Pre-Annual General Meeting Information • Apr 29, 2016
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you are recommended to seek immediately your own personal financial advice from your independent financial adviser, stockbroker, bank manager, solicitor, accountant, or from another appropriately qualified and duly authorised independent adviser.
If you have sold or transferred all your shares in BH Macro Limited, please send this document, together with the accompanying Tender Form(s) and Form(s) of Proxy, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. The Tender Form(s) and any accompanying documents should not, however, be forwarded or transmitted in or into the United States, Canada, Australia or Japan.
J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Tender Offer and the contents of this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of J.P. Morgan Cazenove or for providing advice in relation to the Tender Offer and the contents of this document or any matter referred to herein. Nothing in this document shall serve to exclude or limit any responsibilities which J.P. Morgan Cazenove may have under FSMA or the regulatory regime established thereunder.
IF YOU DO NOT WISH TO TENDER ANY OF YOUR SHARES DO NOT COMPLETE OR RETURN A TENDER FORM OR SUBMIT A TTE INSTRUCTION IN CREST.
_________________________________________________________________________________
(an authorised closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registration number 46235)
__________________________________________________________________________
Notice of an Extraordinary General Meeting of the Company to be held at 2.00 p.m. on 24 May 2016 is set out at the end of this document. Shareholders are requested to return the Form(s) of Proxy accompanying this document for use at the Extraordinary General Meeting. To be valid, the Form(s) of Proxy must be completed and returned in accordance with the instructions printed thereon so as to be received by Computershare Investor Services (Guernsey) Ltd, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible and, in any event, not later than 2.00 p.m. on 20 May 2016. The Form(s) of Proxy may also be sent to Computershare Investor Services (Guernsey) Ltd either by fax at +44(0)370 703 6322 or by email at [email protected]. If you own more than one class of Shares, you will need to complete and return a Form of Proxy for the Extraordinary General Meeting in respect of each class of Shares that you own. PLEASE COMPLETE AND RETURN A FORM OF PROXY.
The Tender Offer will close at 5.00 p.m. on 20 May 2016 and will only be available to Eligible Shareholders on the Register at the close of business on the Record Date.
Eligible Shareholders who hold their Shares in certificated form and who wish to tender Shares for purchase by the Company under the Tender Offer should ensure that their completed Tender Forms are returned to the Receiving Agent by post to Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours only) to The Pavilions, Bridgwater Road, Bristol BS13 8AE, so as to be received by no later than 5.00 p.m. on 20 May 2016. Eligible Shareholders who hold their Shares in certificated form should also return their Share certificate(s) and/or other document(s) of title in respect of the Shares tendered.
Eligible Shareholders who hold Shares in uncertificated form (that is, in CREST) should not return the Tender Form and should arrange for the Shares tendered to be transferred into escrow as described in paragraph 4 of Part III of this document.
In light of the Tender Offer, the Company is suspending the ability for Shareholders to convert their Shares from one class to another in respect of the April and May 2016 share conversion dates. Conversions received in respect of the March 2016 share conversion date will be processed as normal. See Part III of this document for further details.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should inform their Dubai brokerage house or custodian that is a business partner in the Nasdaq Dubai CSD (the "Business Partner") so as to ensure that the relevant settlement instruction is submitted to the Receiving Agent by no later than 5.00 p.m. on 20 May 2016. Overseas Shareholders should also note the provisions of paragraph 11 of Part III of this document. In addition, such persons who wish to attend the Extraordinary General Meeting or to exercise the voting rights attached to interests in Shares held by them at the Extraordinary General Meeting should inform their Business Partner at least 10 full days before the Extraordinary General Meeting, after which they will receive an attendance ticket and proxy card.
The Tender Offer is not being made directly or indirectly in or into or by use of mails or by any means or instrumentality (including, without limitation, facsimile transmission, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange, of the United States, nor is it being made directly or indirectly in or into Canada, Australia or Japan and cannot be accepted by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan.
Your attention is drawn to the letter from the Chairman of BH Macro Limited which is set out in Part 1 of this document and which recommends that you vote in favour of the Resolution to be proposed at the Extraordinary General Meeting. Your attention is also drawn to the section entitled "Risk Factors" on page 7 of this document and "Action to be Taken" on page 16 of this document.
| Expected Timetable 4 |
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|---|---|
| Documents Accompanying this Circular5 | |
| Risk Factors 7 |
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| Part I - Letter from the Chairman8 |
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| 19 Part II - Letter from J.P. Morgan Cazenove |
|
| 23 Part III - Terms and Conditions |
|
| United Kingdom and Guernsey40 Part IV - Taxation in the |
|
| Part V - Additional Information 44 |
|
| Definitions47 |
| Latest time and date for receipt of Tender Forms |
5.00 p.m. on 20 May 2016 |
|---|---|
| Record Date for Tender Offer | the close of business on 20 May 2016 |
| Latest time and date for receipt of Forms of Proxy for the Extraordinary General Meeting |
2.00 p.m. on 20 May 2016 |
| Extraordinary General Meeting | 2.00 p.m. on 24 May 2016 |
| Results of Extraordinary General Meeting announced |
24 May 2016 |
| NAV Determination Date (being the date of the NAVs on which the Tender Prices are based) |
31 May 2016 |
| Results of Tender Offer announced | 3 June 2016 |
| Final Tender Price(s) for each class of Share and repurchase date for successfully tendered Shares announced |
Final week of June 2016 |
| Settlement through CREST of, and despatch of cheques for, the Tender Offer consideration, as appropriate |
by 8 July 2016 |
All references are to London time.
The dates set out in the expected timetable may be adjusted by J.P. Morgan Cazenove, with the consent of the Board, in which event details of the new dates will be notified to Shareholders via an announcement made by the Company through a Regulatory Information Service.
Accompanying this document is a Form of Proxy and a Tender Form for each class of Shares of the Company that you hold.
Complete and return the Form(s) of Proxy for the EGM to Computershare Investor Services (Guernsey) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible and by no later than 2.00 p.m. on 20 May 2016 and/or attend and vote at the EGM on 24 May 2016.
You should send (or, if you are a CREST sponsored member, procure that your CREST sponsor sends) a TTE Instruction to Euroclear, which must be properly authenticated in accordance with Euroclear's specification and which must contain, in addition to other information that is required for the TTE Instruction to settle in CREST, the following details:
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should inform their Business Partner so as to ensure that the relevant settlement instruction is submitted by the Business Partner to the Receiving Agent by no later than 5.00 p.m. on 20 May 2016. In addition, such persons who wish to attend the Extraordinary General Meeting or to exercise the voting rights attached to interests in Shares held by them at the Extraordinary General Meeting should inform their Business Partner at least 10 full days before the Extraordinary General Meeting, as appropriate, after which they will receive an attendance ticket and proxy card.
Full details of the action to be taken are set out in this document and in the instructions on the respective forms. YOU SHOULD READ THE WHOLE OF THIS DOCUMENT, WHICH CONTAINS THE MATERIAL TERMS OF THE TENDER OFFER, AND NOT JUST THIS SECTION WHEN DECIDING WHAT ACTION TO TAKE. The attention of Overseas Shareholders is drawn to the section headed ''Overseas Shareholders'' in paragraph 11 of Part III of this document.
If you have any queries in relation to your shareholding(s), please contact Computershare Investor Services PLC by telephone on 0370 707 4040 or, if calling from outside the UK, on +44 370 707 4040. Computershare Investor Services PLC can only provide information regarding the completion of forms and cannot provide you with advice on the Tender Offer or provide any personal, legal, financial or tax advice.
In considering whether to vote in favour of the Resolution and whether to tender Shares pursuant to the Tender Offer, Shareholders should have regard to the following risk factors. This list of risk factors is not exhaustive.
(an authorised closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registration number 46235)
Directors:
Registered office:
Ian Plenderleith (Chairman) Huw Evans Christopher Legge Colin Maltby Claire Whittet
PO Box 255 Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3QL
27 April 2016
Dear Shareholder,
This document provides details of the Tender Offer announced by the Company on 5 April 2016 to acquire up to 25 per cent. of the issued Shares of each class of the Company and the terms on which the Tender Prices payable under the Tender Offer will be determined.
