JPMorgan China Region Fund in Merger Talks with Korea Equity Fund.
20 July 2016 - US-based closed-end management investment company JPMorgan China Region Fund, Inc (NYSE: JFC) is in talks with the board of Korea Equity Fund, Inc concerning a possible merger of the two funds, JFC said.
The fund announced on 9 June that it had been pursuing various initiatives intended to increase the fund's appeal and reduce the Fund's discount.
While discussions between the boards of the Fund and KEF are ongoing, it is anticipated that the terms of the proposed merger would include the following:
The two funds would merge on terms based upon the two funds' relative net asset values per share at the date of the merger. JFC will be the surviving fund and would continue to retain the services of JF International Management, Inc., a company that operates under the name of J.P. Morgan Asset Management as its investment adviser.
Subject to JFC stockholder approval, the successor fund's investment objective and principal investment strategies would be modified from JFC's current investment objective to the extent necessary to permit the successor fund to actively invest in equity securities of the countries in North East Asia including China, South Korea, Taiwan and Hong Kong.
The successor fund will continue to make direct investments in China A shares, seek to utilise Hong Kong Stock Connect, use leverage and actively invest in small / mid cap stocks as warranted.
Based on the new investment objective and strategy, the proposed name of the Successor Fund will be The North East Asia Growth Fund;
In addition, it is expected that the Successor Fund would adopt a more concentrated investment strategy under normal investment conditions so that it can actively differentiate itself from other NYSE-listed closed-end funds that invest in the Greater China and Asia-Pacific region;
The successor fund's proposed benchmark would be the MSCI All Country Far East ex. Japan Total Return Index, which will be reweighted for purposes of the fund's geographic scope to exclude the component attributable to issuers in Southeast Asia;
JFC added that the investment advisory fee of the successor fund would be 0.90% per annum of the successor fund's managed gross assets;
The successor fund board would comprise four members of the current fund board (following the changes being proposed at JFC's reconvened annual meeting of Stockholders set for July 20, 2016) and two KEF directors; and
Following the merger, the successor fund would seek to purchase up to 50% of the successor fund's issued shares at net asset value per share less associated costs.
JPMorgan China Region Fund Inc is a non-diversified, closed-end management investment company incorporated in the USA. The fund seeks long-term capital appreciation. The fund invests in equity securities of companies with substantial assets in, or revenues derived from the People's Republic of China, Hong Kong, Taiwan and the China Region.
Sector: Banking/Financial Services
Target: Korea Equity Fund, Inc
Buyer: JPMorgan China Region Fund
Deal size in USD:
Buyer advisor: , ,
Comment: Terms of the deal were not disclosed
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|Publication:||M & A Navigator|
|Date:||Jul 20, 2016|
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