Jupiter Dividend & Growth Trust PLC Regulatory News (JDT)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA OR THE REPUBLIC OF SOUTH AFRICA

19 October 2017

JUPITER DIVIDEND & GROWTH TRUST PLC

Scheme of Reconstruction - Publication of Circular

The Company will reach the end of its planned life on 30 November 2017. On 13 September 2017, it was announced that the Company had agreed in principle to proposals with Jupiter UK Growth Investment Trust PLC (Jupiter UK Growth) under which the Company, through a scheme of reconstruction expected to be effected under section 110 of the Insolvency Act 1986, will be wound up voluntarily and Shareholders will be offered a choice of:

· rolling over their investment on a cost and tax efficient basis into new ordinary shares to be issued by Jupiter UK Growth; and/or

· electing for a cash exit at the final asset value of their Shares calculated in accordance with the Articles.

The Board is pleased to announce that the circular in connection with the Proposals and containing notices of the General Meetings (the "Circular") has been published.

Jupiter UK Growth is an investment trust which aims to achieve capital appreciation by investing principally in companies which are listed and/or which undertake a significant proportion of their business in the UK. As well as Jupiter UK Growth offering Shareholders a similar investment exposure, it was important to the Board's consideration that Jupiter UK Growth implements a discount and premium policy under which it uses share buy-backs and issues with the intention of ensuring that, in normal market conditions, the market price of its shares tracks their underlying net asset value.

In its planning for the winding-up, the Board has been conscious that the Terminal Asset Value per Ordinary Income Share (if any) and the Terminal Asset Value per Common Share will be sensitive to the costs of the Proposals. We are therefore pleased to note that the manager (JUTM) has, conditional on the passing of the special resolutions to be proposed at the First General Meeting, proposed a payment to the Company intended to limit the costs incurred to a level that would be expected on a standalone winding up.

The Proposals are subject to the approval of both the Company's shareholders and shareholders of Jupiter UK Growth.

The circular will shortly be available on the Company's website at www.jupiteram.com and on the National Storage Mechanism at www.morningstar.co.uk/uk/NSM.

The Proposals

Under the Proposals, the Company will be wound up on the Wind-up Date by means of a members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act and Shareholders can choose to receive ordinary shares in Jupiter UK Growth and/or cash in respect of all or part of their holding of Shares in the Company.

The Jupiter UK Growth Shares to be issued under the Scheme will be issued at a price equivalent to the NAV per Jupiter UK Growth Share as at the Calculation Date plus an issue premium as set out under "Costs of the Proposals" below.

Shareholders (other than Restricted Shareholders) who do not choose one or more of the options set out will be treated as having chosen to rollover their entire investment in the Company into Jupiter UK Growth Shares.

Benefits of the Proposals

Benefits for all Shareholders

The Directors consider that the Proposals should have the following benefits for all Shareholders:

· they provide Shareholders with a greater choice than if the Company were simply to be wound up, since the Proposals enable Shareholders to: (i) continue their investment exposure through a rollover into Jupiter UK Growth Shares; (ii) receive cash; or (iii) receive a combination of cash and Jupiter UK Growth Shares; and

· they save on costs that would otherwise be incurred on the realisation of the Company's portfolio on a winding-up as certain assets are expected to be transferred to Jupiter UK Growth. Furthermore, the administration of the Company in liquidation is likely to be less complex, and therefore less expensive, than a simple liquidation of the Company.

Benefits for Shareholders who choose to rollover into Jupiter UK Growth Shares

The Directors consider that the Proposals should have the following additional benefits for Shareholders who choose to, and do, rollover their investment in the Company into Jupiter UK Growth Shares:

· they will enable those Shareholders to retain market exposure through another investment trust managed by JAM and, for certain Shareholders, to continue to receive investment returns without triggering an immediate liability to capital gains tax; and

· they will enable those Shareholders to avoid dealing and other costs associated with a share purchase in the secondary market.