The specific attention of Shareholders is drawn to the pricing structure for the Tender Offer, as described further below.
The Tender Offer requires the consent of Shareholders at the Extraordinary General Meeting, notice of which is included at the end of this document.
This document also provides details of how Eligible Shareholders can tender their Shares for purchase should they wish to do so.
In the period since the Company's launch to 31 March 2016, the three currency classes of Shares have recorded rises in NAV as follows: the NAV of the US Dollar Shares has risen 102.59 per cent., for the Euro Shares 104.72 per cent. and for the Sterling Shares 111.08 per cent. These figures are unaudited.
The mid-market share price for each class of Shares as at the close of business on the Latest Practicable Date was \$18.68 for the US Dollar Shares, €18.91 for the Euro Shares and £19.54 for the Sterling Shares.
The discount to the last published NAV at which the Shares were trading as at the close of business on the Latest Practicable Date was 7.9 per cent. for the US Dollar Shares, 7.7 per cent. for the Euro Shares and 7.6 per cent. for the Sterling Shares.
The average discount at which the Shares have traded in the past 12 months is 5.2 per cent. for the US Dollar Shares, 5.5 per cent. for the Euro Shares and 5.3 per cent. for the Sterling Shares (Source: Datastream).
| USD | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | - | - | 0.10 | 0.90 | 0.15 | 2.29 | 2.56 | 3.11 | 5.92 | 0.03 | 2.96 | 0.75 | 20.27 |
| 2008 | 9.89 | 6.70 | (2.79) | (2.48) | 0.77 | 2.75 | 1.13 | 0.75 | (3.13) | 2.76 | 3.75 | (0.68) | 20.32 |
| 2009 | 5.06 | 2.78 | 1.17 | 0.13 | 3.14 | (0.86) | 1.36 | 0.71 | 1.55 | 1.07 | 0.37 | 0.37 | 18.04 |
| 2010 | (0.27) | (1.50) | 0.04 | 1.45 | 0.32 | 1.38 | (2.01) | 1.21 | 1.50 | (0.33) | (0.33) | (0.49) | 0.91 |
| 2011 | 0.65 | 0.53 | 0.75 | 0.49 | 0.55 | (0.58) | 2.19 | 6.18 | 0.40 | (0.76) | 1.68 | (0.47) | 12.04 |
| 2012 | 0.90 | 0.25 | (0.40) | (0.43) | (1.77) | (2.23) | 2.36 | 1.02 | 1.99 | (0.36) | 0.92 | 1.66 | 3.86 |
| 2013 | 1.01 | 2.32 | 0.34 | 3.45 | (0.10) | (3.05) | (0.83) | (1.55) | 0.03 | (0.55) | 1.35 | 0.40 | 2.70 |
| 2014 | (1.36) | (1.10) | (0.40) | (0.81) | (0.08) | (0.06) | 0.85 | 0.01 | 3.96 | (1.73) | 1.00 | (0.05) | 0.11 |
| 2015 | 3.14 | (0.60) | 0.36 | (1.28) | 0.93 | (1.01) | 0.32 | (0.78) | (0.64) | (0.59) | 2.36 | (3.48) | (1.42) |
| 2016 | 0.71 | 0.73 | (1.77) | (0.35) | |||||||||
| EUR | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD |
| 2007 | - | - | 0.05 | 0.70 | |||||||||
| 2008 | 9.92 | ||||||||||||
| 2009 | 0.02 | 2.26 | 2.43 | 3.07 | 5.65 | (0.08) | 2.85 | 0.69 | 18.95 | ||||
| 6.68 | (2.62) | (2.34) | 0.86 | 2.84 | 1.28 | 0.98 | (3.30) | 2.79 | 3.91 | (0.45) | 21.65 | ||
| 5.38 | 2.67 | 1.32 | 0.14 | 3.12 | (0.82) | 1.33 | 0.71 | 1.48 | 1.05 | 0.35 | 0.40 | 18.36 | |
| 2010 2011 |
(0.30) 0.71 |
(1.52) 0.57 |
0.03 0.78 |
1.48 0.52 |
0.37 0.65 |
1.39 (0.49) |
(1.93) 2.31 |
1.25 6.29 |
1.38 0.42 |
(0.35) (0.69) |
(0.34) 1.80 |
(0.46) (0.54) |
0.93 12.84 |
| 2012 | 0.91 | 0.25 | (0.39) | (0.46) | (1.89) | (2.20) | 2.40 | 0.97 | 1.94 | (0.38) | 0.90 | 1.63 | 3.63 |
| 2013 | 0.97 | 2.38 | 0.31 | 3.34 | (0.10) | (2.98) | (0.82) | (1.55) | 0.01 | (0.53) | 1.34 | 0.37 | 2.62 |
| 2014 | (1.40) | (1.06) | (0.44) | (0.75) | (0.16) | (0.09) | 0.74 | 0.18 | 3.88 | (1.80) | 0.94 | (0.04) | (0.11) |
| GBP | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 | - | - | 0.11 | 0.83 | 0.17 | 2.28 | 2.55 | 3.26 | 5.92 | 0.04 | 3.08 | 0.89 | 20.67 |
| 2008 | 10.18 | 6.86 | (2.61) | (2.33) | 0.95 | 2.91 | 1.33 | 1.21 | (2.99) | 2.84 | 4.23 | (0.67) | 23.25 |
| 2009 | 5.19 | 2.86 | 1.18 | 0.05 | 3.03 | (0.90) | 1.36 | 0.66 | 1.55 | 1.02 | 0.40 | 0.40 | 18.00 |
| 2010 | (0.23) | (1.54) | 0.06 | 1.45 | 0.36 | 1.39 | (1.96) | 1.23 | 1.42 | (0.35) | (0.30) | (0.45) | 1.03 |
| 2011 | 0.66 | 0.52 | 0.78 | 0.51 | 0.59 | (0.56) | 2.22 | 6.24 | 0.39 | (0.73) | 1.71 | (0.46) | 12.34 |
| 2012 | 0.90 | 0.27 | (0.37) | (0.41) | (1.80) | (2.19) | 2.38 | 1.01 | 1.95 | (0.35) | 0.94 | 1.66 | 3.94 |
| 2013 | 1.03 | 2.43 | 0.40 | 3.42 | (0.08) | (2.95) | (0.80) | (1.51) | 0.06 | (0.55) | 1.36 | 0.41 | 3.09 |
| 2014 | (1.35) | (1.10) | (0.34) | (0.91) | (0.18) | (0.09) | 0.82 | 0.04 | 4.29 | (1.70) | 0.96 | (0.04) | 0.26 |
| 2015 | 3.26 | (0.58) | 0.38 | (1.20) | 0.97 | (0.93) | 0.37 | (0.74) | (0.63) | (0.49) | 2.27 | (3.39) | (0.86) |
| 2016 | 0.60 | 0.70 | (1.78) | (0.50) |
0.38 0.78 (1.56) (0.42)
Source: BH Macro Limited's NAV data is provided by its Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited. Data calculations made by Brevan Howard Capital Management LP ("BHCM"); performance data is unaudited and shown net of all fees and expenses as at 31 March 2016.
The Company's investment strategy has proven successful since its launch, as illustrated by the figures above. Since its inception, the Company has a track record of preserving Shareholders' capital and achieving a positive return, uncorrelated with other markets and with low volatility.
The Manager remains confident in the ability of the Master Fund and its investment strategies to deliver future growth for the Company and Shareholders and remains strongly committed to supporting the Company as a listed feeder fund into the Master Fund.
The principal objectives of the Board in pursuing the Tender Offer are as follows:
The Board estimates that the Company's present liquidation value would be in the range of 95 to 96 per cent. of its current NAV which is, largely, influenced by the fact that the Company's management agreement with the Manager would terminate upon the liquidation of the Company. Upon such termination the Company will be required to pay to the Manager an amount equal to the aggregate management fee which would have been payable to the Manager in the 24 months following the date of the Company giving notice to the Manager of a winding-up resolution having been passed by Shareholders (such amount being calculated by reference to the prevailing NAV of the Company immediately prior to the termination of the agreement) together with any accrued performance fee in respect of the current calculation period.
The Tender Price Increments have been set taking account of both the Company's probable liquidation value and the approximate discounts to net asset value at which the Shares have traded in the past 12 months.
