Source - RNS
RNS Number : 7714L
Blackfriars Developing Markets Fund
05 October 2016
 

 

THIS CIRCULAR IS SENT TO YOU AS A SHAREHOLDER IN BLACKFRIARS ORIENTAL FOCUS FUND.  IT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.  IF YOU ARE IN ANY DOUBT AS TO THE ACTION TO BE TAKEN, YOU SHOULD IMMEDIATELY CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR OR ATTORNEY OR OTHER PROFESSIONAL ADVISOR.

 

 

If you have sold or otherwise transferred your holding in Blackfriars Oriental Focus Fund, please send this document and the accompanying proxy form to the stockbroker, bank manager, or other agent through whom the sale was effected for transmission to the purchaser or transferee.

 

Unless otherwise indicated, all defined terms in this Circular shall have the same meaning as described in the prospectus for the Company dated 2 February 2015 (the Prospectus).

 

 

 

 

BLACKFRIARS DEVELOPING MARKETS FUNDS PLC (the Company)

 

(an open-ended umbrella fund with segregated liability between sub-funds)

25/28 North Wall Quay

Dublin 1

 

PROPOSED MERGER

 

 

OF

 

BLACKFRIARS ASIAN FOCUS FUND

(a sub-fund of the Company)

 

INTO

 

BLACKFRIARS ORIENTAL FOCUS FUND

(a sub-fund of the Company)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated 4 October 2016



 

 

 

CONTENTS                                                                                                                               PAGE

 

Explanatory Letter from the Company                                                                                       5

 

 

KEY DATES FOR THE MERGER.*

 

Date of Meeting                                                      28 October 2016
 
Date of dispatch of notification of outcome of Meeting                  28 October 2016

 

Latest time for dealing in Shares and submitting        4pm (Irish time) on 3 November 2016
repurchase or exchange requests in the Merging Fund
                                                                            
Effective Date and Time                                          0.01 am on 10 November 2016

 

 

*The merger is subject to the approval of Shareholders in the Merging Fund. Save where otherwise mentioned, times referred to above are to Irish time.



DEFINITIONS

 

Administrator

 

RBC Investor Services Ireland Limited;

 

Articles

 

memorandum and articles of association of the Company;

Central Bank

Central Bank of Ireland;

 

Central Bank UCITS Regulations

 

 

the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 as amended;

Dealing Day

each Business Day (as defined in the Prospectus);

 

Directors

the directors of the Company;

 

Depositary

 

RBC Investor Services Bank S.A., Dublin Branch;

Effective Date

10 November 2016 or if considered appropriate by the directors such later date as may be determined by the Directors (which must be cleared in advance by the Central Bank) and notified in advance to Shareholders;

 

Effective Time

 

0.01 am on the Effective Date;

Exchange Ratio

the number of  New Shares which Shareholders participating in the Merger will receive in exchange for their Existing Shares in the Merging Fund as described in this Circular;

 

Existing Shares

 

 

Shares held by a Shareholder in the Merging Fund;

 

Investment Manager

 

Blackfriars Asset Management Limited;

 

Meeting

the extraordinary general meeting of the Merging Fund to be held on 28 October  2016;

 

Merger

 

 

Merging Fund

 

 

New Shares;

 

 

Prospectus

 

 

Receiving Fund 

the merger of  Blackfriars Asian Focus Fund with  Blackfriars Oriental Focus Fund as more particularly described in the Circular;

 

Blackfriars Asian Focus Fund;

 

 

Shares in the Receiving Fund to be issued to a Shareholder under the Merger in exchange for their holding of Existing Shares;

 

the prospectus of the Company dated 2 February 2015 and/or any supplements thereto;

 

Blackfriars Oriental Focus Fund;

 

Regulations

 

 

European Communities (Undertaking for Collective Investment in Transferable Securities) Regulations 2011 as amended by the European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2016;

 

Resolutions

 

the resolutions to be considered at the Meeting;

 

Shares

 

Shares in the Merging Fund or the Receiving Fund, as applicable;

Shareholder

a holder of Shares in the Merging Fund or the Receiving Fund, as applicable;

 

UCITS

 

an undertaking for collective investment in transferable securities authorised pursuant to the Regulations; and

 

Valuation Day

the Dealing Day.


4 October 2016

 

The Proposed Merger of Blackfriars Asian Focus Fund with Blackfriars Oriental Focus Fund

 

Dear Shareholder

 

We are writing to you as a Shareholder in the Blackfriars Oriental Focus Fund (the Receiving Fund) of the Company.

 

The purpose of this Circular is to describe the proposed merger with the Blackfriars Asian Focus Fund (the Merging Fund) with the Receiving Fund.  

 

To be effective, the proposals require Shareholders of the Merging Fund to pass the Resolutions in accordance with the Articles approving the proposed Merger. 

