29th Nov 2006 07:02
Elderstreet VCT PLC29 November 2006 Not for release, distribution or publication, in whole or in part, in or intothe United States, Canada, Australia or Japan 29 November 2006 Merger by way of recommended offer by Elderstreet VCT plc ("Elderstreet") for Elderstreet Millennium Venture Capital Trust plc ("Millennium") Summary The boards of Elderstreet and Millennium announce that Millennium andElderstreet have reached agreement on the terms of a merger by way of arecommended offer to be made by Elderstreet for the entire issued ordinary sharecapital of Millennium. •The Offer will be all-share and, in addition, a special dividend will be paid (tax-free to Qualifying Shareholders), subject to the Offer becoming or being declared wholly unconditional. The Offer is being made on the basis of 381 New Elderstreet Shares for every 1,000 Millennium Shares. The Special Dividend will be payable in cash on the basis of 22.5p per Millennium Share. •The table below sets out the approximate value of the Offer (per share and for the whole of the current issued ordinary share capital of Millennium), when combined with the Special Dividend and based on the closing price of 55.0p per Elderstreet Share on 28 November 2006: Offer price Special Offer value per Total Offer per Millennium Dividend per Millennium value (incl. Share Millennium Share (incl. Special Share Special Dividend) Dividend) Offer value 21.0p 22.5p 43.5p £7.0m •The Merger will create an enlarged VCT with enhanced diversification and achieve estimated cost savings of approximately £200,000 per annum. Total annual running costs are expected to be less than 3.2 per cent. of the Enlarged Group's Net Assets. •Millennium Shareholders who receive New Elderstreet Shares under the Offer should not lose any entitlements to VCT tax relief as a result of the Merger. •If the Merger does not proceed, shareholders in Millennium could potentially remain invested in a small VCT with higher overheads (and no fee cap) and limited prospects for growth. •If Millennium becomes a subsidiary of Elderstreet and its stock exchange listing is cancelled, it will lose its VCT status and certain shareholders who do not accept the Offer may lose the tax reliefs obtained and thereby incur substantial tax liabilities. •The Millennium Directors, who have been so advised by PKF (UK) LLP, consider the terms of the Offer, when combined with the Special Dividend, to be fair and reasonable and intend to recommend that Millennium Shareholders accept the Offer. This summary should be read in conjunction with the full text of thisannouncement. Enquiries: Elderstreet Investment Management Limited (investment manager of Elderstreet andMillennium)Tel: 020 7831 5088Barnaby TerryWilliam Horlick Smith & Williamson (financial adviser to Elderstreet)Tel: 020 7131 4000Dr A BasirovDavid Jones PKF (UK) LLP (financial adviser to Millennium)Tel: 020 7065 0316Stephen Bayfield This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer will be made solely by the OfferDocument and the Form of Acceptance, which will contain the full terms andconditions of the Offer, including details of how the Offer may be accepted. Smith & Williamson Corporate Finance Limited, which is authorised and regulatedin the United Kingdom by the Financial Services Authority, is acting exclusivelyfor Elderstreet VCT plc and no one else in connection with the Offer and willnot be responsible to anyone other than Elderstreet VCT plc for providing theprotections afforded to customers of Smith & Williamson Corporate FinanceLimited nor for providing advice in relation to the Offer or any other matterreferred to herein. PKF (UK) LLP, which is regulated by the Institute of Chartered Accountants inEngland and Wales, is acting exclusively for Elderstreet Millennium VentureCapital Trust plc and no one else in connection with the Offer and will not beresponsible to anyone other than Elderstreet Millennium Venture Capital Trustplc for providing the protections afforded to customers of PKF (UK) LLP nor forproviding advice in relation to the Offer or any other matter referred toherein. The Offer will not be made, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan and the Offer Document and the Form ofAcceptance will not be, and should not be, mailed or otherwise distributed orsent in or into the United States, Canada, Australia or Japan or any otherjurisdiction if, in the latter case, to do so would constitute a violation ofthe relevant laws in such jurisdiction. The New Elderstreet Shares have not been, and will not be, registered under theUnited States Securities Act of 1933 (as amended) or under any relevantsecurities laws of any state or jurisdiction of the United States, Canada,Australia or Japan and no regulatory clearances in respect of the NewElderstreet Shares have been, or will be, applied for in any jurisdiction.Accordingly, unless an exemption under the United States Securities Act of 1933(as amended) or other relevant securities laws is applicable, the NewElderstreet Shares will not be, and may not be, offered, sold, resold, deliveredor distributed, directly or indirectly, in or into the United States, Canada,Australia or Japan or to, or for the account or benefit of, any United Statesperson or person resident in Canada, Australia or Japan. Certain terms used in this summary are defined in Appendix III to thisannouncement. Not for release, distribution or publication, in whole or in part, in or intothe United States, Canada, Australia or Japan 29 November 2006 Merger by way of recommended offer by Elderstreet VCT plc ("Elderstreet") for Elderstreet Millennium Venture Capital Trust plc ("Millennium") 1. Introduction The boards of Elderstreet and Millennium announce that Millennium andElderstreet have reached agreement on the terms of a merger by way of arecommended offer to be made by Elderstreet for the entire issued ordinary sharecapital of Millennium. 