REG - Down MicroCap InvTst - Statement re receipt of requisition notice

Downing Strategic Micro-Cap Investment TrustAnnouncement

18/06/2024 16:30

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RNS Number : 9321S  Downing Strategic Micro-Cap IT PLC  18 June 2024

RNS Number: 9321S

Downing Strategic Micro-Cap Investment Trust plc

18 June 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release.

 

Downing Strategic Micro-Cap Investment Trust plc (the "Company" or "DSM")

LEI Number: 213800QMYPUW4POFFX69

Receipt of Requisition Notice

On 17 June 2024, the board of directors of DSM (the "Board") received a letter
from Vidacos Nominees Limited acting as nominee of Milkwood Capital Limited
("Milkwood"), seeking to requisition a general meeting of the Company (the
"Requisition").

The Board is in the process of reviewing the legal validity of the Requisition
with its advisers and will make further announcements regarding the convening
of a general meeting in due course.

Shareholders should take no action at this time.

In summary, the Requisition proposes that shareholders be asked to consider:

§ ordinary resolutions to: (i) remove Hugh Aldous and Robert Legget (and any
person appointed as a director of the Company subsequent to the date of the
letter and before the requisitioned general meeting) as directors of the
Company; and (ii) appoint Rhys Summerton, Andre Tonkin and Paul Shackleton as
directors of the Company; and

§ a special resolution to direct that the Board do not declare any dividend,
return of capital or other distribution on or prior to the requisitioned
general meeting of the Company, and that the second special interim dividend
of 12 pence per share declared on 28 May 2024 by the Company (the "Second
Special Interim Dividend") and any dividend, return of capital or other
distribution declared or announced but not paid or made immediately prior to
the requisitioned general meeting be cancelled (the "Special Resolution").

As previously announced, the Board is aware that Milkwood is attempting to get
control of the Board of DSM without making a bid for the Company and is
thereby seeking to secure the future management of the Company's portfolio for
itself and, to this end, built up an approximately 28 per cent. shareholding
in the Company. That shareholding allowed Milkwood to block the implementation
of the Company's proposed B share scheme in April 2024 which would have
allowed the Company to make a tax efficient capital return to all shareholders
at next to NAV. Milkwood's shareholding has, therefore, allowed it to
compromise the position of the Company's other shareholders who had voted in
favour of the Company's managed wind-down in February 2024, but to whom
Milkwood has not offered a cash exit.

The Board remains committed to doing the right thing for all shareholders, and
is mindful of the other shareholders' vote at the general meeting of the
Company held in February 2024 that overwhelmingly wished a return of cash
proceeds. To this end, earlier today the Board declared a third special
interim dividend of 17.5 pence per share, equivalent to, in aggregate,
£8.0 million (the "Third Special Interim Dividend") which will be paid to
shareholders on 18 July 2024, taking the total aggregate of the dividends paid
or declared by the Company since it entered into managed wind-down to 59.5
pence per share, being equivalent to 90.2 per cent. of the Company's NAV as at
28 February 2024. In the event that the Company deems the Requisition to be
valid, and in accordance with the requirements of the Companies Act 2006 and
the Company's articles of association, the Company expects to hold the
requisitioned general meeting in late July - early August 2024.
Notwithstanding the terms of the Special Resolution, the Board does not expect
that the Second Special Interim Dividend or Third Special Interim Dividend
will be affected by the Requisition if it is deemed valid.

The Board considers that Milkwood's decision to lodge the Requisition is
wholly self-interested and disruptive when the Company and the Investment
Manager are focused on returning cash to shareholders.

Further announcements will be made as appropriate.

Hugh Aldous, chairman of Downing Strategic Micro-Cap Investment Trust, said:

 

"The shareholders in our Company have overwhelmingly voted to wind down the
trust, and return capital as fast as practicable, which is precisely what we
have done. To date we have returned 30 pence per share, on 21 June 2024 will
return another 12 pence per share, and on 18 July 2024 a further 17.5 pence
per share will be distributed. That works out at a return of actual cash,
which investors can dispose of as they wish, of £27.4 million. So far, all
Milkwood has done is to try and thwart the process that shareholders have
voted for. Calling for a general meeting in order to attempt to gain control
of the Board, so soon after losing their previous attempt to frustrate
shareholders wishes, will only provide a further distraction for the Board and
impose additional unnecessary costs and hassle on shareholders.

 

"As we have said to Milkwood repeatedly, if they want to take control of the
Company and run it in their own specific interests, then they should table a
realistic offer that is fair to all shareholders and it will receive due
consideration. In the meantime, we urge shareholders to ensure they protect
their own interests by rejecting this unwarranted further attempt by Milkwood
to acquire control of your Company and its assets on the cheap."

 

For further information, please contact:

 Chairman
 Hugh Aldous  Tel: 020 7416 7780

 

 

 Dickson Minto Advisers LLP
 Douglas Armstrong           Tel: 020 7649 6823

 

 Media Contacts - Garfield Advisory
 Andrew Garfield                     Tel: 07974 982337
 Jason Nisse                         Tel: 07769 688618

The person responsible for arranging for the release of this announcement on
behalf of the Company is ISCA Administration Services Limited, the Company
Secretary.

 

 

 

 

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