merger details..more...2 Mar 2011 18:33
i. Terms of the Merger
The merger will provide for all of the assets and liabilities of Keydata 1 and
Keydata 2 to be transferred to Foresight VCT in consideration for:
* the issue of New Shares to Keydata VCTs Shareholders equal in value to the
aggregate Roll-Over Value of the Keydata VCTs Shares on 24 February 2011;
and
* the issue of additional New Shares to Keydata VCTs Shareholders by way of
Additional Consideration if the Enterprise Value of the Derby Project
(defined below) as at 30 September 2013, exceeds the Roll-Over Value of the
Keydata VCTs Shares on 24 February 2011.
The maximum consideration (comprising the New Shares and the additional New
Shares) which may be paid by Foresight VCT for the acquisition of the assets of
Keydata 1 and Keydata 2 will not exceed £6.4 million. Therefore the maximum
Additional Consideration will be the difference between the aggregate Roll-Over
Value of the Keydata VCTs Shares on 24 February 2011 and £6.4 million.
The merger will be completed, as regards the initial consideration, on a
relative net asset value basis and will be subject to the Scheme becoming
unconditional. The acquisition of the asset and liabilities of Keydata 1 and
Keydata 2 is in line with Foresight VCT's investment policy.
Following the transfer, the listing of the Keydata VCTs Shares will be cancelled
and Keydata 1 and Keydata 2 will be wound up.
(ii) Benefits anticipated from the merger
The merger of the Keydata VCTs should result in cost savings and enhanced
administrative efficiency. As the Keydata VCTs have the same investment manager,
common advisers and similar investment policies, the merger should be achievable
without major additional cost or disruption to the portfolio investments. The
existing investment management arrangements between Foresight Group LLP
("Foresight Group") and Foresight VCT will remain in place.
The Foresight VCT board considers that this merger should bring significant
benefits to Foresight VCT shareholders and the Keydata VCTs shareholders
through:
* creation of a single VCT of a more economically efficient size with a
greater capital base over which to spread administration and management
costs;
* a reduction in annual running costs for the enlarged company compared to the
aggregate annual running costs of the three separate companies;
* creation of an enlarged entity with a larger cash positive position making
Foresight VCT better positioned to meet its ongoing obligations and to
support existing investee companies, in this challenging economic
environment;
* the enlarged company will hold a more diversified portfolio thereby
dispersing the portfolio risk;
* an increased exposure to the environmental infrastructure asset class which
is believed by the Foresight VCT board and Foresight Group to offer real
growth for the future; and
* the potential to make regular distributions in the future, particular