JF China Region Fund Announces Merger Proposals Put to the Board of the Greater China Fund
The Board of the JF China Region Fund, Inc. (NYSE: JFC) notes the announcement by the Board of the Greater China Fund, Inc. (NYSE: GCH) in response to JFC’s merger proposal.
JFC put this proposal to the Chairman of GCH in a letter dated July 24, 2012, following the results of the GCH Annual Meeting of Stockholders on June 29, 2012, in which stockholders approved a proposal to terminate GCH’s Investment Advisory Agreement with Baring Asset Management (Asia) Ltd, and taking account of the announcement released by City of London Investment Management Company, a major shareholder, on October 10, 2011, in which it indicated that it would support a merger proposal between JFC and GCH on the terms summarized in its announcement.
The proposals put forward are summarized below:
- A merger of GCH into JFC on the basis of the two funds’ relative net asset values per share. Following this transaction, JFC would continue to retain the services of its Investment Advisor, JF International Management, Inc, a member of the J.P. Morgan Group;
- JFC to retain the same service providers as presently in place;
- A post-merger tender offer by JFC, the terms of which will need to be determined by the Board following consultation with shareholders;
- The introduction of an enhanced ongoing share repurchase program and/or other measure(s) to reduce discount volatility in normal market conditions; and
- Following the merger, JFC will seek to retain the current investment objectives and policies of JFC including maintaining the same level of direct China A-Share exposure (subject to necessary approvals), the ability to utilize leverage and an investment in mid and small cap companies.
The Board of JFC believes these proposals are in the best interests of JFC shareholders as a whole, and further believes that the proposed reorganization offers significant potential benefits to GCH shareholders. Accordingly, the Board of JFC will look forward to hearing the views of major shareholders on these proposals.
If appropriate, the Board of JFC will make a further announcement in due course. There is, however, no guarantee that any merger or reorganization transaction will proceed and any transaction proposed may materially differ from the terms outlined above.
The JF China Region Fund (the “Fund”) is a non-diversified, closed-end management investment company whose shares are traded on the New York Stock Exchange under the symbol “JFC.” For more information please refer to the Fund’s website: www.jfchinaregion.com
Certain of the statements contained in this press release are forward-looking and reflect the Fund’s expectations regarding the Fund’s future investments, turnover, regulatory approvals, capital raising, performance, investment strategy and business based on information currently available to the Fund. Forward-looking statements are provided to present information about the Fund’s current expectations and plans relating to the future and readers are cautioned that these types of statements may not be appropriate for other purposes. These statements use forward-looking words, such as “expect,” “could,” “may,” “likely,” “undertake," “will,” “believe” or other similar words.
The Fund seeks to achieve long-term capital appreciation through investments primarily in equity securities of companies with substantial assets in, or revenues derived from, the People's Republic of China, Hong Kong, Taiwan and Macau -collectively, the China Region.
J.P. Morgan Fund Services, in Boston, MA is the Fund’s accounting and administrative agent.
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