Nippon Active . Regulatory News (NAVF)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION FOR WHICH THE SAME COULD BE UNLAWFUL.

The information communicated in this announcement is deemed to constitute inside information as stipulated under the UK Version of Market Abuse Regulation (EU) No. 596/2014 (as incorporated into UK Law by virtue of the European Union (Withdrawal) Act 2018, and as subsequently amended ("MAR"). Upon the publication of this announcement, this information is considered to be in the public domain.

1 September 2023

Nippon Active Value Fund plc

LEI: 213800JOFEGZJYS21P75

Publication of Prospectus and Circular

Further to the Company announcements dated 18 May 2023 and 11 August 2023, the Board is today pleased to publish detailed proposals relating to the rollover of assets of each of abrdn Japan Investment Trust plc ("AJIT") and Atlantis Japan Growth Fund Limited ("AJG") into the Company pursuant to schemes of reconstruction of AJIT and AJG (respectively the "AJIT Scheme" and the "AJG Scheme", and together the "Schemes"). Neither Scheme is conditional on completion of the other.

Additionally, the prospectus of the Company dated 1 September 2023 relating to the Schemes and a 12-month placing programme to issue up to 250 million new Ordinary Shares and/or C (the "Prospectus") has been approved by the Financial Conduct Authority.

A copy of the Prospectus has been submitted to the National Storage Mechanism and will shortly be available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism, and is available on the Company's website at https://www.nipponactivevaluefund.com/shareholder-information/shareholder-documents/.

Capitalised terms used and not otherwise defined in this announcement shall have the same meaning as in the Prospectus.

In connection with the Schemes (but, in any event, whether or not either Scheme proceeds) the Company intends to transfer its listing from the Specialist Fund Segment and have its Existing Shares and New Shares (whether issued pursuant to the Schemes or the Placing Programme) be admitted to (i) the Official List; and (ii) to trading on the premium segment of the Main Market (the "Migration").

Summary of the AJIT Scheme

The AJIT Scheme

Subject to the passing of the resolutions to be proposed at the AJIT General Meetings and to the satisfaction of the AJIT Scheme Conditions, AJIT will be placed into members' voluntary liquidation and the AJIT Scheme will take effect. It is expected that the AJIT Scheme will become effective on the AJIT Scheme Effective Date, whereupon the cash, undertaking and other assets of AJIT comprising the AJIT Rollover Pool will be transferred to the Company pursuant to the AJIT Transfer Agreement, in exchange for the allotment of New Shares to the AJIT Liquidators (as nominees for AJIT Shareholders entitled to them in accordance with the AJIT Scheme). Thereafter, the AJIT Liquidators will renounce the allotments of the New Shares in favour of AJIT Shareholders who have elected (or are deemed to have elected) to receive New Shares, and such New Shares will be issued by the Company to those AJIT Shareholders pursuant to the AJIT Scheme.

The issue of New Shares under the AJIT Rollover Option will be effected on a formula asset value ("FAV") for FAV basis as at the AJIT Scheme Calculation Date. For the purposes of the AJIT Scheme, the net asset values ("NAVs") of each of the Company and AJIT will be adjusted to take account of (inter alia) all the costs associated with the AJIT Scheme not already accrued, in order to determine their respective FAVs. Further details of the relevant FAV calculations of each company are set out in Part 2 (Additional Information) of the Circular. The new Ordinary Shares issued pursuant to the AJIT Scheme will rank pari passu with the existing Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the issue of the relevant new Ordinary Shares).

AJIT Cash Option

As part of the AJIT Scheme, AJIT Shareholders may elect to receive cash instead of New Shares in respect of some or all of their holdings in AJIT at a discount of two per cent. to the AJIT FAV per Share (the "AJIT Cash Option"). The maximum number of AJIT Shares that can be elected for the AJIT Cash Option is 25 per cent. of the total number of AJIT Shares in issue (excluding AJIT Shares held in treasury) as at the AJIT Scheme Calculation Date.

