Rule 2.5 Announcement Recomme

RNS Number : 2260K

ING UK Real Estate Income Trust Ltd

15 April 2010

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES, OR TO US PERSONS (AS DEFINED BY REGULATION S), OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

15 April 2010

RECOMMENDED OFFER

by

IRET SECURITIES LIMITED

(a wholly owned subsidiary of ING UK Real Estate Income Trust Limited (ING UK RET))

for

Rugby Estates Investment Trust plc

Summary and highlights

·      The Boards of ING UK RET and Rugby REIT are pleased to announce that they have reached agreement on the terms of a recommended offer to be made by IRET Securities, a newly incorporated and wholly owned subsidiary of ING UK RET, to acquire the entire issued share capital of Rugby REIT.

·      Under the terms of the Offer, Rugby REIT Shareholders may elect to receive:

for each Rugby REIT Share	1.206 New ING UK RET Ordinary Shares (valued at 68 pence at net asset value(note1) and 59.1 pence at current market value(note2))
	or
	one ZDP Share (valued at approximately 65 pence(note3))
	or
	63 pence in cash

Rugby REIT Shareholders may elect for any of the above options, or a combination of any of the above, in respect of their holding of Rugby REIT Shares.

Key Highlights of the Offer

The Offer provides Rugby REIT Shareholders with a range of consideration alternatives to suit their individual circumstances:

·      the Share Offer provides Rugby REIT Shareholders with the opportunity to own shares in ING UK RET which:

- pay a current dividend yield of 7.1 per cent (note4);

- offer greater secondary market liquidity compared to Rugby REIT Shares; and

- provide exposure to a larger and more diversified property portfolio than a shareholding in Rugby REIT.

·      the ZDP Alternative offers Rugby REIT Shareholders:

- a final entitlement payable in cash on 31 October 2012 of approximately 77(note5) pence; and

- an annualised return of 6.875 per cent currently taxed for UK resident individuals as capital gain (at 18 per cent) rather than as income (up to 50 per cent)(note6). The ZDP Share offers a gross yield premium of 5.4 per cent over a comparably dated UK Gilt as at 14 April 2010.

·      the Cash Alternative enables Rugby REIT Shareholders to realise their investment immediately at a significant premium to both the Rugby REIT share price prior to the announcement of merger talks between Rugby REIT and ING UK RET and to the previous offer for Rugby REIT.

For all Rugby REIT Shareholders, irrespective of their choice of consideration, the Offer represents:

·      a faster exit from their investment in Rugby REIT with greater certainty as to quantum and timing of cash and/or liquid securities than if Rugby REIT's portfolio was to be realised in an orderly manner; and

·      the opportunity to select a form, or forms, of consideration most appropriate to their individual requirements and tax planning considerations.

The Rugby REIT Directors have agreed unanimously to recommend the Offer.

Irrevocable Undertakings

·      ING UK RET has secured irrevocable undertakings to accept the Offer in respect of a total of 26,195,454 Rugby REIT Shares, representing approximately 44.4 per cent of the existing issued share capital of Rugby REIT.

·      included within the above: Laxey Partners has irrevocably undertaken to accept the Offer in respect of its holding of 21,025,254 Rugby REIT Shares, representing approximately 35.7 per cent of the existing issued share capital of Rugby REIT; Rugby CGLP Limited has irrevocably undertaken to accept the Offer in respect of its holding of 4,990,200 Rugby REIT Shares, representing approximately 8.5 per cent of the existing issued share capital of Rugby REIT; and the Directors of Rugby REIT have irrevocably undertaken to accept the Offer in respect of their combined holding of 180,000 Rugby REIT Shares, representing approximately 0.3 per cent of the existing issued share capital of Rugby REIT.

Summary table of Offer premia

The Offer represents the following premia to Rugby REIT's share price:

	Share Offer - Net Asset Value (note1)	Share Offer - Market Value (note2)	ZDP Alternative	Cash Alternative
Offer basis	68.0p	59.1p	65.0p	63.0p
Premium to:
Terra Offer(note7)	65.9%	44.1%	58.5%	53.7%
Pre merger talks announcement price(note8)	38.1%	20.0%	32.0%	27.9%
Last practicable price prior to publication(note9)	23.6%	7.5%	18.2%	14.5%

Offer Conditions

·      the Offer is conditional upon, amongst other things: (i) valid acceptances being received (and not, where permitted, withdrawn) in respect of more than 90 per cent in nominal value of Rugby REIT Shares to which the Offer relates (or such lesser percentage as IRET Securities may, in its sole discretion decide, provided such percentage exceeds 50 per cent of the voting rights then normally exercisable at a general meeting of Rugby REIT); and (ii) Admission of the New ING UK RET Ordinary Shares.

Commenting on the Offer, Nicholas Thompson, Chairman of ING UK RET, said:

"We believe this represents a compelling transaction for both our own shareholders and those of Rugby REIT.

The Offer has been structured to ensure Rugby REIT Shareholders have been provided with a range of alternatives to suit their own objectives. It provides those who take up the Share Offer with access to a combined portfolio which we believe will continue to deliver strong income and a fully covered dividend. Alternatively, we have provided the option of an immediate cash exit, as well as an innovative form of consideration through the issue of ZDP Shares, which we believe offers an attractive coupon and tax planning advantages to certain shareholders.

Furthermore, the Offer also removes the considerable risk of deliverability from Rugby REIT's stated alternative, which is portfolio run off, whilst offering Rugby REIT Shareholders the opportunity to remain invested in a good quality UK commercial property portfolio, should they so wish."

Commenting on the Offer, Philip Kendall, Chairman of Rugby REIT, said:

"We believe the Offer provides Rugby REIT Shareholders with the benefit of a choice of consideration at a premium to the current Rugby REIT share price. As part of our strategic review announced late last year, we concluded that the interests of Rugby REIT Shareholders would be best served by either an orderly disposal of the portfolio or a sale to another group. The Rugby REIT Board has carefully considered an orderly disposal of the portfolio, however we have concluded that the certainty of value and choice of consideration provided by ING UK RET's Offer delivers a more attractive alternative for Rugby REIT Shareholders."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement.  The conditions to which the Offer will be subject and certain further terms of the Offer are set out in Appendix I to this announcement. The bases and sources of certain financial information contained in this announcement, together with summary information regarding the irrevocable undertakings provided by the Rugby REIT Directors and certain Rugby REIT Shareholders in connection with the Offer, are set out in Appendix II of this announcement. Appendix III contains a valuation letter from King Sturge LLP with regard to ING RET's property portfolio. Appendix IV contains definitions of certain expressions and terms used in this summary and the following announcement. 

Notes

1        Based on the value of 1.206 ING UK RET Ordinary Shares and the 31 March 2010 net asset value of 56.4 pence per ING UK RET Ordinary Share.

2        Based on the value of 1.206 ING UK RET Ordinary Shares and the Closing Price of 49 pence on 14 April 2010, the latest practicable date prior this announcement.

3        Approximate value of ZDP Share estimated by J.P. Morgan Cazenove on 15 April 2010.

4        Based on an annualised dividend calculated from the dividend announced on 15 April 2010 for the first quarter 2010 of 1 pence per ING UK RET Ordinary Share and the issue price of ING UK RET Ordinary Shares (56.4 pence).

5        The exact term of the ZDP Shares and thus the final entitlement will depend on the date the ZDP Shares are issued. For example, an issue date of 17 May 2010 would result in a final capital entitlement of 76.6 pence (based on the issue price of 65 pence, the gross redemption yield of 6.875 per cent and the maturity date of 31 October 2012).

6        Rugby REIT Shareholders who are subject to UK corporation tax should refer to the paragraph titled "United Kingdom taxation" in Part 2 of the Offer Document.

7        The Offer of 41 pence per Rugby REIT Share made by Terra Investments Limited on 13 October 2009.

8        The Closing Price of 49.25 pence per Rugby REIT Share on 12 February 2010 (the latest practicable date prior to the announcement that ING UK RET and Rugby REIT were in merger discussions and the commencement of the Offer Period).

9        The Closing Price of 55 pence per Rugby REIT Share on 14 April 2010 (the latest practicable date prior to the date of this announcement).

ENQUIRIES

ING UK RET                                                                   Tel: [phone]

Nicholas Thompson

ING Real Estate Investment Management                     Tel: [phone]

(Investment Manager)               

Michael Morris                                                                                            

Helen Stott   

ING Corporate Finance                                                 Tel: [phone]

(Joint Financial Adviser to ING UK RET)

William Marle                                                                                             

John Denby                                       

J.P. Morgan Cazenove                                                  Tel: [phone]

(Sponsor and Joint Financial Adviser to ING UK RET)

William Simmonds                                                                            

Financial Dynamics                                                       Tel: [phone] 7269 7261

(Financial PR, ING UK RET)

Dido Laurimore

Laurence Jones

Northern Trust                                                                Tel: [phone]

(Company Secretary, ING UK RET)       

David Sauvarin

Rugby REIT                                                                    Tel: [phone]

Philip Kendall                                                                                                

Hawkpoint Partners Limited                                          Tel: [phone]

(Financial Adviser to Rugby REIT)

Ben Mingay                                                                                      

Edward Arkus 

Collins Stewart Europe Limited                                    Tel: [phone]

(Corporate Broker to Rugby REIT)

Bruce Garrow     

Financial Dynamics                                                       Tel: [phone]

(Financial PR, Rugby REIT)                                                                                            

Richard Sunderland

Rachel Drysdale 

Notes to editors

ING UK Real Estate Income Trust Limited:

ING UK Real Estate Income Trust Limited ("ING UK RET") is a closed-ended investment company which is domiciled and incorporated in Guernsey and listed on the London & Channel Islands Stock Exchanges which invests in commercial property throughout the UK through its subsidiary undertakings.

ING UK RET's property portfolio is managed by ING Real Estate Investment Management (UK) Limited, a member of the ING Group and one of the UK's leading property asset managers with approximately £5 billion of property assets under management.

As at 31 March 2010, the ING UK RET Group had a property portfolio of £352.4 million and net assets of £186.3 million (equivalent to 56.4 pence per ING UK RET Ordinary Share).

Entities controlled by ING Group own approximately 3 per cent of the share capital of ING UK RET, although, for avoidance of doubt, ING UK RET is not part of the ING Group.

Rugby Estates Investment Trust plc:

Rugby Estates Investment Trust plc ("Rugby REIT") is a public limited company established to take advantage of the REIT regime in the UK. Rugby REIT Shares have been admitted to the Official List of the UK Listing Authority since 15 May 2007.

Rugby REIT's investment objective is to assemble and manage a portfolio of investment properties in the UK, principally through the acquisition of privately owned property investment companies.

Investor presentation

There will be an analyst meeting this morning at 8.30 a.m. at the offices of J.P. Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. There will also be a live conference call facility. Please contact Dido Laurimore or Laurence Jones at Financial Dynamics for full details. A copy of the presentation will be made available on the Company's website: www.ingreit.co.uk.

Further information

This announcement will be available on ING UK RET and Rugby REIT's websites by no later than 12 noon (London time) on 15 April 2010 at www.ingreit.co.uk and www.rugbyreit.co.uk respectively. 

Further information on the Offer, each of IRET Securities, ING UK RET and Rugby REIT and the expected timetable of principal events will be set out in the Offer Document and the Prospectus to be published by ING UK RET and IRET Securities in due course.  The Offer Document, the Prospectus and (in the case of Rugby REIT Shares held in certificated form) the Form of Acceptance will be posted to Rugby REIT Shareholders as soon as practicable and, in any event, except with the consent of the Panel, within 28 days of this announcement, other than in relation to a Restricted Jurisdiction.

ING Corporate Finance, which is authorised by the Dutch Central Bank, is acting exclusively as joint financial adviser to ING UK RET and IRET Securities and no one else in relation to the Offer and will not be responsible to anyone other than ING UK RET or IRET Securities for providing the protections afforded to clients of ING Corporate Finance nor for providing advice in relation to the Offer or any other matters referred to in this document. 

