TIDMPJF
RNS Number : 6844G
Prospect Co., Ltd.
31 May 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
(INCLUDING THE UNITED STATES) WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For immediate release
31 May 2017
RECOMMED ALL-SHARE OFFER
for
THE PROSPECT JAPAN FUND LIMITED
by
PROSPECT CO., LTD.
TO BE IMPLEMENTED BY MEANS OF A SCHEME OF ARRANGEMENT
UNDER PART VIII OF THE COMPANIES LAW OF GUERNSEY
Summary
-- The board of directors of Prospect Co., Ltd. ("Prospect") and
the independent directors of The Prospect Japan Fund Limited
("TPJF" or the "Company") are pleased to announce that they have
reached agreement on the terms of a recommended share for share
exchange offer to be made by Prospect for the entire issued and to
be issued share capital of TPJF (the "Offer"). It is intended that
the Offer will be implemented by way of a Court-sanctioned scheme
of arrangement between TPJF and its shareholders under Part VIII of
the Companies Law of Guernsey (the "Scheme").
-- Prospect is a Japanese company listed on the Tokyo Stock
Exchange (ticker code: 3528), which owns and operates a number of
Japanese and Hawaii based businesses including a real estate
developer, a construction company, a house building company, an
investment management business and a solar power generation
business.
-- The Offer is a share for share exchange offer at a ratio of
2.5 New Prospect Shares in exchange for each TPJF Share (the
"Exchange Ratio"). The Exchange Ratio attributes an implied value
for the entire issued share capital of TPJF of approximately
US$146.6 million (based on the middle market closing price of
Yen70.50 per Prospect Share on 30 May 2017, being the last Business
Day in Japan prior to the date of this Announcement and using an
exchange rate of 111.03 Yen/US$).
-- If successful, the combination of TPJF and Prospect will
result in TPJF Shareholders holding approximately 57.6 per cent. of
the Combined Group and Prospect Shareholders holding approximately
42.4 per cent. of the Combined Group.
-- At the value implied by the Exchange Ratio, the Offer
represents a premium of approximately:
o 67.98 per cent. to the middle market closing price of US$0.945
per TPJF Share on 9 January 2017 (being the last Business Day in
London prior to the start of the Offer Period);
o 71.05 per cent. to the volume weighted average price for TPJF
Shares of US$0.928 over the three month period ended on and
including 9 January 2017 (being the last Business Day in London
prior to the start of the Offer Period);
o 45.63 per cent. to the middle market closing price of US$1.09
per TPJF Share on 30 May 2017 (being the last Business Day in
London prior to the date of this Announcement); and
o 28.13 per cent. to TPJF's last published NAV per share of
US$1.2389 on 26 May 2017*.
Note:
* - This NAV calculation is on the basis that the Company's
holding of SARs is valued at par. As set out in the Company's
announcement of 26 May 2017, if the SARs were to be 'fair valued'
using the Black-Scholes-Merton model, in line with TPJF's annual
financial statements, the NAV per share would be US$1.3380. At the
value implied by the Exchange Ratio, the Offer would represent a
premium of approximately 18.64 per cent. to such alternative NAV
per TPJF Share.
-- Prospect is the parent company of both the investment manager
and the investment adviser to TPJF, being Prospect Asset Management
(Channel Islands) Ltd. ("PAM(CI)") and Prospect Asset Management,
Inc. ("PAMI"), respectively. As at the date of this Announcement,
neither PAM(CI) nor PAMI is interested in any TPJF Shares.
-- Mr Rupert Evans, a non-executive director of TPJF, is also a
non-executive director of PAM(CI) and is therefore not part of the
committee of Independent TPJF Directors that was formed to assess
the Offer.
-- Implementation of the Scheme will be subject to, amongst
other things, the approval of Scheme Shareholders at the Court
Meeting and TPJF Shareholders at the TPJF General Meeting, and the
sanction of the Scheme by the Court. The Scheme Document, setting
out full details of the Scheme and the procedures to be followed by
TPJF Shareholders to approve the Scheme, together with the Forms of
Proxy, are expected to be despatched to TPJF Shareholders as soon
as reasonably practicable. It is expected that the Scheme will
become Effective in the second half of 2017, subject to the
Conditions and certain further terms set out in Appendix I to this
Announcement and to be set out in the Scheme Document.
-- The Offer is also subject to the approval by Prospect
Shareholders of certain resolutions at the Prospect ASM to approve
the issue of the New Prospect Shares as consideration under the
Offer. The Prospect Directors (save for Curtis Freeze due to a
conflict of interest) have unanimously agreed to recommend that
Prospect Shareholders vote in favour of the special resolutions to
be proposed at the Prospect ASM. The Prospect Directors have
irrevocably undertaken to vote in favour of such resolutions in
respect of their own beneficial holdings of 180,530 Prospect Shares
representing, in aggregate, approximately 0.11 per cent. of
Prospect's issued ordinary share capital outside treasury.
-- If the Scheme does not become Effective by the Longstop Date,
the Offer will lapse, except where the approval of Scheme
Shareholders at the Court Meeting and TPJF Shareholders at the TPJF
General Meeting is obtained before this date, in which case the
Longstop Date for the Offer may be extended to such later date as
Prospect and the Independent TPJF Directors may agree and, if
appropriate, the Court and the Panel may approve.
-- TPJF Shareholders who hold either a direct account with
JASDEC or an account with one of the account management
institutions (a "JASDEC Account") and have a standing proxy or a
mailing address in Japan and who make a valid notification to
Equiniti Limited acting as receiving agent (the "Receiving Agent")
by completing and submitting a JASDEC settlement form ("Form A")
(which will accompany the Scheme Document), will have the New
Prospect Shares to which they are entitled pursuant to the terms of
the Scheme delivered to the relevant JASDEC Account by no later
than the date which is 14 days after the Effective Date.
-- TPJF Shareholders who do not have a JASDEC Account and a
standing proxy or mailing address in Japan and who are unable or
unwilling to open such an account and submit Form A to the
Receiving Agent, may instead choose to complete and submit a
sub-account opening form ("Form B") (which will accompany the
Scheme Document) to the Receiving Agent, thereby opening a
sub-account with Equiniti Financial Services Limited acting as
fiduciary (the "Fiduciary") to receive and hold the New Prospect
Shares to which they are entitled pursuant to the terms of the
Scheme on their behalf.
-- In the case of TPJF Shareholders who neither validly complete
and submit Form A nor Form B to the Receiving Agent, they will
initially have the New Prospect Shares to which they are entitled
pursuant to the terms of the Scheme held on their behalf by the
Fiduciary and such New Prospect Shares will ultimately be sold in
the market in accordance with the approved Sales Policy, details of
which are set out in this Announcement with funds being remitted to
the address set out on the TPJF Shareholder register.
-- In order to provide sufficient information to its new
shareholders, following completion of the Offer, Prospect has
committed to, amongst other things, providing an English
translation of significantly all of its corporate website and all
announcements made by Prospect in Japan, including quarterly NAV
updates, and to simultaneously release such translated
announcements on RNS Reach in the UK, as well as English
translations of shareholder communications and company results, and
to fund regular independent English language research on Prospect
which would also be uploaded to its website. In addition, an
English speaking investor relations professional has been hired by
Prospect who will be the main contact for English speaking
investors.
-- The Independent TPJF Directors, who have been so advised by
Stockdale, the Company's financial adviser, consider the terms of
the Offer to be fair and reasonable so far as TPJF Shareholders are
concerned. In providing its advice to the Independent TPJF
Directors, Stockdale has taken into account the commercial
assessments of the Independent TPJF Directors.
-- Accordingly, the Independent TPJF Directors intend
unanimously to recommend that TPJF Shareholders vote in favour of
the resolutions relating to the Offer at the Court Meeting and the
TPJF General Meeting. The Independent TPJF Directors do not hold
any TPJF Shares.
-- Prospect has received letters of intent from certain
institutional TPJF Shareholders (who are listed in Appendix III to
this Announcement) to vote or procure the vote in favour of the
resolutions in relation to the Offer in respect of their entire
beneficial holdings of TPJF Shares amounting, in aggregate, to
58,196,952 TPJF Shares, representing approximately 63.02 per cent.
of the existing issued share capital of TPJF.
Commenting on the Offer on behalf of Prospect, Curtis Freeze,
President of Prospect, said:
"I am pleased to announce this strategically important
transaction for Prospect and TPJF. I am confident that a
Prospect/TPJF combination will significantly benefit our respective
stakeholders. Together, we plan to pursue various collaboration
opportunities and to further expand the investment business in the
future. I strongly believe that together we can achieve this
goal."
Commenting on the Offer on behalf of the Independent TPJF
Directors, John Hawkins, Non-Executive Chairman of TPJF, said:
"The Offer represents an attractive implied value for TPJF and
is at a level that we believe should be put to our shareholders. It
provides a healthy premium over the recent market share price and
would create a strong platform for future growth and value
creation."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including the Appendices).
The Offer will be subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to the full
terms and conditions which will be set out in the Scheme Document.
Appendix II to this Announcement contains the sources of
information and bases of calculation of certain information
contained in this Announcement. Appendix III to this Announcement
contains a summary of the letters of intent and irrevocable
undertakings received in relation to the Offer. Appendix IV to this
Announcement contains definitions of certain terms used in this
Announcement.
Any statement of intention, belief or expectation for the
Combined Group following the Effective Date is an intention, belief
or expectation of the Prospect Directors and not of the TPJF
Directors.
A copy of this Announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on the website of TPJF at
www.prospectjapanfund.com, along with certain other documentation
required to be posted online under the Code.
Enquiries:
Prospect Co., Ltd.
Curtis Freeze, President Tel: +1 808 383 3833
The Prospect Japan Fund Limited
John Hawkins, Non-Executive Chairman Tel: +44 (0)1481 745
918
Strand Hanson Limited
(Joint Financial Adviser to Prospect) Tel: +44 (0)207 409 3494
Stuart Faulkner
Matthew Chandler
James Dance
Mizuho Bank, Ltd. (Corporate Advisory
department) Tel: +81 (0) 3 3284 1655
(Joint Financial Adviser to Prospect)
Ryo Kamisaku
Eiichi Igarashi
Stockdale Securities Limited
(Financial Adviser to TPJF) Tel: +44 (0) 20 7601
Daniel Harris 6100
David Coaten
Important Notices
Strand Hanson Limited, which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively for Prospect as joint financial adviser in connection
with the Offer and other matters set out in this Announcement and
for no one else and will not be responsible to anyone other than
Prospect for providing the protections afforded to its clients or
for providing advice in relation to the Offer and other matters set
out in this Announcement. Neither Strand Hanson Limited nor any of
its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Strand Hanson Limited in connection
with this Announcement, any statement contained herein or
otherwise.
Mizuho Bank, Ltd. (Corporate Advisory department), an investment
banking arm of Mizuho Financial Group, which is regulated by the
Japanese Financial Services Agency, is acting exclusively for
Prospect as joint financial adviser in connection with the Offer
and other matters set out in this Announcement and for no one else
and will not be responsible to anyone other than Prospect for
providing the protections afforded to its clients or for providing
advice in relation to the Offer and other matters set out in this
Announcement. Neither Mizuho Bank, Ltd. (Corporate Advisory
department) nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Mizuho
Bank, Ltd. (Corporate Advisory department) in connection with this
Announcement, any statement contained herein or otherwise.
Stockdale Securities Limited, which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for TPJF as financial adviser in connection with the
Offer and other matters set out in this Announcement and for no one
else and will not be responsible to anyone other than TPJF for
providing the protections afforded to its clients or for providing
advice in relation to the Offer and other matters set out in this
Announcement. Neither Stockdale Securities Limited nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Stockdale Securities Limited in
connection with this Announcement, any statement contained herein
or otherwise.
Further information
This Announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer or
invitation, or the solicitation of an offer, to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Offer or otherwise nor will there be
any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law.
The Offer will be made solely pursuant to the disclosures and
information contained in the Scheme Document which, together with
the Forms of Proxy, will contain the full terms and conditions of
the Offer, including details of how TPJF Shareholders may vote at
the Meetings in respect of the Offer.
TPJF will prepare the Scheme Document to be distributed to TPJF
Shareholders (with input from Prospect, including with respect to
information about the New Prospect Shares and the Combined Group).
TPJF urges TPJF Shareholders to read the Scheme Document when it
becomes available because it will contain important information in
relation to the Offer, the New Prospect Shares and the Combined
Group. Any vote in respect of the Scheme or other response in
relation to the Offer should be made only on the basis of the
information contained in the Scheme Document.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
jurisdictions other than the UK and Guernsey may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK and Guernsey should inform
themselves about, and observe any applicable requirements. In
particular, the ability of persons who are not resident in the UK
or Guernsey to participate in the Offer may be affected by the laws
of the relevant jurisdictions in which they are located. This
Announcement has been prepared for the purpose of complying with
English law and Guernsey law and with the Code and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside the UK and Guernsey.
The Offer will be subject to the applicable requirements of the
Companies Law of Guernsey, the Court (as a result of TPJF being
incorporated in Guernsey) and the GFSC (as a result of TPJF being
an authorised closed-ended investment scheme in Guernsey), with the
applicable requirements of English law, the Code, the Panel, the
London Stock Exchange and the FCA (as a result of TPJF being listed
on the London Stock Exchange) and also with the applicable
requirements of Japanese laws, JASDEC, the Tokyo Stock Exchange and
the Japanese Financial Services Agency (as a result of Prospect
being a Japanese company, listed on the Tokyo Stock Exchange).
The Offer may not be made directly or indirectly, in or into, or
by the use of (electronic) mail or any means or instrumentality
(including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and no
person may vote in favour of the Scheme by any such use, means,
instrumentality or facilities. Accordingly, copies of this
Announcement, the Scheme Document, the Notices of Court Meeting and
TPJF General Meeting, the Forms of Proxy and all other documents
relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. All persons receiving this
Announcement (including, without limitation, custodians, nominees
and trustees) should observe these restrictions and any applicable
legal or regulatory requirements of their jurisdiction and must not
mail or otherwise forward, send or distribute this Announcement in,
into or from any Restricted Jurisdiction.
The receipt of securities pursuant to the Offer by Overseas
Shareholders may be a taxable transaction under applicable
national, state and local, as well as foreign and other tax laws.
Each Overseas Shareholder is urged to consult their independent
professional adviser regarding the tax consequences of accepting
the Offer.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Additional information for US investors
These materials are not for distribution, directly or
indirectly, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia). These materials do not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States.
The New Prospect Shares have not been and will not be registered
under the US Securities Act of 1933 (the "US Securities Act") or
under the securities laws of any State or other jurisdiction of the
United States. Accordingly, the New Prospect Shares may not be
offered, sold, resold, delivered, distributed or otherwise
transferred, directly or indirectly, in or into the United States
absent registration under the US Securities Act or an exemption
therefrom. The New Prospect Shares issued pursuant to the Offer are
expected to be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. There will be no public offer of New
Prospect Shares in the United States.
