GLIF.L Regulatory News (GLIF)

This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the City Code. GLIF and AMIC would like to emphasise that there can be no certainty that the Proposed Acquisition will be forthcoming and no certainty as to whether any offer will be made on the terms described. A further announcement will be made in due course as appropriate.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 

26 OCTOBER 2010

RECOMMENDED ACQUISITION OF ASSET MANAGEMENT INVESTMENT COMPANY PLC ("AMIC") BY

GREENWICH LOAN INCOME FUND LIMITED ("GLIF")

The Boards of GLIF and AMIC announce that they are in discussions with a view to GLIF acquiring the entire issued share capital of AMIC (the "Proposed Acquisition") on a recommended basis by way of a scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme"). The Scheme would be subject to the approval of both companies' shareholders, Court approval and certain other conditions and further terms set out below. The aim would be to complete the Proposed Acquisition before the end of January 2011. Under the Scheme, GLIF would be the ongoing company and AMIC would become a wholly-owned subsidiary of GLIF. It is also the intention of the GLIF Board to seek admission of the Enlarged GLIF Group to the Official List of the Channel Islands Stock Exchange, LBG ("CISX") (the "Proposed Listing") alongside its existing AIM quote, upon completion of the Scheme. GLIF is making this announcement with the approval of the Board of AMIC. There can be no certainty that an offer will be made for AMIC.

The Board of GLIF believes that the Proposed Acquisition would provide an opportunity to create a larger closed-ended investment company with a stable and predictable dividend yield, and with long term preservation of net asset value. T2 Advisers LLC (the "Manager") would be the manager of the Enlarged GLIF Group.

As part of the Scheme, if made, a full cash offer would be provided for shareholders in AMIC for their shareholdings in AMIC (the "Cash Offer"). For those AMIC shareholders wishing to participate in the ongoing strategy of the Enlarged GLIF Group, GLIF is also proposing to offer AMIC Shareholders a full share alternative (the "Share Alternative").

Documentation setting out the details of the Proposed Acquisition and the Enlarged GLIF Group's Proposed Listing (together the "Proposals"), and convening the necessary meetings at which shareholders of each of AMIC and GLIF will be asked to approve the Proposals, will be dispatched to shareholders as soon as practicable following completion of the Boards' discussions. Completion of the Proposed Acquisition and Proposed Listing would also be subject to the receipt of all necessary regulatory and tax clearances.

Shareholders representing 42.8 per cent of AMIC's issued share capital have indicated in writing that they intend to vote in favour of the Proposals. Further details of the irrevocable undertaking and letters of intent to accept the Proposals are set out below.

Background to and benefits of the Proposed Acquisition

The Board of GLIF approached the Board of AMIC indicating that it would like to combine the businesses of GLIF and AMIC and the two Boards have been engaged in constructive discussions with one another. At the same time, the GLIF Board has approached certain AMIC Shareholders, representing approximately 42.8 per cent of AMIC issued share capital, to explain the rationale and benefits of a combination of the two companies and to seek their support for the Proposed Acquisition.

Based on the gross assets of both companies and assuming a full take up of the Cash Offer the Enlarged GLIF Group would have aggregate gross assets of approximately £200 million.

The GLIF Board believes that the Proposed Acquisition would provide the following benefits:

● acquisition of complementary assets, that should be accretive to both capital and income for GLIF Shareholders;

● although the gross assets of the Enlarged GLIF Group will be less than 10% larger than those of GLIF at present, the transaction will increase the level of assets outside of the CLO and thus diversify the sources of both capital and income return for the Enlarged GLIF Group;

● the Proposed Acquisition should result in an enhancement in the net asset value per GLIF Share;

● the Proposed Acquisition should increase the revenue per share of GLIF;

● a tax and cost efficient rollover for continuing AMIC Shareholders to retain an investment in a larger, listed vehicle with an objective of producing stable and predictable dividend payments with a longer term investment horizon than AMIC;

● to the extent that AMIC Shareholders opt to retain an investment in the Enlarged GLIF Group the Proposed Acquisition should give greater strength and depth to the ownership of GLIF which may provide more liquidity in GLIF Shares under normal market circumstances;

● the offer shouldrepresent a premium to the current trading price of AMIC;

● cost reduction across the Enlarged GLIF Group through economies of scale and having one quoted holding company rather than two; and

● the portfolio of AMIC is in line with GLIF's stated strategy and should enhance the income and capital prospects of GLIF's Shareholders whilst not adversely affecting GLIF's risk profile.