J.P. Morgan plc, which conducts its UK investment banking businesses as J.P. Morgan Cazenove, and is authorised and regulated in the United Kingdom by the Financial Services Authority is acting exclusively as joint financial adviser to ING UK RET and IRET Securities and no one else in connection with the Offer and will not be responsible to anyone other than ING UK RET and IRET Securities for providing the protections afforded to clients of J.P. Morgan plc nor for providing advice in connection with the Offer.   

Hawkpoint Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Rugby REIT and no one else in connection with the Offer and will not be responsible to anyone other than Rugby REIT for providing the protections afforded to clients of Hawkpoint Partners Limited or for providing advice in relation to the Offer.

Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Rugby REIT and no one else in connection with the matters referred to herein and will not be responsible to anyone other than Rugby REIT for providing the protections afforded to clients of Collins Stewart Europe Limited or for providing advice in relation to the Offer.

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the availability of the Offer to Rugby REIT Shareholders who are not resident in the United Kingdom, may be affected by the laws or regulations of relevant jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom, or Rugby REIT Shareholders who are not resident in the United Kingdom, will need to inform themselves about, and observe, any applicable requirements.  This announcement has been prepared in accordance with English law, the City Code and the Disclosure and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. 

Unless otherwise determined by ING UK RET and IRET Securities or required by the City Code and permitted by applicable law and regulation, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded or sent in, into or from the United States or any other Restricted Jurisdiction and persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into or from any such jurisdiction. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Further details in relation to Overseas Shareholders will be contained in the Offer Document.

This announcement is not intended to, and does not, constitute or form any part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire or subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to this announcement or otherwise. The Offer will be made solely by means of the Offer Document, an advertisement to be published in the London Gazette and the Form of Acceptance (in respect of certificated Rugby REIT Shares), which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance or other response to the Offer should be made only on the basis of the information contained in the Offer Document, the Form of Acceptance (in the case of certificated Rugby REIT Shares) and the Prospectus which are proposed to be published and/or posted to Rugby REIT Shareholders in due course.  Neither the New ING UK RET Ordinary Shares nor the ZDP Shares are being offered to the public by means of this announcement.

In order to enable Rugby REIT Shareholders who elect for the New ING UK RET Ordinary Shares to obtain the benefit of rollover relief on the sale of their Rugby REIT Shares, any Rugby REIT Shareholder electing to receive New ING UK RET Ordinary Shares under the Share Offer will sell their Rugby REIT Shares to IRET Securities, which will issue them with Exchangeable Preference Shares.  These Exchangeable Preference Shares will immediately and automatically exchange on issue into New ING UK RET Ordinary Shares.  The Exchangeable Preference Shares will not be listed on any stock exchange.

Neither the New ING UK RET Ordinary Shares, the Exchangeable Preference Shares nor the ZDP Shares to be issued in connection with the Offer have been, or will be, registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under the securities laws of any state of the United States; the relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no Prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and neither the New ING UK RET Ordinary Shares, the Exchangeable Preference Shares nor the ZDP Shares have been, or will they be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada, Japan or Australia. Accordingly, neither the New ING UK RET Ordinary Shares, the Exchangeable Preference Shares nor the ZDP Shares are being and may be (unless an exemption under relevant securities laws is applicable) offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Japan or Australia or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States, Canadian, Japanese or Australian person. 

The Offer may provide that Exchangeable Preference Shares, New ING UK RET Ordinary Shares or ZDP Shares which would otherwise be issued to an accepting Rugby REIT Shareholder resident in a Restricted Jurisdiction may be sold, and the net proceeds of sale remitted to the accepting Rugby REIT Shareholder.

ING UK RET and IRET Securities reserve the right to elect, with the agreement of Rugby REIT and the consent of the Panel (where necessary) to implement the Acquisition by way of a court-approved scheme of arrangement in accordance with Part 26 of the Companies Act.  In such event, the Acquisition will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.

Forward looking statements

This announcement, including information included in this announcement, contains statements about the Offer, Rugby REIT, IRET Securities and ING UK RET that are or may be forward looking statements. All statements other than statements of historical facts included in this document may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'may', 'anticipates', 'estimates', 'projects', or words or terms of similar substance or the negative thereof identify forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of Rugby REIT's, ING UK RET's or IRET Securities' operations.

These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Rugby REIT, ING UK RET or IRET Securities. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Rugby REIT, ING UK RET or IRET Securities or any of their members or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this announcement are based on information available to the relevant parties on the date hereof. Investors should not place undue reliance on such forward-looking statements, and neither Rugby REIT,  ING UK RET or IRET Securities nor their respective directors undertakes any obligation in respect of, and do not intend to update or revise any forward-looking statements except as required by the City Code or pursuant to applicable law.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of Rugby REIT, IRET Securities or ING UK RET all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Rugby REIT, IRET Securities or ING UK RET, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Rugby REIT, IRET Securities or ING UK RET by Rugby REIT, IRET Securities or ING UK RET or by any of their respective "associates", must be disclosed by no later than 12.00 noon on the business day following the date of the relevant transaction (unless the "dealing" is for discretionary clients and the associate is an "exempt fund manager" in which case the "dealing" must be privately disclosed in accordance with Notes 4(b) and 5(b) to Rule 8 of the City Code).

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

Terms in quotations marks are defined in the City Code, which can also be found on the Panel's website.  If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the City Code, you should consult the Panel.  

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES, OR TO US PERSONS (AS DEFINED BY REGULATION S), OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 15 April 2010

RECOMMENDED OFFER

by

IRET SECURITIES LIMITED

(a wholly owned subsidiary of ING UK Real Estate Income Trust Limited (ING UK RET))

for

Rugby Estates Investment Trust plc

1      Introduction

The boards of ING UK RET and Rugby REIT are pleased to announce the terms of a recommended offer to be made by IRET Securities, a newly incorporated and wholly owned subsidiary of ING UK RET, to acquire the entire issued ordinary share capital of Rugby REIT. 

This follows the mandatory cash offer of 41 pence per Rugby REIT Share made by Terra Investments Limited on 3 November 2009.  The Terra Offer was not recommended by the Rugby REIT Board and lapsed on 24 November 2009. 

2      The Offer 

The Offer, which comprises the Share Offer, the ZDP Alternative and the Cash Alternative, will be subject to the conditions set out in Appendix I to this announcement and to the conditions and further terms to be set out in the Offer Document and, in the case of Rugby REIT Shares held in certificated form, the Form of Acceptance, will be made by IRET Securities on the following basis:

for each Rugby REIT Share	1.206 New ING UK RET Ordinary Shares (valued at 68 pence at net asset value(note1) and 59.1 pence at current market value(note2))
	or
	one ZDP Share (valued at approximately 65 pence(note3))
	or
	63 pence in cash

It is intended that Rugby REIT Shareholders will be able to elect for any of the above options or a combination of any of the above in respect of their holdings of Rugby REIT Shares.

The Offer is conditional upon, amongst other things: (i) valid acceptances being received (and not, where permitted, withdrawn) in respect of more than 90 per cent in nominal value of Rugby REIT Shares to which the Offer relates (or such lesser percentage as IRET Securities may, in its sole discretion decide, provided such percentage exceeds 50 per cent of the voting rights then normally exercisable at a general meeting of Rugby REIT); and (ii) Admission of the New ING UK RET Ordinary Shares.  Please see Appendix I to this announcement for further details of the conditions relating to the Offer.

Fractions of a New ING UK RET Ordinary Share will not be allotted or issued pursuant to the Offer.

2.1     The Share Offer

The Share Offer values each Rugby REIT Share for the purposes of the Offer at 68 pence and the existing issued and to be issued share capital of Rugby REIT at approximately £40.1 million, based on the net asset value of a ING UK RET Ordinary Share of 56.4 pence as at 31 March 2010 (being the latest published ING UK RET net asset value prior to this announcement, the "ING UK RET March NAV") and assuming the Share Offer is fully taken up.

The Share Offer provides Rugby REIT Shareholders with the opportunity to own shares in ING UK RET which:

·      pay a current dividend yield of 7.1 per cent(note4);

·      offer greater secondary market liquidity compared to Rugby REIT Shares; and

·      provide exposure to a larger and more diversified property portfolio than is possible with a shareholding in Rugby REIT.

Based on the ING UK RET March NAV, the Share Offer represents a premium of:

·      65.9 per cent over the Terra Offer(note5);

·      38.1 per cent over the Rugby REIT Closing Price on the last business day before the announcement of the merger talks(note6); and

·      23.6 per cent over the Rugby REIT 14 April 2010 Closing Price(note7).

Rugby REIT Shareholders should note that the value of each New ING UK RET Ordinary Share for the purposes of the Offer will be the net asset value of an ING UK RET Ordinary Share as at 31 March 2010.  This may differ from the market price of an ING UK RET Ordinary Share which may vary from day to day.  Based upon the Closing Price of ING UK RET's Ordinary Shares of 49 pence on 14 April 2010 (being the latest practical business day prior to the Announcement), the Share Offer values each Rugby REIT Share for the purposes of the Offer at 59.1 pence and represents a premium of:

·      44.1 per cent over the Terra Offer(note5);

·      20.0 per cent over the Rugby REIT Closing Price on the last business day before the announcement of the merger talks(note6); and

·      7.5 per cent over Rugby REIT 14 April 2010 Closing Price(note7).

The New ING UK RET Ordinary Shares will rank pari passu with the Existing ING UK RET Ordinary Shares, including in respect of all dividends made, paid or declared by reference to a record date falling after Admission. The New ING UK RET Ordinary Shares shall not have any entitlement to the dividend of 1 pence per share declared by ING UK RET on 15 April 2010.

IRET Securities has been incorporated as the acquisition vehicle for the ING UK RET Group. In order to enable Rugby REIT Shareholders to obtain the benefit of rollover relief on the sale of their Rugby REIT Shares (so that the exchange of their Rugby REIT Shares under the Share Offer is not treated as a disposal for UK tax purposes), any Rugby REIT Shareholders electing to receive New ING UK RET Ordinary Shares under the Share Offer will sell their Rugby REIT Shares to IRET Securities which will in turn issue them with Exchangeable Preference Shares.  These Exchangeable Preference Shares will immediately and automatically exchange on issue into New ING UK RET Ordinary Shares.

The Exchangeable Preference Shares will not be listed on any stock exchange.  Rugby REIT Shareholders will not have the option of holding Exchangeable Preference Shares instead of exchanging them for New ING UK RET Ordinary Shares.  The Exchangeable Preference Shares will not be transferable to any person other than ING UK RET or a member of the ING UK RET Group.  Further details of the Exchangeable Preference Shares will be set out in the Offer Document and the Prospectus.

2.2     The ZDP Alternative

The ZDP Alternative values each Rugby REIT Share for the purposes of the Offer at approximately 65 pence and the existing issued share capital of Rugby REIT at approximately £38.3 million assuming the ZDP Alternative is fully taken up.

The ZDP Shares represent a new class of security to be issued by IRET Securities which will offer Rugby REIT Shareholders the opportunity to realise a fixed cash amount on 31 October 2012, some 2.5 years from the date of their issue. Further information on the ZDP Shares is set out below.

The ZDP Alternative represents a premium of:

·      58.5 per cent over the Terra Offer(note5);

·      32.0 per cent over the Rugby REIT Closing Price on the last business day before the announcement of the merger talks(note6); and

·      18.2 per cent over the Rugby REIT 14 April 2010 Closing Price(note7);

The ZDP Shares offer an annualised return of 6.875 per cent currently taxed, for UK resident individuals, as capital gains (at 18 per cent) rather than as income (up to 50 per cent)(note8). They also offer a gross yield premium of 5.4 per cent over a comparably dated UK Gilt as at 14 April 2010.