TPJF is organised under the laws of Guernsey and Prospect is
organised under the laws of Japan. All of the officers and
directors of TPJF are residents of countries other than the United
States, and most of the officers and directors of Prospect are
residents of countries other than the United States. It may not be
possible to sue TPJF and Prospect in a non-US court for violations
of US securities laws. It may be difficult to compel TPJF, Prospect
and their respective affiliates to subject themselves to the
jurisdiction and judgment of a US court.
The Offer, to be implemented by way of the Scheme, is being made
to acquire the entire issued and to be issued share capital of a
company incorporated in Guernsey by way of a scheme of arrangement
provided for under Part VIII of the Companies Law of Guernsey. A
transaction effected by way of a scheme of arrangement is not
subject to the proxy solicitation or tender offer rules under the
US Securities Exchange Act of 1934 (the "US Exchange Act").
Accordingly, the Scheme will be subject to the disclosure
requirements, rules and practices applicable in the UK and Guernsey
to schemes of arrangement and takeover offers, which differ from
the disclosure requirements, style and format of US tender offer
and proxy solicitation rules. If Prospect determines to extend the
offer into the US, the Offer will be made in compliance with
applicable US laws and regulations. Financial information included
in this Announcement and the Scheme Document has been or will have
been prepared in accordance with non-US accounting standards that
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US. However,
if Prospect were to elect to implement the Offer by means of a
contractual offer, rather than the Scheme, such offer will be made
in compliance with all applicable laws and regulations, including
Section 14(e) of the US Exchange Act and Regulation 14E thereunder.
Such offer would be made in the US by Prospect and no one else.
Neither the US Securities and Exchange Commission nor any
securities commission of any state of the United States has
approved or disapproved the Offer, nor have such authorities passed
upon or determined the fairness of the Offer or the adequacy or
accuracy of the information contained in this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
If the Offer is required to be made in the US, it will be done
in compliance with the applicable tender offer rules under the US
Exchange Act.
Forward-looking statements
This Announcement may contain certain forward-looking statements
with respect to the financial condition, results of operations and
business of Prospect and/or TPJF and certain plans and objectives
of Prospect with respect thereto. These forward-looking statements
can be identified by the fact that they do not relate to historical
or current facts. Forward-looking statements also often use words
such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar
meaning. These statements are based on assumptions and assessments
made by Prospect and/or TPJF (as applicable) in light of their
experience and perception of historical trends, current conditions,
future developments and other factors they believe appropriate. 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 and the factors
described in the context of such forward-looking statements in this
Announcement could cause actual results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to be correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this Announcement. Prospect does not assume any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise), except as required by the Panel, the Code or by
applicable law.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither Prospect nor TPJF undertakes
any obligation to update or revise any forward-looking statement as
a result of new information, future events or otherwise, except to
the extent legally required.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
For a discussion of important factors which could cause actual
results to differ from forward-looking statements in relation to
the Prospect Group or the TPJF Group, refer to the annual report
and accounts of the Prospect Group for the financial year ended 31
March 2016 and of the TPJF Group for the financial year ended 31
December 2016, respectively.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per TPJF
Share or earnings per Prospect Share for the current or future
financial years would necessarily match or exceed the historical
published earnings per TPJF Share or earnings per Prospect
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of the offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26.1 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on TPJF's website at
www.prospectjapanfund.com by no later than 12.00 p.m. (London time)
on the Business Day following this Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks is incorporated into, or forms part of, this
Announcement.
You may request a hard copy of this Announcement by contacting
TPJF's company secretary, Northern Trust International Fund
Administration Services (Guernsey) Limited, on +44 (0) 1481 745
918. You may also request that all future documents, announcements
and information to be sent to you in relation to the Offer should
be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
other information provided by TPJF Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from TPJF may be provided to Prospect during the
Offer Period as required under Section 4 of Appendix 4 of the Code
to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
(INCLUDING THE UNITED STATES) WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
31 May 2017
RECOMMED ALL-SHARE OFFER
for
THE PROSPECT JAPAN FUND LIMITED
by
PROSPECT CO., LTD.
TO BE IMPLEMENTED BY MEANS OF A SCHEME OF ARRANGEMENT
UNDER PART VIII OF THE COMPANIES LAW OF GUERNSEY
1. Introduction
The Prospect Directors and the Independent TPJF Directors are
pleased to announce that they have reached agreement on the terms
of a recommended share for share exchange offer for the entire
issued and to be issued share capital of TPJF by Prospect (the
"Offer"). It is intended that the Offer will be implemented by way
of a Court-sanctioned scheme of arrangement between TPJF and its
shareholders under Part VIII of the Companies Law of Guernsey (the
"Scheme").
Prospect, a Japanese company listed on the Tokyo Stock Exchange,
is the parent company of the investment manager and investment
adviser to TPJF, being Prospect Asset Management (Channel Islands)
Ltd. ("PAM(CI)") and Prospect Asset Management, Inc. ("PAMI"),
respectively. Mr Rupert Evans, a non-executive director of TPJF, is
also a non-executive director of PAM(CI) and is therefore
considered not to be "independent" and is not part of the committee
of Independent TPJF Directors formed to assess the Offer. The
Independent TPJF Directors continue to have regard to the interests
of all TPJF Shareholders, in accordance with their duties as
directors.
If successful, the combination of TPJF and Prospect will result
in TPJF Shareholders holding approximately 57.6 per cent. of the
Combined Group and Prospect Shareholders holding approximately 42.4
per cent. of the Combined Group.
2. The Offer
Under the terms of the Offer, which will be subject to the
Conditions and further terms summarised below and in Appendix I to
this Announcement and to the full terms and conditions to be set
out in the Scheme Document, TPJF Shareholders will be entitled to
receive:
for each TPJF Share 2.5 New Prospect Shares
This Exchange Ratio attributes an implied value for the entire
issued share capital of TPJF of approximately US$146.6 million
(based on the middle market closing price of Yen70.50 per Prospect
Share on 30 May 2017, being the last Business Day in Japan prior to
the date of this Announcement and using an exchange rate of 111.03
Yen/US$).
At the value implied by the Exchange Ratio, the Offer represents
a premium of approximately:
-- 67.98 per cent. to the middle market closing price of
US$0.945 per TPJF Share on 9 January 2017 (being the last Business
Day in London prior to the start of the Offer Period);
-- 71.05 per cent. to the volume weighted average price for TPJF
Shares of US$0.928 over the three month period ended on and
including 9 January 2017 (being the last Business Day in London
prior to the start of the Offer Period);
-- 45.63 per cent. to the middle market closing price of US$1.09
per TPJF Share on 30 May 2017 (being the last Business Day in
London prior to the date of this Announcement); and
-- 28.13 per cent. to TPJF's last published NAV per share of US$1.2389 on 26 May 2017*.
Note:
* - This NAV calculation is on the basis that the Company's
holding of SARs is valued at par. As set out in the Company's
announcement of 26 May 2017, if the SARs were to be 'fair valued'
using the Black-Scholes-Merton model, in line with TPJF's annual
financial statements, the NAV per share would be US$1.3380. At the
value implied by the Exchange Ratio, the Offer would represent a
premium of approximately 18.64 per cent. to such alternative NAV
per TPJF Share.
Following completion of the Offer, TPJF Shareholders will hold
approximately 57.6 per cent. of the Combined Group and Prospect
Shareholders will hold approximately 42.4 per cent. of the Combined
Group.
The New Prospect Shares will be issued credited as fully paid
and will rank pari passu in all respects with existing Prospect
Shares in issue at the time the New Prospect Shares are issued,
including the right to receive and retain dividends and other
distributions declared, made or paid by reference to a record date
falling after the date on which the Scheme becomes Effective.
Fractional entitlements to New Prospect Shares for each TPJF
Shareholder will be rounded down to an integral number. These
fractional entitlements will be aggregated and sold to Prospect as
soon as practicable after the Effective Date in accordance with the
Companies Act of Japan, Prospect's articles of incorporation and
its share handling regulations. The net proceeds of such sale shall
be contributed towards the costs of the settlement arrangements for
the Offer described further in paragraph 15 of this
Announcement.
It is expected that the Scheme Document will be published as
soon as reasonably practicable. It is therefore expected that the
Scheme will become Effective in the second half of 2017, subject to
the Conditions and certain further terms set out in Appendix I to
this Announcement and to be set out in the Scheme Document.
3. Background to and reasons for the Offer
The Prospect Group comprises a diverse range of businesses,
reflecting its past mergers and acquisitions activity, and the
Prospect Board believes that the proposed combination with TPJF
would create a strong platform for future growth and value creation
for the benefit of shareholders of both companies.
In particular, TPJF's portfolio companies span a number of
industry sectors where Prospect is already active and has
considerable experience and expertise, including real estate,
finance and construction. As such there are clear synergistic
benefits and cost savings which should serve to accelerate the
delivery of the Combined Group's growth strategy to capitalise on
opportunities arising from ongoing structural changes and reforms
in Japan.
Furthermore, the Prospect Board is confident that the stronger
balance sheet of the Combined Group and enhanced debt capacity
would facilitate access to potential acquisition debt financing and
growth capital to help drive beneficial corporate activity and
change in TPJF's investee companies and thereby unlock the inherent
value in the Combined Group's portfolio.
The Prospect Board believes that as a relatively small and
specialist closed-ended investment company on the Main Market of
the London Stock Exchange (with the restraints, regulatory burden
and costs associated with such a listing), it is difficult for TPJF
to attract and retain interest and research coverage in its
activities and it therefore suffers from a general lack of
liquidity and low trading volumes in its shares with a relatively
small and concentrated share register. In contrast, Prospect has a
much larger and more active shareholder base in Japan and
consequently greater liquidity, which the Prospect Board believes
should prove attractive to those TPJF Shareholders who continue to
be shareholders in the Combined Group.
Under the direction and support of Mr Freeze, working closely
with his investment team at Prospect, PAMI and PAM(CI), the
Prospect Board believes that the Combined Group will be well placed
to generate returns for shareholders from its combined asset
portfolio over the medium to longer term, improve liquidity and
significantly reduce or eliminate the prevailing sizeable market
discount to the underlying NAV of the two groups' investments.
4. Recommendation of the Independent TPJF Directors
The Independent TPJF Directors, who have been so advised by
Stockdale, the Company's financial adviser, as to the financial
terms of the Offer, consider the terms of the Offer to be fair and
reasonable. In providing its advice to the Independent TPJF
Directors, Stockdale has taken into account the commercial
assessments of the Independent TPJF Directors. Stockdale is
providing independent financial advice to the Independent TPJF
Directors for the purposes of Rule 3 of the Code.
Accordingly, the Independent TPJF Directors intend unanimously
to recommend that TPJF Shareholders vote in favour of the Scheme at
the Court Meeting and in favour of the resolutions to be proposed
at the TPJF General Meeting, which will be convened in connection
with the Offer.
In addition, all of the Prospect Directors (save for Mr Freeze
due to a conflict of interest) intend unanimously to recommend that
Prospect Shareholders vote in favour of the special resolutions to
be proposed at the Prospect ASM. The Prospect Directors have
irrevocably undertaken to vote in favour of such resolutions in
respect of their own beneficial holdings of 180,530 Prospect Shares
representing, in aggregate, approximately 0.11 per cent. of
Prospect's issued ordinary share capital outside treasury on 30 May
2017 (being the latest practicable date prior to this
Announcement).
5. Background to and reasons for the recommendation of the Independent TPJF Directors
For some time now, the share price of TPJF has been trading at a
discount to TPJF's NAV per share. On 9 January 2017, the date
immediately prior to the announcement of the Possible Offer on 10
January 2017, the middle market closing price per TPJF Share was
US$0.945. This represented a discount of 25.06 per cent. to TPJF's
then latest published NAV per share of US$1.261 on 1 January 2017.
This discount has remained fairly consistent, averaging
approximately 30.4 per cent. for the two years prior to the date of
the announcement made on 10 January 2017 in accordance with Rule
2.4 of the Code, being the start of the Offer Period.
TPJF has recently underperformed against many of the key UK
listed investment trusts that invest in Japanese assets and, due to
its investment policy, the Independent TPJF Directors cannot see
short term catalysts to create value for shareholders. Accordingly,
the Independent TPJF Directors believe that the Offer therefore
presents TPJF Shareholders with a significant premium to both the
TPJF Share price immediately prior to commencement of the Offer
Period and the last published NAV per share of US$1.2389 on 26 May
2017, based upon the Exchange Ratio and the current Prospect share
price.
A key ongoing challenge for TPJF stock has been the weakness in
its liquidity. In the last two years, average daily trading volume
has been 78,942 shares or 0.085 per cent. of the total issued
shares of the Company. Prospect has far greater levels of
liquidity, primarily driven in recent years from its predominantly
retail share register. Over the same period, the volume traded in
Prospect was over 22 times the volume traded in TPJF, in each case
as a percentage of their respective total shares in issue,
equivalent to 1.94 per cent. of its issued share capital.
Liquidity in Prospect has been further enhanced recently through
the announcement of an uplift in its dividend which has proven very
attractive in Japan where yields on Japanese bonds have been in
decline in recent years and most recently negative for certain bond
terms. At the Prospect share price immediately prior to
commencement of the Offer Period, at close of business on 9 January
2017, of Yen67, the dividend of Yen3 for the period to 31 March
2017 represents a yield of approximately 4.5 per cent., placing
Prospect in the top 15 of the 3,586 stocks listed on the TSE for
yield. As evidence of the demand for yield in Japan, on the day
following the announcement of the proposed tripling of its yield on
6 December 2016, trading volume in the stock was 74.3m shares or
43.8 per cent. of the total issued shares outside treasury.
Additionally, Prospect has, in its recently published unaudited
annual accounts, again forecast a dividend of Yen3 per share for
the period to 31 March 2018. If the Offer successfully completes,
TPJF Shareholders may be entitled to that dividend if it is payable
and if they are holders of Prospect consideration shares at the
relevant record date.
The Independent TPJF Directors believe that the potentially
larger size of the Combined Group could also lead to a further
improvement in liquidity for Prospect as the larger entity may
become increasingly attractive to institutional investors both
inside Japan and abroad and with the prospects for wider research
coverage on the stock.
The Offer enables TPJF Shareholders to own shares in Prospect.
The Independent TPJF Directors are well acquainted with Prospect as
a result of the historical management of TPJF by Prospect's
subsidiary companies, PAM(CI) and advisory business, PAMI and its
President, Curtis Freeze, since 1994 and consider Mr Freeze to have
a strong reputation for identifying potentially lucrative
investment opportunities in Japan and elsewhere. Furthermore, since
taking over leadership of Prospect in 2010, Mr Freeze has
transformed a company which was focused solely on condominium
development in Tokyo, and diversified into the current four
business lines operating in a number of jurisdictions. Over that
period, the market capitalisation of Prospect has risen from
approximately US$15.97 million to US$107.81 million.
