REG-BlackRock Smaller Companies Trust Plc: Combination of BlackRock Smaller Companies Trust plc and BlackRock Throgmorton Trust plc
20/02/2026 07:02
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Legal Entity Identifier: 549300MS535KC2WH4082
20 February 2026
BlackRock Smaller Companies Trust plc (the "
Company " or " BRSC
")
Combination of BlackRock Smaller Companies Trust plc and BlackRock Throgmorton
Trust plc
Publication of a circular in connection with recommended Proposals for (i) a
Tender Offer for up to 28 per cent. of the issued share capital of the
Company; (ii) the issue of New Shares pursuant to a scheme of reconstruction
and members’ voluntary winding up of BlackRock Throgmorton Trust plc under
section 110 of the Insolvency Act 1986; (iii) the adoption of a New Investment
Policy; and (iv) the Sub-division of the Existing Shares
(the "Proposals")
Introduction
The Board of BlackRock Smaller Companies Trust plc is pleased to announce that
it has agreed a proposed combination with BlackRock Throgmorton Trust plc ("
THRG ") (the “
Combination ”). The Combination will bring together two
similar investment companies with significant portfolio overlap to create a
company with net assets of approximately £780 million (the “
Enlarged BRSC ”), delivering greater scale,
liquidity and cost efficiencies. The Enlarged BRSC will consolidate its
position as the largest growth-focused trust in the AIC’s UK Smaller
Companies sector.
The Combination, if approved by both sets of Shareholders, will be effected by
way of a scheme of reconstruction and members' voluntary winding up of THRG
under section 110 of the Insolvency Act (the “ Scheme
”) and the issue of new ordinary shares in the Company (the
“ New Shares ”) (the “
Scheme Issue ”) to THRG Shareholders who are
deemed to have elected to roll over their investment into the Enlarged BRSC.
In connection with the Proposals, Eligible Shareholders will have the option
to elect for a cash exit in respect of a proportion of their shareholding in
the Company at a discount of 1.0 per cent. to NAV. The Company's cash exit
will be implemented by way of a tender offer and will be limited to up to 28
per cent. of the Company's issued share capital (excluding Shares held in
treasury) (the " Tender Offer ").
The record date for participating in the Tender Offer is 6.00
p.m. on 23 February 2026. Any shareholding that is not recorded on the
Register by 6.00 p.m. on 23 February 2026 will not be eligible to participate
in the Tender Offer.
As part of the Scheme, THRG will also offer a cash exit opportunity to THRG
Shareholders for up to 38 per cent. of THRG’s issued share capital, subject
to a 1.0 per cent. discount to NAV.
As at the Latest Practicable Date, Saba Capital Management, L.P. (“
Saba ”) (including the Saba Investment
Vehicles) was interested in 10.4 per cent. of the voting rights in BRSC and
17.8 per cent. of the voting rights in THRG, and Saba has provided an
irrevocable commitment to vote in favour of the Proposals and participate in
both the BRSC Tender Offer and THRG cash exit, as set out in further detail
below.
In addition, BRSC and THRG have received letters of intent to vote in favour
of the Proposals from other shareholders representing, in aggregate, 23.9 per
cent. of BRSC’s issued share capital and 12.0 per cent. of THRG’s issued
share capital, in each case excluding shares held in treasury.
Following implementation of the Scheme, the Company will continue to be
managed by BlackRock Fund Managers Limited (the “ AIFM
”) and BlackRock Investment Management (UK) Limited (the
“ Investment Manager ” and,
together with the AIFM, “ BlackRock
”). Conditional on the Scheme Issue and Tender Offer being approved by
Shareholders and the Scheme becoming unconditional in accordance with its
terms, the Board is proposing certain amendments to the Company’s investment
policy (the “ Investment Policy Change
”) which will also be subject to Shareholder approval. Under the New
Investment Policy, the Investment Manager will continue to seek to achieve the
Company’s investment objective through investing predominantly in listed UK
smaller companies, but will have additional flexibility to invest in small cap
stocks outside of the Benchmark index and will be able to invest up to 15 per
cent. of the Portfolio by value at the time of investment in global small cap
stocks which are listed overseas and which do not have a primary or secondary
UK listing.
Following completion of the Combination, Roland Arnold will continue as lead
portfolio manager of the Enlarged BRSC and he will be joined by Dan
Whitestone, THRG’s current portfolio manager, as co-manager.
The Company has published a circular (the " Circular
") to Shareholders in connection with the Proposals, which
includes a notice of general meeting (the " General
Meeting ").
