Calculus Vct Regulatory News (CLC)

CALCULUS VCT PLC - Recommended Proposals for Merger and Offer to subscribe for up to £5m with an over-allotment option of up to a further £5m

19 June 2017

CALCULUS VCT PLC ("The Company")

NEPTUNE-CALCULUS INCOME AND GROWTH VCT PLC ("Neptune VCT")

(Together the "Companies")

TIDM: CLC, CLCC, CLCD and CLCN

RECOMMENDED PROPOSALS FOR MERGER WITH NEPTUNE VCT AND OFFER TO SUBSCRIBE FOR UP TO £5M WITH AN OVER ALLOTMENT OPTION OF UP TO A FURTHER £5M

SUMMARY

Your Board is pleased to announce that it has agreed in principle with the board of Neptune VCT to merge with the Company (the "Merger") on a relative net asset basis. Each of the Companies is managed by Calculus Capital Limited ("Calculus Capital").

Your board believes there will be significant benefits for all Shareholders arising from the proposed merger with the Neptune VCT which are set out below. The merger, which will follow the methodology used in the majority of VCT mergers, will be effected by means of placing Neptune VCT into members' voluntary liquidation pursuant to Section 110 of IA 1986 and the acquisition by the Company of all of Neptune VCT's assets and liabilities in consideration for the issue of Consideration Shares, forming an enlarged VCT (the "Enlarged Company").

The Merger will be conditional upon certain conditions being satisfied which will be set out in the circulars to be posted in due course to the Companies' respective shareholders together with a prospectus in connection with the Merger (the "Prospectus").

Conditional upon the Merger being effected, the Company intends to seek further investment of up to £5 million to be allotted in the 2017/18 and 2018/19 tax years with an over-allotment option of up to a further £5 million (the "Offer").

If the Merger is effected, the Company should have increased net assets to in excess of £10 million, prior to any shares being issued in the Offer. This is net of dividends paid to date to the Ordinary and C shares of 84.05p pence and 73.10p pence per share, respectively.

BENEFITS ANTICIPATED FROM THE MERGER

The Merger should result in the following benefits for Shareholders:

· a reduction in the expected annual running costs for Shareholders due to operational expenses being spread over a larger base;

· a larger pool of distributable reserves to support future dividend payments;

· the opportunity for future buy backs, particularly for Shareholders who have held their shares for more than 5 years; and

· exposure to a more diversified portfolio.

Additional attractive features of the Merger include:

· the Company's venture capital investment manager, Calculus Capital has agreed to contribute 33% of the costs of the Merger, meaning that the costs will be split evenly between Calculus Capital, the Company and Neptune VCT;

· no impact on the tax position of Shareholders, and

· existing VCT tax reliefs carry over and attach to the post-Merger shares for Shareholders and shareholders in Neptune VCT.

A reduction in the expected annual running costs

Subject to the Merger taking place, Calculus Capital has agreed to increase its potential contribution to the running costs of the Company by reducing the cost cap (excluding irrecoverable VAT, annual trail commission and performance incentive fees) from 3% of the gross amount raised under the ordinary and C Share offers and 3.4% of the gross amount raised under the D Share offers to 3% of the net assets of the Enlarged Company at each financial year end.

THE COMPANY BOARD

It is proposed that, if the Merger is approved, the Board of the Company should be:

· Michael O'Higgins;

· Arthur John Glencross;

· Kate Cornish-Bowden;

· Steven Meeks; and

· Diane Seymour-Williams.

TIMETABLE

It was announced in the Company's Report and Accounts on 12 May 2017, that the merger of the Company's Ordinary, C and D Share classes was expected to take place on a date as soon as possible after 30 May 2017 when HMRC clearance for the share class merger is received. HMRC clearance is expected imminently and it is expected that that the share class merger will take place as soon as possible thereafter.

Following the merger of the share classes, it is expected that shareholder circulars seeking approval for the Merger and other related matters, together with the Prospectus, will be posted to the shareholders of the Company and Neptune VCT as soon as possible thereafter.

Subject to shareholders' approvals, it is expected that the Merger of the Companies can be completed within 6 weeks of the date of posting.

Calculus Capital Limited

Company Secretary