Proposed Tender Offer

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION IN WHOLE OR IN PART IN AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE ITS RELEASE, PUBLICATION OR DISTRIBUTION IS OR MAY BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN INVITATION TO PARTICIPATE IN THE TENDER OFFER (AS DEFINED HEREIN) IN OR FROM ANY JURISDICTION IN OR FROM WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER UNDER APPLICABLE SECURITIES LAWS OR OTHERWISE.

This announcement contains information that is inside information for the purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (the Market Abuse Regulation).

Schroder UK Mid Cap Fund plc

Proposed Tender Offer

20 May 2026

Key Highlights

· The Board believes there is significant support for the ongoing future of the Company from a wide range of Shareholders. However, following discussions between the Board and Saba Capital Management, the Board is putting forward a 100 per cent. tender offer open to all Eligible Shareholders.

· Saba have agreed to support the Tender Offer proposal, vote in favour of the Resolution and tender their Shares, as well as committing to a standstill agreement for three years.

· The Board is proud of the Company's impressive track record and has full confidence in its experienced investment management team at Schroders. 

· The Board and Schroders are confident in the Company's strategy, believing there to be attractive long-term investments within the UK Mid Cap Sector, and are pleased that Shareholders will continue to have access to it through the investment trust structure.

· The Directors will not tender their Shares and three Directors have committed to purchasing additional Shares.

· The Board will implement a discount management policy aimed at maintaining a mid-single digit discount in normal market conditions with a view to minimising discount volatility to those Shareholders who remain invested.

Harry Morley, Chair of Schroder UK Mid Cap Fund plc, commented:

"We are pleased to have reached agreement with Saba to facilitate their exit, allowing us to focus on our differentiated proposition going forward. The UK Mid Cap equity space remains one of the most dynamic parts of the investable landscape and with our talented portfolio management team at Schroders, we are confident of the Company's future ability to generate attractive total returns for our Shareholders."

Jean Roche, Fund Manager of Schroder UK Mid Cap Fund plc, commented:

"The UK Mid Cap market continues to provide, every day, a plethora of potentially high returning investment opportunities, such as those we describe as the "multi baggers", and we look forward to continuing to unearth these opportunities for investors. Valuations have rarely been more attractive as evidenced by a spate of recent M&A approaches for companies in the universe, together with a very high incidence of share buybacks, underlining the uniqueness and/or cash generative nature of these companies."

Introduction

The Board of Schroder UK Mid Cap Fund plc (the "Company") believes there is significant support for the ongoing future of the Company from a wide range of Shareholders. However, following discussions between the Board and Saba Capital Management, which is interested in 19.5 per cent. of the issued share capital of the Company, the Board is putting forward the Tender Offer.

The Tender Offer will provide the opportunity for all Eligible Shareholders to have a cash exit by way of a Tender Offer for up to 100 per cent. of their Shares in the Company at NAV less costs.

Saba Capital Management, on behalf of the Saba Investment Vehicles, has committed, as far as possible, to validly elect to tender all of its Shares in the Company in the Tender Offer and, in relation to Shares beneficially held by the Saba Investment Vehicles, to vote in favour of the Resolution. In addition, subject to the Tender Offer proceeding, Saba has agreed to a Standstill Agreement pursuant to which it will be restricted from taking certain activist actions such as seeking to replace the Board, voting against the Board's recommendations and convening a general meeting of the Company pursuant to section 303 of the Companies Act for a period of 3 years from the date of the Standstill Agreement.

The Board and Schroders continue to have conviction in the Company's strategy, believing there to be attractive long-term investment opportunities within the UK Mid Cap sector. In addition, the Board is proud of the Company's impressive track record and has full confidence in its experienced investment management team at Schroders.

Portfolio performance has been strong. Over 1, 5 and 10 years to 31 March 2026, the Company's NAV total return has outperformed the Benchmark Index by 4.3 per cent., 2.5 per cent. and 18.5 per cent. respectively. Both the Board and the Investment Manager believe that the market outlook for UK Mid Caps is compelling, noting that the long-term performance of the Benchmark Index has matched the total return of the S&P 500, while current valuations are at the lower end of their historic range.