In reaching a view as to a voting recommendation to AMIC shareholders on the Proposed Acquisition the Board of AMIC has and will take into consideration various factors including, but not limited to, the following:

● the level of the Cash Offer, if made, at an 8 per cent. discount to AMIC's Formula Asset Value compared to the average discount to net asset value at which AMIC's share have traded being 14.5 per cent over the last 12 months;

● the certainty of value relative to net asset value that the Cash Offer, if made, would provide for AMIC shareholders in the current economic climate, notwithstanding the fact that it may not match the Board of AMIC's assessment of the underlying asset value that could potentially be realised over time;

● the option via the Cash Offer, if made, for AMIC shareholders to exit in full rather than participate in the ongoing strategy of the Enlarged GLIF Group;

● the significant number, by shareholding, of AMIC shareholders who have indicated, through the signing of irrevocable commitments and letters of intent, their support for the Proposed Acquisition; and

● the implications for AMIC of the scheduled repayment of the FX Concepts loan note investment due in May 2011 which represents approximately 27 per cent. of AMIC's current net assets.

The Proposed Acquisition

Under the terms of the Scheme, all of AMIC's existing issued share capital would be cancelled and new AMIC Shares issued and credited as fully paid to GLIF or as it directs. AMIC would become a wholly-owned subsidiary of GLIF. At the same time, GLIF would issue New GLIF Shares to the former AMIC Shareholders other than those who have elected for the Cash Offer.

The assets and liabilities of AMIC would be transferred to GLIF (or as it directs) as part of the Proposed Acquisition.

The formula for calculating the Cash Offer price would be calculated by applying an 8 per cent. discount to AMIC's Formula Asset Value ("FAV").

The formula for calculating the number of New GLIF Shares offered under the Share Alternative would be calculated by reference to GLIF's closing mid-market share price of 28.25 pence on 25 October 2010 (being the last Business Day prior to this announcement) and applying an 8 per cent. discount to AMIC's Formula Asset Value.

The Formula Asset Value will be calculated as at a calculation date in accordance with the formula applicable under the Scheme. The FAV calculation will take into account the net asset value of AMIC at the Calculation Date, adjusted for certain items such as the cost of termination of various contracted liabilities within AMIC.

The New GLIF Shares would rank pari passu with the existing GLIF Shares in issue, including for future dividends and would be issued in consideration for the cancellation of the shares in AMIC.

Conditions of the Proposed Acquisition

The Proposed Acquisition would be conditional, among other things, upon:

● approval of the Scheme by a majority in number of AMIC Shareholders who are present and vote, either in person or by proxy, at a Court meeting (or any adjournment thereof) and who represent 75 per cent. or more in value of the AMIC Shares voted by such AMIC Shareholders;

● all resolutions to approve matters to give effect to the Scheme being passed by the requisite majority of AMIC Shareholders at a AMIC general meeting or any adjournment thereof;

● the sanction of the Scheme and the confirmation of the capital reduction by the Court (in either case, with or without modification, on terms acceptable to GLIF and AMIC); and

● the approval of the Proposed Acquisition, a change in investment policy and the amendment to GLIF's articles of association by GLIF Shareholders at a GLIF extraordinary general meeting.

The Share Alternative is also expected to be conditional upon the admission of the Enlarged GLIF Group to the Official List of the CISX.

Irrevocable commitments and letters of intent

GLIF has received an irrevocable commitment and letters of intent from AMIC Shareholders to vote in favour of the Proposed Acquisition (if made). Such irrevocable commitment and letters of intent are in respect of the following AMIC Shares:

These shares would represent approximately 42.8 per cent. of AMIC's current issued share capital.

For the purposes of Note 15 to Rule 8 as it refers to Note 3(d) to Rule 2.11 of the City Code, the value (and other material terms) of the Proposed Acquisition in respect of which the above irrevocable commitment and letters of intent have been procured are those of the Proposed Acquisition. 

Financing

It is anticipated that GLIF would finance the Cash Offer through a £12m loan ("Loan Facility") from its bankers. GLIF can confirm that it has received a credit-committee approved Loan Facility which is subject, inter alia, to confirmation of the final agreed deal structure.

Board of Directors of the Enlarged GLIF Group

It is proposed that the GLIF Board will remain in place upon completion of the Proposals and that the entire AMIC Board will step down upon the Scheme becoming effective.

Information on GLIF

GLIF is a closed-ended Guernsey exempt investment company. GLIF's objective is to produce a stable and predictable dividend yield, with long term preservation of net asset value.

GLIF currently seeks to achieve this primarily through investment in the US senior secured loan market. However, in order to develop its business for the benefit of shareholders GLIF has publicly stated its desire to find suitable acquisitions, providing the acquisitions are enhancing to the income and capital prospects of GLIF Shareholders and does not adversely affect GLIF's risk profile.

The Board of GLIF believes that the Proposed Acquisition would benefit both sets of shareholders and the Proposed Acquisition therefore has the full support of the GLIF Board.

On 24 September 2010, GLIF announced its unaudited results for the six months ended 30 June 2010. The net asset value at this date was 81p per share (31 December 2009: 70p per share).

The shares of GLIF are currently admitted to trading on AIM. As stated above, alongside its existing AIM listing, it is the GLIF Board's intention to seek admission of the Enlarged GLIF Group to the Official List of the CISX upon completion of the Proposed Acquisition.