It should, however, be emphasised that TPJF Shareholders will
become shareholders of a company whose current assets and
constituent underlying businesses are private companies. Therefore,
evaluation of the Combined Group's NAV will be less transparent
when compared with TPJF to date and the nature of the businesses
that Prospect is currently involved with will have a different
risk/reward profile than TPJF, whose assets are primarily listed
equities on Japanese stock markets. Furthermore, TPJF Shareholders
will be exchanging their shares in an unlevered company for shares
in a company with a stated total debt equity ratio of 81.7 per
cent., based on Prospect's balance sheet as at 31 March 2017.
Further details of the risks associated with accepting the Offer
will be set out in the Scheme Document.
The structure arising from the combination of the two companies
will also offer both shareholders of Prospect and TPJF the
potential for enhancement of shareholder value. The acquisition of
TPJF and the transfer of ownership of assets into the Japanese
market will further offer Mr Freeze greater flexibility and
bargaining power locally to undertake potentially value enhancing
deals and an improved chance of realising asset values and securing
access to capital on better terms going forward. In addition, the
acquisition will offer certain cost savings as a result of the
delisting of the TPJF Shares from the London Stock Exchange. This
Announcement provides further information on the various business
segments of Prospect and further information will also be set out
in the Scheme Document.
6. Letters of intent and Irrevocable Undertakings
Letters of Intent
Prospect has received letters of intent from each of the
following TPJF Shareholders to vote in favour of the Scheme at the
Court Meeting and in favour of the resolutions to be proposed at
the TPJF General Meeting in respect of the number of TPJF Shares
indicated:
-- Lazard Asset Management Limited in respect of 23,293,778 TPJF Shares;
-- 1607 Capital Partners in respect of 17,997,489 TPJF Shares;
-- Weiss Asset Management LP in respect of 8,370,506 TPJF Shares;
-- South Yorkshire Pensions Authority in respect of 4,540,000 TPJF Shares;
-- Wells Capital Management in respect of 3,995,179 TPJF Shares,
representing, in aggregate, approximately 63.02 per cent. of the
issued ordinary share capital of TPJF on 30 May 2017 (being the
latest practicable date prior to this Announcement). Further
details of these letters of intent are set out in Appendix III to
this Announcement.
Irrevocable Undertakings
TPJF has also received irrevocable undertakings from all of the
Prospect Directors (save for Mr Henderson who does not hold any
Prospect Shares) to vote in favour of the resolutions to be
proposed at the Prospect ASM in relation to the Offer from the
Prospect Directors who hold or are beneficially entitled to 180,530
Prospect Shares, representing, in aggregate, approximately 0.11 per
cent. of the Existing Prospect Share Capital. Further details of
these irrevocable undertakings (including the circumstances in
which they will fall away) are set out in Appendix III to this
Announcement.
7. Dividend policy for the Combined Group
The Prospect Board considers returning profits to shareholders
to be an important management issue, and its basic policy, which
will continue in place for the Combined Group following the Scheme
becoming Effective, is to maintain stable and continuous dividends
that take business performance into consideration, while securing
the retained earnings necessary for stable growth of the Combined
Group in the future and for responding to changes in the business
environment.
8. Information on the Prospect Group
Prospect (Japanese name: 'Kabushiki Kaisha Prospect') is a
Japanese company listed on the Tokyo Stock Exchange (ticker code:
3528). It was originally established in 1937 and owns and operates
a number of Japanese and Hawaii based businesses including a real
estate developer, a construction company, a house building company,
an investment management business and a solar power generation
business, employing over 180 people. Prospect's strategy is to
capitalise on opportunities arising from structural changes in
Japan.
Prospect's issued share capital comprises 169,783,473 ordinary
shares (excluding 2,773,334 ordinary shares held in treasury),
which at the prevailing middle market closing share price on 30 May
2017 of Yen70.50, equates to a current market capitalisation of
Yen11.97 billion (approximately US$107.81 million). Its latest
published NAV as at 31 March 2017 was Yen12.49 billion
(approximately US$112.48 million). In its unaudited results for the
year ended 31 March 2017, Prospect generated Yen14.14 billion
(US$127.38 million) of revenue and Yen2.26 billion (US$20.38
million) gross profit, declaring a dividend of Yen3 per Prospect
Share.
The Prospect Directors comprise Curtis Rudolf Freeze (President
and a director of Prospect's investment management subsidiaries),
Masato Tabata (Managing Director) and Dominic Henderson
(Director).
In 2004, PAMI became TPJF's investment adviser and, in 2006,
Prospect acquired PAMI. Since that time, Prospect and TPJF have
established a strong and co-operative relationship, leading to TPJF
accumulating a stake in Prospect Shares and also subscribing for
certain Stock Acquisition Rights (SARs), which are described in
more detail below.
Prospect's Business Segments
Real Estate Development
Since entering the real estate business over 20 years ago,
Prospect has delivered over 7,686 condominium units to its
customers, mainly in the Metropolitan Tokyo area. Prospect's
development approach is to take into account the end user's
wellbeing and lifestyle, including consideration of factors such
as: environmental symbiosis, health, child-rearing, crime
prevention and disaster preparedness. Prospect is currently jointly
developing a mixed use project in Hawaii, comprising 422
residential units for sale. More than 94 per cent. of the units
have been contracted for sale and completion is scheduled for late
2017. Prospect Group employs 60 people in the real estate
development segment and, in the year ended 31 March 2017, the
segment generated revenue of Yen7.93 billion (US$71.46 million) and
segmental profit of Yen0.56 billion (US$5.05 million).
Asset Management
Prospect operates an investment management business, via its
wholly owned subsidiaries PAMI and PAM(CI), and is the investment
manager to TPJF. Further details on PAMI and PAM(CI) are set out
below.
Public Sector Construction
Kidoh Construction Industry Co., Ltd. ("Kidoh") is a wholly
owned subsidiary of Prospect and was established in 1946 as a civil
engineering and construction contractor to commercialise its unique
jacking method and was acquired by Prospect in March 2014. Kidoh
holds a number of patents/utility models in relation to
construction methods focused on underground jacking works for
water/sewerage, gas, telephone, electrical tunnels and also
pre-stressed concrete works for building/bridge construction. Kidoh
has completed over 2,500km of tunneling since its inception.
In 2015, Kidoh, together with two other Japanese contractors,
completed a sizeable underground drainage construction project in
Jakarta, Indonesia. Prospect Group employs 105 people in its Public
Sector Construction segment and, in the year ending 31 March 2017,
the segment generated revenue of Yen5.72 billion (US$51.54 million)
and segmental profit of Yen0.29 billion (US$2.59 million).
Renewable Energy
Prospect has 11 solar projects, of which five are producing
electricity and six are currently under development and scheduled
to come online during the course of the next few years. Once all of
the projects are in production, the total output is expected to be
approximately 98 mW. Prospect's producing projects are located in
Asago in the Hyogo Prefecture (1.1mW) and Rikuzentakata (1.6mW),
Ushiku (1.8mW), Katori (2.0mW) and Sanbu Higashi (5.1mW), in the
Chiba Prefecture.
To date, Prospect has committed approximately Yen15 billion
(US$135.10 million) to its solar projects, and anticipates that the
total cost to bring all projects into production, will be
approximately Yen25 billion (US$225.16 million). Prospect believes
that its renewable energy projects will ultimately prove to be
attractive to pension and life insurance companies which are
seeking a yield in Japanese Yen. Prospect employs 4 people in its
Renewable Energy segment and, in the year ending 31 March 2017, the
segment generated revenue of Yen0.25 billion (US$2.26 million) and
segmental profit of Yen0.07 billion (US$0.66 million).
In addition, Prospect has signed two letters of intent regarding
the development of certain biomass and wood pellet power generation
joint venture projects located in Russia. The letters of intent
have been signed with RFP Group, the largest forestry industry
company in Russia.
Further information on PAM(CI) and PAMI
Prospect Asset Management (Channel Islands) Ltd.
PAM(CI) is a Guernsey incorporated investment manager
established in November 1994 and licensed by the GFSC under the POI
Law which is 100 per cent. owned by Prospect. It is responsible for
managing TPJF's portfolio pursuant to the terms of a management
agreement dated 1 December 1994, however PAM(CI) has sub-contracted
its advisory authorities to PAMI pursuant to an investment advisory
agreement dated 1 December 1994. PAM(CI) has three directors namely
Mr Christopher Hill, Mr Rupert Evans and Mr Curtis Freeze. Pursuant
to an investment advisory agreement dated 1 January 2014 between Mr
Curtis Freeze and PAM(CI), Mr Curtis Freeze provides investment
advisory services to PAM(CI) in connection with TPJF.
PAM(CI) receives a monthly management fee in arrears at a rate
of 1.5 per cent. per annum of the NAV of TPJF. Of this amount, 0.55
per cent. of TPJF's NAV is paid to PAMI as investment adviser and
0.5 per cent. of the NAV is retained by PAM(CI), with the remaining
0.45 per cent. of the NAV paid to Mr Freeze as investment
adviser.
Prospect Asset Management Inc.
PAMI is a U.S. corporation and registered as an investment
adviser under the United States Investment Advisers Act of 1940 (as
amended), with Securities and Exchange Commission number 801-47749.
It is wholly owned by Prospect and, via PAM(CI), has managed TPJF
since its inception. PAMI was founded by Mr Freeze in September
1994 and provides investment advisory services in equity portfolio
management, specialising in Japanese equities and real estate and
seeks to identify either (i) investments offering above average
earnings, trading at reasonable valuations; or (ii) companies with
undervalued assets, in relation to which an investment may act as a
realistic catalyst for positive change.
PAMI has managed closed and open ended investment companies,
pooled investment vehicles and discretionary investment accounts in
long-only equity, long-short equity, private equity and real estate
investment funds in Japan for clients including a sovereign wealth
fund, a large fund-of-funds and a family office. Currently, PAMI
and PAM(CI) manage two investment funds, TPJF and the Shareholders'
Consensus Fund L.P. As at 30 April 2017, PAMI had three clients and
approximately US$138.04 million in assets under management, the
majority of which are managed on a discretionary basis. PAMI has
two directors namely Ms Kaori Matsumoto (President) and Mr Hamilton
Smith (Chief Financial Officer). Mr Freeze is a Director of
PAMI(CI), and acts as Chief Investment Officer to PAMI.
Pursuant to a consulting agreement, dated 1 April 2017, between
PAMI and Prospect, Prospect's research team in Tokyo provides
dedicated proprietary fundamental research, analysis and
recommendations in respect of the Japanese market and economy to
PAMI's investment committee which drives the investment process.
This is provided by Prospect for a fee of Yen4,940,000 per month as
well as one-half of all performance based-fees received by PAMI
from its investors.
9. Information on TPJF
TPJF is an authorised closed-ended investment company, which was
incorporated in Guernsey in November 1994 with registration number
28863 and is listed on the Main Market of the London Stock
Exchange. It is regulated by the GFSC pursuant to the POI Law and
the Authorised Rules. The fund's inception date was 20 December
1994 and its investment objective is to achieve long-term capital
appreciation from a portfolio of securities, primarily comprising
smaller Japanese companies listed or traded on Japanese stock
markets. It has been focused on consolidation opportunities in
Japan, especially in the domestic demand and J-REIT sectors, with a
current focus on regional banks and logistics companies. Its issued
share capital comprises 92,352,602 ordinary shares of US$0.001
each, which at the prevailing market share price of US$1.09 equates
to a current market capitalisation of US$100.66 million. Its latest
published NAV as at 26 May 2017 (based on valuation of its holding
of SARs at par value) was approximately US$114.4 million.
The Company has no employees and the board members comprise John
Hawkins (Non-Executive Chairman), Richard Battey (Non-Executive
Director) and Rupert Evans (Non-Executive Director).
Rupert Evans is also a non-executive director of PAM(CI) and is
therefore not considered to be independent for the purposes of
considering the Offer.
The Board is responsible for the determination of the Company's
investment policy and has overall responsibility for supervising
the Company's activities. However, it has delegated the day-to-day
management of its investment portfolio to PAM(CI), as investment
manager, with PAMI acting as a United States based Investment
Adviser.
The Company's investment policy is that it will invest mainly in
shares, but may also invest in equity related instruments such as
convertible bonds or warrants issued by smaller Japanese companies
and debt instruments. Its assets may also be used to provide
venture or start-up capital and for investments in unlisted
securities within certain parameters. The Company also currently
adheres to certain investment restrictions in connection with
maintaining its listing as an investment company on the London
Stock Exchange, including a limit of 25 per cent. of the amount of
its assets that it may invest or lend in the securities of any one
company or single issuer.
The Company has a concentrated portfolio, comprising positions
in 9 investee companies across a variety of sectors. As at 30 April
2017, approximately 77.5 per cent. of its total assets was held in
listed investments with the balance comprising net current
assets.
Stock Acquisition Rights (SARs)
In December 2015, the Company purchased 1,440 SARs for
approximately US$2.4 million from Prospect, each of which gives the
Company the right to purchase 100,000 Prospect Shares (144 million
ordinary shares in total) at an exercise price of Yen5.4 million
per SAR (or Yen54 per Prospect Share, subject to an anti-dilution
adjustment formula to lower the exercise price in the event of
certain new share issuances).
The Company was the sole subscriber for the SARs, which are
unlisted and freely transferable and can be exercised at any point
from 21 December 2015 until 20 December 2020. In February 2016,
following the receipt of shareholder approval, the parties entered
into an exercise agreement setting out the terms of the potential
exercise of the SARs in order to provide clarity in relation to the
timing and circumstances of the exercise of the SARs, which
effectively limits TPJF's holding in Prospect to five per cent. of
the Company's gross assets from time to time.
Further to the conversion of certain historical convertible
bonds and 90 of the SARs, TPJF is currently interested in 6,706,000
Prospect Shares representing approximately 3.95 per cent. of the
Existing Prospect Share Capital and 1,350 SARs (to potentially
purchase up to a further 135 million Prospect Shares, representing
approximately 44.30 per cent. of Prospect's share capital as
enlarged by any such issue). For the purposes of the NAV
calculation published on 26 May 2017, valuations of the SARs were
made on the basis of both par, in which case the NAV was US$1.2389,
per share and the Black-Scholes-Merton model which delivered an NAV
per share, for information purposes only, with a value of
US$1.3380.
10. Management, employees, directors and locations
TPJF does not have any employees or management. The TPJF Board
is responsible for the determination of TPJF's investment policy
and has overall responsibility for supervising TPJF's activities.
However, it has delegated the day to day management of its
investment portfolio to PAM(CI), with PAMI acting as a U.S. based
Investment Adviser. PAM(CI) and PAMI are both wholly owned
subsidiaries of Prospect.