Discount Management

The Board would highlight the single-digit discount at which the Company's Shares have traded for a sustained period, with an average discount of 5.1 per cent. calendar year-to-date. In addition, following the conclusion of this tender process, the Board will implement a discount management policy aimed at maintaining a mid-single digit discount in normal market conditions. This should provide protection from discount volatility to those Shareholders who remain invested. 

For those Shareholders who choose to remain invested in the Company, the Board reaffirms its commitment to a Continuation Vote at the annual general meeting every three years. The first Continuation Vote will be proposed at the AGM in 2029 (previously 2028).

Directors will not tender their shares and have committed to buying additional Shares

The Board have all confirmed that they will not be tendering any Shares in the Tender Offer; and three Directors intend to add to their holdings by buying an additional £120,000 worth of Shares in aggregate.

Tender offer conditions

The Tender Offer will only proceed if the Conditions (details of which are set out in the Circular) are satisfied. These include the requirement that the aggregate number of Shares validly tendered does not exceed 16,661,822 (the "Maximum Tender Condition"). Based on the total issued share capital of the Company (excluding Shares held in treasury) as at the Latest Practicable Date, this amounts to 49.87 per cent. of Shares and, based further on the NAV per Share as at the Latest Practicable Date, would result in a Company with net assets in excess of £125 million if the Tender Offer were to be implemented. At this level, the Company estimates that its ongoing charges ratio (OCR) would be approximately 1.06 per cent. per annum. The actual net assets of the Company on completion of the Tender Offer will depend, inter alia, on movements in the NAV per Share and any buybacks that are undertaken by the Company. The Maximum Tender Condition represents the level determined by the Board, in consultation with the Investment Manager, above which the continuance of the Company would not be in the best interests of the continuing Shareholders. If the Maximum Tender Condition is not met, the Tender Offer will not proceed and the Board will instead consult with Shareholders with a view to putting forward alternative proposals for the future of the Company as soon as practicable and, in any event, within three months of termination of the Tender Offer.

The Tender Offer is also conditional on Shareholder approval of the Resolution at the General Meeting, which requires at least 75 per cent. of votes cast to be in favour in order for it to pass. All of the Directors intend to vote in favour of the Resolution.

The Tender Price will be calculated by reference to the realised value of the Tender Pool, created following receipt of all valid elections for the Tender Offer, and from which all of the costs associated with making the Tender Offer will be deducted.

Shareholders remaining fully invested in the Company will not bear any of the costs of the Tender Offer, assuming it proceeds. In addition, by continuing to hold their Shares and not participating in the Tender Offer, they should not be treated as making any disposal of their Shares for UK tax purposes, whereas a Shareholder who participates in the Tender Offer may, depending on their circumstances, incur a tax liability in connection with the disposal of their Shares.

The Directors intend to vote in favour of the Resolution in respect of the Tender Offer to be proposed at the forthcoming General Meeting to be held on 24 June 2026 ("General Meeting") in respect of their own beneficial holdings of Shares amounting to 21,500 Shares in aggregate as at the date of the Circular. 

Tender Offer Summary:

· The proposed Tender Offer will be for up to 100 per cent. of the issued share capital of the Company and will be open to Eligible Shareholders on the Register as at the Record Date, 21 May 2026. Investors purchasing Shares in the Company for ordinary settlement on or after 21 May 2026 will not be entitled to participate in the Tender Offer in respect of those Shares.

· The Tender Offer will only proceed if the Conditions (details of which are set out in the Circular) are satisfied, including the Maximum Tender Condition. The Maximum Tender Condition will result in a maximum of 16,661,822 Shares (49.87 per cent. of the Shares in issue at the Latest Practicable Date) being repurchased in the Tender Offer.

· The Tender Price will be based on the realised value of the Tender Pool (from which all the costs, including stamp duty and commission, associated with making the Tender Offer will be deducted).

· In order to allow an orderly realisation of assets in the Tender Pool, the Tender Offer is likely to complete in early August 2026.