The ZDP Alternative will remain open until 1.00 p.m. on the first closing date of the Offer when it will close (assuming the Offer is not unconditional as to acceptances on this date) unless IRET Securities agrees to extend it. The ZDP Alternative will lapse if the Offer lapses or expires. If the ZDP Alternative closes, IRET Securities reserves the right to re-introduce a ZDP Alternative at its discretion, subject to the provisions of the City Code. Further details of the ZDP Shares will be set out in the Offer Document and the Prospectus.

2.3     The Cash Alternative

The Cash Alternative values each Rugby REIT Share at 63 pence and the existing issued share capital of Rugby REIT at approximately £37.1 million assuming the Cash Alternative were to be fully taken up. 

The Cash Alternative represents a premium of:

·      53.7 per cent over the Terra Offer(note5);

·      27.9 per cent over the Rugby REIT Closing Price on the last business day before the announcement of the merger talks(note6); and

·      14.5 per cent over the Rugby REIT 14 April 2010 Closing Price(note7).

The Cash Alternative will remain open until 1.00 p.m. on the first closing date of the Offer when it will close unless IRET Securities agrees to extend it. The Cash Alternative will lapse if the Offer lapses or expires. If the Cash Alternative closes, IRET Securities reserves the right to re-introduce a cash alternative at its discretion, subject to the provisions of the City Code.

Summary table of Offer premia

	Share Offer - Net Asset Value (note1)	Share Offer - Market Value (note2)	ZDP Alternative	Cash Alternative
Offer basis	68.0p	59.1p	65.0p	63.0p
Premium to:
Terra Offer(note5)	65.9%	44.1%	58.5%	53.7%
Pre merger talks announcement price(note6)	38.1%	20.0%	32.0%	27.9%
Last practicable price prior to publication(note7)	23.6%	7.5%	18.2%	14.5%

3      The ZDP Shares

The ZDP Shares will have an entitlement to receive a fixed cash amount on 31 October 2012 but will carry no entitlement to any dividends or income distributions during their existence.  The ZDP Shares do not carry the right to vote at general meetings of IRET Securities, although they carry the right to vote as a class on certain proposals which would be likely to materially affect their position.

The ZDP Shares will be issued at a price of 65 pence per share and additional capital will accrue on a daily basis from the date of first issue of any ZDP Shares at the equivalent of 6.875 per cent per annum until the ZDP Repayment Date, resulting in a final capital entitlement per ZDP Share on maturity of approximately 77 pence(note9).  In the event of a winding-up of IRET Securities, the capital entitlement of the ZDP Shares (except for any undistributed revenue profits) will rank ahead of the Exchangeable Preference Shares and IRET Securities' Ordinary Shares but behind IRET Securities' other creditors.  The ING UK RET Group's assets are held in subsidiary undertakings of ING UK RET and the ZDP Shares will effectively rank behind the borrowings and other liabilities of such subsidiary undertakings. ING UK RET has agreed to support IRET Securities' obligations and has agreed to certain protections to ensure that ING UK RET does not make distributions or returns of capital without retaining sufficient capital to meet its obligations.  Details of the ZDP Shares and these protections will be set out in the Offer Document and the Prospectus.

It is IRET Securities' intention to seek to obtain a listing of the ZDP Shares on the London Stock Exchange's main market for listed securities on the date of Admission of the New ING UK RET Ordinary Shares. However, Rugby REIT Shareholders should be aware that, depending on the elections made by Rugby REIT Shareholders accepting the Offer, there may not be a sufficient number of ZDP Shares in public hands for a listing of the ZDP Shares to be achieved on the date of Admission of the New ING UK RET Ordinary Shares. Should this be the case, IRET Securities will use its reasonable endeavours to procure a listing of the ZDP Shares on the London Stock Exchange after Admission of the New ING UK RET Ordinary Shares, assuming a sufficient number of ZDP Shares are held in public hands at the relevant time. Similarly, if the ZDP Shares are listed, but the number of shares in public hands falls below the requisite threshold, the listing may not be capable of being maintained.

In addition to seeking a listing of the ZDP Shares on the London Stock Exchange, IRET Securities will also seek to obtain a listing of the ZDP Shares on the Channel Islands Stock Exchange.  Rugby REIT Shareholders should be aware that the Channel Islands Stock Exchange also has a requirement that a certain number of ZDP Shares are held in public hands and that it may not be possible to obtain such a listing, or, if a listing is obtained, to maintain such a listing, for the same reasons set out above.

Neither the Offer, nor the issue of the ZDP Shares pursuant to the Offer, is conditional on the ZDP Shares being listed on the London Stock Exchange's main market for listed securities or any other securities exchange.

In addition to seeking a listing of the ZDP Shares on the London Stock Exchange, IRET Securities will also seek to arrange for the ZDP Shares to be able to be traded and settled through CREST. This settlement arrangement is not conditional on the ZDP shares being listed on the Channel Islands Stock Exchange or the London Stock Exchange.

Details of the conditions and certain further terms of the Offer are set out below and in Appendix I to this announcement. The expected timetable of principal events will be set out in the Prospectus. The Offer Document, the Prospectus and the Form of Acceptance will, except with the consent of the Panel, be posted within 28 days of this Announcement.

4      Background to and reasons for the Offer

ING UK RET's investment objective is to provide its shareholders with an attractive level of income together with the potential for capital growth from investing in a diversified portfolio of UK commercial real estate assets. 

Since August 2009 the underlying market has seen signs of price stability and the ING UK RET Directors and ING REIM now wish to take advantage of the acquisition opportunities emerging in the UK real estate market and have identified Rugby REIT as an attractive opportunity. The ING UK RET Board believes that the combination of Rugby REIT's portfolio of assets, the proposed financing of the acquisition and ING UK RET's lower cost base will provide ING UK RET Shareholders (including Rugby REIT Shareholders who elect for the Share Offer) with scope for attractive returns.  The Rugby REIT portfolio also contains a number of smaller assets that ING UK RET is likely to dispose of in the short to medium term with an expectation that the sale proceeds will be used to further reduce the ING UK RET Group's indebtedness and reinvested in assets that ING REIM believes would add value to ING UK RET's enlarged property portfolio. For those Rugby REIT Shareholders who do not wish to remain invested in the UK property market, the Offer represents a route to realising a value which represents a significant premium to the market value of their Rugby REIT Shares prior to the announcement that Rugby REIT and ING UK RET were in merger discussions.

The ING UK RET Directors believe that the acquisition of Rugby REIT will provide ING UK RET with the following benefits:

·      an increase in ING UK RET's retail and industrial exposure and a further increase in ING UK RET's exposure to Central London and South East England;

·      opportunities for active management of Rugby REIT's portfolio;

·      the opportunity to realise value from the Rugby REIT portfolio through selective asset disposals where there is limited scope for management to add value; and

·      operational flexibility.

5      Background to and reasons for recommending the Offer

Rugby REIT was admitted to the London Stock Exchange in May 2007 to take advantage of the UK's new real estate investment trust regime. The purpose of the company was to assemble a portfolio of investment properties in the UK principally via the acquisition of privately owned property companies. 

The tax status of Rugby REIT as a real estate investment trust (REIT) was intended to enable Rugby REIT to acquire property companies with latent tax liabilities and extinguish those liabilities on payment to HMRC of an entry charge of 2 per cent of the market value of the acquired properties, thereby allowing Rugby REIT to acquire these companies without having to provide in full for those latent tax liabilities.

At the time of its incorporation in May 2007, the prospects for UK property seemed attractive, and it was anticipated that REIT status would give Rugby REIT an advantage over other potential acquirers of private property companies.  Indeed, during the remainder of 2007, Rugby REIT acquired three private property companies for a mixture of consideration including shares, loan notes and cash.  The assets within the companies acquired were well spread and the great majority situated in attractive locations with good covenants, and with positive growth potential.  However, towards the end of 2007, the UK property market began to face declines in investment values, with declines accelerating substantially during 2008.  Between January 2008 and June 2009, UK commercial property values fell by approximately 35 per cent and this decline significantly eroded Rugby REIT's ability to grow via such acquisitions.  As a result Rugby REIT has remained relatively small and its shares relatively illiquid.

The significant falls in commercial property values detailed above have also prevented Rugby REIT from paying a dividend.  Despite the increase in the value of the Group's property portfolio in 2009, the valuation reductions of 2008 have not been fully recovered and as at 31 December 2009, deficits remained on the distributable reserves of Rugby REIT and the Rugby REIT Group.  Under UK Company law, Rugby REIT will be unable to pay a dividend, or make any other distributable payments to shareholders, until such time as the deficit on the Company's distributable reserves has been made good (by way of a successful capital reduction exercise or otherwise).

As a result of these and other factors, Rugby REIT's share price has traded at a significant discount to Rugby REIT's latest published net asset value. This discount ranged from 31 per cent to 63 per cent during the period 1 January 2009 to 12 October 2009.

On 13 October 2009, Terra Investments Limited announced that it had acquired Rugby REIT Shares to take its holding (when aggregated with those of its joint offerors and persons acting in concert with them) to 35.67 per cent of Rugby REIT's issued share capital, thereby triggering a mandatory offer under Rule 9 of the City Code for Rugby REIT at 41 pence per share (the "Terra Offer"). This offer was not recommended by the Board of Rugby REIT, was not accepted by the required percentage of shareholders and lapsed in November 2009.

The Board of Rugby REIT commenced a strategic review in late 2009, and concluded that a near term exit should be explored in order to maximise value for Rugby REIT Shareholders.

On 30 March 2010, the Board of Rugby REIT announced net asset value per Rugby REIT Share of 79 pence as at 31 December 2009. Based on this latest announced net asset value per Rugby REIT Share, an orderly disposal of the portfolio might have been expected to deliver more value for Rugby REIT Shareholders. However, in recommending ING UK RET's Offer the Rugby REIT Board also considered:

·           the inherent uncertainty as to the valuations that might have been achieved had an orderly disposal of Rugby REIT's property portfolio been pursued;

·           the risk exposure to changes in market conditions during the disposal period;

·           the likely delayed receipt of any resultant proceeds; and

·           the optionality presented by the Offer, comprising New ING UK RET Ordinary Shares, deferred cash consideration delivered via an issue of ZDP Shares, or immediate cash which enables Rugby REIT Shareholders to choose the most appropriate form, or forms, of consideration to suit their individual requirements and tax planning considerations.

As such, the Board of Rugby REIT has agreed to unanimously recommend that Rugby REIT Shareholders accept the Offer, as further described in paragraph 11 of this announcement.

ING UK RET has secured irrevocable undertakings in respect of a total of 26,195,454 Rugby REIT Shares, representing approximately 44.4 per cent of the existing issued share capital of Rugby REIT.

6      Information on IRET Securities and ING UK RET

IRET Securities is a newly-incorporated company which has been formed for the purposes of making the Offer. IRET Securities is a wholly-owned subsidiary of ING UK RET. IRET Securities has not traded since its date of incorporation nor has it entered into any obligations other than in connection with the Offer and the financing of the Offer. The directors of IRET Securities are the directors of ING UK RET.

ING UK RET is a closed-ended investment company which is domiciled and incorporated in Guernsey and listed on the London Stock Exchange's main market for listed securities and the Channel Islands Stock Exchange. The Company is managed by ING Real Estate Investment Management (UK) Limited, a member of the ING Group and one of the UK's leading property asset managers with approximately £5 billion under management.

ING UK RET's investment objective is to provide its shareholders with an attractive level of income together with the potential for capital growth from directly or indirectly investing in a diversified portfolio of UK property, covering five commercial property sectors: office, retail, retail warehousing, industrial and leisure.  The ING UK RET Group may also invest in other property funds.  The ING UK RET Group's property portfolio is diversified by both geography and sector.  Further details of the ING UK RET Group's property portfolio will be set out in the Prospectus.

ING UK RET is proposing, subject to the approval of its shareholders at its next annual general meeting, to amend its investment policy to broaden the range of property related assets that the ING UK RET Group may invest in so as to include, subject to certain specified limitations, the debt securities issued by real estate companies and to allow the ING UK RET Group to make use of real estate derivatives. Further details of these proposed changes will be described more fully in the Prospectus.

