UK Mortgages Ltd Rejection of Final Possible Offer

 
TIDMUKML 
 
THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, 
RELEASE OR DISTRIBUTION (IN WHOLE OR IN PART) DIRECTLY OR INDIRECTLY IN OR INTO 
OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE 
RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A 
TAKEOVER OFFER OR AN OFFER OF SECURITIES. 
 
13 August 2020 
 
                             UK MORTGAGES LIMITED 
 (a closed-ended investment company incorporated in Guernsey with registration 
                                 number 60440) 
 
                           LEI 549300388LT7VTHCIT59 
 
                       Rejection of Final Possible Offer 
 
The Board of UK Mortgages Limited (the "Company" or "UKML") notes the 
announcement earlier today by M&G Investment Management Ltd ("MAGIM"), 
regarding an increased and final possible offer for all of the issued and to be 
issued share capital of the Company of 70 pence per UKML share (the "Final 
Possible Offer"). The making of a firm offer by MAGIM remains subject to 
certain pre-conditions and reservations (see Appendix 1). 
 
Specifically, the Board draws to the attention of Shareholders the statement by 
MAGIM that this represents its final possible offer which can be increased only 
in the event that a third party announces a firm offer. The Board confirms that 
it is not in discussions with any third party at this time, nor has it been 
previously. 
 
The Board confirms receipt of the Final Possible Offer earlier this morning, 
following contact between respective financial advisers over the weekend. The 
Board continues to believe in the quality of the assets in the Company's 
portfolio, the robustness of the Company's Net Asset Value methodology, as well 
as the quality of the investment management services provided by TwentyFour 
Asset Management LLP. The Board believes that the terms of the Final Possible 
Offer continue to undervalue the Company and its prospects. The Board does not 
believe this valuation is recommendable to Shareholders and therefore sees no 
basis for engagement on this Final Possible Offer. 
 
The Board refers Shareholders to the Company's announcement on 7 August 2020, 
reiterating the material undervaluation of the previous proposals and 
announcing a review of future strategy. 
 
The Board confirms that the review would commence once the Company is no longer 
in an Offer Period under the Takeover Code. The review would be with the aim of 
maximising the value created for and delivered to Shareholders from the high 
quality assets that are within the Company's portfolio and would seek to 
provide Shareholders with a strategy that delivered an understood pathway to 
enhanced liquidity as well as a narrowing and removal of the discount at which 
the shares trade versus the NAV. 
 
The Chairman, Chris Waldron comments: 
 
"The Board considers that the final possible offer continues to be an 
undervaluation of the Company and does not believe this valuation is 
recommendable. In addition, the Board reiterates its intention to launch a 
review of future strategy with the aim of maximising value delivered to 
shareholders." 
 
Shareholders should note that the Final Possible Offer does not amount to an 
announcement of a firm intention to make an offer for the Company under Rule 
2.7 of the Takeover Code and there can be no certainty that any offer will be 
forthcoming. 
 
The Company notes that in accordance with Rule 2.6(a) of the Takeover Code, 
MAGIM has until 5.00pm on 17 August 2020, being 28 days after the date of 
MAGIM's initial possible offer announcement, to either announce a firm 
intention to make an offer for the Company in accordance with Rule 2.7 of the 
Takeover Code or announce that it does not intend to make an offer for the 
Company, in which case the announcement will be treated as a statement to which 
Rule 2.8 of the Takeover Code applies. This deadline will only be extended with 
the consent of the Company and the Takeover Panel in accordance with Rule 2.6 
(c) of the Takeover Code. 
 
This statement is being made by the Company without the prior agreement or 
approval of MAGIM. 
 
Enquiries: 
 
UK Mortgages Limited 
Christopher Waldron (Chairman)           020 7260 1000 
 
Numis Securities Limited, Financial Adviser and Corporate Broker 
Hugh Jonathan                                       020 7260 1000 
Nathan Brown 
Stuart Ord 
 
Garfield Advisory, Public Relations Adviser 
Andrew Garfield                                      079 7498 2337 
Jason Nisse                                            077 6968 8618 
 
Further information 
 
This announcement is not intended to and does not constitute an offer to buy or 
the solicitation of an offer to subscribe for or sell or an invitation to 
purchase or subscribe for any securities or the solicitation of any vote in any 
jurisdiction. The release, publication or distribution of this announcement in 
whole or in part, directly or indirectly, in, into or from certain 
jurisdictions may be restricted by law and therefore persons in such 
jurisdictions should inform themselves about and observe such restrictions. 
 
Numis Securities Limited ("Numis"), which is authorised and regulated in the 
United Kingdom by the Financial Conduct Authority, is acting exclusively for UK 
Mortgages Limited and no one else in connection with the matters set out in 
this announcement and will not regard any other person as its client in 
relation to the matters in this announcement and will not be responsible to 
anyone other than UK Mortgages Limited for providing the protections afforded 
to clients of Numis, nor for providing advice in relation to any matter 
referred to herein. 
 
