Proposed Fund Raise
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT, IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION AND THE SECURITIES DESCRIBED HEREIN WILL BE SOLD IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.
THE DEFINED TERMS SET OUT IN THE APPENDIX APPLY IN THIS ANNOUNCEMENT.
22 May 2013
Primary Health Properties PLC
("PHP" or the "Company")
Proposed Firm Placing and Placing, Open Offer and Offer for Subscription
and Notice of General Meeting
The Board of PHP announces a share issue to raise gross proceeds of up to £60.0 million (approximately £58.0 million net of expenses) through the issue of up to 19,047,618 new Ordinary Shares by way of a Firm Placing and Placing, Open Offer and Offer for Subscription at a price of 315 pence per New Share.
The Issue Price represents a discount of 6.3 per cent. to the Closing Price of 336.25 pence per Ordinary Share on 21 May 2013.
PHP will shortly be publishing a Prospectus in connection with the Capital Raising and will convene a General Meeting to approve certain matters necessary to implement the proposed fundraising.
Summary
· Issue of 7,301,587 new Ordinary Shares through a Firm Placing raising gross proceeds of £23.0 million. The Firm Placing is underwritten by Numis and Peel Hunt
· Issue of up to 11,746,031 new Ordinary Shares pursuant to a Placing, Open Offer and Offer for Subscription to raise gross proceeds of up to £37.0 million
· Qualifying Shareholders are being offered the opportunity to participate in the Open Offer on the basis of 1 Open Offer Share for every 10 Existing Ordinary Shares
· Qualifying Shareholders are also being offered the opportunity to subscribe for New Shares in addition to their Basic Entitlements under the Excess Application Facility
· The Board has the ability to increase the size of the Capital Raising by up to 25 per cent should there be sufficient demand so that the gross proceeds would be approximately £75.0 million
· The Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions whilst maintaining gearing at an appropriate level
· The selective application of the net proceeds alongside existing and future debt facilities will enable the Group to enlarge the property portfolio by making property acquisitions where the rental yield delivers a surplus return over its costs of borrowing and management, generating a growing return to maintain its progressive dividend policy
· PHP has currently identified an acquisition pipeline of 22 properties with a total unaudited value of approximately £92.4 million. The Board believes this pipeline is indicative of the attractive long term investment opportunities that exist for the Company
· The Capital Raising is conditional on the passing of the Resolutions at the General Meeting. If the Resolutions are passed and the other conditions to the Capital Raising are satisfied, it is expected that dealings in the New Shares will commence at 8.00 a.m. on 13 June 2013
The Prospectus concerning the Capital Raising will shortly be sent to Shareholders and will also be made available on the Company's website www.phpgroup.co.uk. Further details are set out in this announcement and in the Prospectus. A copy of the Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.Hemscott.com/nsm.do.
Harry Hyman, Managing Director of PHP said:
"PHP is benefiting from favourable market conditions which have enabled us to continue executing our strategy of growing the portfolio for the benefit of our shareholders. The Company has successfully diversified its sources of debt finance and has been able to secure financing at attractive margins. Our purchase of the AMP portfolio in December, and subsequent refinancing of the associated debt facilities, demonstrates our ability to identify and execute earnings enhancing acquisitions which we believe will enable the business to grow and help support our progressive dividend policy. This capital raise will enable us to continue delivering such acquisitions."
Further details of the Firm Placing and Placing, Open Offer and Offer for Subscription are set out in this announcement. Readers are referred to the important notice that applies to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time. This announcement has been issued by and is the sole responsibility of Primary Health Properties PLC.
For further information contact:
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Primary Health Properties PLC |
+44(0) 20 7451 7050 |
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Harry Hyman, Managing Director |
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Phil Holland |
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Pelham Bell Pottinger |
+44(0) 20 7861 3232 |
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David Rydell / Victoria Geoghegan / Elizabeth Snow |
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Numis Securities Limited |
+44(0) 20 7260 1000 |
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Corporate Finance: Michael Meade / Andrew Holloway |
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Corporate Broking: David Poutney / James Black |
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Peel Hunt |
+44(0) 20 7418 8900 |
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Corporate Finance: Capel Irwin / Hugh Preston |
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Corporate Sales & Syndications: Andy Crossley/ Jock Maxwell Macdonald |
IMPORTANT NOTICE
This announcement is an advertisement and does not constitute a prospectus or prospectus equivalent document. Nothing in this announcement should be interpreted as a term or condition of the Capital Raising. Investors should not subscribe for or purchase any New Shares except on the basis of the information contained in the Prospectus to be published today and incorporated by reference into the Prospectus. The Prospectus, when published, will be made available on the Company's website (www.phpgroup.co.uk) and will be available for inspection at: http://www.Hemscott.com/nsm.do.
