Increase in dividend and proposals for acquisition

Companies

Ediston Property Investment Company (EPIC)

UK 100

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA AND JAPAN
This announcement is an advertisement and not a prospectus. This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in Ediston Property Investment Company PLC (the "Company") or securities in any other entity, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities. Any investment decision must be made exclusively on the basis of the final prospectus published by the Company and any supplement thereto.
15 November 2017
INCREASE IN DIVIDEND AND RECOMMENDED PROPOSALS FOR THE ACQUISITION OF A NEW PORTFOLIO
Increase in dividend
It is the Board's intention to increase the annualised dividend by 4.5 per cent. to 5.75 pence per share, in the absence of unforeseen circumstances, commencing with the dividend in respect of the month ending 31 January 2018 which will be paid in February 2018. In determining the level of future dividends, the Board will seek to ensure that any dividend level is sustainable over the medium term taking into account any expected increase in dividend cover and the projected income performance of the Company.
The Acquisition
Further to the announcement made by the Company on 6 October 2017, the Board is pleased to announce that the Company has entered into a conditional acquisition agreement with the Stadium Group in relation to the acquisition of a new portfolio of four retail warehouse parks (the "Acquisition") with an aggregated market value of approximately £144 million (the "New Portfolio"). The New Portfolio comprises four high quality, well located UK retail warehouse parks and the Acquisition will result in a substantial increase in the size of the Company's existing portfolio to approximately £317.6 million. The Board believes that the Acquisition will introduce a number of asset management opportunities which should enhance returns to shareholders, being consistent with the Company's and manager's investment style and income strategy. The manager believes that there is credible growth potential within the New Portfolio and scope to improve the income stream of each new retail warehouse park.
The Acquisition remains conditional, inter alia, upon minimum proceeds of approximately £37 million being raised under a share issue and shareholders voting in favour of the Acquisition and the issue of new shares on a non pre-emptive basis. The proposals are expected to complete in early December 2017 upon the admission of the new shares issued to the Official List of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange. The acquisition agreement will terminate in the event that these conditions are not satisfied by 22 December 2017.
The aggregate amount payable on completion of the Acquisition in respect of the New Portfolio will be approximately £144 million. The Company will fund the Acquisition by a combination of: § cash from the Company's existing cash resources; § a new loan facility (the "New Facility") the Company has arranged with Aviva Commercial Finance Limited ("Aviva"); § the proceeds of an open offer to existing shareholders, an initial placing, offer for subscription and intermediaries offer (the "Share Issue"); and § the issue of new ordinary shares to the Stadium Group (the "Vendor Issue").
A newly established subsidiary of the Company has entered into a new facility agreement with Aviva conditional on, inter alia, the completion of the Acquisition. The New Facility is in addition to the Group's existing borrowings and consists of a 10 year term loan facility of up to approximately £54 million. Although as part of the Acquisition the Board intends to increase the Group's borrowings, the Group's gearing is expected to remain at broadly 30 per cent. of gross assets. Depending on the extent of the proceeds from the Share Issue, gearing may be increased to 35 per cent., being the maximum limit under the Company's investment policy, for a period but this is not expected to be the gearing level for the Group over the longer term.
The Share Issue and the Vendor Issue
As previously announced, in order to fund the Acquisition and to provide for future portfolio purchases, the Board is proposing to raise additional equity share capital by offering up to 150 million new shares, in aggregate, under the Share Issue and the Vendor Issue.
The Share Issue will be structured to give priority to existing shareholders who want to participate in the fundraising, but also to provide the opportunity for new investors to subscribe, including from the retail investment community through the offer for subscription and the intermediaries offer. The Stadium Group has agreed to subscribe for a maximum of, in aggregate, £36.5 million of new ordinary shares which will be subject to a 12 month lock-in, whereby disposals can only be made (subject to customary exceptions) with the consent of the Company, and to orderly marketing arrangements for a further 12 months thereafter.
If the Share Issue does not proceed, the Acquisition will not proceed and no funds will be drawn down under the New Facility. The Company continues to receive positive messages from shareholders and potential investors, both in respect of voting in favour of the proposals and subscribing for new shares under the Share Issue and remains confident of the success of the proposals.
Further documentation
The Company will publish a circular to convene a general meeting of the Company to approve the proposals and a prospectus shortly in respect of the issue of new shares which will have further details of the Acquisition, the Share Issue and a subsequent 12 month placing programme. A detailed analysis of the Company's existing portfolio and its portfolio following completion of the Acquisition will be included in the prospectus.
William Hill, Chairman of Ediston Property Investment Company plc commented:
"The Manager has made consistent good progress in improving the company's income profile and it is good news that we are today able to announce an increase in the dividend level. I am delighted with the progress of this property transaction and consider these proposals to be an important next step in the development of the Company. I am also encouraged with the discussions we have had to date with both our existing shareholders and potential new investors in relation to the equity raising to support these proposals. The Board believes that acquiring the New Portfolio will be accretive to the level of dividend cover and will provide a number of asset management opportunities which should enhance the income profile and the capital value of the Group's property assets."
For further information please contact:
Ediston Properties Limited Danny O'Neill Calum Bruce	0131 225 5599
Canaccord Genuity Limited Will Barnett Robbie Robertson	020 7523 8000
Notes:
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service this information is now considered to be in the public domain.
The information 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 material set forth herein is for information purposes only.
Canaccord Genuity Limited ("Canaccord") is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Canaccord is acting exclusively for the Company and for no-one else in relation to the Share Issue and the placing programme and will not regard any other person as its client. Apart from the responsibilities and liabilities, if any, which may be imposed on Canaccord by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Canaccord will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the Share Issue, the placing programme, or any transaction contemplated in or by the prospectus to be published by the Company. Dickson Minto W.S. is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Dickson Minto W.S. is acting exclusively for the Company and for no-one else in relation to the share issue and the placing programme and will not regard any other person as its client. Apart from the responsibilities and liabilities, if any, which may be imposed on Dickson Minto W.S. by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Dickson Minto W.S. will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the share issue, the placing programme, or any transaction contemplated in or by the prospectus to be published by the Company.