THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
3 September 2013
Great Portland Estates plc Convertible Bond Offering
Great Portland Estates plc ("GPE" or the "Company") today announces the launch of an offering (the "Offering") of £150 million of senior, unsecured Convertible Bonds due 2018 (the "Bonds").
The Company intends to use the net proceeds of the Offering to refinance the recently announced acquisition of Oxford House, W1 and to help fund its significant committed and near term development programme.
The Company is currently on site at four schemes (580,000 sq ft), which are already 57% pre-let, with capital expenditure still to come of £79.8 million. The Company has a further five schemes (659,900 sq ft), including its proposed major mixed use development at Rathbone Place, W1 (414,100 sq ft), with potential starts in the next 24 months and associated capital expenditure of around £338 million. Taken together, GPE's total potential development programme extends to 2.4 million sq ft, spread over the next decade.
In the investment market, the Company remains active with purchases of £202.0 million and sales of £217.2 million in the last 12 months. The Company intends to continue both investing in opportunities for growth as it finds them and actively recycling capital.
The Bonds are expected to be issued by Great Portland Estates Capital (Jersey) Limited (the "Issuer"), a wholly-owned subsidiary of the Company incorporated in Jersey, and will be guaranteed by the Company.
The Bonds, which are expected to have a stated maturity date of 10 September 2018, will be issued at par and are expected to carry a coupon of between 1.0% and 1.5% per annum payable semi-annually in arrear. The Bonds will, subject to certain conditions, be convertible into fully paid ordinary shares of the Company (the "Shares"). The initial conversion price is expected to be set at a premium of between 30% and 35% above the volume weighted average price of the Shares between launch and pricing on 3 September 2013 and the conversion price will be subject to adjustments pursuant to the terms and conditions of the Bonds.
The Shares underlying the Bonds represent approximately 5.9% - 6.2% of the Company's issued share capital immediately prior to the Offering. Under the terms of the Bonds the Company will have the right to elect to settle any conversion entirely in Shares, cash or a combination of Shares and cash.
If not previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed at par on 10 September 2018. The Issuer will have the option to call all outstanding Bonds at par plus accrued interest at any time (i) on or after 25 September 2016 if the aggregate value of the underlying Shares per Bond for a specified period of time equals or exceeds 130% of the principal amount of the Bonds or (ii) if 15% or less of the principal amount of the Bonds originally issued remains outstanding. The final terms of the Bonds are expected to be announced today and settlement is expected to take place on or about 10 September 2013 (the "Settlement Date").
It is intended that Application will be made for the Bonds to be listed on a recognised stock exchange prior to the first Interest Payment Date.
J.P. Morgan Securities plc and The Royal Bank of Scotland plc are acting as Joint Global Coordinators and Joint Bookrunners (together, the "Joint Global Coordinators") and Credit Suisse Securities (Europe) Limited and HSBC Bank plc as Joint Bookrunners (together with the Joint Global Coordinators, the "Joint Bookrunners") and Banco Santander, S.A. and Crédit Agricole Corporate and Investment Bank as Co-Managers (together with the Joint Bookrunners, the "Managers") in connection with the Offering. Lazard is acting as financial adviser to GPE in relation to the the Offering.
For further information, please contact:
Great Portland Estates plc
Toby Courtauld, Chief Executive 020 7647 3042
Nick Sanderson, Finance Director 020 7647 3034
RLM Finsbury Group
James Murgatroyd / Gordon Simpson 020 7251 3801
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The information in this announcement is subject to change.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Australia, Canada, Japan, South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this announcement have not been and will not be registered in the United States under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, South Africa, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, South Africa, Canada or Japan. There will be no public offer of the securities in the United States, Australia, Canada, Japan or South Africa.
This communication is directed only at persons (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and qualified investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated under the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
Each of the Managers, each of which is authorised and regulated by the Financial Conduct Authority and also regulated by the Prudential Regulation Authority, and Lazard & Co., Limited ("Lazard"), which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Offering and will not be responsible to any other person for providing the protections afforded to clients of such Manager or Lazard respectively or for providing advice in relation to the Offering, the Bonds or any other transaction, matter or arrangement referred to in this announcement.
Each of the Company, the Issuer, the Managers, Lazard and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.
Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bonds. The value of the Bonds can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Bonds for the person concerned.
In connection with the Offering, the Managers and any of their affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and any other securities of the Company or related investments in connection with the Bonds or the Company or otherwise. Accordingly, references to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Managers and any of their respective affiliates acting as investors for their own accounts. The Managers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
None of the Managers, Lazard or any of their respective directors, officers, employees, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.