Dunedin Ent.it. Regulatory News (DNE)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR 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 OR OF THE UK

21 October 2022

Dunedin Enterprise Investment Trust PLC

Legal Entity Identifier: 213800E2VLUZ5AF9Z434

As set out in the interim results of Dunedin Enterprise Investment Trust PLC (the "Company") published on 16 September 2022, the Board of the Company has looked at opportunities to combine the proceeds of more than one realisation from the Company's portfolio before conducting a further tender offer in order to achieve economies in the process.

The Company announced in March 2022 that it has realised its investment in Incremental and, as announced on 7 October 2022, Dunedin Buyout Fund II LP has now completed the realisation of the investment in RED, the provider of SAP contract and permanent staff.

Following these realisations and in accordance with the Company's distribution and investment policies, the Board is therefore proposing to return up to £41 million to Shareholders pursuant to a tender offer ("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 Sanctions Restricted Persons, 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 1.0 per cent. discount to the NAV per Share as at 30 September 2022 (adjusted for the Dividend of 34 pence per Share (as defined below) announced today).

Under the terms of the Tender Offer, which is being made by Singer Capital Markets Securities Limited ("Singer Capital Markets"), Shareholders (other than Sanctions Restricted Persons, 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 Basic Entitlement.

The Tender Price and the Basic Entitlement will be announced on 1 November 2022, alongside the Company's NAV per Share as at 30 September 2022. The maximum number of Shares that will be purchased under the Tender Offer will be calculated by dividing £41 million by the Tender Price. The aggregate Basic Entitlement will equal the percentage of the Company's 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 for listed securities 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 special distributable reserve.

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 existing authority to repurchase its own Shares, which was granted at the last annual general meeting of the Company held on 11 May 2022 and equated to authority to repurchase up to 1,969,207 Shares (being approximately 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 £200,000 including VAT, assuming the Tender Offer is taken up in full. 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 £205,000. All costs in relation to the Tender Offer will be borne by the Company. Assuming the Tender Offer is taken up in full, the costs of the Tender Offer are not expected to result in dilution to the NAV per Share.

Overseas Shareholders, Restricted Shareholders and Sanctions Restricted Persons

The making of the Tender Offer to persons outside of the United Kingdom may be prohibited or affected by the laws of the relevant overseas jurisdictions. Shareholders with registered or mailing addresses outside of 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.

In order to comply with the Company's obligations under the UK's domestic and international sanctions regimes, Sanctions Restricted Persons are not entitled to participate in the Tender Offer. For the avoidance of doubt, neither the Dividend (as defined below) nor any consideration for Shares tendered pursuant the Tender Offer will be paid to a Sanctions Restricted Person.

Dividend

The Company has today announced an interim dividend for the financial year ending 31 December 2022 of 34 pence per Share which is to be paid on 24 November 2022 to Shareholders on the Register as at 6.00 p.m. on 4 November 2022 (the "Dividend").

This follows the Company's announcements of 25 August 2022 and 7 October 2022 that, following regulatory approval, Dunedin Buyout Fund II LP has realised the investment in RED, the provider of SAP contract and permanent staff, from which the Company has received £24.1 million of proceeds (the "RED Realisation"). The Company notes that this is an uplift of £0.4 million to the valuation of the investment in RED reported in the Company's interim report and accounts for the period ended 30 June 2022. In particular, of the £24.1 million of proceeds received from the RED Realisation, £4.0 million comprised income.

Future realisations

In line with the Company's investment policy, the Investment Manager will continue to conduct the 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.

Realisation opportunities will be considered by the Investment Manager as appropriate but there can be no certainty as to the precise timing or quantum of any such realisations which will depend, inter alia, on prevailing market conditions.

Consequently, there can also be no certainty as to the precise timing or quantum of any future returns of capital to Shareholders, if any, following receipt by the Company of the net proceeds of such realisations. Any future returns of capital to Shareholders will also be dependent on the Company's liabilities, its uncalled fund commitments and general working capital requirements.

The Board acknowledges the importance of monitoring the Company's ongoing costs as the realisation progresses and will continue to keep the options available to the Company under review. That said, following consideration of the Company's remaining investments and discussions with the Investment Manager and the Company's advisers, the Board does not currently anticipate putting formal proposals to Shareholders for a members' voluntary liquidation of the Company in the short to medium term while the orderly realisation continues. Furthermore, the Board considers maintaining the Company's listed status to be important during this stage of the orderly realisation as it is aware that many Shareholders would be unable to hold the Shares, or greatly inconvenienced by holding them, if they were not admitted to trading on the London Stock Exchange. As the realisation progresses, the Board will continue to assess whether the Company's current arrangements remain in the interests of Shareholders as a whole and will continue to keep Shareholders informed as to the future of the Company.

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 16 November 2022 at 12 noon. 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 9,000,000 Shares, representing approximately 68.5 per cent. of the issued Share capital of the Company 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 £41 million to Shareholders.

The Board makes no recommendation to Shareholders 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 reasonable 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 07813 138 367

Singer Capital Markets

Robert Peel 020 7496 3000

This announcement contains inside information for the purposes of Article 7 of Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 and as amended ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.