Prospect has no current plans to change TPJF's board of
directors (or their compensation for the services provided by
them), principal business, location, nor to make any major changes
to the business, such as the redeployment of the fixed assets of
TPJF. Prospect intends, following the delisting of TPJF, to procure
that TPJF relinquishes its authorisation by the GFSC as a
collective investment scheme under the POI Law.
11. Structure of the Offer
It is intended that the Offer will be implemented by means of a
Court-sanctioned scheme of arrangement between TPJF and the TPJF
Shareholders under Part VIII of the Companies Law of Guernsey.
The purpose of the Scheme is to provide for Prospect to become
the owner of the entire issued and to be issued ordinary share
capital of TPJF. This is to be achieved by the transfer by TPJF
Shareholders of all of the TPJF Shares to Prospect, in
consideration for which, TPJF Shareholders will receive the New
Prospect Shares on the basis of the Exchange Ratio. The transfer to
Prospect of the TPJF Shares will result in TPJF becoming a
wholly-owned subsidiary of Prospect.
To become Effective, the Scheme requires, among other things,
the approval of a majority in number of the Scheme Shareholders
present and voting in person or by proxy at the Court Meeting,
representing not less than 75 per cent. in value of the Scheme
Shares held by such Scheme Shareholders, together with the sanction
of the Court and the passing of any additional resolution necessary
to implement the Scheme at the TPJF General Meeting.
The Scheme can only become Effective in accordance with its
terms if all the Conditions have been satisfied or, where relevant,
waived. The Scheme will be conditional upon it becoming
unconditional and Effective, subject to the provisions of the Code,
by no later than the Longstop Date or such later date (if any) as
Prospect or TPJF may, with the consent of the Panel, agree and (if
required) the Court may allow.
Under the terms of the Scheme the TPJF Shares being acquired
will be fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature whatsoever (except for any
arising by operation of law) and together with all rights attaching
or accruing to them, including voting rights and the right to
receive and retain in full all dividends and other distributions
(if any) declared, made or paid on or after the Effective Date.
Further details of the Scheme, including an indicative timetable
for its implementation and notices of the Court Meeting and TPJF
General Meeting, will be set out in the Scheme Document, which will
also specify the action to be taken by TPJF Shareholders.
The Scheme will be governed by Guernsey law and will be subject
to the jurisdiction of the Court. The Scheme will be subject to the
applicable requirements of the Code, the Panel, the London Stock
Exchange, the UKLA, the Companies Act of Japan, the Tokyo Stock
Exchange and the JASDEC rules.
12. Conditions to the Offer
The Offer will be subject to the Conditions and further terms
summarised below and in Appendix I to this Announcement and to be
set out in full in the Scheme Document.
The Offer is conditional on, among other things:
-- the approval of TPJF Shareholders at both the Court Meeting
and the TPJF General Meeting and the Scheme becoming unconditional
and Effective and being sanctioned by the Court;
-- the approval of Prospect Shareholders of the issuance of the
New Prospect Shares at the Prospect ASM; and
-- admission of the New Prospect Shares to trading on the Tokyo Stock Exchange.
The New Prospect Shares will not be, directly or indirectly,
offered or sold in Japan. The New Prospect Shares have not been and
will not be registered under the FIEA. Prospect is not required to
publish a prospectus or offering circular in connection with the
issuance of the New Prospect Shares.
In order to issue new shares in the capital of Prospect on
favourable terms for TPJF Shareholders (as will be the case with
the issuance of the New Prospect Shares), Prospect is required to
seek the approval of Prospect Shareholders and, accordingly, a
resolution seeking approval for the terms and conditions of
issuance of the New Prospect Shares for the Offer will be put to
the Prospect ASM.
The Offer is therefore conditional on, among other things, the
requisite resolution being passed by Prospect Shareholders at the
Prospect ASM, as set out in greater detail in Condition 3(a) of
Part A of Appendix I.
13. Scheme Document
It is expected that the Scheme Document (which will also include
a Form A, Form B and the Forms of Proxy) will be published as soon
as practicable. The Scheme Document will be made available to all
TPJF Shareholders (other than Restricted Overseas Persons) at no
charge to them.
TPJF Shareholders are urged to read the Scheme Document in full
because it will contain important information. Any TPJF Shareholder
who is in any doubt about the content of this Announcement should
consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
14. Delisting
The last day of dealings in, and registration of transfers of,
TPJF Shares (other than the registration of the transfer of the
Scheme Shares to Prospect pursuant to the Scheme) on the London
Stock Exchange is expected to be the Business Day immediately prior
to the Effective Date, following which all TPJF Shares will be
suspended from the Official List and from trading on the London
Stock Exchange's Main Market for listed securities and no transfers
will be registered after 6.00 p.m. (London time) on that date.
It is intended that applications will be made to the London
Stock Exchange to cancel trading in TPJF Shares on its Main Market
for listed securities, and to the UK Listing Authority to cancel
the listing of the TPJF Shares on the Official List, in each case
being conditional upon the Scheme becoming Effective and to take
effect from or shortly following the Effective Date.
On the Effective Date, entitlements to TPJF Shares held within
the CREST system will be cancelled (and such entitlements
rematerialised), and share certificates in respect of TPJF Shares
will cease to be valid. Prospect intends, following the delisting,
to procure that TPJF relinquishes its authorisation by the GFSC as
a collective investment scheme under the POI Law.
15. Settlement
15.1 The New Prospect Shares as consideration
The consideration that TPJF Shareholders will receive pursuant
to the Scheme will be the New Prospect Shares, to which they will
be entitled in exchange for their TPJF Shares on the basis of the
Exchange Ratio (i.e. for each TPJF Share transferred to Prospect, a
TPJF Shareholder will receive 2.5 New Prospect Shares). Fractional
entitlements to New Prospect Shares for each TPJF Shareholder will
be rounded down to an integral number. These fractional
entitlements will be aggregated and sold to Prospect as soon as
practicable after the Effective Date in accordance with the
Companies Act of Japan, Prospect's articles of incorporation and
its share handling regulations. The net proceeds of such sale shall
be contributed towards the costs of the settlement arrangements for
the Offer.
15.2 Background to Settlement of Listed Japanese Shares
The Prospect Shares are listed and traded on the Tokyo Stock
Exchange (as will the New Prospect Shares be, once allotted, issued
and admitted). The Japanese book-entry system for listed shares of
Japanese companies under the Act on Book-Entry of Company Bonds,
Shares, etc. of Japan (the "Book-Entry Act") applies to the shares
of Prospect's common stock. Pursuant to this system, all shares of
Japanese listed companies (including Prospect) are dematerialised
and transfers of such shares are effected through an entry in the
record maintained by Japan Securities Depository Center, Inc.
("JASDEC"), which is Japan's central securities depository and the
only institution that is designated as a clearing house under the
Book-Entry Act.
In order to hold and trade listed shares, investors must either
have an account with JASDEC or, failing that, an account with an
account management institution ("AMI"). AMIs are financial
instruments business operators (i.e. securities firms), banks,
trust companies and certain other financial institutions that meet
the requirements prescribed by the Book-Entry Act.
As such, transfers (and new allotments) of shares in Prospect's
common stock are effected exclusively through entry in the records
maintained by JASDEC and the AMIs, and title to the shares passes
to the transferee (or allottee) at the time the transfer (or
allotment) of the shares is recorded in the transferee's (or
allottee's) account at JASDEC or an AMI.
Under the Companies Act of Japan and the Book-Entry Act it is
also necessary for a shareholder to provide a name and an address
in Japan to be registered in the company's register of members.
Pursuant to Prospect's articles of incorporation and its share
handling regulations, non-resident shareholders are required to
appoint a standing proxy in Japan or to provide a mailing address
in Japan.
15.3 The Settlement Procedure for the New Prospect Shares
The New Prospect Shares will be available for settlement within
14 days of the Effective Date, in accordance with Rule 31.8 of the
Code. This will take place in one of three ways, at the election of
each TPJF Shareholder.
(a) TPJF Shareholders with a JASDEC Account
TPJF Shareholders who:
(i) hold either a direct account with JASDEC or an account with
one of the AMIs (a "JASDEC Account") and have a standing proxy in
Japan or mailing address in Japan; and
(ii) notify Equiniti Limited acting as receiving agent (the
"Receiving Agent") of that JASDEC Account and standing proxy in
Japan or mailing address in Japan by completing and submitting Form
A (which will accompany the Scheme Document) to the Receiving Agent
(with a copy to Prospect) by no later than the date which is 7
Business Days prior to the Effective Date,
will have the New Prospect Shares to which they are entitled
pursuant to the terms of the Scheme delivered to the relevant
JASDEC Account by no later than the date which is 14 days after the
Effective Date.
The Scheme Document will provide more information on the ways in
which TPJF Shareholders may open a JASDEC Account should they
choose to do so.
(b) TPJF Shareholders without a JASDEC Account
TPJF Shareholders who:
(i) do not have a JASDEC Account and a standing proxy in Japan
or mailing address in Japan; and
(ii) are unable or unwilling to open one and submit Form A to
the Receiving Agent by no later than the date which is 7 Business
Days prior to the Effective Date,
may instead choose to complete and submit Form B (which will
accompany the Scheme Document) to the Receiving Agent (with a copy
to Prospect).
The effect of such TPFJ Shareholders submitting Form B to the
Receiving Agent will be to open a sub-account in their name which
will enable Equiniti Financial Services Limited, acting as
fiduciary (the "Fiduciary") to receive the New Prospect Shares to
which the relevant TPJF Shareholders are entitled pursuant to the
terms of the Scheme into a master JASDEC Account that is to be
established for this purpose pursuant to an arrangement put in
place between TPJF, Prospect, the Fiduciary, several affiliates of
Mizuho Bank, Ltd. and PAMI.
TPJF Shareholders who validly complete and submit Form B to the
Receiving Agent by the specified date will be able to continue to
hold and, at their election to sell, the New Prospect Shares
through the sub-account opened in their name by the Fiduciary.
The Fiduciary will also ensure that such shareholders will
receive all relevant communications to which they are entitled as
Prospect Shareholders and will, on instruction, also vote such
shareholders' Prospect Shares on any relevant shareholder
resolutions on behalf of and as directed by such shareholders.
Any sales through the sub-account will be made in accordance
with the relevant sales policy to be approved by TPJF Shareholders
at the TPJF General Meeting (the "Sales Request Policy"). In
essence, TPJF Shareholders will be able to effect such sales by
issuing an instruction to the Fiduciary, who will then arrange for
the sale to be executed by the Sales Agent and its broker(s) in
accordance with such instruction and Japanese Securities Law.
In the case of TPJF Shareholders who hold less than 1,000 New
Prospect Shares, such shareholders will (like all other Prospect
Shareholders with a holding of less than 1,000 Prospect Shares) be
entitled to require Prospect to repurchase their shares (see
further information below in the section 15.3(d)).
Upon settlement of any such sales, the Fiduciary will procure
that the net sale proceeds (after deducting dealing and
administrative expenses) are translated into Pounds Sterling at the
then prevailing JPY/GBP exchange rate and remitted to the relevant
shareholder in accordance with their instructions.
TPJF Shareholders who validly complete and submit Form B to the
Receiving Agent by the specified date and hold their New Prospect
Shares through the sub-account opened in their name by the
Fiduciary will, prior to the end of the two year period referred to
below, be entitled to extract their New Prospect Shares from the
relevant sub-account and transfer them to a JASDEC Account, by
completing and submitting Form A to the Receiving Agent.
At the end of a two year period from the Settlement Date, any
remaining New Prospect Shares that have not either been sold or
transferred from the relevant sub-account to a TPJF Shareholder's
JASDEC Account will then be sold in accordance with the termination
sales policy, which is also to be approved by TPJF Shareholders at
the TPJF General Meeting (the "Termination Sales Policy"). The net
proceeds of the termination sales (after deducting dealing and
administrative expenses) will then be translated into Pounds
Sterling at the then prevailing JPY/GBP exchange rate and remitted
to the relevant shareholders. Each TPJF Shareholder on behalf of
whom New Prospect Shares are sold in accordance with the
Termination Sales Policy will therefore receive the same amount of
proceeds (in Pounds Sterling) per New Prospect Share sold, based on
the average selling price achieved for all New Prospect Shares sold
pursuant to the Termination Sales Policy.
Further details of this arrangement will be set out in the
Scheme Document.
(c) TPJF Shareholders who take no action
In the case of TPJF Shareholders who neither:
(i) validly notify the Receiving Agent of their JASDEC Account
and a standing proxy in Japan or mailing address in Japan by
completing and submitting Form A by no later than the date which is
7 Business Days prior to the Effective Date; nor
(ii) complete and submit Form B to the Receiving Agent by no
later than the specified date
(the "No Action Shareholders"),
the New Prospect Shares to which such No Action Shareholders are
entitled pursuant to the terms of the Scheme will automatically be
delivered to a sub-account with the Fiduciary opened in the name of
TPJF as the representative of the No Action Shareholders (the "No
Action Sub-Account"), to be held on such No Action Shareholders'
behalf until one of two things, as set out in the following
sub-paragraphs, occurs.
The Scheme will contain a provision pursuant to which TPJF is
appointed as the representative of the No Action Shareholders for
this purpose and the Scheme Document will contain further details
of this arrangement as a whole.
(i) Extraction of New Prospect Shares from the No Action Sub-Account
Even after the New Prospect Shares to which the No Action
Shareholders are entitled pursuant to the terms of the Scheme have
been delivered to the No Action Sub-Account, the No Action
Shareholders will still have the ability to open a JASDEC Account
or a sub-account with the Fiduciary in their own name (with the
Fiduciary) by completing and submitting either Form A or Form B,
respectively, to the Receiving Agent by no later than the date
which is 9 Business Days before the commencement of the sell-down
procedure explained in the following sub-paragraph (c)(ii).
No Action Shareholders who validly complete and submit Form A
prior to such date will then have their New Prospect Shares
transferred after the Settlement Date into the JASDEC Account that
they have nominated and those who validly complete and submit Form
B prior to such date will then have their New Prospect Shares
transferred after the Settlement Date into a sub-account with the
Fiduciary in their own name and be entitled to continue to hold
and, at their election to sell, the New Prospect Shares in
accordance with the Sales Request Policy described above. In
addition, the Fiduciary will, on instruction, also vote such
shareholders' Prospect Shares on any relevant shareholder
resolutions on behalf of and as directed by such shareholders.
(ii) New Prospect Shares sold on behalf of No Action Shareholders
No Action Shareholders who do not validly complete and submit
either a Form A or a Form B by no later than the date which is 7
Business Days before a date that will be specified as the date for
the commencement of the sales process in the Scheme Document will
then have their New Prospect Shares sold on their behalf in the
market by the Sales Agent. Such sales on behalf of No Action
Shareholders will be made in accordance with a sales policy, which
will be approved by TPJF Shareholders at the TPJF General Meeting
(the "Sales Policy"). The proceeds of such sales, less dealing and
other expenses, will be returned to such No Action Shareholders
(having been converted into Pounds Sterling from Japanese Yen at
the then prevailing exchange rate).
