Maven I&g 4 Regulatory News (MAV4)

Maven Income and Growth VCT 4 PLC ("Maven VCT 4")

Maven Income and Growth VCT 6 PLC ("Maven VCT 6")

(together the "Companies")

14 November 2019

Publication of a prospectus (the "Prospectus") and circulars (the "Circulars") in connection with recommended proposals to merge the Companies (to be effected pursuant to a scheme of reconstruction (the "Scheme" or "Merger") under section 110 of the Insolvency Act 1986

On 28 August 2019, the boards of Maven VCT 4 and Maven VCT 6 (the "Boards") announced that they were in discussions to merge the Companies into one company (the "Enlarged Company").

The Boards are pleased to advise that discussions have now concluded and that the Companies have issued Circulars setting out the proposals for the Merger for consideration by their respective shareholders. Maven VCT 4 and Maven Income and Growth VCT 3 PLC have issued a joint prospectus relating to offers for subscription of those companies, as well as for the issue of consideration shares by Maven VCT 4 pursuant to the Merger. Each of these companies is managed by Maven Capital Partners UK LLP ("Maven").

The Boards propose that the Merger be effected by Maven VCT 6 being placed into members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986. Shareholders should note that a merger solely on this basis would not be governed by The City Code on Takeovers and Mergers. Consequently, the Merger does not need to follow the timetable and disclosure requirements of the Code but does need to comply with the Listing Rules and the Prospectus Regulation Rules which impose similar disclosure obligations. Although it is proposed that the merger would be undertaken under provisions set out in the Insolvency Act 1986, it would nevertheless be a solvent liquidation.

The Merger will be implemented on a relative NAV basis, and this will feed into a calculation for determining the number of ordinary shares in Maven VCT 4 to be issued to the Shareholders of Maven VCT 6 under the Merger.

Background

Maven VCT 4 was launched in 2004 with the aim of achieving long term capital appreciation and to generate income for Shareholders. It has been managed by the Maven team since inception, initially at Aberdeen Asset Management plc (Aberdeen) until the senior team of the Aberdeen private equity and VCT business led a buyout to form Maven. Maven VCT 6 was launched in 2000 and has been managed by the same Maven team since 2005.

The latest unaudited published NAV of Maven VCT 4, as at 30 September 2019, was 72.65p per ordinary share and the latest unaudited published NAV of Maven VCT 6, as at 30 September 2019, was 49.69p per ordinary share. The table below sets out the unaudited net asset values of the Companies.

Each of the Companies has the same investment policy, with an investment objective of achieving long term capital appreciation and to generate income for Shareholders by investing their funds in a broad spread of smaller, unquoted UK companies and AIM/NEX quoted companies which meet the relevant criteria for VCTs.

In September 2004, the Merger Regulations were introduced allowing VCTs to be acquired by, or merge with, each other without prejudicing the VCT tax reliefs obtained by their shareholders. A number of VCTs have taken advantage of these regulations to create larger VCTs, without the loss of VCT tax reliefs.

With the above in mind, the Boards entered into discussions to consider a merger of the Companies to create a single, larger VCT with the potential to deliver improved shareholder value.

The Merger

The Merger is expected to bring a number of benefits to Shareholders including:

·; amalgamation of the Companies' portfolios, for efficient management and administration, with the same existing investment policy applying to the Enlarged Company's portfolio after the Merger;

·; participation in a larger VCT with a widely diversified portfolio that allows for effective mitigation of investment risk; and

·; efficiencies in annual running costs for the Enlarged Company compared to the separate companies (anticipated to save approximately £157,000 p.a.).

The Scheme will, if effected, result in an Enlarged Company with net assets of just over £74 million.

The Scheme

The mechanism by which the Merger will be completed is as follows:

·; Maven VCT 6 will be placed into members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986; and

·; all of the assets and liabilities of Maven VCT 6 will be transferred to Maven VCT 4 in consideration for the issue by Maven VCT 4 of ordinary shares (the "Scheme Shares") to the Shareholders of Maven VCT 6.

