REG-Invesco Perp EuroAbs: Restructure Proposals

Invesco Perpetual European Absolute Return Trust plc ( the `Company')

HEADLINE: Recommended proposals for the voluntary winding-up and reconstruction
of the Company

Introduction

The Company announced on 18 June 2009 that at its annual general meeting held
on the same date, the ordinary resolution for the continuation of the Company
as an investment trust had been defeated. Accordingly, and in accordance with
the requirements of the Articles, the Directors are obliged to put to
Shareholders proposals for the reconstruction of the Company incorporating
proposals for Shareholders to either continue their investment in a
closed-ended company or to receive a cash alternative.

After a review by the Board, in consultation with its advisers, of the options
for the reconstruction of the Company, the Board has concluded that it is in
Shareholders' interests to submit recommended proposals for the reconstruction
and members' voluntary liquidation of the Company, through a scheme under
section 110 of the Insolvency Act 1986 (the "Scheme"). Under the Proposals,
Shareholders will be able to elect to receive their entitlement upon the
winding-up of the Company either in cash or to roll over some or all of their
investment into one or both of the Rollover Funds.

The Company today announces that it is posting a Circular to Shareholders
providing further details of the Proposals, which, inter alia, are conditional
on the approval by Shareholders at the GMs. Notices convening the Meetings are
set out in the Circular. The Board is recommending that Shareholders vote in
favour of all the Resolutions to be proposed at the Meetings.

The Options

Shareholders may elect, in accordance with their personal investment
requirements, for any combination of the following options:

* the Jupiter European Growth Option - to receive class L sterling shares in
Jupiter European Growth, which aims to provide long-term capital growth by
exploiting specialist investment opportunities in Europe. Jupiter European
Growth is a sub-fund of The Jupiter Global Fund, an FSA recognised UCITS
fund structured as a Luxemburg SICAV. Its shares have been granted "UK
Distributing Fund" status by HMRC. Jupiter European Growth Shares are not
admitted to listing and/or to trading by any authority or stock exchange;
and/or

* the City Merchants Option - to receive ordinary shares in City Merchants
High Yield Trust plc, an investment trust listed on the Official List whose
shares are admitted to trading on the main market of the London Stock
Exchange, that seeks to obtain both high income and capital growth from
investment predominantly in high-yielding fixed-interest securities. City
Merchants is managed by Invesco Asset Management Limited, the Company's
existing investment manager; and/or

* the Cash Option - to receive cash in the liquidation of the Company.

Some of the key features of Jupiter European Growth and City Merchants are set
out in the Circular. Shareholders will also be sent a simplified prospectus for
Jupiter European Growth and a prospectus for City Merchants.

Overseas Holders

Overseas Holders will not receive a Form of Election and will be deemed to have
elected for the Cash Option and accordingly will receive cash from the Company
in respect of their entire holding of Shares.

Interim Dividend

A final dividend for the year ended 31 December 2008 of 5.25 pence per Share
was paid on 19 June 2009 to Shareholders on the Register on 22 May 2009.

The Directors may declare and pay a final interim dividend prior to the
liquidation of the Company if this is considered necessary to ensure that the
Company continues to comply with the requirement for approval as an investment
trust under Section 842 of the Taxes Act.

Proposals

Under the Proposals the Company will be wound up on 30 October 2009.

Subject to the restrictions described in Part IV of the Circular relating to
Overseas Holders and to the Scheme becoming unconditional in all respects,
Shareholders will have a choice between continuing their investment by electing
for one or both of the Rollover Options listed above and/or realising some or
all of their investment for cash under the Cash Option. Shareholders will be
entitled to receive their Residual Net Asset Value per Share in respect of
their option(s). The Residual Net Asset Value per Share for these purposes is
an amount equal to the net asset value of the Company at the Calculation Date
minus the Retention after providing for the liabilities to be discharged out of
the Liquidation Pool, divided by the number of Shares in issue.

