Polar Capital Global Healthcare investors back new strategy
£200m minimum target looks secure after tender offer
Investors in the c £250m Polar Capital Global Healthcare Growth & Income Trust (PCGH) have strongly backed a proposed continuation and strategy change at a general meeting held on 1 June. At the same time, holders of c 22% of the shares (worth c £54-55m based on the latest NAV and closing price) have chosen to exit via a tender offer for up to 100% of shares at close to NAV.
Holders of more than half of the shares voted on the proposals to extend the life of the trust, adopt a new investment strategy and issue shares to new and existing shareholders, with c 94% voting in favour. The relatively low take-up of the tender offer means PCGH is within reach of its minimum target of £200m of net assets following the tender offer and new share issue, with pro forma net assets of c £196m based on the latest NAV.
The investment trust, managed by Dr Daniel Mahony and Gareth Powell at Polar Capital, was launched in 2010 with a fixed life of seven years. However, after consulting with shareholders, the board and management felt there was still investor appetite for the healthcare sector, albeit with a different focus from the navigation of patent cliffs and resumption of research and development that had informed PCGH’s original investment approach. Detailed proposals and a prospectus were published in May setting out a new, growth-focused strategy, again with a seven-year life, based on benefiting from large-cap consolidation and small-cap technological innovation within the global healthcare sector.
The proposed change in strategy was to be accompanied by a tender offer for up to 100% of shares, at a net asset value taking into account the cost of reconstruction (c 0.4%), and an issue of new ordinary and zero-dividend preference (ZDP) shares. For the proposals to be implemented, the trust must have at least £200m of assets following the tender offer and the new share issue (excluding ZDPs). The tender price will be announced on or around 16 June, the day after the new share offer closes.
Read our initiation on PCGH here.
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