Foresight 4 VCT PLC : Tender Offer

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Foresight 4 VCT plc

21 July 2017

Tender Offer      

The Company has today posted to shareholders of the Company a tender offer document (Tender Offer Document) in respect of a tender offer to purchase ordinary shares of 1p each in the capital of the Company (Shares) having an aggregate value of up to £5 million (Tender Offer). Terms used in this announcement shall have the same meaning as in the Tender Offer Document.

Introduction

Shareholders of both the Company and Foresight 3 VCT plc (Foresight 3) voted overwhelmingly in favour of merging the two companies, with the merger being completed on 22 June 2017 (Merger). As a result, the special dividend of 4.0p per Share, which was conditional on the Merger becoming effective, was paid on 17 July 2017 to all Shareholders of the enlarged entity on the register on 30 June 2017. Having completed the Merger and paid the special dividend, the Company now has net assets of over £72 million.

The Board is now positioning the Company to take advantage of its increased size, cost efficiencies and other strategic benefits. The Company is currently seeking to raise funds under the Offer to further increase its net assets and be able to take up the investment opportunities being seen by Foresight. Shareholders will also recall that the Board set out in the Merger circular its intention to make available a tender offer post Merger for up to £5 million. The Board is delighted to be writing today to Shareholders to make this opportunity available.

The Tender Offer

The Tender Offer is being made to all Shareholders (other than certain Overseas Shareholders). Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in the Tender Offer Document and on the Tender Form which has been sent to Shareholders who hold their Shares in certificated form.

The Tender Offer involves the following:

•      The Tender Offer is being made to Shareholders (other than certain Overseas Shareholders) for up to a number of Shares (rounded down to the nearest whole number of Shares) equal in value, in aggregate, to £5 million at the Tender Price.

•       The Tender Price will be an amount equal to 92.5% of the latest published NAV per Share as at the date of the purchase (ie a 7.5% discount to NAV). The Board considers this to be an appropriate discount to take into account the costs of the Tender Offer and balance the interests of selling Shareholders and remaining Shareholders.

•       The number of Shares to which the Tender Offer will apply will be determined by dividing £5 million (being the total amount being made available to purchase Shares under the Tender Offer) by the Tender Price, and rounding the result down to the nearest whole number of Shares, subject to a maximum of 8.5 million Shares (representing 8.04% of the Company's issued share capital of 105, 712,831 Shares on 20 July 2017).

•       Each Shareholder will be entitled to have purchased from their holding at the Tender Price under the Tender Offer such percentage (Basic Entitlement Percentage) of their holding of Shares on the Record Date as is equal to the percentage which the total number of Shares to which the Tender Offer will apply bears to the total number of Shares in issue on the Record Date, rounded down to the nearest whole number of Shares (such entitlement being a Shareholder's Basic Entitlement). Shareholders may tender a higher or lower percentage of their holdings but tenders in excess of the Basic Entitlement will only be satisfied to the extent that other Shareholders tender less than their Basic Entitlement.

•       Shareholders (other than certain Overseas Shareholders) will be able to decide whether to continue their existing investment in the Company without tendering any Shares or to tender some or all of their Shares within the overall limit of the Tender Offer.

•       All Shares validly tendered by any Shareholder up to their Basic Entitlement (which represents such Shareholder's pro rata share of the total number of Shares to be acquired under the Tender Offer) will be accepted in full.

•       The Tender Form to be completed by Shareholders who hold their Shares in certificated form contains a box to enable those Shareholders who wish to tender their Basic Entitlement to do so. If you hold your Shares in certificated form and you tick this box, the Company's receiving agent, Computershare Investor Services Limited (Computershare) will calculate your Basic Entitlement on the Record Date. If you wish to tender a different number of Shares to your Basic Entitlement, insert such number of Shares in the alternate box provided on the Tender Form.

•       Shareholders who hold their Shares in uncertificated form (ie in CREST) and who wish to tender their Basic Entitlement should send a TTE instruction through CREST to the basic entitlement member account as set out in the Tender Offer Document. Computershare will calculate your Basic Entitlement on the Record Date and return any excess Shares. If you wish to tender a different number of Shares to your Basic Entitlement, you should send a TTE Instruction through CREST to the alternate member account specifying such number of Shares as set out in the Tender Offer Document.

•       If the aggregate value, at the Tender Price, of the number of Shares validly tendered equates to a value of £5 million or less, all such Shares will be accepted and purchased.