For illustrative purposes only, had the Scheme become effective on 1 October
2009 (being the latest practicable date prior to the publication of the
Circular), the Directors estimate that the Residual Net Asset Value per Share
would have been 157.24p. This is based on the following figures and estimates:
the net assets of the Company as at 1 October 2009 which were approximately £
40.56 million, the anticipated costs of the Proposals and of liquidating the
Company, estimated at approximately £410,000, and the retention anticipated to
be required by the Liquidators (to meet contingent and unknown liabilities) of
£50,000.

Based on the illustrative Residual Net Asset Value per Share set out above, and
assuming that there is no change in those net assets between now and 30 October
2009; that Jupiter European Growth Shares are issued at 1109p (being the net
asset value per Jupiter European Growth Share as at close of business on 1
October 2009); and that City Merchants Shares are issued at 151.4p (being the
net asset value per City Merchants Share as at close of business on 1 October
2009, as increased by 2 per cent. in order to cover the costs associated with
making the City Merchants Option available to Shareholders) this would give
rise to the following entitlements for every 1000 Shares held under the
Proposals:

141 Jupiter European Growth Shares; or

1,038 City Merchants Shares; or

£1,572.43 in cash.

Due to the interval between the Calculation Date (28 October 2009) and 12.00
noon on the Effective Date (30 October 2009), being the date and time on which
the value of the Jupiter European Growth Rollover Pool will be calculated for
the purpose of determining the number of Jupiter European Growth Shares which
Shareholders who elect, or are deemed to elect, for the Jupiter European Growth
Option will receive, those Shareholders will be exposed to any movement in the
value of the Jupiter European Growth Rollover Pool between the Calculation Date
and 12.00 noon on the Effective Date.

Shareholders should note that any further payments over and above the Residual
Net Asset Value per Share would be made in cash to all Shareholders regardless
of the option(s) they choose. Such payments would be made in the event that any
funds retained in the Liquidation Pool are not required to meet costs or
liabilities of the Company.

Advantages of the Proposals

The Directors believe that the Proposals are in the best interests of
Shareholders because:

* they allow Shareholders who elect to roll over into City Merchants to
continue their exposure to an investment trust listed on the Official List
whose shares are admitted to trading on the main market of the London Stock
Exchange, managed by Invesco, predominantly invested in fixed-interest
securities and providing income returns;

* they allow Shareholders who elect to roll over into Jupiter European Growth
to continue their investment in a fund which seeks to achieve long-term
capital growth through exposure to securities of companies which have their
registered office in Europe or exercise the predominant part of their
economic activities in Europe (including the UK) and which are considered
by Jupiter Asset Management to be undervalued or otherwise to offer good
prospects for capital growth;

* Jupiter European Growth Shares are being offered to Shareholders without an
initial subscription fee or requirement for minimum investment levels which
are usually applied to direct subscriptions; as Jupiter European Growth is
an open-ended investment vehicle, Jupiter European Growth Shares can be
redeemed on any business day in Luxembourg, without penalty, at the
prevailing net asset value per share; and Jupiter European Growth
shareholders are also entitled to switch their holding, free of any initial
charges or commission, into any of the other funds within The Jupiter
Global Fund, of which there are 8 launched sub-funds as at the date of this
document. Shareholders should be aware that switching may trigger a
disposal for UK capital gains tax purposes. Investors should take their own
tax advice as to the consequences of switching between sub-funds;

* Jupiter Asset Management has agreed that, for the period of 18 months
following the Effective Date, it will rebate half of its annual Jupiter
Management Fee payable in respect of Jupiter European Growth Shares issued
pursuant to the Scheme (and not redeemed within the period of 18 months
following the Effective Date). This rebate of management fees will be paid
quarterly to the Liquidators, on behalf of the Company, and will form part
of the Liquidation Pool;

* they should allow Shareholders who elect to receive shares in one or both
of the Rollover Funds to retain an investment exposure without triggering a
disposal for UK capital gains purposes until disposing of such shares at a
time of their choosing; and

* Shareholders who elect for the Cash Option will be able to receive cash in
the liquidation of the Company.