The Board of BRSC strongly believes that the Proposals will deliver a number
of significant benefits for its Shareholders, including:
* Greater scale and improved liquidity
- providing exposure to a diverse range of high-quality UK smaller
companies with excellent growth prospects
* Cost savings - through a
revised management fee structure
* Immediate value realisation opportunity
- through a tender offer to be made available to the Company’s
Shareholders prior to implementation of the Combination
* Conditional exit opportunity -
introduction of a triennial 100 per cent. conditional tender offer, linked to
performance against the Benchmark
* Management expertise - enlarged
portfolio management team with Roland Arnold continuing as lead portfolio
manager, joined by Dan Whitestone, the current
portfolio manager of THRG, as co-manager.
Ronald Gould, Chairman of BRSC, said:
“This proposed combination represents an exciting opportunity for our
Shareholders: they will maintain their exposure to this highly attractive
sub-sector with an enhanced management team whilst gaining the added benefit
of being part of a larger and more liquid vehicle with reduced fees which we
believe will have the lowest ongoing charges of those companies in the AIC UK
Smaller Companies sector without a performance fee.
The UK Smaller Companies sector is a diverse and exciting part of the domestic
equity market, encompassing a broad range of established businesses with
meaningful growth prospects, but which are often under-researched and
overlooked by most investors and available at discounted valuations compared
to global comparators. With increased scale, lower costs and improved
liquidity, the Enlarged BRSC will be well positioned to provide Shareholders
with sustained and enhanced exposure to this compelling growth opportunity
over the medium and long term.
Our proposal has been carefully constructed to deliver value to Shareholders.
Those who wish to realise value immediately at a 1.0 per cent. discount to NAV
will have an opportunity to do so, whilst those who stay invested will benefit
from a triennial 100% conditional tender offer to keep the management team
focused on driving performance. I have every confidence that the Enlarged BRSC
will become the go-to vehicle for investment trust investors seeking exposure
to a best-in-class growth portfolio of UK smaller companies.”
Benefits of the Proposals
The Proposals are expected to result in substantial benefits for both BRSC and
THRG Shareholders, including the following:
* Scale : following completion of
the Combination and the Tender Offer, the Enlarged BRSC is expected to have
net assets of approximately £780 million (on the basis of the trusts’
respective net asset values as at 16 February 2026 and assuming full take up
of both the Tender Offer and the THRG cash option), consolidating its position
as the largest growth-focused trust in the AIC’s UK Smaller Companies
sector. This increase in scale is expected to (i) improve secondary market
liquidity for continuing shareholders; (ii) support the marketability of the
Enlarged BRSC; and (iii) provide the Board with additional flexibility in
pursuing discount control initiatives.
* Continuity: shareholders in the
Enlarged BRSC will benefit from continuity of management, investment approach
and dividend track-record, including in the following respects:
* Combined portfolio manager expertise
: the
Combination will bring together two highly experienced and well-regarded UK
Smaller Companies managers, Roland Arnold and Dan Whitestone, who will
co-manage the Enlarged BRSC with a clear and distinctive investment strategy
and process that has proven successful over the long term.
* Investment approach
: BRSC and THRG pursue comparable investment approaches and
currently have a significant level of portfolio overlap with over 75 per cent.
of BRSC’s portfolio (by value) invested in companies that are also held by
THRG (as at 31 January 2026). The Enlarged BRSC will create a single
BlackRock-managed UK smaller companies trust which will continue to prioritise
quality growth in its portfolio composition, consistent with BRSC’s existing
investment approach, and with the flexibility for a 15 per cent. allocation to
global small cap, in line with THRG’s current investment policy.
* Attractive dividend policy
: the Enlarged BRSC's
dividend policy is expected to build on the track record achieved by the
Company, which has delivered annual dividend growth for more than 20 years and
is categorised as a “Dividend Hero” by the AIC.
* Compelling long-term prospects:
the Board believes that UK smaller companies continue to offer attractive
long-term investment opportunities, notwithstanding a challenging period for
the sector in recent years. The Investment Manager believes that the prolonged
de-rating of the sector has created a more compelling entry point, with
valuations historically cheap, while a number of potential cyclical and
structural tailwinds are beginning to emerge, including easing interest-rate
expectations and sustained corporate and private-equity interest in the UK
market, particularly among undervalued mid and smaller companies. While market
conditions have not favoured the respective investment managers’ quality
growth investment style over the shorter term, both BRSC and THRG have
demonstrated the ability to deliver strong long-term performance, having
outperformed their respective benchmarks over the last 10 years, delivering a
NAV total return of approximately 97.2 per cent. and 128.9 per cent.,
respectively. The Board considers that the combination of resilient business
fundamentals, attractive valuations and the increased scale and resources of
the Enlarged BRSC provide a supportive backdrop for long-term investors.
