CAS Crusader Resou.

RNS Number:8740M
Collective Assets Trust PLC
27 May 2005

          
To:       RNS

From:     Collective Assets Trust plc

Date:     27 May 2005

Collective Assets Trust plc ("CAT" or the "Company")

Recommended proposals for the amalgamation of CAT
with Personal Assets Trust plc

The Board of CAT today announces that it has issued a circular to Shareholders
(the Circular) in which it notes that, despite CAT's success, the Board has
concluded that the Company should no longer continue in being, for the reasons
listed below.  Therefore, the Board has decided to give Shareholders the
opportunity to roll their investment into Personal Assets Trust plc, an
investment trust with which many Shareholders will already be familiar, or to
realise their investment in the Company for cash (the Proposals). At 25 May 2005
(the latest practicable date prior to the publication of this document), #4.2
million (or 30.0 per cent.) of CAT's assets were represented by its investment
in PAT.

These Proposals are being brought forward for the following principal reasons:
     
*    the Listing Rules have, from 1 April 2005, prohibited a listed investment 
     company from having a board in which the majority of directors are also 
     directors of another investment company which is managed by the same 
     manager. PAT has, in Ian Rushbrook, the same managing director as CAT and 
     each of the directors of CAT (with the exception of CAT's chairman) is also 
     a director of PAT. The amended Listing Rules would therefore necessitate a
     significant change in the composition of CAT's Board of Directors and/or 
     in the Board of Directors of PAT if Ian Rushbrook were to remain as 
     managing director of both PAT and CAT;

*    those directors of CAT who are also directors of PAT receive only a small 
     incremental directors' fee for their services to CAT and therefore any 
     change in the composition of CAT's Board would be likely to lead to a 
     substantial increase in directors' fees payable by CAT;

*    when CAT was launched, the Board envisaged that it would seek to increase 
     its assets in part by participating in reconstructions of other investment 
     companies and investment trusts. As CAT Shares have usually traded at a 
     premium to net assets, CAT would have been well placed to participate in 
     such reconstructions without the problem faced by many investment trusts of 
     having to offer, at net asset value, shares which could be purchased in the 
     market at a discount.  However, as a result of CAT's relatively small size, 
     its participation in reconstructions would inevitably have involved the 
     publication of listing particulars or even re-applying for its listing in 
     the event that CAT was considered to have effected a reverse takeover. In 
     part owing to the costs which that would entail, but also owing to a lack 
     of suitable reconstruction opportunities, CAT has not been able to achieve 
     significant growth by acquisition.

THE PROPOSALS

The Board has concluded that it is in the interests of Shareholders as a whole
to propose a scheme of reconstruction comprising a members' voluntary winding up
of the Company under section 110 of the Insolvency Act 1986 and the Company's
articles of association, with options for Shareholders to elect:
     
*    to roll over their investment in a tax efficient manner into PAT on a NAV 
     for NAV basis (the PAT Option); or

*    to realise their investment in the Company for cash at NAV (the Cash 
     Option).

The Board considers that it is important to offer an unrestricted Cash Option at
NAV as part of the Proposals as this is consistent with its policy of ensuring
that CAT's shares always trade at close to net asset value.

Shareholders (other than Overseas Shareholders and Shareholders who would be
entitled to less than one PAT Share) who do not make a valid election for the
purposes of the Proposals will be deemed to have made an election for the PAT
Option. Overseas Shareholders and Shareholders who would be entitled to less
than one PAT Share will be deemed to have made an election for the Cash Option.

INFORMATION ABOUT PAT AND THE PAT OPTION

PAT is an existing self-managed investment trust in the AITC's Global Growth
sector. PAT's managing director is Ian Rushbrook. As at 30 April 2005, PAT had a
market capitalisation of #152 million and a yield, based on the current rate of
dividend payment, of 1.6 per cent. PAT is managed specifically for private
investors. It has a capital structure consisting only of ordinary shares and has
no investment specialisation or policy restrictions. Its investment policy is
simply to protect and increase the value of shareholders' funds over the long
term and to achieve as high a total return as possible at a risk not
significantly greater than that of investing in its benchmark index, the FTSE
All-Share.

Since PAT became self-managed in July 1990, it has continued with the same
investment management personnel, investment process and board relationships that
have enabled it not only to achieve considerable investment success but also to
expand significantly in size through the development of its zero charge
investment plans for shareholders.

The policy of the Board of PAT is to ensure that PAT's shares always trade at
close to net asset value through the active issuing or buying in of shares. The
success of this policy has been such that, from 1995 to 30 April 2005, the
widest discount on which PAT Shares traded was 3.3 per cent. and over the period
as a whole the average premium of PAT's share price to net asset value was 3.1
per cent. compared to an average discount of 9.0 per cent. for the UK Investment
Trusts Total Market Index.

The entitlement of a Shareholder who elects for the PAT Option shall be
calculated as follows. The NAV of a CAT Share will be divided by the price at
which the New PAT Shares are to be issued under the Scheme (being the net asset
value of a PAT

Share as at the Calculation Date) to give the ratio at which a CAT Share rolls
over into a New PAT Share.  In determining this ratio, no account shall be taken
of the costs of the Proposals as all these costs will ultimately be borne by Ian
Rushbrook.

The New PAT Shares will rank pari passu with the existing PAT Shares.