The Sales Agent will abide by the Sales Policy and will seek to
execute the sell-down procedure in such a manner that preserves an
orderly market in Prospect Shares for at least a six month period.
Whilst the Sales Agent will be encouraged to sell the New Prospect
Shares reactively on behalf of the No Action Shareholders, in order
to take advantage of high trading volumes due to, amongst other
things, news flow, a limit will be imposed of 25 per cent. of the
4-week daily average trading volume for the first 6 months, and 30
per cent. of the 4-week daily average trading volume for the
following 6 months for the sale of Prospect Shares in compliance
with the Sales Policy and the relevant rules under the Japanese
Securities Laws.
The Sales Agent has committed to make commercially reasonable
efforts to complete the sell-down procedure on behalf of the No
Action Shareholders over a period of up to 12 months following
commencement of the sell-down procedure. After completion of the
sell-down procedure and sale of all New Prospect Shares held by the
No Action Shareholders, all No Action Shareholders on behalf of
whom New Prospect Shares are sold will receive the same amount of
net proceeds per New Prospect Share and such net proceeds, together
with any accrued interest and any dividends received in respect of
such shares, will be distributed after the completion of the
sell-down procedure and remitted by the Fiduciary by cheque in
Pounds Sterling to the No Action Shareholders at the then
prevailing JPY/GBP exchange rate.
Further details of the Sales Policy will be set out in the
Scheme Document.
(d) TPJF Shareholders who will hold less than 1,000 Prospect Shares
Prospect follows the 'unit share system' (which is standard in
Japan) whereby shareholders have one voting right for each unit of
shares held by them and shares constituting less than a full unit
carry no voting rights. Prospect's articles of incorporation
provide that one unit comprises 1,000 Prospect Shares. In addition,
pursuant to Rule 15 of the Business Regulations of Tokyo Stock
Exchange, shares constituting less than one unit are not deemed to
comprise a trading unit, except in limited circumstances, and
accordingly may not be sold on the Tokyo Stock Exchange.
The TPJF Shareholders whose TPJF Shares would, following
settlement, constitute less than a full unit of New Prospect Shares
for the purposes of Prospect's articles of incorporation will still
be entitled to deliver a Form A or Form B to the Receiving Agent in
the same manner as any other TPJF Shareholder is entitled to. Such
TPJF Shareholders may, at any time following the Settlement Date,
request, through JASDEC or AMIs that Prospect purchases their New
Prospect Shares, in accordance with the Companies Act of Japan,
Prospect's articles of incorporation and share handling regulations
(i) at the closing price of Prospect Shares on the Tokyo Stock
Exchange on the day on which such request is received by Prospect's
transfer agent, or (ii) if there is no trade on such a day, at the
price of the first trading that is entered thereafter. In addition,
such TPJF Shareholders with a JASDEC Account who delivered a Form
A, may require Prospect to sell to them such number of additional
New Prospect Shares to enable their holding of New Prospect Shares
to constitute one whole unit for the purposes of Prospect's
articles of incorporation, and in accordance with the Companies Act
of Japan, Prospect's articles of incorporation and share handling
regulations, provided always that Prospect has sufficient shares in
treasury to accommodate such a request.
To the extent that such TPJF Shareholders deliver a Form B to
the Receiving Agent, their New Prospect Shares will be held through
a sub-account opened in their name by the Fiduciary and they shall
be afforded the same rights as other TPJF Shareholders who have
delivered a Form B to the Receiving Agent, save that (i) they will
not be entitled to vote on any relevant shareholder resolutions of
Prospect; and (ii) any sale of their New Prospect Shares will be to
Prospect itself at the prevailing market price as opposed to
through the market by the Sales Agent.
(e) Costs to TPJF Shareholders
None of the costs incurred by Prospect with respect to the
initial establishment of the arrangements referred to above will be
passed on to the TPJF Shareholders on behalf of whom New Prospect
Shares will be held in the sub-accounts with the Fiduciary. To
comply with Japanese law, arm's-length account maintenance fees are
required to be charged to those shareholders who enjoy the benefit
of the arrangements following the Settlement Date. The arm's-length
account maintenance fees and other service fees required to be
passed on to the TPJF Shareholders on behalf of whom New Prospect
Shares are held in the sub-accounts (so as to respect the principle
of equality of treatment of shareholders under the Companies Act of
Japan) shall not exceed GBP5.25 per sub-account per year.
Such arm's-length account maintenance fees are, however,
separate to any dealing expenses, brokerage fees or foreign
exchange fees which will be passed on to TPJF Shareholders on
behalf of whom sales are made or for whom dividends are
received.
16. Shareholder Communications following completion
Following completion of the Offer, Prospect has agreed with the
Independent TPJF Directors to undertake the following actions, at
its own expense, in order to provide information to its new
shareholders, being those TPJF Shareholders who have joined the
Prospect shareholder register following issue of the New Prospect
Shares.
-- Prospect will maintain an English language version of Prospect's corporate website (www.prospectjapan.co.jp), with the exception of certain non-material items, which it would not be cost effective to translate.
-- Prospect will ensure that all corporate press releases, or
similar announcements, required to be issued by the Tokyo Stock
Exchange will simultaneously be released in English on RNS Reach in
the United Kingdom. In addition, these translations will also be
available on Prospect's corporate website.
-- Prospect will also ensure that all: (i) shareholder
circulars; (ii) notices of annual shareholder meetings and
extraordinary special meetings and details of resolutions proposed
(and where appropriate the recommendation of the board of directors
of Prospect) at general/special meetings and voting instructions;
and (iii) notices of any corporate transaction and action to be
taken to resolve any matters in respect of the shareholder meetings
under the Companies Act of Japan (and where appropriate the
recommendation of the board of directors of Prospect) are provided
to the relevant new shareholders in English.
-- Prospect will provide English translations of the details in
relation to any dividend declarations.
-- Prospect will publish quarterly announcements of its NAV,
calculated using Prospect's prevailing Japanese accounting
standards and reported in the required format of the Tokyo Stock
Exchange, on both RNS Reach and Prospect's corporate website.
-- Prospect's senior management will visit London at least twice
a year and will be available for meetings with institutional
shareholders during that time. In addition, once a year, Prospect
will hold an investor day, in London, to which all Prospect
Shareholders will be invited. Notice of the investor day will be
published on RNS Reach in the United Kingdom, and on Prospect's
corporate website, a month in advance of such investor day.
-- Prospect will retain an equity research provider to write and
publish at least two substantive pieces of equity research per
annum, in English, on Prospect and its businesses. Such research
will be made available on Prospect's corporate website.
-- Prospect would be pleased to host any institutional
Shareholder wishing to visit the Prospect Group's operations, but,
given Japanese company law would not be able to pay for such
visits.
-- Prospect has already retained a full time Investor Relations
professional, based in Tokyo, who is bilingual in Japanese /
English, to oversee these intended Shareholder Communication
activities.
The above-mentioned items are deemed to be Post-Offer Intention
Statements, as set out under Rule 19.6 of the Code.
Prospect has also provided legally binding undertakings in
relation to these shareholder communications, which will apply for
a period of five years from the Settlement Date. Details of these
undertakings are summarised in paragraph 17 below under the heading
Deed Poll.
17. Offer related arrangements
Confidentiality Agreement
Prospect and TPJF entered into a confidentiality agreement on 2
December 2016 (the "Confidentiality Agreement") pursuant to which
each of Prospect and TPJF has undertaken to keep confidential
information relating to the other party and not to disclose it to
third parties (other than to permitted disclosees) unless required
by law or regulation. These confidentiality obligations will remain
in force for a period of 12 months from the date of the
Confidentiality Agreement.
The Confidentiality Agreement also contains undertakings from
both TPJF and Prospect that, for a period of 12 months after the
request for return/destruction of confidential information, neither
will solicit the other's directors or employees.
Cooperation Agreement
Pursuant to a cooperation agreement dated 31 May 2017 (the
"Cooperation Agreement"), among other things:
-- Prospect has agreed to provide TPJF with certain information
and assistance in the preparation of the Scheme Document;
-- Prospect has agreed to put the necessary resolutions to
enable it to issue the New Prospect Shares to the Prospect ASM and
to ensure that the Prospect ASM is held in the last week of June
2017;
-- Prospect has agreed to certain customary restrictions on the
conduct of its business during the period pending completion of the
acquisition, and which prohibit, among other things: (a) the
payment by Prospect of extraordinary dividends, (b) the allotment
of further shares (or rights or options in respect of shares)
(other than as would be consistent with past practice or pursuant
to existing commitments), or (c) any amendment by Prospect of its
constitutional documents in any manner than would have a material
and adverse impact on the value of, or rights attaching to, the New
Prospect Shares;
-- Prospect has agreed that it will cover certain costs incurred
by TPJF up to US$2,000,000 in connection with the Offer, with such
costs coverage applying on the occurrence of certain specified
events which lead to the Scheme not becoming Effective or the Offer
not otherwise being completed in accordance with its terms; and
-- Prospect has agreed that in the event Prospect elects to
implement the Offer by way of a takeover offer rather than the
Scheme, it will do so only with the prior written consent of the
Independent TPJF Directors.
Deed Poll
Pursuant to a deed poll entered into by Prospect dated 31 May
2017 (the "Deed Poll"), Prospect undertakes to certain categories
of the TPJF Shareholders to take the actions referred to in
paragraph 16 above.
The Deed Poll comes into effect from the Settlement Date for a
duration of five years.
Master Custody Agreement
Pursuant to a master custody agreement entered into between
Prospect, TPJF, the Receiving Agent, the Fiduciary, PAMI and Mizuho
Trust & Banking (Luxembourg) S.A. dated 31 May 2017 (the
"Master Custody Agreement"), the parties have agreed to implement
the arrangements necessary to facilitate the settlement procedure
for the New Prospect Shares described in paragraph 15.3 above.
18. Litigation
No material litigation, arbitration proceedings, prosecution or
other legal proceedings have been instituted or threatened or
remain outstanding against or by a member of the Prospect Group
(whether as plaintiff or defendant or otherwise).
19. SESC matter
On 22 March 2017, it was announced that the Securities and
Exchange Surveillance Commission of Japan ("SESC") had recommended
to the Commissioner of the Financial Services Agency of Japan
("FSAJ") that an administrative monetary penalty payment order be
issued in regard to insider trading of the shares of Tri-Stage Inc.
("Tri-Stage") by PAMI pursuant to Article 20(1) of the Act for
Establishment of the Financial Services Agency of Japan. The SESC
and FSAJ contend that certain trades in the shares of Tri-Stage by
PAMI during September and October 2015 were made on the basis of
information conveyed to an investment officer of PAMI concerning a
buyback by Tri-Stage of its own shares before such information was
made public on 20 October 2015. The SESC contends that the actions
of PAMI in connection with these trades were in violation of the
FIEA.
The administrative monetary penalty recommended by the SESC,
under the administrative order, is Yen3,290,000 (approximately
GBP24,000 at the foreign exchange rate prevailing on the date of
the FSAJ announcement).
There has been no civil or criminal trial conducted by the SESC
or the FSAJ against PAMI or any representative of PAMI. There has
been no suggestion by the SESC or FSAJ that any criminal or civil
proceedings will be brought against PAMI or any individual involved
in the trades in question. The matter concerns an administrative
order. On 31 May 2017, PAMI decided to pay the monetary penalty of
Yen3,290,000 and has therefore made the appropriate filing with the
FSAJ, admitting responsibility. As a result of this filing, it is
expected that the SESC will take no further action in relation to
this matter.
20. General
The Offer will be made on the terms and subject to the
Conditions and certain further terms set out in Appendix I to this
Announcement and to full terms and conditions which will be set out
in the Scheme Document. The sources of information and bases of
calculations contained in this Announcement are set out in Appendix
II to this Announcement. A summary of the letters of intent and
irrevocable undertakings is set out in Appendix III to this
Announcement. Certain terms used in this Announcement are defined
in Appendix IV to this Announcement.
Each of Prospect and TPJF confirms that it has made an Opening
Position Disclosure, setting out the details required to be
disclosed by it under Rule 8 of the Code and both Prospect and TPJF
confirm that these disclosures are accurate as at the date of this
Announcement.
This Announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). Market soundings, as defined in MAR, were taken in respect
of the Offer, with the result that certain persons became aware of
inside information, as permitted by MAR. That inside information is
set out in this Announcement. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of inside information relating to TPJF and its
securities.
21. Consents
Each of Strand Hanson, Mizuho and Stockdale has given and not
withdrawn its consent to the publication of this Announcement with
the inclusion in it of the references to its respective name and
(where applicable) advice in the form and context in which they
appear.
22. Documents available on website
Copies of the following documents will be made available on
TPJF's website at www.prospectjapanfund.com from no later than 12
noon (London time) on 1 June 2017 up to and including the Effective
Date or the date the Scheme lapses or is withdrawn, whichever is
earlier:
-- the letters of intent and irrevocable undertakings referred
to in paragraph 6 above and summarised in Appendix III to this
Announcement;
-- the Confidentiality Agreement;
-- the Deed Poll;
-- the Cooperation Agreement;
-- audited final results of Prospect for the 12 months ended 31
March 2016 and unaudited preliminary results of Prospect for the 12
months ended 31 March 2017;
-- the Master Custody Agreement; and
-- the written consents provided by each of Strand Hanson,
Mizuho and Stockdale referred to in paragraph 21 of this
Announcement.
Enquiries:
Prospect Co., Ltd.
Curtis Freeze, President Tel: +1 808 383
3833
The Prospect Japan Fund Limited
John Hawkins, Non-Executive Chairman Tel: +44 (0) 1481
745 918
Strand Hanson Limited
(Joint Financial Adviser to Prospect) Tel: +44 (0) 207
Stuart Faulkner 409 3494
Matthew Chandler
James Dance
Mizuho Bank, Ltd. (Corporate Advisory department)
(Joint Financial Adviser to Prospect) Tel: +81 (0) 3 3284
Ryo Kamisaku 1655
Eiichi Igarashi
Stockdale Securities Limited
(Financial Adviser to TPJF) Tel: +44 (0) 20 7601
Daniel Harris 6100
David Coaten
Important Notices
Strand Hanson Limited, which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively for Prospect as joint financial adviser in connection
with the Offer and other matters set out in this Announcement and
for no one else and will not be responsible to anyone other than
Prospect for providing the protections afforded to its clients or
for providing advice in relation to the Offer and other matters set
out in this Announcement. Neither Strand Hanson Limited nor any of
its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Strand Hanson Limited in connection
with this Announcement, any statement contained herein or
otherwise.