* Immediate cash exit opportunity
: while the Board believes the benefits and strategic rationale of the
Combination are compelling for continuing shareholders, a cash exit option has
been included to accommodate shareholders wishing to realise part of their
investment. Accordingly, Eligible Shareholders in BRSC and THRG will each have
the option to elect for a cash exit in respect of a proportion of their
shareholding as part of the Combination, at a discount of 1.0 per cent. to
NAV. The BRSC cash exit will be implemented by way of the Tender Offer for up
to 28 per cent. of the Company’s Shares in issue as at the Tender Offer
Record Date (excluding Shares held in treasury), while the THRG cash exit will
be limited to up to 38 per cent. of THRG’s issued share capital (excluding
THRG Shares held in treasury).
* Triennial 100 per cent. conditional tender offer
: subject to completion of the Combination, the Company will
introduce a triennial performance-related tender offer for up to 100 per cent.
of its issued share capital (excluding Shares held in treasury) at a 4 per
cent. discount to net asset value (less costs), which will be triggered if the
Enlarged BRSC underperforms its Benchmark, the Deutsche Numis Smaller
Companies plus AIM (excluding Investment Companies) Index, over the relevant
performance period. It is expected that the first such tender offer, were it
to be triggered, would be in 2029.
* Reduced management fees :
subject to completion of the Combination, BlackRock has agreed a revised
management fee structure for the Enlarged BRSC. If implemented, with effect
from Admission, the management fee payable by the Enlarged BRSC to BlackRock
will be equal to (i) 0.5 per cent. per annum on the first £500 million of
NAV; (ii) 0.475 per cent. per annum on the NAV between £500 million and £750
million; and (iii) 0.45 per cent. per annum on the NAV in excess of £750
million. This represents a material reduction in the current BRSC management
fee and a removal of the performance fee for THRG shareholders who roll over
their investment, while maintaining a competitive fee structure for the
Enlarged BRSC. If adopted, the revised management fee will be the lowest in
the AIC’s UK Smaller Companies sector for an investment company without a
performance fee.
* Lower ongoing charges : the
Proposals are expected to deliver greater cost efficiencies through scale and,
together with the revised management fee arrangements, result in an estimated
ongoing charges ratio for the Enlarged BRSC of approximately 0.63 per cent.
(excluding the benefit of the BlackRock Cost Contribution described below).
This compares with BRSC’s ongoing charges ratio of 0.8 per cent. (in respect
of the year ended 28 February 2025) and THRG’s average ongoing charges ratio
of 0.82 per cent. (over the five years to 30 November 2025, including
performance fees). On this basis, the Enlarged BRSC is expected to have the
lowest ongoing charges ratio amongst investment companies in the AIC’s UK
Smaller Companies sector that do not charge a performance fee.
* BlackRock Cost Contribution :
BlackRock has agreed to make a cost contribution in connection with the
Combination by way of a fee waiver equivalent to six months of management fees
on the Net Asset Value of the Enlarged BRSC immediately following completion
of the Combination. This contribution is expected to be sufficient to ensure
that all (or substantially all) costs of the Proposals are covered, so that
continuing BRSC and THRG shareholders suffer no (or no material) NAV dilution
(assuming that the Tender Offer and THRG Cash Option are taken up in full).
The Scheme
Overview of the Scheme
The Scheme will be effected by way of a scheme of reconstruction of THRG under
section 110 of the Insolvency Act, resulting in the members’ voluntary
winding up of THRG and the transfer of part of THRG’s cash, assets and
undertaking to the Company on a formula asset value (“
FAV ”) for FAV basis.
Under the Scheme, Eligible THRG Shareholders will be entitled to elect to
receive in respect of some or all of their THRG Shares:
* New Shares (the “ Rollover Option
”); and/or
* cash (the “ Cash Option
”).
The Cash Option, which is limited to 38 per cent. of the THRG Shares in issue
(excluding THRG Shares held in treasury), will be offered at a 1.0 per cent
discount to the THRG NAV (after adding back any costs relating to the
implementation of the Combination already incurred or accrued in the THRG
NAV), with portfolio realisation costs to be borne by those THRG Shareholders
electing for the Cash Option. Should total elections for the Cash Option
exceed 38 per cent. of the THRG Shares in issue (excluding THRG Shares held in
treasury), excess elections for the Cash Option will be scaled back into New
Shares on a pro rata basis.
New Shares in BRSC will be issued to THRG Shareholders as the default option
under the Scheme in the event that they do not make a valid election for the
Cash Option under the Scheme or only elect for the Cash Option in respect of a
proportion of their Shares, or to the extent elections for the Cash Option are
scaled back as a result of the Cash Option being oversubscribed.