Shareholders who are in any doubt as to the contents of this announcement or as to the action to be taken should immediately seek their own personal financial advice from an appropriately qualified independent adviser authorised under the Financial Services and Markets Act 2000.

Final Interim Dividend

The Directors intend to declare a final interim dividend, payable to holders of Common Shares and Ordinary Income Shares (in the Common Share Proportion and the Ordinary Income Share Proportion respectively) prior to the Effective Date, equal to the revenue profits of the Company (including accumulated revenue reserves) at the relevant date. The final interim dividend will be paid on 23 November 2017 to Common Shareholders and Ordinary Income Shareholders who are on the Register as at close of business on 3 November 2017. Any balance accruing to the Company's revenue reserve after the final interim dividend has been declared (if any) will be included in the calculation of Total Assets for the purposes of calculating the Final Capital Entitlement per ZDP Share, the Terminal Asset Value per Common Share and the Terminal Asset Value per Ordinary Income Share (if any).

Conditions to the Scheme

The Scheme is conditional upon, amongst other things:

(i) the passing of all the Resolutions to be proposed at: (a) the ZDP Shareholders' Class Meeting; (b) the Common Shareholders' Class Meeting; (c) the Ordinary Income Shareholders' Class Meeting; (d) the First General Meeting; and (e) the Second General Meeting and all conditions to such Resolutions (excluding any condition relating to the passing of any other Resolution) being fulfilled;

(ii) the passing of the Jupiter UK Growth Resolution;

(iii) the UK Listing Authority agreeing to amend the listing of the Shares to reflect their reclassification as Reclassified Shares for the purpose of implementing the Scheme;

(iv) the UK Listing Authority having agreed to admit the Jupiter UK Growth Shares which are to be issued under the Scheme to the premium segment of the Official List and the London Stock Exchange having agreed to admit such Jupiter UK Growth Shares to trading on the premium segment of the main market for listed securities of the London Stock Exchange; and

(v) the Directors not resolving to abandon the Scheme.

In the event that any of conditions (i), (ii), (iii) and (iv) fails to be satisfied, the Winding-up Resolution will, in any event, be put to Shareholders at the Second General Meeting, which will place the Company into members' voluntary liquidation and appoint the Liquidators.

The Rollover Vehicle - Jupiter UK Growth Investment Trust PLC

Jupiter UK Growth is an investment trust company whose ordinary shares are admitted to the premium segment of the Official List and to trading on the premium segment of the main market for listed securities of the London Stock Exchange.

Jupiter UK Growth employs Jupiter Unit Trust Managers Limited (JUTM) as its Alternative Investment Fund Manager, which, in turn, delegates portfolio management to Jupiter Asset Management Limited (JAM) to manage its assets actively. Jupiter UK Growth is managed by a different portfolio manager to the Company, who has a more UK focused investment strategy. Unlike the Company, Jupiter UK Growth has only one class of shares in issue, being ordinary shares, and these will be the shares which Shareholders electing for the Jupiter UK Growth Shares Option will receive.

As at the Latest Practicable Date, Jupiter UK Growth had unaudited net assets of £44.62m (338.29 pence per Jupiter UK Growth Share) and a market capitalisation of approximately £43.66 million. 

Jupiter UK Growth implements a discount and premium policy under which it uses share buy-backs and issues with the intention of ensuring that, in normal market conditions, the market price of its ordinary shares tracks their underlying net asset value. Shareholders should note that, unlike the Company, Jupiter UK Growth has an unlimited life and, therefore, Shareholders who elect for the Jupiter UK Growth Shares Option and who subsequently wish to realise their investment in Jupiter UK Growth will be required to dispose of their Jupiter UK Growth Shares in the market.

Further information on Jupiter UK Growth is set out in the Jupiter UK Growth Prospectus. The audited reports and accounts of Jupiter UK Growth for the years ended 30 June 2017, 30 June 2016 and 30 June 2015 are available at www.jupiteram.com.

Costs of the Proposals

The costs of the Proposals incurred by the Company (including all advisers' fees, printing and other ancillary costs of the Proposals) are expected to be approximately £380,000 (inclusive of VAT).

