
the protections afforded to its clients nor for providing advice in
relation to any tender offer by the Company or any other matter
referred to herein. To the fullest extent permitted by law
recipients agree that Numis shall not have any liability (direct or
indirect) for or in connection with this announcement or any
matters arising out of or in connection herewith. Numis has not
authorised the contents of, or any part of, this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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