The Tender Price Increments have also been calculated to ensure that continuing Shareholders are not unduly prejudiced should they choose not to participate in the Tender Offer whilst taking into account a reasonable estimate of the costs of implementing the Tender Offer. The Board believes that continuing Shareholders should receive an uplift in NAV following completion of the Tender Offer.
The purpose of this letter is to set out the detailed terms of the Tender Offer and to seek Shareholders' authority to implement the Tender Offer. The Resolution to be proposed at the Extraordinary General Meeting to effect the Tender Offer is a special resolution, which requires not less than three-quarters of the votes cast on the Resolution by those Shareholders attending in person or by proxy to be in favour. If Shareholders fail to pass the Resolution by the requisite majority, the Tender Offer will not be completed.
The Tender Offer is subject to certain conditions set out in paragraph 2 of Part III of this document. In addition, the Tender Offer may be suspended or terminated in certain circumstances, as set out in paragraphs 2 and 10 of Part III of this document.
The Board has arranged for the Tender Offer to be made for 25 per cent. of each class of the Company's issued share capital to enable those Eligible Shareholders who wish to realise their Shares in the Company to do so at a price which is close to the discounts to Net Asset Value at which the Shares have traded in the past 12 months, whilst ensuring that continuing Shareholders who do not wish to tender their Shares are not disadvantaged.
Eligible Shareholders may tender any number of their holdings of each class of Shares in the Tender Offer but the extent to which an application is successful or scaled back will depend on the number of Shares tendered at each Tender Price Increment, as described below.
The maximum number of Shares of each class to be acquired under the Tender Offer will be 7,812,223 Sterling Shares, 861,331 Euro Shares and 3,805,094 US Dollar Shares, representing 25 per cent. of each class of Shares in issue as at the Latest Practicable Date (the "Available Shares").
Eligible Shareholders wishing to tender their Shares in the Tender Offer can choose to tender their Shares for repurchase at one or more incremental Tender Prices (the "Tender Price Increments").
Eligible Shareholders will not be permitted to tender the same Shares at multiple Tender Price Increments but will be permitted to split their Shares and tender separate blocks of Shares at multiple Tender Price Increments.
Eligible Shareholders will not be able to tender any Shares in excess of their total shareholding as at the Record Date (their "Eligible Shares") and J.P. Morgan Cazenove will not accept any tenders in respect of Shares that are in excess of each Eligible Shareholder's Eligible Shares.
If any Eligible Shareholder tenders Shares in excess of its Eligible Shares J.P. Morgan Cazenove will only fulfil such a request up to the maximum number of that Eligible Shareholder's Eligible Shares. J.P. Morgan Cazenove will accept such tenders, in accordance with the process detailed below, taking the Shares offered at the lowest Tender Price Increment first until such time as tenders have been accepted in respect of all of the Eligible Shareholder's Eligible Shares.
The lowest Tender Price Increment represents a discount of eight per cent. to the Net Asset Value per Share of each class on the NAV Determination Date (the "Base Tender Price").
The highest Tender Price represents a discount of four per cent. to the Net Asset Value per Share of each class on the NAV Determination Date (the "Maximum Tender Price").
Between the Base Tender Price Increment and the Maximum Tender Price, the Tender Price Increments increase in three steps, at a discount to the relevant NAV of seven per cent., six per cent. and five per cent. respectively.
Successful tenders will be determined as follows:
The information set out in the example below is for illustrative purposes only and does not constitute a forecast or any representation or warranty as to the effects of the Tender Offer on Shareholders.
Assumptions:
| Eligible Shareholder | |||||||
|---|---|---|---|---|---|---|---|
| Tender Price Increment |
A | B | C | D | E | Total per band |
Cumulative Total |
| Base Tender Price (eight per cent.) |
25 | - | 25 | - | - | 50 | 50 |
| Seven per cent. |
25 | 25 | - | 10 | - | 60 | 110 |
| Six per cent. | 15 | 10 | - | 10 | - | 35 | 145 |
| Five per cent. |
15 | - | - | 5 | 25 | 45 | 190 |
| Maximum Tender Price (four per cent.) |
20 | - | - | - | - | 20 | 210 |
| Total number of Shares tendered by each Eligible Shareholder |
100 | 35 | 25 | 25 | 25 | - | - |
The above example would result in the following:
Accordingly, the final position would be as follows:
Basic Entitlements will be calculated by reference to registered shareholdings. No guarantee can be given that allocations will be made other than by reference to registered shareholdings, in particular in circumstances where Shares held by nominee Shareholders are tendered at multiple Tender Price Increments.
The Tender Offer is being made by J.P. Morgan Cazenove. J.P. Morgan Cazenove will, as principal, purchase the Shares tendered by means of on-market purchases and, following the completion of all those purchases, sell them to the Company.
All Shares acquired by the Company from J.P. Morgan Cazenove will be cancelled save to the extent that such Shares can be held in treasury in accordance with applicable laws and regulations. The repurchase of Shares by the Company (and related costs) will be funded from cash resources generated by the realisation of part of the Company's investment in the Master Fund.
It should be noted that the Tender Offer is being made in addition to the Company's existing discount management measures. These are the ability to make market purchases of Shares, the partial capital return and the obligation to propose class closure resolutions if, in any 12 month period ending on 31 December in each year, the average daily closing market price of the relevant class of Shares during such period is 10 per cent. or more below the average NAV per Share of the relevant class taken over the 12 monthly NAV calculation dates in that 12 month period. No partial capital return will be made this year. The Board is committed to continuing with market purchases of Shares to the extent it considers appropriate and the class closure procedure will remain in place.
Shareholders' attention is drawn to the letter from J.P. Morgan Cazenove in Part II of this document and to the details set out in Part III of this document which, together with the Tender Form, constitute the terms and conditions of the Tender Offer. Details of how to tender Shares can be found in paragraph 4 of Part III of this document.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should read the section entitled "Procedure for US Dollar Shares held through an account on Nasdaq Dubai" in Part III of this document. In addition, such persons who wish to attend the Extraordinary General Meeting or to exercise the voting rights attached to interests in Shares held by them at the Extraordinary General Meeting should inform their Business Partner at least 10 full days before the Extraordinary General Meeting, as appropriate, after which they will receive an attendance ticket and proxy card.
The Directors are making no recommendation to Eligible Shareholders as to whether they should tender Shares in the Tender Offer. Whether Eligible Shareholders decide to tender their Shares will depend, among other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders who are in any doubt as to the action they should take should consult an appropriate independent professional adviser.
In light of the Tender Offer, the Company is suspending the ability for Shareholders to convert their Shares from one class to another in respect of the April and May 2016 share conversion dates. Conversions received in respect of the March 2016 share conversion date will be processed as normal.
The Tender Offer is not available to certain Overseas Shareholders. The attention of Overseas Shareholders is drawn to paragraph 11 of Part III of this document.
Eligible Shareholders who sell Shares in the Tender Offer may, depending on their individual circumstances, incur a liability to taxation. The attention of Eligible Shareholders is drawn to Part IV of this document which sets out a general guide to certain aspects of current law and tax authority practice in respect of UK and Guernsey
taxation. Eligible Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United Kingdom or Guernsey should consult an appropriate professional adviser.
The implementation of the Tender Offer requires the approval of Shareholders. A notice convening an Extraordinary General Meeting of the Company, which is to be held at 2.00 p.m. on 24 May 2016, is set out at the end of this document. The quorum requirement for the Extraordinary General Meeting is not less than two Shareholders present in person or by proxy (or, in the case of a corporation, by a duly appointed representative).
The Resolution must be passed in order to enable the implementation of the Tender Offer.
The Resolution permits the Company to effect the Tender Offer so as to permit those Eligible Shareholders who wish to realise their investment (whether in whole or in part) to do so, subject to the terms of the Tender Offer and the extent to which Eligible Shareholders of each class tender their Shares.
You will find enclosed Form(s) of Proxy for use at the Extraordinary General Meeting. If you own more than one class of Shares, you will need to complete a Form of Proxy for the Extraordinary General Meeting in respect of each class of Shares that you own. Whether or not you intend to attend the Extraordinary General Meeting, you are urged to complete and return the Form(s) of Proxy as soon as possible. To be valid, the Form(s) of Proxy must be completed in accordance with the instructions printed thereon and lodged with Computershare Investor Services (Guernsey) Ltd, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY, as soon as possible, but in any event not later than 2.00 p.m. on 20 May 2016. Forms of Proxy may also be sent by fax to +44(0) 370 703 6322 or by email to [email protected].