2. The Offer and the Special Dividend The Offer, which will be made on the terms and subject to the conditions set outbelow and in Appendix I to this announcement, and to be set out in the OfferDocument and in the Form of Acceptance, will be made on the following basis: for every 1,000 Millennium Shares 381 New Elderstreet Shares In addition, a special dividend will be paid, subject to the Offer becoming orbeing declared wholly unconditional, on the following basis: per each Millennium Share 22.5p in cash (tax free to Qualifying Shareholders) The Special Dividend will be paid by Millennium to all Millennium Shareholderson the register of members at the close of business on the day on which theOffer becomes or is declared wholly unconditional. In the absence of the Offerbeing made and becoming unconditional in all respects, the Millennium Directorswould not have felt able to recommend or pay the Special Dividend due to theadverse impact on the cash resources of Millennium as a stand-alone entity. The table below sets out the approximate value of the Offer (per share and forthe whole of the current issued ordinary share capital of Millennium), whencombined with the Special Dividend and based on the closing price of 55.0p perElderstreet Share on 28 November 2006: Offer price Special Offer value per Total Offer per Millennium Dividend per Millennium value (incl. Share Millennium Share (incl. Special Share Special Dividend) Dividend) Offer value 21.0p 22.5p 43.5p £7.0m The Offer will extend to all Millennium Shares unconditionally allotted orissued on the date the Offer is made and any further Millennium Sharesunconditionally allotted or issued while the Offer remains open for acceptance.Assuming Elderstreet acquires all the Millennium Shares under the Offer,existing Millennium Shareholders would receive up to 6,149,829 New ElderstreetShares representing approximately 26.8 per cent. of the increased share capitalof the Enlarged Group. The Millennium Shares to be acquired by Elderstreet pursuant to the Offer willbe acquired fully paid and free from all liens, equities, charges, encumbrances,rights of pre-emption and other third party rights and interests of any naturewhatsoever and together with all rights now or hereafter attaching thereto,including the right to receive and retain all dividends and other distributions(if any) declared, paid or made on or after the date of this announcement otherthan the Special Dividend. 3. Irrevocable undertakings to accept the Offer and interests in Millennium Shares Elderstreet has received irrevocable undertakings from the Millennium Directorsto accept, or procure the acceptance of, the Offer in respect of their interestsin Millennium Shares, amounting in total to 278,000 Millennium Shares(representing approximately 1.7 per cent. of the currently issued share capitalof Millennium). The undertakings remain binding even in the event that a higheroffer for Millennium is announced and will cease to be binding only if the Offerlapses or is withdrawn. The Millennium Directors who have given irrevocable undertakings to accept, orprocure the acceptance, of the Offer in respect of their interests in MillenniumShares, are: Michael Stoddart (in respect of 140,000 Millennium Shares); HughAldous (in respect of 10,000 Millennium Shares); Philip Ling (in respect of100,000 Millennium Shares); Christopher Kay (in respect of 18,000 MillenniumShares); and John Young (in respect of 10,000 Millennium Shares). Nomineecompanies owned by Smith & Williamson Holdings Limited hold 89,000 MillenniumShares on behalf of discretionary fund management clients. 4. Background to and reasons for the Merger Since the time of their initial offers for subscription (1998 for Elderstreetand 1996 for Millennium), Elderstreet and Millennium have operated as separatelegal entities each with obligations under the Listing Rules and the Act. Theseobligations entail, inter alia, separate board and shareholder meetings, auditsand regulatory reporting requirements. The combined net assets of Elderstreetand Millennium are approximately £20.9 million (at 31 August 2006) and theboards of the two companies consider the cost and time involved in theadministration of the separately-listed entities to be out of proportion totheir size. Until a relatively recent change in UK tax legislation, a merger of Elderstreetand Millennium would have resulted in the loss of the tax advantaged status oftheir shares for Qualifying Investors. The VCT Merger Regulations, which becameeffective in September 2004, now allow for the merger of VCTs without the lossof their VCT status and as a result Millennium Shareholders who receive NewElderstreet Shares under the Offer should not lose any entitlements to VCT taxrelief as a result of the Merger. Currently, Elderstreet and Millennium have the same investment manager andadministrator and similar investment strategies. They also share a number ofcommon quoted and unquoted equity investments. The merger of the two entities,which is expected to involve the transfer of substantially all of the assets ofMillennium to Elderstreet, should enable cost savings and enhance administrativeefficiency and, due to their common features, should be achievable withoutincurring major costs arising from rearranging investment and administrativearrangements. The total recurring annualised savings in respect of corporate andadministrative costs expected to arise from the Merger are estimated to beapproximately £200,000. Moreover, the total annual running costs are expected tobe less than 3.2 per cent. of the Enlarged Group's Net Assets); currently, suchcosts (which, in Millennium's case, are uncapped) are estimated to amount toapproximately 3.9 per cent. of Millennium's Net Assets. In addition to the cost savings and enhancement of operational efficiency whichare expected to arise from the Merger, there are a number of further anticipatedbenefits, including the broadened range and diversity of the investmentportfolio of the Enlarged Group. A special cash dividend of 22.5p per Millennium Share will be paid to MillenniumShareholders (this dividend will be tax free to Qualifying Shareholders),subject to the Offer becoming or being declared wholly unconditional. In theabsence of the Offer being made and becoming unconditional in all respects,Millennium Directors would not have felt able to recommend or pay the SpecialDividend due to the adverse impact on the cash resources of Millennium as astand-alone entity. The level of the Offer has been determined by reference to an adjusted net assetvalue based on the net asset values of Elderstreet and Millennium as at 31August 2006. Millennium Shareholders will receive New Elderstreet Shares with anet asset value equal to the net asset value of their current holding ofMillennium Shares less: the Special Dividend; the estimated total expenses ofthe Merger of £295,000; and a discount of 7.5 per cent. In view of the size of Millennium in relation to Elderstreet and the number ofNew Elderstreet Shares to be issued in connection with the Merger, the Offerwill be subject to the approval of Elderstreet Shareholders and C Shareholderswhich will be sought at an extraordinary general meeting to be convened toconsider the appropriate resolutions further details of which will be set out inthe Prospectus to be sent to Elderstreet Shareholders. 