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21 May 2007 14:41
PANTHEON INTERNATIONAL PARTICIPATIONS PLC ("PIP" or the "Company" )
Publication of a prospectus in relation to a Placing and Open Offer
21 May 2007
Publication of prospectus
The Board of Directors of PIP (the "Directors") announces that a prospectus has been published today in relation to the Placing and Open Offer (the "Issue") of up to 11,050,000 ordinary shares in PIP at a price of 905 pence per share (the "Issue Price") to raise up to approximately ‚£100 million before expenses. The Open Offer is being made to existing ordinary shareholders on the basis of 1 ordinary share for every 5 ordinary shares held at close of business on 17 May 2007 (the "Record Date").
The prospectus will shortly be available for viewing at the Document Viewing Facility of the UKLA.
The Placing and Open Offer are subject to the approval of ordinary shareholders to be sought at an extraordinary general meeting convened for 14 June 2007.
Expected timetable
17 May 2007 Record date for entitlement under the Open Offer
21 May 2007 Publication of the prospectus
22 May 2007 Ordinary shares marked "ex" entitlement and Open Offer entitlements credited to CREST accounts of Qualifying CREST Shareholders
3.00 p.m. on 11 June 2007 Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)
11 a.m. on 13 June 2007 Open Offer closes
14 June 2007 Extraordinary General Meeting to approve the Issue
Last date for receipt of placing commitments
8 a.m. on 20 June 2007 Admission and commencement of dealings in new ordinary shares
Introduction
The Company is the longest-established private equity fund-of-funds quoted on the London Stock Exchange, enabling private investors as well as institutions to gain access to a substantial portfolio of unquoted companies in the US, UK, Continental Europe and Asia, within funds managed by experienced private equity managers.
The primary investment objective of the Company is to maximise capital growth by investing in private equity funds and, occasionally, directly in private companies.
Information and background on the Issue
Market Conditions
Highly favourable conditions have continued for buyout investors to acquire companies in leveraged buyout transactions. Private equity can, in many cases, provide companies with an ownership structure that is more conducive to aligning the interests of shareholders and management. The rapid decision making and close accountability which are key features of such ownership structures has meant that the buyout industry has continued to attract top quality management teams. These factors, combined with recent record fundraisings by private equity firms and debt markets that continue to accommodate the high levels of issuance associated with leveraged buyout transactions, have expanded the number of opportunities for buyout funds to acquire companies, including even the largest companies.
The Company's manager, Pantheon Ventures Limited (the "Manager"), expects the current high levels of new investment from buyout funds to continue as long as debt finance continues to be available on favourable terms, and distributions from existing investments should also remain strong during this period. This will mean that investment activity levels, and consequently the rate at which the Company is financing investment calls, should also remain high during this period.
In addition to the buyout market, the venture capital market has strengthened, with venture capital investment in US companies reaching its highest level for five years. The Manager expects this part of the private equity market to remain active.
The Manager believes that a number of factors have driven the market for secondary investment, including the cumulative growth of primary investment in private equity funds in recent years, changes in the investment strategy of investors, more active portfolio management by investors and regulatory changes.
The Directors believe that the growth in the market for secondary interests in private equity funds should continue to provide attractive investment opportunities for the Company. The Directors further believe that the Company's ability to participate in such opportunities is enhanced by its entitlement, under Pantheon's secondary investment allocation policy, to invest alongside the US$2 billion Pantheon Global Secondary Fund III, a fund established by the Pantheon Group in July 2006 for the purpose of acquiring secondary investments. The fundraising would therefore increase the ability of the Company to participate in secondary investment opportunities that arise in the foreseeable future.
The Company
The Company has also had an active year, committing a record ‚£281 million to private equity investments in the nine month period ended 31 March 2007, which compares to ‚£240 million committed to investments during the whole of the previous year. Of this amount, ‚£134 million relates to the purchase by the Company, in nine separate transactions, of secondary interests in private equity funds. The largest such secondary investment comprised the acquisition, by the Company and several other funds managed or advised by Pantheon, of a portfolio of partnership interests in over 90 venture funds and direct investments in eight companies and was completed on 31 October 2006 for a total cash consideration of approximately $280 million, of which the Company's proportion was approximately $74.1 million. Of the total transaction consideration payable by the Company, approximately $27.8 million has been deferred until 14 December 2007.
Following the recent period of investment activity described above, the Company has drawn down approximately ‚£20 million of its principal ‚£80 million loan facility from The Royal Bank of Scotland plc.