Conditions of the Scheme
Implementation of the Scheme is subject to a number of conditions, including:
* the Directors and the THRG Directors resolving to proceed with
the Scheme;
* the passing of the THRG Resolutions to approve the Scheme and the
winding up of THRG at the THRG General Meetings and the Scheme becoming
unconditional in all respects (including the Transfer Agreement becoming
unconditional in all respects);
* the passing of Resolution 1 (approval of the Scheme Issue) and
such Resolution becoming unconditional in all respects;
* the passing of Resolution 4 (approval of the Tender Offer) and
the Tender Offer not having been terminated, and the Saba Tender Condition
being satisfied (at the Board’s sole discretion);
* an election for the Cash Option being made in respect of all (or
substantially all, to be determined by the THRG Board and the Board, in their
sole discretion) of the THRG Shares beneficially owned by the Saba Investment
Vehicles, or in respect of which the Saba Investment Vehicles have an economic
interest, or such lesser number as may be agreed between the THRG Board and
the Board; and
* the London Stock Exchange agreeing to admit the New Shares to
trading on the Main Market, subject only to allotment.
Unless the conditions referred to above have been satisfied or, to the extent
permitted, waived by both the Company and THRG on or before 30 April 2026, the
Combination will not become effective and the New Shares will not be issued.
New Management Fee
As part of the Combination, and conditional upon the Scheme being implemented,
the Company and BlackRock have agreed
a new management fee structure pursuant to which BlackRock will be paid an
annual fee for its management services to the Enlarged BRSC, charged on NAV
and calculated as follows:
1. 0.50 per cent. on the first £500 million;
2. 0.475 per cent. on the value between £500 million and £750
million; and
3. 0.45 per cent. on the value in excess of £750 million,
the " New Management Fee ".
The New Management Fee will apply with effect from Admission of the New Shares
under the Scheme.
The New Management Fee represents a reduction in the current BRSC management
fee (a tiered fee of 0.60 per cent. per annum on the first £750 million of
the Company’s NAV, reducing to 0.50 per cent. thereafter) and a removal of
the performance fee for THRG Shareholders who roll over their investment,
while maintaining a competitive fee structure for the Enlarged BRSC. If
adopted, the New Management Fee will be the lowest in the AIC’s UK Smaller
Companies sector for an investment company without a performance fee.
The BlackRock Cost Contribution
BlackRock has agreed to make a contribution to the costs of the Combination by
means of a temporary waiver of the management fee that would otherwise be
payable by the Enlarged BRSC. The fee waiver will be for an amount equal to
six months of the New Management Fee charged on the NAV of the Enlarged BRSC
immediately following completion of the Combination (the “
BlackRock Cost Contribution ”). Based on the respective
NAVs of BRSC and THRG as at 16 February 2026 and assuming full take up of both
the Tender Offer and the Cash Option, the value of the BlackRock Cost
Contribution would be approximately £1.9 million.
The benefit of the BlackRock Cost Contribution will be apportioned between
BRSC and THRG as further described in Part 3 of the Circular.
In the event that the Scheme does not proceed, each of the Company and THRG
will bear its own costs.
Investment Management Arrangements
The Enlarged BRSC will largely follow the Company’s current investment
strategy, seeking to achieve long-term capital growth through investing
predominantly in UK small and mid-cap companies. The portfolio managers will
be permitted to use gearing, in the form of debt, up to 20 per cent. of net
assets to enhance returns and will have the ability to invest up to 15 per
cent. of the portfolio by value in non-UK listed smaller companies. The
BlackRock Emerging Companies team has extensive experience investing both
within the UK and internationally and believes that accessing opportunities
not available in the UK (for example, in technology), can enhance returns in
the portfolio, without increasing the overall portfolio volatility.
The Enlarged BRSC’s portfolio will be managed by Roland Arnold, the
Company’s existing lead portfolio manager, who has over 20 years’
experience investing in UK small and mid-cap companies. Dan Whitestone, the
current lead portfolio manager of THRG, will be a named co-manager of the
Enlarged BRSC. Dan is an experienced fund manager with an extensive track
record and knowledge of investing in UK listed small and mid-cap companies as
well as emerging companies across international developed markets. Dan will
support Roland through ongoing stock and industry level research and debate,
and will also focus on the global small cap element of the portfolio. Roland
will have the final decision over positioning in the portfolio of the Enlarged
BRSC.
Dan and Roland have worked closely with each other as members of BlackRock’s
Emerging Companies team for over a decade. Dan is currently head of this team
which comprises four portfolio managers, all of whom collaborate with research
and sharing investment ideas. The Emerging Companies team operates as a
separate unit within BlackRock’s Fundamental Equity division, and benefits
from the considerable resources of this wider platform. The portfolio managers
are responsible for portfolio management and research, while account
management responsibilities are covered by product strategists, client
relationship managers and fund administrators. In addition, the team has a
core portfolio manager, who provides support to portfolio managers in the
portfolio implementation process.