Forward looking statements 
 
This announcement, oral statements made regarding the possible offer, and other 
information published by UK Mortgages Limited may contain statements which are, 
or may be deemed to be, "forward-looking statements". Forward-looking 
statements are prospective in nature and are not based on historical facts, but 
rather on current expectations and projections of the management of UK 
Mortgages Limited about future events, and are therefore subject to risks and 
uncertainties which could cause actual results to differ materially from the 
future results expressed or implied by the forward-looking statements. The 
forward-looking statements contained in this announcement include statements 
relating to the expected timing and scope of the Possible Offer. Often, but not 
always, forward-looking statements can be identified by the use of 
forward-looking words such as "plans", "expects" or "does not expect", "is 
expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", 
"intends", "anticipates" or "does not anticipate", or "believes", or variations 
of such words and phrases or statements that certain actions, events or results 
"may", "could", "should", "would", "might" or "will" be taken, occur or be 
achieved. Although UK Mortgages Limited believe that the expectations reflected 
in such forward-looking statements are reasonable, UK Mortgages Limited can 
give no assurance that such expectations will prove to be correct. By their 
nature, forward-looking statements involve risk and uncertainty because they 
relate to events and depend on circumstances that will occur in the future. 
There are a number of factors that could cause actual results and developments 
to differ materially from those expressed or implied by such forward-looking 
statements. Such forward-looking statements should therefore be construed in 
the light of such factors. Neither UK Mortgages Limited, nor any of its 
associates or directors, officers or advisers, provides any representation, 
assurance or guarantee that the occurrence of the events expressed or implied 
in any forward-looking statements in this announcement will actually occur. You 
are cautioned not to place undue reliance on these forward-looking statements. 
Other than in accordance with its legal or regulatory obligations (including 
under the Disclosure Guidance and Transparency Rules of the FCA), UK Mortgages 
Limited is under no obligation, and expressly disclaims any intention or 
obligation, to update or revise any forward-looking statements, whether as a 
result of new information, future events or otherwise. 
 
Dealing Disclosure Requirements 
 
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of 
any class of relevant securities of an 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 pm 
(London time) on the 10th business day following the commencement of the offer 
period and, if appropriate, by no later than 3.30 pm (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% 
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 pm (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 an 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 
 
A copy of this announcement and the documents required to be published by Rule 
26 of the Code will be made available on UK Mortgages Limited's website at 
www.twentyfouram.com/funds/uk-mortgages-fund/ by no later than 12 noon (London 
time) on the business day following the date of this announcement. For the 
avoidance of doubt, the contents of the website are not incorporated into and 
do not form part of this announcement. 
 
In accordance with Rule 30.3 of the Code, a person so entitled may request a 
hard copy of this Announcement, free of charge, by contacting Numis on +44 (0) 
20 7260 1000. For persons who receive a copy of this Announcement in electronic 
form or via a website notification, a hard copy of this Announcement will not 
be sent unless so requested. In accordance with Rule 30.3 of the Code, a person 
so entitled may also request that all future documents, announcements and 
information be sent to them in relation to the Acquisition should be in hard 
copy form. 
 
MAR 
 
The information contained within this announcement is deemed by UKML to 
constitute inside information as stipulated under the Market Abuse Regulation. 
Upon the publication of this announcement via a Regulatory Information Service, 
this inside information is now considered to be in the public domain. 
 
Appendix 1 
 
Reservations and conditions 
 
MAGIM states in the Final Possible Offer Announcement that any formal offer for 
UKML under the Takeover Code would be conditional on, amongst other things, 
satisfactory completion of diligence and the unanimous and unqualified 
recommendation by the UKML Board of Directors.  MAGIM reserves the right to 
waive any or all of these pre-conditions to a firm offer, in whole or in part. 
MAGIM further reserves the right to announce an offer at a price below 70 pence 
per UKML share in the event that (a) the Board of UKML recommends an offer at 
the reduced price; (b) a third party announces a firm intention to make an 
offer for UKML; (c) UKML announces a whitewash transaction pursuant to the 
Takeover Code.  MAGIM also reserves the right to announce an offer at a price 
above 70 pence per UKML share in the event that a third party announces a firm 
intention to make an offer for UKML. 
 
The Final Possible Offer is not affected by the Company's recently paid out 
fourth interim dividend of 0.375p per share. However, the Company draws the 
attention of Shareholders to MAGIM's statement that in the event that the 
recently proposed fifth interim dividend of 1.5p per share for the financial 
year ended 30 June 2020 is paid before completion, the offer price will be 
reduced to 68.5p per share, and that the offer price will be reduced by the 
amount of any dividend or distribution or return of capital announced, declared 
or paid by UKML after 13 August 2020. 
 
 
 
END

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August 13, 2020 08:04 ET (12:04 GMT)

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