5. Considerations for Millennium Shareholders The Millennium Board is unanimously recommending that Millennium Shareholdersaccept the Offer. In forming its view on the merits of the Offer, the MillenniumBoard has considered, inter alia, the following factors: •The Enlarged Group is expected to achieve estimated cost savings of approximately £200,000 per annum. The total annual running costs are expected to be less than 3.2 per cent. of the Enlarged Group's Net Assets; currently, such costs (which, in Millennium's case, are not subject to a cap) are estimated to amount to approximately 3.9 per cent. of Millennium's Net Assets. •Millennium Shareholders will receive the Special Dividend within 14 days of the Offer becoming or being declared wholly unconditional (this dividend will be exempt from income tax to Qualifying Shareholders and will be available to be paid primarily due to the increased size and liquidity of the Enlarged Group). •The Merger should create a more efficient VCT with enhanced diversification of investments. •As the payment of dividends is essentially dependent on the realisation of investments, the greater number of investments held by the Enlarged Group and the enlarged portfolio's wider spread over the investment cycle should increase the potential for a smoother flow of dividends. •Millennium's experienced investment management team will continue in place following the Merger with an unchanged investment policy. •Millennium Shareholders who receive New Elderstreet Shares under the Offer should not lose any entitlements to VCT tax relief as a result of the Merger. •If the Merger does not proceed, shareholders in Millennium could potentially remain invested in a small VCT with higher overheads (and, unlike Elderstreet, with no fee cap) and more limited prospects for growth. •If Millennium becomes a subsidiary of Elderstreet and its stock exchange listing is cancelled, it will lose its VCT status and certain shareholders who do not accept the Offer may lose the tax reliefs obtained and thereby incur substantial tax liabilities. 6. Recommendation The Millennium Directors, who have been so advised by PKF (UK) LLP, consider theterms of the Offer, when combined with the Special Dividend, to be fair andreasonable. Accordingly, the Millennium Directors unanimously recommendMillennium Shareholders to accept the Offer as they intend to do in respect oftheir own holdings of Millennium Shares which represent in aggregate 1.4 percent. of Millennium's issued share capital. 7. Information on Elderstreet Shares in Elderstreet, formerly named Elderstreet Downing VCT plc, wereinitially offered to the public in January 1998. Elderstreet raised £15.1million (after expenses) and its shares were admitted to trading on the OfficialList in May 1998. Since then Elderstreet has carried on the business of aninvestment company in accordance with VCT legislation. As at 31 August 2006, Elderstreet held investments in 24 companies with a totalvalue of £8.8 million and £3.2 million in fixed interest securities, cash andbank deposits. Elderstreet's unaudited net asset value as at 31 August 2006 was£12.1 million (70.4p per Elderstreet Share; 92.5p per C Share). Furtherinformation on Elderstreet will be set out in the Offer Document and Prospectus. 8. Information on Millennium Shares in Millennium, formerly named Gartmore Venture Capital Trust plc, wereinitially offered to the public in February 1996. Millennium raised £18.7million (after expenses) and its shares were admitted to trading on the OfficialList in April 1996. Since then Millennium has carried on the business of aninvestment company in accordance with VCT legislation. As at 31 August 2006, Millennium held investments in 18 companies with a totalvalue of £5.2 million and £3.5 million in fixed interest securities, cash andbank deposits. Millennium's unaudited net asset value as at 31 August 2006 was £8.8 million (54.4p per Millennium Share). Further information on Millennium willbe set out in the Offer Document and Prospectus. 9. Management and employees There are no employees of Millennium. It has been agreed that, if the Mergerbecomes effective, Hugh Aldous (currently a director of Millennium) will beappointed to the Elderstreet Board and that the other Millennium Directors willresign from the Millennium Board. Further details on the Elderstreet Board willbe set out in the Prospectus. 10. Inducement fee Millennium has agreed to pay a fee to Elderstreet of the lesser of £70,000 andan amount representing 1 per cent. of the value of the Offer plus the SpecialDividend in the event that: (a) a competing offer for Millennium is announced before the Offer lapses or iswithdrawn and such competing offer subsequently becomes or is declaredunconditional in all respects or is otherwise completed or implemented; or (b) the Millennium Board withdraws or adversely modifies its recommendation ofthe Offer. Further information on the inducement fee will be set out in the Prospectus. Noinducement fee will be payable to Elderstreet if the Offer becomes or isdeclared unconditional in all respects. 11. De-listing and compulsory acquisition If the Offer becomes or is declared wholly unconditional, and subject toapplicable requirements of the London Stock Exchange, Elderstreet intends toprocure the making of an application by Millennium to the UKLA for thecancellation of the listing of the Millennium Shares on the Official List and tothe London Stock Exchange for the cancellation of trading in Millennium Shareson its market for listed securities. It is anticipated that such cancellationwill take effect no earlier than 20 business days after the date on which theOffer becomes or is declared wholly unconditional. The cancellation of listingand trading would be expected to reduce significantly the liquidity andmarketability of any Millennium Shares in respect of which valid acceptances ofthe Offer are not received. In addition, the cancellation of listing would leadto the loss of Millennium's tax status as a VCT and the loss of VCT tax reliefsobtained by any remaining Millennium Shareholders who had not accepted theOffer. If sufficient acceptances under the Offer are received, and assuming all theother conditions of the Offer have been satisfied or waived, and the Offerbecomes or is declared wholly unconditional Elderstreet intends to exercise itsrights pursuant to the provisions of Schedule 2 to the Takeovers Directive(Interim