17 October 2016
("UIL" or the "Company")
Update re further investment in Somers Limited and closing of the Placing Programme
On 18 May 2016, the Company published a circular (the "Circular") containing proposals in relation to the purchase by the Company of 2.45 million shares in Somers Limited, a financial services company which is listed on the Bermuda Stock Exchange, from Permanent Investments Limited (the "Proposed Investment"). The Company announced on 14 July 2016 that two of the conditions to Completion under the Sale and Purchase Agreement had been satisfied and that Completion would be dependent upon satisfaction of the remaining conditions (which had to occur by not later than 31 December 2016, being the long-stop date for Completion under the Sale and Purchase Agreement).
The Company announces today that although the final condition has now been satisfied, the Board has decided not to proceed with the Proposed Investment in light of changes in market conditions over the last five months and that Permanent Investments Limited has consented to the Proposed Investment not proceeding.
As set out in the Circular, the principal rationale for the Proposed Investment was to provide increased ZDP Cover for the ZDP Shares in light of the 2016 ZDP Share Rollover Offer and placing of 2020 ZDP Shares and 2022 ZDP Shares under the Placing Programme, details of which were set out in the Prospectus also published on 18 May 2016. The Circular stated that, based on UIL's NAV per Ordinary Share and Somers' share price and net asset value at that time, the acquisition would have led to pro forma dilution of 3.2% although the benefits of the Proposed Investment were expected to outweigh the initial pro forma dilution in UIL's NAV per Ordinary Share.
Since that time, UIL's NAV per Ordinary Share has increased from 203.55p to 334.25p, an increase of 64%. As a result, following the 2016 ZDP Share Rollover Offer and placing of 2020 ZDP Shares and 2022 ZDP Shares under the Placing Programme, the ZDP Cover for the ZDP Shares has also increased significantly from the levels disclosed in the Prospectus published on 18 May 2016. In light of such material changes, since the Proposed Investment would still lead to dilution in the Company's NAV per Ordinary Share, the Board believes that it would be in Shareholders' best interests if the Proposed Investment did not proceed. To that end UIL approached Permanent Investments Limited who confirmed that it consented to the Proposed Investment not proceeding.
The Company also announces today that, following the issue of 50 million 2022 ZDP Shares pursuant to the 2016 ZDP Share Rollover Offer and Initial Placing and 14 million 2020 ZDP Shares pursuant to the Placing Programme, the Placing Programme has now been closed.
Terms used and not defined in this announcement have the meaning set out in the Circular.
For further information please contact:
ICM Investment Management Limited
Charles Jillings 01372 271486
Stockdale Securities Limited
Alastair Moreton/Rose Ramsden 0207 601 6118
This information is provided by RNS