As at 30 April 2007the Company had unaudited net assets of ‚£492.8 million and an unaudited NAV per share of 890.4 pence , representing an increase of approximately one per cent. in the unaudited NAV per share since 31 March 2007 and an increase of 7.4 per cent. in the unaudited NAV per share since 31 December 2006. As at the close of business on 17 May 2007 (the latest practicable date prior to the issue of this announcement), the middle market quotation for an Ordinary share as derived from the Daily Official List of London Stock Exchange PLC was 917.5p.
Reasons for the Issue
The Directors believes that the Issue is in the interests of the Company and its shareholders because:
i. the Issue will provide the Company with increased financial resources to
implement its investment strategy. Following increases in the rate of the Company's primary investment programme, which is designed to give the Company continuing strategic access to top tier private equity managers, commitments under the primary programme are expected to substantially absorb cash generated from existing assets. The fundraising will therefore increase the Company's ability to participate in secondary investment opportunities in the future as the market for these interests grows. The opportunistic purchase of secondary investments in existing funds can benefit the Company by adding more mature assets to the Company's portfolio from which distributions are received over a shorter period of time. In addition, the Company benefits to the extent that the fees and expenses that occur in the first few years of a fund's life have already been paid;
ii. under the terms of the Placing new investors will have the opportunity to
acquire new ordinary shares in the Company providing the Company with the opportunity to further broaden its shareholder base and increase the size of the ordinary share class, potentially enhancing levels of liquidity in the ordinary shares; and
iii. by increasing the size of the Company, its fixed operating expenses can be
spread over a wider asset base.
Use of Proceeds
The Company intends that the net proceeds of the Placing and Open Offer will be used as follows:
i. in re-paying the drawn down amount, being approximately ‚£20 million as at
the date of this document, of its principal ‚£80 million loan facility with
The Royal Bank of Scotland plc;
ii. to the extent of any surplus, for investment in accordance with the
Company's investment policy (further details of which is set out in the
prospectus) including, in particular, pursuing investment opportunities to
acquire secondary interests.
Loan Facility
In addition to the Issue, the Company is intending to replace its principal ‚£80 million loan facility with The Royal Bank of Scotland plc with an unsecured loan facility of up to ‚£150 million.
Details of the Issueand Issue Price
The Company is proposing to raise up to approximately ‚£100 million, before expenses, through the issue of new ordinary shares by way of the Placing and Open Offer. Neither the Placing nor the Open Offer is conditional upon a minimum amount being raised. The Issue is not underwritten.
Pursuant to the terms of a placing agreement between inter alia Dresdner Kleinwort and the Company, Dresdner Kleinwort will seek to place with certain existing and new investors up to 11,050,000 new ordinary shares at the Issue Price, less the number of new ordinary shares required to satisfy valid applications under the Open Offer to the extent accepted by the Company.
Under the Open Offer, Qualifying Shareholders (as defined in the prospectus) are entitled to apply to subscribe for new ordinary shares at the Issue Price pro rata to their holdings of ordinary shares as at the Record Date on the basis of 1 new ordinary share for every 5 ordinary shares held at the Record Date ("Open Offer Entitlements"). Entitlements of Qualifying Shareholders to apply to subscribe for ordinary shares under the Open Offer will be rounded down to the nearest whole number of new ordinary shares in order that fractional entitlements do not arise.
Valid applications under the Open Offer will be satisfied in full up to applicants' Open Offer Entitlements. Applicants can apply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for more than an Open Offer Entitlement will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or none of their own Open Offer Entitlements. The Company may satisfy valid applications for more than the Open Offer Entitlement of applicants in whole or in part but reserves the right not to satisfy any excess above any Open Offer Entitlement. The Directors may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate in the interests of the Company, giving priority to applicants with smaller holdings of Existing Ordinary Shares and having regard to any participation of relevant applicants in the Placing. To the extent that the monies subscribed by an applicant in relation to any valid application for new ordinary shares under the Open Offer exceeds the aggregate value, at the Issue Price, of the new ordinary shares issued pursuant to that application, the excess subscription monies will be returned by the Company to that applicant (at the applicant's risk and without interest).
In order to satisfy valid applications under the Open Offer, the Directors may, at its discretion, allot new ordinary shares in excess of the aggregate Open Offer Entitlements of Qualifying Shareholders, in which case the number of new Ordinary Shares available for the Placing will be reduced accordingly.
To the extent that the new ordinary shares available under the Open Offer are not validly applied for in full, the shares not so applied for will be made available under the Placing.