As at 31 March 2010, the ING UK RET Group had a property portfolio of £352.4 million and net assets of £186.3 million (equivalent to 56.4 pence per ING UK RET Ordinary Share).  Further details of the financial position of the ING UK RET Group will be set out in the Offer Document and the Prospectus.

7      Information on Rugby REIT

Rugby REIT is a public limited company established to take advantage of the real estate investment trust regime in the UK. Rugby REIT Shares have been admitted to the Official List of the UK Listing Authority since 15 May 2007.

Rugby REIT's investment objective is to assemble and manage a portfolio of investment properties in the UK, principally through the acquisition of privately owned property investment companies.

Rugby REIT is advised by Rugby Asset Management Limited in relation to the acquisition of property investments.  RAM also advises Rugby REIT on the development, management and disposal of its property portfolio.

As at 31 December 2009, Rugby REIT had a property portfolio valued at £68.3 million and net assets of £46.8 million, equivalent to 79 pence per Rugby REIT Share. Further details of the financial position of Rugby REIT will be set out in the Offer Document and the Prospectus.

8      Current trading and prospects of Rugby REIT

On 30 March 2010, Rugby REIT announced its preliminary results for the year to 31 December 2009. Extracts from these results are set out below.

During the year the UK economy was in recession and in the first half of the year UK commercial property values continued to fall before rallying strongly in the final months of 2009. Given the economic and market conditions, Rugby REIT did not make any corporate or property acquisitions during the period, although some limited property disposals were made. The Group's property portfolio performed well in comparison to the sector generally.

The property portfolio was valued as at 31 December 2009 at £68.3 million (31 December 2008: £60.3 million). The like for like increase in valuation, including increases realised on disposal, was £8.6 million. This takes into account property disposals which realised £0.7 million and capital expenditure on properties during the year of £0.1 million. Principally as a result of the increase in the property valuations, net asset value per Rugby REIT Share as at 31 December 2009 was 79 pence, compared with 64 pence as at 31 December 2008 (representing an increase of 23 per cent).

The result for the period was an after tax profit of £9.3 million (prior period from 7 January 2008 to 31 December 2008: £20.1 million loss). This comprised profit arising from recurring items ("revenue profit") of £1.2 million (prior period £1.2 million), property gains of £8.6 million (prior period £20.8 million loss), costs associated with the Terra Offer of £0.6 million (prior period nil) and other net gains of £0.1 million (prior period £0.5 million loss).

9      ING UK RET's current trading and prospects for the Enlarged Group

As Rugby REIT Shareholders are aware, the UK property market experienced a significant decline in values from mid 2007 to the latter part of 2009. The peak to trough decline in the IPD Quarterly Index was over 42 per cent and reached a floor in June 2009. The market experienced a recovery in the second half of 2009 and values grew by 9.8 per cent in the second half of the year, primarily driven by yield compression as investors were attracted by the repricing of the sector. Consistent with the UK market as a whole, after the significant falls in the value of the ING UK RET Group's portfolio over the two year period to 30 June 2009, a degree of stability was witnessed in the second half of 2009 with the portfolio value recovering.  During the six months to 31 December 2009, the ING UK RET Group's portfolio rose 6.9 per cent in value which translated into a 12 per cent increase in ING UK RET's NAV per share over the same period. This growth in commercial real estate values has continued into 2010 with the ING UK RET Group's portfolio increasing by 2.1 per cent in value with the NAV per share increasing by 2.9 per cent in the three months to 31 March 2010.

The pace of any further capital growth is likely to be slower in the short term, with the market having seen strong yield compression in the final quarter of 2009. Rental value growth has been negative since 2007, however, whilst the rate of this decline in rental values has started to reduce, it has not yet turned positive.  As economic conditions improve this is likely to result in an improvement in occupier demand and consequently rental growth.

Economic and political uncertainties remain, with historically low interest rates, a high level of government borrowings and the as yet unknown effect of the quantitative easing programme. Set against this the ING UK RET Group is fortunate to continue to have high occupancy levels ahead of the market which underpin its cashflow. The key focus for the ING UK RET Group remains maintaining operational flexibility, occupancy levels and a strong rent collection record.

From an income perspective, the underlying cash flow remains robust and the Company benefits from owning a diversified portfolio with approximately 250 tenants. The top 20 tenants comprise 49 per cent of the ING UK RET Group's net rental income.

10    Irrevocable undertakings  

IRET Securities has secured irrevocable undertakings in respect of a total of 26,195,454 Rugby REIT Shares, representing approximately 44.4 per cent of the existing issued share capital of Rugby REIT.  Further details of these irrevocable undertakings are set out in Part 2 of Appendix II to this announcement.

The Rugby REIT Directors, all of whom own Rugby REIT Shares, have given irrevocable undertakings to IRET Securities to accept the Offer in respect of, in aggregate, 180,000 Rugby REIT Shares, representing approximately 0.3 per cent of the existing issued share capital of Rugby REIT.  These irrevocable undertakings remain binding unless the Offer lapses or is withdrawn.

All of the Rugby REIT Directors intend to elect to accept the Cash Alternative in respect of their entire shareholdings in Rugby REIT. They have each indicated that they intend to do so in order to achieve an immediate realisation of their investments, and provide greater flexibility over the re-investment of any proceeds.

IRET Securities has also received irrevocable undertakings to accept the Offer from certain other Rugby  REIT Shareholders in respect of a total of 26,015,454 Rugby REIT Shares, representing approximately 44.1 per cent of the existing issued share capital of Rugby REIT. 

The irrevocable undertakings received comprise:

Name of shareholder	Number of Rugby REIT Shares	Approximate percentage of issued share capital of Rugby REIT	Election
Laxey Partners	21,025,254	35.7%	ZDP Alternative
Rugby CGLP Limited	4,990,200	8.5%	Cash
Rugby REIT Directors	180,000	0.3%	Cash
Total	26,195,454	44.4%

11    Recommendation

The Rugby REIT Directors, who have been so advised by Hawkpoint, consider the terms of the Offer to be fair and reasonable.  In providing advice to the Rugby REIT Directors, Hawkpoint has taken into account the commercial assessments of the Rugby REIT Directors.

Accordingly, the Rugby REIT Directors have agreed to unanimously recommend that all Rugby REIT Shareholders accept the Offer, as they have irrevocably undertaken to do in respect of their entire beneficial holdings and those of their families and associated interests, which amount to 180,000 Rugby REIT Shares, representing, in aggregate, 0.3 per cent of Rugby REIT's existing ordinary share capital.

The Rugby REIT Directors make no recommendation as to the form of consideration which Rugby REIT Shareholders should accept as this will be dependent on an individual shareholder's circumstances. Rugby REIT Shareholders should pay careful attention to the risk factors in relation to, inter alia, ING UK RET Group, the New ING UK RET Ordinary Shares and the ZDP Shares to be set out in the Prospectus to be published by ING UK RET in due course.

12    Financing of the Offer and cash confirmation

The Offer will be financed through the issue of New ING UK RET Ordinary Shares and ZDP Shares. The New ING UK RET Ordinary Shares will be issued at ING UK RET's 31 March NAV, being 56.4 per share, and the ZDP Shares will be issued at 65 pence per share. The existing bank indebtedness of Rugby REIT, comprising RBS bank financing and loan notes, will remain, at least initially, in place after completion of the Offer.  It is ING UK RET and IRET Securities' intention to make proposals to the holders of the Rugby REIT Loan Notes in due course.

Full acceptance of the Cash Alternative would result in the payment by IRET Securities of approximately £37.1 million in cash.  The cash consideration payable to accepting Rugby REIT Shareholders who elect for the Cash Alternative will be satisfied by the issue by IRET Securities of new ZDP Shares at a price of 65 pence per ZDP Share.  Such ZDP Shares will rank pari passu with any ZDP Shares issued to accepting Rugby REIT Shareholders who validly elect for the ZDP Alternative.

This issue of ZDP Shares will be fully underwritten by ING Bank N.V., London Branch and will be fully sub-underwritten by funds advised by Laxey Partners. The terms of the underwriting agreement will be summarised in the Offer Document and the Prospectus. 

ING Corporate Finance is satisfied that the necessary financial resources are available to IRET Securities to enable it to satisfy in full the cash consideration payable by IRET Securities as a result of full acceptance of the Offer.

13    Financial effects of the Offer

The ING UK RET Directors believe that the Offer will be net asset value per share accretive for ING UK RET.  Further information as to the illustrative pro forma effect that the Offer will have on ING UK RET will be set out in the Offer Document and the Prospectus to be posted to Rugby REIT Shareholders in due course.

14    Financial effects of acceptance

The following table sets out, for illustrative purposes only, and on the bases and assumptions set out in the notes below, the financial effects of acceptance of the Offer on capital value and gross income for an accepting Rugby REIT Shareholder if the Offer becomes or is declared unconditional in all respects:

	Notes	Share Offer - Net Asset Value(note1)	Share Offer - Market Value(note2)	ZDP Alternative	Cash Alternative
Capital Value
Market value of 1 Rugby REIT Share	(7)	55.0p	55.0p	55.0p	55.0p
Value of the ING UK RET Offer
Value of 1.206 ING UK RET Shares	(1) & (2)	68.0p	59.1p
Value of 1 ZDP Share	(3)			65.0p
Cash consideration for 1 Rugby REIT Share					63.0p
Capital Value of Offer		68.0p	59.1p	65.0p	63.0p
Increase in Capital Value to Rugby REIT Shareholders		13.0p	4.1p	10.0p	8.0p
Representing an increase of		23.6%	7.5%	18.2%	14.5%
Gross Income
Historic dividend per year from 1 Rugby REIT Share	(10)	0.0p	0.0p	0.0p	0.0p
Gross dividend per year from 1.206 ING UK RET Shares	(11)	4.8p	4.8p
Rolled up income per year per 1 ZDP Share	(12)			4.5p
Interest on cash consideration	(13)				0.4p
Total Gross Income per year		4.8p	4.8p	4.5p	0.4p
Increase in Gross Income		4.8p	4.8p	4.5p	0.4p
Representing an increase of		The Gross Income increase for a Rugby REIT Shareholder is infinite as Rugby REIT has never paid a dividend

15    ING UK RET Dividend policy

Dividends on the ING UK RET Ordinary Shares are paid in respect of each financial year in quarterly instalments in February, May, August and November. All dividends are paid as interim dividends.

ING UK RET announced on 15 April 2010 that the May 2010 dividend of 1 pence per ING UK RET Ordinary Share would be paid in the usual manner consistent with the basis announced by the ING UK RET Board at the end of 2008 on a fully covered basis. The ING UK RET Board does not expect, following the acquisition of the Rugby REIT Group, to amend this dividend policy.

As of 31 December 2009, ING UK RET had a revenue reserve of £149.7 million. It is one of the few income-focused UK listed property investment companies whose dividends are currently fully covered by recurring earnings.  Further details of the financial position of the ING UK RET Group will be set out in the Offer Document and the Prospectus.

16    Management and employees, locations and future intentions

Rugby REIT is a property company which outsources its management and administration functions to a third party and has only one part-time employee. It is ING UK RET's intention to replace Rugby Asset Management as investment manager with its own investment manager, ING REIM. Rugby Asset Management has agreed to early termination of its management and administrative contracts with Rugby REIT, once the Offer has become or is declared wholly unconditional, in exchange for a fee of £600,000 and has agreed to effect an orderly handover of Rugby REIT's affairs for a period of approximately one month thereafter.

On a change of control of Rugby REIT, the Directors of Rugby REIT are required to resign from the Company on six months' notice. As such, in the event that the Offer becomes or is declared wholly unconditional, the Directors of Rugby REIT will resign from their positions as Directors of the Company.

17    Further details of the Offer

The Rugby REIT Shares will be acquired under the Offer fully paid and free from all liens, equities, charges, encumbrances and other interests and together with all rights attaching to them on or after the date of Admission, including the right to receive all dividends (if any) declared, made or paid thereafter.

