Bellevue Health Regulatory News (BBH)

5 November 2018

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE SECTION ENTITLED "DISCLAIMER" TOWARDS THE END OF THIS ANNOUNCEMENT.

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and does not constitute a prospectus. Investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in a prospectus expected to be published later today by BB Healthcare Trust plc (the "Prospectus") in its final form and not in reliance on this announcement. A copy of the Prospectus will, following publication, be available for inspection from the Company's registered office and on its website (www.bbhealthcaretrust.com). This announcement does not constitute, and may not be construed as, an offer to sell or an invitation or recommendation to purchase, sell or subscribe for any securities or investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

BB Healthcare Trust plc

Announcement of Initial Placing, Offer for Subscription and Intermediaries Offer

Further to its announcement on 30 October 2018, the Board of Directors (the "Directors" or "Board") of BB Healthcare Trust plc (the "Company" or "BB Healthcare") announces the proposed issue of new ordinary shares ("Ordinary Shares") in the Company (the "Initial Issue") pursuant to a new Prospectus, also containing a share issuance programme (the "Share Issuance Programme"). The Initial Issue will comprise an Initial Placing, Offer for Subscription and Intermediaries Offer.

To facilitate the Initial Issue and Share Issuance Programme the Company will shortly publish a new Prospectus.

Background to and reasons for the Initial Issue

Equity markets have been volatile over recent weeks with the MSCI World Index declining 5.3% in sterling terms during October 2018. The Directors and Bellevue Asset Management AG (the "Portfolio Manager" or "Bellevue") believe that the reasons for this market correction are multi-factorial and of little direct consequence to the outlook for the healthcare industry. The MSCI World Healthcare Index has declined 4.5% in sterling terms over the same period.

Furthermore, the Directors and the Portfolio Manager believe that the correction has had a disproportionate impact on companies that are growth-orientated and with smaller market capitalisations, thus, it has been a challenging time for a number of the Company's holdings. Despite this significant short-term pull-back, the Company has delivered a total return that is 7.9% higher than the MSCI World Healthcare Index since its inception in December 2016.

As at 31 October 2018, the Company had unaudited net assets of approximately £404 million (representing a cum-income Net Asset Value per Ordinary Share of 128.81 pence) and the closing market price of the Ordinary Shares was 129.0 pence per share. Since IPO, the Company's Ordinary Shares have traded at an average premium to NAV per Ordinary Share of 1.7 per cent.

The Directors and Bellevue strongly believe that the recent correction in equity markets, and the prevailing valuations of the Company's holdings, offer a compelling opportunity for total returns over the Company's 3 to 5 year investment horizon. Additionally, there is potential for investment into stocks that are not currently held by the Company and have been similarly challenged by recent market conditions.

Over the course of 2018 the Company has issued a further 57,438,526 Ordinary Shares pursuant to its tap issuance programme, raising gross proceeds of approximately £77.5 million. The Directors believe that a further increase in the size of the Company should improve liquidity in the market for the Company's Ordinary Shares and enhance the marketability of the Company, resulting in a broader investor base and spreading fixed costs over a larger capital base.

The Company's key points of differentiation

The Portfolio Manager believes that the Company's approach remains differentiated from other existing closed-ended listed healthcare investment companies or their open-ended equivalents in the following ways:

· First, the Company has a longer term investment horizon. Focusing on ideas that the Portfolio Manager believes will deliver superior total returns over a three year period and beyond should enable the Portfolio Manager to focus on the factors that will drive fundamental outperformance;

· Second, the Company has a high conviction portfolio capped at 35 positions that is unconstrained with respect to a benchmark. The Portfolio Manager believes that the track record of BB Biotech demonstrates that a concentrated portfolio has a greater probability of outperforming the wider healthcare sector over the longer-term;

· Third, the Directors believe that there is strong alignment of Board and Portfolio Manager interests with those of investors: an annual redemption facility offers a robust form of discount control, Board compensation in locked-in shares (for UK based Directors), and a flat management fee with no performance element; and

· Fourth, the Company will target an annual dividend of 3.5 per cent. of its Net Asset Value as at the last day of the Company's preceding financial year, financed predominantly from capital, offering a combination of income with a capital-growth focused investment objective. This dual approach is not currently offered by any other healthcare-focused closed-ended listed fund.

Justin Stebbing, Chairman of BB Healthcare Trust plc, said:

"BB Healthcare's long-term focused strategy has generated outperformance from launch through to September 2018 and the Board strongly believes that the Company is following the right strategy for long-term success. Recent trading has been very challenging, driven by macro factors that we see as being of little concern to the Company's strategy. As such, we feel current market conditions offer a compelling opportunity to deploy additional capital, which will broaden the investor base and improve marketability. The opportunity for our particular brand of healthcare investing is very much intact. We are in the foothills of an unprecedented period of change for our industry that offers multitudinous new opportunities for investors. Valuations now look very attractive in a number of healthcare sub-sectors and the need for healthcare products and services will continue to grow into the foreseeable future."