This announcement does not constitute or form part of any offer or invitation to purchase, or otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction.
The information contained in this announcement is not for release, publication or distribution to persons in the United States, Canada, Australia, Japan, New Zealand or The Republic of South Africa or in any jurisdiction where to do so would breach any applicable law. The New Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws. No public offer of the New Shares is being made by virtue of this announcement into Australia, Canada, Japan, New Zealand, the Republic of South Africa or the United States or any other jurisdiction outside the United Kingdom in which such offer would be lawful. No action has been or will be taken by the Company, Numis, Peel Hunt or any other person to permit a public offering or distribution of this announcement or any other offering or publicity materials or the New Shares in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.
The New Shares and any entitlements pursuant to the open offer and offer for subscription will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or the relevant laws of any state, province or territory of the United States. Unless so registered, the New Shares and any entitlements pursuant to the open offer and offer for subscription may not be offered, sold, taken up or exercised, within the United States except in a transaction that is exempt from, or not subject to, the registration requirements of the US Securities Act. There will be no public offer in the United States. Outside the United States, the New Shares are being offered in reliance on Regulation S under the US Securities Act.
This announcement has been issued by and is the sole responsibility of the Company.
Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Primary Health Properties PLC and for no-one else in connection with the contents of this and will not be responsible to anyone other than Primary Health Properties PLC for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in relation to the contents of this announcement or any matters referred to herein. Numis Securities Limited is not responsible for the contents of this announcement. Numis Securities Limited has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.
Peel Hunt LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Primary Health Properties PLC and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Primary Health Properties PLC for providing the protections afforded to clients of Peel Hunt LLP, or for providing advice in relation to the contents of this announcement or any matters referred to herein. Peel Hunt LLP is not responsible for the contents of this announcement. Peel Hunt LLP has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.
This announcement has been prepared for the purposes of complying with the applicable law and regulation of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.
Note regarding forward-looking statements:
This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms anticipates, believes, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's and/or Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations for the primary healthcare market.
Any forward-looking statements in this announcement reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules, none of the Company, the Directors, Numis and Peel Hunt undertake any obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement. Past performance of the Company is not necessarily indicative of future performance.
You are advised to read this announcement and, once available the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Company's or the Group's future performance and the industries in which they operate. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.
Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.
Any person receiving this announcement is advised to exercise caution in relation to the Capital Raising. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.
This summary should be read in conjunction with the full text of the announcement which follows.
Expected timetable
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Record Date for entitlements under the Open Offer
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close of business on 16 May 2013
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Announcement of the Capital Raising, publication and posting of the Prospectus, Form of Proxy and Application Form
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22 May 2013
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Ex-entitlement date for the Open Offer
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23 May 2013 |
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Basic Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders into CREST
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as soon as possible after 8.00 a.m. on 23 May 2013 |
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Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements into CREST
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4.30 p.m. on 5 June 2013 |
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Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST
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3.00 p.m. on 6 June 2013 |
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Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)
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3.00 p.m. on 7 June 2013 |
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Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via the CREST system
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10.00 a.m. on 10 June 2013 |
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Latest time and date for receipt of completed Application Form and payment in full under the Open Offer or settlement of relevant CREST Instruction
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11.00 a.m. on 11 June 2013 |
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Latest time and date for receipt of completed Subscription Form and payment in full under the Offer for Subscription or settlement of relevant CREST Instruction
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11.00 a.m. on 11 June 2013 |
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Latest time and date for receipt of Placing commitments
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11.00 a.m. on 11 June 2013 |
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General Meeting |
10.00 a.m. on 12 June 2013
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Expected date of announcement of results of the General Meeting and the Capital Raising through a Regulatory Information Service
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12 June 2013 |
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Expected date of Admission and commencement of dealings in New Shares and CREST Members' accounts credited in respect of New Shares in uncertificated form
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by 8.00 a.m. on 13 June 2013 |
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Expected date of despatch of definitive share certificates for New Shares in certificated form |
No later than 18 June 2013 |
The times set out in the expected timetable of principal events above and mentioned throughout this announcement are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Numis and Peel Hunt, in which event details of the new times and dates will be notified to the Financial Conduct Authority, the London Stock Exchange and, where appropriate, Shareholders.
Introduction
The Board announces that the Company intends to raise up to £60.0 million (approximately £58.0 million net of all Capital Raising costs and expenses) in a Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription consisting of the issue of up to 19,047,618 New Shares at an Issue Price of 315 pence per New Share. The Board has the ability to increase the size of the Issue by up to 25 per cent should there be sufficient demand. It is the Board's opinion that the Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions in line with its prudent acquisition policies, whilst maintaining gearing at a conservative level. The Board believes that investing the proceeds in primary care properties in the current environment, will generate a favourable return, thus facilitating a return to full dividend cover whilst enabling the Company to maintain a progressive dividend policy.
Shareholders will be asked to approve the Resolutions to approve the Capital Raising, details of which are set out within this announcement and in the Prospectus. The General Meeting has been convened for 10.00 a.m. on 12 June 2013 at the Company's offices at Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB.
Background to and reasons for the Capital Raising
Overview of the Company, its objectives and investment characteristics
The principal activity of PHP is the generation of rental income and capital growth through investments in primary healthcare property in the United Kingdom, leased principally to GPs, NHS bodies and other associated healthcare users.
The Directors believe that PHP has little development risk and a low risk portfolio due to its:
· strong tenant covenants relative to the UK property market, given that 90 per cent. of the Group's rent roll is paid directly or indirectly by the Government;
· long leases and effectively upward only rent reviews; and
· minimal vacancies.
Accordingly, the Directors believe that PHP offers strong and visible cash flows to Shareholders. Historically, the increase in rents receivable achieved through the rent review process has broadly matched increases in the RPI. If this trend continues, the Directors believe that an investment in PHP will provide an effective hedge against inflation.
The current quantum of the Group's property assets enables it to spread its fixed costs over a relatively large portfolio and the Company expects further benefits from economies of scale as PHP grows in size.
The Board believes that the Joint Managers have considerable expertise in sourcing deals, the Company's cost structure is well-defined, the pipeline of acquisition opportunities remains significant, and the current positive gap between yields and financing costs is providing opportunities for PHP to make immediately earnings enhancing and cash generating property investments.
On 18 May 2012, the Company raised a net sum of £18.4 million from an equity issue which was then followed on 23 July 2012 by the Company becoming the first REIT to issue a retail bond, raising £75 million on a seven year, unsecured basis. The Company has acted swiftly to invest these funds, completing the acquisition of a further 22 investment properties for a total consideration of over £109 million since the most recent equity issue in May 2012.
The Directors consider that the attractive investment characteristics of the Company and the stability of its underlying income and shareholder returns have contributed to PHP outperforming the FTSE All Share Real Estate Investment Trust Index by 67.5 per cent. over the five years ended 30 April 2013. The Directors believe that long leases, strong tenant covenants and little or no oversupply in the primary healthcare property market are the principal reasons why yields on the Group's portfolio have remained resilient in comparison to other sectors of the property industry.
Reasons for the Capital Raising
It is the Board's opinion that the Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions whilst maintaining gearing at an appropriate level and supporting its progressive dividend policy.
The table below sets out a summary of the current pipeline of acquisition opportunities where the Company has agreed acquisition terms with the vendors. All are subject to contract and currently in the hands of solicitors for documenting and completion. The Company is under no contractual obligation and there can be no guarantee that the Group will complete the acquisition of any of these investment opportunities. The Directors consider that this pipeline of medical properties, if substantially completed, would significantly benefit the Company:
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Geographical region |
No. of indicative pipeline opportunities* |
Acquisition cost (£m)* |
Rent roll (£m)* |
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North |
3 |
30.7 |
1.8 |
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Midlands |
3 |
7.6 |
0.5 |
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South East |
7 |
22.7 |
1.4 |
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South West |
2 |
5.5 |
03 |
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Wales |
4 |
14.2 |
0.9 |
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Scotland |
3 |
11.7 |
0.7 |
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Total |
22 |
92.4 |
5.6 |
*Unaudited
The Board believes that this pipeline is indicative of the attractive and suitable investment opportunities that currently exist and are expected to arise. This is evidenced by a number of additional acquisition opportunities that are actively being negotiated with vendors and has led the Board to conclude that now is an appropriate time to seek to raise sufficient additional capital to exploit these opportunities.
Fulfilment of some or all of these pipeline opportunities would significantly increase the size and rent roll of the Group's portfolio and help to enable PHP to gain further critical mass, regarded by the Directors as necessary to compete effectively with other property companies, as well as enabling it to benefit from some additional economies of scale and increase financing flexibility. In addition, the Board anticipates that the earnings enhancement derived from the successful completion of some or all of these investment opportunities would expedite the Group's ability to pay a fully covered dividend whilst supporting a progressive dividend policy. The Board also expects that the increased market capitalisation of the Company following the Capital Raising will improve the liquidity of the Ordinary Shares, to the benefit of all Shareholders.
The Board has consistently believed that, despite the secure nature of the Company's tenants and the long lease expiry profile, a conservative consolidated level of gearing of below 65 per cent. is appropriate for the Company. The effect of the Capital Raising will be to allow PHP to continue to pursue its growth strategy and maintain maximum funding flexibility on an ongoing basis. The proceeds will be used alongside existing and future banking facilities to acquire further assets in line with its acquisition policy, whilst maintaining a conservative LTV ratio and, in due course, facilitating the return to full dividend cover.
PHP's LTV ratio as at 31 December 2012 was approximately 60.9 per cent. The Group now has no consolidated LTV covenants within its range of debt facilities. Specific individual loan facility maximum LTV limits range from 60 per cent. to 70 per cent. and are calculated with reference to dedicated property pools that form the security for an individual facility. A proportion of the Group's property portfolio is currently unfettered with debt and the Group has the ability to transfer such properties into the security pools of its debt facilities if required.
Current trading trends and prospects
The key priority for the Board is to return the Company to full dividend cover at the earliest opportunity, and the Directors believe that a combination of continuing to purchase assets that yield a satisfactory surplus over PHP's marginal cost of debt, managing the existing portfolio to create added value and income, and agreeing rental increases at review will serve to facilitate this primary objective.
The Board believes that the operating and financial environment remains very positive and that the Group is ideally placed to provide the new modern specialist premises demanded by the healthcare professionals who are PHP'#s tenants. As such, the Board remains confident in the prospects for the Group.
Principal Terms of the Capital Raising
PHP is proposing to raise gross proceeds of up to approximately £60.0 million (approximately £58.0 million net of expenses) by the issue of up to 19,047,618 new Ordinary Shares through the Capital Raising at 315 pence per New Share, although the Directors have the ability to increase the size of the Issue by up to 25 per cent. such that the gross proceeds would be approximately £75.0 million (approximately £72.7 million net of expenses). The Firm Placing is underwritten by Numis and Peel Hunt. The Board considers the Firm Placing and Placing, Open Offer and Offer for Subscription to be a suitable fundraising structure as it will allow access to a wide variety of new investors to broaden the Company's shareholder base, whilst providing existing Shareholders with the opportunity to participate in the fundraising to an extent through the Open Offer.
Assuming that the size of the Issue is approximately £60.0 million, 7,301,587 of the New Shares will be issued through the Firm Placing and 11,746,031 of the New Shares will be issued through the Placing, Open Offer and Offer for Subscription (the actual number of New Shares to be issued pursuant to the Issue will be notified by the Company via a Regulatory Information Service announcement prior to Admission). Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders are not being offered the right to subscribe for the Firm Placed Shares. Qualifying Shareholders applying for their Basic Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Basic Entitlements as described below. The Company is also making the Offer for Subscription as described below in the UK only.
All elements of the Capital Raising have the same Issue Price. The Issue Price was set having regard to the prevailing market conditions and the size of the Issue, and represents a discount of approximately 6.3 per cent. to the Closing Price of 336.25 pence per Ordinary Share on 21 May 2013 (being the last Business Day before the announcement of the Capital Raising). The Board believes that both the Issue Price and the discount are appropriate.
The New Shares, when issued and fully paid, will rank in full for all dividends or distributions made, paid or declared after the date of the Prospectus or otherwise pari passu in all respects with the Existing Ordinary Shares.
On the basis that the Issue size is £60.0 million, the Capital Raising is expected to result in 19,047,618 new Ordinary Shares being issued (representing approximately 25.0 per cent. of the existing issued share capital). On the basis that the Issue size is increased to a maximum of £75.0 million, the Capital Raising is expected to result in 23,809,522 new Ordinary Shares being issued (representing approximately 31.3 per cent. of the existing issued share capital).
The Capital Raising has been structured in a way that is expected to have the effect of creating distributable reserves equal to the net proceeds of the Capital Raising less the par value of the New Shares issued by the Company. It should be possible for the Company to declare dividends from the aggregate distributable reserves created by the Capital Raising (together with any other distributable reserves of the Company) provided that the Company has sufficient cash resources to fund such dividends, the distributable reserves have not otherwise been reduced and the Directors consider it appropriate to declare such dividends.
Some questions and answers in relation to the Open Offer, together with details of further terms and conditions of the Open Offer, including the procedure for application and payment and the procedure in respect of entitlements not taken up, are set out in the Prospectus and, where relevant, are set out in the Application Form.
Details of further terms and conditions of the Offer for Subscription, including the procedure for application and payment and the procedure in respect of Subscription Entitlements, are set out in the Prosecptus and, where relevant, are set out in the Subscription Form. The Subscription form is contained in the Prospectus and will be available at the Company's website.
Firm Placing
The Firm Placees have conditionally agreed to subscribe for 7,301,587 of the New Shares at the Issue Price (representing gross proceeds of approximately £23.0 million). The Firm Placed Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and are not part of the Placing, Open Offer and Offer for Subscription. The Firm Placing is underwritten by Numis and Peel Hunt. The terms and conditions of the Firm Placing and the Placing will be contained in the Prospectus.
Open Offer
The Directors recognise the importance of pre-emption rights to Shareholders and consequently 7,609,824 of the New Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. The Placing and the Offer for Subscription may be scaled back at the Directors' discretion to increase the size of the Open Offer by allocating New Shares that could otherwise be available under the Placing and/or the Offer for Subscription to be available to Qualifying Shareholders through the Excess Application Facility.
To the extent that valid applications are not received in respect of any of the Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet any valid applications under the Excess Application Facility.
Basic Entitlements
Qualifying Shareholders are being offered the opportunity to subscribe at the Issue Price for Open Offer Shares on the following basis:
1 Open Offer Share for every 10 Existing Ordinary Shares
registered in their name at the close of business on the Record Date.
Basic Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will not be allocated but will be aggregated and sold for the benefit of the Company under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.
If you have sold or otherwise transferred all of your Existing Ordinary Shares before the ex‑entitlement date, you are not entitled to participate in the Open Offer.
Qualifying Shareholders are also being offered the opportunity to subscribe for Excess Shares in excess of their Basic Entitlements as described below.
Excess Application Facility
Qualifying Shareholders may apply to acquire Excess Shares using the Excess Application Facility, should they wish. Qualifying Non-CREST Shareholders wishing to apply for Excess Shares, may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Basic Entitlements will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility.
The maximum amount of New Shares to be issued under the Excess Application Facility (the "Maximum Excess Application Number") will be limited to: (a) the maximum size of Issue (as may be increased by the Directors by up to 25 per cent. to approximately £75.0 million); less (b) the aggregate of the Firm Placed Shares, the New Shares issued under the Open Offer pursuant to Qualifying Shareholders' Basic Entitlements and any New Shares that the Directors determine to issue under the Placing and Offer for Subscription. Excess Applications will therefore only be satisfied to the extent that: (a) other Qualifying Shareholders do not apply for their Basic Entitlements in full; (b) where fractional entitlements have been aggregated and made available under the Excess Application Facility; and (c) if the Directors exercise their discretion to reallocate New Shares that would otherwise have been available under the Placing or Offer for Subscription to the Excess Application Facility. Qualifying Shareholders can apply for up to the Maximum Excess Application Number of New Shares under the Excess Application Facility, although applications under the Excess Application Facility shall be allocated in such manner as the Directors may determine, in their absolute discretion, and no assurance can be given that the applications by Qualifying Shareholders will be met in full or in part or at all. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.
The Excess Application Facility will be comprised of New Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Basic Entitlements and any New Shares that the Directors determine should be reallocated from the Placing and/or the Offer for Subscription to satisfy demand from Qualifying Shareholders in preference to prospective new investors. Excess applications may be allocated in such manner as the Directors determine, in their absolute discretion, and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full or in part or at all.
Placing
To the extent that any New Shares remain unallocated via the Excess Application Facility and are not allocated to the Offer for Subscription, New Shares will be made available under the Placing. New Shares are being allocated to Placees pursuant to the Placing Agreement. The Placing will not be underwritten by Numis and Peel Hunt and may be scaled back in favour of the Open Offer and/or the Offer for Subscription. The terms and conditions of the Placing and the Firm Placing will be contained in the Prospectus.
Offer for Subscription
To the extent that any New Shares remain unallocated via the Excess Application Facility and are not allocated to the Placing, New Shares will be made available under the Offer for Subscription. The Offer for Subscription may be scaled back in favour of the Open Offer and/or the Placing,
The Offer for Subscription is only being made in the UK but, subject to applicable law, the Company may allot New Shares on a private placement basis to applicants in other jurisdictions. The terms and conditions of application under the Offer for Subscription will be set out in the Prospectus and, where relevant, in the Subscription Form. These terms and conditions should be read carefully before an application is made. Investors should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser if they are in doubt.
Dilution
Assuming that the size of the Issue is approximately £60.0 million, if a Qualifying Shareholder does not take up his Basic Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 20.0 per cent. as a result of the Firm Placing and the Placing, Open Offer and Offer for Subscription. Furthermore, a Qualifying Shareholder who takes up his Basic Entitlements in full in respect of the Open Offer (and does not receive any other New Shares pursuant to the Capital Raising) will suffer dilution of approximately 12.0 per cent. to his shareholding in the Company as a result of the Firm Placing.
If the Directors increase the Issue by 25 per cent, the size of the Issue will be approximately £75.0 million and if a Qualifying Shareholder does not take up his Basic Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 23.8 per cent. as a result of the Firm Placing and the Placing, Open Offer and Offer for Subscription. Furthermore, a Qualifying Shareholder who takes up his Basic Entitlements in full in respect of the Open Offer (and does not receive any other New Shares pursuant to the Capital Raising) will suffer dilution of approximately 16.2 per cent. to his shareholding in the Company as a result of the Firm Placing and the increase in size of the Issue.
Fractions
Fractions of Open Offer Shares will not be allocated to Qualifying Shareholders in the Open Offer and fractional entitlements under the Open Offer will be aggregated and sold in the market place for the benefit of the Company under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.
Basis of allocation under the Capital Raising
The Placing may be scaled back in favour of the Open Offer or the Offer for Subscription and the Offer for Subscription may be scaled back in favour of the Placing or the Open Offer. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders and is not subject to scaling back in favour of either the Placing or the Offer for Subscription. The Directors have the discretion to scale back the Placing and/or the Offer for Subscription in favour of the Open Offer by reallocating New Shares that would otherwise be available under the Placing and/or the Offer for Subscription to be available to Qualifying Shareholders through the Excess Application Facility under the Open Offer. Any New Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Basic Entitlements and under the Excess Application Facility will be reallocated to the Placing and/or the Offer for Subscription and available thereunder.
The Directors have the discretion to determine the basis of allotment between Qualifying Shareholders under the Excess Application Facility and any scaling back of or reallocation of Open Offer Shares to the Placing and/or the Offer for Subscription. In exercising this discretion, the Directors generally intend to give priority to existing Shareholders over prospective new Shareholders, although the Directors will seek to balance the benefits to the Company of allowing existing Shareholders to maintain or increase the size of their relative Shareholdings with expanding the Shareholder base of the Company.
Conditionality
The Capital Raising is conditional, inter alia, upon:
· the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 12 June 2013;
· the Placing Agreement having become unconditional in all respects save for the condition relating to Admission and not being terminated in accordance with its terms before Admission occurs; and
· Admission occurring by not later than 8.00 a.m. on 13 June 2013 (or such later time and date as the Company, Numis and Peel Hunt may agree, not being later than 8.00 a.m. on 30 June 2013).
Prior to Admission, Numis and Peel Hunt may terminate the Placing Agreement in certain defined circumstances. Following Admission, the Placing Agreement cannot be terminated.
If the conditions of the Placing Agreement are not fulfilled on or before 8.00 a.m. on 30 June 2013, application monies will be returned to applicants (at the applicant's risk) without interest as soon as possible thereafter.
Admission
Applications will be made to the FCA and to the London Stock Exchange, respectively, for the New Shares to be admitted to the listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.
Subject to the conditions to the Capital Raising having been satisfied (or, if applicable, waived) it is expected that Admission will occur at 8.00 a.m. on or around 13 June 2013.
General meeting
A General Meeting is to be held on 12 June 2013 at 10.00 a.m. at the Company's offices at Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. The full text of the Notice of General Meeting is set out in the Prospectus.
At the General Meeting, the Resolutions will be proposed to:
· approve the Capital Raising;
· grant the Directors authority pursuant to section 551 of the Companies Act to allot Ordinary Shares generally and in connection with the Firm Placing, Placing and Open Offer; and
· disapply where relevant statutory pre-emption rights set out in section 561 of the Companies Act.
Recommendation
The Board considers the Capital Raising and the passing of the Resolutions to be in the best interests of Shareholders as a whole.
Accordingly, the Board recommends unanimously that Shareholders vote in favour of the Resolutions, as each of the Directors has irrevocably undertaken to do in respect of their own beneficial holding, to the extent that they have any such holding, which together amount to 4,687,146 Ordinary Shares, representing approximately 6.2 per cent. of the Ordinary Shares in issue as at 21 May 2013.
Shareholders should also be aware that if the Resolutions to be proposed at the General Meeting are not passed, the Capital Raising will lapse.
It is anticipated that a Prospectus providing further details of the Firm Placing and Placing, Open Offer and Offer for Subscription and convening the General Meeting will be published today and posted to Shareholders. Copies of the Prospectus will be available from the registered office of PHP at Ground Floor, Ryder Court, 14 Ryder Street, London SW1Y 6QB. The Prospectus will also be available free of charge during normal business hours on any weekday (except Saturdays, Sundays and public holidays) from the date of its publication until Admission at the offices of Nabarro LLP, Lacon House, 84 Theobald's Road, London WC1X 8RW.
APPENDIX
In this announcement, the following expressions have the following meanings unless the context requires otherwise:
|
Admission |
On Admission or more admissions of the New Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the premium segment of the London Stock Exchange's main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards
|
||
|
Admission and Disclosure Standards |
the "Admission and Disclosure Standards" of the London Stock Exchange containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
|
||
|
Application Form |
the application form accompanying the Prospectus on which Qualifying Non-CREST Shareholders may apply for Open Offer Shares under the Open Offer (including under the Excess Application Facility)
|
||
|
Basic Entitlements |
the pro rata entitlement of Qualifying Shareholders to subscribe for 1 Open Offer Share for every 10 Existing Ordinary Shares registered in their name as at the Record Date
|
||
|
Board |
the Directors of PHP
|
||
|
Business Day |
a day (other than a Saturday, Sunday or public holiday) on which banks are generally open for business in the City of London for the transaction of normal banking business
|
||
|
Capital Raising |
the Firm Placing and the Placing, Open Offer and the Offer for Subscription
|
||
|
Capital Raising Shares |
all New Shares to be issued pursuant to the Capital Raising
|
||
|
certificated or in certificated form |
in relation to a share or other security, a share or other security which is not in uncertificated form
|
||
|
Closing Price |
the closing middle market quotation as derived from the Daily Official List of the London Stock Exchange on a particular day
|
||
|
Companies Act |
the Companies Act 2006 as amended
|
||
|
Company |
Primary Health Properties PLC
|
||
|
Corporate Governance Code |
the UK Corporate Governance Code published in June 2010 by the Financial Reporting Council
|
||
|
CREST |
the relevant system, as defined in the CREST Regulations (in respect of which Euroclear is the operator as defined in the CREST Regulations)
|
||
|
CREST Regulations or Regulations |
the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended
|
||
|
Daily Official List |
the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
|
||
|
Directors |
the executive director and non-executive directors of the Company
|
||
|
Disclosure and Transparency Rules |
the rules relating to the disclosure of information made in accordance with section 73A(3) of the FSMA
|
||
|
EU or European Union |
the European Union
|
||
|
Euroclear |
Euroclear & Ireland Limited, the operator of CREST
|
||
|
Excess Application Facility |
the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlements in accordance with the terms and conditions of the Open Offer
|
||
|
Excess CREST Open Offer Entitlements |
in respect of each Qualifying CREST Shareholder, the entitlement (in addition to their basic entitlement) to apply for Existing Ordinary Shares pursuant to the Excess Application Facility
|
||
|
Excess Shares |
Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility
|
||
|
Excluded Territories
|
Australia, Canada, Japan, South Africa and New Zealand and any other jurisdiction where the extension or availability of the Capital Raising (and any other transaction contemplated thereby) would breach any applicable law or regulation
|
||
|
ex-entitlement date |
the date on which the Ordinary Shares trade ex-entitlement to participate in the Open Offer, expected to be 23 May 2013
|
||
|
Existing Ordinary Shares |
the 76,098,244 Ordinary Shares in issue as at the date of this announcement
|
||
|
Financial Conduct Authority or FCA
Firm Placees
|
the Financial Conduct Authority of the United Kingdom
any persons who have agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing
|
||
|
Firm Placed Shares |
the 7,301,587 new Ordinary Shares which are to be allocated pursuant to the Firm Placing
|
||
|
Firm Placing |
the conditional placing by Numis and Peel Hunt on behalf of the Company of the Firm Placed Shares pursuant to the Placing Agreement
|
||
|
Form of Proxy |
the form of proxy for use at the General Meeting
|
||
|
FSMA |
the Financial Services and Markets Act 2000, as amended
|
||
|
General Meeting |
the general meeting of PHP to be held at 10.00 a.m. on 12 June 2013, notice of which is set out in Part 10 of the Prospectus
|
||
|
GP |
General Practitioner
|
||
|
Group |
the Company and its subsidiaries at the date of this announcement
|
||
|
Issue
|
the issue of New Shares pursuant to the Capital Raising
|
||
|
Issue Price |
315 pence per New Share
|
||
|
JOHCML |
J O Hambro Capital Management Limited of Ground Floor, Ryder Court, 14 Ryder Street, London SW1Y 6QB (a wholly-owned subsidiary of J O Hambro Capital Management Group Limited)
|
||
|
Joint Managers |
Nexus and JOHCML
|
||
|
Listing Rules |
the Listing Rules made by the FCA under Part VI of FSMA
|
||
|
London Stock Exchange |
London Stock Exchange plc
|
||
|
New Shares |
the Ordinary Shares to be issued under the terms set out in the Prospectus
|
||
|
Nexus |
Nexus Tradeco Limited of Greener House, 66-68 Haymarket, London SW1Y 4RF
|
||
|
NHS |
the National Health Service
|
||
|
Notice of General Meeting |
the notice of the General Meeting contained in Part 13 of the Prospectus
|
||
|
Numis |
Numis Securities Limited
|
||
|
Offer for Subscription
|
the offer for subscription to the public in the UK of the New Shares on the terms set out in the Prospectus and (where applicable) the Subscription Form
|
||
|
Official List |
the Official List of the Financial Conduct Authority pursuant to Part VI of FSMA
|
||
|
Open Offer |
the conditional invitation to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Prospectus and in the case of Qualifying Non-CREST Shareholders only, the Application Form
|
||
|
Open Offer Shares |
means the New Shares being offered in aggregate pursuant to the Open Offer together, where the context requires, with the Excess Application Facility
|
||
|
Ordinary Shares or Shares |
ordinary shares of 50 pence each in the share capital of the Company
|
||
|
PHP or the Company |
Primary Health Properties PLC, a public limited company incorporated in England and Wales with registered number 03033634
|
||
|
PHP Group or Group |
the Company and each of its subsidiaries and subsidiary undertakings from time to time
|
||
|
Overseas Shareholders |
Shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom
|
||
|
Peel Hunt |
Peel Hunt LLP
|
||
|
Placed Shares |
the New Shares to be allotted and issued by the Company pursuant to the Placing
|
||
|
Placees |
any persons who have agreed to subscribe for Placed Shares
|
||
|
Placing |
the conditional placing by Numis and Peel Hunt on behalf of the Company of the Placed Shares pursuant to the Placing Agreement
|
||
|
Placing Agreement |
the placing agreement dated 22 May 2013 between the Company, Numis and Peel Hunt relating to the Capital Raising
|
||
|
Pounds Sterling or £ |
the lawful currency of the United Kingdom
|
||
|
Prospectus |
document dated 22 May 2013 comprising a combined prospectus and notice of general meeting
|
||
|
Prospectus Rules |
the Prospectus Rules published by the FCA under Section 73A of FSMA
|
||
|
Qualifying CREST Shareholders |
Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST at close of business on the Record Date
|
||
|
Qualifying Non-CREST Shareholders |
Qualifying Shareholders holding Ordinary Shares in certificated form at close of business on the Record Date
|
||
|
Qualifying Shareholders |
holders of Ordinary Shares on the register of members of the Company at the Record Date with the exclusion (subject to certain exemptions) of Overseas Shareholders
|
||
|
Record Date |
5.00 p.m. on 16 May 2013
|
||
|
Regulatory Information Service |
one of the regulatory information services authorised by the Financial Conduct Authority to receive, process and disseminate regulatory information in respect of listed companies
|
||
|
REIT |
Real Estate Investment Trust
|
||
|
Resolutions |
the resolutions to be proposed at the General Meeting set out in the Notice of General Meeting
|
||
|
RPI |
retail price index
|
||
|
Shareholder |
a holder of Ordinary Shares from time to time
|
||
|
stock account |
an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited
|
||
|
Subscription Entitlement |
in respect of each Selected Subscription Applicant (as defined in the Prospectus) the entitlement to apply for New Shares pursuant to the Offer for Subscription
|
||
|
Subscription Form
|
the application form to be included in Appendix 4 of the Prospectus for use in connection with the Offer for Subscription
|
||
|
uncertificated or in uncertificated form |
recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
|
||
|
United Kingdom or UK |
the United Kingdom of Great Britain and Northern Ireland
|
||
|
US Securities Act |
the United States Securities Act 1933, as amended
|
||
|
United States |
the United States of America, its territories and possessions, any state of the United States and the District of Columbia.
|
||
This information is provided by RNS
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