Rollover Options

Shareholders will find enclosed with the Circular a simplified prospectus
relating to Jupiter European Growth. Jupiter European Growth aims to achieve
long-term capital growth by exploiting specialist investment opportunities in
Europe. As at the date of this release, Jupiter European Growth's investments
are held across a range of sectors including healthcare, industrials,
technology and oil & gas in a number of European countries including France,
the UK, Denmark, the Netherlands, Switzerland and Germany. The full prospectus
for The Jupiter Global Fund is available via Jupiter's website at
www.jupiterinternational.com. Shareholders may also find key features about The
Jupiter Global Fund in Part II of the Circular.

Shareholders will also find enclosed with the Circular a prospectus relating to
City Merchants High Yield Trust plc. City Merchants' investment objective is to
seek to obtain both high income returns and capital growth through investment
predominantly in high-yielding fixed-interest securities. City Merchants seeks
to provide a high level of dividend income relative to prevailing interest
rates through investment in fixed-interest securities, various equity-like
securities within fixed-income markets and equity-linked securities such as
convertible bonds and in direct equities that have a high income yield. It also
seeks to enhance total returns through capital appreciation generated by
investments which have equity-related characteristics. City Merchants'
investments may include preference shares and loan stocks, corporate bonds and
government stocks. Shareholders may also find key features about City Merchants
High Yield Trust plc in Part III of the Circular.

Cash Option

Shareholders who elect for the Cash Option will receive in respect of their
entitlement a cheque if they hold Shares in certificated form or a payment
through CREST if they hold Shares in uncertificated form.

Failure to make an Election

Shareholders (other than Overseas Holders and Shareholders who hold their
Shares in an ISA or savings plan) who make no valid Election will be deemed to
have elected for the Jupiter European Growth Option.

Liquidation Pool

Under the Proposals, the Company will be wound up by means of a members'
voluntary liquidation. The Liquidators will set aside sufficient assets in the
Liquidation Pool to meet all estimated liabilities and contingencies, including
the costs of implementing the Scheme. The Liquidators will also provide in the
Liquidation Pool for a Retention which they consider sufficient to meet any
contingent and unknown liabilities of the Company. The Retention is currently
expected to amount to approximately £50,000. To the extent that funds in the
Liquidation Pool are not required they will be distributed by the Liquidators
at a later date, in cash, pro rata to all Shareholders on the Record Date,
regardless of the option(s) they choose.

Details of the Proposals

As part of the reconstruction and winding-up of the Company it is necessary,
for technical reasons, to amend the Articles in order to reorganise its share
capital. Set out in the Circular are the notices convening the GMs.

At the First GM, special resolutions will be proposed to (i) re-classify the
rights attaching to the Shares such that those Shareholders who elect (or are
deemed to elect) to roll over some or all of their Shares into Jupiter European
Growth will, in respect of such Shares, hold Shares with "A" rights giving them
the right to receive Jupiter European Growth Shares on a winding-up of the
Company, those Shareholders who elect to roll over some or all of their Shares
into City Merchants will, in respect of such Shares, hold Shares with "B"
rights giving them the right to receive City Merchants Shares on a winding-up
of the Company, and those Shareholders who elect to receive cash in respect of
some or all of their Shares will, in respect of such Shares, hold Shares with
"C" rights giving them the right to receive cash on a winding-up of the
Company; (ii) authorise the implementation of the Scheme by the Liquidators
including a future application to delist the Company's Shares from the Official
List; and (iii) amend the Articles for the purposes of implementing the Scheme.
The resolutions proposed at the First GM are required pursuant to the Articles
and for the purposes of the Companies Act 2006.

Subject to the passing of the resolutions at the First GM, at the Second GM,
special resolutions will be proposed to wind the Company up voluntarily, to
appoint the Liquidators and to confer certain powers on the Liquidators. These
resolutions are required pursuant to the Insolvency Act 1986 and the Articles.

At the First GM and the Second GM, every member present in person or by proxy
shall on a show of hands have one vote, and on a poll shall have one vote for
every Share held by him.

