THE Northern Investors Company has announced its latest tender to return £10m to shareholders as part of the gradual wind-down of the private equity investment trust.
The Newcastle-based business, managed by NVM Private Equity Limited, stopped making new investments last year and is in the process of returning capital to its investors.
Company secretary Christopher Mellor said: “The board decided this should be by tender offers. The first tender offer was in December 2011.
“Last December, the company returned £12.8m to shareholders and now an additional £10m is being returned.
“The company buys back the shares from the shareholders and returns the cash that way. It is an orderly realisation of the portfolio.
“It is a long-term wind-down. It’s estimated it will take five to six years in total. The board currently expects it to be substantially completed by March 2017.”
This year’s tender offer, which must be approved by shareholders at a meeting in December, will work via a mechanism where Oriel Securities will buy almost 20% of the issued share capital on behalf of the company at a tender price of 335p per share. Northern will buy the shares from Oriel and cancel them.
The capital amount to be returned via the tender increased from £7m to £10m after Northern sold its investment in Paladin Group Limited for £3.4m.
This will take the total amount of cash distributed to shareholders since July 2011 to £25.3m – equivalent to 42.9% of the net assets at the time of the change in strategy.
Northern’s half yearly management report for the six months to the end of September, published yesterday, revealed it has net assets of £51.6m, compared to £59.6m a year ago.
In addition to the Paladin Group, Northern also sold its investment in Closerstill Holdings, which organises business-to-business exhibitions, to Phoenix Equity Partners for £3.7m.
A further £1.1m was realised from other investments. The cash sale of the Paladin Group took place after the half-year end. Northern said: “The portfolio has shown an encouraging degree of resilience in the face of continuing weakness in the UK economy and financial markets.”
Northern Investors was set up in 1984 and has been listed on the Stock Exchange since 1990. In July last year, new investments ended and the business began returning capital to shareholders.