Mizuho Bank, Ltd. (Corporate Advisory department), an investment
banking arm of Mizuho Financial Group, which is regulated by the
Japanese Financial Services Agency, is acting exclusively for
Prospect as joint financial adviser in connection with the Offer
and other matters set out in this Announcement and for no one else
and will not be responsible to anyone other than Prospect for
providing the protections afforded to its clients or for providing
advice in relation to the Offer and other matters set out in this
Announcement. Neither Mizuho Bank, Ltd. (Corporate Advisory
department) nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Mizuho
Bank, Ltd. (Corporate Advisory department) in connection with this
Announcement, any statement contained herein or otherwise.
Stockdale Securities Limited, which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for TPJF as financial adviser in connection with the
Offer and other matters set out in this Announcement and for no one
else and will not be responsible to anyone other than TPJF for
providing the protections afforded to its clients or for providing
advice in relation to the Offer and other matters set out in this
Announcement. Neither Stockdale Securities Limited nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Stockdale Securities Limited in
connection with this Announcement, any statement contained herein
or otherwise.
Further information
This Announcement is for information purposes only and is not
intended to, and does not, constitute or form part of any offer or
invitation, or the solicitation of an offer, to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Offer or otherwise nor will there be
any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law.
The Offer will be made solely pursuant to the disclosures and
information contained in the Scheme Document which, together with
the Forms of Proxy, will contain the full terms and conditions of
the Offer, including details of how TPJF Shareholders may vote at
the Meetings in respect of the Offer.
TPJF will prepare the Scheme Document to be distributed to TPJF
Shareholders (with input from Prospect, including with respect to
information about the New Prospect Shares and the Combined Group).
TPJF urges TPJF Shareholders to read the Scheme Document when it
becomes available because it will contain important information in
relation to the Offer, the New Prospect Shares and the Combined
Group. Any vote in respect of the Scheme or other response in
relation to the Offer should be made only on the basis of the
information contained in the Scheme Document.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
jurisdictions other than the UK and Guernsey may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the UK and Guernsey should inform
themselves about, and observe any applicable requirements. In
particular, the ability of persons who are not resident in the UK
or Guernsey to participate in the Offer may be affected by the laws
of the relevant jurisdictions in which they are located. This
Announcement has been prepared for the purpose of complying with
English law and Guernsey law and with the Code and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside the UK and Guernsey.
The Offer will be subject to the applicable requirements of the
Companies Law of Guernsey, the Court (as a result of TPJF being
incorporated in Guernsey) and the GFSC (as a result of TPJF being
an authorised closed-ended investment scheme in Guernsey), with the
applicable requirements of English law, the Code, the Panel, the
London Stock Exchange and the FCA (as a result of TPJF being listed
on the London Stock Exchange) and also with the applicable
requirements of Japanese laws, JASDEC, the Tokyo Stock Exchange and
the Japanese Financial Services Agency (as a result of Prospect
being a Japanese company, listed on the Tokyo Stock Exchange).
The Offer may not be made directly or indirectly, in or into, or
by the use of (electronic) mail or any means or instrumentality
(including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and no
person may vote in favour of the Scheme by any such use, means,
instrumentality or facilities. Accordingly, copies of this
Announcement, the Scheme Document, the Notices of Court Meeting and
TPJF General Meeting, the Forms of Proxy and all other documents
relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send them in or into
or from any Restricted Jurisdiction. All persons receiving this
Announcement (including, without limitation, custodians, nominees
and trustees) should observe these restrictions and any applicable
legal or regulatory requirements of their jurisdiction and must not
mail or otherwise forward, send or distribute this Announcement in,
into or from any Restricted Jurisdiction.
The receipt of securities pursuant to the Offer by Overseas
Shareholders may be a taxable transaction under applicable
national, state and local, as well as foreign and other tax laws.
Each Overseas Shareholder is urged to consult their independent
professional adviser regarding the tax consequences of accepting
the Offer.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Additional information for US investors
These materials are not for distribution, directly or
indirectly, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia). These materials do not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States.
The New Prospect Shares have not been and will not be registered
under the US Securities Act of 1933 (the "US Securities Act") or
under the securities laws of any State or other jurisdiction of the
United States. Accordingly, the New Prospect Shares may not be
offered, sold, resold, delivered, distributed or otherwise
transferred, directly or indirectly, in or into the United States
absent registration under the US Securities Act or an exemption
therefrom. The New Prospect Shares issued pursuant to the Offer are
expected to be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by
Section 3(a)(10) thereof. There will be no public offer of New
Prospect Shares in the United States.
TPJF is organised under the laws of Guernsey and Prospect is
organised under the laws of Japan. All of the officers and
directors of TPJF are residents of countries other than the United
States, and most of the officers and directors of Prospect are
residents of countries other than the United States. It may not be
possible to sue TPJF and Prospect in a non-US court for violations
of US securities laws. It may be difficult to compel TPJF, Prospect
and their respective affiliates to subject themselves to the
jurisdiction and judgment of a US court.
The Offer, to be implemented by way of the Scheme, is being made
to acquire the entire issued and to be issued share capital of a
company incorporated in Guernsey by way of a scheme of arrangement
provided for under Part VIII of the Companies Law of Guernsey. A
transaction effected by way of a scheme of arrangement is not
subject to the proxy solicitation or tender offer rules under the
US Securities Exchange Act of 1934 (the "US Exchange Act").
Accordingly, the Scheme will be subject to the disclosure
requirements, rules and practices applicable in the UK and Guernsey
to schemes of arrangement and takeover offers, which differ from
the disclosure requirements, style and format of US tender offer
and proxy solicitation rules. If Prospect determines to extend the
offer into the US, the Offer will be made in compliance with
applicable US laws and regulations. Financial information included
in this Announcement and the Scheme Document has been or will have
been prepared in accordance with non-US accounting standards that
may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US. However,
if Prospect were to elect to implement the Offer by means of a
contractual offer, rather than the Scheme, such offer will be made
in compliance with all applicable laws and regulations, including
Section 14(e) of the US
Exchange Act and Regulation 14E thereunder. Such offer would be
made in the US by Prospect and no one else.
Neither the US Securities and Exchange Commission nor any
securities commission of any state of the United States has
approved or disapproved the Offer, nor have such authorities passed
upon or determined the fairness of the Offer or the adequacy or
accuracy of the information contained in this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
If the Offer is required to be made in the US, it will be done
in compliance with the applicable tender offer rules under the US
Exchange Act.
Forward-looking statements
This Announcement may contain certain forward-looking statements
with respect to the financial condition, results of operations and
business of Prospect and/or TPJF and certain plans and objectives
of Prospect with respect thereto. These forward-looking statements
can be identified by the fact that they do not relate to historical
or current facts. Forward-looking statements also often use words
such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar
meaning. These statements are based on assumptions and assessments
made by Prospect and/or TPJF (as applicable) in light of their
experience and perception of historical trends, current conditions,
future developments and other factors they believe appropriate. 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 and the factors
described in the context of such forward-looking statements in this
Announcement could cause actual results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to be correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this Announcement. Prospect does not assume any
obligation to update or correct the information contained in this
Announcement (whether as a result of new information, future events
or otherwise), except as required by the Panel, the Code or by
applicable law.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither Prospect nor TPJF undertakes
any obligation to update or revise any forward-looking statement as
a result of new information, future events or otherwise, except to
the extent legally required.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
For a discussion of important factors which could cause actual
results to differ from forward-looking statements in relation to
the Prospect Group or the TPJF Group, refer to the annual report
and accounts of the Prospect Group for the financial year ended 31
March 2016 and of the TPJF Group for the financial year ended 31
December 2016, respectively.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per TPJF
Share or earnings per Prospect Share for the current or future
financial years would necessarily match or exceed the historical
published earnings per TPJF Share or earnings per Prospect
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of the offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk ,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26.1 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on TPJF's website at
www.prospectjapanfund.com by no later than 12.00 p.m. (London time)
on the Business Day following this Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks is incorporated into, or forms part of, this
Announcement.
You may request a hard copy of this Announcement by contacting
TPJF's company secretary, Northern Trust International Fund
Administration Services (Guernsey) Limited, on +44 (0) 1481 745
918. You may also request that all future documents, announcements
and information to be sent to you in relation to the Offer should
be in hard copy form.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
other information provided by TPJF Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from TPJF may be provided to Prospect during the
Offer Period as required under Section 4 of Appendix 4 of the Code
to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
APPIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
Part A: Conditions of the Scheme and the Offer
1. The Offer will be conditional upon the Scheme becoming
unconditional and Effective, by no later than the Longstop Date or
such later date (if any) as Prospect and TPJF may, with the consent
of the Panel, agree and (if required) the Court may allow.
2. The Scheme will be subject to the following conditions:
2.1
(i) the Court Meeting being held on or before the 22nd day after
the expected date of the Court Meeting as set out in the Scheme
Document (or such later date as may be agreed by Prospect and TPJF
and which the Court may allow); and
(ii) the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Scheme
Shareholders (or the relevant class or classes thereof, if
applicable) who are present and voting, whether in person or by
proxy, at the Court Meeting;
2.2
(i) the TPJF General Meeting being held on or before the 22nd
day after the expected date of the TPJF General Meeting as set out
in the Scheme Document (or such later date as may be agreed by
Prospect and TPJF and which the Court may allow); and
(ii) all resolutions necessary to approve and implement the
Scheme (including to approve the Sales Policy, the Termination
Sales Policy, the Sales Request Policy and the appointment of TPJF
as the Representative) being duly passed by the requisite majority
of TPJF Shareholders at the TPJF General Meeting; and
2.3
(i) the Court hearing to sanction the Scheme being held on or
before the 22nd day after the expected date of the Court sanction
hearing as set out in the Scheme Document (or such later date as
may be agreed by Prospect and TPJF and the Court may allow);
and
(ii) the sanction of the Scheme by the Court, with or without
modification (subject to any modification being on terms acceptable
to TPJF and Prospect) and the delivery of a copy of the Court
Order(s) to the Guernsey Registry.
3. In addition, subject as stated in Part B below and to the
requirements of the Panel, the Offer will be conditional upon the
following Conditions and, accordingly, the sanction of the Scheme
by the Court will not be sought and the Court Order(s) will not be
delivered to the Guernsey Registry unless such Conditions (as
amended if appropriate) have been satisfied or, where relevant,
waived:
Prospect Shareholder Approval
(a) the passing at the Prospect ASM of a resolution to approve
the issuance of the New Prospect Shares at a discount to the
prevailing market price by at least two-thirds of the voting rights
represented at the meeting at which at least one-third of the total
number of voting rights attended;
Admission of the New Prospect Shares
(b) Prospect having taken all necessary actions (i.e.,
submission of an application for listing of the New Prospect Shares
to the TSE by no later than three weeks prior to the Effective
Date) so that the New Prospect Shares will be admitted to trading
on the Tokyo Stock Exchange by no later than 14 days after the
Effective Date;
Notifications, waiting periods and Authorisations
(c) other than in relation to the matters referred to in
Conditions 1, 2 and 3(a) to (b) (inclusive), all material
notifications, filings or applications which are necessary under
any applicable legislation or regulation of any relevant
jurisdiction in connection with the Offer having been made or will
be made and all necessary waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as
appropriate), and all statutory and regulatory obligations in any
jurisdiction having been complied with in each case in respect of
the Offer and all Authorisations necessary in any jurisdiction for
or in respect of the Offer and, except pursuant to Part XVIII of
the Companies Law of Guernsey, the acquisition or the proposed
acquisition of any shares or other securities in, or control or
management of, TPJF or any other member of the Wider TPJF Group by
any member of the Wider Prospect Group having been obtained in
terms and in a form reasonably satisfactory to Prospect from all
appropriate Third Parties or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member of
the Wider TPJF Group or the Wider Prospect Group has entered into
contractual arrangements and all such Authorisations necessary to
carry on the business of any member of the Wider TPJF Group in any
relevant jurisdiction which is material in the context of the Wider
TPJF Group taken as a whole having been obtained and all such
Authorisations remaining in full force and effect at the time at
which the Offer becomes otherwise Effective and there being no
notice or intimation of an intention to revoke, suspend, restrict,
modify or not to renew such Authorisations;
General antitrust and regulatory
(d) other than in relation to the matters referred to in
Conditions 1, 2 and 3(a) to (b) (inclusive), no antitrust regulator
or Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and in each case, not having
withdrawn the same), or having required any action to be taken or
otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) which
would or might:
(i) require, prevent or materially delay the divestiture or
alter the terms envisaged for such divestiture by any member of the
Wider Prospect Group or by any member of the Wider TPJF Group of
all or any part of its businesses, assets or property or impose any
limitation on the ability of all or any of them to conduct their
businesses (or any part thereof) or to own, control or manage any
of their assets or properties (or any part thereof);
(ii) except pursuant to Part XVIII of the Companies Law of
Guernsey, require any member of the Wider Prospect Group or the
Wider TPJF Group to acquire or offer to acquire a material number
of shares, other securities (or the equivalent) or interest in any
member of the Wider TPJF Group or any asset owned by any Third
Party (other than in the implementation of the Offer), where such
acquisition would be material in the context of the Wider TPJF
Group taken as a whole;
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Prospect Group
directly or indirectly to acquire, hold or to exercise effectively
all or any rights of ownership in respect of shares or other
securities in TPJF or on the ability of any member of the Wider
TPJF Group or any member of the Wider Prospect Group directly or
indirectly to hold or exercise effectively all or any rights of
ownership in respect of shares or other securities (or the