The Offer will extend to all Rugby REIT Shares unconditionally allotted or issued and fully paid on the date of the Offer (excluding any Rugby REIT Shares already owned by IRET Securities or ING UK RET and treasury shares except to the extent these cease to be held as treasury shares before such date as IRET Securities or ING UK RET may determine) and any Rugby REIT Shares which are unconditionally allotted or issued and fully paid before the date on which the Offer closes or such earlier date as IRET Securities may, subject to the City Code, decide not being earlier than the date on which the Offer becomes unconditional as to acceptances.

There are no agreements or arrangements to which IRET Securities or ING UK RET is a party which relate to the circumstances in which IRET Securities may or may not invoke or seek to invoke a condition of the Offer.

18    Overseas Shareholders

The availability of the Offer and of the New ING UK RET Ordinary Shares and the ZDP Shares under the terms of the Offer to Rugby REIT Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Rugby REIT Shareholders who are not so resident should inform themselves about and observe any applicable legal or regulatory requirements.  Further details in relation to Overseas Shareholders will be contained in the Offer Document.

19    Admission and dealings in the New ING UK RET Ordinary Shares

Application will be made to the UK Listing Authority and the Channel Islands Stock Exchange for the New ING UK RET Ordinary Shares to be issued in connection with the Offer to be admitted to the Official Lists of the UKLA and the CISX. Application will also be made for the New ING UK RET Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities and on the Channel Islands Stock Exchange.

It is expected that listing will become effective and that dealings for normal settlement in the New ING UK RET Ordinary Shares will commence on the first business day following the day on which the Offer becomes or is declared unconditional in all respects (save only in respect of the Admission of such shares becoming effective).

20    Prospectus and timetable

ING UK RET and IRET Securities will be required to publish a Prospectus in connection with the issue of the New ING UK RET Ordinary Shares and the ZDP Shares. The Prospectus will be published by ING UK RET and IRET Securities in due course and will contain information on, inter alia, ING UK RET, IRET Securities, the New ING UK RET Ordinary Shares and the ZDP Shares. 

The expected timetable of principal events will be set out in the Prospectus.

21    Compulsory acquisition, cancellation of admission of Rugby REIT Shares to trading on London Stock Exchange's main market for listed securities and re-registration

IRET Securities intends, assuming that it receives sufficient acceptances under the Offer to entitle it to do so and all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), to invoke the procedures set out in sections 979 to 982 (inclusive) of the Companies Act, to acquire compulsorily, on the same terms as the Offer, any outstanding Rugby REIT Shares in respect of which the Offer has not been accepted.

It is also intended that, upon the Offer becoming or being declared unconditional in all respects and sufficient acceptances being received, that IRET Securities will procure that Rugby REIT applies to the UKLA for the cancellation of the listing of the Rugby REIT Shares on the Official List and the admission of the Rugby REIT Shares to trading on the London Stock Exchange.  Delisting is likely to reduce significantly the liquidity and marketability of any Rugby REIT Shares in respect of which the Offer has not been accepted.

It is anticipated that cancellation of listing on the Official List and admission to trading on London Stock Exchange will take effect no earlier than 20 Business Days after: (i) the date on which IRET Securities has, by virtue of acceptances of the Offer, acquired or agreed to acquire issued ordinary share capital carrying at least 75 per cent of the voting rights of Rugby REIT (or Rugby REIT has passed a special resolution to delist); or (ii) the first date of issue of compulsory acquisition notices under section 979 of the Companies Act.

It is also intended that, following the Offer becoming or being declared unconditional in all respects and after the cancellation referred to above becoming effective, Rugby REIT will be re-registered as a private company under the relevant provisions of the Companies Act.

22    Disclosure of interests in Rugby REIT Shares

Save for the irrevocable undertakings referred to in paragraph 10 of this announcement, neither ING UK RET nor IRET Securities, nor, so far as the ING UK RET Directors and IRET Securities Directors are aware, any person acting in concert with them, has any interest in or right to subscribe for Rugby REIT Shares or has any short position (including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery) in Rugby REIT Shares, has borrowed or lent any Rugby REIT Shares (save for any borrowed shares which have been either on-lent or sold) or has any arrangement in relation to Rugby REIT Shares. For these purposes, "arrangement" includes any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery and borrowing or lending of Rugby REIT Shares. An "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature relating to Rugby REIT Shares which may be an inducement to deal or refrain from dealing in such securities. "Interest" includes any long economic exposure, whether conditional or absolute, to changes in the price of securities and a person is treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

23    Securities in issue

In accordance with Rule 2.10 of the City Code, as at close of business on 14 April 2010, being the last Business Day prior to this announcement, IRET Securities had 1 ordinary share of £1.00 in issue, ING UK RET had 330,401,300 ordinary shares of no par value in issue (ISIN number GB00B0LCW208) and Rugby REIT had 58,940,581 ordinary shares of 1 pence each in issue (ISIN number GB00B1VVM685).

24    General

The Offer will be on the terms and subject to the conditions set out in this announcement (including Appendix I) and the full terms to be set out in the Offer Document and the Form of Acceptance.  Relevant documentation will be sent to Rugby REIT Shareholders (other than certain Overseas Shareholders) in due course.  In deciding whether or not to accept the Offer in respect of their Rugby REIT Shares, Rugby REIT Shareholders should carefully consider the information contained in, and the procedures described in, such documentation.

The Offer Document, the Prospectus and (in the case of Rugby REIT Shares held in certificated form) the Form of Acceptance will be posted to Rugby REIT Shareholders as soon as practicable and in any event within 28 days of this announcement, except with the consent of the Panel.

The conditions to which the Offer will be subject and certain further terms of the Offer are set out in Appendix I to this announcement.  The bases and sources of certain financial information contained in this announcement, together with summary information regarding the irrevocable undertakings provided by the Rugby REIT Directors and certain Rugby REIT Shareholders in connection with the Offer, are set out in Appendix II. Appendix III contains a valuation letter from King Sturge LLP with regard to ING UK RET's property portfolio. Definitions of certain expressions used in this announcement are contained in Appendix IV of this announcement.

Notes

1        Based on the value of 1.206 ING UK RET Ordinary Shares and the 31 March 2010 net asset value of 56.4 pence per ING UK RET Ordinary Share.

2        Based on the value of 1.206 ING UK RET Ordinary Shares and the Closing Price of 49 pence on 14 April 2010, the latest practicable date prior this announcement.

3        Approximate value of ZDP Share estimated by J.P. Morgan Cazenove on 15 April 2010.

4        Based on an annualised dividend calculated from the dividend announced on 15 April 2010 for the first quarter 2010 of 1 pence per ING UK RET Ordinary Share and the issue price of a New ING UK RET Ordinary Shares (56.4 pence).

5        The Offer of 41 pence per Rugby REIT Share made by Terra Investments Limited on 13 October 2009.

6        The Closing Price of 49.25 pence per Rugby REIT Share on 12 February 2010 (the latest practicable date prior to the announcement that ING UK RET and Rugby REIT were in merger discussions and the commencement of the Offer Period).

7        The Closing Price of 55 pence per Rugby REIT Share on 14 April 2010 (the latest practicable date prior to the date of this announcement).

8        Rugby REIT Shareholders who are subject to UK corporation tax should refer to the paragraph titled "United Kingdom taxation" in Part 2 of the Offer Document.

9        The exact term of the ZDP Shares and thus the final entitlement will depend on the date the ZDP Shares are issued. For example, an issue date of 17 May 2010 would result in a final capital entitlement of 76.6 pence (based on the issue price of approximately 65 pence, the gross redemption yield of 6.875 per cent and the maturity date of 31 October 2012).

10      The gross dividend income of 1 Rugby REIT Share is based on the final dividend of nil pence in respect of the 12 months ended 31 December 2009.

11      The gross dividend income of 1.206 ING UK RET Shares is based on an annualised dividend calculated from the dividend announced for the first quarter 2010 of 1 pence per ING UK RET Ordinary Share. Excludes any interest on interim dividends received.

12      The ZDP return per year is the rolled up return payable on ZDP Shares at a Gross Redemption Yield of 6.875 per cent., compounded daily. This return is only received on redemption of the ZDP Shares on 31 October 2012.

13      The interest on cash consideration is calculated on the assumption that the cash is reinvested for a period of 12 months to yield approximately 0.60 per cent. per annum, being the redemption yield for the UK Gilt Treasury (March 2011) as at 14 April 2010, being the last practicable date prior to the posting of this document.

No account has been taken of any potential tax consequences of accepting the Offer.

ENQUIRIES

ING UK RET                                                                   Tel: [phone]

Nicholas Thompson

ING Real Estate Investment Management                     Tel: [phone]

(Investment Manager)               

Michael Morris                                                                                            

Helen Stott   

ING Corporate Finance                                                 Tel: [phone]

(Joint Financial Adviser to ING UK RET)

William Marle                                                                                             

John Denby                                       

J.P. Morgan Cazenove                                                  Tel: [phone]

(Sponsor and Joint Financial Adviser to ING UK RET)

William Simmonds                                                                            

Financial Dynamics                                                       Tel: [phone] 7269 7261

(Financial PR, ING UK RET)

Dido Laurimore

Laurence Jones

Northern Trust                                                                Tel: [phone]

(Company Secretary, ING UK RET)       

David Sauvarin

Rugby REIT                                                                    Tel: [phone]

Philip Kendall                                                                                                

Hawkpoint Partners Limited                                          Tel: [phone]

(Financial Adviser to Rugby REIT)

Ben Mingay                                                                                      

Edward Arkus 

Collins Stewart Europe Limited                                    Tel: [phone]

(Corporate Broker to Rugby REIT)

Bruce Garrow     

Financial Dynamics                                                       Tel: [phone]

(Financial PR, Rugby REIT)                                                                                            

Richard Sunderland

Rachel Drysdale 

Notes to editors

ING UK Real Estate Income Trust Limited:

ING UK Real Estate Income Trust Limited ("ING UK RET") is a closed-ended investment company which is domiciled and incorporated in Guernsey and listed on the London & Channel Islands Stock Exchanges which invests in commercial property throughout the UK through its subsidiary undertakings.

ING UK RET's property portfolio is managed by ING Real Estate Investment Management (UK) Limited, a member of the ING Group and one of the UK's leading property asset managers with approximately £5 billion of property assets under management.

As at 31 March 2010, the ING UK RET Group had a property portfolio of £352.4 million and net assets of £186.3 million (equivalent to 56.4 pence per ING UK RET Ordinary Share).

Entities controlled by ING Group own approximately 3 per cent of the share capital of ING UK RET, although, for avoidance of doubt, ING UK RET is not part of the ING Group.

Rugby Estates Investment Trust plc:

Rugby Estates Investment Trust plc ("Rugby REIT") is a public limited company established to take advantage of the REIT regime in the UK. Rugby REIT Shares have been admitted to the Official List of the UK Listing Authority since 15 May 2007.

Rugby REIT's investment objective is to assemble and manage a portfolio of investment properties in the UK, principally through the acquisition of privately owned property investment companies.

Investor presentation

There will be an analyst meeting this morning at 8.30 a.m. at the offices of J.P. Morgan Cazenove, 20 Moorgate, London, EC2R 6DA. There will also be a live conference call facility. Please contact Dido Laurimore or Laurence Jones at Financial Dynamics for full details. A copy of the presentation will be made available on the Company's website www.ingreit.co.uk.

Further information

This announcement will be available on ING UK RET and Rugby REIT's websites by no later than 12 noon (London time) on 15 April 2010 at www.ingreit.co.uk and www.rugbyreit.co.uk respectively. 

Further information on the Offer, each of IRET Securities, ING UK RET and Rugby REIT and the expected timetable of principal events will be set out in the Offer Document and the Prospectus to be published by ING UK RET in due course.  The Offer Document, the Prospectus, and (in the case of Rugby REIT Shares held in certificated form) the Form of Acceptance will be posted to Rugby REIT Shareholders as soon as practicable and, in any event, except with the consent of the Panel, within 28 days of this announcement, other than in relation to a Restricted Jurisdiction.