ADVANTAGES OF THE PROPOSALS

The Directors believe that the Proposals have no disadvantages and offer
Shareholders some benefits:

*    the total expense ratio (TER) of PAT for its last completed financial year 
     was 1.13 per cent., which is significantly lower than the TER of CAT for 
     its last completed financial year of 1.47 per cent.  The Directors expect 
     that the TER of CAT would increase following a change to the composition of 
     its Board as this would result in significantly higher directors' fees;

*    the bid-to-offer spread on a PAT Share has generally been narrower than the 
     bid-to-offer spread on a CAT Share; and

*    the amalgamation of CAT with PAT will eliminate investor confusion between 
     the two companies.

COSTS AND EXPENSES

PAT has agreed to assume the liability for all of the costs and expenses of the
Proposals, subject to the Scheme becoming effective. The Proposals will
therefore not result in any reduction in shareholder value. PAT has agreed with
Ian Rushbrook, its managing director, that, in the event that the Scheme becomes
effective, the salary which he receives from PAT will be reduced by an amount
equal to the costs and expenses of the Proposals (including irrecoverable VAT)
such that the costs and expenses of the Proposals will ultimately be borne
entirely by Ian Rushbrook.

Ian Rushbrook has agreed with CAT that in the event that the Scheme does not
become effective then the salary which he receives from CAT will be reduced such
that Ian Rushbrook will ultimately bear the entire costs and expenses of the
Proposals.

CASH OPTION

Shareholders who elect for the Cash Option or who are Overseas Shareholders or
who would be entitled to less than one PAT Share will receive an amount in cash
equivalent to their entitlement under the Scheme. This amount will be the net
asset value of a CAT Share (without taking account of the costs of the
Proposals, as the costs and expenses of the Proposals will not ultimately be
borne by CAT) multiplied by the number of CAT Shares held.

Cheques in respect of the cash amount due to Shareholders who elect for the Cash
Option are expected to be dispatched to them in the week beginning 4 July 2005
or as soon as practicable thereafter.

DEFAULT PROVISIONS

Shareholders (other than Overseas Shareholders and Shareholders who would be
entitled to less than one PAT Share) who do not make a valid election for the
purposes of the Proposals will be deemed to have made an election for the PAT
Option. Overseas Shareholders and Shareholders who would be entitled to less
than one PAT Share will be deemed to have made an election for the Cash Option.

FINAL INTERIM DIVIDEND

In order to ensure that the Company continues to comply with the provisions of
section 842 of the Income and Corporation Taxes Act 1988, the Board intends that
the Company shall pay a final interim dividend on 27 June 2005 to Shareholders
on the register on 17 June 2005.  Based on current estimates of costs and
revenues for this financial year, the interim dividend is expected to be 1.75p
per share. This is not a profit forecast. This interim dividend will not be paid
if the resolution to be proposed at the First EGM is not passed by the requisite
majority.

CAT'S SHAREHOLDING IN PAT

As at the date of this document, CAT holds 18,100 PAT Shares. Since these shares
would be unable to be transferred to PAT under the Scheme, the Board of
Directors of PAT has agreed that PAT will buy back these shares prior to the
Calculation Date.

EXTRAORDINARY GENERAL MEETINGS

The Proposals are conditional on the passing by Shareholders of the special
resolutions at the first and second extraordinary general meetings or any
adjournments thereof (the First EGM and the Second EGM respectively) and all
conditions to such resolutions and the Scheme being fulfilled.

The First EGM will be held at 12 noon on Wednesday, 22 June 2005. At the First
EGM, a special resolution will be proposed to sanction the Scheme and to amend
the Articles for the purpose of implementing the Scheme.

The Second EGM will be held at 12 noon on Wednesday, 29 June 2005. At the Second
EGM, a special resolution will be proposed to approve the winding up of the
Company and to appoint the liquidators and an extraordinary resolution will be
proposed to confer appropriate powers on them.

Both EGMs will be held at the Edinburgh offices of F&C Asset Management plc, 80
George Street, Edinburgh EH2 3BU.


DEFINITIONS

"Board"                      the board of directors of CAT
"Calculation Date"           the date (to be determined by the directors of CAT 
                             but expected to be Tuesday, 28 June 2005) on which 
                             the value of the assets of the Company will
                             be determined for the purpose of the Scheme

"CAT Share"                  an ordinary share of #0.02 in the capital of CAT or 
                             a Reclassified Share (as the context may require)

"Listing Rules"              the listing rules of the UK Listing Authority

"NAV"                        net asset value of a share

"New PAT Shares"             PAT Shares to be issued pursuant to the Scheme

"Overseas Shareholders"      Shareholders with a registered address outside the 
                             United Kingdom, the Channel Islands or the Isle of 
                             Man

"PAT Shares"                 ordinary shares of #12.50 each in the capital of 
                             PAT

"Reclassified Shares"        shares with A rights and shares with B rights to be 
                             created for the purpose of the Scheme, subject to 
                             shareholder approval at the First EGM

"Scheme"                     the proposed scheme implementing the Proposals, 
                             details of which are set out in the Circular

"Shareholders"               holders of shares in CAT


The Circular is available to the public for inspection only during normal
business hours at the Document Viewing Facility, The Financial Services
Authority, 25 The North Colonnade, London E14 5HS.


For further information please contact:


Ian Rushbrook, Collective Assets Trust plc:              0131 225 2049
Robin Angus, Collective Assets Trust plc:                0131 465 1179

This announcement, which has been issued by the Company, has been approved by F&
C Asset Management plc for the purposes of section 21 of the Financial Services
and Markets Act 2000. F&C Asset Management plc is Authorised and regulated in
the United Kingdom by the Financial Services Authority.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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