THE PROSPECT JAPAN FUND LIMITED
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER
UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE
CAN BE NO CERTAINTY THAT ANY SUCH OFFER WILL ULTIMATELY BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For immediate release
10 January 2017
The Prospect Japan Fund Limited
("TPJF")
Statement re Possible Offer for TPJF by Prospect, Co. Ltd ("Prospect")
The independent directors of TPJF today announce that they are in preliminary
discussions in respect of a possible offer by Prospect for the entire issued
and to be issued share capital of TPJF (the "Possible Offer").
The independent directors of TPJF, who have received financial advice from
Stockdale Securities Limited, consider it appropriate that the Possible Offer
is progressed and put to TPJF shareholders in due course. Accordingly, the
independent directors have instructed advisers and are currently co-operating
with Prospect and its advisers, so that the Possible Offer can be worked up
into a proposal which can then be put to TPJF shareholders to decide upon, in
due course.
Prospect, a Japanese company listed on the Tokyo Stock Exchange (Tokyo Stock
Exchange code: 3528) is the parent company of the investment manager and
investment adviser to TPJF, being Prospect Asset Management (Channel Islands)
Ltd. ("PAM(CI)") and Prospect Asset Management, Inc. ("PAMI"), respectively.
As at the date of this announcement, neither PAM(CI) nor PAMI is interested in
any TPJF shares. Mr Rupert Evans, a non-executive director of TPJF, is also a
non-executive director of PAM(CI) and is therefore not part of the committee of
independent directors of TPJF that has been formed to assess the Possible
Offer. The independent directors of TPJF will continue to have regard to the
interests of all TPJF shareholders, in accordance with their duties as
directors.
The Possible Offer under consideration, discussion and evaluation by both
parties is a securities exchange offer at a ratio of 2.5 Prospect ordinary
shares in exchange for each TPJF share (the "Exchange Ratio") (subject to the
reservations set out below). This Exchange Ratio would give an implied value
for the entire existing issued share capital of TPJF of approximately US$133.2
million (based on the middle market closing price of approximately US$0.577 per
Prospect share on 6 January 2017, being the last business day in Japan prior to
the date of this announcement and using an exchange rate of 116.1 ¥/US$).
At the value implied by the Exchange Ratio, the Possible Offer, if made, would
represent a premium of approximately:
* 52.7 per cent. to the middle market closing price of US$0.945 per TPJF
share on 9 January 2017, being the last business day in London prior to the
date of this announcement;
* 55.4 per cent. to the volume weighted average price for TPJF shares of
US$0.928 over the three month period ended on and including 9 January 2017;
and
* 14.4 per cent. to TPJF's last published net asset value per share of
US$1.261 on 6 January 2017.
Prospect reserves the right to vary the form of the proposed consideration.
Prospect also reserves the right to make an offer at any time on less
favourable terms, under the following circumstances:
(a) with the agreement and recommendation of the independent directors of
TPJF; and/or
(b) to the extent that TPJF declares, makes or pays any dividend or
distribution or other payment to its shareholders; and/or
(c) if a third party announces a possible or firm intention to make an offer
for TPJF on terms less favourable than the value implied by the Exchange Ratio.
This announcement has been made with the consent of Prospect.
Transaction rationale
Prospect believes that the Possible Offer, if completed, would create a strong
platform for future growth and value creation. In particular, TPJF's portfolio
companies span a number of industry sectors where Prospect is already active
and has considerable experience and expertise, including real estate, finance
and construction. As such, Prospect believes that there are clear synergistic
benefits and cost savings which should serve to accelerate the delivery of the
enlarged group's growth strategy to capitalise on opportunities arising from
ongoing structural changes and reforms in Japan.
Prospect further believes that the stronger balance sheet of the enlarged group
and enhanced debt capacity should serve to facilitate access to potential
acquisition debt financing and growth capital to help drive potential
beneficial corporate activity and change in TPJF's investee companies. Prospect
also believes that the enlarged group would be well positioned to generate
returns for shareholders from the combined asset portfolios over the medium to
longer term, improve liquidity and significantly reduce or eliminate the
prevailing sizeable market discounts to the underlying net asset values of the
two groups' investments.
A presentation by Prospect outlining an overview of the strategic rationale for
the proposed combination will also be made available on TPJF's website at
www.prospectjapanfund.com.
This is an announcement falling under Rule 2.4 of the Code which does not
amount to a firm intention to make an offer under Rule 2.7 of the Code and
there can be no certainty that an offer for TPJF will ultimately be made.
As a consequence of this announcement, an 'offer period' has now commenced in
respect of TPJF in accordance with the rules of the Code. The attention of
TPJF's and Prospect's shareholders is drawn to the disclosure requirements of
Rule 8 of the Code, which are summarised below.