The lodging of a Form of Proxy will not prevent you from attending the Extraordinary General Meeting and voting in person if you so wish. If you have any queries relating to the completion of the Form(s) of Proxy, please contact the Receiving Agent at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY. The Receiving Agent can only provide information regarding the completion of the Form(s) of Proxy and cannot provide you with advice on the Tender Offer or provide any personal, legal, financial, legal or tax advice.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai who wish to attend the Extraordinary General Meeting or to exercise the voting rights attached to interests in Shares held by them at the Extraordinary General Meeting should inform their Business Partner at least 10 full days before the Extraordinary General Meeting, as appropriate, after which they will receive an attendance ticket and proxy card.
Shareholders who wish to maintain their current shareholding in the Company should not complete or return a Tender Form or submit a TTE Instruction in CREST.
Only those Eligible Shareholders who wish to tender Shares and who hold their Shares in certificated form should complete and return a Tender Form. Those Eligible Shareholders who hold their Shares in uncertificated form do not need to complete or return a Tender Form.
Eligible Shareholders who wish to participate in the Tender Offer and hold their Shares in certificated form should complete the applicable Tender Form in accordance with the instructions set out therein and return the completed Tender Form to the Receiving Agent at Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to The Pavilions, Bridgwater Road, Bristol BS13 8AE, to arrive as soon as possible and by no later than 5.00 p.m. on 20 May 2016. There are different Tender Forms to use for each class of Shares being tendered, as stated on the front page of the Tender Forms. Please ensure that you use the correct Tender Form for the class of Shares you wish to tender.
Eligible Shareholders who wish to participate in the Tender Offer and hold their Shares in certificated form should also return their Share certificate(s) and/or other document(s) of title in respect of the Shares tendered with their Tender Form.
Eligible Shareholders who wish to tender Shares and hold their Shares in uncertificated form (that is, in CREST) should arrange for the relevant Shares to be transferred to escrow by means of a TTE Instruction as described in paragraph 4.2 of Part III of this document.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should inform their Business Partner so as to ensure that the relevant settlement instruction is submitted by the Business Partner to the Receiving Agent by no later than 5.00 p.m. on 20 May 2016.
None of the Directors will be taking part in the Tender Offer.
The Board, which has been advised by J.P. Morgan Cazenove, considers that the Tender Offer is in the best interests of Shareholders as a whole.
Accordingly, the Board unanimously recommends Shareholders to vote in favour of the Resolution to be proposed at the Extraordinary General Meeting.
The Board makes no recommendation to Eligible Shareholders as to whether or not they should tender their Shares in the Tender Offer. Whether or not Eligible Shareholders decide to tender their Shares will depend, among other factors, on their view of the Company's prospects and their own individual circumstances, including their tax position.
You are requested to complete and return the enclosed Form(s) of Proxy without delay, whether or not you intend to attend the Extraordinary General Meeting.
Yours faithfully
25 Bank Street Canary Wharf London E14 5JP
27 April 2016
To Shareholders of BH Macro Limited
Dear Sir or Madam,
As explained in the letter from your Chairman in Part I of this document, Eligible Shareholders are being given the opportunity to tender some or all of their Shares for purchase in the Tender Offer. The purpose of this letter is to set out the principal terms and conditions of the Tender Offer.
J.P. Morgan Cazenove hereby invites Eligible Shareholders to tender Shares for purchase by J.P. Morgan Cazenove for cash at the applicable Tender Prices determined in accordance with the terms of the Tender Offer.
Eligible Shareholders may choose to tender their Shares for repurchase at one or more Tender Price Increments, starting with the Base Tender Price and rising up to the Maximum Tender Price. The Base Tender Price represents a discount of eight per cent. to the Net Asset Value per Share of each class on the NAV Determination Date and the Maximum Tender Price represents a discount of four per cent. to the Net Asset Value per Share of each class on the NAV Determination Date. Eligible Shareholders will not be able to tender any Shares in excess of their Eligible Shares and J.P. Morgan Cazenove will not accept any tenders in respect of Shares that are in excess of each Eligible Shareholder's Eligible Shares.
Successful tenders will be determined as follows:
To the extent that the Company does not receive valid tenders for all Available Shares at the Base Tender Price, the same process (as set out above) will be followed in respect of tenders made at the next highest Tender Price Increment.
This process will be repeated at each subsequent higher Tender Price Increment until the point at which tenders have been satisfied in respect of all Available Shares or the Maximum Tender Price has been reached.
Eligible Shareholders should note, therefore, that the Company is unable to guarantee that tenders in respect of an Eligible Shareholder's Basic Entitlement will be satisfied in whole or in part unless they are made at the Base Tender Price.
The Tender Offer is being made on the terms and subject to the conditions set out in Part III of this document.
The Tender Offer will be implemented only if the requisite approval of Shareholders is obtained in respect of the Resolution to be proposed at the Extraordinary General Meeting.
J.P. Morgan Cazenove, which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Tender Offer and the contents of this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of J.P. Morgan Cazenove or for providing advice in relation to the Tender Offer and the contents of this document or any matter referred to herein. Nothing in this paragraph shall serve to exclude or limit any responsibilities which J.P. Morgan Cazenove may have under FSMA or the regulatory regime established thereunder.
The Company has agreed to purchase the Shares purchased by J.P. Morgan Cazenove under the Tender Offer for the Tender Price pursuant to the Repurchase Agreement.
Eligible Shareholders who wish to tender Shares and hold their Shares in certificated form should complete the applicable Tender Form for the relevant class in accordance with the instructions set out therein and return the completed Tender Form to the Receiving Agent at Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to The Pavilions, Bridgwater Road, Bristol BS13 8AE, so as to be received as soon as possible and, in any event, not later than 5.00 p.m. on 20 May 2016. Eligible Shareholders should at the same time return the Share certificate(s) and/or other document(s) of title in respect of any Shares tendered which are in certificated form.
Eligible Shareholders who wish to tender Shares and who hold their Shares in uncertificated form (that is, in CREST) should arrange for their Shares to be transferred into escrow as described in paragraph 4.2 of Part III of this document.
Only those Eligible Shareholders who hold their Shares in certificated form should complete and return a Tender Form. Those Eligible Shareholders who hold their Shares in uncertificated form do not need to complete or return a Tender Form.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should inform their Business Partner so as to ensure that the relevant settlement instruction is submitted by the Business Partner to the Receiving Agent by no later than 5.00 p.m. on 20 May 2016. See Part III of this document for further details.
Further details of the procedure for tendering are set out in paragraph 4 of Part III of this document and, in the case of certificated Shares, in the Tender Form.
Tender Forms or TTE Instructions which are received by the Receiving Agent after 5.00 p.m. on the Closing Date or which at that time are incorrectly completed or not accompanied by all relevant documents or instructions may be rejected and, if relevant, returned to Eligible Shareholders or their appointed agent, together with any accompanying share certificate(s) and/or other document(s) of title.
J.P. Morgan Cazenove reserves the right to treat as valid Tender Forms or TTE Instructions which are not entirely in order and, in the case of Tender Forms, which are not accompanied by the relevant Share certificate(s) and/or other document(s) of title or a satisfactory indemnity in lieu thereof.
The making of the Tender Offer to persons outside the United Kingdom may be prohibited or affected by the relevant laws of the overseas jurisdiction. Shareholders with registered or mailing addresses outside the United Kingdom or who are citizens or nationals of, or resident in, a jurisdiction other than the United Kingdom should read paragraph 11 of Part III of this document.
The Tender Offer is conditional on the passing of the Resolution set out in the notice of Extraordinary General Meeting at the end of this document on 24 May 2016 or such later date as the Company and J.P. Morgan Cazenove may determine. The Tender Offer is also conditional on the other matters described in paragraph 2.1 of Part III of this document.