equivalent) in, or to exercise voting or management control over,
any member of the Wider TPJF Group;
(iv) make the Offer, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or
control or management of, TPJF by any member of the Wider Prospect
Group void, unenforceable and/or illegal under the laws of any
relevant jurisdiction, or otherwise prevent or prohibit, restrict,
restrain, or delay or otherwise interfere with the implementation
of, or impose additional conditions or obligations with respect to,
or otherwise challenge, impede, interfere with the Offer or the
acquisition or proposed acquisition of any shares or other
securities in, or control or management of, TPJF by any member of
the Wider Prospect Group; or
(v) impose any material limitation on the ability of any member
of the Wider Prospect Group of any member of the Wider TPJF Group
to conduct, integrate or co-ordinate all or any part of its
business with all or any part of the business of any other member
of the Wider Prospect Group and/or the Wider TPJF Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such antitrust regulator or
Third Party could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or
reference or take any other step under the laws of any jurisdiction
in respect of the Offer or the acquisition or proposed acquisition
of any TPJF Shares or otherwise intervene having expired, lapsed or
been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
(e) except as Disclosed, there being no provision of any
arrangement, agreement, permit or other instrument to which any
member of the Wider TPJF Group is a party or by or to which any
such member or any of its assets is or may be bound, entitled or be
subject or any event or circumstance which, as a consequence of the
Offer or the acquisition or the proposed acquisition by any member
of the Wider Prospect Group of any shares or other securities (or
the equivalent) in TPJF or otherwise, would or might, to an extent
which is material in the context of the Wider TPJF Group as a whole
or material in the context of the Offer, result in:
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider
TPJF Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or becoming capable of being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the Wider TPJF Group or any
such security interest (whenever created, arising or having arisen)
becoming enforceable;
(iii) any such arrangement, agreement, permit or other
instrument being terminated or being adversely modified or
adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
(iv) the rights, liabilities, obligations or interests of any
member of the Wider TPJF Group in or the business of any such
member under any such arrangement, agreement, permit or instrument
with any other person or body or firm or company (or any
arrangement or arrangement relating to any such interests or
business) being terminated, or adversely modified or affected;
(v) any member of the Wider TPJF Group ceasing to be able to
carry on business under any name under which it presently carries
on business;
(vi) the value of, or the financial or trading position or
prospects of, any member of the Wider TPJF Group being prejudiced
or adversely affected; or
(vii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider TPJF Group other than trade
creditors or other liabilities incurred in the ordinary course of
business,
and no event having occurred which, under any provision of any
arrangement, agreement, permit, or other instrument to which any
member of the Wider TPJF Group is a party or by or to which any
such member or any of its assets are bound, entitled or subject,
would or could result in any of the events or circumstances as are
referred to in Conditions 3(e)(i) to (vii) (inclusive);
TPJF Shareholder resolution
(f) no resolution of TPJF Shareholders in relation to any
acquisition or disposal of assets or shares (or the equivalent
thereof) in any undertaking or undertakings (or in relation to any
merger, demerger, reconstruction, amalgamation or scheme) being
passed at a meeting of TPJF Shareholders;
Certain events occurring since 31 December 2016
(g) except as Disclosed, no member of the Wider TPJF Group having since 31 December 2016:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of TPJF
Shares out of treasury (except, where relevant, as between TPJF and
wholly owned subsidiaries of TPJF or between the wholly owned
subsidiaries of TPJF); -
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly owned subsidiary of
TPJF to TPJF or any of its wholly owned subsidiaries;
(iii) other than pursuant to the Offer (and except for
transactions between TPJF and its wholly owned subsidiaries or
between the wholly owned subsidiaries of TPJF and transactions in
the ordinary course of business), implemented, effected, authorised
or proposed or announced its intention to implement, effect,
authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital;
(iv) (except for transactions between TPJF and its wholly owned
subsidiaries or between the wholly owned subsidiaries of TPJF)
disposed of, or transferred, mortgaged or created any security
interest over any material asset or any right, title or interest in
any material asset or authorised, proposed or announced any
intention to do so, in each case other than in the ordinary course
of business and to an extent which is material in the context of
the Wider TPJF Group taken as a whole;
(v) (except for transactions between TPJF and its wholly owned
subsidiaries or between the wholly owned subsidiaries of TPJF)
issued, authorised or proposed or announced an intention to
authorise or propose, the issue of or made any change in or to the
terms of any debentures or become subject to any contingent
liability or incurred or increased any indebtedness;
(vi) entered into or varied or authorised, proposed or announced
its intention, other than in the ordinary course of business, to
enter into or vary any material contract, arrangement, agreement,
transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or
onerous nature or magnitude or which is or which involves an
obligation of a nature or magnitude which is reasonably likely to
be restrictive on the business of any member of the Wider TPJF
Group, in either case to an extent which is material in the context
of the Wider TPJF Group taken as a whole;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary the terms
of any contract, service agreement, commitment or arrangement with
any director of any member of the Wider TPJF Group, other than in
the ordinary course of business;
(viii) purchased, redeemed or repaid or announced any proposal
to purchase, redeem or repay any of its own shares or other
securities or reduced or, except in respect of the matters
mentioned in sub-paragraph (i) above, made any other change to any
part of its share capital;
(ix) waived, compromised or settled any claim, other than in the
ordinary course of business, which is material in the context of
the Wider TPJF Group as a whole;
(x) terminated or varied the terms of any agreement or
arrangement between any member of the Wider TPJF Group and any
other person in a manner which would or could have a material
adverse effect on the financial position of the Wider TPJF Group
taken as a whole;
(xi) made any alteration to its memorandum or articles of incorporation/association or other incorporation documents;
(xii) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
or
(xiii) (other than in respect of a member of the Wider TPJF
Group which is dormant and was solvent at the relevant time) taken
or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its
winding-up (voluntary or otherwise), dissolution, reorganisation or
for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any
material part of its assets or revenues or any analogous or
equivalent steps or proceedings in any jurisdiction or appointed
any analogous person in any jurisdiction or had any such person
appointed; and
No adverse change, litigation, regulatory enquiry or similar
(h) except as Disclosed, since 31 December 2016 there having been:
(i) no adverse change in the business, assets, financial or
trading position or profits or prospects of any member of the Wider
TPJF Group to an extent which is material in the context of the
Wider TPJF Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been announced or instituted by or
against or remaining outstanding against or in respect of, any
member of the Wider TPJF Group, in each case to an extent which is
material in the context of the Wider TPJF Group taken as a
whole;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider TPJF Group having been threatened, announced or
instituted or remaining outstanding by, against or in respect of
any member of the Wider TPJF Group, in each case to an extent which
is material in the context of the Wider TPJF Group taken as a
whole; and
(iv) no contingent or other liability having arisen or been
incurred which might reasonably be expected to adversely affect any
member of the Wider TPJF Group to an extent which is material in
the context of the Wider TPJF Group taken as a whole.
Part B: Certain further terms of the Offer
1. To the extent permitted by law and subject to the
requirements of the Panel, Prospect reserves the right to waive in
whole or in part, but subject to the provisions of the Code, all or
any of the above Conditions 3(c) to (h) (inclusive).
2. If Prospect is required by the Panel to make an offer for
TPJF Shares under the provisions of Rule 9 of the Code, Prospect
may make such alterations to any of the above Conditions and terms
of the Offer as are necessary to comply with the provisions of that
Rule.
3. The TPJF Shares acquired under the Offer shall be acquired
fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all
rights attaching or accruing to them, including voting rights and
the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the
Effective Date.
4. Prospect will be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of Conditions 3 (c) to (h) (inclusive) by a date
earlier than the latest date for the fulfilment of that Condition
notwithstanding that the other Conditions of the Offer may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
5. If, after the date of this Announcement but prior to the
Effective Date, any dividend or other distribution is declared,
paid or made or payable by TPJF, Prospect reserves the right
(without prejudice to any right of Prospect), with the consent of
the Panel, to invoke Condition 3(g)(ii) above) to reduce the
consideration payable under the Offer in respect of a TPJF Share by
making an adjustment to the Exchange Ratio so as to reduce the
implied value under the terms of the Offer by an amount up to the
amount of such dividend or distribution. If such reduction occurs,
any reference in this Announcement to the Exchange Ratio will be
deemed to be a reference to the Exchange Ratio as so reduced and,
notwithstanding the terms on which the TPJF Shares are expressed to
be acquired by Prospect pursuant to the Offer in Appendix I, the
TPJF Shares will be acquired by or on behalf of Prospect pursuant
to the Offer together with all rights now and hereafter attaching
to such shares including the right to receive in full all dividends
and other distributions (if any) declared, paid or made on or after
the date of this Announcement. To the extent that such a dividend
or distribution has been declared, paid, made or is payable or will
be: (i) transferred pursuant to the Offer on a basis which entitles
Prospect to receive the dividend or distribution and to retain it;
or (ii) cancelled, the Exchange Ratio will not be subject to change
in accordance with this paragraph. Any exercise by Prospect of its
rights referred to in this paragraph will be the subject of an
announcement and, for the avoidance of doubt, will not be regarded
as constituting any revision or variation of the Offer.
6. Prospect reserves the right to elect (subject to the consent
of the Panel and to the provisions of the Cooperation Agreement) to
implement the acquisition of the TPJF Shares by way of a takeover
offer (which shall be an offer for the purposes of section 337 of
the Companies Law of Guernsey), as an alternative to the Scheme. In
such an event, the acquisition will be implemented on substantially
the same terms as those which would apply to the Scheme (subject to
appropriate amendments, including an acceptance condition set at 75
per cent. in value of the shares to which such offer relates or
such lesser percentage, being more than 50 per cent. in value, as
Prospect may decide). Furthermore, if such offer is made and
sufficient acceptances of such offer are received, Prospect
reserves the right to apply the provisions of Part XVIII of the
Companies Law of Guernsey to compulsorily acquire any outstanding
TPJF Shares to which such offer relates.
7. The availability of the New Prospect Shares to persons not
resident in Guernsey or the UK may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in Guernsey or
the UK should inform themselves about and observe any applicable
requirements. The New Prospect Shares to be issued pursuant to the
Offer have not been and will not be registered under the US
Securities Act, the FIEA nor under any of the relevant securities
laws of any other Restricted Jurisdiction. Accordingly, the New
Prospect Shares may not be offered, sold or delivered, directly or
indirectly, in any Restricted Jurisdiction, except pursuant to
exemptions from applicable requirements of any such
jurisdiction.
8. The Offer is to be implemented by means of a Court-sanctioned
scheme of arrangement between TPJF and the TPJF Shareholders under
Part VIII of the Companies Guernsey Law, 2008, as amended, and the
Scheme is subject to the jurisdiction of the courts and to the
Conditions and further terms set out in this Appendix I and to be
set out in the Scheme Document. The Offer will also be subject to
the applicable requirements of the Companies Law of Guernsey, the
Court (as a result of TPJF being incorporated in Guernsey) and the
GFSC (as a result of TPJF being an authorised closed ended
investment scheme in Guernsey), the applicable requirements of
English law, the Code, the Panel, the London Stock Exchange and the
FCA (as a result of TPJF being listed on the London Stock Exchange)
and the applicable requirements of Japanese laws, JASDEC, the Tokyo
Stock Exchange and the Japanese Financial Services Agency (as a
result of Prospect being a Japanese company, listed on the Tokyo
Stock Exchange).
9. The New Prospect Shares will be issued credited as fully paid
and will rank pari passu in all respects with the existing Prospect
Shares at the time the New Prospect Shares are issued, including
the right to receive and retain dividends and other distributions
declared, made or paid by reference to a record date falling after
the date on which the Scheme becomes Effective.
10. Fractions of the New Prospect Shares will not be allotted or
issued to the TPJF Shareholders. Fractional entitlements will
instead be aggregated and sold to Prospect and the net proceeds
shall be contributed towards the costs of the settlement
arrangements for the Offer.
11. Under Rule 13.5 of the Code, Prospect may not invoke a
condition to the Offer so as to cause the Offer not to proceed, to
lapse or to be withdrawn unless the circumstances which give rise
to the right to invoke the condition are of material significance
to Prospect in the context of the Offer. Conditions 1, 2 and 3(a)
to (b) (inclusive) are not subject to this provision of the
Code.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
1. The value attributed to the Offer is based on:
(a) The value of Yen70.50 per Prospect Share, being the middle
market closing price on the Tokyo Stock Exchange on 30 May 2017
(being the last dealing day prior to the date of this Announcement)
and applying an exchange rate of 111.03 Yen/US$;
(b) multiplying by the number of TPJF Shares in issue, being 92,352,602; and
(c) multiplying by the Exchange Ratio.
2. Unless otherwise stated all prices and closing prices for
TPJF Shares are closing middle market quotations derived from the
London Stock Exchange Daily Official List.
3. Unless otherwise stated all prices and closing prices for
Prospect Shares are closing prices derived from Bloomberg.
4. Unless otherwise stated all exchange rates are the average of
the "best ask" and "best bid" Yen/US$ cross rate sourced from
Bloomberg on 30 May 2017 (being the last Business Day prior to this
Announcement).
5. Volume weighted average prices are calculated using middle
market closing prices and volumes derived from Capital IQ for the
time periods stipulated.
6. Prospect's market capitalisation is calculated by multiplying
the Existing Prospect Share Capital by Yen70.50 per Prospect Share,
being the middle market closing price on the Tokyo Stock Exchange
on 30 May 2017 (being the last Business Day prior to the date of
this Announcement) and applying an exchange rate of 111.03
Yen/US$).
7. Unless otherwise stated, the financial information relating
to TPJF is extracted or derived (without any adjustment) from the
results of TPJF for the financial year to 31 December 2016,
prepared in accordance with IFRS.
8. Unless otherwise stated, the financial information relating
to Prospect is extracted or derived (without any adjustment) from
the audited financial information of the Prospect Group for the
financial year to 31 March 2016 and the unaudited financial
information of the Prospect Group for the financial year ended 31
March 2017 (reviewed and published pursuant to the Companies Act of
Japan) and available on TPJF's website,
www.prospectjapanfund.com.
9. TPJF's NAV per share is derived from a TPJF announcement on
26 May 2017 and includes a holding in Prospect's stock acquisition
rights ('SARs') at par. For information purposes only, the
announcement also included an alternative NAV per share figure,
with the SARs being 'fair valued' using the Black-Scholes-Merton
model in line with its annual financial statements, which results
in an uplift of approximately US$9.15 million, increasing the total
NAV to US$123.56 million which, when divided by the number of TPJF
Shares in issue (as stated in 1(b) above), derives an alternative
value for NAV per share of US$1.3380.