In accordance with Rule 2.6(a) of the Code, Prospect acknowledges that it must,
by not later than 5.00 p.m. on 7 February 2017, either announce a firm
intention to make an offer for TPJF in accordance with Rule 2.7 of the Code or
announce that it does not intend to make an offer, in which case the
announcement will be treated as a statement to which Rule 2.8 of the Code
applies. This deadline will only be extended with the consent of the Takeover
Panel in accordance with Rule 2.6(c) of the Code.
Pursuant to Rule 2.9 of the Code, Prospect confirms that, as at the date of
this announcement, it has 169,783,473 ordinary shares in issue and admitted to
trading on the Tokyo Stock Exchange (Tokyo Stock Exchange code: 3528), a market
operated by the Japan Exchange Group, Inc. (excluding ordinary shares held in
treasury). The International Securities Identification Number for these
securities is JP3221000007. Prospect also holds 2,773,334 ordinary shares in
treasury. In addition, Prospect has in issue 1,350 unlisted, transferable stock
acquisition rights ("SARs") each of which gives the holder the right to acquire
100,000 ordinary shares in Prospect (135 million ordinary shares in total) at
an exercise price of ¥5.4 million per SAR (or ¥54 per ordinary share) which are
exercisable from 21 December 2015 until 20 December 2020. All of the SARs are
currently held by TPJF and are subject to the terms of a pre-existing exercise
agreement between Prospect and TPJF.
Pursuant to Rule 2.9 of the Code, TPJF confirms that, as at the date of this
announcement, it has 92,352,602 ordinary shares in issue and admitted to
trading on the London Stock Exchange (LSE: PJF). The International Securities
Identification Number for these securities is GB00B011QL44. TPJF does not hold
any shares in treasury.
A further announcement(s) will be made in due course as and when appropriate.
Person making this notification:
John Hawkins, Non-Executive Chairman
Enquiries:
The Prospect Japan Fund Limited Tel: 01481 745918
John Hawkins
Stockdale Securities Limited Tel: 020 7601 6100
(Financial Adviser to TPJF)
Alastair Moreton
Daniel Harris
David Coaten
Prospect, Co. Ltd Tel: +1 808 383 3833
Curtis Freeze
Strand Hanson Limited Tel: 020 7409 3494
(Joint Financial Adviser to Prospect)
Stuart Faulkner
Matthew Chandler
James Dance
Mizuho Corporate Advisory Co., Ltd. Tel: +81 (0) 3 3284 1655
(Joint Financial Adviser to Prospect)
Ryo Kamisaku
Eiichi Igarashi
Stockdale Securities Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively as financial
adviser to TPJF and no-one else in connection with the Possible Offer and will
not be responsible to anyone other than TPJF for providing the protections
afforded to clients of TPJF or for providing advice in relation to the Possible
Offer or any other matter referred to herein.
Strand Hanson Limited, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively as joint financial
adviser to Prospect and no-one else in connection with the Possible Offer and
will not be responsible to anyone other than Prospect for providing the
protections afforded to clients of Prospect or for providing advice in relation
to the Possible Offer or any other matter referred to herein.
Mizuho Corporate Advisory Co., Ltd., an investment banking arm of Mizuho
Financial Group, is acting exclusively as joint financial adviser to Prospect
and no-one else in connection with the Possible Offer and will not be
responsible to anyone other than Prospect for providing the protections
afforded to clients of Prospect or for providing advice in relation to the
Possible Offer or any other matter referred to herein.
Disclosure requirements of the Code:
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of the offeree company or of any securities
exchange 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 securities
exchange 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 securities exchange 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 p.m.
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 p.m. (London time) on the
10th business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities exchange
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
securities exchange offeror(s), 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 p.m. (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 the offeree company or a securities exchange 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).
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
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. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Notice to overseas investors
This announcement does not constitute an offer to purchase any securities, or
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any offer to purchase or sell securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful. The release,
distribution or publication of this announcement in jurisdictions other than
the UK may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the UK should inform themselves about
and observe any applicable requirements.
Website disclosure
A copy of this announcement will be made available (subject to certain
restrictions relating to persons resident in restricted jurisdictions) on
TPJF's website at www.prospectjapanfund.com by no later than 12 noon (London
time) on 11 January 2017. A presentation by Prospect outlining an overview of
the strategic rationale for the proposed combination will also be made
available on TPJF's website at www.prospectjapanfund.com. The content of the
website referred to in this announcement is not incorporated into and does not
form part of this announcement.
Prospect Japan Fund : Statement re Possible Offer
January 10, 2017 at 07:00 am
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© PRNewswire - 2017