If, in the Board's opinion, it is impractical or inappropriate, as a result of market conditions, to dispose of investments held by the Company or otherwise to raise finance to enable it to fund the repurchase of each of the Shares as are to be repurchased by it pursuant to the Repurchase Agreement without materially harming the interests of Shareholders as a whole or if the completion of the Tender Offer would have unexpected adverse fiscal consequences for the Company or its Shareholders, closing of the Tender Offer may be terminated or deferred by up to 10 Business Days. If the closing of the Tender Offer is deferred to a subsequent date and such circumstances continue to exist at that subsequent date, the Tender Offer will lapse on that date as described in paragraph 2 of Part III of this document.
Subject to the Tender Offer becoming unconditional, payment of the Tender Price due to Eligible Shareholders whose tenders under the Tender Offer have been accepted will be made (by cheque or payment through CREST, as appropriate) by 8 July 2016 or as soon as practicable thereafter, as described in paragraph 5 of Part III of this document.
Your attention is drawn to the information contained in the rest of this document, including, in particular, the terms and conditions of the Tender Offer in Part III of this document.
Yours faithfully,
William H. Simmonds Managing Director Corporate Finance
(b) The Company, the Directors and J.P. Morgan Cazenove being satisfied that the Company has in its control or to its order the aggregate of the Tender Price for all successfully tendered Shares and the Company having paid the same into an account or accounts in accordance with the Repurchase Agreement;
(c) J.P. Morgan Cazenove being satisfied that the Company will, immediately following repurchase of all successfully tendered Shares, satisfy the solvency test prescribed by The Companies (Guernsey) Law 2008, as amended; and
J.P. Morgan Cazenove will not purchase any Shares pursuant to the Tender Offer unless the Conditions have been satisfied in full. The Conditions, other than 2.1(b), may not be waived by J.P. Morgan Cazenove. If the Conditions are not satisfied prior to the close of business on 8 July 2016, the Company may postpone the completion of the Tender Offer for up to 10 Business Days, after which time the Tender Offer, if not then completed, will lapse.
2.2 If the Company (acting through the Directors) shall at any time prior to J.P. Morgan Cazenove effecting the purchase as principal of the tendered Shares pursuant to the Tender Offer notify J.P. Morgan Cazenove in writing that in its reasonable opinion either: (i) it has become impractical or inappropriate for the Company to redeem its investment in the Master Fund or otherwise to raise finance to enable it to fund the repurchase of such of the Shares as are to be repurchased by it pursuant to the Repurchase Agreement without materially harming the interests of Shareholders as a whole; or (ii) the completion of the purchase of Shares under the Tender Offer would have unexpected adverse fiscal consequences (whether by reason of a change in legislation or practice or otherwise) for the Company or its Shareholders if the Tender Offer were to proceed, the Company may either exercise its powers to terminate the Tender Offer in accordance with paragraph 10 of this Part III or may postpone the NAV Determination Date or the completion of the Tender Offer for up to 10 Business Days, after which the Tender Offer, if not then completed by reason of the postponement circumstances continuing, will lapse.
The Tender Price for each class of Shares will be calculated as follows:
| Base Tender Price for each Share | An eight per cent. discount to the NAV |
|---|---|
| class. | per Share for the relevant class. |
| Second Tender Price Increment for | A seven per cent. discount to the NAV |
| each Share class. | per Share for the relevant class. |
| Third Tender Price Increment for each | A six per cent. discount to the NAV per |
| Share class. | Share for the relevant class. |
| Fourth Tender Price Increment for |
A five per cent. discount to the NAV per |
each Share class. Share for the relevant class.
Maximum Tender Price for each Share class. A four per cent. discount to the NAV per Share for the relevant class.
If you hold Shares in certificated form, you may only tender such Shares by completing and returning the Tender Form for the relevant class of Shares in accordance with the procedure set out in paragraph 4.1 below. Additional Tender Forms are available from the Receiving Agent by telephone on 0370 707 4040 or, if calling from outside the UK, on +44 370 707 4040.
If you hold Shares in uncertificated form (that is, in CREST), you may only tender such Shares by TTE Instruction in accordance with the procedure set out in paragraph 4.2 below and, if those Shares are held under different account IDs, you should send a separate TTE Instruction for each Member Account ID.
If you are in any doubt as to how to complete the Tender Form or as to the procedure for tendering Shares, please contact the Receiving Agent by telephone on 0370 707 4040 or, if calling from outside the UK, on +44 370 707 4040. Please note that calls will be monitored or recorded. The Receiving Agent will not provide advice on the Tender Offer or provide any personal, legal, financial or tax advice. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.
To tender your Shares held in certificated form you must complete, sign and have witnessed the Tender Form for the relevant class of Shares.
The completed, signed and witnessed Tender Form should be sent either by post in the accompanying reply-paid envelope (for use in the UK only) along with the relevant share certificate(s) and/or other document(s) of title or by hand (during normal business hours only) to the Receiving Agent at Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to The Pavilions, Bridgwater Road, Bristol BS13 8AE, as soon as possible and, in any event, so as to be received by no later than 5.00 p.m. on 20 May 2016. J.P. Morgan Cazenove shall be entitled (in its sole discretion) to accept late Tender Forms. No acknowledgement of receipt of documents will be given.
The completed and signed Tender Form should be accompanied by the relevant Share certificate(s) and/or other document(s) of title.
If your Share certificate(s) and/or other document(s) of title are not readily available (for example, if they are with your stockbroker, bank or other agent) or are lost, the Tender Form should nevertheless be completed, signed and returned as described above so as to be received by the Receiving Agent at Computershare Investor Services PLC, Corporate Actions Projects, Bristol BS99 6AH or by hand (during normal business hours) to The Pavilions, Bridgwater Road, Bristol BS13 8AE, not later than 5.00 p.m. on 20 May 2016 together with any share certificate(s) and/or document(s) of title you may have available, accompanied by a letter of explanation stating that the (remaining) Share certificate(s) and/or other document(s) of title will be forwarded as soon as possible thereafter and, in any event, not later than 5.00 p.m. on 20 May 2016. The Receiving Agent will effect such procedures as are required to transfer your Shares to J.P. Morgan Cazenove under the Tender Offer. If you have lost your Share certificate(s) and/or other document(s) of title, you should write to the Registrar at Computershare Investor Services (Guernsey) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY to request a letter of indemnity in respect of the lost Share certificate(s) which, when completed in accordance with the instructions given, should be returned to the Receiving Agent so as to be received not later than 5.00 p.m. on 20 May 2016.
By signing the Tender Form, Eligible Shareholders will be deemed to have instructed J.P. Morgan Cazenove to issue a contract note to the Receiving Agent on behalf of such Eligible Shareholder and to remit the cash consideration to the Receiving Agent with instructions that such consideration be remitted in accordance with the instructions set out in the Tender Form.
If the Shares which you wish to tender are held in uncertificated form, you should take (or procure to be taken) the action set out below to transfer (by means of a TTE Instruction) the number of Shares which you wish to tender under the Tender Offer to an escrow balance, specifying Computershare Investor Services PLC (in its capacity as a CREST receiving agent under its Participant ID and Member Account ID referred to below) as the escrow agent, as soon as possible and, in any event, so that the transfer to the relevant escrow account settles by not later than 5.00 p.m. on 20 May 2016. J.P. Morgan Cazenove shall be entitled (in its sole discretion) to accept late transfers to escrow.
If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action. Your CREST sponsor will be able to confirm details of your Participant ID and the Member Account ID under which your Shares are held. In addition, only your CREST sponsor will be able to send a TTE Instruction to Euroclear in relation to the Shares which you wish to tender. You should send (or, if you are a CREST sponsored member, procure that your CREST sponsor sends) a TTE Instruction to Euroclear, which must be properly authenticated in accordance with Euroclear's specification and which must contain, in addition to other information that is required for the TTE Instruction to settle in CREST, the following details:
After settlement of the TTE Instruction, you will not be able to access the Shares concerned in CREST for any transaction or for charging purposes, notwithstanding that they will be held by the Receiving Agent as your agent until completion or lapsing of the Tender Offer. If the Tender Offer becomes unconditional, the Receiving Agent will transfer the Shares which are accepted for purchase to J.P. Morgan Cazenove.
You are recommended to refer to the CREST manual published by Euroclear for further information on the CREST procedures outlined above.