Investment Objective and Policy
If the Combination is approved and implemented, the investment objective of
the Enlarged BRSC will replicate the Company’s current investment objective,
seeking to achieve long-term capital growth for Shareholders through
investment mainly in smaller UK quoted companies. The Enlarged BRSC will also
continue to use the Deutsche Numis Smaller Companies plus AIM (excluding
Investment Companies) Index as its benchmark.
However, as part of the Combination, the Board is proposing certain amendments
to the Company’s investment policy which will be subject to Shareholder
approval. Under the proposed revised investment policy (the “
New Investment Policy ”), the Investment Manager
will continue to seek to achieve the Company’s investment objective through
investing predominantly in listed UK smaller companies, but will have
additional latitude to invest in small cap stocks outside of the Benchmark
index, and will be able to invest up to 15 per cent. of the Company's
Portfolio by value at the time of investment in listed small cap companies
outside of the UK, in line with THRG’s current investment policy. The
Company’s proposed New Investment Policy is set out in full in Part 4 of the
Circular.
The UK Listing Rules require any proposed material changes to the Company’s
published investment policy to be submitted to the FCA for prior approval; and
the FCA has approved the New Investment Policy. The UK Listing Rules also
require Shareholder approval prior to any material changes being made to the
Company’s published investment policy; this approval will be sought at the
General Meeting by way of Resolution 2.
Tender Offer
Background to and reasons for the Tender Offer
The Board is proposing the Tender Offer in order to allow a realisation
opportunity for the Company’s Shareholders who may wish to receive some cash
prior to implementation of the Combination. The Tender Offer is for up to 28
per cent. of the Company’s Shares in issue as at the Tender Offer Record
Date (excluding Shares held in treasury), and will provide Eligible
Shareholders who wish to exit with the opportunity to do so, subject to the
overall limits of the Tender Offer.
While offering Shareholders this exit opportunity, the Board remains of the
belief that UK Smaller Companies continue to offer attractive long-term
investment opportunities for investors. Although market conditions have not
favoured the Investment Manager's quality growth investment style over the
shorter term, BRSC has demonstrated the ability to deliver strong long-term
performance, having outperformed its Benchmark over the last 10 years,
delivering a NAV total return (with dividends reinvested and debt at fair
value) of 97.2 per cent (for the ten years to 31 January 2026).
Summary of the Tender Offer
* Eligible Shareholders will be able to tender up to 28 per cent.
of their holding of Shares in the Company.
* Eligible Shareholders may also tender additional Shares, but any
such excess tenders above the Tender Offer Basic Entitlement will only be
satisfied, on a pro rata basis,
to the extent that other Eligible Shareholders tender less than their
aggregate Tender Offer Basic Entitlement.
* Following receipt of all valid elections for the Tender Offer
(and if the Resolutions to approve the Tender Offer and the Scheme Issue are
passed at the General Meeting and the Tender Offer is not otherwise
terminated), the Company will notionally allocate its assets and liabilities
between two pools as follows:
* a pool of investments, cash, other assets and liabilities
attributable to the Shares that are validly tendered pursuant to the Tender
Offer (the “ Tender Pool ”);
and
* a pool of investments, cash, other assets and liabilities
attributable to the Shares that are not so tendered (the “
Continuation Pool ”).
* A pro rata portion
of the Company’s assets and liabilities will be allocated to the Tender Pool
corresponding to the proportion of Shares validly tendered, but adjusted to:
(i) take account of the BRSC Second Interim Dividend that is attributable to
the Tendered Shares (to the extent that such dividend has not already been
accrued in the Company’s NAV); (ii) add back the value of any costs relating
to the implementation of the Combination already incurred by the Company or
accrued in the Company’s NAV; and (iii) deduct a 1.0 per cent. discount. The
balance of the Company’s assets and liabilities will be allocated to the
Continuation Pool. As far as practicable, all holdings within the Company’s
Portfolio will be split between the Tender Pool and the Continuation Pool in
proportion to the Shares validly tendered or not tendered respectively (being
the “ Relevant Proportion ”).
* The Tender Pool will be realised for cash in a disciplined manner
in order to maximise value for Exiting Shareholders.
* The Tender Price at which Tendered Shares will be sold by
Eligible Shareholders under the Tender Offer will be based on the pro rata
realised value of the Tender Pool.
Further information on the Tender Offer is set out in Part 2 and Part 5 of the
Circular and the terms and conditions of the Tender Offer are set out in Part
6 of the Circular.