Information on AMIC

AMIC is a closed-ended investment trust investing in worldwide private or listed asset management companies. Pursuant to a special resolution passed on 20 October 2006, AMIC adopted a new investment objective to effect an orderly realisation of its investment portfolio in order to return capital to shareholders.

In its interim management statement (unaudited) for the quarter ended 30 June 2010, AMIC reported Net Asset Value of 73.50p (ex-income) and 76.61p (cum-income) per ordinary share.

During the quarter ended 30 June 2010, no new investments were made in accordance with AMIC's investment objective of effecting an orderly realisation of the investment portfolio in order to return capital to shareholders.

The shares of AMIC are admitted to trading on the Main Market.

Geoff Miller, Chairman of GLIF, said, "We believe that the terms of the Proposed Acquisition are attractive for both AMIC's and GLIF's shareholders, providing GLIF Shareholders an enlarged, more diversified Group with enhanced capital and income prospects, and for AMIC shareholders the opportunity to either receive a cash return in accordance with AMIC's investment policy or an ongoing investment in a high yield vehicle."

Enquiries

A copy of this announcement will shortly be available on GLIF's website: http://www.glifund.com and on AMIC's website: http://www.amicplc.com.

General

Singer Capital Markets Limited, which is regulated by the Financial Services Authority, is acting exclusively for GLIF in connection with the Proposed Acquisition and no-one else and will not be responsible to anyone other than GLIF for providing the protections afforded to customers of Singer Capital Markets Limited or for providing advice in relation to the Proposed Acquisition.

Numis Securities Limited, which is regulated by the Financial Services Authority, is acting exclusively for AMIC in connection with the Proposed Acquisition and no-one else and will not be responsible to anyone other than GLIF for providing the protections afforded to customers of Numis Securities Limited or for providing advice in relation to the Proposed Acquisition.

Disclosure in accordance with Rule 2.10 of the City Code 

GLIF announces, in accordance with Rule 2.10 of the UK City Code on Takeovers and Acquisitions (the "Takeover Code"), that at the close of business on 25 October 2010, GLIF had the following relevant securities (within the meaning of the Takeover Code) in issue: 87,300,000 ordinary shares of no par value. The ISIN reference number for these securities is GB00B0CL3P62.

AMIC announces, in accordance with Rule 2.10 of the UK City Code on Takeovers and Acquisitions (the "Takeover Code"), that at the close of business on 25 October 2010, AMIC had the following relevant securities (within the meaning of the Takeover Code) in issue: 17,314,411 ordinary shares of 25p each. The ISIN reference number for these securities is GB0000580653.

Dealing disclosure requirements 

Under Rule 8.3(a) of the City Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the City Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Overseas territories

The distribution of this announcement in jurisdictions other than England and Wales may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than England and Wales should inform themselves about, and observe, any applicable requirements. In particular, no offer will be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, internet, email, telex or telephone) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of, the United States, Canada, Australia, the Republic of South Africa or Japan or any other Restricted Jurisdiction and subject to certain exceptions no offer will be capable of acceptance by any such use, means instrumentality or facility or from within those territories. Copies of this announcement and any related offer documentation are not being, will not be, and must not be, mailed or otherwise distributed or sent in or into the United States, Canada, Australia, the Republic of South Africa or Japan or any other Restricted Jurisdiction.

This announcement is not intended to, and does not, constitute or form any part of an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy or subscribe for any securities nor shall there be any sale, issuance or transfer of the securities referred to in the announcement in the United States or any jurisdiction in contravention of applicable law.

The New GLIF Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state, district, province or other jurisdiction of the United States, Canada, Australia, the Republic of South Africa or Japan or any other Restricted Jurisdiction. No regulatory clearances in respect of the New GLIF Shares have been, or will be, applied for in any state, province, territory or jurisdiction other than the United Kingdom. Accordingly, unless an exemption under relevant securities laws is applicable, the New GLIF Shares are not being, and may not be, offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States, Canada, Australia, the Republic of South Africa or Japan or any other Restricted Jurisdiction or to or for the account or benefit of any resident of the United States, Canada, Australia, the Republic of South Africa or Japan or any other Restricted Jurisdictions. 

The availability of the offer to AMIC Shareholders who are not resident in, and citizens of, the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be made available in due course as appropriate.

This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England and Wales.

Forward-looking statements

This document may contain "forward-looking statements" concerning GLIF and AMIC. Generally, the words "anticipate", "believe", "estimate", "expect", "forecast", "intend", "may", "plan", "project", "should" and similar expressions identify forward-looking statements. Such statements reflect the relevant company's current views with respect to future events and are subject to risks and uncertainties that could cause the actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as changes in general economic and business conditions, changes in currency exchange rates and interest rates, lack of acceptance of new exchange rates and interest rates, introduction of competing products or services, lack of acceptance of new products or services, changes in business strategy and the behaviour of other market participants and therefore undue reliance should not be placed on such statements. GLIF does not intend or assume any obligation to update these forward-looking statements other than as required by law.