You should note that Euroclear does not make available special procedures, in CREST, for any particular corporate action. Normal system timings and limitations will therefore apply in connection with a TTE Instruction and its settlement. You should therefore ensure that all necessary action is taken by you (or by your CREST sponsor) to enable a TTE Instruction relating to your Shares to settle prior to 5.00 p.m. on 20 May 2016. In this regard, you are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. J.P. Morgan Cazenove shall be entitled (in its sole discretion) to accept late TTE Instructions to settle.
An appropriate announcement will be made if any of the details contained in this paragraph 4.2 are altered.
Notwithstanding the powers in paragraph 12 below, J.P. Morgan Cazenove reserves the right to treat as valid only: (i) (in the case of Shares held in certificated form) Tender Forms which are accompanied by the relevant Share certificate(s) and/or other document(s) of title or a satisfactory indemnity in lieu thereof; or (ii) (in the case of Shares held in uncertificated form) settled TTE Instructions, in each case to be received entirely in order by no later than 5.00 p.m. on 20 May 2016 in respect of the entire number of Shares tendered. The Record Date for the Tender Offer is close of business on 20 May 2016.
Notwithstanding the completion of a valid Tender Form or TTE Instruction, the Tender Offer may be suspended, terminated or lapse in accordance with the Terms and Conditions set out in this Part III.
J.P. Morgan Cazenove shall be entitled to accept Tender Forms or TTE Instructions which are received after 5.00 p.m. on 20 May 2016 in its sole discretion. The decision of J.P. Morgan Cazenove as to which Shares have been validly tendered shall be conclusive and binding on all Eligible Shareholders.
Normal CREST procedures (including timings) apply in relation to any Shares that are, or are to be, converted from uncertificated to certificated form, or from certificated to uncertificated form, during the course of the Tender Offer (whether such conversion arises as a result of a transfer of Shares or otherwise). Shareholders who are proposing to convert any such Shares are recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring Shares as a result of the conversion to take all necessary steps in connection with such person's participation in the Tender Offer (in particular, as regards delivery of Share certificate(s) and/or other document(s) of title or transfers to an escrow balance as described above) prior to 5.00 p.m. on 20 May 2016.
Eligible Shareholders who own US Dollar Shares through an account on Nasdaq Dubai and who wish to participate in the Tender Offer should inform their Business Partner of the number of Shares they wish to have repurchased under the Tender Offer. The Business Partner will then provide the relevant settlement instruction to Nasdaq Dubai CSD which in turn will provide instructions to Computershare Company Nominees Limited (as UK custodian). Computershare Company Nominees Limited, acting as instructed by Nasdaq Dubai CSD, will accept the Tender Offer in respect of the appropriate number of Shares via a TTE Instruction. Such persons should, therefore, ensure that they have contacted their Business Partners in sufficient time for all relevant actions to have been completed prior to closing of the Tender Offer at 5.00 p.m. on 20 May 2016. Eligible Shareholders will be unable to deal in Shares so tendered, as dealing in such interests will be blocked pending purchase of the Shares under the Tender Offer and will be released if the Shares are not repurchased.
If you are in any doubt as to how to complete the Tender Form or as to the procedure for tendering Shares, please contact the Receiving Agent by telephone on 0370 707 4040 or, from outside the UK, +44 370 707 4040. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.
Eligible Shareholders should note that, once tendered, Shares may not be sold, transferred, charged or otherwise disposed of.
Settlement of the consideration to which any Eligible Shareholder is entitled pursuant to valid tenders accepted by J.P. Morgan Cazenove is expected to be made on, or as soon as practicable, after 8 July 2016 as follows:
5.6 The payment of any consideration for Shares pursuant to the Tender Offer will be made only after the relevant TTE Instruction has settled or (as the case may be) timely receipt by the Receiving Agent of certificates and/or other requisite documents evidencing such Shares, a properly completed and duly executed Tender Form and any other documents required under the Tender Offer.
5.7 Payments of consideration will be made in the same currency as the class of Shares being acquired by the Company. Entitlements to a fraction of a penny or cent will be rounded down to the nearest whole penny or cent, as appropriate.
certificate(s) and/or other document(s) relating to such Shares, for registration within six months of the Tender Offer becoming unconditional and to do all such other acts and things as may in the opinion of such Attorney be necessary or expedient for the purpose of, or in connection with, the Tender Offer and to vest in J.P. Morgan Cazenove or its nominee(s) or such other person(s) as J.P. Morgan Cazenove may direct such Shares;
specified in the Tender Form will constitute a complete discharge by J.P. Morgan Cazenove of its obligation to make such payment to such Eligible Shareholder.
6.2 A reference in this paragraph 6 to an Eligible Shareholder includes a reference to the person or persons executing the Tender Form and, in the event of more than one person executing a Tender Form, the provisions of this paragraph 6 will apply to them jointly and to each of them.
(c) the input of the TTE Instruction will, subject to the Tender Offer becoming unconditional, constitute the irrevocable appointment of the Receiving Agent as the Eligible Shareholder's attorney and/or agent (the ''Attorney'') and an irrevocable instruction and authority to the Attorney (i) subject to the Tender Offer becoming unconditional, to transfer to itself by means of CREST and then to transfer to J.P. Morgan Cazenove (or to such person or persons as J.P. Morgan Cazenove may direct) by means of CREST all of the Relevant Shares (as defined below) in respect of which the Tender Offer is accepted or deemed to be accepted (but not exceeding the number of Shares which have been tendered pursuant to the Tender Offer); and (ii) if the Tender Offer does not become unconditional and lapses, or there are Shares which have not been successfully tendered under the Tender Offer, to give instructions to Euroclear, as promptly as practicable after the lapsing of the Tender Offer, to transfer the Relevant Shares to the original accounts from which those Shares came. For the purposes of this paragraph 7.1, ''Relevant Shares'' means Shares in uncertificated form and in respect of which a transfer or transfers to escrow has or have been effected pursuant to the procedures described in this paragraph 7.1(c);
(d) such Eligible Shareholder will ratify and confirm each and every act or thing which may be done or effected by J.P. Morgan Cazenove or the Receiving Agent or any of their respective directors or any person nominated by J.P. Morgan Cazenove or the Receiving Agent in the proper exercise of its or his or her powers and/or authorities hereunder;
8.1 Each person holding US Dollar Shares through an account on Nasdaq Dubai and by whom, or on whose behalf, a tender is made irrevocably undertakes, represents, warrants and agrees to and with J.P. Morgan Cazenove (for itself and as trustee for the Company) (so as to bind him, his personal representatives, heirs, successors and assigns) that:
the Tender Offer may be made to such Overseas Shareholder under the laws of the relevant jurisdiction;
Cazenove agreeing to process his tender, such Eligible Shareholder will not revoke his tender or withdraw his, her or its Shares without the prior written consent of the Company. Eligible Shareholders should note that, once tendered, Shares may not be sold, transferred, charged or otherwise disposed of.
10.1 If the Company (acting through the Directors) shall at any time prior to J.P. Morgan Cazenove effecting the purchase as principal of the tendered Shares pursuant to the Tender Offer (and including where it has previously deferred the NAV Determination Date in accordance with paragraph 2.2 of this Part III) notify J.P. Morgan Cazenove in writing that in its reasonable opinion either: (i) it has either become impractical or inappropriate for the Company to redeem its investments or otherwise to raise finance to enable it to fund the repurchase of Shares pursuant to the Repurchase Agreement without materially harming Shareholders as a whole; or (ii) the completion of the purchase of Shares under the Tender Offer would have unexpected adverse fiscal or other consequences (whether by reason of a change in legislation or practice or otherwise) for the Company or its Shareholders if the Tender Offer were to proceed, the Company shall be entitled at its complete discretion to terminate the Tender Offer by a public announcement and a subsequent written notice to Shareholders, in which event the Tender Offer shall terminate immediately or as otherwise specified in such announcement.
mails or any such means, instrumentality or facility in connection with the Tender Offer, and doing so will render invalid any purported acceptance of the Tender Offer. Persons wishing to accept the Tender Offer should not use such mails or any such means, instrumentality or facility for any purpose directly or indirectly relating to acceptance of the Tender Offer. Envelopes containing Tender Forms should not be postmarked in the United States, Canada, Australia or Japan or otherwise dispatched from the United States, Canada, Australia or Japan and all accepting Shareholders must provide addresses outside the United States, Canada, Australia or Japan for the remittance of cash or return of Tender Forms and Share certificate(s) or other document(s) of title.