APPIX III
LETTERS OF INTENT AND IRREVOCABLE UNDERTAKINGS
TPJF Shareholders' Letters of Intent
Each of the following TPJF Shareholders have entered into
letters of intent with Prospect to vote in favour of the
resolutions to be proposed at the TPJF General Meeting and the
Court Meeting (or if applicable to accept an offer), as
follows:
Number of TPJF Shares
in respect of which Percentage of
letter of intent is TPJF's issued
Name of TPJF Shareholder given share capital
Lazard Asset Management
Limited 23,293,778 25.22%
---------------------- ---------------
1607 Capital Partners 17,997,489 19.49%
---------------------- ---------------
Weiss Asset Management
LP 8,370,506 9.06%
---------------------- ---------------
South Yorkshire Pensions
Authority 4,540,000 4.92%
---------------------- ---------------
Wells Capital Management 3,995,179 4.33%
---------------------- ---------------
Total: 58,196,952 63.02%
---------------------- ---------------
Prospect Directors' Irrevocable Undertakings
Each of the following Prospect Directors have entered into
irrevocable undertakings with TPJF to vote in favour of the
resolutions to be proposed at the Prospect ASM, as follows:
Number of Prospect
Shares in respect Percentage of Prospect's
of which undertaking issued share capital
Name of Prospect Director is given outside treasury
Curtis Freeze 108,824 0.064%
---------------------- -------------------------
Masato Tabata 71,706 0.042%
---------------------- -------------------------
Total: 180,530 0.106%
---------------------- -------------------------
These irrevocable undertakings cease to be binding if:
-- the Scheme is withdrawn or lapses in accordance with its
terms; or
-- TPJF announces that it will recommend a competing offer for
TPJF; or
-- the resolutions to be proposed at the Prospect ASM (which are
necessary to approve the issuance of the New Prospect Shares and
therefore also to implement and effect the Offer) are duly passed,
without any material amendment, on or before the 22nd day after the
date for the ASM set out in the Scheme Document (or such later date
as may be agreed between Prospect and TPJF); or
-- Prospect announces, with the consent of the Panel, that it
does not intend to proceed with the Offer, the Scheme is withdrawn
or any competing offer for TPJF is made which is declared wholly
unconditional or otherwise becomes Effective; and
-- in any event by 30 September 2017.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"Announcement" this announcement including its appendices;
"Appendices" the appendices to this Announcement;
"Authorisations" regulatory authorisations, orders,
recognitions, grants, consents, clearances,
confirmations, certificates, licences,
permissions or approvals;
"Authorised Rules" The Authorised Closed-Ended Investment
Scheme Rules 2008;
"Bloomberg" Bloomberg L.P., a financial software
services, news and data company;
"Board" the board of directors of Prospect
or TPJF (as applicable) with the terms
"Prospect Board" and "TPJF Board"
being construed accordingly;
"Business Day" a day (other than Saturdays, Sundays
and public holidays in London, Guernsey
and/or Tokyo, as applicable) on which
banks are open for general commercial
business;
"Capital IQ" S&P Capital IQ, a part of McGraw Hill
Financial Inc.;
"certificated" or "in the description of a share or other
certificated form" security which is not in uncertificated
form (that is, not in CREST);
"Code" the City Code on Takeovers and Mergers
in the UK;
"Combined Group" the combined TPJF Group and Prospect
Group following completion of the
Offer;
"Companies Act of Japan" The Companies Act of Japan, enacted
in May 2006;
"Companies Law of Guernsey" The Companies (Guernsey) Law, 2008
(as amended);
"Conditions" the conditions to the implementation
of the Offer, as set out in Appendix
I to this Announcement and to be set
out in the Scheme Document;
"Court" the Royal Court of Guernsey;
"Court Meeting" the meeting of Scheme Shareholders
to be convened pursuant to an order
of the Court under section 107 of
the Companies Law of Guernsey for
the purpose of considering and, if
thought fit, approving the Scheme
(with or without modifications), including
any adjournment thereof;
"Court Order(s)" the order(s) of the Court sanctioning
the Scheme;
"CREST" the computerised settlement system
(as defined in the CREST Regulations)
operated by Euroclear UK & Ireland
Limited which facilitates the transfer
of title to shares in uncertificated
form;
"CREST Regulations" the Uncertificated Securities (Guernsey)
Regulations, 2009, including (i) any
enactment or subordinate legislation
which amends or supersedes those regulations
and (ii) any applicable rules made
under those regulations or any such
enactment or subordinate legislation
for the time being in force;
"Daily Official List" the Daily Official List published
by the London Stock Exchange;
"Dealing Disclosure" has the same meaning as in Rule 8
of the Code;
"Disclosed" the information disclosed by, or on
behalf of TPJF, (i) in the audited
results of the TPJF Group for the
financial year ended 31 December 2016;
(ii) in the annual report and accounts
of the TPJF Group for the financial
year ended 31 December 2016; (iii)
in this Announcement; (iv) in any
other announcement to a Regulatory
Information Service by, or on behalf
of TPJF prior to the publication of
this Announcement; or (v) as otherwise
fairly disclosed to Prospect (or its
respective officers, employees, agents
or advisers) prior to the date of
this Announcement;
"Effective" in the context of the Offer:
(i) if the Offer is implemented by
way of Scheme, means the Scheme having
become effective pursuant to its terms;
or
(ii) if the Offer is implemented by
way of a takeover offer, such offer
having become or been declared unconditional
in all respects in accordance with
its terms;
"Effective Date" the date on which the Scheme becomes
Effective in accordance with its terms;
"Exchange Ratio 2.5 New Prospect Shares for each TPJF
Share;
"Excluded Share" any TPJF Share which is registered
in the name of or beneficially owned
by any member of the Prospect Group
at the Scheme Record Time;
"Existing Prospect Share the existing issued ordinary share
Capital" capital in Prospect, excluding those
held in Treasury by Prospect, comprising
169,783,473 shares as at 30 May 2017
(being the latest practicable date
prior to the publication of this Announcement);
"FCA" or "Financial Conduct the Financial Conduct Authority acting
Authority" in its capacity as the competent authority
for the purposes of Part VI of the
UK Financial Services and Markets
Act 2000 (as amended);
"Fiduciary" Equiniti Financial Services Limited,
a private limited company incorporated
in England and Wales, with its registered
address at Aspect House, Spencer Road,
Lancing, West Sussex BN99 8AH and
with company number 06208699;
"FIEA" the Financial Instruments and Exchange
Act (Act No. 25 of 1948, as amended)
of Japan;
"Form A" a JASDEC settlement form;
"Form B" a sub-account opening form;
"Forms of Proxy" the forms of proxy in connection with
each of the Court Meeting and the
TPJF General Meeting, which will accompany
the Scheme Document;
"FSAJ" the Commissioner of the Financial
Services Agency of Japan;
"GFSC" the Guernsey Financial Services Commission;
"Guernsey" the Island of Guernsey;
"Guernsey Registry" the body authorised by the states
of Guernsey to maintain various registers
as required under Guernsey legislation
and operation under the name Guernsey
Registry;
"IFRS" International Financial Reporting
Standards as adopted by the European
Union;
"Independent TPJF Directors" the independent directors of TPJF,
as at the date of this Announcement,
namely, John Hawkins and Richard Battey;
"Japan" the sovereign state of Japan (Nippon-koku);
"Japanese Securities Laws" Japanese securities laws (Financial
Instruments and Exchange Act);
"JASDEC" Japan Securities Depository Center,
Inc.;
"Listing Rules" the rules and regulations made by
the Financial Conduct Authority in
its capacity as the competent authority
under Part VI of the Financial Services
and Markets Act 2000 (as amended),
and contained in the UKLA's publication
of the same name;
"London Stock Exchange" London Stock Exchange plc;
"Longstop Date" 30 September 2017;
"Main Market" the main market of the London Stock
Exchange;
"Meetings" the Court Meeting and the TPJF General
Meeting;
"Mizuho" Mizuho Bank, Ltd. (Corporate Advisory
department);
"mW" megawatt, a unit of power equal to
one million watts;
"NAV" net asset value;
"New Prospect Shares" the new Prospect Shares proposed to
be allotted and issued to TPJF Shareholders
in connection with the Offer, being
230,881,505 shares;
"No Action Shareholders" has the meaning give in paragraph
15.3(c) of this Announcement;
"No Action Sub-Account" has the meaning give in paragraph
15.3(c) of this Announcement;
"Offer" the recommended share for share exchange
offer being made by Prospect to acquire
the entire issued and to be issued
ordinary share capital of TPJF to
be implemented by means of the Scheme
and, where the context admits, any
subsequent revision, variation, extension
or renewal thereof;
"Offer Period" the offer period (as defined by the
Code) relating to TPJF, which commenced
on 10 January 2017 which and will
end on the Effective Date;
"Official List" the official list maintained by the
UKLA pursuant to Part VI of the Financial
Services and Markets Act 2000;
"Opening Position Disclosure" an announcement pursuant to Rule 8
of the Code containing details of
interests or short positions in, or
rights to subscribe for, any relevant
securities of a party to an offer;
"Overseas Shareholders" TPJF Shareholders (or nominees of,
or custodians or trustees for TPJF
Shareholders) not resident in, or
nationals or citizens of, the UK;
"POI Law" The Protection of Investors (Guernsey)
Law, 1987, as amended;
"Panel" the Panel on Takeovers and Mergers
in the UK;
"PAM(CI)" Prospect Asset Management (Channel
Islands) Ltd., a Guernsey registered
investment manager;
"PAMI" Prospect Asset Management, Inc.;
"Prospect" Prospect Co., Ltd.;
"Prospect ASM" the annual shareholders meeting of
Prospect Shareholders to be held in
the last week of June 2017;
"Prospect Directors" the directors of Prospect;
"Prospect Group" Prospect and its subsidiaries and,
where the context permits, each of
them;
"Prospect Shareholders" the holders of Prospect Shares;
"Prospect Shares" the allotted and issued and fully
paid ordinary shares in the capital
of Prospect;
"Receiving Agent" Equiniti Limited, a private limited
company incorporated in England and
Wales, with its registered address
at Aspect House, Spencer Road, Lancing,
West Sussex BN99 8AH and with company
number 06226088;
"Regulatory Information a primary information provider which
Service" has been approved by the FCA to disseminate
regulated information;
"Representative" the representative of the No Action
Shareholders for the purposes of the
settlement arrangements described
in paragraph 15 of this Announcement
and in relation to which further details
will be provided in the Scheme Document;
"Restricted Jurisdiction" any jurisdiction where the extension
or availability of the Offer to TPJF
Shareholders generally in such jurisdiction
would contravene any applicable law,
including, without limitation, Australia,
Japan, the Republic of South Africa
and the United States;
"Restricted Overseas Person" TPJF Shareholders resident in, or
nationals or citizens of, Restricted
Jurisdictions or who are nominees
or custodians, trustees or guardians
for, citizens, residents or nationals
of such Restricted Jurisdictions;
"RNS Reach" an investor communication service
allowing listed, unlisted and non-UK
companies to distribute non-regulatory
news releases into the public domain;
"Sales Agent" PAMI in its capacity as sales agent
for the purposes of the settlement
arrangements described in paragraph
15 and in relation to which further
details will be provided in the Scheme
Document;
"Sales Policy" the sales policy referred to in paragraph
15.3(c) with respect to the sales
process to be undertaken by the Sales
Agent on behalf of the No Action Shareholders
and in relation to which further details
will be provided in the Scheme Document;
"Sales Request Policy" the policy referred to in paragraph
15.3(b) on the sales process to be
undertaken by the Sales Agent on behalf
of the TPJF Shareholders who have
timely and validly submitted the Form
B and on whose behalf New Prospect
Shares are held by the Fiduciary.
Further details in relation to this
policy will be provided in the Scheme
Document;
"SARS" the stock acquisition rights;
"SESC" the Securities and Exchange Surveillance
Commission of Japan;
"Scheme" the proposed scheme of arrangement
under Part VIII of the Companies Law
of Guernsey as amended between TPJF
and the Scheme Shareholders in connection
with the Offer, with or subject to
any modification, addition or condition
approved or imposed by the Court and
agreed by TPJF and Prospect;
"Scheme Document" the document to be sent to TPJF Shareholders
containing, among other things, the
Scheme, an explanatory statement in
compliance with Part VIII of the Companies
Law of Guernsey and the notices convening
the Court Meeting and the TPJF General
Meeting;
"Scheme Record Time" the date and time to be specified
in the Scheme Document by reference
to which the Scheme will be binding
on the holders of TPJF Shares;
"Scheme Shareholders" the holders of Scheme Shares;
"Scheme Shares" the TPJF Shares:
(i) in issue at the date of the Scheme
Document and which remain in issue
at the Scheme Record Time;
(ii) if any, issued after the date
of the Scheme Document but before
the Scheme Voting Record Time and
which remain in issue at the Scheme
Record Time; and
(iii) if any, issued at or after the
Scheme Voting Record Time but at or
before the Scheme Record Time on terms
that the original or any subsequent
holders thereof are, or shall have
agreed in writing, to be bound by
the Scheme and, in each case, which
remain in issue at the Scheme Record
Time,
in each case, other than any Excluded
Shares;
"Scheme Voting Record the date and time to be specified
Time" in the Scheme Document by reference
to which entitlement to vote at the
Court Meeting will be determined,
expected to be 6.00 p.m. (London time)
on the day which is two days before
the Court Meeting or, if the Court
Meeting is adjourned, 6.00 p.m. (London
time) on the day which is two days
before the date of such adjourned
Court Meeting;
"Settlement Date" the date which will be specified as
such in the Scheme Document, or such
other date as may be agreed between
Prospect and TPJF, being no later
than 14 days after the Effective Date;
"Significant Interest" in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of the total voting rights
conferred by the equity share capital
of such undertaking;
"Stockdale" Stockdale Securities Limited;
"Strand Hanson" Strand Hanson Limited;
"Termination Sales Policy" the termination sales policy referred
to in paragraph 15.3(b) of this Announcement
with respect to the sales process
to be undertaken by the Sales Agent
on behalf of those TPJF Shareholders
on whose behalf any New Prospect Shares
are still held on their behalf by
the Fiduciary, on the date which is
two years following the Settlement
Date. Further details in relation
to this policy will be provided in
the Scheme Document;
"Third Party" each of a central bank, government
or governmental, quasi-governmental,
supranational, statutory, regulatory,
environmental, administrative, fiscal
or investigative body, court, trade
agency, association, institution,
environmental body, any other body
or person whatsoever in any jurisdiction;
"Tokyo Stock Exchange" Tokyo Stock Exchange, Inc.;
or "TSE"
"TPJF" or "Company" The Prospect Japan Fund Limited;
"TPJF Directors" the board of directors of TPJF, as
at the date of this Announcement;
"TPJF General Meeting" the general meeting of TPJF Shareholders
(including any adjournment thereof)
to be convened in connection with
the Scheme;
"TPJF Group" TPJF and its subsidiaries and, where
the context permits, each of them;
"TPJF Shareholders" or the holders of TPJF Shares;
"Shareholders"
"TPJF Shares" the existing unconditionally allotted
and issued and fully paid ordinary
shares of US$0.001 each in the capital
of TPJF and any further such ordinary
shares which are unconditionally allotted
or issued before the Scheme becomes
Effective;
"UKLA" the UK Listing Authority, being the
Financial Conduct Authority acting
in its capacity as the competent authority
for the purposes of Part VI of the
Financial Services and Markets Act
2000 (as amended);
"UK" the United Kingdom of Great Britain
and Northern Ireland;
"UK Companies Act" The Companies Act 2006, as amended
from time to time;
"United States" or "US" the United States of America, its
territories and possessions, any state
of the United States of America, the
District of Columbia and all other
areas subject to its jurisdiction
and any political sub-division thereof;
"US Exchange Act" the US Securities Exchange Act of
1934;
"US Securities Act" the US Securities Act of 1933;
"Wider Prospect Group" Prospect and its associated companies
and any other body corporate, partnership,
joint venture or person in which Prospect
and all such associated companies
(aggregating their interests) have
a Significant Interest; and
"Wider TPJF Group" TPJF Group and its associated companies
and any other body corporate, partnership,
joint venture or person in which any
member of the TPJF Group and such
associated companies (aggregating
their interests) have a Significant
Interest.
For the purposes of this Announcement "subsidiary" and
"associates" have the meanings given by the UK Companies Act.
All references to "GBP", "pounds", "pounds Sterling",
"Sterling", "GBP", "pence", "penny" and "p" are to the lawful
currency of the United Kingdom.
All references to "US$" and "$" are to the lawful currency of
the United States.
All references to "Japanese Yen", "JPY" and "Yen" are to the
lawful currency of Japan.
All the times referred to in this Announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFVFLBXDEFEBBL
(END) Dow Jones Newswires
May 31, 2017 05:00 ET (09:00 GMT)
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