GHS.L Regulatory News (GHS)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Gresham House Strategic plc15 October 2021

Statement regarding:Further announcement regarding Strategic ReviewRequisition for a General Meeting from Rock Nominees Limited

Further announcement regarding Strategic Review

On 11 October 2021, Gresham House Strategic plc ("GHS" or the "Company") announced the conclusion of a strategic review (the "Strategic Review") which determined that the best course of action for all shareholders was the termination of Gresham House Asset Management Limited ("GHAM") as Investment Manager and the appointment of Harwood Capital LLP ("Harwood") as replacement. This was considered to be in the best interests of all shareholders for the following reasons:

· Harwood's outstanding investment track record.

· The significant reduction in management fees and revised performance fee which materially lower the Company's cost base, and were significantly lower than the revised fee proposals from GHAM.

· Harwood's commitment to invest up to £18 million in GHS. This included an offer from Harwood to Gresham House plc ("GHE"), the largest shareholder in GHS, to purchase up to its entire holding of GHS shares at a price equal to the latest published NAV per share, which GHE has rejected. This offer was made because during the Strategic Review, GHE made clear to the board of GHS (the "Board") that it would not wish to remain an investor if GHAM ceased to be the investment manager.

· The Company and Harwood entering into a conditional relationship agreement pursuant to which Harwood has made certain customary binding commitments to ensure the independence of the Board in governing the Company in the best interests of all shareholders. This includes Harwood irrevocably undertaking not to exercise any of its voting rights above 10 per cent. on any resolution which is proposed at any general meeting of the Company, save with the written consent of the independent directors of GHS ("Independent Directors"). The Independent Directors sought to reach a relationship agreement with GHE but was unable to reach a satisfactory conclusion.

The Company and Harwood are seeking to work with GHAM to ensure a smooth transition. As part of this, the Company has proposed to GHAM a transitional services agreement (the "TSA") under which GHAM would manage the Company on a "hold and maintain" basis during the period up until the FCA approve Harwood's appointment as the Company's alternative investment fund manager (the "Hold and Maintain Period"). GHAM has not yet agreed this TSA and, having already invoiced the Company on 11 October 2021 for a performance fee payment of over £2.6 million, is seeking a further performance fee for the Hold and Maintain Period, which is not expected to exceed one month. The Independent Directors have not agreed to this request as GHAM is not expected to be responsible for any material investment decisions during this period.

Requisition for a General Meeting from Rock Nominees Limited

Following the announcement on 11 October 2021, the directors of GHS have received from Rock Nominees Limited (on behalf GHE, which is the ultimate parent company of GHAM) a notice of requisition dated 14 October 2021 (the "Requisition") of a general meeting of GHS. Further details on the ordinary resolutions put forward in the Requisition are set out below, which include certain changes to the Board and the complete realisation of GHS's assets and return of capital to shareholders within 24 months.

The Independent Directors are disappointed to receive another requisition notice from Rock Nominees Limited (on behalf of GHE). Following the requisition notice received by them in May 2021 (which was subsequently withdrawn), the Board undertook a Strategic Review (at GHE's request) and went through an extensive process with the guidance of a highly experienced independent corporate finance adviser, which included reviewing six detailed proposals and engagement with the Company's shareholders. In respect of the Requisition, the Independent Directors note the following:

1. The proposed resolutions would result in a majority of the Board being directors nominated by GHE, which the Independent Directors believe goes against the principles of the AIC Code of Corporate Governance.

2. The Strategic Review included input from GHAM which indicated that a realisation of the Company's assets was unlikely to be in the best interests of shareholders.

3. As part of the Strategic Review shareholders other than GHE accounting for approximately 30 per cent. of the total issued share capital of GHS were consulted. All of these shareholders indicated support for the continuation of the Company's existing Investing Policy and none of these shareholders indicated support for a realisation of the Company's portfolio.

GHE has informed GHS in writing that certain GHS shareholders have signed irrevocable undertakings to support the resolutions relating to the return of cash on its balance sheet (resolution one) and the realisation of GHS's assets (resolution two). GHE has stated that these shareholders in combination with GHE account for approximately 42 per cent. of the total issued share capital of GHS. GHE has not provided any further information on the identity of the potential concert party members at this stage.

The Board and its advisers will consult with GHE and other shareholders and a further announcement will be made in due course.

Helen Sinclair, Interim Chair of GHS, said:

"The Independent Directors believe that a substantial proportion of shareholders wish to retain a continuing investment in this Company, are supportive of the existing Investing Policy, and are supportive of the Board's proposals as regards the future management of the Company. We feel that these views should also be taken into account, although we do take note that the Company's largest shareholder and a number of other shareholders are indicating that they would like the Company to be run-off and capital returned to shareholders.

"The Board changes proposed by GHE are also an unnecessary intervention at a time when the Board is a substantial way through the process of appointing a new independent Chair.

"The Independent Directors are considering the content of the requisition notice, to which they intend to respond in accordance with the requirements of the Companies Act 2006."

The Requisition to convene a general meeting of the shareholders of GHS proposes the following six ordinary resolutions:

1. That GHS immediately returns the cash on its balance sheet (including the proceeds arising from the disposal of its interest in Augean plc) to its existing shareholders;

2. That GHS shall commence the complete realisation of GHS's assets to maximise the value of its assets for the benefit of all its shareholders, with such realisation and return of capital to shareholders to be completed within 24 months of the requisitioned meeting;

3. That Philip Pickard be appointed as a non-executive director of GHS with immediate effect;

4. That Simon Pyper be appointed as a non-executive director of GHS with immediate effect;

5. That Charles Berry be removed as a non-executive director of GHS with immediate effect; and

6. That any person appointed by the directors as an additional director pursuant to GHS's articles of association between the date of the requisition and the conclusion of the requisitioned meeting be removed from office as a director of GHS.

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This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Strategic Review with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

For the purposes of MAR, the person responsible for releasing this announcement is Shaun Zulafqar, Company Secretary.

Important notices

Smith Square Partners LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Gresham House Strategic plc and no-one else in connection with the Strategic Review and will not be responsible to anyone other than Gresham House Strategic plc for providing the protections afforded to clients of Gresham House Strategic plc or for providing advice in relation to the Strategic Review or any other matter referred to in this announcement.

This announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company.

As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.