A circular setting out the details of the Tender Offer in full will be published today, containing notice of the General Meeting. It will shortly be available on both the National Storage Mechanism and the Company's website at https://www.schroders.com/en-gb/uk/individual/funds-and-strategies/investment-trusts/schroder-uk-mid-cap-fund-plc/.

Details of the Tender Offer

The Tender Offer provides Eligible Shareholders with the opportunity to tender for sale some or all of their Shares in the Company, pursuant to which they will receive cash in respect of successfully tendered Shares in an amount equal to the Tender Price multiplied by the relevant number of Shares. It also ensures that Shareholders who wish to retain their current investment in the Company are able to do so (subject to the Maximum Tender Condition).

The Record Date for participation in the Tender Offer is 6.00 p.m. on 21 May 2026. 

Shareholders' attention is drawn to the letter from Investec in the Circular and to the details set out in the Circular 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 the Circular.

The Tender Offer is conditional on the passing of the Resolution set out in the notice of the General Meeting in the Circular. The Tender Offer is also subject to certain other conditions set out in the Circular. In addition, the Tender Offer may be suspended or terminated in certain circumstances, as set out in the Circular. If the Tender Offer is terminated, the Company will announce this through a Regulatory Information Service.

If the Tender Offer proceeds, the Tendered Shares will be acquired by Investec, acting as principal, at the Tender Price. The Tendered Shares will then be repurchased by the Company pursuant to the Repurchase Agreement at the Tender Price and may be held in treasury and/or cancelled.

Following valuation on the Calculation Date, the assets and liabilities of the Company will be allocated between the Tender Pool and the Continuing Pool based on the number of Shares referable to each pool. The net asset value of the assets allocated to the Tender Pool on its establishment will represent the Tender Pool Initial Net Asset Value (calculated in accordance with the Circular) and the net assets attributable to the Continuing Pool will be equal to the Net Asset Value of the Company less the Tender Pool Initial Net Asset Value.

The assets in the Tender Pool will then be realised for cash in a disciplined manner in order to maximise value for Tendering Shareholders. The Tender Price at which Tendered Shares will be sold by Eligible Shareholders under the Tender Offer will be an amount equal to the realised value of the Tender Pool, after deducting all of the costs associated with making the Tender Offer and the other liabilities attributable to the Tender Pool (including the proportionate share of the Company's operating costs allocated to the Tender Pool and to take account of any dividends attributable to the Tendered Shares, to the extent that such dividends have not already been accrued in the Company's NAV), divided by the total number of Tendered Shares, in each case as at the Tender Price Determination Date.

While it is currently expected that all the assets allocated to the Tender Pool will be realised within six weeks of the closure of the Tender Offer, the actual realisation period will depend on the prevailing market environment. The Company will provide an update by way of an RIS announcement once the realisation of the Tender Pool is complete, with the Tender Price and payment date being advised at that time.

Shareholders should note that Shares which are tendered for acceptance under the Tender Offer may not be withdrawn or sold, transferred, charged or otherwise disposed of other than in accordance with the Tender Offer.

Costs and expenses

The fixed costs and expenses incurred in relation to the Tender Offer, including financial advice and other professional advice, but excluding stamp duty or stamp duty reserve tax and commission payable by the Company on the acquisition of the Tendered Shares and any portfolio realisation costs (including the costs of realising any Tender Pool), are expected to be approximately £430,000, including VAT. The quantum of the remaining costs will vary depending on how many Shares are tendered and the extent of any portfolio realisation costs.

The Company's assets and liabilities will, following valuation on the Calculation Date, be allocated between a Continuing Pool and a Tender Pool (on the basis set out in the Circular). All costs and expenses relating to the Tender Offer will be borne by the Tender Pool and, therefore, the costs of the Tender Offer will not result in dilution to the NAV per Share for Shareholders that continue to be invested in the Company in respect of their remaining Shares.

The Tender Pool will also bear its share of the operating costs of the Company between the Calculation Date and the Tender Price Determination Date. These operating costs will be borne on a pro rata basis between the Tender Pool and the Continuing Pool by reference to the relative NAVs of the pools.