Conditions of the Tender Offer
Implementation of the Tender Offer is subject to a number of conditions which
are set out in Part 6 of the Circular. The Tender Offer Conditions include
(without limitation):
* The passing of a special resolution by Shareholders
to approve the Tender Offer (Resolution 4): In
accordance with usual market practice, the Tender Offer will be subject to the
passing of a special resolution (which requires not less than 75 per cent. of
the votes cast by Shareholders present, in person or by proxy, at the General
Meeting to be voted in favour of the resolution in order to proceed).
* The passing of an ordinary resolution by Shareholders
to approve the Scheme Issue (Resolution 1):
Implementation of the Tender Offer is conditional on Shareholders approving
the Scheme Issue. If this resolution is not passed by Shareholders, the Board
will terminate the Tender Offer with immediate effect.
* The Saba Tender Condition: The
Tender Offer is also conditional on Saba (including the Saba Investment
Vehicles) validly electing to tender all (or substantially all, to be
determined by the BRSC Board, in its sole discretion) the Shares in which Saba
or the Saba Investment Vehicles have an interest as at the Tender Offer
Closing Date (the “ Saba Tender Condition
”).
Saba Standstill Agreements and Irrevocables
As more fully detailed in the Company’s announcement of 22 January 2025, the
Company and Saba are currently party to a Standstill Agreement whereby Saba
has given the Company a number of undertakings, including that Saba will not
put forward proposals to Shareholders or requisition a general meeting of the
Company, such undertakings to expire on the earlier of the day following the
Company’s annual general meeting in 2027 or 31 August 2027.
In connection with the Proposals, and following constructive discussions, Saba
and the Company have agreed to amend the terms of the existing Standstill
Agreement to extend the term of the agreement to 30 June 2030, subject to
completion of the Tender Offer and the Scheme. In addition, Saba has
undertaken, among other things, to use best endeavours to: (i) procure that
all the votes attaching to the Shares in respect of which the Saba Investment
Vehicles have beneficial interests or are otherwise able to control the right
to exercise voting rights at the record date for voting are cast in favour of
the Resolutions; and (ii) tender or procure the tender under the Tender Offer
of all Shares which are beneficially owned by Saba (including the Saba
Investment Vehicles) or in which Saba (including the Saba Investment Vehicles)
has an economic interest, as at the Tender Offer Closing Date.
THRG has received an irrevocable undertaking from Saba pursuant to which Saba
has undertaken, among other things, to use best endeavours to: (i) procure
that all the votes attaching to the THRG Shares in respect of which the Saba
Investment Vehicles have beneficial interests or are otherwise able to control
the right to exercise voting rights at the relevant record dates for voting
are cast in favour of the THRG Resolutions; and (ii) procure that an election
for the Cash Option is made in respect of all of the THRG Shares which are
beneficially owned by the Saba Investment Vehicles (including beneficial
interests held through any financial instruments) as at the latest date for
electing for the Cash Option under the Scheme.
As at 16 February 2026, Saba (including the Saba Investment Vehicles) was
interested in 10.4 per cent. of the voting Share capital of the Company and
17.8 per cent. of the voting share capital in THRG. As at 16 February 2026,
Saba (including the Saba Investment Vehicles) beneficially owned 2.4 per cent.
of the Shares and 1.7 per cent. of the THRG Shares.
In addition, the Company and THRG have received letters of intent to vote in
favour of the Proposals from other shareholders representing, in aggregate,
23.9 per cent. of the Company’s issued Share capital and 12.0 per cent. of
THRG’s issued share capital, in each case excluding shares held in treasury.
Gearing
The portfolio managers will continue to make tactical use of gearing dependent
on prevailing market conditions and the use of which is subject to a maximum
level of 20 per cent. of net assets at the time of investment. Under normal
operating conditions it is envisaged that gearing will be within a range of 0
per cent. to 15 per cent. of net assets.
Share Rating
While the Board regards the Company’s share rating at any particular time as
primarily a reflection of sentiment towards the sector alongside portfolio
performance, both in absolute terms and relative to the peer group, it
recognises that there are a number of other factors which can have a material
impact in the context of driving demand for the Company’s shares. The
Proposals include a number of features which are designed with that in mind:
the refreshed investment proposition; the new highly competitive management
fee structure; the attractive estimated ongoing charges ratio of the Enlarged
BRSC; and the triennial 100 per cent. performance-related conditional tender
offer to be made available to shareholders. The Board is also introducing
quarterly dividend payments in place of the current bi-annual dividend
payments from March 2026 which (combined with the Company’s progressive
dividend approach and AIC dividend hero status) should in the Board’s view
help to enhance demand for the Company’s shares. The Board believes that the
introduction of these initiatives, coupled with a continuation of the
proactive approach to share buybacks which it has pursued over the past twelve
months (the Company repurchased 14.6 per cent. of its issued share capital
during 2025), make a sustained single-digit discount achievable for the
Company in normal market conditions.