Details of the Initial Issue

Details of the Initial Issue (including the Share Issuance Programme) will be set out in a Prospectus expected to be published shortly. The maximum size of the Share Issuance Programme (including the Initial Issue) is 345 million new Ordinary Shares. Terms not otherwise defined in this announcement have the meanings given to them in the Prospectus. The Prospectus will, when published, be available on the Company's website (www.bbhealthcaretrust.com), subject to certain access restrictions, and for inspection at the Company's registered office at Mermaid House, 2 Puddle Dock, London EC4V 3DB, and at the National Storage Mechanism via www.morningstar.co.uk/uk/NSM.

Ordinary Shares issued in the Initial Issue will be issued subject to the terms and conditions set out in the Securities Note contained within the Prospectus. When issued, they will rank pari passu with the existing Ordinary Shares in issue including the right to receive any final dividend for the financial year ending 30 November 2018. As announced by the Company on 5 December 2017, for the financial year ending 30 November 2018, the target total dividend is 4.0 pence per Ordinary Share, this being 3.5 per cent. of the Net Asset Value per Ordinary Share as at 30 November 2017 (this is a target only and not a profit forecast and there can be no assurance that it will be met). The Company announced on 11 July 2018 that the interim dividend for the six months to 31 May 2018 would be 2.0 pence per Ordinary Share, payable on 24 August 2018 to Shareholders on the register as at 27 July 2018.

The issue price per Ordinary Share of any shares issued pursuant to the Initial Issue will be at a premium of 2% to the unaudited NAV per Ordinary Share (cum income) on the day that the Initial Placing closes, which is expected to be 28 November 2018.

Applications will be made to the UK Listing Authority and to the London Stock Exchange for admission of the Ordinary Shares in the Company to be issued pursuant to the Initial Issue to the Official List and to trading on the London Stock Exchange's main market for listed securities ("Admission"). It is expected that Admission will become effective on 3 December 2018.

Expected timetable

* Underlying applicants who apply to Intermediaries for Ordinary Shares under the Intermediaries Offer will not receive share certificates

The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates will be notified by an announcement through a Regulatory Information Service. All references to times in this announcement are to London times.

Peel Hunt LLP ("Peel Hunt") is acting as sole sponsor, joint bookrunner and sole intermediaries offer adviser, and J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), as joint bookrunner, to the Company.

The Company's LEI is: 213800HQ3J3H9YF2UI82

For further information please contact:

Disclaimer

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the Prospectus expected to be published by the Company shortly and not in reliance on this announcement. Copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company and at the National Storage Mechanism at http://www.morningstar.co.uk/NSM and on the Company's website. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Mirabella Financial Services LLP solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement is not for release, publication or 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, collectively, the "United States"), Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction where such distribution is unlawful, or to US Persons, as defined in Regulation S. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement is not an offer of securities for sale into the United States. Each of Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA, and J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is authorised in the United Kingdom by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the FCA and the PRA, are acting exclusively for the Company and for no-one else in connection with the Initial Issue, the Share Issuance Programme or any Admission and the other arrangements referred to in this announcement and will not regard any other person as their respective clients in relation to the Initial Issue, the Share Issuance Programme or any Admission and the other arrangements referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in connection with the Initial Issue and the other arrangements referred to in this announcement.

The Ordinary Shares have not been, and will not be, registered under the US Securities Act 1933 ("US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold within the United States or to or for the account or benefit of US Persons (as defined in Regulation S under the US Securities Act ("Regulation S"). In addition the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended. Outside the United States, the Ordinary Shares may be sold to non-US Persons pursuant to the provisions of Regulation S.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement contains forward looking statements, including, without limitation, statements including the words "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Such forward looking statements involve unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Portfolio Manager, the AIFM, Peel Hunt and J.P. Morgan Cazenove expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority, the EU Market Abuse Regulation or other applicable laws, regulations or rules.

The information in this announcement is for background purposes only and does not purport to be full or complete. None of Peel Hunt or J.P. Morgan Cazenove, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Peel Hunt, J.P. Morgan Cazenove, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Initial Issue, Peel Hunt, J.P. Morgan Cazenove and any of their affiliates, may take up a portion of the Ordinary Shares in the Initial Issue as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such Ordinary Shares and other securities of the Company or related investments in connection with the Initial Issue or otherwise. Accordingly, references in the Prospectus, once published, to the Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, Peel Hunt, J.P. Morgan Cazenove and any of their affiliates acting in such capacity. In addition Peel Hunt, J.P. Morgan Cazenove and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which Peel Hunt, J.P. Morgan Cazenove and any of their affiliates may from time to time acquire, hold or dispose of Ordinary Shares. Peel Hunt and J.P. Morgan Cazenove do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares which are the subject of the Initial Issue have been subject to a product approval process, which has determined that such Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or fully predictable return profile, who are not looking for full capital protection or full repayment of the amount invested, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Peel Hunt and J.P. Morgan Cazenove will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.

Disclaimer (Switzerland)

The attention of potential investors in Switzerland is drawn to the section titled "Additional information for Swiss investors" contained within the "Important Information" section of the securities note which forms part of the Prospectus.