Implementation) Regulations 2006 to acquire compulsorily the remainingMillennium Shares on the same terms as the Offer. It is further intended that, following the Offer becoming or being declaredwholly unconditional and following the cancellation of listing and tradingreferred to above, Millennium will be re-registered as a private company underthe relevant provisions of the Act. 12. Rule 8 of the City Code on Takeovers and Mergers Under the provisions of rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes, ''interested'' (directly or indirectly)in one per cent. or more of any class of ''relevant securities'' of Elderstreetor of Millennium, all ''dealings'' in any ''relevant securities'' of thatcompany (including by means of an option in respect of, or a derivativereferenced to, any such ''relevant securities'') must be publicly disclosed byno later than 3.30 p.m. (London time) on the London business day following thedate of the relevant transaction. This requirement will continue until the dateon which the Offer becomes, or is declared, unconditional as to acceptances,lapses or is otherwise withdrawn or on which the ''offer period'' otherwiseends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an ''interest'' in''relevant securities'' of Elderstreet or of Millennium, they will be deemed tobe a single person for the purpose of rule 8.3. Under the provisions of rule 8.1 of the Code, all ''dealings'' in ''relevantSecurities'' of the Company or of Millennium by Elderstreet or Millennium, or byany of their respective ''associates'', must be disclosed by no later than 12.00noon (London time) on the London business day following the date of the relevanttransaction. A disclosure table giving details of the companies in whose ''relevantsecurities'' ''dealings'' should be disclosed and the number of such securitiesin issue can be found on the Panel's website at www.thetakeoverpanel.org.uk. ''Interests in securities'' arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an ''interest'' byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a ''dealing'' under rule 8, you should consult the Panel. 13. General The conditions of the Offer are set out in Appendix I to this announcement.Sources of information and bases of calculation used in the announcement aregiven in Appendix II to this announcement. The definitions of certain terms usedin this announcement are contained in Appendix III to this announcement. Smith & Williamson, on behalf of Elderstreet, will despatch the Offer Document,setting out full details of the Offer as soon as practicable and in any eventwithin 28 days of the date of this announcement. This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer will be made solely by the Offer Document and the Form of Acceptance,which will contain the full terms and conditions of the Offer, including detailsof how the Offer may be accepted. The laws of the relevant jurisdictions may affect the availability of the Offerto persons not resident in the UK. Persons who are not resident in the UK, orwho are subject to the laws of any jurisdiction other than the UK, should informthemselves about, and observe, any applicable requirements. Further details inrelation to overseas shareholders will be contained in the Offer Document. The Offer will not be made, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan and the Offer Document and the Form ofAcceptance will not be, and should not be, mailed or otherwise distributed orsent in or into the United States, Canada, Australia or Japan or any otherjurisdiction if, in the latter case, to do so would constitute a violation ofthe relevant laws in such jurisdiction. The New Elderstreet Shares have not been, and will not be, registered under theUnited States Securities Act of 1933 (as amended) or under any relevantsecurities laws of any state or jurisdiction of the United States, Canada,Australia or Japan and no regulatory clearances in respect of the NewElderstreet Shares have been, or will be, applied for in any jurisdiction.Accordingly, unless an exemption under the United States Securities Act of 1933(as amended) or other relevant securities laws is applicable, the NewElderstreet Shares will not be, and may not be, offered, sold, resold, deliveredor distributed, directly or indirectly, in or into the United States, Canada,Australia or Japan or to, or for the account or benefit of, any United Statesperson or person resident in Canada, Australia or Japan. The Elderstreet Directors accept responsibility for the information contained inthis announcement other than that relating to the Millennium Group and theMillennium Directors and their connected persons and persons acting in concertwith, and associates of, Millennium. To the best of the knowledge and belief ofthe Elderstreet Directors (who have taken all reasonable care to ensure thatsuch is the case), the information contained in this announcement for which theyare responsible is in accordance with the facts and does not omit anythinglikely to affect the import of such information. The Millennium Directors accept responsibility for the information contained inthis announcement relating to the Millennium Group and the Millennium Directorsand their connected persons and persons acting in concert with, and associatesof, Millennium. To the best of the knowledge and belief of the MillenniumDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. Enquiries: Elderstreet Investment Management Limited (investment manager of Elderstreet andMillennium) Tel: 020 7831 5088Barnaby TerryWilliam Horlick Smith & Williamson (financial adviser to Elderstreet)Tel: 020 7131 4000Dr A BasirovDavid Jones PKF (UK) LLP (financial adviser to Millennium)Tel: 020 7065 0316Stephen Bayfield This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer will be made solely by the OfferDocument and the Form of Acceptance, which will contain the full terms andconditions of the Offer, including details of how the Offer may be accepted. Smith & Williamson Corporate Finance Limited, which is authorised and regulatedin the United Kingdom by the Financial Services Authority, is acting exclusivelyfor Elderstreet VCT plc and no one else in connection with the Offer and willnot be responsible to anyone other than Elderstreet VCT plc for providing theprotections afforded to customers of Smith & Williamson Corporate FinanceLimited nor for providing advice in relation to the Offer or any other matterreferred to herein. PKF (UK) LLP, which is regulated by the Institute of Chartered Accountants inEngland and Wales, is acting exclusively