THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA (INCLUDING TO U.S. PERSONS, AS SUCH TERM IS DEFINED UNDER REGULATION S OF THE U.S. SECURITIES ACT 1933, AS AMENDED (THE "US SECURITIES ACT"), ANY MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM), CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION TO BE CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS PUBLISHED BY THE COMPANY TODAY IN CONNECTION WITH THE PROPOSED PLACING PROGRAMME. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NEW ORDINARY SHARES. NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE PLACING PROGRAMME. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE NEW ORDINARY SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS. COPIES OF THE PROSPECTUS WILL BE AVAILABLE FROM THE OFFICES OF THE COMPANY AND ON ITS WEBSITE AT WWW.FEETPLC.CO.UK. THE PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY EXCLUDED TERRITORY.
31 August 2016
FUNDSMITH EMERGING EQUITIES TRUST PLC
Publication of a Prospectus
Fundsmith Emerging Equities Trust plc ("FEET" or the "Company") has today published a prospectus (the "Prospectus"), which has been approved by the UK Listing Authority, in relation to a placing programme for up to 10 million new ordinary shares ("Ordinary Shares") in the capital of the Company (the "Placing Programme").
Details of the Placing Programme
The Placing Programme is being implemented to satisfy market demand for the Company's Ordinary Shares and to enable the Company to raise additional capital in the period from 31 August 2016 to 30 August 2017 should the Board determine that market conditions are appropriate. The Placing Programme is intended to be flexible and will have a number of closing dates in order to provide the Company with the ability to issue and allot Ordinary Shares over a period of time. Any issue of Ordinary Shares under the Placing Programme will be notified by the Company through an RIS announcement and the Company's website prior to each Admission.
The Directors intend to apply the net proceeds of the Placing Programme in making investments that have been identified by the Company's investment manager, Fundsmith LLP ("Fundsmith"), in accordance with the Company's investment objective and policy and to pay operational expenses.
Shareholders should note that, as a result of the resolutions passed at the annual general meeting of the Company on 26 May 2016, the Directors have shareholder authority to issue and allot up to 4,164,480 Ordinary Shares on a non-pre-emptive basis pursuant to the Placing Programme. Should the Directors wish to issue and allot new Ordinary Shares in the following 12 months from today's date in excess of this amount, up to a maximum of 10 million Ordinary Shares under the Placing Programme, further shareholder authorities will be sought by convening a general meeting of the Shareholders for this purpose.
The Placing Programme is not being underwritten and, as at the date of the Prospectus, the actual number of Ordinary Shares to be issued under the Placing Programme is not known. The number of Ordinary Shares available under the Placing Programme should not be taken as an indication of the number of Ordinary Shares finally to be issued. The terms and conditions that apply to any subscription for Ordinary Shares pursuant to the Placing Programme are contained in Part 8 of the Prospectus.
Background to and reasons for the Placing Programme
As announced on 18 March 2016 in the Company's annual report for the period ended 31 December 2015, it is the Directors' view that the ability to issue new Ordinary Shares at a small premium to Net Asset Value per Ordinary Share plays an important part in ensuring that the level of premium at which the Company's Ordinary Shares trade does not reach excessive levels. In addition, growing the total assets under management through share issuance reduces the ongoing costs per Ordinary Share and potentially enhances the secondary market liquidity of the Company's Ordinary Shares, both of which are attractive to all Shareholders.
Following its launch on 25 June 2014, the Company has consistently traded at a premium to Net Asset Value and accordingly, given the Company was then fully invested, the Company announced its intention on 18 March 2016 to utilise the existing Shareholder authority to issue up to 10 per cent. of the Company's issued share capital, which was obtained at the Company's annual general meeting in May 2015, to begin issuing new Ordinary Shares. At the Company's annual general meeting on 26 May 2016, the Company's 10 per cent. authority was renewed and, in addition, with regard to the potential benefits of increasing the scale of the Company further, the Company also obtained a Shareholder authority to issue a further 15 per cent. of the Company's issued share capital.
