Foresight 4 VCT Announce Board and Other Changes

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Following a campaign by some shareholders in Foresight 4 VCT Plc (FTF) supported by ShareSoc (see www.sharesoc.org/campaigns/foresight-4-vct/) which resulted in the directors only narrowly managing to get re-elected at the recent AGM, the company has now responded with a major announcement. The proposed changes are:

  1. Chairman Philip Stephens and Director Peter Dicks indicate they intend to retire from the board. A specialist recruitment firm is being engaged to identify suitable candidates to replace them (this was one of the suggestions that the campaign made). No recommendations regarding options for the company will be put to shareholders before new directors are in place.
  2. The new board will consider the proposed merger with Foresight 3 VCT but shareholders will be given an advisory vote on this matter when the half-yearly report is issued. The company reiterated the benefits they saw from the proposed merger in the announcement.
  3. The board anticipates that a tender offer will be made to shareholders subsequent to the proposed merger. In addition they will introduce share buy-backs to enable the share price discount to NAV to be reduced to 10% (another complaint from shareholders at the AGM was the high discount and lack of buy-backs).
  4. In addition to the tender offer and share buy-backs, the board expects that the enlarged VCT would be in a position to pay a post-merger dividend.

Comment: In general this is surely a positive announcement as it meets many of the objectives desired by shareholders, although they may still have some concerns about the proposed merger. In addition there may be technical issues related to the tender offer that might prejudice the tax position of some shareholders if they took it up. The tender offer and dividend may also require the company to have considerable cash available which might be problematic but it does indicate a strategy to return cash to shareholders which many desired.

Let us hope that good new directors willing to take on some of the problems faced by the company readily come forward.

Roger Lawson

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