New ordinary shares issued pursuant to the Placing and Open Offer will be issued at the Issue Price of 905p. The Issue Price is the Net Asset Value per Share of 890.4 pence as at 30 April 2007 plus a premium of 1.64 per cent. estimated to cover the costs of the fundraising. It should be noted that the premium may be in excess of, or fall short of, the actual expenses incurred in respect of the fundraising. The actual expenses are dependent on the monies raised in the fundraising and the proportion of such monies subscribed by placees introduced by the Manager. Any resulting appreciation or dilution to NAV would be minimal. 30 April 2007 is an extraordinary calculation date for the purposes of the Placing and Open Offer and the NAV per Share as at that date has been determined in accordance with the valuation principles referred to in the prospectus.
The Placing is conditional, among other things, upon the passing of the resolutions summarised below, the Placing Agreement becoming unconditional in all respects and not being terminated in accordance with its terms and Admission becoming effective in relation to the new ordinary shares to be allotted pursuant to the Placing.
The Open Offer is conditional, among other things, upon the passing of the resolutions summarised below, the Placing Agreement becoming unconditional in all respects and not being terminated in accordance with its terms and Admission becoming effective in relation to the new ordinary shares to be allotted pursuant to the Open Offer.
Extraordinary General Meeting
To give effect to the Placing and Open Offer it will be necessary to increase the authorised ordinary share capital of the Company. An extraordinary general meeting of the Company has been convened for 10.30 a.m. on 14 June 2007 for the purpose of considering and, if thought fit, passing resolutions which involve:
(a) increasing the authorised share capital of the Company;
(b) authorising the Directors to allot the increased ordinary share capital; and
(c) disapplying shareholders' statutory pre-emption rights in relation to the allotment of new ordinary shares for the purpose of giving effect to the Placing and Open Offer.
Notice of the extraordinary general meeting is set out in the prospectus. No separate approval of the Company's Redeemable Shareholders is required for the purposes of effecting the Placing and Open Offer, although redeemable shareholders are entitled to attend the extraordinary general meeting.
Contacts
Rhoddy Swire +44 207 484 6200
Pantheon International Participations PLC
Andrew Lebus +44 20 7484 6200
Pantheon Ventures Limited
Lewis Aldridge +44 20 7484 6200
Pantheon Ventures Limited
Andrew Zychowski +44 20 7475 6681
Dresdner Kleinwort
Dominic Waters +44 20 7475 6688
Dresdner Kleinwort
Robbie Robertson +44 20 7475 6674
Dresdner Kleinwort
The contents of this announcement have been approved by Pantheon Ventures Limited (a company authorised and regulated by the Financial Services Authority) for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.
This announcement, which is for information purposes only, is not a prospectus and does not constitute, or form part of, any offer to sell or an invitation to purchase or subscribe for shares, nor may it or any part of it, nor the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating thereto. Any application to subscribe for shares in the Company under the Placing or the Open Offer must be made only on the basis of the published prospectus. The information contained herein has not been independently verified by Dresdner Kleinwort or any of its connected persons. It should not be considered as a recommendation by Dresdner Kleinwort, Pantheon Ventures Limited or the Company or any of their directors, officers, employees, agents or advisers to subscribe for shares under the Placing or Open Offer. Neither Dresdner Kleinwort nor Pantheon Ventures Limited nor any of their directors, officers, employees, agents or advisers accepts any liability or responsibility for the accuracy or completeness of, nor makes any representation or warranty, express or implied, with respect to, the information contained in this document or on which this document is based or any other information or representations supplied or made in connection with the proposed Placing and Open Offer of ordinary shares in the Company.
Dresdner Kleinwort Securities Limited, which is authorised and regulated by the Financial Services Authority, is acting for the Company, and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Dresdner Kleinwort Securities Limited, or for affording advice in relation to the contents of this announcement or any matters referred to herein. Dresdner Kleinwort Securities Limited is not responsible for the contents of this document. Dresdner Kleinwort Securities Limited has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.
Pantheon Ventures Limited, which is authorised and regulated by the Financial Services Authority, is acting for the Company, and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Pantheon Ventures Limited, or for affording advice in relation to the contents of this announcement or any matters referred to herein. Pantheon Ventures Limited has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.
Not for release, publication or distribution in whole or in part, directly or indirectly in or into the United States, Australia, Canada, Italy, Japan, Republic of South Africa or New Zealand or any other jurisdiction where to do so might constitute a violation of local securities law or regulation or require any action to be taken to register or qualify. Any failure to comply with this restriction may constitute a violation of the laws of the relevant jurisdiction.
PANTHEON INTERNATIONAL PARTICIPATIONS PLC