JP Morgan Private Equity : JPEL – Strategic Initiatives

JPEL has secured third parties to buy up t0 84m of its shares at $0.80 per share – a premium to the current share price, it will cease making capital distributions and invest up to $150m in “growth” companies.

Having repaid part of its zero dividend finance, cut debt and bought back $20m worth of shares – financed by sales of investments – JPEL still finds itself trading at a wide discount and has decided to implement these new proposals as a way of addressing this.

JPEL advises shareholders wanting to sell to the institutional investors looking to purchase its shares to contact Liberum before 24 January 2014.

The new investments are planned to be made, over the next two years, in 15-20 private companies, predominantly in the US and Western Europe.

In addition, at the next AGM, JPEL will put forward proposals to create a redeemable realisation share class. The new class will be created following the redemption of JPEL’s 2015 zero dividend preference shares and shareholders opting for this share class will get cash distributions (as JPEL’s sells the underlying investments) from 31 January 2016 but payments will only be made if there is sufficient money set aside to cover the redemption of the 2017 zero dividend share class.

If shareholders reject these proposals, JPEL will have a rethink.