LMS Capital ups tender offer to shareholders

LMS Capital updated the market on its ongoing tender offer to shareholders on Tuesday, having initially announced its £6m offer on 6 June, before being notified of a forthcoming distribution of between $11m and $12m from San Francisco Equity Partners on 15 June, following that organisation’s partial realisation of its stake in YesTo.

The AIM-traded firm confirmed on Tuesday that it had received the distribution, totalling $11.6m, from SFEP.

In light of that “significant increase” in liquid resources, the board said it considered whether it was able to increase the amount of the tender previously announced on 6 June.

It said it determined that the tender should be increased to £11m, thereby satisfying in full the proposals in the July 2016 circular to return that amount to shareholders.

“It is the company's intention that the tender offer be launched at the same time as, or shortly after, the company announces its 30 June 2017 results,” the board said in its statement.

“In accordance with the July 2016 circular, the tender offer price will be determined by reference to a 5% discount to the 30 June 2017 net asset value reported in those results.”

The tender offer, once completed, will bring the amount returned to shareholders since the company's July 2016 circular to £17m.

It was at that point that Gresham House Asset Management was appointed to manage the company's portfolio.

“This final tender offer will bring the total amount returned to shareholders to £172m since the company commenced its realisation policy in January 2012, at which time the market capitalisation was approximately £153m.”

Looking at its future investment, the board reiterated that following changes to the company's investment policy approved by shareholders in August 2016, LMS now focussed predominantly on private equity investment and specialist asset classes.

“The investment committee will continue to oversee the remaining assets, to determine how best to maximise shareholder value, and at the same time oversee the implementation of the new investment policy.

“Following completion of the tender offer announced above, the company will have met in full its proposals to make further returns of cash to shareholders and will be well placed to progress the implementation of its new investment policy,” the board continued.

“In future, it is the intention of the company to return to shareholders an amount in the region of 30% of annual realised cash profits from investments made pursuant to the new investment policy and in doing so, to generate a dividend yield over the longer term.”