ING Corporate Finance, which is authorised by the Dutch Central Bank, is acting exclusively for ING UK RET and IRET Securities and no one else in relation to the Offer and will not be responsible to anyone other than ING UK RET or IRET Securities for providing the protections afforded to clients of ING Corporate Finance nor for providing advice in relation to the Offer or any other matters referred to in this document. 

J.P. Morgan plc, which conducts its UK investment banking businesses as J.P. Morgan Cazenove, and is authorised and regulated in the United Kingdom by the Financial Services Authority is acting exclusively for ING UK RET and IRET Securities and no one else in connection with the Offer and will not be responsible to anyone other than ING UK RET and IRET Securities for providing the protections afforded to clients of J.P. Morgan plc nor for providing advice in connection with the Offer.   

Hawkpoint Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Rugby REIT and no one else in connection with the Offer and will not be responsible to anyone other than Rugby REIT for providing the protections afforded to clients of Hawkpoint Partners Limited or for providing advice in relation to the Offer.

Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Rugby REIT and no one else in connection with the matters referred to herein and will not be responsible to anyone other than Rugby REIT for providing the protections afforded to clients of Collins Stewart Europe Limited or for providing advice in relation to the Offer.

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the availability of the Offer to Rugby REIT Shareholders who are not resident in the United Kingdom, may be affected by the laws or regulations of relevant jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom, or Rugby REIT Shareholders who are not resident in the United Kingdom, will need to inform themselves about, and observe, any applicable requirements.  This announcement has been prepared in accordance with English law, the City Code and the Disclosure and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. 

Unless otherwise determined by ING UK RET and IRET Securities or required by the City Code and permitted by applicable law and regulation, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded or sent in, into or from the United States or any other Restricted Jurisdiction and persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in, into or from any such jurisdiction. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this announcement and/or any other related document to any jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Further details in relation to Overseas Shareholders will be contained in the Offer Document.

This announcement is not intended to, and does not, constitute or form any part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire or subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to this announcement or otherwise. The Offer will be made solely by means of the Offer Document, an advertisement to be published in the London Gazette and the Form of Acceptance (in respect of certificated Rugby REIT Shares), which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance or other response to the Offer should be made only on the basis of the information contained in the Offer Document, the Form of Acceptance (in the case of certificated Rugby REIT Shares) and the Prospectus which are proposed to be published and/or posted to Rugby REIT Shareholders in due course.  Neither the New ING UK RET Ordinary Shares, Exchangeable Preference Shares nor the ZDP Shares are being offered to the public by means of this announcement.

Neither the New ING UK RET Ordinary Shares, Exchangeable Preference Shares nor the ZDP Shares to be issued in connection with the Offer have been, or will they be, registered under the US Securities Act or under the securities laws of any state of the United States; the relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no Prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and neither the New ING UK RET Ordinary Shares nor the ZDP Shares have been, or will they be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada, Japan or Australia. Accordingly, neither the New ING UK RET Ordinary Shares nor the ZDP Shares are being and may be (unless an exemption under relevant securities laws is applicable) offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Japan or Australia or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States, Canadian, Japanese or Australian person. 

 The Offer may provide that New ING UK RET Ordinary Shares or ZDP Shares which would otherwise be issued to an accepting Rugby REIT Shareholder resident in a Restricted Jurisdiction may be sold, and the net proceeds of sale remitted to the accepting Rugby REIT Shareholder.

 ING UK RET and IRET Securities reserve the right to elect, with the agreement of Rugby REIT and the consent of the Panel (where necessary) to implement the Acquisition by way of a court-approved scheme of arrangement in accordance with Part 26 of the Companies Act.  In such event, the Acquisition will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.

Forward looking statements

This announcement, including information included in this announcement, contains statements about Rugby REIT, the Offer, IRET Securities and ING UK RET that are or may be forward looking statements. All statements other than statements of historical facts included in this document may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims', 'intends', 'will', 'may', 'anticipates', 'estimates', 'projects', or words or terms of similar substance or the negative thereof identify forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of Rugby REIT's, ING UK RET's or IRET Securities' operations.

These forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of Rugby REIT, ING UK RET or IRET Securities. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to Rugby REIT, ING UK RET or IRET Securities or any of their members or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included in this announcement are based on information available to the relevant parties on the date hereof. Investors should not place undue reliance on such forward-looking statements, and neither Rugby REIT,  ING UK RET or IRET Securities nor their respective directors undertakes any obligation in respect of, and do not intend to update or revise any forward-looking statements except as required by the City Code or pursuant to applicable law.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of Rugby REIT, IRET Securities or ING UK RET all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Rugby REIT, IRET Securities or ING UK RET, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Rugby REIT, IRET Securities or ING UK RET by Rugby REIT, IRET Securities or ING UK RET or by any of their respective "associates", must be disclosed by no later than 12.00 noon on the business day following the date of the relevant transaction (unless the "dealing" is for discretionary clients and the associate is an "exempt fund manager" in which case the "dealing" must be privately disclosed in accordance with Notes 4(b) and 5(b) to Rule 8 of the City Code).

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

Terms in quotations marks are defined in the City Code, which can also be found on the Panel's website.  If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the City Code, you should consult the Panel.  

THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, DISTRIBUTION, DIRECTLY OR INDIRECTLY, INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA). THE MATERIAL SET FORTH HEREIN IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES OR ANY OTHER JURISDICITION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT, OR THE LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND APPLICABLE STATES LAWS. THERE WILL BE NO PUBLIC OFFERING OF THESE SECURITIES IN THE UNITED STATES OR TO US PERSONS (AS DEFINED BY REGULATION S).

APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

The Offer is made by IRET Securities in compliance with the applicable rules and regulations of the City Code and is governed by English law and will be subject to the non-exclusive jurisdiction of the courts of England. In addition it will be subject to the following conditions and to the terms and conditions set out in the Form of Acceptance.

1     The Offer is subject to the following conditions:

1.1   valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as IRET Securities may, subject to the rules of the City Code or with the consent of the Panel, decide) in respect of not less than 90 per cent. of the Rugby REIT Shares to which the Offer relates and not less than 90 per cent. of the voting rights carried by those Rugby REIT Shares (or in each case such lesser percentage as IRET Securities may decide), provided that this condition shall not be satisfied unless IRET Securities and/or its wholly-owned subsidiaries shall have acquired or agreed to acquire, pursuant to the Offer or otherwise, Rugby REIT Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Rugby REIT including for this purpose (to the extent, if any, required by the Panel) any such voting rights attached to any Rugby REIT Shares unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise and for the purposes of this condition:

(a)   the expression Rugby REIT Shares to which the Offer relates shall be construed in accordance with sections 974 to 991 of the Companies Act;

(b)   Rugby REIT Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue; and

(c)   valid acceptances shall be deemed to have been received in respect of Rugby REIT Shares which are treated for the purposes of section 979(8) of the Companies Act as having been acquired or contracted to be acquired by IRET Securities by virtue of acceptances of the Offer;

1.2   admission of the New ING UK RET Ordinary Shares (i) to listing on the Official List becoming effective in accordance with the Listing Rules of the UK Listing Authority; and (ii) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance with paragraph 2.1 of the Admission and Disclosure Standards made by the London Stock Exchange from time to time, or, if IRET Securities so determines (subject to the consent of the Panel) the UK Listing Authority and the London Stock Exchange agreeing to admit such New ING UK RET Ordinary Shares to listing and trading, subject to the allotment of such New ING UK RET Ordinary Shares and/or the Offer becoming or being declared unconditional in all respects and (iii) to listing on the Official List of the CISX becoming effective in accordance with the Listing Rules of the CISX.

1.3   no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, professional association, institution, employee representative body or any other such body or person whatsoever in any jurisdiction (each a Third Party and all collectively Third Parties) having decided or given notice of a decision to take, institute or threaten any action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:

(a)   make the Offer or its implementation or the acquisition or proposed acquisition by IRET Securities of all or any Rugby REIT Shares, or the acquisition or proposed acquisition of control of Rugby REIT, by any member of the Wider ING UK RET Group, void, illegal or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, challenge, delay, hinder or otherwise interfere with the same, or impose additional material conditions or obligations with respect thereto, or otherwise challenge or require amendment to the terms of the Offer or any such acquisition;

(b)   require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture, by any member of the Wider ING UK RET Group or by any member of the Wider Rugby REIT Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their respective businesses (or any part of them) or to own or manage their respective assets or properties or any part of them;

(c)   impose any limitation on, or result in a delay in, the ability of any member of the Wider ING UK RET Group, directly or indirectly, to acquire or to hold or to exercise effectively all or any rights of ownership in respect of shares, loans or other securities (or the equivalent) in any member of the Wider Rugby REIT Group or to exercise management control over any such member, in any such case to an extent which is material to ING UK RET in the context of the Offer or to the Wider ING UK RET Group taken as a whole;

(d)   otherwise adversely affect any or all of the businesses, assets, liabilities, profits or prospects of any member of the Wider ING UK RET Group or any member of the Wider Rugby REIT Group (including any action which would or might adversely affect or prejudice any of the status, licences, authorisations, exemptions or consents of any member of the Wider ING UK RET Group or of the Wider Rugby REIT Group), in any such case to an extent which is material in the context of the Wider ING UK RET Group or the Wider Rugby REIT Group (in each case taken as a whole) or which is otherwise material in the context of the Offer;

(e)   save pursuant to the Offer or sections 974 to 991 of the Companies Act, require any member of the Wider ING UK RET Group or the Wider Rugby REIT Group to acquire, or offer to acquire, any shares or other securities (or the equivalent) in, or any asset owned by, any member of the Wider Rugby REIT Group or the Wider ING UK RET Group;

(f)    result in a delay in the ability of IRET Securities, or render it unable, to acquire some or all of the Rugby REIT Shares or require a divestiture by IRET Securities or any member of the Wider ING UK RET Group of any shares or other securities (or the equivalent) in Rugby REIT;

(g)   limit the ability of any member of the Wider ING UK RET Group or the Wider Rugby REIT Group to co-ordinate or integrate its business, or any part of it, with the business or any part of the business of any other member of the Wider ING UK RET Group or of the Wider Rugby REIT Group, in any such case to an extent which is material in the context of the Wider ING UK RET Group or the Wider Rugby REIT Group (in each case taken as a whole) or which is otherwise material in the context of the Offer; or

(h)   result in any member of the Wider Rugby REIT Group or the Wider ING UK RET Group ceasing to be able to carry on business under any name which it presently does so, to an extent which is material in the context of the Wider ING UK RET Group or the Wider Rugby REIT Group (in each case taken as a whole) or which is otherwise material in the context of the Offer,

and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference under the laws of any relevant jurisdiction or enact any such statute, regulation, order or decision or take any steps having expired, lapsed or been terminated;

1.4   all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, certificates, exemptions, permissions and approvals (Authorisations) necessary or reasonably appropriate in any relevant jurisdiction for or in respect of the Offer or the proposed acquisition of all or any Rugby REIT Shares or other securities in, or control of, Rugby REIT by any member of the Wider ING UK RET Group having been obtained on terms and in a form satisfactory to IRET Securities from all appropriate Third Parties or persons with whom any member of the Wider Rugby REIT Group has entered into contractual arrangements and all such Authorisations, together with all Authorisations necessary or appropriate to carry on the business of any member of the Wider Rugby REIT Group remaining in full force and effect at the time at which the Offer becomes otherwise unconditional and there being no indication of any intention to revoke, withdraw, suspend, restrict, withhold or modify or not to grant or review any of the same;

1.5   all necessary filings or applications having been made in connection with the Offer, and all appropriate waiting periods (including extensions thereof) in respect of the Offer or its implementation under any applicable legislation or regulations in any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the Wider ING UK RET Group of any shares or other securities in, or control of, Rugby REIT;