If the Tender Offer were not to proceed (for example, if Shareholders did not pass the Resolution to approve the Tender Offer at the General Meeting, or if the Maximum Tender Condition or any other Condition was not met), it is estimated that the Company would bear abort costs of approximately £230,000 (including VAT where applicable).

Arrangements with Saba: Irrevocable undertaking and Standstill Agreement

The Company has received an irrevocable undertaking from Saba pursuant to which Saba has, in respect of the Beneficial Interest Shares, undertaken to use best endeavours: (i) to vote or procure a vote in favour of the Resolution; and (ii) in respect of the Beneficial Interest Shares and the Economic Interest Shares to procure the tender of such Beneficial Interest Shares and Economic Interest Shares pursuant to the Tender Offer.

The Company has also entered into a Standstill Agreement with Saba pursuant to which Saba has agreed, amongst other things:

(a) that Saba shall not, and shall procure that its affiliates shall not, during the Standstill Period, (i) require the Board to convene a general meeting of the Company pursuant to section 303 of the Companies Act, or (ii) exercise any voting rights available to remove, or publicly propose the removal of, any member of the Board; 

(b) that Saba shall not, and shall procure that its affiliates shall not, during the Standstill Period, seek to control or influence the Board or the Company or the policies or management of the Company;

(c) that Saba shall, and shall procure that its Affiliates shall, procure that the registered holder of any Ordinary Shares in respect of which it or any of the Saba Investment Vehicles is able (at the relevant record time for voting) to control the right to exercise (or procure the exercise of) any voting rights, shall not, during the Standstill Period, exercise such voting rights to vote against any resolution for the election or re-election of a Director;

(d) that Saba shall, and shall procure that its Affiliates shall, procure that the registered holder of any Ordinary Shares in respect of which it or any of the Saba Investment Vehicles is able (at the relevant record time for voting) to control the right to exercise (or procure the exercise of) any voting rights, shall not, following completion of the implementation of the Tender Offer, vote against the recommendation of the Board on any other resolution proposed at a general meeting of the Company;

(e) that Saba shall not, and shall use reasonable endeavours to procure that its affiliates shall not, directly or indirectly, alone or in concert with others, prior to the earlier of, (i) 15 September 2026 and (ii) completion of the Tender Offer, increase the aggregate beneficial interests held (including through any financial instruments) by the Saba Investment Vehicles in the share capital of the Company.

The Standstill Agreement is subject to certain carve outs, including in respect of the Saba RICs, and will terminate at the end of the Standstill Period or earlier in the event of a material and continuing breach of the Standstill Agreement.

The Standstill Period is the period from the execution of the agreement and ending on the earlier of: (i) three years from the date of execution; (ii) 31 August 2026, if the Resolution is not passed at the General Meeting on or prior to such date; (iii) 15 September 2026, if the implementation of the Tender Offer is not completed by such date; (iv) the date on which the Company has ceased to pursue the Tender Offer (with no intention of resuming and implementing the Tender Offer ahead of 15 September 2026) or it has ceased to be possible for the Tender Offer to be completed by 15 September 2026; and (v) the date on which the Tender Offer has lapsed or been terminated in accordance with its terms.

The Standstill Agreement is governed by and construed in accordance with English law.

General Meeting

The implementation of the Tender Offer requires the approval of Shareholders. A notice convening a General Meeting of the Company, which is to be held at the offices of Schroder Investment Management Limited, 1 London Wall Place, London, EC2Y 5AU at 1.00 p.m. on 24 June 2026, and at which the Resolution will be proposed, is set out at the end of the Circular. The notice includes the full text of the Resolution.

The Resolution is a special resolution. To become effective, the Resolution must be passed by Shareholders representing 75 per cent. (or more) of the total voting rights of Shareholders who, being entitled to vote, do so in person or by proxy. The Resolution must be passed for the Tender Offer to become unconditional.

The quorum for the General Meeting is not less than two Shareholders who, being entitled to vote, are present in person or by proxy.

Timetable

All references to times in this document are to London time unless otherwise stated.