12.2 None of J.P. Morgan Cazenove, the Receiving Agent, the Registrar or the Company will accept responsibility for documentation lost or delayed in the postal system.
12.3 The latest time for receipt of valid documentation under the Tender Offer is 5.00 p.m. on 20 May 2016. Any documentation received by the Receiving Agent which is either incomplete, incorrect or received after 5.00 p.m. on 20 May 2016 will (unless the Receiving Agent, J.P. Morgan Cazenove and the Company, in their absolute discretion determine otherwise) be returned without any transaction taking place.
The following discussion does not constitute tax advice, it is intended as a general guide to certain United Kingdom and Guernsey tax considerations and does not purport to be a complete analysis of all potential United Kingdom and Guernsey tax consequences of selling Shares pursuant to the Tender Offer. It is based on current United Kingdom and Guernsey legislation and tax authority published practice, which are subject to change at any time (possibly with retroactive effect). It is of a general nature and (unless otherwise stated) only applies to certain Eligible Shareholders who are resident for tax purposes in (and only in) the United Kingdom (although the discussion of certain Guernsey tax considerations applies to Eligible Shareholders who are resident for tax purposes in or outside Guernsey), who hold their Shares as an investment and who are the absolute beneficial owners of the Shares. It does not address the position of certain categories of Eligible Shareholders who are subject to special rules, such as dealers in securities, insurance companies and collective investment schemes.
Eligible Shareholders who are in any doubt as to the potential tax consequences of selling their Shares pursuant to the Tender Offer or who may be subject to tax in a jurisdiction other than the United Kingdom or Guernsey are strongly recommended to consult their own independent tax advisers before making any such sales.
Having regard to advice received, the Company does not consider any class of its shares to be a "mutual fund" for the purposes of section 356 of the Taxation (International and Other Provisions) Act 2010 and therefore the special regime for the taxation of interests in offshore funds in Part 8 of that Act should not apply.
The sale of Shares by an Eligible Shareholder to J.P. Morgan Cazenove pursuant to the Tender Offer should be treated as a disposal of those shares for United Kingdom tax purposes. This may, subject to the Eligible Shareholder's individual circumstances and any available exemption or relief, give rise to a chargeable gain (or allowable loss) for the purposes of United Kingdom taxation of chargeable gains ("CGT").
For an Eligible Shareholder who is an individual, the amount of CGT payable, if any, as a consequence of the sale of Shares will depend on their own personal tax position. Broadly, an Eligible Shareholder whose total taxable gains and income in a given tax year of assessment, including any gains made on the sale of Shares ("Total Taxable Gains and Income"), are less than or equal to the upper limit of the income tax basic rate band applicable in respect of that tax year (the "Band Limit") will normally be subject to CGT at the basic rate in respect of any gain arising on the sale of their Shares. An Eligible Shareholder whose Total Taxable Gains and Income are more than the Band Limit will normally be subject to CGT at the basic rate in respect of any gain arising on the sale of their Shares (to the extent that, when added to the Eligible Shareholder's other taxable gains and income, the gain is less than or equal to the Band Limit) and at the higher rate in respect of the remainder of the gain arising on the sale of their Shares.
As announced in the Budget 2016, and as provided for in the current Finance Bill, it is expected that legislation will be introduced in the Finance Act 2016 to reduce: (i) the basic rate of CGT from 18 per cent. to 10 per cent.; and (ii) the higher rate of CGT from 28 per cent. to 20 per cent., in each case with effect from 6 April 2016.
However, no tax will be payable on any gain arising on the sale of Shares if the amount of the chargeable gain realised by an Eligible Shareholder in respect of the sale, when aggregated with other chargeable gains realised by that Eligible Shareholder in the tax year of assessment (and after taking into account aggregate losses), does not exceed the annual exemption (£11,100 for 2016/2017).
A corporate Shareholder is normally taxable on all of its chargeable gains, subject to any reliefs and exemptions. Corporate Shareholders should be entitled to indexation allowance up to the date the chargeable gain is realised.
Under the provisions of Part 15 of the Corporation Tax Act 2010 (for companies subject to corporation tax) and Chapter 1 of Part 13 of the Income Tax Act 2007 (for individuals and others subject to income tax), HMRC can in certain circumstances counteract tax advantages arising in relation to a transaction or transactions in securities. If these provisions were to be applied by HMRC to the Tender Offer, Eligible Shareholders who are subject to corporation tax might be liable to corporation tax or income tax (as applicable) as if they had received an income amount rather than a capital amount.
In summary, these provisions do not apply where it can be shown, in the case of any corporation tax advantage, that the transaction or transactions in question were entered into for genuine commercial reasons and none of the transactions involved as one of their main objects the obtaining of any corporation tax advantage and, in the case of any income tax advantage, inter alia, that the person did not become a party to any of the transactions with one of the main purposes of obtaining an income tax advantage.
No application has been made to HMRC for clearance in respect of the application of Part 15 of the Corporation Tax Act 2010 or Chapter 1 of Part 13 of the Income Tax 2007 to the Tender Offer.
Whether or not these provisions would apply to any Eligible Shareholder will depend on that Eligible Shareholder's own circumstances, but the Company would not expect these provisions to apply to any Eligible Shareholder in respect of the Tender Offer.
Eligible Shareholders who are not resident in the United Kingdom for tax purposes will not generally be subject to United Kingdom taxation on chargeable gains in respect of any disposal of their Shares unless they hold their Shares for the purposes of a trade, profession or vocation carried on by them through a branch, agency or permanent establishment in the United Kingdom or for the purposes of such a branch, agency or permanent establishment. Individual Shareholders may later become liable to United Kingdom capital gains tax in respect of any gain made on the disposal of their Shares in the Tender Offer if they become resident in the United Kingdom for tax purposes at some point during the tax year in which the sale occurs or if they resume United Kingdom residence after a period of temporary non-residence.
The sale of Shares by an Eligible Shareholder to J.P. Morgan Cazenove pursuant to the Tender Offer should not give rise to any Guernsey income tax.
The Company could be subject to the application of FATCA. FATCA generally imposes a reporting regime and potentially a 30 per cent. withholding tax with respect to certain US source income (including dividends and interest) and, from 1 January 2019, gross proceeds from the sale or other disposal of property that can produce US source interest or dividends and (from the later of 1 January 2019 or the date of publication of certain final regulations) a portion of non-US source payments from certain non-US financial institutions to the extent attributable to US source payments if it does not comply with certain registration and due diligence obligations under FATCA ("Withholdable Payments"). As a general matter, the rules are designed to require US persons' direct and indirect ownership of non-US accounts and non-US entities to be reported to the US Internal Revenue Service (the "Service"). The 30 per cent. withholding tax regime applies if there is a failure to provide required information regarding US ownership.
Generally, the rules subject all Withholdable Payments received by the Company to 30 per cent. withholding tax (including the share that is allocable to non-US persons) unless the Company complies with information reporting rules implemented pursuant to an intergovernmental agreement between Guernsey and the United States or the Company enters into an agreement with the Service to provide information, representations and waivers of non-US law as may be required to comply with the provisions of the rules, including, information regarding its direct and indirect US accountholders.
FATCA IS PARTICULARLY COMPLEX. EACH ELIGIBLE SHAREHOLDER SHOULD CONSULT ITS OWN TAX ADVISER TO OBTAIN A MORE DETAILED EXPLANATION OF FATCA AND THE OTHER SIMILAR LEGISLATION REFERRED TO BELOW AND HOW THIS LEGISLATION MIGHT AFFECT EACH ELIGIBLE SHAREHOLDER IN ITS PARTICULAR CIRCUMSTANCE.
On 13 December 2013 the Chief Minister of Guernsey signed an intergovernmental agreement with the US ("US-Guernsey IGA") regarding the implementation of FATCA, under which certain disclosure requirements may be imposed in respect of certain Eligible Shareholders who are, or are entities that are controlled by one or more natural persons who are, residents or citizens of the US, subject to any applicable exemption. Where applicable, information that will need to be disclosed will include certain information about Eligible Shareholders, their ultimate beneficial owners and/or controllers, and their investment in and returns from the Shares, including any sale of Shares. The US-Guernsey IGA is implemented through Guernsey's domestic legislation, in accordance with guidance which is currently published in draft form.