for Millennium and no one else inconnection with the Offer and will not be responsible to anyone other thanMillennium for providing the protections afforded to customers of PKF (UK) LLPnor for providing advice in relation to the Offer or any other matter referredto herein. APPENDIX I CONDITIONS OF THE OFFER The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted, withdrawn) bynot later than 1.00 p.m. (London time) on the first closing date of the Offer(or such later time(s) and/or date(s) as Elderstreet may, subject to the rulesof the Code, decide) in respect of not less than 90 per cent. (or such lowerpercentage as Elderstreet may decide) in nominal value of the Millennium Sharesto which the Offer relates and not less than 90 per cent. (or such lowerpercentage as Elderstreet may decide) of the voting rights carried by theMillennium Shares to which the Offer relates, provided that this condition willnot be satisfied unless Elderstreet and/or its wholly owned subsidiaries shallhave acquired or agreed to acquire (whether pursuant to the Offer or otherwise)Millennium Shares carrying in aggregate more than 50 per cent. of the votingrights then normally exercisable at a general meeting of Millennium, includingfor this purpose (except to the extent otherwise agreed by the Panel) any suchvoting rights attaching to any Millennium Shares that are unconditionallyallotted or issued before the Offer becomes or is declared unconditional as toacceptances, whether pursuant to the exercise of any outstanding subscription orconversion rights or otherwise; and for this purpose: (i) the expression "Millennium Shares to which the Offer relates" shall beconstrued in accordance with Schedule 2 to the Takeovers Directive (InterimImplementation) Regulations 2006 (SI 1183/2006); and (ii) Millennium Shares which have been unconditionally allotted shall be deemedto carry the voting rights which they will carry upon issue; (b) any resolution or resolutions of Elderstreet Shareholders required toapprove and implement the Offer and the acquisition of Millennium Shares byElderstreet pursuant to the Offer being duly passed at an extraordinary generalmeeting to be convened by Elderstreet (or at any adjournment of that meeting); (c) the UKLA having announced its agreement to admit the New Elderstreet Sharesto be issued as consideration for the acquisition of the Millennium Sharespursuant to the Offer to the Official List and the London Stock Exchange havingannounced its agreement to admit the New Elderstreet Shares to trading on itsmarket for listed securities; (d) no Third Party having intervened and there not continuing to be outstandingany statute, regulation or order of any Third Party in each case which would ormight reasonably be expected (in any case to an extent which is material in thecontext of the Elderstreet Group or the Millennium Group, as the case may be,taken as a whole) to: (i) make the Offer, its implementation or the acquisition or proposedacquisition by Elderstreet or any member of the Wider Elderstreet Group of anyshares or other securities in, or control or management of, Millennium or anymember of the Wider Millennium Group void, illegal or unenforceable in anyjurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit,restrict or delay the same or impose additional conditions or obligations withrespect to the Offer or such acquisition, or otherwise impede, challenge orinterfere with the Offer or such acquisition, or require amendment to the termsof the Offer or the acquisition or proposed acquisition of any Millennium Sharesor the acquisition of control of Millennium or the Wider Millennium Group byElderstreet; (ii) limit or delay the ability of any member of the Wider Elderstreet Group orany member of the Wider Millennium Group to acquire or to hold or to exerciseeffectively, directly or indirectly, all or any rights of ownership in respectof shares or other securities in, or to exercise voting or management controlover, any member of the Wider Millennium Group or any member of the WiderElderstreet Group; (iii) require, prevent or delay the divestiture or alter the terms envisaged forany proposed divestiture by any member of the Wider Elderstreet Group of anyshares or other securities in Millennium; (iv) require, prevent or delay the divestiture or alter the terms envisaged forany proposed divestiture by any member of the Wider Elderstreet Group or by anymember of the Wider Millennium Group of all or any portion of their respectivebusinesses, assets or properties or limit the ability of any of them to conductany of their respective businesses or to own or control any of their respectiveassets or properties or any part thereof; (v) except pursuant to Schedule 2 to the Takeovers Directive (InterimImplementation) Regulations 2006, require any member of the Wider ElderstreetGroup or of the Wider Millennium Group to acquire, or to offer to acquire, anyshares or other securities (or the equivalent) in any member of either groupowned by any third party; (vi) limit the ability of any member of the Wider Elderstreet Group or of theWider Millennium Group to conduct or integrate or co-ordinate its business, orany part of it, with the businesses or any part of the businesses of any othermember of the Wider Elderstreet Group or of the Wider Millennium Group; (vii) result in any member of the Wider Millennium Group or the WiderElderstreet Group ceasing to be able to carry on business under any name underwhich it presently does so; or (viii) otherwise adversely affect the business, assets, profits, financial ortrading position or prospects of any member of the Wider Millennium Group or ofthe Wider Elderstreet Group, and all applicable waiting and other time periodsduring which any Third Party could intervene under the laws of any relevantjurisdiction having expired, lapsed or been terminated; (e) all notifications and filings which are necessary or are reasonablyconsidered appropriate by Elderstreet having been made, all appropriate waitingand other time periods (including any extensions of such waiting and other timeperiods) under any applicable legislation or regulation of any relevantjurisdiction having expired, lapsed or been terminated (as appropriate) and allstatutory or regulatory obligations in any relevant jurisdiction having beencomplied with in each case in connection with the Offer or the acquisition orproposed acquisition of any shares or other securities in, or control of,Millennium or any other member of the Wider Millennium Group by any member ofthe Wider Elderstreet Group or the