1.6   save as fairly disclosed in writing to IRET Securities or its advisers or as disclosed in the annual report and accounts for the year ended 31 December 2009 or as publicly announced to a Regulatory Information Service prior to 15 April 2010, there being no provision of any agreement, authorisation, arrangement, agreement, lease, licence, permit or other instrument to which any member of the Wider Rugby REIT Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Offer or the proposed acquisition by IRET Securities or any member of the Wider ING UK RET Group of any shares or other securities (or the equivalent) in Rugby REIT or because of a change in the control or management of Rugby REIT or any member of the Rugby REIT Group, would or might reasonably be expected to result in (to an extent which would be material and adverse in the context of the Wider Rugby REIT Group (taken as a whole):

(a)   any monies borrowed by or any other indebtedness (actual or contingent) of, or grant available to, any member of the Wider Rugby REIT Group, being or becoming repayable or being capable of being declared repayable immediately or prior to their or its stated maturity date or repayment date or the ability of any such member to borrow monies or incur any indebtedness being withdrawn, prohibited or inhibited or becoming capable of being withdrawn, prohibited or inhibited;

(b)   the rights, liabilities, obligations or interests of any member of the Wider Rugby REIT Group in, or the business of any such member with, any person, company, firm or body (or any agreements or arrangements relating to any such interest or business) being terminated, or modified or affected;

(c)   any assets or interests of any member of the Wider Rugby REIT Group being or falling to be disposed of or charged or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or charged;

(d)   the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Rugby REIT Group, or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable or being enforced;

(e)   the value of any member of the Wider Rugby REIT Group or its financial or trading position or profits or prospects being prejudiced or adversely affected;

(f)    the creation or assumption of any liability, actual or contingent, by any member of the Wider Rugby REIT Group; or

(g)   any such agreement, authorisation, arrangement, licence, permit or other instrument or the rights, liabilities, obligations or interests of any member of the Wider Rugby REIT Group thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

and no event having occurred which, under any provision of any agreement, authorisation, arrangement, agreement, lease, licence, permit or other instrument to which any member of the Wider Rugby REIT Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would be reasonably likely to result in any of the events referred to in sub-paragraph (a) to (g) of this paragraph 1.6 (in each case to an extent which would be material and adverse in the context of the Wider Rugby REIT Group taken as a whole);

1.7   save as fairly disclosed in writing to IRET Securities or its advisers, or as otherwise publicly announced to a Regulatory Information Service or as disclosed in the annual report and accounts for the year ended 31 December 2009, prior to 15 April 2010 no member of the Wider Rugby REIT Group having, since 31 December 2009:

(a)   (save as between Rugby REIT and wholly-owned subsidiaries of Rugby REIT) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue of additional shares of any class or securities convertible into or exchangeable for, shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(b)   sold or transferred or agreed to sell or transfer any Rugby REIT Shares held in treasury;

(c)   recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether payable in cash or otherwise other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Rugby REIT to Rugby REIT or any of its wholly-owned subsidiaries;

(d)   other than pursuant to the Offer (and save for transactions between Rugby REIT and its wholly-owned subsidiaries or other than in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings in any such case;

(e)   (save for transactions between Rugby REIT and its wholly-owned subsidiaries or other than in the ordinary course of business) disposed of, or transferred, mortgaged or created any security interest over any asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so;

(f)    (save as between Rugby REIT and its wholly-owned subsidiaries) made or authorised or proposed or announced an intention to propose any change in its loan capital;

(g)   (save as between transactions between Rugby REIT and its wholly-owned subsidiaries) issued, authorised, or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness other than in the ordinary course of business;

(h)   (save for transactions between members of the Rugby REIT Group) purchased, redeemed or repaid, or announced any proposal to purchase, redeem or repay, any of its own shares or other securities or reduced or made any other change to or proposed the reduction or other change to any part of its share capital;

(i)    entered into, implemented, effected, varied, authorised, proposed or announced its intention to enter into, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business which in any such case is material in the context of the Wider Rugby REIT Group taken as a whole;

(j)    entered into or varied or terminated or authorised, proposed or announced its intention to enter into or vary any contract, arrangement, agreement transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or is likely to be restrictive on the business of any member of the Wider Rugby REIT Group or the Wider ING UK RET Group or which involves or is likely to involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business;

(k)   entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of, any investment management agreement or contract, service agreement or arrangement with any director or senior executive of any member of the Wider Rugby REIT Group, which in any such case is material in the context of the Wider Rugby REIT Group taken as a whole;

(l)    terminated or varied the terms of any agreement or arrangement between any member of the Wider Rugby REIT Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position or prospects of the Wider Rugby REIT Group taken as a whole;

(m)  proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed in the Wider Rugby REIT Group;

(n)   been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease to carry on all or a substantial part of its business;

(o)   (other than in respect of a member of the Wider Rugby REIT Group which is dormant and was solvent at the relevant time) taken or proposed any corporate action, or had any legal proceedings threatened or instituted against it for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any part of its assets or revenues or any analogous or equivalent steps or proceedings in any relevant jurisdiction having been taken or had any such person appointed;

(p)   waived or compromised or settled any claim otherwise than in the ordinary course of business which would or might reasonably be expected to be material in the context of the Wider Rugby REIT Group taken as a whole;

(q)   made any alteration to its memorandum or articles of association or other constitutional documents; or

(r)    entered into any contract, agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this condition, in any such case which would or might reasonably be expected to be material in the context of the Wider Rugby REIT Group taken as a whole;

1.8   save as fairly disclosed in writing to IRET Securities or its advisers or as otherwise publicly announced to a Regulatory Information Service prior to 15 April 2010 or as disclosed in the annual report and accounts for the year ended 31 December 2009, since 31 December 2009;

(a)   no material adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Rugby REIT Group;

(b)   no litigation, arbitration proceedings, prosecution or other legal proceedings or investigations having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Rugby REIT Group or to which any member of the Wider Rugby REIT Group is or may become a party (whether as a claimant, defendant or otherwise) which in any such case is or might reasonably be expected to be material in the context of the Wider Rugby REIT Group taken as a whole;

(c)   no enquiry or investigation by any Third Party against or in respect of any member of the Wider Rugby REIT Group having been commenced, announced or threatened in writing by or against or remaining outstanding in respect of any member of the Wider Rugby REIT Group which in any such case is or might reasonably be expected to be material in the context of the Wider Rugby REIT Group taken as a whole;

(d)   no contingent or other liability having arisen or increased or become apparent to any member of the Wider ING UK RET Group which would or might materially and adversely affect any member of the Wider Rugby REIT Group;

(e)   no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Rugby REIT Group, which is necessary or reasonably appropriate for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which is likely to materially and adversely affect the Wider Rugby REIT Group taken as a whole;

1.9   save as fairly disclosed in writing to IRET Securities or its advisers or as otherwise publicly announced to a Regulatory Information Service prior to 15 April 2010 or as disclosed in the annual report and accounts for the year ended 31 December 2009, IRET Securities not having discovered, in each case that would be material in the context of the Wider Rugby REIT Group taken as a whole:

(a)   that any financial, business or other information concerning the Wider Rugby REIT Group publicly announced or disclosed at any time by or on behalf of any member of the Wider Rugby REIT Group to the Wider ING UK RET Group, is misleading, contains a misrepresentation of any fact or omits to state a fact necessary to make that information not misleading;

(b)   that any present member of the Wider Rugby REIT Group or any partnership, company or other entity in which any member of the Wider Rugby REIT Group has a significant economic interest and which is not a subsidiary undertaking of Rugby REIT, is subject to any liability, contingent or otherwise, which is not disclosed in the annual report and accounts for Rugby REIT for the year ending 31 December 2009;

(c)   any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider Rugby REIT Group;

(d)   that any past or present member of the Wider Rugby REIT Group has not complied with all applicable legislation, regulations or other requirements of any relevant jurisdiction with regard to the use, treatment, storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or that there has otherwise been a material emission, discharge, disposal, spillage or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) on or from any land or property of any description or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Rugby REIT Group or in which any such member may now or previously have had an interest which would, in any case, be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Wider Rugby REIT Group;

(e)   that there is or is likely to be any liability (whether actual or contingent) on the part of any member of the Wider Rugby REIT Group to make good, repair, reinstate or clean up any property of any description or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Rugby REIT Group, or in which any such member may now or previously have had an interest, under any environmental legislation, regulation, notice, circular or order of any Third Party; or

(f)    that circumstances exist (whether as a result of the making of the Offer or otherwise) which would be likely to lead to any Third Party instituting, (or whereby any member of the Wider Rugby REIT Group would be likely to be required to institute), an environmental audit or take any steps which would in any such case be likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or other asset now or previously owned, occupied or made use of by any member of the Wider Rugby REIT Group, or in which any such member may now or previously have had an interest, or any controlled waters.

Defined terms

For the purposes of these conditions the Wider Rugby REIT Group means Rugby REIT and its subsidiary undertakings, associated undertakings and any other undertaking in which Rugby REIT and/or such undertakings (aggregating their interests) have a significant interest and the Wider ING UK RET Group means ING UK RET and its subsidiary undertakings, associated undertakings and any other undertaking in which IRET Securities and/or such undertakings (aggregating their interests) have a significant interest and for these purposes associated undertaking has the meaning given by the Companies Act, subsidiary undertaking and undertaking have the meaning given by sections 1162 and 1161 of the Companies Act respectively, and significant interest means a direct or indirect interest in more than 20 per cent. of the equity share capital (as defined in section 548 of the Companies Act).

Waiver and amendment of Conditions

IRET Securities reserves the right to waive, in whole or in part, all or any of conditions 1.2 to 1.10 inclusive. Conditions 1.2 to 1.10 must be satisfied as at, or waived on or before midnight (London time), on the twenty first day after the later of first closing date of the Offer and the date on which the condition in paragraph 1.2 is fulfilled (or in each case such later date as the Panel may agree).

IRET Securities shall be under no obligation to waive (if capable of waiver) or treat as fulfilled any of conditions 1.2 to 1.10 inclusive by a date earlier than the latest date specified above for the fulfilment thereof, notwithstanding that the other conditions of the Offer may at such earlier date have been fulfilled and that there are, at such earlier date, no circumstances indicating that any of such conditions may be incapable of fulfilment.

If IRET Securities is required by the Panel to make an offer for Rugby REIT Shares under the provisions of Rule 9 of the Code, IRET Securities may make such alterations to the above conditions of the Offer, including the condition in paragraph 1.2, as are necessary to comply with the provisions of that Rule.

The Offer will lapse if it is referred to the Competition Commission or the European Commission initiates proceedings under Article 6(1)(c) of the Merger Regulation, or following a referral under Article 9(1) of the Merger Regulation, there is a subsequent reference to the Competition Commission before 3.00 p.m. (London time) on the first closing date of the Offer or the time and date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later. In such circumstances, the Offer will cease to be capable of further acceptance and persons accepting the Offer and IRET Securities shall thereupon cease to be bound by Forms of Acceptance delivered on or before the date on which the Offer so lapses.

APPENDIX II
BASES AND SOURCES

1.     Unless otherwise stated in this announcement:

(a)   Financial information relating to ING UK RET has been extracted (without material adjustment) from the audited accounts of ING UK RET for the year ended 31 December 2009.

(b)   Financial information relating to Rugby REIT has been extracted (without material adjustment) from the audited accounts for Rugby REIT for the year ended 31 December 2009.

(c)   The net asset value per ING UK RET Ordinary Share as at 31 March 2010 has been extracted from ING UK RET's NAV announcement dated 15 April 2010.

(d)   The terms of the Share Offer value each Rugby REIT Share at 68 pence at net asset value and 59.1 pence at market value, the terms of the ZDP Alternative value each Rugby REIT Share at approximately 65 pence and the terms of the Cash Alternative value each Rugby REIT Share at 63 pence.

The terms of the Acquisition value the Rugby REIT Group at £40.1 million, assuming full take up of the Share Offer, based on a net asset value per share of 56.4 pence per New ING UK RET Ordinary Share. The number of New ING UK RET Ordinary Shares to be issued in respect of full acceptance of the Share Offer is calculated based upon there being 58,940,581 Rugby REIT Shares in issue on the last business day prior to the date of this announcement.

