Ventus 2 VCT PLC Company share class decision (0807E)
May 03 2017 - 9:01AM
UK Regulatory
TIDMVEN2
RNS Number : 0807E
Ventus 2 VCT PLC
03 May 2017
Ventus 2 VCT plc
Company share class decision
The Board of Ventus 2 VCT plc (the "Company") announces that it
does not intend to proceed with the merger of the Ordinary and C
share classes of the Company.
The principal benefit of a merger was considered to be the
creation of a larger pool of shares leading to improved liquidity
in the market and a reduction in the discounts to net asset value
at which the shares were trading. In recent months, the discounts
have narrowed significantly and the benefits of a merger would be
much reduced.
The legal, professional and administration costs of a merger
would however be unchanged and substantial. The Directors now
consider that from a shareholder cost-benefit point of view the
case for a merger is much less compelling.
The Directors also have a duty to ensure that a share class
conversion would not disadvantage one group of shareholders over
another, both at the time of the merger and in the future. Given
the lack of homogeneity between the portfolios behind the Ordinary
and C classes of shares it will always be difficult to determine a
fair conversion ratio. The Directors have found it impossible to be
certain that, after a merger, divergent paths for the underlying
asset values would not emerge with the result that unintended
transfers of value would occur.
A further problem for which no totally satisfactory answer has
yet been found arises from the contractual obligation to pay a
performance fee to the Investment Manager if certain conditions are
met. Given the respective total shareholder returns (as disclosed
in the most recent financial reports), it seems likely that such
conditions may be met in the case of the C class of shares but not
in the foreseeable future for the Ordinary shares. A merger could
mean that some shareholders would help meet the cost of the
performance fee despite not having shared in the benefits which
gave rise to the payment.
Taking all these factors into account the Directors have decided
at present to retain the existing share structure. However, the
possibility of a merger of the share classes in the future,
including eventually the D shares, will be reviewed by the
Directors on a regular basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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