Proposed Changes to the Board
It is intended that, following completion of the Scheme, Angela Lane and
Louise Nash (both THRG Directors) will be appointed as non-executive Directors
of the Company.
Share Sub-division
Since BlackRock was appointed as manager in December 2004, the market price of
the Company’s Shares has increased from 204 pence to 1,366 pence as at 16
February 2026. In order to assist monthly savers and those who reinvest their
dividends or are looking to invest smaller amounts, the Directors believe that
it is appropriate to propose the sub-division of each of the Existing Shares
of 25 pence each into five new ordinary shares of 5 pence each (the “
Sub-divided Shares ”) (the “
Sub-division ”), thereby resulting in a lower
market price per ordinary share. The Directors believe the Sub-division may
also improve the liquidity in and marketability of the Company’s ordinary
shares, which would benefit all continuing Shareholders.
Following the Sub-division, each Shareholder will hold five Sub-divided Shares
for each Existing Share they held immediately prior to the Sub-division.
Whilst the Sub-division will increase the number of ordinary shares the
Company has in issue, the Net Asset Value per share and market price
immediately after the Sub-division are expected to become one-fifth of their
respective values immediately preceding the Sub-division. The Sub-division
will therefore not itself affect the overall value of a Shareholder’s
holding in the Company. The Sub-divided Shares will rank equally with each
other and will carry the same rights and be subject to the same restrictions
(save as to nominal value) as the Existing Shares, including the same rights
to participate in dividends paid by the Company.
The Sub-division requires the approval of Shareholders and, accordingly,
Resolution 3 in the Notice of General Meeting seeks this approval. If
Resolution 3 is passed and becomes unconditional, the Sub-division will become
effective on admission of the Sub-divided Shares, which is expected to be at
8.00 a.m. on 1 July 2026 or such later date as the Directors may in their
absolute discretion determine. The Sub-divided Shares will have a new ISIN and
SEDOL which will be announced by the Company in due course.
General Meeting
The Proposals are conditional, among other things, upon Shareholders’
approval of the Resolutions to be proposed at the General Meeting. A notice
convening the General Meeting, which will be held at 3.30 p.m. on 30 March
2026 at the offices of BlackRock, 12 Throgmorton Avenue London, EC2N 2DL, is
set out at the end of the Circular.
For the avoidance of doubt:
* the Scheme Issue is conditional on Shareholders approving the
Tender Offer;
* the Tender Offer is conditional on Shareholders approving the
Scheme Issue;
* the Investment Policy Change is conditional on Shareholders
approving both the Scheme Issue and the Tender Offer; and
* the Sub-division is not conditional on the passing of any other
Resolution and as such stands alone.
The full terms of each Resolution are set out in the Notice of General
Meeting.
Recommendation
The Board, which has been so advised by Investec, considers that the Proposals
and the Resolutions are in the best interests of the Company and its
Shareholders as a whole. In advising the Board, Investec has taken into
account the Board’s commercial assessment of the Proposals.
Accordingly, for the reasons set out above, the Board recommends unanimously
that all Shareholders VOTE IN FAVOUR of each of the Resolutions to be proposed
at the General Meeting, as the Directors intend to do in respect of their own
beneficial holdings in the Company which, in aggregate, amount to 7,580 Shares
(representing approximately 0.02 per cent. of the Company’s issued share
capital (excluding Shares held in treasury) as at 16 February 2026).
The Board makes no recommendation to Shareholders as to whether or not they
should tender all or any of their Shares under the Tender Offer. Whether, and
the extent to which, Eligible Shareholders participate in the Tender Offer is
a matter for each Eligible Shareholder to decide and will be influenced by
their own individual financial and tax circumstances and investment
priorities.
None of the Directors intend to tender their Shares under the Tender Offer.