carrying on by any member of the WiderMillennium Group of its business; (f) all Authorisations which are necessary or are reasonably considerednecessary or appropriate by Elderstreet in any relevant jurisdiction for or inrespect of the Offer or the acquisition or proposed acquisition of any shares orother securities in, or control of, Millennium or any other member of the WiderMillennium Group by any member of the Wider Elderstreet Group or the carrying onby any member of the Wider Millennium Group of its business having beenobtained, in terms and in a form reasonably satisfactory to Elderstreet, fromall appropriate Third Parties or from any persons or bodies with whom any memberof the Wider Millennium Group has entered into contractual arrangements in eachcase where the absence of such Authorisation would have a material adverseeffect on the Millennium Group taken as a whole and all such Authorisationsremaining in full force and effect and there being no notice or intimation ofany intention to revoke, suspend, restrict, modify or not to renew any of thesame; (g) except as publicly announced by Millennium (by the delivery of anannouncement to a Regulatory Information Service) prior to the date of thisannouncement or as fairly disclosed in writing to Elderstreet by or on behalf ofMillennium prior to the date of this announcement, there being no provision ofany arrangement, agreement, licence, permit, franchise or other instrument towhich any member of the Wider Millennium Group is a party, or by or to which anysuch member or any of its assets is or are or may be bound, entitled or subjector any circumstance, which, in each case as a consequence of the Offer or theacquisition or proposed acquisition of any shares or other securities in, orcontrol of, Millennium or any other member of the Wider Millennium Group by anymember of the Wider Elderstreet Group or otherwise, could or might reasonably byexpected to result in (in any case to an extent which is or would be material inthe context of the Millennium Group taken as a whole): (i) any monies borrowed by or any other indebtedness or liabilities (actual orcontingent) of, or any grant available to, any member of the Wider MillenniumGroup being or becoming repayable or capable of being declared repayableimmediately or prior to its stated repayment date or the ability of any memberof the Wider Millennium Group to borrow monies or incur any indebtedness beingwithdrawn or inhibited or becoming capable of being withdrawn; (ii) the creation or enforcement of any mortgage, charge or other securityinterest over the whole or any part of the business, property, assets orinterests of any member of the Wider Millennium Group or any such mortgage,charge or other security interest (wherever created, arising or having arisen)becoming enforceable; (iii) any such arrangement, agreement, licence, permit, franchise or instrument,or the rights, liabilities, obligations or interests of any member of the WiderMillennium Group thereunder, being, or becoming capable of being terminated oradversely modified or affected or any adverse action being taken or anyobligation or liability arising thereunder; (iv) any asset or interest of any member of the Wider Millennium Group being orfalling to be disposed of or ceasing to be available to any member of the WiderMillennium Group or any right arising under which any such asset or interestcould be required to be disposed of or could cease to be available to any memberof the Wider Millennium Group otherwise than in the ordinary course of business; (v) any member of the Wider Millennium Group ceasing to be able to carry onbusiness under any name under which it presently does so; (vi) the creation of liabilities (actual or contingent) by any member of theWider Millennium Group; (vii) the rights, liabilities, obligations or interests of any member of theWider Millennium Group under any such arrangement, agreement, licence, permit,franchise or other instrument or the interests or business of any such member inor with any other person, firm, company or body (or any arrangement orarrangements relating to any such interests or business) being terminated,adversely modified or affected; or (viii) the financial or trading position or the prospects or the value of anymember of the Wider Millennium Group being prejudiced or adversely affected, andno event having occurred which, under any provision of any such arrangement,agreement, licence, permit or other instrument, could result in any of theevents or circumstances which are referred to in paragraphs (i) to (viii) ofthis condition (g) in any case to an extent which is or would be material in thecontext of the Millennium Group taken as a whole; (h) since 28 February 2006 and except as disclosed in Millennium's annual reportand accounts for the year then ended or as otherwise publicly announced byMillennium (by the delivery of an announcement to a Regulatory InformationService) prior to the date of this announcement or as otherwise fairly disclosedin writing to Elderstreet by or on behalf of Millennium prior to the date ofthis announcement no member of the Wider Millennium Group having: (i) issued or agreed to issue, or authorised the issue of, additional shares ofany class, or securities convertible into or exchangeable for, or rights,warrants or options to subscribe for or acquire, any such shares or convertiblesecurities other than as between Millennium and wholly-owned subsidiaries ofMillennium; (ii) purchased or redeemed or repaid any of its own shares or other securitiesor reduced or made any other change to any part of its share capital; (iii) recommended, declared, paid or made any bonus, dividend or otherdistribution whether payable in cash or otherwise (other than to Millennium or awholly-owned subsidiary of Millennium and excluding the Special Dividend); (iv) made or authorised any change in its loan capital; (v) (other than any acquisition or disposal in the ordinary course of businessor a transaction between Millennium and a wholly-owned subsidiary of Millennium)merged with, demerged or acquired or disposed of or transferred, mortgaged orcharged or created any security interest over any assets or any right, title orinterest in any assets (including shares in any undertaking and tradeinvestments) or authorised the same (which in any case is material in thecontext of the Millennium Group taken as a whole); (vi) issued or authorised the issue of, or made any change in or to, anydebentures or (except in the ordinary course of business) incurred or increasedany indebtedness