As noted above, conditional on the passing of the special resolutions to be proposed at the First General Meeting, JUTM has agreed to contribute £100,000 such that the net costs of the Proposals to Shareholders (excluding any dealing costs to realign or realise the Company's portfolio), will be limited to approximately £280,000 (inclusive of VAT) which is approximately the amount which would have been incurred had the Scheme not been put forward and the Company simply placed into liquidation at the end of its fixed life.

Those Shareholders who choose to receive Jupiter UK Growth Shares for some or all of their investment will also incur costs equal to the Issue Premium applicable to the Jupiter UK Growth Shares issued under the Scheme. This Issue Premium is intended to defray the costs which will be incurred by Jupiter UK Growth in respect of its participation in the Scheme.

The level of the Issue Premium will depend on the value of the assets to be transferred to Jupiter UK Growth under the Scheme. If the value of these assets is up to £30 million then the Issue Premium will be set at 0.75 per cent. However, if their value exceeds £30 million, the Issue Premium will reduce on a straight line basis so that at a value of £60 million, the Issue Premium will be 0.45 per cent. To the extent that the Issue Premium does not cover the costs of Jupiter UK Growth's participation in the Scheme, JUTM has agreed to make a contribution of up to £100,000 (and no less than £50,000) to meet any shortfall.

The stamp duty incurred on the in specie transfer of assets from the Company to Jupiter UK Growth pursuant to the Transfer Agreement will be paid by the enlarged Jupiter UK Growth and spread across the existing shareholders of Jupiter UK Growth as well as the Company's shareholders electing to roll over.

Liquidation Fund

Before any assets are transferred to Jupiter UK Growth under the Scheme or set aside to pay Shareholders who have elected for cash, the Liquidators will retain cash and other assets in the Liquidation Fund in an amount which they consider sufficient to provide for all liabilities of the Company (including tax and contingent liabilities and an amount for unknown and unascertained liabilities of the Company). The retention in respect of unknown and unascertained liabilities is currently expected to be £50,000. Further details of the Liquidation Fund are set out in Part II of this document.

Restricted Shareholders and Overseas Shareholders

Restricted Shareholders and Overseas Shareholders should refer to the section headed "Restricted Shareholders and Overseas Shareholders" in Part of the circular.

Shareholder Meetings

As described above, the Proposals are conditional on the approval of Shareholders which is being sought at the Class Meetings, the First General Meeting and the Second General Meeting.

At each of the Class Meetings, the holders of the relevant class of Shares will be asked to vote on a special resolution to approve the special resolutions to be proposed at the First General Meeting and to approve any variation to the special rights attached to their Shares resulting from the amendments to the Articles proposed pursuant to the Proposals.

At the First General Meeting special resolutions will be proposed which, if passed, will reclassify the ZDP Shares, the Common Shares and the Ordinary Income Shares, authorise the implementation of the Scheme by the Liquidators and amend the Articles for the purposes of implementing the Scheme.

At the Second General Meeting, a special resolution will be proposed which will appoint the Liquidators and the Company will be placed into liquidation (the Winding-up Resolution).

If the special resolutions to be proposed at the Class Meetings or at the First General Meeting are not passed or (in the case of the special resolutions to be proposed at the First General Meeting) do not otherwise become unconditional, the special resolution to be proposed at the Second General Meeting will still be proposed and is guaranteed to be passed (as a result of weighted voting rights contained in the Articles) and the Company will in any event be placed into liquidation on the date of the Second General Meeting. In these circumstances, all Shareholders will receive cash distributions in the Company's liquidation, to the extent they are entitled to such distributions under the Articles.

Expected timetable

This announcement does not contain all the information which is contained in the Circular. Shareholders and Unitholders should read the Circular and the Jupiter UK Growth Prospectus to make informed elections under the Proposals.

Terms used and not defined in this announcement have the meanings given in the Circular unless the context otherwise requires.

For further information, please contact: