PLACING TO FUND ACQUISITIONS AND DEVELOPMENTS
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA (UNLESS AN EXEMPTION UNDER THE RELEVANT SECURITIES LAWS IS AVAILABLE) OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
LONDONMETRIC PROPERTY PLC
("LondonMetric" or "Company")
PLACING TO FUND DISTRIBUTION ACQUISITIONS AND DEVELOPMENTS
LondonMetric Property PLC, today announces a placing (the "Placing") of up to 62,804,390 new Ordinary Shares (the "Placing Shares") representing approximately 9.9% of the Company's issued share capital. The Company intends to use the net proceeds of the Placing (the "Net Proceeds") to fund the acquisition of predominantly "last mile" distribution assets and to finance newly committed distribution developments.
Highlights
· Proposed Placing to raise approximately £97 million of gross proceeds (based on the closing share price on 22 March 2017). The Placing will enable the Company to accelerate its portfolio alignment towards distribution by:
o increasing its exposure to the attractive returns available from last mile distribution; and
o building out three new developments following material progress on pre-lettings, as announced separately today.
· The Net Proceeds will be used to fund committed and potential investments and new developments that amount to c.£100 million:
o £42 million to fund distribution developments at Dagenham, Stoke and Crawley, totalling 560,000 sq ft, at an anticipated yield on cost of 6.2%
o £28 million to fund recently completed distribution investments acquired at a blended net initial yield of 5.9% and a reversionary yield of 6.4%
o £30 million to fund a pipeline of last mile and regional distribution investments.
· The Company expects to deploy c.75% of the Net Proceeds within six months. The Placing is expected to be earnings per share accretive following completion of the three developments, which is expected to occur over a 9 to 12 month period.
· The Company's progressive and covered quarterly dividend policy remains unchanged, and the Placing is complementary to its unsecured credit facility where the marginal cost on further debt drawn is 1.5%.
Andrew Jones, Chief Executive Officer of LondonMetric, commented:
"Our increased commitment to last mile acquisitions and short cycle distribution developments, together with a healthy pipeline of further opportunities, will support our plans to grow our distribution exposure to at least 70% within a year. Earlier this week, we secured two further last mile acquisitions and today we have announced major pre-lettings to Eddie Stobart and Michelin, alongside the letting to Amazon. These transactions highlight the compelling market opportunities that exist and we expect to deploy raised funds at pace, leading to accretive earnings whilst maintaining a progressive and fully covered dividend.
"Structural trends in consumer behaviour and shopping patterns are continuing to drive demand for distribution, from last mile facilities to mega sheds, but supply remains constrained. For those with market access and knowledge, investments in the sector are able to create long-term, reliable income. At LondonMetric, we have 99.6% occupancy and our assets are backed by some of the biggest retailers and logistics groups."
Introduction
The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated bookbuild which will be launched immediately following this placing announcement (the "Announcement") and will be subject to the terms and conditions set out in the Appendix. J.P. Morgan Cazenove and Peel Hunt have been appointed joint bookrunners in respect of the Placing.
Background to the Placing
Successful implementation of the Company's strategy to focus on distribution
LondonMetric's strategic focus of aligning its portfolio towards retailer-led distribution over the last few years has resulted in a significant increase in its weighting in this sector to approximately 60% of the overall portfolio.
The portfolio re-alignment and management's actions have ensured that LondonMetric has maintained its sector leading portfolio metrics with a weighted average lease length consistently above twelve years and an occupancy rate at around 99%. The Company has delivered long term shareholder value through significant growth in its earnings and strong capital growth. Importantly, its earnings growth has allowed it to comfortably cover and progress its dividend and, with over 50% of its portfolio benefitting from contractual rental uplifts, it has good visibility on future dividend progression.
Distribution investments have been funded predominantly through the recycling of sale proceeds from mature retail park assets where business plans have been fully executed. Retail disposal activity has been particularly strong over the last six months, totalling £116 million (at share), and the Company's retail park weighting has halved over the last two years to c.13% of the overall portfolio.
Distribution market remains strong
LondonMetric has been a significant beneficiary of an early move into the distribution sector. The demand/supply dynamics for distribution assets have strengthened considerably over recent years and remain highly attractive as online retail continues to grow rapidly. After a record year for distribution take up in 2016, occupier demand remains strong across the UK. Supply remains highly restricted and new builds are predominantly build to suit with limited speculative development.
The investment market, as a consequence, remains competitively bid. This is particularly the case for institutional quality distribution warehousing that is typically over 100,000 sq ft, let to strong covenants with long leases. Pricing of these assets remains tight and the Company has remained disciplined and only pursued acquisitions that meet its strict investment criteria.
Over the last year, LondonMetric completed two large developments totalling 880,000 sq ft in Warrington and Wakefield. These developments had a combined cost of £70 million and delivered a blended yield on cost of 6.6%, which is c.150bps better than completed investment yields.
Significant opportunity in 'last mile' investments
Against this competitive backdrop, the Company has been able to source attractive opportunities which have allowed it to build an end to end logistics portfolio which, as at September 2016, was valued at £867 million.
In addition to developments, last mile distribution warehousing has been a particular investment focus for the Company. These assets are typically c.100,000 sq ft or less in size, service spoke operations for larger hubs, are well located and facilitate next day and same day delivery to major cities and conurbations. They are increasingly critical to the distribution networks for retailers, third party logistics providers and other operators that need to meet rising consumer delivery expectations. Yields on last mile assets are up to 100bps higher than available on larger hub locations. They also offer stronger rental growth prospects as evidenced by the c.17% average five yearly uplifts on rent reviews that the Company has achieved in the current financial year to date.
As set out below, the Company has made 15 last mile acquisitions totalling £98 million in the current financial year at a blended net initial yield of 6.2%. These acquisitions have grown the last mile portfolio to 22 assets with a value of £138 million.
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Location |
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Basildon |
£3.8m |
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Crawley |
£20.1m |
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Hemel Hempstead |
£8.3m |
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Stevenage |
£7.3m |
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Portfolio of 6 assets |
£26.0m |
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Bicester |
£3.2m |
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Crawley |
£10.7m |
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Dartford |
£6.3m |
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Leeds |
£7.9m |
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Leeds |
£4.0m |
Use of Proceeds
The Company has consistently employed a strict internal competition for capital. It has funded recent investments primarily through ongoing retail park disposals and, consequently, has not raised further equity since it was formed through merger in 2013.
Following this morning's separate announcements of material progress on pre-lettings and, as a result of recently completed and potential distribution investments, the Company has identified a programme of distribution developments and investments that total c.£100 million:
· £42 million to fund three new distribution developments at an anticipated yield on cost of c.6.2%:
o £16 million to fund a new 180,000 sq ft development at Eddie Stobart's warehouse in Dagenham at a marginal yield on cost of 5.75%. Completion is expected by April 2018;
o £15 million to fund a new 270,000 sq ft development at Stoke at a yield on cost of 6.3%. 137,000 sq ft has been pre-let to Michelin for 15 years and completion of the Michelin warehouse is expected by December 2017; and
o £11 million to fund a new 110,000 sq ft development at Crawley at a yield on cost of 6.3%. A pre-let has been agreed on 35,000 sq ft and completion of the development is expected by December 2017
· £28 million to fund recently completed distribution investments acquired at a net initial yield of 5.9%, and a reversionary yield of 6.4%:
o 120,000 sq ft regional warehouse in Wakefield let to One Stop Stores
o 100,000 sq ft last mile warehouse in Leeds let to Vision Alert
o 49,000 sq ft last mile warehouse in Dartford let to Antalis
o 49,000 sq ft last mile warehouse in Leeds let to Siemens
· £30 million pipeline of last mile and regional investment opportunities at a net initial yield of c.6.0-6.5%.
The Net Proceeds will be used to fund the above programme of investments and developments.
Financial impact
The Company expects to deploy c.75% of the Net Proceeds within six months. The Placing is expected to be earnings per share accretive following completion of the three developments, which is expected to occur over a 9 to 12 month period. The Company's progressive and covered dividend policy remains unchanged and it expects to pay an increased fourth quarterly dividend to shareholders in July 2017.
Following the Company's £130 million private debt placement in 2016, the proceeds of that placement were used to pay down some of the debt drawn under its unsecured revolving credit facility. Undrawn debt under the facility was £204 million as at 28 February 2017 and the marginal cost of drawing further debt is 1.5%. LondonMetric remains alert to other investment and development opportunities across the end to end logistics market, and the Placing, alongside the undrawn debt under this facility, provides further scope for the Company to fund these opportunities.
Details of the Placing
Under the terms of the Placing, LondonMetric intends to place up to 62,804,390 Placing Shares, representing approximately 9.9% of the current issued ordinary share capital of the Company.
The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated bookbuild process (the "Bookbuild") to be carried out by Peel Hunt and J.P. Morgan Cazenove (the "Bookrunners"). The book will open with immediate effect and may close at any time thereafter. The timing of the closing of the book, the Placing Price and the number of Placing Shares will be agreed between the Bookrunners and the Company following completion of the Bookbuild and will then be announced as soon as practicable on a Regulatory Information Service (the "Pricing Announcement").
A description of certain relevant aspects of the Placing Agreement can be found in the terms and conditions contained in the Appendix to this announcement under the heading "Participation in, and principal terms of, the Placing". The Placing will be made on a non-pre-emptive basis. The Company will rely on the waiver of pre-emption rights authority given by shareholders of the Company at the Annual General Meeting held on 14 July 2016.
Application will be made for admission of the Placing Shares to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities ("UK Admission"). It is expected that Admission will become effective on 27 March 2017.
The Placing Shares will, when issued, be credited as fully paid and rank pari passu with the existing Ordinary Shares in the capital of the Company including the right to receive all future dividends and distributions declared, made or paid, save that the Placing Shares will not be entitled to the third quarterly interim dividend announced on 9 March 2017 as the Ordinary Shares were marked ex dividend on 16 March 2017. The Company has agreed with the Bookrunners to a 90 day lock-up from Admission, subject to certain exceptions.
The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional upon the Placing Agreement becoming unconditional and not being terminated.
The Appendix to this announcement (which forms part of the announcement) sets out the terms and conditions of the Placing. By choosing to participate in the Placing and by making an oral or written offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making a legally binding offer on the terms and subject to the terms and conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.
Further enquiries:
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LondonMetric Property PLC |
Tel: +44 (0) 20 7484 9000 |
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Andrew Jones |
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Martin McGann
Gareth Price
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Peel Hunt |
Tel: +44 (0) 20 7418 8914 |
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Capel Irwin |
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Alastair Rae |
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J.P. Morgan Cazenove |
Tel: +44 (0) 20 7742 4000 |
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Bronson Albery |
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Charles Pretzlik |
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FTI Consulting |
Tel: +44 (0) 20 3727 1000 |
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Dido Laurimore |
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Tom Gough
Richard Gotla
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This Announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014.
IMPORTANT NOTICE
The information contained in this Announcement is restricted and not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or South Africa or any jurisdiction in which the same would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, Japan or South Africa (unless an exemption under the relevant securities laws is available) or any other jurisdiction. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive (as defined below)) to be published. Persons needing advice should consult an independent financial adviser.
The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended ("Securities Act"), or with any securities regulatory authority of any state or jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold (i) outside the United States only to non-US persons (within the meaning of the Securities Act) in accordance with Regulation S under the Securities Act and (ii) within the United States only to a limited number of eligible investors pursuant to an exemption from the registration requirements of the Securities Act.
The contents of this Announcement are not to be construed as legal, financial or tax advice. If necessary, each recipient of this Announcement should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice. Each placee should consult with its own advisers as to legal, tax, business and related aspects of an acquisition of Placing Shares.
This announcement is not being distributed by, nor has it been approved for the purposes of section 21 of the Financial Services and Markets Act 2000 ("FSMA") by, a person authorised under FSMA. This announcement is being distributed and communicated to persons in the UK only in circumstances in which section 21(1) of FSMA does not apply.
This Announcement does not constitute an offer of securities to the public in the United States, the United Kingdom or in any other jurisdiction. There will be no public offer of securities in the United States, United Kingdom or in any other jurisdiction. This Announcement is being directed only at persons in member states of the European Economic Area who are 'Qualified Investors' within the meaning of article 2(1)(e) of the Prospectus Directive (which means Directive 2003/71/EC and includes any relevant implementing directive measure in any member state). In addition, in the UK, this announcement is being directed only at Qualified Investors who (a) have professional experience in matters relating to investments and who fall within article 19(5) ("Investment professionals") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (b) are persons falling within article 49(2)(a) to (d) ("High net worth companies, unincorporated associations, etc") of the Order; or (c) are persons to whom it may otherwise be lawfully communicated. Any investment activity in connection with the Placing will only be available to, and will only be engaged with, relevant persons. This Announcement must not be acted on or relied on by persons who are not Relevant Persons.
This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Peel Hunt or JPMC or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed. Neither Peel Hunt, JPMC nor any of their affiliates or agents shall have any obligation to update this announcement or any additional information or to correct any inaccuracies in it which may become apparent.
Peel Hunt LLP ("Peel Hunt") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA"), is acting as joint bookrunner to the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to the Placing or any other matter referred to in this Announcement.
J.P. Morgan Securities plc (which conducts its UK investment banking business under the name J.P. Morgan Cazenove) ("JPMC"), which is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated by the PRA and the FCA is acting as joint bookrunner to the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of JPMC nor for providing advice in relation to the Placing or any other matter referred to in this Announcement.
Aside from the responsibilities and liabilities, if any, which may be imposed under FSMA or the regulatory regime established thereunder, or any other applicable regulatory regime, none of Peel Hunt, JPMC or any of their respective affiliates accept any responsibility or liability whatsoever for, nor make any representation or warranty, express or implied, as to the contents of this Announcement, including its accuracy, fairness, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Placing and nothing in this Announcement is, or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Each of Peel Hunt, JPMC and their respective affiliates accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this Announcement or any such statement.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Peel Hunt or JPMC that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, Peel Hunt and JPMC to inform themselves about, and to observe, such restrictions.
The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, subject to any obligations under the Listing Rules and the Disclosure Guidance and Transparency Rules or any other applicable law or regulation, the Company does not assume any responsibility or obligation to update publicly or review any of forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the LSE.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPENDIX: TERMS AND CONDITIONS OF THE PLACING
Terms and Conditions - Important Information for Placees Only Regarding the Placing
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE RESTRICTED AND ARE NOT, SUBJECT TO CERTAIN LIMITED EXCEPTIONS, FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. ALL OFFERS OF THE PLACING SHARES IN THE EUROPEAN UNION WILL BE MADE PURSUANT TO AN EXEMPTION UNDER THE PROSPECTUS DIRECTIVE (AS DEFINED BELOW), FROM THE REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE PLACING SHARES AND ALL OFFERS OF THE PLACING SHARES IN CANADA WILL BE MADE PURSUANT TO AN EXEMPTION to the prospectus requirement as set out in Section 2.3 of National Instrument 45-106 - Prospectus Exemptions.
THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT:
(A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHICH HAVE IMPLEMENTED THE PROSPECTUS DIRECTIVE WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS");
(B) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS AND WHO ARE (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, (THE "ORDER"); OR (II) PERSONS WHO ARE HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS AND OTHER PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER OR TO WHOM THEY MAY OTHERWISE LAWFULLY BE DISTRIBUTED; OR
(C) PERSONS WHO ARE RESIDENT in Canada or otherwise subject to the securities laws of Canada that are "permitted clients" as defined in National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT, THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT AND THIS APPENDIX DO NOT CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES.
Placees will be deemed to have read and understood this Announcement (including this Appendix) in its entirety and to be participating in the Placing on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular, each Placee represents, warrants and acknowledges that:
(a) it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
(b) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the European Economic Area which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Banks has been given to each such proposed offer or resale; and
(c) unless it has signed a US investor letter in a form satisfactory to the Company and the relevant Bank, it is acquiring the Placing Shares for its own account or for an account with respect to which it exercises sole investment discretion, and that it (and any such account) is outside the United States and is acquiring the Placing Shares in an "offshore transaction" in accordance with Regulation S under the Securities Act.
The Company and each of the Banks will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.
The Placing Shares are, subject to certain exceptions (in which case the investor will be required to sign a US investor letter in a form satisfactory to the Company and the relevant Bank), being offered and sold outside the United States in accordance with Regulation S under the Securities Act in an offshore transaction (as such term is defined in Regulation S under the Securities Act).
No prospectus has been lodged with or registered by the securities commission of any state, province or territory of Canada, the Australian Securities and Investments Commission, the Companies and Intellectual Property Commission of South Africa or the Japanese Ministry of Finance; the Placing Shares are being issued pursuant to a prospectus exemption under the securities laws of Canada and have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia Japan, or any other jurisdiction outside the United Kingdom.
The distribution of this Announcement (including this Appendix) and the Placing or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Banks or any of their affiliates that would permit an offer of the Placing Shares or possession or distribution of this Announcement (including this Appendix) or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement (including this Appendix) comes are required by the Company and the Banks to inform themselves about and to observe any such restrictions.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.
Details of the Placing
The Banks have today entered into the Placing Agreement under which, subject to the terms and conditions set out therein, each of the Banks has agreed to use reasonable endeavours to procure subscribers for the Placing Shares.
The Placing is conditional upon the Placing Agreement becoming unconditional in all respects, including, inter alia, Admission occurring not later than 8.00 a.m. (London time) on 27 March 2017 (or such later date as may be agreed between the Company and the Banks), the execution of the Pricing Agreement and the warranties in the Placing Agreement being, in the opinion of either of the Banks, untrue, inaccurate or misleading in any respect when made nor becoming untrue, inaccurate or misleading in any respect by reference to the facts and circumstances existing at the time.
The Placing Shares will, when issued, be subject to the Articles of Association of the Company, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of the Placing Agreement. This will not include the third quarterly interim dividend announced on 9 March 2017 as the shares were marked ex dividend on 16 March 2017.
As part of the Placing, the Company has agreed with the Banks that it will not, for a period of 60 days after the date of Admission, (i) enter into, or incur any obligation to make, any commitment or agreement, or put itself in a position where it is obliged to announce that any commitment or agreement may be entered into or made, which in either case is or might be material in the context of the Placing or (ii) provide any public statement or commentary regarding the Placing Shares or the Placing or make any other announcement through a Regulatory Information Service relating to the Group or its business or any event, which in either case is or might be material in the context of the Placing, in each case without the prior written approval of the Banks.
Application for Admission
Application will be made for the Placing Shares to be admitted to the premium segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange. It is expected that Admission will take place at 8.00 a.m. London time on 27 March 2017 (or such later date as may be agreed between the Company and the Banks).
Participation in, and principal terms of, the Placing
1. The Banks are acting as joint bookrunners and brokers and agents of the Company in connection with the Placing. Participation in the Placing will only be available to persons who are Relevant Persons or who may lawfully be, and are, invited to participate by the Banks.
2. The Banks and their respective affiliates are each entitled to participate in the Placing as principal.
3. The Placing Shares will be issued to Placees at a price to be determined by the Company and the Banks following the Bookbuild.
4. Each prospective Placee's Placing Participation will be determined by the relevant Bank and the Company in their sole discretion and their Placing Participation and the Placing Price will be confirmed orally and/or via written correspondence by the relevant Bank as agent of the Company. That oral and/or written confirmation constitutes an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Articles of Association.
5. The Bookbuild is expected to close no later than 4.00 pm on the date of this Announcement but may be closed earlier or later at the discretion of the Banks. The Banks may, in agreement with the Company accept bids that are received after the Bookbuild has closed. The Banks reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of an oversubscription under the Placing. The Banks also reserve the right not to accept offers for Placing Shares or to accept such offers in part rather than in whole.
6. Each Placee also has an immediate, separate, irrevocable and binding obligation, owed to the Banks, each as agents of the Company, to pay in cleared funds in Sterling at the relevant time in accordance with the requirements set out below under "Registration and Settlement", an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and the Company has agreed to allot and issue to that Placee, conditional upon Admission becoming effective.
7. Irrespective of the time at which a Placee's Placing Participation is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made on the same day, on the basis explained below under "Registration and Settlement".
8. Completion of the Placing be subject to the fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement ". In the event that the Placing Agreement does not become unconditional in any respect or is terminated, the Placing will not proceed.
9. By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee, and is not subject to any further conditions or requirements other than those set out in this Announcement or Placing Agreement.
10. To the fullest extent permissible by law, neither the Banks nor the Company nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Banks nor any of their affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Banks' conduct of the Bookbuild (including the Banks entering or not entering into the Pricing Agreement) or of such alternative method of effecting the Placing as the Banks and the Company may agree.
Conditions of the Placing
The Placing Agreement is conditional on, inter alia:
(a) each of the Warranties not being, in the opinion of either of the Banks, untrue, inaccurate or misleading in any respect when made nor becoming untrue, inaccurate or misleading in any respect by reference to the facts and circumstances existing at the time;
(b) the Banks and the Company entering into the Pricing Agreement;
(c) the Company allotting, subject only to Admission, the Placing Shares; and
(d) Admission taking place not later than 8.00 a.m. (London time) on 27 March 2017 or such later date as the Company and the Banks may otherwise agree.
If (i) any of the conditions contained in the Placing Agreement have not been fulfilled or waived by the Banks by the applicable time or date where specified (or such later time and/or date as the Company and the Banks may agree), (ii) any of the conditions contained in the Placing Agreement becomes incapable of being satisfied or (iii) the Placing Agreement is terminated in accordance with their terms (as summarised below), the Placing will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. The Placing is not being underwritten.
The Banks may, in their absolute discretion and upon such terms as they think fit, waive fulfilment, in whole or in part, of any or all of the conditions in the Placing Agreement, other than that relating to, inter alia, Admission (to the extent permitted by law or regulations), by giving notice in writing to the Company. Any such waiver will not affect Placees' commitments as set out in this Announcement.
None of the Banks, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally or for entering or not entering into the Pricing Agreement and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Banks and the Company.
Termination of the Placing Agreement
The Banks are entitled, at any time before Admission and in accordance with its terms, to terminate the Placing Agreement by giving notice to the Company if, inter alia:
(a) any of the warranties given by the Company in the Placing Agreement is, in the opinion of either of the Banks, untrue, inaccurate or misleading in any respect when made or becomes untrue, inaccurate or misleading in any respect by reference to the facts and circumstances existing at the time;
(b) the Company breaches any of its obligations under the Placing Agreement and such breach is, in the opinion of either of the Banks, material in the context of the Placing and/or Admission;
(c) in the opinion of either of the Banks any statement in this Announcement or the Investor Presentation is untrue, inaccurate or misleading in any respect or becomes untrue, inaccurate or misleading in any respect;
(d) in the opinion of either of the Banks there has been a material adverse change in or any development or event reasonably likely to involve a prospective material adverse change in or affecting the condition (financial, operational, legal or otherwise) or the earnings or business affairs or business prospects of the Group; or
(e) there has been: (i) the suspension of trading in securities generally on the London Stock Exchange, the New York Stock Exchange or any other securities exchange in the EEA, or trading is limited or minimum prices established on any such exchange; the declaration of a banking moratorium in London, any EEA member state or by the US federal or New York State authorities or any material disruption to commercial banking or securities settlement or clearance services in the US or the UK; (iii) any change, or development involving a prospective change, in national or international financial, economic, political, industrial or stock market conditions or currency exchange rates or exchange controls, or any incident of terrorism or outbreak or escalation of hostilities or any declaration by the UK or the US or the any EEA member state of a national emergency or war or any other calamity or crisis; (iv) there is an announcement of intended withdrawal from the Euro currency or intended redenomination of any obligation, public or private, by any EEA member state; or (v) any adverse change or prospective adverse change since the date of the Placing Agreement in UK tax, in each case which either of the Banks considers in its discretion to be likely to have an adverse effect on the financial or trading position or the business or prospects of the Group which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.
Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement and the Placing will not proceed.
By participating in the Placing, Placees agree that the exercise by either Bank of any right of termination or by either Bank of any other discretion under the Placing Agreement, shall be within the absolute discretion of the relevant Bank and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.
No Prospectus
The Placing Shares are being offered to Relevant Persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or elsewhere. No offering document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) and any information publicly released to a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement.
Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has not relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Banks or any other person and neither the Company nor the Banks nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in participating in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Registration and Settlement
The Placing
Settlement of transactions in the Placing Shares (ISIN: GB00B4WFW713) will take place within the CREST system. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and the Banks may agree that the Placing Shares should be issued in certificated form.
The Banks reserve the right to require settlement for the Placing Shares, and to deliver the Placing Shares to
Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a contract note or electronic confirmation stating the number of Placing Shares to be allocated to it. Each such Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions as set out in that contract note or electronic confirmation.
The Company will deliver such Placing Shares to the CREST account operated by Peel Hunt as agent for the Company and Peel Hunt and JPMC will enter its respective delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.
General provisions
It is expected that settlement will be on 27 March 2017 in accordance with the instructions given to the Banks.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at prevailing market rates as determined by the Banks.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may without limiting any other rights it may have, and subject to the provisions of the Placing Agreement, sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or United Kingdom stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing from the Company or the Banks.
Representations and Warranties
By participating in the Placing each Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges, confirms and agrees with the Company and each of the Banks, in each case as a fundamental term of its participation, that:
1. it has read and understood this Announcement, including this Appendix, in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained in this Announcement;
2. none of the Banks nor the Company nor any of their affiliates or any person acting on behalf of any of them has provided it with, nor will they provide it with, any material regarding the Placing Shares or the Company or any other person other than this Announcement; nor has it requested any of the Banks or the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;
3. the exercise by the Banks of any right of termination or any right of waiver exercisable by the Banks contained in the Placing Agreement including, without limitation, the right to terminate the Placing Agreement and/or to enter into or refrain from entering into the Pricing Agreement, is within the absolute discretion of the Banks and the Banks will not have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights;
4. if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived), or (ii) the Placing Agreement is terminated, or (iii) the Pricing Agreement is not executed by the Banks and the Company, or (iv) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will lapse and its rights (save as to return of funds) and obligations hereunder shall cease and determine at such time and no claim shall be made by any Placee in respect thereof;
5. no offering document or prospectus has been, or will be, prepared in connection with the Placing and represents and warrants that it has not received a prospectus or other offering document in connection therewith;
6. the Ordinary Shares are (and the Placing Shares will be) listed on the Main Market, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the Main Market and applicable legislation, and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other Main Market listed company, without undue difficulty;
7. unless it is a Canadian Purchaser (as defined below), it is not a resident of Canada or otherwise subject to the securities laws of Canada and is not purchasing the Placing Shares as principal who is a resident of Canada or otherwise subject to the laws of Canada;
8. (i) it is not and, if different, the beneficial owner of the Placing Shares is not, and at the time the Placing Shares are acquired will not be, a resident of Australia, or Japan and (ii) that the Placing Shares have not been and will not be (A) registered under the securities legislation of the Australia or Japan or (B) qualified for distribution by prospectus under the securities laws of any province or territory of Canada and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;
9. unless it has signed a US investor letter in a form satisfactory to the Company and the relevant Bank, it is outside of the United States and is acquiring the Placing Shares in an offshore transaction for its own account or for the account of a person outside of the United States or it is a dealer or other professional fiduciary in the United States acquiring Placing Shares in reliance upon Regulation S under the Securities Act acting on a discretionary basis for the benefit of a person (other than an estate or trust) outside of the United States (all such terms as defined in Regulation S);
10. except as otherwise permitted by the Company in writing, it is not an ERISA Entity or using the assets of an ERISA Entity to purchase the Placing Shares. "ERISA Entity" shall mean any person that is (i) an "employee benefit plan" as defined in Section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is subject to Title I of ERISA; or (ii) a "plan" as defined in Section 4975 of the United States Internal Revenue Code of 1986, as amended (the "Code"), including an individual retirement account or other arrangement that is subject to Section 4975 of the Code; or (iii) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the Code; or (iv) any governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code whose purchase, holding, and disposition of the Placing Shares could constitute or result in a non-exempt violation of any such substantially similar law;
11. it is either:
(i) not a national or resident of South Africa or a corporation, partnership or other entity organised under the laws of South Africa and that it will not offer, sell or deliver directly or indirectly any of the Placing Shares in South Africa or to or for the benefit of any person resident in South Africa; or
(ii) resident in South Africa and, accordingly:
(A) if it is an individual, (1) it is a tax payer in good standing over the age of 18 years; and (2) its payment of the aggregate value of its Placing Participation at the Placing Price will not result in it exceeding its foreign direct investment allowance under the Financial Surveillance Regulations and Rulings, issued in terms of the Currencies and Exchanges Act 9 of 1933 ("Exchange Control Restrictions");
(B) if it is a private, public or listed company incorporated in South Africa, and its payment of the aggregate value of its Placing Participation at the Placing Price results in it exceeding its foreign direct investment allowance in a calendar year, (1) it has or will have obtained the prior approval of the Financial Surveillance Department in respect of its Placing Participation; and (2) its Placing Participation will result in it meeting the prescribed thresholds in respect of voting rights in the Company;
(C) if it is a private, public or listed company incorporated in South Africa, and its payment of the aggregate value of its Placing Participation at the Placing Price does not result in it exceeding its foreign direct investment allowance in a calendar year, (1) its Placing Participation will result in it meeting the prescribed thresholds in respect of voting rights in the Company; and (2) its Placing Participation does not result in a passive real estate investment;
(D) if it is an institutional investor for the purposes of the Exchange Control Restrictions, specifically:
(a) a retirement fund or a long term insurer, then the aggregate value of its Placing Participation at the Placing Price does not and will not exceed 25% of the aggregate value of its retail assets, calculated in accordance with the Exchange Control Restrictions; or
(b) a collective investment scheme management company, or investment manager registered as an institutional manager for South African exchange control purposes, then the aggregate value of its Placing Participation at the Placing Price does not and will not exceed 35% of the aggregate value of its retail assets, calculated in accordance with the Exchange Control Restrictions; and
it has complied in all respects with the regulations administered by the South African Financial Services Board.
12. the content of this Announcement is exclusively the responsibility of the Company and that neither of the Banks nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has not relied on any other information given or representations, warranties or statements made by either of the Banks or the Company and neither of the Banks nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;
13. neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the UK Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;
14. it has complied with its obligations in connection with money laundering and terrorist financing under the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. If within a reasonable time after a request for verification of identity a Bank has not received such satisfactory evidence, such Bank may, in its absolute discretion, terminate the Placee's Placing Participation in which event all funds delivered by the Placee to such Bank will be returned without interest to the account of the drawee bank or CREST account from which they were originally debited;
15. if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors (as defined above), or in circumstances in which the prior consent of the Banks has been given to each such proposed offer or resale;
16. it has not offered or sold and, prior to the expiry of a period of 6 months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;
17. that any offer of Placing Shares may only be directed at persons in member states of the European Economic Area who are Qualified Investors and represents, warrants and undertakes that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state) except in circumstances which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive;
18. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
19. it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing from or otherwise involving, the United Kingdom companies, securities and financial and intermediary services laws and regulations;
20. it is a Relevant Person (as defined above);
21. it and any person acting on its behalf is entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence (including in relation to your obligations to obtain all required approvals in terms of the financial surveillance or "exchange control" regulations promulgated under the South African Currency and Exchanges Act, No 9 of 1933, and any rulings issued pursuant thereto), the residence of the Company, or otherwise (including all relevant provisions of MAR, FSMA and the Financial Services Act 2012 in respect of anything done in, from or otherwise involving the United Kingdom);
22. the Placing Shares have not been and will not be registered under the Securities Act or with any State or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, and further acknowledges that, subject to certain exceptions (in which case the investor shall be required to sign a US investor letter in a form satisfactory to the Company and the relevant Bank), the Placing Shares are being offered and sold only outside the United States pursuant to Regulation S under the Securities Act in an "offshore transaction" (as such terms are defined in Regulation S under the Securities Act);
23. it will not distribute, forward, transfer or otherwise transmit this Announcement or Appendix, or any other presentational or other materials concerning the Placing in or into the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;
24. it (and any person acting on its behalf) will make or procure payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein or as directed by the relevant Bank, failing which the relevant Placing Shares may be placed with other subscribers or sold as the applicable Bank may in its discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon the sale of such Placee's Placing Shares;
25. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
26. neither of the Banks, nor any of their respective affiliates, nor any person acting on behalf of the Banks, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of any Bank and that the Banks have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing (including for the purposes of the South African Financial Advisory and Intermediary Services Act 37 of 2002 ("FAIS")) nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
27. the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of the Banks nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Banks in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Peel Hunt who will hold them as nominee on behalf of such Placee, in accordance with the provisions for registrations and settlement set out in this Announcement;
28. these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Banks in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
29. the Company and the Banks and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Banks on their own behalf and on behalf of the Company and are irrevocable;
30. it shall indemnify on an after-tax basis and hold the Company and the Banks and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;
31. its commitment to subscribe for Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of the Company and the Banks. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. In respect of the Placing, such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the UK Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing, stamp duty, stamp duty reserve tax or securities transfer tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty, stamp duty reserve tax or securities transfer tax, and neither the Company nor the Banks shall be responsible for such stamp duty, stamp duty reserve tax or securities transfer tax. If this is the case, each Placee should seek its own advice and notify the Banks accordingly;
32. unless paragraph 33 below applies, it has neither received nor relied on any inside information (for the purpose of and section 56 of the CJA) in relation to its participation in the Placing;
33. if it has received any inside information (for the purposes of MAR and section 56 of the CJA) in relation to the Company and its securities, it confirms that it has received such information within the marketing soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;
34. the Company may be a passive foreign investment company ("PFIC") for US federal income tax purposes, and it could be a PFIC in future years and acknowledges that if the Company is a PFIC, then US taxable investors may be subject to adverse US tax consequences in respect of their investment in the Placing Shares, whether or not they are resident in the United States.
35. if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations;
36. the Placing Shares will be allotted and issued subject to the terms and conditions of this Appendix;
37. no action has been or will be taken by any of the Company, the Banks or any person acting on behalf of the Company or the Banks that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required; and
38. it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and are able to sustain a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved.
NOTICE TO CANADIAN INVESTORS
General
The Banks may, but are under no obligation to, permit certain persons that are in Canada or subject to the Securities laws of Canada to participate in the Placing. This Announcement, including this Appendix, is being delivered solely, and for the confidential use of only the Canadian Purchasers (as defined below) identified by a Bank to evaluate an investment in the Placing Shares. The information contained within this Announcement does not constitute an offer in Canada to any other person, or a general offer to the public, or a general solicitation from the public, to subscribe for or purchase the Placing Shares. The distribution of this Announcement and the offer and sale of Placing Shares in certain of the Canadian provinces may be restricted by law. Persons into whose possession this Announcement comes must inform themselves about and observe any such restrictions.
Any distribution made in Canada will be made in reliance upon an exemption from the prospectus requirement of applicable Canadian securities laws. Accordingly, Placees do not receive the benefits associated with a subscription for securities issued pursuant to a prospectus, including the review of offering materials by any securities regulatory authority. No securities commission or similar securities regulatory authority in Canada has reviewed or in any way passed upon this Announcement or the merits of the Placing Shares and any representation to the contrary is an offence under applicable Canadian securities laws.
Placing in Canada
The offering of Placing Shares in Canada or to person subject to Canadian securities laws is being made only to "permitted clients" as defined in National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations under the "accredited investor" exemption to the prospectus requirement as set out in Section 2.3 of National Instrument 45-106 - Prospectus Exemptions. A Placee that is in Canada or subject to Canadian Securities laws will, upon a Placee's Placing Participation being confirmed, be deemed to have represented and warranted to the Company and Banks that it is a "permitted client" and purchasing the Placing Shares from a Bank which is a dealer permitted to rely on the "international dealer exemption" contained in, and that such Placee has received the notice from such dealer referred to in, section 8.18 of National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations (such a Placee, a "Canadian Purchaser"). A "permitted client" includes, among other things: (i) a person or company, other than an individual or an investment fund, that has net assets of at least Cdn. $25 million as shown on its most recently prepared financial statements; (ii) an individual who beneficially owns financial assets (being cash, securities, contracts of insurance, deposits, or evidence of a deposit) having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds Cdn. $5 million; and (iii) a person or company acting on behalf of a managed account which is managed by that person or company, if it is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of any province or territory of Canada, or the securities legislation of any other country.
By purchasing the Placing Shares, the Canadian Purchaser acknowledges that its name, address, telephone number and other specified information, including the number of Placing Shares it has purchased, may be disclosed to Canadian securities regulatory authorities and become available to the public in accordance with the requirements of applicable laws. The Canadian Purchaser consents to the disclosure of that information.
Resale Restrictions
The Placing Shares have not been nor will they be qualified for offer or sale to the public under applicable Canadian securities laws and, accordingly, the Placing Shares acquired by Canadian Purchasers may not be sold, transferred or otherwise disposed of in any manner unless such sale, transfer or disposition complies with the resale restrictions of the applicable securities laws of the Canadian Jurisdictions.
Unless determined otherwise in compliance with applicable law, Canadian Purchasers acquiring Placing Shares must not trade the Placing Shares before the date that is four months and a day after the later of the distribution date of the Placing Shares and the date that the Corporation became a reporting issuer in any province or territory of Canada and the Placing Shares will be subject to the following legend restriction and a legend to the following effect will be placed on certificates, if any, representing the Placing Shares:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THIS SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF (I) [INSERT DISTRIBUTION DATE], AND (II) THE DATE THAT THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA."
The above constitutes written notice of the legend requirement set out in section 2.5 of National Instrument 45-102 - Resale of Securities of the Canadian Securities Administrators ("NI 45-102") pursuant to, and as required by, Section 2.5(2)(3.1) of NI 45-102.