(e)   All share prices are derived from Daily Official List in respect of ING UK RET Shares and Rugby REIT Shares and are mid market prices.

(f)    The yields on UK Government Gilts are sourced from Bloomberg, at close of business on 14 April 2010.

(g)   All references to time in the Offer Document and in the Form of Acceptance are to London time unless the context provides otherwise.

(h)   Where information in this announcement has been sourced from a third party, the Company   confirms that this information has been accurately reproduced and, insofar as the Company is aware and is able to ascertain from information published by that party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

2.     Irrevocable undertakings:

IRET Securities has received irrevocable undertakings to accept, or to procure the acceptance of, the Offer from the following Rugby REIT Directors in respect of the following interests in Rugby REIT Shares:

Name	Number of Rugby REIT Shares committed	Approximate percentage of entire existing issued share capital of Rugby REIT
Philip Kendall	50,000	0.08%
Brian Galan	80,000	0.14%
Richard Midmer	30,000	0.05%
Duncan Watt	20,000	0.03%
Total	180,000	0.31%

The undertakings given by the Rugby REIT Directors (described above) will only cease to be binding if the Offer lapses or is withdrawn without having become unconditional in all respects.

IRET Securities has received irrevocable undertakings to accept, or to procure the acceptance of, the Offer from the following Rugby REIT Shareholders in respect of the following interests in Rugby REIT Shares:

Name	Number of Rugby REIT Shares committed	Approximate percentage of entire existing issued share capital of Rugby REIT
Laxey Partners	21,025,254	35.7%
Rugby CGLP Limited	4,990,200	8.5%
Rugby REIT Directors	180,000	0.3%
Total	26,195,454	44.4%

The undertaking given by Laxey Partners remains binding, including in the event of a competing offer being made for the entire issued and to be issued share capital of Rugby REIT, and will only lapse and be of no effect if the Offer lapses or is withdrawn. 

The undertaking provided by Rugby CGLP Limited will lapse in the event that prior to the Offer being declared wholly unconditional, any third party announces a firm intention to make a general offer for Rugby REIT which offer, in the reasonable opinion of Rugby CGLP Limited, represents an improvement to the terms of the Cash Alternative. In addition, the undertaking will lapse and be of no effect if the Offer lapses or is withdrawn.

APPENDIX III
VALUATION LETTER

King Sturge LLP

30 Warwick Street

London W1B 5NH

T  [phone]

F  [phone]

7^th April 2010

ING UK Real Estate Income Trust Limited

C/o P O Box 255

Trafalgar Court

Les Banques

Guernsey

GY1 3QL

Dear Sirs

VALUATION OF PROPERTIES

In accordance with your instructions we have valued the freehold and long leasehold properties held by ING UK Real Estate Income Trust Limited as at the Valuation Date, 31 March 2010.  This valuation report has been prepared for balance sheet purposes.

The properties have been valued individually on the basis of "Market Value" in accordance with the RICS Valuation Standards Sixth Edition.  No allowance has been made for expenses of realisation nor any taxation that may arise.  Our valuations are expressed exclusive of Value Added Tax.

Having regard to foregoing we are of the opinion that the aggregate of the individual values as at 31 March 2010 of the respective freehold and long leasehold interests, subject to and with the benefit of the various occupational leases described, as summarised in the schedules, is in the sum of £352,435,000 (Three Hundred and Fifty Two Million Four Hundred and Thirty Five Thousand Pounds).  The properties are, we understand, all held as investments and accordingly, no other categorisation is made.  A full breakdown of the valuation has been provided to you.

Yours faithfully

ROBERT BALDWIN

Partner

King Sturge LLP

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires:

Acquisition	the proposed acquisition by IRET Securities of the entire issued and to be issued share capital of Rugby REIT pursuant to the Offer
Admission	the admission of the New ING UK RET Ordinary Shares to the Official Lists of the UKLA and the CISX and to trading on the London Stock Exchange and the CISX
Articles	the articles of incorporation of the Company and/or IRET Securities (as amended from time to time), as the context may require
Business Day	a day on which banks are normally open for business in London and Guernsey
Cash Alternative	the alternative whereby Rugby REIT Shareholders who validly accept the Offer may elect to receive 63 pence in cash for each Rugby REIT Share, instead of the New Ordinary Shares to which they would otherwise be entitled under the Offer
certificated or in certificated form	a share or other security which is not in uncertificated form
Channel Islands Stock Exchange or CISX	the Channel Islands Stock Exchange, LBG
City Code	the City Code on Takeovers and Mergers
Closing Price	the closing middle market quotation of the relevant share as derived from the Official List
Companies Act	the UK Companies Act 2006 (as amended from time to time)
CREST	the relevant system (as defined in the Regulations) in respect of which Euroclear UK & Ireland is the Operator (as defined in the Regulations)
CREST participant	a person who is, in relation to CREST, a system-participant (as defined in the Regulations)
CREST sponsor	a CREST participant admitted to CREST as a CREST sponsor
Disclosure and Transparency Rules	the disclosure and transparency rules made by the FSA and forming part of the FSA's handbook of rules and guidance, as from time to time amended
Enlarged Group	ING UK RET Group as enlarged by the proposed acquisition of Rugby REIT
Euroclear	Euroclear UK & Ireland Limited
Exchangeable Preference Shares	Exchangeable Preference Shares of 10 pence each in the capital of IRET Securities to be issued pursuant to the Share Offer, which will immediately and compulsorily exchange on issue into New ING UK RET Ordinary Shares in accordance with the terms set out in IRET Securities' Articles
Existing Ordinary Shares	the ING UK RET Ordinary Shares in issue as at the date of this document
Form of Acceptance	the form of acceptance, election and authority relating to the Offer
FSA	the Financial Services Authority of the United Kingdom
FSMA	the Financial Services and Markets Act 2000
Hawkpoint	Hawkpoint Partners Limited
ING Corporate Finance	the corporate finance division of ING Bank N.V., London Branch
ING Group	ING Groep N.V., a global financial services company incorporated in the Netherlands with the registration number 33231073 under the Commercial Register of Amsterdam, with its registered address at Amstelveenseweg 500, 1081 KL Amsterdam, P.O. Box 810, 1000 AV Amsterdam
ING REIM	ING Real Estate Investment Management (UK) Limited
ING UK RET or the Company	ING UK Real Estate Income Trust Limited
ING UK RET Directors or ING UK RET Board	the board of directors of ING UK RET as at the date of this announcement, including any duly appointed committee thereof
ING UK RET Group	the Company and any of its subsidiaries or subsidiary undertakings
ING UK RET Ordinary Shares	ordinary shares of no par value in the share capital of the Company, including, where the context requires, the Existing Ordinary Shares and/or the New ING UK RET Ordinary Shares
IPD	Investment Property Databank Limited
IPD Quarterly Index	the IPD UK Quarterly Property Index
IRET Securities	IRET Securities Limited, a wholly-owned subsidiary of ING UK RET
IRET Securities Directors	the board of directors of IRET Securities as at the date of this announcement, including any duly appointed committee thereof
J.P. Morgan Cazenove	J.P. Morgan plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove
Laxey Partners	Laxey Partners Limited
Listing Rules	the Listing Rules made by the FSA under section 73A of FSMA and, where applicable, the listing rules of CISX
London Stock Exchange	the London Stock Exchange plc
NAV	the value of the assets of the ING UK RET Group less its liabilities, determined in accordance with the accounting principles adopted by the ING UK RET Group from time to time
NAV per Share	means the net asset value per ordinary share calculated in accordance with the Company's accounting policies
New ING UK RET Ordinary Shares	new ordinary shares of no par value in the capital of ING UK RET to be issued pursuant to the exchange of the Exchangeable Preference Shares
Offer	the recommended offer made by IRET Securities (including the Cash Alternative and the ZDP Alternative) to acquire all of the Rugby REIT Shares not already owned by IRET Securities or its associates on the terms and subject to the conditions to be set out in the Offer Document and the Form of Acceptance and, where the context requires, any revision, variation, extension or renewal of such offer
Offer Document	the document(s) containing the terms and conditions of the Offer to be sent to Rugby REIT Shareholders in due course
Offer Period	the period which commenced on 15 February 2010, being the date on which ING UK RET announced that it was considering the possibility of making an offer for Rugby REIT, until the latest of: (i) the first closing date of the Offer; (ii) the date on which the Offer lapses; and (iii) the date on which the Offer becomes or is declared wholly unconditional in accordance with its terms
Official List	the Official List of the Listing Authority and/or the official list of CISX, as the context requires
Overseas Shareholders	Rugby REIT Shareholders who are resident in, or nationals of, jurisdictions outside the UK or who are nominees of, or custodians or trustees for, citizens, residents or nationals of countries other than the UK
Panel	the Panel on Takeovers and Mergers
Prospectus	the prospectus dated the same date as the Offer Document relating to the proposed issue of the ZDP Shares, the Exchangeable Preference Shares and the New ING UK RET Ordinary Shares (together with any supplements or amendments thereto)
RAM or Rugby Asset Management	Rugby Asset Management Limited
Regulations	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
REIT	real estate investment trust
Restricted Jurisdiction	means any of the United States, Canada, Japan and Australia or any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure for IRET Securities, ING UK RET or Rugby REIT if information or documentation concerning the Offer is sent or made available to Rugby REIT Shareholders in that jurisdiction
Rugby REIT	Rugby Estates Investment Trust plc
Rugby REIT Directors or Rugby REIT Board	the board of directors of Rugby REIT as at the date of this announcement, including any duly appointed committee thereof
Rugby REIT Group	Rugby REIT and its subsidiaries and subsidiary undertakings
Rugby REIT Loan Notes	the loan note instruments dated 6 August 2007 constituting £3,442,140 guaranteed unsecured loan notes and 28 November 2007 constituting £12,899,982 unsecured loan notes
Rugby REIT Shareholders	holders of Rugby REIT Shares
Rugby REIT Shares	the existing unconditionally issued or allotted and fully paid ordinary shares of 1 pence each in Rugby REIT and any further such shares which are unconditionally allotted or issued fully paid or credited as fully paid in each case prior to the time at which the Offer ceases to be open for acceptance (or such earlier time, as IRET Securities may, with the Panel's consent or in accordance with the Code, decide) including shares unconditionally allotted or issued pursuant to the exercise of options
Shareholder	the holders of ING UK RET Ordinary Shares
Share Offer	the basic offer of 1.206 New ING UK RET Ordinary Shares for each Rugby REIT Share to be satisfied through the issue of Exchangeable Preference Shares and their exchange into New ING UK RET Ordinary Shares
Terra Offer	the mandatory cash offer for Rugby REIT made by Terra Investments Limited on 3 November 2009
UK Listing Authority or UKLA	the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA
uncertificated or in uncertificated form	recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST, and title to which, by virtue of the Regulations may be transferred by means of CREST
United Kingdom or UK	the United Kingdom of Great Britain and Northern Ireland
US or United States	the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction
ZDP Alternative	the alternative whereby Rugby REIT Shareholders who validly accept the Offer may elect to receive one ZDP Share for each Rugby REIT Share, instead of the New ING UK RET Ordinary Shares to which they would otherwise be entitled under the Offer
ZDP Issue Price	65 pence per ZDP Share
ZDP Share Repayment Date	31 October 2012
ZDP Shareholders	holders of ZDP Shares
ZDP Shares	zero dividend preference shares of 0.0001 pence each in the capital of IRET Securities
£	pounds sterling, the lawful currency of the United Kingdom (and references to pence or p shall be construed accordingly)

References in this announcement to singular includes the plural and vice versa, unless the context otherwise requires.

Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

All references to time in this announcement are to London time unless otherwise stated.

Save where otherwise stated, for the purpose of this announcement, "subsidiary'', "subsidiary undertaking'', "associated undertaking'' and "undertaking'' shall be construed in accordance with the 2006 Act. 

This information is provided by RNS

The company news service from the London Stock Exchange

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