Expected Timetable of Principal Events
General Meeting timetable
Publication of the Circular 20 February 2026
Latest time and date for receipt of Forms of Proxy and electronic proxy appointment instructions (including through CREST and Proxymity) for the General Meeting 3.30 p.m. on 26 March 2026
Record time and date for entitlement to vote at the General Meeting 6.00 p.m. on 26 March 2026
General Meeting 3.30 p.m. on 30 March 2026
Results of General Meeting announced 30 March 2026
Tender Offer timetable
Tender Offer Record Date 6.00 p.m. on 23 February 2026
Tender Offer opens 24 February 2026
Tender Offer Closing Date : latest time and date for receipt of PINK Tender Forms and submission of TTE Instructions in respect of the Tender Offer 1.00 p.m. on 25 March 2026
Tender Offer Calculation Date close of business on 25 March 2026
Results of the Tender Offer elections announced and confirmation that the Tender Offer will proceed 30 March 2026
Establishment of Tender Pool and Continuation Pool for the Tender Offer and realisation of the Tender Pool assets commences 31 March 2026
Tender Price and payment date announced as soon as reasonably practicable but currently expected to be in or around week commencing 29 June 2026
Acquisition by Investec, and repurchase by the Company from Investec, of the Tendered Shares within 10 Business Days from the announcement of the Tender Price
CREST settlement date: payments through CREST made in respect of the Tendered Shares held in uncertificated form within 10 Business Days from the announcement of the Tender Price
CREST accounts credited for revised uncertificated holdings of Shares within 10 Business Days from the announcement of the Tender Price
Cheques despatched in respect of the Tendered Shares held in certificated form within 10 Business Days from the announcement of the Tender Price
Despatch of balancing share certificates in respect of unsold certificated Shares within 10 Business Days from the announcement of the Tender Price
Scheme timetable
Scheme Entitlements Record Date 6.00 p.m. on 9 April 2026
Scheme Calculation Date close of business on 9 April 2026
Scheme Effective Date 16 April 2026
Announcement of the results of the Scheme and respective FAVs per share 16 April 2026
CREST accounts credited with, and dealings commence in, New Shares 8.00 a.m. on 17 April 2026
Share certificates in respect of New Shares despatched not later than 10 Business Days
from the Scheme Effective Date
BRSC Second Interim Dividend timetable
Announcement expected to be by no later than 31 March 2026
Ex-dividend date for BRSC Second Interim Dividend 9 April 2026
Record date for BRSC Second Interim Dividend 6.00 p.m. on 10 April 2026
Payment date for BRSC Second Interim Dividend 8 May 2026
Sub-division timetable Last day of dealings in Existing Shares 30 June 2026
Record date for Sub-division and Existing Shares disabled in CREST 6.00 p.m. on 30 June 2026
Announcement of Sub-division becoming effective 1 July 2026
Admission of Sub-divided Shares effective and dealings commence in Sub-divided Shares 8.00 a.m. on 1 July 2026
CREST accounts credited with, and dealings commence in, Sub-divided Shares 8.00 a.m. on 1 July 2026
Issue of new share certificates in respect of the new Sub-divided Shares to be issued to those Shareholders who hold their Existing Shares in certificated form not later than 10 Business Days from the Sub-division Effective Date
Enquiries:
BlackRock Smaller Companies Trust plc Ronald Gould via Burson Buchanan BlackRock Investment Management (UK) Limited Company Secretary to BlackRock Smaller Companies Trust plc BRSC@bursonbuchanan.com +44 (0)20 3649 3432
Investec Bank plc (Financial adviser and Corporate Broker) David Yovichic Helen Goldsmith Denis Flanagan +44 (0)20 7597 4000
Burson Buchanan (Financial PR) Henry Wilson Helen Tarbet Nick Croysdill BRSC@bursonbuchanan.com +44 (0)7788 528143
Important Information
This announcement is not for publication or distribution in or into the United
States of America. This announcement is not an offer of
securities for sale into the United States. The securities referred to herein
have not been and will not be registered under the U.S. Securities Act of
1933, as amended, and may not be offered or sold in the United States, except
pursuant to an applicable exemption from registration. No public offering of
securities is being made in the United States.
This announcement contains information that is inside information for the
purposes of Article 7 of the UK version of Regulation (EU) No. 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as
amended (the Market Abuse Regulation). The person responsible for arranging
for the release of this announcement on behalf of BlackRock Smaller Companies
Trust plc is BlackRock Investment Management (UK) Limited, the Company
Secretary. Upon the publication of this announcement via a Regulatory
Information Service, this information is considered to be in the public
domain.
Investec Bank plc (" Investec "), which
is authorised in the United Kingdom by the Prudential Regulation Authority and
regulated in the United Kingdom by the Prudential Regulation Authority and the
Financial Conduct Authority, is acting exclusively for BlackRock Smaller
Companies Trust plc and no one else in connection with the Proposals and none
of Investec nor any of its affiliates, branches or subsidiaries will be
responsible to anyone other than BlackRock Smaller Companies Trust plc for
providing the protections afforded to clients of Investec, nor for providing
advice in relation to any matter referred to in this announcement or the
Circular.
Neither Investec nor any of its subsidiaries, branches or affiliates or any of
its and their respective directors, officers, employees, representatives or
agents owes or accepts any duty, liability or shall be held responsible in any
way whatsoever for any direct, indirect or consequential losses (whether in
contract, in tort, under statute or otherwise) arising from the use of this
announcement, the Circular or their contents or reliance on the information
contained herein, except to the extent this would be prohibited by law or
regulation.
Capitalised terms used in this announcement have the meaning as defined in the
Circular, unless otherwise defined in this announcement.
Release (https://mb.cision.com/Main/22402/4310507/3944297.pdf)
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