 

Background to and reasons for the proposed Merger

 

Given the longstanding and continued difficult macro-economic situation in Japan, contrasted with the more attractive investment case to be found across the wider Asian and Asian 'frontier' markets, the Investment Manager has formed the view that its stock research efforts should be exclusively applied to these markets and not Japan in future. The 'Asia-including Japan' investment sector has now largely disappeared as an asset class with most investors preferring to treat Japan and Asia ex Japan as separate asset classes.  In the longer term, driven by superior demographic profiles, the investment manager believes that the Asia ex Japan asset class will continue to generate better returns than Japan equities.  By merging the Blackfriars Asian Focus Fund with the Blackfriars Oriental Focus Fund, Blackfriars will be offering clients a larger fund that is invested in a carefully selected portfolio of companies from a wide range of Asian markets excluding Japan.

 

The purpose of this Circular is to describe in detail the proposed Merger. The Merger will need to be approved by Shareholders of the Merging Fund only. The Merger will not become effective without it being approved by the requisite majority of Shareholders of the Merging Fund at the Meeting.

 

The Proposed Merger and the impact on Shareholders

 

Transfer of assets and liabilities

 

The proposed Merger will involve the delivery and/or transfer of all assets and liabilities of the Merging Fund to the Receiving Fund in exchange for the issue of New Shares in the Receiving Fund to Shareholders of the Merging Fund on the register of members of the Company on the Effective Date.

 

Accrued Income

 

Any income of the Merging Fund accrued but not yet paid out by the Merging Fund as at the Effective Date will form part of the assets transferred to the Receiving Fund and will be treated as income of the Receiving Fund. 

 

Impact on Shareholding and Shareholder Rights, Issue of New Shares and Exchange Ratio

 

As at the Effective Time, Shareholders of the relevant Share class in the Merging Fund will receive New Shares in the relevant Share class of the Receiving Fund as detailed in the table below:

 

                                                                                   

Merging Fund

Share Class

Receiving Fund

Share Class

A Dollar Shares

A Sterling Shares

A Euro Shares

B Dollar Shares

B Sterling Shares

B Euro Shares

A Dollar Shares

A Sterling Shares

A Euro Shares

B Dollar Shares

B Sterling Shares

B Euro Shares

Under the terms of the Merger, Shareholders in the Merging Fund will receive Shares in the Receiving Fund having an equivalent value to their holding of Existing Shares on the Effective Date. Shareholders holding fractions of Existing Shares will receive fractions of New Shares in the Receiving Fund. No cash payment will be made to Shareholders under the Merger. As the value of the New Shares which a Shareholder will receive in the Receiving Fund will be equal to the value of a Shareholder's holding of Existing Shares immediately prior to the Effective Time, the exact number of New Shares to be issued in exchange for Existing Shares will not be known until the Effective Date.

Rights of Shareholders

 

As the Merging Fund and the Receiving Fund are both sub-funds of the Company, it is not anticipated that there will be any material difference in the rights of Shareholders arising from the Merger.

 

Impact on performance

 

The Merger is not expected to negatively impact the performance experienced by Shareholders. It is envisaged that the Receiving Fund will benefit from the economies of scale and lower expense ratio associated with the increased assets of the Receiving Fund post- Merger.

 

Rebalancing of Portfolio

 

Investors in the Receiving Fund will experience NO change in the investment policy or risk profile.

 

It is not anticipated that there will be any significant re-balancing of the portfolio of assets of the Receiving Fund arising from the Merger.

Post Effective Date

 

If the Resolutions are passed, the Merger will be binding on all Shareholders on the register of members of the Merging Fund and the Receiving Fund on the Effective Date and Shareholders of the Merging Fund will be issued New Shares without any further action on their part, whether or not they voted in favour of the Merger or voted at all.

 

Conditions applying to the Merger

 

The Merger is conditional upon: -

 

(i)         the passing of the Resolutions by Shareholders of the Merging Fund to approve the Merger (by way of a majority consisting of 75% or more of the total number of votes cast by Shareholders of the Merging Fund present in person or by proxy at the Meeting); and

 

(ii)         clearance and approval of the Merger by the Central Bank.

 

Irish Taxation

 

The below summary is only intended as a general guide to some of the main aspects of current Irish tax law and practice applicable to the Merger and may not apply to certain categories of investor. It is not intended to provide specific advice and no action should be taken or omitted to be taken in reliance upon it.  If Shareholders are in any doubt about their personal tax position in relation to the Merger, they should seek independent advice immediately from their professional adviser.

 

The tax status of the Company as an investment undertaking for the purposes of Chapter 1A Part 27 of the Irish Taxes Consolidation Act 1997 will not be affected by the Merger and, accordingly, there will be no impact on the Irish taxation treatment of Receiving Fund Shareholders should the proposed Merger proceed.

 

Following the Merger, there should be no difference in the manner in which Receiving Fund Shareholders are taxed in relation to their Shares in the Receiving Fund.