AJIT Transfer Agreement

On the AJIT Scheme Effective Date, or as soon as practicable thereafter, the Company and the AJIT Liquidators (in their personal capacity and on behalf of AJIT) will enter into and implement the AJIT Transfer Agreement (subject to such modifications as may be agreed between the parties thereto), whereby the AJIT Liquidators will procure the transfer of the cash, undertaking and other assets of AJIT comprising the AJIT Rollover Pool to the Company (or its nominee) in consideration for the allotment of New Shares to the AJIT Liquidators (as nominees for the AJIT Shareholders entitled to them), such shares to be renounced by the AJIT Liquidators in favour of the holders of AJIT Rollover Shares.

The AJIT Transfer Agreement provides that the assets to be transferred to the Company will be transferred with such rights and title as AJIT may have in respect of the same or any part thereof subject to (and with the benefit of) all and any rights, restrictions, obligations, conditions and agreements affecting the same or any part thereof. The AJIT Transfer Agreement further provides that AJIT, acting by the AJIT Liquidators, insofar as they are reasonably able to do so by law or otherwise, will comply with all reasonable requests made by the Company (or its nominee) in respect of the cash, undertaking and other assets of AJIT to be acquired.

Costs and expenses of the AJIT Scheme

Any stamp duty, SDRT (or equivalent Japanese tax payable in connection with the transfer of Japanese securities) or other transaction tax, or investment costs incurred by the Company on the acquisition of the AJIT Rollover Pool and listing fees in relation to the listing of the Ordinary Shares will be borne by the Enlarged Company. If the AJIT Scheme does not proceed on the terms agreed or the required AJIT Scheme Conditions are not satisfied, then the Company and AJIT will each bear their own costs. The Company's costs in connection with the AJIT Scheme are estimated at approximately £570,000. The Investment Adviser has agreed to pay for AJIT's costs to implement the AJIT Scheme up to a cap of £800,000.

Summary of the AJG Scheme

The AJG Scheme

Subject to the passing of the resolutions to be proposed at the AJG EGM and to the satisfaction of the AJG Conditions, AJG will be placed into members' voluntary winding up and the AJG Scheme will take effect. It is expected that the AJG Scheme will become effective on the AJG Scheme Effective Date, whereupon the cash, undertaking and other assets of AJG comprising the AJG Rollover Pool will be transferred to the Company pursuant to the AJG Transfer Agreement, in exchange for the allotment of New Shares to the AJG Liquidators (as nominees for AJG Shareholders entitled to them in accordance with the AJG Scheme). Thereafter, the AJG Liquidators will renounce the allotments of the New Shares in favour of AJG Shareholders who have elected (or are deemed to have elected) to receive New Shares, and such New Shares will be issued by the Company to those AJG Shareholders pursuant to the AJG Scheme.

The issue of New Shares under the AJG Rollover Option will be effected on a formula asset value ("FAV") for FAV basis as at the AJG Scheme Calculation Date. For the purposes of the AJG Scheme, the NAVs of each of the Company and AJG will be adjusted to take account of (among other matters) all of the costs associated with the AJG Scheme not already accrued, in order to determine their respective FAVs. Further details of the relevant FAV calculations of each company are set out in Part 2 (Additional Information) of the Circular. The new Ordinary Shares issued pursuant to the AJG Scheme will rank pari passu with the existing Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the issue of the relevant new Ordinary Shares).

AJG Cash Option

As part of the AJG Scheme, AJG Shareholders may elect to receive cash instead of New Shares in respect of some or all of their holdings in AJG at a discount of two per cent. to the AJG FAV per Share (the "AJG Cash Option"). The maximum number of AJG Shares that can be elected for the AJG Cash Option is 25 per cent. of the total number of AJG Shares in issue (excluding AJG Shares held in treasury) as at the AJG Scheme Calculation Date.

AJG Scheme Transaction Agreement

Pending publication of the AJG Circular, the Company and AJG have entered into the AJG Scheme Transaction Agreement. Pursuant to the AJG Scheme Transaction Agreement, subject to receipt of relevant tax clearances, AJG has undertaken to use all reasonable endeavours to (i) publish the AJG Circular by 15 September 2023; and (ii) to implement the AJG Scheme in accordance with the terms of the AJG Scheme set out in the Prospectus.