or liability (actual or contingent) which in any case ismaterial in the context of the Millennium Group taken as a whole; (vii) entered into, varied or authorised any agreement, transaction, arrangementor commitment (whether in respect of capital expenditure or otherwise) which: (A) is of a long term, onerous or unusual nature or magnitude or which is orcould involve an obligation of such nature or magnitude; or (B) could restrict the business of any member of the Wider Millennium Group; or (C) is other than in the ordinary course of business, and which in any case ismaterial in the context of the Millennium Group taken as a whole; (viii) entered into, implemented, effected or authorised any merger, demerger,reconstruction, amalgamation, scheme, commitment or other transaction orarrangement in respect of itself or another member of the Wider Millennium Groupotherwise than in the ordinary course of business which in any case is materialin the context of the Millennium Group taken as a whole; (ix) entered into or varied the terms of, any contract, agreement or arrangementwith any of the directors or senior executives of any member of the WiderMillennium Group; (x) taken any corporate action or had any legal proceedings instituted orthreatened against it or petition presented or order made for its winding-up(voluntarily or otherwise), dissolution or reorganisation or for the appointmentof a receiver, administrator, administrative receiver, trustee or similarofficer of all or any material part of its assets and revenues or any analogousproceedings in any jurisdiction or appointed any analogous person in anyjurisdiction which in any case is material in the context of the MillenniumGroup taken as a whole; (xi) been unable, or admitted in writing that it is unable, to pay its debts orhaving stopped or suspended (or threatened to stop or suspend) payment of itsdebts generally or ceased or threatened to cease carrying on all or asubstantial part of its business in any case with a material adverse effect onthe Millennium Group taken as a whole; (xii) waived or compromised any claim which is material in the context of theMillennium Group taken as a whole; (xiii) made any alteration to its memorandum or articles of association which ismaterial in the context of the Offer; or (xiv) entered into any agreement, commitment or arrangement or passed anyresolution or made any offer (which remains open for acceptance) or proposed orannounced any intention with respect to any of the transactions, matters orevents referred to in this condition (h); (i) since 28 February 2006 and except as disclosed in Millennium's annual reportand accounts for the year then ended or as otherwise publicly announced byMillennium (by the delivery of an announcement to a Regulatory InformationService) prior to the date of this announcement or as otherwise fairly disclosedin writing to Elderstreet by or on behalf of Millennium prior to the date ofthis announcement: (i) there having been no adverse change or deterioration in the business,assets, financial or trading positions or profit or prospects of any member ofthe Wider Millennium Group which in any case is material in the context of theMillennium Group taken as a whole; (ii) no contingent or other liability of any member of the Wider MillenniumGroup having arisen or become apparent or increased which in any case ismaterial in the context of the Millennium Group taken as a whole; (iii) no litigation, arbitration proceedings, prosecution or other legalproceedings to which any member of the Wider Millennium Group is or may become aparty (whether as plaintiff, defendant or otherwise) having been threatened,announced, implemented or instituted by or against or remaining outstandingagainst or in respect of any member of the Wider Millennium Group which in anycase is material in the context of the Millennium Group taken as a whole; and (iv) (other than as a result of the Offer) no enquiry or investigation by, orcomplaint or reference to, any Third Party having been threatened, announced,implemented, instituted by or against or remaining outstanding against or inrespect of any member of the Wider Millennium Group which in any case ismaterial in the context of the Millennium Group taken as a whole; (j) Elderstreet not having discovered: (i) that any financial or business or other information concerning the WiderMillennium Group disclosed at any time by or on behalf of any member of theWider Millennium Group, whether publicly, to any member of the Wider ElderstreetGroup or otherwise, is misleading or contains any misrepresentation of fact oromits to state a fact necessary to make any information contained therein notmisleading and which was not subsequently corrected before the date of thisannouncement by disclosure either publicly or otherwise to Elderstreet to anextent which in any case is material in the context of the Millennium Group as awhole; (ii) that any member of the Wider Millennium Group is subject to any liability(actual or contingent) which is not disclosed in Millennium's annual report andaccounts for the financial year ended 28 February 2006 and which in any case ismaterial in the context of the Millennium Group taken as a whole; or (iii) any information which affects the import of any information disclosed atany time by or on behalf of any member of the Wider Millennium Group to anextent which is material in the context of the Millennium Group taken as awhole. For the purpose of these conditions: (a) "Third Party" means any government, government department or governmental,quasigovernmental, supranational, statutory, regulatory or investigative body,authority (including any national anti-trust or merger control authority),court, trade agency, association, institution or professional or environmentalbody or any other person or body whatsoever in any relevant jurisdiction; (b) a Third Party shall be regarded as having "intervened" if it has decided totake, institute, implement or threaten any action, proceeding, suit,investigation, enquiry or reference or made, proposed or enacted any statute,regulation, decision or order or taken any measures or other steps or requiredany action to be taken or information to be provided or otherwise having doneanything and "intervene" shall be construed accordingly; (c) "Authorisations" means authorisations, orders, grants, recognitions,determinations, certificates, confirmations, consents, licences, clearances,provisions and approvals; (d) "Wider Elderstreet Group" means Elderstreet and its subsidiaries andsubsidiary undertakings