•       If the aggregate value, at the Tender Price, of the number of Shares validly tendered equates to more than £5 million, tenders will be accepted in the order set out below:

-      all Shares validly tendered by any Shareholder up to their Basic Entitlement will be accepted in full; and

-      all Shares validly tendered by Shareholders in excess of their Basic Entitlements will be satisfied in proportion to the number of Shares tendered by each Shareholder in excess of their Basic Entitlement so as to ensure that the aggregate price paid in respect of all Shares purchased under the Tender Offer does not exceed £5 million.

•       All successfully tendered Shares purchased and will be cancelled and will not rank for any future dividends.

•       Any rights of Shareholders who choose not to tender their Shares will be unaffected.

•       The Board is making no recommendation to Shareholders in relation to participating in the Tender Offer and Shareholders are recommended to take their own investment, financial andr tax advice.

The Tender Price (based on an unaudited NAV per Share of 68.9p, this being the latest published NAV per Share of 72.9p as at the Merger, but reduced by the recent special dividend of 4.0p) would be 63.7325p.

The Tender Price is at a discount to the NAV per Share. The Tender Offer is not, therefore, expected to have a dilutive effect on remaining Shareholders (assuming a successful take up). The Tender Offer will, however, have a dilutive effect on Shareholders to the extent that the costs are more than the 7.5% discount to NAV at which the actual number of Shares are purchased.

Shareholders who remain invested should be aware that the Tender Offer may (though unlikely) have the effect of increasing their percentage of the total share capital in the Company remaining in issue to a level above 3%, in which case they will be required to notify the Company under the Disclosure Guidance and Transparency Rules of the UK Listing Authority.

Taxation

The information below and contained in this document is a general guide only and is based on UK tax law as well as the practice of HMRC at the date of this document in relation to Shareholders who are individuals. Shareholders who are in any doubt as to their tax position, or who may be subject to tax in a jurisdiction other than the UK, should consult an appropriate professional adviser. These comments are not exhaustive and do not constitute legal or tax advice.

The purchase of Shares under the Tender Offer will be regarded as a disposal of such Shares.

The purchase of any Shares that have not been held for five years from the date of issue will be subject to clawback of any up-front income tax relief obtained on such Shares. In addition, any deferred capital gains on the original subscription of the Shares will become chargeable to capital gains tax.

There could be an income tax charge for Shareholders on any excess of the Tender Price above the original issue price paid for the Shares. Shareholders who do not qualify for VCT tax reliefs may also be subject to a capital gains tax charge by the amount that the original issue price exceeds the price paid.

The disposal of shares in a VCT within six months before or after a subscription for new shares in the same VCT will result in the amount of the investment in the new shares to which VCT tax reliefs are available being reduced by an amount equal to the proceeds received on disposal.

The timing of the purchase of Shares under the Tender Offer has been set after the expiry of the five year holding period required to maintain up-front income tax relief in respect of Shares issued pursuant to the 2012 Enhanced Buyback Scheme and Shares issued pursuant to the Merger which are originally derived from the Foresight 3 2012 Enhanced Buyback Scheme. Shareholders who participated in the 2012 Enhanced Buyback Scheme or the Foresight 3 2012 Enhanced Buyback Scheme should, therefore be able to participate without prejudicing the up-front income tax relief obtained. The Board will consider making further tender offers available in which Shares who participated in the 2013 Enhanced Buyback Scheme can participate.

Shareholders who may have participated in the Foresight 3 Top-Up Offer or the 2013 Enhanced Buyback Scheme, or who have applied, or intend to apply, under the Offer or have acquired Shares in the Company and/or Foresight 3 at different times, will need to carefully consider the implications of participating in the Tender Offer.

Further details relating to the taxation implications of participating in the Tender Offer are set out in the Tender Offer Document

Overseas Shareholders

Shareholders with registered or mailing addresses outside the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than the UK, should read the Tender Offer Document and the relevant provisions of the Tender Form. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to complete and return a Tender Form.

Expected Timetable

If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by an announcement through the Regulatory Information Service of the London Stock Exchange.

Further Information

A copy of the Tender Offer Document has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

Additional copies of these documents are available on the following website (www.foresightgroup.eu) and may be also obtained on request from the Company's registered office at:

c/o Foresight Group LLP
The Shard
32 London Bridge Street
London
SE1 9SG

Enquiries:

Gary Fraser
Foresight Group LLP
Tel: 020 667 8100