Prelude Trust relaunches £5m share buyback; £5.6m of new investments in pipeline
Cambridge-based Prelude Trust plc (PDT.L), the investment trust that specialises in early stage, technology-based businesses, has relaunched its offer to buy up to 3.7m shares from shareholders to return £5m capital to them.
The Trust, managed by Prelude Ventures, last week withdrew a similar offer announced in late March after it belatedly found that it would contravene s264 of the Companies Act 1985.
Chairman Michael Brooke said the Board originally decided to make a tender offer after meetings with shareholders indicated a "significant number" wanted some capital to be returned. This situation has not changed and the Board will make a new tender offer to shareholders on the same terms through brokers Panmure Gordon.
Shareholders will be entitled to have up to 9.78% of their holdings purchased at 135p a share. The tender price represents a discount of 6.9% to the diluted Net Asset Value per share of 145p as at 31 March 2006. The company said the effect of buying shares at a discount to NAV is expected to cause a small increase in the NAV per share.
The share was trading at 119.5p by mid morning.
Cash position
Prelude said it is currently holding cash or cash equivalents totalling £21m. Up to the end of June next year, about £0.2m is committed and £9.2m is allocated to existing portfolio companies and an additional £5.6m is required for new investments that are in the later stages of negotiation and moving towards completion. Additional cash receipts of £1.1m are expected from escrow accounts relating to previous realisations, taking the projected cash position to £7.1m.
Leaving a margin for costs and contingencies, the company has decided it has enough cash to allow the buy-back of shares up to a value of £5m.
It said the directors considered buying shares in the market using powers obtained at the last year's AGM, when the buy-back for cancellation of up to 10% of the its shares was approved. But they decided it would be more equitable to give all shareholders the opportunity to tender shares for purchase on a pro-rata basis
It anticipates the tender will be completed by the end of July when payments will be made.
Prelude Trust was launched in 1997 with initial capital of £21m and in March 2000 raised a further £30m via a rights issue. Its current investment portfolio includes: Cambridge Positioning Systems Ltd; CeNeS Pharmaceuticals plc; De Novo Pharmaceuticals Ltd; Kiadis BV; Lime Microsystems; m-spatial Ltd; NanoMagnetics Ltd; Oxford Immunotec Ltd; Phyworks Ltd; Polatis Ltd; Sciona Ltd; SiConnect Ltd; Xanadu Wireless; and, ZBD Displays Ltd.
30th May 2006
(Esprit Capital Partners)