and associated undertakings (including any company inwhich any member of the Elderstreet Group is interested or any undertaking inwhich Elderstreet and such undertakings (aggregating their interests) have adirect or indirect interest in 20 per cent. or more of the voting equity capitalof an undertaking); and (e) "Wider Millennium Group" means Millennium and its subsidiaries andsubsidiary undertakings and associated undertakings (including any company inwhich any member of the Millennium Group is interested or any undertaking inwhich Millennium and such undertakings (aggregating their interests) have adirect or indirect interest in 20 per cent. or more of the voting equity capitalof an undertaking). Subject to the requirements of the Panel, Elderstreet reserves the right towaive all or any of the above conditions, in whole or in part, except conditions(a) to (c). Conditions (b) to (j) (inclusive) must be fulfilled, be determined byElderstreet to be or remain satisfied or (if capable of waiver) be waived bymidnight on the 21st day after the later of the first closing date of the Offerand the date on which condition (a) is fulfilled (or in each case such laterdate as Elderstreet may, with the consent of the Panel, decide), failing whichthe Offer will lapse. Elderstreet shall be under no obligation to waive (ifcapable of waiver), to determine to be or remain satisfied or to treat asfulfilled any of conditions (b) to (j) (inclusive) by a date earlier than thelatest date specified above for the fulfillment of that condition. If the Panel requires Elderstreet to make an offer for the Millennium Sharesunder the provisions of Rule 9 of the Code, Elderstreet may make suchalterations to the conditions of the Offer, including to condition (a), as arenecessary to comply with the provisions of that Rule. If the Offer lapses it will cease to be capable of further acceptance.Millennium Shareholders who have accepted the Offer and Elderstreet shall thencease to be bound by acceptances delivered on or before the date on which theOffer lapses. APPENDIX IIBASES OF CALCULATION AND SOURCES OF INFORMATION In this announcement, unless otherwise stated, or the context otherwiserequires, the following bases of calculation and sources of information havebeen used: (a) The value placed by the Offer on the existing issued ordinary share capitalof Millennium is based on 16,141,283 Millennium Shares in issue on 28 November2006. (b) The share price of Elderstreet is the closing middle market quotation ofElderstreet Shares and is derived from the London Stock Exchange Daily OfficialList on the relevant date. APPENDIX IIIDEFINITIONS The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Act" the Companies Act 1985 (as amended) "Code" The City Code on Takeovers and Mergers "C holders of C SharesShareholders" "C Shares" the issued 'C' shares of 5p each in the capital of Elderstreet "Elderstreet" Elderstreet VCT plc "Elderstreet the board of directors of ElderstreetBoard" or"ElderstreetDirectors" "Elderstreet funds managed by the Manager or Elderstreet Investments LimitedFunds" "Elderstreet Elderstreet and its subsidiaries and subsidiary undertakings, ifGroup" any "Elderstreet a holder of Elderstreet SharesShareholder" "Elderstreet the issued ordinary shares of 5p each in ElderstreetShares" "Enlarged Elderstreet as enlarged by the MergerGroup" "Form of the form of acceptance relating to the OfferAcceptance" "ICTA" Income and Corporation Taxes Act 1988 (as amended) "Listing the listing rules issued by the FSA from time to timeRules" "London Stock London Stock Exchange plcExchange" "Manager" Elderstreet Private Equity Limited, a wholly owned subsidiary of Elderstreet Investments Limited "Merger" the acquisition by Elderstreet of Millennium pursuant to the Offer "Millennium" Elderstreet Millennium Venture Capital Trust plc "Millennium the board of directors of MillenniumBoard" or"MillenniumDirectors" "Millennium Millennium and its subsidiaries and subsidiary undertakings, ifGroup" any "Millennium a holder of Millennium SharesShareholder" "Millennium the existing unconditionally allotted or issued ordinary sharesShares" of 10p each in Millennium and any further such shares which are unconditionally allotted or issued and fully paid before the date on which the Offer closes (or such earlier date, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances as Elderstreet may, subject to the Code, decide) "Net Asset Net Assets per shareValue" or"NAV" "Net Assets" gross assets less all liabilities (excluding contingent liabilities) "New the new Elderstreet Shares to be issued pursuant to the MergerElderstreetShares" "Offer" the offer to be made by Elderstreet to acquire Millennium Shares on the terms set out in this announcement and, where the context admits, any subsequent revision, variation, extension or renewal thereof "Offer the document containing the OfferDocument" "Official the official list of the UKLAList" "Panel" the Panel on Takeovers and Mergers "Prospectus" the prospectus equivalent to be issued by Elderstreet in connection with the Merger "Qualifying an individual who subscribes for or acquires shares in a VCT andShareholder" satisfies the conditions for eligibility for tax relief available to investors in a VCT pursuant to section 842AA and schedule 28B ICTA "Regulatory any of the services set out in Appendix 3 to the Listing RulesInformation from time to timeService" "Smith & Smith & Williamson Corporate Finance LimitedWilliamson" "Special the interim dividend of 22.5p per Millennium Share which isDividend" conditional on the Offer becoming or being declared unconditional in all respects "subsidiary" shall have the meaning given to it in Section 736 of the Act "subsidiary shall have the meaning given to it in Section 258 of the Actundertaking" "UKLA" the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "United the United Kingdom of Great Britain and Northern IrelandKingdom" or"UK" "United the United States of America (including any states of the UnitedStates" States of America and the District of Columbia), its possessions and territories, and all other areas subject to its jurisdiction "US Person" a US person as defined in Regulation S under the United States Securities Act of 1933 (as amended) "VCT" a company approved as a venture capital trust under Section 842 AA ICTA by the Board of the Inland Revenue "VCT Merger the Venture Capital Trust (Winding Up and Mergers) (Tax)Regulations" Regulations 2004) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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