In the event that the special resolutions are not passed at the First GM or the
Second GM, a special resolution will instead be proposed at the Third GM to
wind up the Company voluntarily. Weighted voting rights will apply at the Third
GM, pursuant to article 152.2 of the Articles, which will have the effect of
ensuring that the Company will be wound up.

In order to implement the Scheme, the assets of the Company will be divided
into four Pools on the Calculation Date: the Cash Pool, the Jupiter European
Growth Rollover Pool, the City Merchants Rollover Pool and the Liquidation
Pool, on the Calculation Date. The assets of the Company will comprise cash and
securities. The division of the assets of the Company will be on the basis of
the value attributable to Elections (and deemed Elections) for each of the
Rollover Options and the value attributable to Elections for the Cash Option as
a proportion of the total value attributable to Elections (and deemed
Elections). In order to make the division between the four Pools, the Manager,
in consultation with the proposed Liquidators, will calculate for the purposes
of determining Residual Net Asset Value the aggregate value of the Company in
accordance with the Scheme as at 5.00 p.m. on the Calculation Date.

Costs and Expenses

The total costs in connection with the Proposals and the liquidation are
estimated to be approximately £410,000 (inclusive of VAT and the estimated
Liquidators' costs but excluding the Retention).

Conditions to the Proposals

The Proposals which provide for, and which will effect, the Rollover Options
and the Cash Option, are conditional upon (i) the resolutions at the First GM
and the Second GM being passed; (ii) the admission to the Official List of the
Reclassified Shares; and (iii) the Directors not resolving to abandon the
Scheme. In the event that the Proposals do not become unconditional, the
Company will proceed to a straight liquidation pursuant to the resolutions
contained in the notice of the Second GM and, if necessary, pursuant to the
resolution contained in the notice of the Third GM. Such a straight liquidation
of the Company would constitute a disposal for UK capital gains tax purposes.

Certain considerations relating to the Proposals

The implementation of, and an Election for one or more options under, the
Proposals carry with them certain considerations for Shareholders as described
below:

* in the event that any of the Resolutions to be proposed at the First GM or
the Second GM is not passed, the Scheme will not be implemented and the
Company will be wound up on 30 October 2009;

* Shareholders who elect for, or are deemed to have elected for, the Cash
Option should be treated as disposing of their Shares for the purposes of
UK taxation of chargeable gains and this may lead to a chargeable gain
which creates a UK tax liability, depending on the Shareholder's
circumstances;

* Shareholders who elect to, or are deemed to have elected to, roll over some
or all of their investment into Jupiter European Growth will receive such
number of Jupiter European Growth Shares as is produced by dividing their
proportion of the Jupiter European Growth Rollover Pool by the Jupiter
European Growth Share Subscription Price, being the published net asset
value per Jupiter European Growth Share as at 12.00 noon on the Effective
Date. Any movement in the value of the Jupiter European Growth Rollover
Pool between the Calculation Date and 12.00 noon on the Effective Date,
will be at the risk of the Shareholder concerned;

* Shareholders who elect to roll over some or all of their investment into
City Merchants will receive such number of City Merchants Shares as is
produced by dividing their proportion of the City Merchants Rollover Pool
by the City Merchants Share Issue Price, which will be calculated at the
close of business on the Calculation Date rounded up to the nearest one
tenth of a penny, provided that if such calculation results in the City
Merchants Share Issue Price being less than 90 per cent. of the closing
middle market price of a City Merchants Share on the same date, the City
Merchants Share Issue Price shall be 90 per cent. of that closing middle
market price;

* if Shareholders elect to roll over some or all of their entitlement into
Rollover Shares any subsequent disposal by such Shareholders of such shares
may constitute a disposal for the purposes of crystallising a liability to
UK capital gains tax;

* there can be no assurance that Jupiter European Growth or City Merchants
will not (subject to any necessary shareholder approval) raise its annual
management charge and/or other fees in the future; or that there will not
be any changes to key personnel within Jupiter and/or Invesco; or that the
investment objective and policy of Jupiter European Growth and/or City
Merchants will not (subject to any necessary shareholder approval) change;

