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Case Study

The Prospect Japan Fund Limited

Location: Japan/ UK

Deal Type: Recommended, all share, offer for Prospect Japan Fund Limited (LSE) by Prospect Co. Ltd (TSE:3528) via a scheme of arrangement

Deal Size: US$146.6m

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Prospect Co., Ltd.

In November 2016, Strand Hanson was appointed by Prospect Co., Ltd. (“Prospect” or the “Company”) to act as Joint Financial Adviser and Rule 3 Adviser, alongside Mizuho Bank, Ltd. (Corporate Advisory department), an investment banking arm of Mizuho Financial Group, as Joint Financial Adviser, in relation to the Company’s recommended all-share offer for the entire issued and to be issued share capital of The Prospect Japan Fund Limited (“TPJF”) under the provisions of the City Code on Takeovers and Mergers (the "Code"). This was the first ever all Japanese equity offer for a UK listed, Code company.

The recommended share-for-share offer was implemented by way of a scheme of arrangement (the “Scheme”) at a ratio of 2.5 New Prospect Shares in exchange for each TPJF Share, valuing the entire issued share capital of TPJF at approximately US$146.6m, a premium of approximately 68 per cent. to the middle market closing price of a TPJF Share prior to the start of the offer period. The offer successfully completed on 27 July 2017, upon the Scheme becoming effective, with 88.06 per cent. of votes cast in favour at the requisite Court Meeting to approve the Scheme.

The transaction included various pioneering elements, including devising bespoke and unprecedented settlement mechanics to comply both with the relevant provisions of the Code and all Japanese legal and regulatory requirements, as well as a unique combination of legal undertakings and post offer intention statements (under the Code) for the benefit of the new (ex TPJF) shareholders of Prospect whereby certain information and participation rights are to be provided in English in a protected form for a five year period post completion.

Strand Hanson is delighted to have jointly led such a precedent setting M&A transaction, which once again demonstrates the innovative creative approach that the M&A team at Strand Hanson brings to challenging transactions.