The Company is not presently, nor does it intend to become, a "reporting issuer", as such term is defined under applicable Canadian securities laws, in any province or territory of Canada. Canadian Purchasers are advised that the Placing Shares will not be listed on any stock exchange in Canada and that no public market for the Placing Shares is expected to exist in Canada following the Placing. Canadian Purchasers are further advised that the Corporation is not required to file, and currently does not intend to file, a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of Placing Shares to the public in any province or territory of Canada. Accordingly, the applicable hold period for the Placing Shares may never expire, and if no further statutory exemption may be relied upon and if no discretionary order is obtained, this could result in a Canadian Purchaser having to hold the Placing Shares for an indefinite period of time.
The foregoing is a summary only of applicable Canadian resale restrictions and is subject to the express provisions of applicable Canadian securities legislation. All Canadian Purchasers should consult with their own Canadian legal advisors to determine the extent of the applicable hold period and the possibilities of utilizing any further statutory exemptions or the obtaining of a discretionary order.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.
Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Banks and any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares. Each Placee acknowledges and is aware that the Banks are receiving fees in connection with their roles in respect of the Placing as detailed in the Placing Agreement.
Past performance is no guide to future performance and persons seeking advice should consult an independent financial adviser.
All times and dates in this Announcement (including this Appendix) may be subject to amendment, and Placees' commitments, representations and warranties are not conditional on any of the expected times and dates in this Announcement (including this Appendix) being achieved. The Banks shall notify their respective Placees and any person acting on behalf of the Placees of any changes.
The rights and remedies of the Banks and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.
DEFINITIONS
The following definitions apply throughout this Announcement:
|
Admission |
the admission of the Placing Shares to the Premium Segment of the Official List becoming effective in accordance with the Listing Rules and the admission of the Placing Shares to trading on the Main Market for listed securities becoming effective in accordance with the Admission and Disclosure Standards of the London Stock Exchange |
|
Announcement |
this announcement including the Appendix |
|
Articles of Association |
the articles of association of the Company |
|
Banks |
JPMC and Peel Hunt |
|
Bookbuild |
the bookbuilding exercise undertaken jointly by the Banks in respect of the Placing |
|
Business Day |
a day not being a Saturday or a Sunday on which banks are open for business in the City of London |
|
Companies Acts |
the Companies Act 2006 (as amended from time to time) |
|
Company |
LondonMetric Property Plc |
|
CREST |
the relevant system (as defined in the CREST Regulations) of which Euroclear UK & Ireland is the Operator (as defined in the CREST Regulations) |
|
CREST Regulations |
the Uncertificated Securities Regulations 2001 |
|
Euroclear UK & Ireland |
Euroclear UK & Ireland Limited, a company incorporated in England and Wales, being the Operator of CREST |
|
FCA |
the Financial Conduct Authority |
|
FSMA |
the Financial Services and Markets Act 2000 |
|
Group |
the Company and its subsidiaries |
|
Investor Presentation |
the management presentation given by the Company in relation to the Placing |
|
JPMC |
J.P. Morgan Securities Plc |
|
Listing Rules |
the listing rules made by the FCA in accordance with section 73A (2) of Part VI of FSMA (in each case as these rules may be amended from time to time) |
|
London Stock Exchange |
the London Stock Exchange plc |
|
Main Market |
the Main Market of the London Stock Exchange |
|
MAR |
EU Market Abuse Regulation (EU596/2014) and all delegated or implementing regulations relating to that Regulation |
|
Official List |
the premium segment of the official list of the UK Listing Authority |
|
Operator |
the meaning given to it in the CREST Regulations |
|
Ordinary Shares |
ordinary shares of 10 pence each in the capital of the Company |
|
Peel Hunt |
Peel Hunt LLP |
|
Placees |
persons procured by any of the Banks in accordance with the Placing Agreement to subscribe for Placing Shares pursuant to the Placing |
|
Placing |
the placing of the Placing Shares by the Banks on the terms of this Announcement |
|
Placing Agreement |
the agreement entered into between the Banks and the Company in connection with the Placing on the date of this Announcement |
|
Placing Participation |
a Placee's allocation in the Bookbuild |
|
Placing Price |
the price payable per Placing Share as established by the Bookbuild |
|
Placing Shares |
up to 62,804,390 Ordinary Shares to be issued by the Company pursuant to the Placing |
|
Pricing Agreement |
the pricing agreement to be entered into between the Banks and the Company in connection with the Placing on the date of this Announcement |
|
Prospectus Directive |
the Directive of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (No 2003/71/EC) (as amended) (including any relevant implementing measure in any member states |
|
Regulations |
MAR, the Criminal Justice Act 1993, the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 and the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010, 2014 of Ireland and the South African Financial Intelligence Centre Act 38 of 2001 (as amended) |
|
Regulation S |
Regulation S under the Securities Act |
|
Regulatory Information Service |
any of the regulatory information services set out on the list maintained by the FCA |
|
Relevant Persons |
has the meaning given to it in the terms and conditions of the Placing set out in the Appendix of this Announcement |
|
Securities Act |
the US Securities Act of 1933 as amended |
|
subsidiary |
a subsidiary or a subsidiary undertaking (each as defined in the Companies Act, and in interpreting those definitions for the purposes of this Announcement, a company is to be treated as a member of a subsidiary or a subsidiary undertaking as the case may be even if its shares are registered in the name of (i) a nominee, or (ii) any party holding security over those shares, or that secured party's nominee |
|
United States |
has the meaning given to it in Regulation S under the Securities Act |
This information is provided by RNS
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