 

Basis of the Merger

An extraordinary meeting of Shareholders of the Merging Fund is being convened for 28 October 2016 at 10 am. The Merger may not take place without the approval of the Shareholders of the Merging Fund ONLY. In order to be passed, the Resolutions require the support of a majority of at least 75% of the total number of votes cast for and against it.  If the Resolutions are passed by the requisite majority, they will be binding on all Shareholders irrespective of how (or whether) they voted.

 

Shareholders in the Receiving Fund are not required to vote on the proposed Merger. Shareholders will be notified promptly of the outcome of the Meeting.

If the Resolutions are passed or if the Resolutions are not passed, there shall be no impact to dealings in the Shares of the Receiving Fund.

Shareholders in the Receiving Fund who are not in favour of the Merger can request the repurchase of their shares in the Receiving Fund prior to the latest time for requesting such a repurchase, as specified on page 2 above.

Although there is no repurchase fee currently applied in relation to the Receiving Fund, the Regulations provide that Shareholders will have the right to request a repurchase of their shares in the Receiving Fund without charge (other than those retained to cover disinvestment costs) from the date of this Circular up to the latest time for requesting a repurchase of their Existing Shares as set out on page 2 above.

In the event that repurchase requests are received from a Shareholder of the Receiving Fund after the latest time for requesting such a repurchase as set out on page 2 above, such requests will be treated as a normal repurchase request.

In the event that Shareholders of the Merging Fund pass the requisite Resolutions, the proposed Merger will involve the delivery and/or transfer to the Custodian, to be held on behalf of the Receiving Fund, of all of the assets and liabilities of the Merging Fund in exchange for the issue of New Shares to Shareholders of the Merging Fund.

 

The number of New Shares to be issued to each Merging Fund Shareholder at the Effective Time will be calculated in accordance with the Exchange Ratio.  The value of the holding of New Shares which a Merging Fund Shareholder will receive under the Merger will equal the value of their holding of Existing Shares immediately prior to the Effective Time.

 

Please also refer to the Common Terms of Merger which is being circulated with this Circular.

 

Expenses of the Merger

 

All costs and expenses which arise from or are incidental to the implementation of the Merger will be borne on a pro rata basis by the Merging Fund and the Receiving Fund. Any taxes and duties, including transfer taxes and stamp duty, payable by the Merging Fund upon the acquisition by the Receiving Fund of the property of the Merging Fund, as a result of the implementation of the Merger, will be paid by Receiving Fund.

 

Review by Custodian and Auditor

 

In accordance with regulation 59 of the Regulations, the Custodian has provided written verification of certain particulars of the Merger to the Central Bank.

 

In accordance with the Regulations, the auditors of the Company, will validate the following:

 

·           the criteria adopted for the valuation of the assets of the Merging Fund on the Effective Date; and

 

·           the calculation method of the Exchange Ratio as well as the actual Exchange Ratio determined on the Effective Date.

 

Following the Effective Date, the auditors of the Company, will prepare a report with details of its findings in relation to the above which will be available to Shareholders free of charge upon request to the Administrator. A copy of this report will also be available to the Central Bank.

 

Additional Information & Documents available for inspection

The following documents are available on request, or are available for inspection at the registered office of the Company during usual business hours on any business day (Saturdays and Sundays excepted) from the date of this Circular up to and including the date of the Meeting and, if the Resolutions are passed, up to and including the Effective Date:

 

·           the Articles of the Company;

 

·           the Prospectus of the Company;

 

·           the Key Investor Information Documents (KIIDs) relating to the Merging Fund and Receiving Fund;

 

·           the latest annual report of the Company;

 

·           the Regulations; and

 

·           the Central Bank UCITS Regulations.

 

In addition, Shareholders will be entitled to obtain a copy of the auditor's report as outlined above.

 

Shareholders who submit subscription requests or who ask to receive copies of the above documents during the period from the date of this Circular to the Effective Date will be provided with a copy of this Circular and the KIIDs of the Receiving Fund.

 

Action to be Taken

 

As a Shareholder of the Receiving Fund there are no actions required to be taken by you. 

 

In summary therefore, in order to implement the Merger, the following actions must be completed:-

 

·              the receipt of all necessary regulatory or other approvals and clearances;

 

·              the passing of the Resolutions by Shareholders of the Merging Fund to approve the Merger;

 

·              the implementation of the transfer of the assets and liabilities of the Merging Fund to the Receiving Fund; and

 

·              the issue of New Shares to Shareholders of the Merging Fund.

 

In the opinion of the Directors, the Merger is fair and reasonable and in the best interests of Shareholders as a whole. 

 

Yours faithfully

 

________________________

Director

for and on behalf of

Blackfriars Developing Markets Funds plc

 

 

This announcement has been issued through the Companies Announcement Service of

The Irish Stock Exchange

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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