Acquisition of Stake
British Land Co PLC
5 June 2000
PROPOSED ACQUISITION OF STRATEGIC INVESTMENT IN
LIBERTY INTERNATIONAL PLC
The British Land Company PLC ('British Land') announces that it has entered
into a conditional agreement with Standard Bank Investment Corporation Limited
('Stanbic' or 'Standard Bank') and Liberty Group Limited ('LGL' or 'Liberty
Group') (together the 'Vendors') to acquire ordinary shares in Liberty
International PLC ('Liberty') which, taken together with the 522,025 Liberty
shares which British Land already owns, would give British Land a 29.9 per
cent. holding in Liberty.
Together Stanbic and LGL, both of which are listed on the Johannesburg Stock
Exchange, currently own or control 105,526,569 Liberty shares, representing
33.6 per cent. of the outstanding share capital of Liberty. The agreement is
conditional, inter alia, on approval of the transaction by the shareholders of
Stanbic and on regulatory approval from the South African Reserve Bank. The
transaction is expected to complete immediately following satisfaction of
these conditions.
Strategic rationale
This strategic investment would increase British Land's exposure to a
substantially ungeared and valuable portfolio with sound properties, including
leading regional and super-regional shopping centres in the UK. It complements
British Land's recent purchase of Meadowhall Shopping Centre in Sheffield.
Liberty's shopping centre interests have strong prospects for rental growth as
well as good development and refurbishment potential.
At the purchase price the investment would show a yield of 4%.
Details of the proposed transaction
Under the agreement, British Land expects to acquire from the Vendors
93,573,247 Liberty shares at a price of 550 pence per share, which, taken
together with the 522,025 shares it already owns in Liberty, would give
British Land ownership of 94,095,272 Liberty shares, representing 29.9 per
cent. of Liberty's existing issued share capital. The total consideration
would be £515 million and British Land has the option to fund £233 million of
the consideration through an issue of new British Land shares to the Vendors.
The balance of the consideration (or the entire consideration if the option to
issue British Land shares is not exercised) would be funded from existing
committed unsecured bank facilities.
If the option is exercised the new British Land shares will be issued to the
Vendors at a price of 450 pence per British Land share and the Vendors would
beneficially own 51.8 million British Land shares, representing approximately
9.1 per cent. of the enlarged British Land share capital. The shares will not
rank for the final dividend for the year ended 31 March 2000, declared on 31
May 2000.
Financial information on Liberty
In the year to 31 December 1999, Liberty generated pre-exceptional operating
profits of £158.9 million on a turnover of £283.1 million. Liberty announced
the payment of an ordinary dividend of 20.5 pence per share for that period.
As at 31 December 1999, Liberty had net assets of £2,230.1 million.
Next steps
Further information will be provided on completion.
Commenting on the proposed acquisition, John Ritblat, Chairman and Managing
Director of British Land, said:
'We are delighted to have agreed to acquire this significant investment in a
company whose assets are of the highest quality and are strategically
complementary to our own and for whose Chairman, Directors and management we
have the highest regard. We look forward to participating in Liberty's
future.
We are also delighted that, should we exercise our option to issue shares to
the Vendors, we will be gaining Standard Bank and Liberty Group as substantial
international investors in the Company.'
Enquiries
John Ritblat, Chairman The British Land Company PLC
John Weston Smith, Finance Director 020 7486 4466
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