* Shareholders electing (or who are deemed to elect) to receive Jupiter
European Growth Shares will be required to supply evidence of their
identity to comply with anti-money laundering regulations. The Jupiter
Administrator will write to the relevant holders of Jupiter European Growth
Shares following the Effective Date, requesting the relevant documentation.
Those holders are advised that, for the purposes of anti-money laundering
laws, they will not be permitted to deal (transfers, redemptions,
subscriptions or conversions) in any new shares received in Jupiter
European Growth until the anti-money laundering procedure has been
completed;

* if the City Merchants Shares allotted pursuant to the Scheme are not, for
whatever reason, admitted to the Official List or to trading on the London
Stock Exchange's main market for listed securities, Elections by
Shareholders for such shares will instead be deemed to be Elections by such
Shareholders for cash (being the cash realisation proceeds from a sale of
the City Merchants Rollover Pool, less the costs of realisation); and

* an investment in either or both of the Rollover Funds entails certain risks
for Shareholders. Shareholders are advised to read the risk factors
relating to an investment in the Rollover Funds as set out in the Circular.

Risk Factors

Shareholders' attention is drawn to the risk factors relating to an investment
in the Rollover Funds as set out in the Circular.

For the purposes of the Proposals, the assets attributable to the Rollover
Pools will be valued at the close of business on the Calculation Date, being 28
October 2009. For the purposes of calculating the number of Rollover Shares to
be issued, the value of those assets to be transferred to Jupiter European
Growth will be calculated on the basis of their value as at 12.00 noon on the
Effective Date. Any movement in the value of the Jupiter European Growth
Rollover Pool between the Calculation Date and 12.00 noon on the Effective
Date, may have a positive or negative impact on the value of entitlements of
those Shareholders who elect (or are deemed to elect) for the Jupiter European
Growth Option, and will be at the risk of those Shareholders concerned.

The value of the assets to be transferred to City Merchants and the number of
City Merchants Shares to be issued to Shareholders who elect for City Merchants
Option will be calculated simultaneously as at 5.00p.m. on the Calculation
Date.

Management Agreement

If the Resolutions are passed, the Company will, pursuant to the Management
Agreement, give notice in writing to the Manager that the Management Agreement
is terminated forthwith. No compensation shall be payable to the Manager in
connection with such termination.

United Kingdom Taxation

As explained more fully in the section headed "UK Taxation" in paragraph 4 of
Part VI of the Circular, the receipt of Rollover Shares under the Proposals
should not, on the basis of current legislation and HMRC practice, trigger a
disposal of shares for the purposes of capital gains tax where these are held
as an investment. The receipt of cash under the Cash Option or a subsequent
sale, redemption or other disposal of Rollover Shares acquired will constitute
a disposal for capital gains tax purposes and may, depending on a Shareholder's
particular circumstances, give rise to a liability to capital gains tax.

Action to be taken

Details of the action to be taken by Shareholders in relation to the Proposals
are set out in Part IV of the Circular. It is important that Shareholders read
Part IV of the Circular carefully and return their Forms of Election or TTE
Instructions so as to be received no later than 1.00 p.m. on 21 October 2009.
Shareholders wishing to receive Jupiter European Growth Shares in respect of
their entire holding do not need to complete a Form of Election or a TTE
Instruction.

Failure to return a Form of Election or a TTE Instruction or the return of a
Form of Election which is not validly completed will result in the relevant
Shareholder (other than an Overseas Holder) being deemed to have elected for
the Jupiter European Growth Option.

Invesco Savings Plans and ISAs

Individuals who hold their Shares through the Invesco Savings Plans and ISAs
(comprising the Invesco Perpetual Investment Trust Series 1: Savings &
Investment Plan and the Invesco Perpetual Investment Trust Series 1:ISA) will
find enclosed with the Circular a letter from the Manager together with a Form
of Direction and an Invesco Savings Plans and ISAs Form of Election which
explains the options available to them and the actions which they should take.
Such individuals should complete and return the Form of Direction and the
Invesco Savings Plans and ISAs Form of Election so as to arrive no later than
the times and dates specified in that letter.

