Dunedin Ent.it. Regulatory News (DNE)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, [AUSTRALIA], CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA AND THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE TO DO SO MAY RESULT IN THE CONTRAVENTION OF ANY REGISTRATION OR OTHER LEGAL REQUIREMENT OF SUCH JURISDICTION

18 October 2021

Dunedin Enterprise Investment Trust plc

Legal Entity Identifier: 213800E2VLUZ5AF9Z434

As noted in the interim results of Dunedin Enterprise Investment Trust plc (the "Company") published on 16 September 2021, to allow the Investment Manager to conduct a managed wind-down of the Company and in accordance with the Company's investment policy and distribution policy, the Board is proposing to return up to £26 million to Shareholders pursuant to a tender offer (the "Tender Offer").

The Company has today published a circular providing shareholders with full details of the Tender Offer. A copy of the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The Circular will also be available on the Company's website (https://www.dunedinenterprise.com/).

Details of the Tender Offer

The Tender Offer will enable those Shareholders (other than Restricted Shareholders and certain Overseas Shareholders) who wish to sell some or all of their Shares to elect to do so, subject to the overall limits of the Tender Offer. Shareholders who successfully tender Shares will receive the Tender Price per Share, being a 1.2 per cent. discount to the NAV per Share as at 30 September 2021.

Under the terms of the Tender Offer, which is being made by Singer Capital Markets Securities Limited ("Singer Capital Markets"), Shareholders (other than Restricted Shareholders and certain Overseas Shareholders) will be entitled to tender up to their Basic Entitlement, rounded down to the nearest whole Share. Shareholders may also tender additional Shares, but any such excess tenders above the Basic Entitlement will only be satisfied, on a pro rata basis, to the extent that other Shareholders tender less than their aggregate Basic Entitlement.

The Tender Price and the Basic Entitlement will be announced on 1 November 2021, alongside the Company's NAV per Share as at 30 September 2021. The maximum number of Shares that will be purchased under the Tender Offer will be calculated by dividing £26 million by the Tender Price. The Basic Entitlement will equal the percentage of the issued Share capital represented by the aggregate number of Shares that will be purchased under the Tender Offer.

Subject to the satisfaction of the conditions relating to the Tender Offer, Singer Capital Markets will purchase, as principal, Shares validly tendered under the Tender Offer at the Tender Price. Following completion of those purchases, it will then sell all the relevant Shares back to the Company pursuant to the Repurchase Agreement at the Tender Price by way of an on-market transaction on the main market of the London Stock Exchange. The Shares which the Company acquires from Singer Capital Markets will be cancelled. The repurchase of Shares by the Company under the Repurchase Agreement will be funded from the Company's realised capital reserves.

The Tender Offer is subject to the terms and conditions set out in the Circular. The Tender Offer may also be terminated in certain circumstances as set out in the Circular. Shareholders should note that, once tendered, Shares may not be sold, transferred, charged or otherwise disposed of other than in accordance with the Tender Offer.

Existing Share buy back authority

The Company's authority to repurchase its own Shares, which was granted at the last annual general meeting of the Company held on 12 May 2021, in respect of up to 14.99 per cent. of the Company's issued share capital as at the date of that meeting, will remain in force and be unaffected by the Tender Offer. 

Estimated expenses

The fixed costs relating to the Tender Offer are expected to be approximately £171,000 including VAT. The foregoing figure does not include stamp duty, assuming the Tender Offer is taken up in full the Company estimates that the costs of stamp duty will be approximately £130,176. All costs in relation to the Tender Offer will be borne by the Company. It is expected that, on the basis that the Tender Offer is taken up in full, the costs of the Tender Offer should not result in a dilution to the NAV per Share.

Overseas Shareholders and Restricted Shareholders

The making of the Tender Offer to persons outside the United Kingdom may be prohibited or affected by the laws of the relevant overseas jurisdictions. Shareholders with registered or mailing addresses outside the United Kingdom who are citizens or nationals of, or resident in, a jurisdiction other than the United Kingdom should read the relevant sections of the circular carefully.