Subsequent to the announcement of a block listing application for 1,933,792 Ordinary Shares on 18 March 2016, the Company has issued a total of 1,707,885 new Ordinary Shares at a premium to NAV, representing 88 per cent. of the total block listing. All such issues have been accretive to the Net Asset Value per Ordinary Share. Notwithstanding the issuance of new Ordinary Shares, the Company has traded at an average premium to NAV of 2.1 per cent. since the announcement of the block listing.
Following discussions with Fundsmith the Board is satisfied that suitable investment opportunities are available to absorb any additional capital raised pursuant to the Placing Programme and Ordinary Shares will only be issued when this remains the case. In addition, the Board are conscious of the need to protect Shareholders from potential "cash drag", i.e. the negative impact on equity returns of having uninvested cash in a rising equity market, and therefore new Ordinary Shares will not be issued pursuant to the Placing Programme where such share issuance would result in the Company having more than 10 per cent. of its gross assets in cash as at the date of each allotment under the Placing Programme.
Benefits of the Placing Programme
The Directors believe that the Placing Programme offers the following principal benefits:
· additional monies can be raised in a timely manner to enable the Company to take advantage of opportunities to make further investments in accordance with the Company's investment policy;
· liquidity in the market for the Ordinary Shares should be improved, making the Ordinary Shares more attractive to a wider range of investors;
· the Company's ability to issue new Ordinary Shares tactically will be improved, so as to manage better the premium to Net Asset Value per Share at which the Ordinary Shares may trade; and
· the Company can grow, thereby spreading fixed costs over a larger capital base which should reduce the level of ongoing charges per Ordinary Share.
A copy of the Prospectus has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm and on the Company's website, www.feetplc.co.uk. A copy of the Prospectus can also be viewed at the Company's offices at 33 Cavendish Square, London W1G 0PW.
This announcement contains inside information.
Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Prospectus.
Tel: 020 3551 6337
Investec Bank plc
Tel: 020 7597 5043
Frostrow Capital LLP
Tel: 020 3709 8734
This announcement which has been issued by Frostrow Capital LLP and prepared by, and is the sole responsibility of, the Directors of the Company has been approved for the purposes of section 21 of the Financial Services and Markets Act 2000 by Fundsmith LLP ("Fundsmith"), which is authorised and regulated by the Financial Conduct Authority.
This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for, any shares in Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Copies of the prospectus are available from the Company's registered office.
Recipients of this announcement who are considering acquiring Ordinary Shares following publication of the prospectus are reminded that any such acquisition must be made only on the basis of the information contained in the prospectus which may be different from the information contained in this announcement. The subscription for Ordinary Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. Persons distributing this announcement must satisfy themselves that it is lawful to do so. The Company assumes no responsibility in the event that there is a violation by any person of such restrictions.
This document may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and will not be offered, sold, exercised, resold, transferred or delivered, directly or indirectly, in or into the United States or to, or for the account or benefit of, any US person (as defined under Regulation S under the US Securities Act). The Company has not been, and will not be, registered under the U.S. Investment Company Act of 1940, as amended.
Neither this announcement nor any copy of it may be: (i) taken or transmitted into or distributed in any member state of the European Economic Area (other than the United Kingdom), Canada, Australia or the Republic of South Africa or to any resident thereof, or (ii) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements.
Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the formal prospectus. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.
Each of Investec Bank plc ("Investec"), which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and Fundsmith, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, are each acting exclusively for the Company and for no one else in relation to the matters described in this announcement and are not acting for or advising any other person, or treating any other person as their respective client, in relation thereto and will not be responsible for providing the regulatory protection afforded to their respective clients or advice to any other person in relation to the matters contained herein. Neither Investec, Fundsmith nor any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of, the information in this announcement (or whether any information has been omitted from the announcement) or any information relating to the Company, whether written, oral or in a visual or electronic format, and howsoever transmitted or made available or any loss howsoever arising from any use of this announcement or its contents or otherwise in connection with it.
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