The Scheme will be completed on a relative unaudited NAV basis, adjusted for the anticipated costs of the Scheme, and will be based on the latest unaudited valuations of the Companies' investments. The effect of the Scheme will be that Maven VCT 6 Shareholders will receive Scheme Shares with effectively the same aggregate net asset value as their Maven VCT 6 Shares.

The Scheme is conditional upon the approval by the Shareholders of resolutions to be proposed at general meetings of each of the Companies, as well as other conditions set out in the Prospectus and Circulars.

As the Companies have the same investment manager and other common advisers, the Merger should be achievable without major cost or disruption to the Companies and the combined portfolio of investments. The costs of the Merger are expected to be recovered from the anticipated costs savings within 32 months.

The aggregate anticipated cost of undertaking the Merger is approximately £408,000 including VAT, legal and professional fees, stamp duty and the costs of winding up Maven VCT 6. The Liquidators' fees are expected to be up to £11,000 (plus VAT). Maven will also be paid a merger administrative and secretarial services fee by the Companies (for an aggregate amount of £100,000) for services provided under the terms of their investment management agreements. The costs of the Merger will be split proportionately between the Companies by reference to their respective net asset values as at the Scheme Calculation Date (see the expected timetable below).

Maven is entitled to an annual fee of £100,000 for the provision of company secretarial and administrative services. It has been agreed that subject to the completion of the Merger, this annual fee shall increase to £125,000. This fee is subject to annual adjustment by reference to increases in the Consumer Prices Index. As Maven is a related party of Maven VCT 4 under the Listing Rules, the increase in the annual fee is a transaction to which Listing Rule 11.1.10R applies.

The portfolio of assets, which will be transferred from Maven VCT 6 to Maven VCT 4 as part of the Scheme, is considered to be consistent with Maven VCT 4's investment policy, particularly as both Companies have the bulk of their investments in predominantly the same unlisted private companies (with only 2 exceptions as at the date of this document), with each of the Companies also holding a proportion of their investments in shares in AIM quoted companies and listed investment trusts. The extent of the liabilities (if any) which will be transferred from Maven VCT 6 to Maven VCT 4 as part of the Scheme will be those which are incurred in the ordinary course of business, and merger costs which remain unpaid at the time of transfer. Any such liabilities are expected to be nominal in comparison to the value of the assets.

Maven VCT 6 Shareholders who do not vote in favour of the resolution to be proposed at the Maven VCT 6 first General Meeting are entitled to dissent and have their shareholding purchased by the Liquidators at a price per share to be agreed between the dissenting Maven VCT 6 Shareholders and the Liquidators (or by arbitration), which would be expected to be at a significant reduction to the most recently published NAV of a Maven VCT 6 Share.

If the conditions of the Scheme are not satisfied, the Companies will continue in their current form and the Boards will continue to review all options available to them regarding the future of their Companies.

Clearances have been requested from HMRC confirming that the Scheme meets the requirements of the Merger Regulations and, therefore, that the implementation of the Scheme should not affect the status of Maven VCT 4 as a VCT.

EXPECTED TIMETABLE

Expected Timetable for the Scheme

Maven VCT 4

Maven VCT 6

\* The final expected date of trading of the Maven VCT 6 Shares will be 17 December 2019. See the timetable for Maven VCT 4 with regard to admission, CREST accounts being credited, and certificates being despatched in respect of the Scheme Shares.

Copies of the Prospectus and Circulars are available from Maven Capital Partners UK LLP at Kintyre House, 205 West George Street, Glasgow G2 2LW.

In accordance with the Listing Rules, the Prospectus and Circular have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM .

Downloadable versions of the Prospectus and Circulars will also be available from the each of the Company's websites at: www.mavencp.com/migvct4 and www.mavencp.com/migvct6.

Any enquiries in respect of the Merger should be directed to:

Maven Capital Partners UK LLP

Telephone: 0141 306 7400 

E-mail: enquiries@mavencp.com 

Maven Capital Partners UK LLPSecretary