Under the terms of the US-Guernsey IGA, Guernsey resident financial institutions that comply with the requirements of Guernsey's domestic legislation to report certain information to the Guernsey tax authorities will be treated as compliant with FATCA and, as a result, should not be subject to FATCA withholding on payments they receive and should not be required to withhold under FATCA on payments they make. The US-
Guernsey IGA is implemented through Guernsey's domestic legislation in accordance with guidance that is published in draft form.
Under the US-Guernsey IGA, securities that are "regularly traded" on an established securities market, such as the main market of the London Stock Exchange, are not considered financial accounts and are not subject to reporting. For these purposes, the Shares will be considered "regularly traded" if there is a meaningful volume of trading with respect to the Shares on an ongoing basis. Notwithstanding the foregoing, since 1 January 2016, a Share will not be considered "regularly traded" and will be considered a financial account if the holder of the Shares is not a financial institution acting as an intermediary. Such holders will be required to provide information to the Company to allow the Company to satisfy its obligations under FATCA, although it is expected that whilst the Shares are in held within CREST, the holder of the Shares will be a financial institution acting as an intermediary.
On 13 February 2014, the Organization for Economic Co-operation and Development released a "Common Reporting Standard" ("CRS") designed to create a global standard for the automatic exchange of financial account information, similar to the information to be reported under FATCA. On 29 October 2014, fifty-one jurisdictions signed a multilateral competent authority agreement ("Multilateral Agreement") that activates this automatic exchange of FATCA-like information in line with the CRS. Since then, further jurisdictions have also signed the Multilateral Agreement and in total over 90 jurisdictions have committed to adopting the CRS.
Early adopters who signed the Multilateral Agreement (including Guernsey and the UK) have pledged to work towards the first information exchanges taking place by September 2017. Others are expected to follow with information exchange starting in 2018.
Under the CRS and legislation enacted in Guernsey to implement the CRS with effect from 1 January 2016, certain disclosure requirements will be imposed in respect of certain investors in the Company who are, or are entities that are controlled by one or more natural persons who are, residents of any of the jurisdictions that have also implemented the CRS, unless a relevant exemption applies. Where applicable, information that would need to be disclosed will include certain information about Eligible Shareholders, their ultimate beneficial owners and/or controllers, and their investment in and returns from the Shares, including any sale of Shares. The CRS is implemented through Guernsey's domestic legislation in accordance with guidance that is published in draft form that is supplemented by guidance issued by the Organization for Economic Co-operation and Development.
Under the CRS, there is no reporting exemption for securities that are "regularly traded" on an established securities market.
All Shareholders should consult with their own tax advisers regarding the possible implications of FATCA, the CRS and any other similar legislation and/or regulations on their investment in the Company.
| Director | Total Shares Held |
|---|---|
| Huw Evans | 710 Sterling Shares |
Euro Shares:
| Shareholder | Total Shares Held | % holding in class | |||
|---|---|---|---|---|---|
| Nordea Bank A.S. |
Danmark | 1,124,235 | 29.58 |
| Shareholder | Total Shares Held | % holding in class |
|---|---|---|
| State Street Nominees Limited |
322,505 | 8.49 |
| Lynchwood Nominees Limited |
214,813 | 5.65 |
| Aurora Nominees Limited | 134,750 | 3.55 |
| Vidacos Nominees Limited |
134,409 | 3.54 |
| Smith & Williamson Nominees Limited |
123,690 | 3.25 |
| Goodbody Stockbrokers Nominees Limited |
119,975 | 3.16 |
| Luna Nominees Limited | 109,332 | 2.88 |
| Nutraco Nominees Limited |
100,000 | 2.63 |
| The Bank of New York (Nominees) Limited |
84,990 | 2.24 |
| Shareholder | Total Shares Held | % holding in class |
|---|---|---|
| Luna Nominees Limited | 5,931,374 | 17.13 |
| Chase Nominees Limited | 3,215,969 | 9.29 |
| Nutraco Nominees Limited |
2,525,074 | 7.29 |
| Rathbone Nominees Limited |
1,051,894 | 3.04 |
| The Bank of New York (Nominees) Limited |
1,038,018 | 3.00 |
| Ferlim Nominees Limited | 852,328 | 2.46 |
| BNY (OCS) Nominees Limited |
849,422 | 2.45 |
| Nortrust Nominees Limited |
568,085 | 1.64 |
| HSBC Global Custody Nominee (UK) Limited |
533,801 | 1.54 |
| Shareholder | Total Shares Held | % holding in class | |
|---|---|---|---|
| Brooks Nominees Limited |
Macdonald | 521,093 | 1.51 |
US Dollar Shares:
| Shareholder | Total Shares Held | % holding in class |
|---|---|---|
| Chase Nominees Limited | 3,906,114 | 23.37 |
| Nortrust Nominees Limited |
2,702,656 | 16.17 |
| Vidacos Nominees Limited |
1,409,200 | 8.43 |
| Morstan Nominees Limited |
1,171,373 | 7.01 |
| J.P. Morgan Clearing Corporation |
914,256 | 5.47 |
| Luna Nominees Limited | 826,944 | 4.95 |
| The Bank of New York (Nominees) Limited |
527,072 | 3.15 |
| Lynchwood Nominees Limited |
463,788 | 2.77 |
| Hero Nominees Limited | 399,764 | 2.39 |
| Vestra Nominees Limited | 260,823 | 1.56 |
| "Available Shares" | has the meaning given to such term in Part I of this document |
|---|---|
| "Base Tender Price" | has the meaning given to such term in Part I of this document |
| "Basic Entitlement" | has the meaning given to such term in Part I of this document |
| "Board" or "Directors" | the board of directors of the Company |
| "Business Day" | any day other than a Saturday, Sunday or public holiday in England and Wales or Guernsey |
| "Business Partner" | a Dubai brokerage house or custodian that is a business partner in the Nasdaq Dubai CSD |
| "Closing Date" | 20 May 2016 |
| "Company" | BH Macro Limited |
| "Court" | The High Court of Justice in England and Wales |
| "CREST" | the relevant system (as defined in the Regulations) in respect of which Euroclear is the Operator (as defined in the Regulations) |
| "CREST member" | a person who has been admitted by Euroclear as a system-member (as defined in the Regulations) |
| "CREST participant" | the relevant system (as defined in the Regulations) in respect of which Euroclear is the Operator (as defined in the Regulations) |
| "CREST sponsor" | a CREST participant admitted to CREST as a CREST sponsor being a sponsoring system participant (as defined in the Regulations) |
| "CREST sponsored member" |
a CREST member admitted to CREST as a sponsored member |
| "CSD" | Central Securities Depositary |
| "Eligible Shareholder" | a Shareholder who is eligible to participate in the Tender Offer (which excludes certain Overseas Shareholders as detailed in Parts I, II or III of this document) |
| "Eligible Shares" | in respect of any Shareholder, their total shareholding as at the Record Date |
| "Euro" or "€" or "EUR" | the lawful single currency shared by the majority of the |
member states of the European Union
nominee or trustee for a citizen, national or resident of a jurisdiction outside the United Kingdom
"Tender Offer" the invitation by J.P. Morgan Cazenove to Eligible Shareholders (other than certain Overseas Shareholders) to tender Shares on the terms and subject to the conditions set out in this document
"Tender Price" the price(s) at which Shares of the relevant class will be purchased pursuant to the Tender Offer as determined in accordance with the terms and conditions of the Tender Offer
(an authorised closed-ended collective investment scheme established as a company with limited liability under the laws of Guernsey with registration number 46235)
NOTICE is hereby given that an Extraordinary General Meeting of BH Macro Limited (the "Company") will be held at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St Peter Port, Guernsey on 24 May 2016 at 2.00 p.m. to consider and, if thought fit, to pass the following resolution which will be proposed as a special resolution as set out below:
By order of the Board Registered Office
PO Box 255 Trafalgar Court, Les Banques St Peter Port, Guernsey, GY1 3QL Channel Islands
Dated 27 April 2016
Notes:
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