AJG Transfer Agreement

On the AJG Scheme Effective Date, or as soon as practicable thereafter, the Company and the AJG Liquidators (in their personal capacity and on behalf of AJG) will enter into and implement the AJG Transfer Agreement (subject to such modifications as may be agreed between the parties thereto), whereby the AJG Liquidators will procure the transfer of the cash, undertaking and other assets of AJG comprising the AJG Rollover Pool to the Company (or its nominee) in consideration for the allotment of New Shares to the AJG Liquidators (as nominees for the AJG Shareholders entitled to them), such shares to be renounced by the AJG Liquidators in favour of the holders of AJG Rollover Shares.

The AJG Transfer Agreement provides that the assets to be transferred to the Company will be transferred with such rights and title as AJG may have in respect of the same or any part thereof subject to (and with the benefit of) all and any rights, restrictions, obligations, conditions and agreements affecting the same or any part thereof. The AJG Transfer Agreement further provides that AJG, acting by the AJG Liquidators, insofar as they are reasonably able to do so by law or otherwise, will comply with all reasonable requests made by the Company (or its nominee) in respect of the cash, undertaking and other assets of AJG to be acquired.

Costs and expenses of the AJG Scheme

Any stamp duty, SDRT (or equivalent Japanese tax payable in connection with the transfer of Japanese securities) or other transaction tax, or investment costs incurred by the Company on the acquisition of the AJG Rollover Pool and listing fees in relation to the listing of the New Shares will be borne by the Enlarged Company. If the AJG Scheme does not proceed on the terms agreed or the required AJG Scheme Conditions are not satisfied, then the Company and AJG will each bear their own costs. The Company's costs in connection with the AJG Scheme are estimated at approximately £470,000. The Investment Adviser has agreed to pay for AJG's costs to implement the AJG Scheme up to a cap of £800,000.

Benets of the Schemes

Your Board believes that the issue of New Shares pursuant to the Schemes would have the following benets to Shareholders:

(a) Shareholders will immediately benet from an enlarged capital base;

(b) the implementation of the Schemes will result in an enlarged and more diverse portfolio of assets which the Investment Adviser is well placed to manage (given its experience);

(c) it will result in a reduction of the estimated pro forma ongoing charges ratio of the Company;

(d) the increase in the size of the Company should mean that the Ordinary Shares have enhanced liquidity in the secondary market;

(e) the Company will be able to deploy additional capital at an advantageous time;

(f) a larger capital base will allow the Investment Adviser to pursue its activist strategy in opportunities involving companies with larger capitalisations; and

(g) the Investment Adviser will be able to have more effective conversations with investee companies (on the basis of the Company having more firepower to build stakes in these companies).

The assets to be received by the Company pursuant to each Scheme, which in each case will consist of shares in listed Japanese companies, will be managed in accordance with the Investment Policy and may be realised over time and redeployed into more activist opportunities. Any proceeds of any such realisation are expected to be redeployed into more activist opportunities within six months of receipt.

AJIT Scheme Conditions

(a) completion of the Migration;

(b) the recommendation of the boards of the Company and AJIT to proceed with the AJIT Scheme, which may be withdrawn at any time (including, without limit, for material adverse change reasons);

(c) the Share Allotment Authorities relating to the AJIT Scheme being approved by Shareholders and not having been revoked or superseded;

(d) the passing of the resolutions to be proposed at the First AJIT General Meeting and the resolution to be proposed at the Second AJIT General Meeting or any adjournment of those meetings and upon any conditions of such resolutions being fulfilled; and

(e) Admission occurring in respect of the New Shares to be issued pursuant to the AJIT Scheme.

Any AJIT Scheme condition may, subject to compliance with legal requirements, be waived with the mutual agreement of each of the Company, the Investment Adviser and AJIT at any time up to completion of the AJIT Scheme.

AJG Scheme Conditions

The AJG Scheme is conditional upon:

(a) completion of the Migration;

(b) the recommendation of the boards of the Company and AJG to proceed with the AJG Scheme, which may be withdrawn at any time (including, without limit, for material adverse change reasons);

(c) the Share Allotment Authorities relating to the AJG Scheme being approved by Shareholders and not having been revoked or superseded;

(d) the passing of the resolutions to be proposed at the AJG EGM or any adjournment of that meeting and upon any conditions of such resolutions being fulfilled; and

(e) Admission occurring in respect of the New Shares to be issued pursuant to the AJG Scheme.

