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Octopus AIM VCT Opens Merger Talks With Octopus AIM VCT 2

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Octopus AIM VCT plc has entered early discussions regarding a potential merger with Octopus AIM VCT 2 plc. Under the proposal, Octopus AIM VCT plc would acquire Octopus AIM VCT 2 plc using a Section 110 scheme of reconstruction under the Insolvency Act, issuing new shares based on the relative net asset values of the two entities.

The transaction is intended to create a larger investment vehicle to reduce operating expenses and enhance share liquidity. The proposed structure is designed to preserve venture capital trust tax benefits and maintain the existing investment approach without invoking the Takeover Code.

Completion of the deal remains subject to approval by shareholders of both trusts. In the meantime, Octopus AIM VCT plc intends to reopen its share subscription to raise fresh capital prior to finalizing the merger.

Key points

  • Octopus AIM VCT plc is in preliminary talks to acquire Octopus AIM VCT 2 plc through a Section 110 reconstruction.
  • The transaction would exchange shares based on the relative net asset values of the two venture capital trusts.
  • Completion of the proposed deal remains subject to shareholder approval from both investment vehicles.
  • Octopus AIM VCT plc plans to reopen its offer for subscription to generate fresh capital ahead of the deal.

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Questions and answers

How would shares be exchanged in the Octopus AIM VCT merger?

New Octopus AIM VCT shares would be issued to Octopus AIM VCT 2 shareholders based on the relative net asset values of both trusts.

What must happen for the Octopus AIM VCT merger to go through?

The deal requires shareholder approvals from both venture capital trusts and the execution of a definitive merger agreement.

What are the expected benefits of merging Octopus AIM VCT and AIM VCT 2?

The transaction aims to deliver greater scale, lower operating costs, and enhanced share liquidity while preserving VCT tax benefits.