The times and dates set out in the expected timetable may be adjusted by the Company in consultation with Investec, in which event details of the new times and/or dates will be notified to Shareholders by an announcement made by the Company through a Regulatory Information Service. In particular, the realisation period for the assets allocated to the Tender Pool will depend on market conditions. The Company will provide an update by way of a RIS announcement once the realisation of the Tender Pool is complete and the Tender Price and payment date will be advised at that time.

Terms used but not otherwise defined in this announcement shall bear the meanings given to them in the Circular.

Notice for US Shareholders

The tender offer relates to securities of a non-U.S. company organized in England and Wales and listed on the London Stock Exchange and is subject to the disclosure requirements, rules and practices applicable to companies listed in the United Kingdom, which differ from those of the United States in certain material respects. A circular will be prepared in accordance with U.K. style and practice for the purpose of complying with the laws of England and Wales and the rules of the FCA and of the London Stock Exchange. The tender offer is not subject to the disclosure or other procedural requirements of Regulation 14D under the U.S. Securities Exchange Act of 1934, as amended. The tender offer will be made in the United States pursuant to Section 14(e) of, and Regulation 14E under, the Exchange Act, subject to the exemptions provided by Rule 14d-1(d) thereunder, and otherwise in accordance with the requirements of the rules of the FCA and the London Stock Exchange. Accordingly, the tender offer will be subject to disclosure and other procedural requirements that are different from those applicable under U.S. domestic tender offer procedures and law. The Company is not listed on an American securities exchange, is not subject to the periodic reporting requirements of the Exchange Act and is not required to, and does not, file any reports thereunder.

It may be difficult for U.S. shareholders to enforce certain rights and claims arising in connection with the tender offer under U.S. federal securities laws, because the Company is located outside the United States, and its officers and directors reside outside the United States. It may not be possible to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of U.S. securities laws. It also might not be possible to compel a non-U.S. company or its affiliates to subject themselves to a U.S. court's judgment.

To the extent permitted by applicable law and in accordance with normal U.K. practice, the Company or Investec or any of their affiliates may make certain purchases of, or arrangements to purchase, shares of the Company outside the United States during the period in which the tender offer remains open for acceptance, including sales and purchases of shares effected by Investec acting as market maker in the Shares.

For further information please contact:

Company

Harry Morley, Chairman

via Investec Bank plc (details below)

Schroder Investment Management Limited, Company Secretary

Phoebe Merrell

+44 (0)20 7658 6000

Investec Bank plc, Corporate Finance Adviser

Lucy Lewis / Tom Skinner

+44 (0)20 7597 4000

Panmure Liberum Limited, Corporate Broker

Michael Janes

+44 (0)20 3100 2000

Schroders PR

Charlotte Banks / Kirsty Preston

[email protected] / [email protected]

+44 (0) 2076 589063 / +44 (0) 2076 581961

Important information

This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to subscribe for or to acquire, any ordinary shares in the Company in any jurisdiction.

This announcement does not contain all the information set out in the Circular. Shareholders should read the Circular in full before deciding what action to take in respect of the General Meeting and the Tender Offer.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. Figures refer to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to its legal and regulatory obligations, the Company expressly disclaims any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority.

Investec Bank plc, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Schroder UK Mid Cap plc and no one else in connection with the Tender Offer and none of Investec Bank plc nor any of its affiliates, branches or subsidiaries will be responsible to anyone other than Schroder UK Mid Cap plc for providing the protections afforded to clients of Investec Bank plc nor for providing advice in relation to the Tender Offer or any other matter referred to in this announcement or the Circular. Neither Investec Bank plc nor any of its affiliates, branches or subsidiaries or any of its or their directors, officers, employees, representatives or agents shall be held responsible in any way for the contents of this announcement or the Circular or accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this announcement or the Circular or the contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation.

Legal Entity Identifier: 549300SOEWCYZTK2SP87

The person responsible for arranging for the release of this announcement on behalf of Schroder UK Mid Cap Fund plc is Phoebe Merrell of Schroder Investment Management Limited, the Company Secretary.