Any AJG Scheme condition may, subject to compliance with legal requirements, be waived with the mutual agreement of each of the Company, the Investment Adviser and AJG at any time up to completion of the AJG Scheme.

Proposed Directors

If the Schemes are implemented, for continuity purposes for the AJIT and AJG shareholders, it is intended that Claire Boyle and Noel Lamb will join the Board of the Company on the completion dates for the respective Schemes. Both will be non-executive-Directors and be considered to be independent of the AIFM and the Investment Adviser.

Summary of the Placing Programme

The Directors intend to implement the Placing Programme to enable the Company to raise additional capital in the 12 month period from the publication of the Prospectus. Subject to the passing of the relevant Resolutions, the Directors will have discretion to issue Ordinary and/or C Shares, provided that such number of Ordinary Shares and C Shares to be issued pursuant to the Placing Programme may not exceed 250 million Shares in aggregate. The Placing Programme is intended to be exible and may have a number of closing dates in order to provide the Company with the ability to issue Ordinary Shares and/or C Shares over a period of time. The Placing Programme is intended to satisfy market demand for New Shares and to raise further money for investment in accordance with the Investment Policy.

Proposed change to the Investment Policy

In connection with the Schemes and in contemplation of the Company's Migration, the Board has proposed amending the Investment Policy of the Company to increase the diversification contained within the Company's portfolio. Further details on the proposed New Investment Policy are set out in the Company's Circular to be sent to shareholders. The Board considers that these adjustments represent a material change to the Company's published investment policy, and therefore the Company's Shareholders should vote to approve such a change. A resolution will be put at the General Meeting seeking such approval.

General Meeting

The Circular containing a notice convening the General Meeting at which Shareholders will be asked to consider and, if thought t, approve the Resolutions, has been published on the Company's website at https://www.nipponactivevaluefund.com/shareholder-information/shareholder-documents/ and will be sent to shareholders shortly. The Resolutions to be considered by Shareholders are to (i) adopt the New Investment Policy; and (ii) authorise the Directors to issue the New Shares pursuant to the Schemes and the Placing Programme on a non-pre-emptive basis.

Recommendation

The Board considers the proposals described in the Circular to be in the best interests of Shareholders as a whole. Accordingly, the Board recommends unanimously that Shareholders vote in favour of the Resolutions. The Directors intend to vote in favour of the Resolutions in respect of their own benecial holdings which total 247,791 Ordinary Shares (representing 0.23 per cent. of the total voting rights in the Company exercisable at the General Meeting).

In addition, the Board understands that the AJIT Directors who hold shares in AJIT, and the AJG Directors who hold shares in AJG, all intend to roll over their entire benecial holdings of AJIT Shares and AJG Shares into New Shares.

The Board greatly appreciates the support it receives from Shareholders, and the Board and/or the Investment Adviser will endeavour to address any questions received on the proposals or the Circular.

Timetable

* or, if earlier, the date on which all of the New Shares available for issue under the Placing Programme have been issued (or such other date as may be agreed between the Company, the Investment Adviser, Shore Capital and Berenberg (such agreed date to be announced by way of an RIS announcement)).

Notes:

(1) References to times above and in the Circular generally are to London times unless otherwise specified.

(2) All times and dates in the expected timetable and in the Circular may be adjusted by the Company in consultation with Shore Capital and Berenberg. Any material changes to the timetable will be notified via an RIS.

(3) The timetable for implementation of the AJG Scheme will be announced by way of an RIS announcement following the publication the AJG Circular.

Enquiries

Berenberg Gillian Martin / Dan Gee-Summons / Natasha Ninkov

Tel: +44 (0)20 3207 7800

Company Secretary Sylvanus Cofie / Maria Matheou

Tel: +44 (0) 20 3327 9720

Important information relating to Sponsor and Financial Adviser

Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") which is authorised and regulated by the German Federal Financial Supervisory Authority and deemed authorised and subject to limited regulation in the United Kingdom by the FCA, is acting solely as sponsor and financial adviser to the Company and for no one else in relation to the proposed transaction, and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Berenberg or for providing advice in relation to the proposed transaction, the contents of the document or any other matters described in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Berenberg by FSMA or the regulatory regime established thereunder, Berenberg does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this announcement, including as to its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the proposed transaction, whether as to the past or future.