Recipients of the Circular who are the beneficial owners of Shares held through
any other savings scheme or ISA should follow the instructions provided by the
relevant plan manager or consult the plan manager or their professional adviser
if no instructions have been provided.

Recommendation

The Board of the Company, which has received financial advice from Fairfax in
the context of the Proposals, considers that the Proposals set out in the
Circular are in the best interests of Shareholders as a whole and recommends
Shareholders to vote in favour of all of the Resolutions. In providing its
advice, Fairfax has placed reliance on the Directors' commercial assessment of
the Proposals.

The Directors intend to vote in favour of the Resolutions in respect of their
own beneficial holdings amounting, in aggregate, to 366,426 Shares
(representing approximately 1.44 per cent. of the voting share capital of the
Company).

The Board cannot and does not give any advice or recommendation to Shareholders
as to whether, or as to what extent, they should elect for any of the options
under the Proposals. The choice between the options is a matter for each
Shareholder to decide and will be influenced by their individual financial and
tax circumstances and their investment objectives. Shareholders should seek
advice from their own independent financial adviser if they are in any doubt as
to action that they should take.

Expected Timetable

Tuesday 20 October 10.30 Latest time and date for receipt of Forms of
a.m. Proxy for the First GM

Wednesday 21 1.00 p.m. Latest time and date for receipt of Forms of
October Election from Shareholders and TTE Instructions
from CREST Shareholders

Wednesday 21 5.00 p.m. Record Date for entitlement to the Scheme and
October share register closes

Thursday 22 October 10.30. First GM and Shares reclassified into
a.m. Reclassified Shares

Thursday 22 October Results of First GM and Elections announced

Friday 23 October 8.00 a.m. Shares reclassified as Reclassified Shares in the
Official List and share register opens

Wednesday 28 Latest time and date for receipt of Forms of
October Proxy for the Second GM (10.30 a.m.) and the
Third GM (10.40 a.m.)

Wednesday 28 5.00 p.m. Calculation Date
October

Thursday 29 October 8.00 a.m. Listing of Reclassified Shares on the Official
List suspended

Friday 30 October 10.30 Second GM and (i) if the Scheme becomes
a.m. unconditional, Effective Date for the
implementation of the Proposals and commencement
of liquidation or (ii) if the Scheme does not
become unconditional, requirement for Third GM
(10.40 a.m.)

Friday 30 October 10.40 In the event the resolutions are not passed at
a.m. the Second GM, Third GM is held

Friday 30 October Jupiter European Growth Shares issued pursuant to
the Scheme

Monday 2 November 8.00 a.m. Dealings commence in City Merchants Shares issued
pursuant to the Scheme

Monday 2 November City Merchants Shares credited to stock accounts
in CREST of persons entitled thereto

W/C Monday 2 CREST Shareholders who elect for the Cash Option
November to be credited through the CREST system

W/C Monday 9 Cheques expected to be dispatched to Shareholders
November who hold their Shares in certificated form who
elect for the Cash Option

Certificates expected to be dispatched in respect
of City Merchants Shares issued in certificated
form

It is expected that the listing of Shares on the Official List of the UK
Listing Authority will be cancelled in November 2010.

Terms used in this announcement shall, unless the context requires otherwise,
bear the meanings defined in the Circular dated 5 October 2009.

A Circular containing full details of the Proposals and including notices
convening the meetings at which Shareholder approval will be sought is being
posted to Shareholders today. Copies of the Circular will shortly be available
for inspection at the UK Listing Authority's document viewing facility, which
is situated at:

Financial Services Authority
25 The North Colannade
Canary Wharf
London
E14 5HS

Enquires:

5 October 2009

Invesco Perpetual European Absolute Return Fund plc T: +44 (0)20 7065 4000
Jonathan Bradley (Chairman)

Guy Short

Fairfax I.S. PLC T: +44 (0)20 7598 5368

James King

Gillian McCarthy

END