The Tender Offer is not being made to Shareholders who are resident in, or citizens of, Restricted Jurisdictions. Restricted Shareholders are being excluded from the Tender Offer in order to avoid offending applicable local laws relating to the implementation of the Tender Offer. Accordingly, copies of the Tender Form are not being and must not be mailed or otherwise distributed in or into Restricted Jurisdictions.

It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to participate in the Tender Offer.

Future realisations

In line with the Company's investment policy, Dunedin LLP (the "Investment Manager") will continue to conduct an orderly realisation of the Company's assets in a manner that seeks to achieve a balance between maximising the value of the Company's investments and progressively returning cash to Shareholders. The quantum and timing of any return of capital to Shareholders following receipt by the Company of the net proceeds of realisations of investments will be dependent on the Company's liabilities, its uncalled fund commitments and general working capital requirements. In particular, the net cash proceeds from realisations of investments, after settlement of and provision for liabilities of the Company, will normally be applied towards the repayment of any outstanding bank borrowings prior to returning capital to Shareholders.

CitySprint

As detailed in the interim results announcement made by the Company on 16 September 2021, an agreement was also entered into following the half year for the realisation of CitySprint, the same day courier. This transaction is subject to regulatory approval and is expected to complete in the second half of 2021. The investment in CitySprint has been valued at the expected proceeds of £1.5m. The investment in CitySprint has generated a return of 2.1 times cost.

GPS

On 13 October 2021, the Company announced that Dunedin Buyout Fund III LP entered into a legally binding agreement for the partial realisation of its investment in Global Processing Services ("GPS"), a market leader in payment processing technology. The investment in GPS was valued at £16.1 million on 30 June 2021. Proceeds from the partial sale will amount to £18.2 million, consisting of capital of £16 million and income of £2.2 million. In addition, £5.9 million will be rolled into a GPS newco resulting in a total consideration of £24.1 million. This represents an uplift of £8 million on the 30 June 2021 valuation, equivalent to 44.1 pence per share. The transaction is subject to regulatory approval and is expected to complete by the end of 2021. The effect of the transaction will be reflected in the net asset value as at 30 September 2021, which is due to be published on 1 November 2021. 

Dividend

On 6 October 2021, the Company announced an interim dividend for the year ended 31 December 2021 of 16 pence per share which is to be paid on 18 November 2021. This follows receipt of loan interest on completion of the realisation of U-POL (the "Dividend").

Further to the Dividend and the Citysprint and GPS announcements (Citysprint and GPS together the "Anticipated Realisations"), the Investment Manager anticipates that there will be further realisations of certain of the Company's investments within the near term; however, there can be no certainty as to the precise timing or quantum of any such realisation, nor as to the timing of any future tender offer or other return of capital to Shareholders.

General Meeting

The Tender Offer is subject to Shareholder approval at a General Meeting which is to be held at the offices of Dickson Minto W.S. at 16 Charlotte Square, Edinburgh EH2 4DF on 10 November 2021 at 11 a.m. At this meeting a special resolution will be proposed to approve the Tender Offer on the terms set out in the Circular and to give the Company authority to make market purchases pursuant to the Tender Offer. Should the resolution fail to be passed, the Tender Offer will not proceed.

The Board has chosen to seek authority to purchase a maximum of 7,000,000 Shares, representing approximately 38.7 per cent. of the issued Share capital as at the date of this announcement. The maximum number of Shares to be purchased under the Tender Offer will not be known until the Tender Price has been calculated. The Board has therefore chosen this figure to ensure that there is sufficient capacity under the authority to return the full £26 million.

The Board would encourage all shareholders to exercise their votes in advance of the General Meeting. The Board makes no recommendation to Shareholders or Interactive Investor Savings Product Investors as to whether or not they should tender all or any of their Shares in the Tender Offer. Whether or not Shareholders decide to tender their Shares will depend, amongst other factors, on their view of the Company's prospects and their own individual circumstances, including their own tax position.

The Directors intend to use all best endeavours to tender their Basic Entitlement in the Tender Offer.

EXPECTED TIMETABLE

Defined terms used in this announcement have the meanings given in the Circular unless the context otherwise requires

For further information please contact:

Dunedin LLP

Graeme Murray 07813138367

Singer Capital Markets

Robert Peel 020 7496 3000