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RIN - Redefine Properties International Limited - Potential merger announcement
Redefine Properties International Limited
(formerly Kalpafon Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2010/009284/06)
JSE share code: RIN ISIN Code: ZAE000149282
("RIN")
POTENTIAL MERGER ANNOUNCEMENT
Set out below is an announcement which was released by Redefine International
plc, the AIM-listed subsidiary of RIN, on the Regulatory News Service ("RNS") of
the London Stock Exchange today.
The announcement relates to a potential merger between Wichford P.L.C. and
Redefine International plc. The full implications of the potential merger on RIN
are set out in the detailed RIN announcement released on SENS simultaneously
with this announcement.
"NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF ANY SUCH JURISDICTION
This is an announcement falling under Rule 2.4 of the City Code on Takeovers and
Mergers (the "Takeover Code") and does not constitute an announcement of a firm
intention to make an offer or to pursue any other transaction under Rule 2.5 of
the Takeover Code.
Accordingly, Redefine International plc shareholders are advised that there can
be no certainty that a formal offer for Redefine International plc will be
forthcoming, even in the event that the pre-conditions in this announcement are
satisfied or waived.
FOR IMMEDIATE RELEASE
23 March 2011
Wichford P.L.C. ("Wichford") and Redefine International plc ("Redefine")
POTENTIAL MERGER OF WICHFORD AND REDEFINE
Summary
- The Boards of Wichford and Redefine are pleased to announce that they have
reached an in principle understanding regarding a potential combination of
the two companies (the "Merger").
- The Merger would create an enlarged property company (the "Enlarged
Company"), listed on the main market of the London Stock Exchange (the
"LSE"), with a well diversified, income-producing investment property
portfolio and a balanced capital structure benefiting from a significant
capital commitment from its largest shareholder. The Enlarged Company
would seek to distribute the majority of its recurring net income in the
form of dividends.
- Following completion of the strategic review announced by the Board of
Wichford on 15 November 2010 (the "Strategic Review"), the Board of
Wichford believes that proceeding with the Merger and the associated
capital commitments made by Redefine`s largest shareholder is in the best
interests of Wichford shareholders.
Commenting on the possible Merger, Philippe de Nicolay, Chairman of Wichford,
said: "We are pleased to announce today the key terms of the proposed Merger
agreed in principle with the Board of Redefine. Following the completion of
Wichford`s strategic review of options we have concluded that the proposed
Merger delivers the most attractive outcome for Wichford shareholders. In
addition to an ongoing participation in the Enlarged Company which will continue
to focus on income distribution from its diversified asset base, the proposed
transaction provides a substantial de-risking of the Wichford October 2012 debt
maturities through securing a significant capital commitment from the Enlarged
Company`s largest shareholder."
Gavin Tipper, Chairman of Redefine, added: "We are delighted to be announcing
the planned combination with Wichford. The merger is consistent with our ongoing
strategy to build a larger, more liquid company focused on diversified, income
producing investment properties. We believe that the Enlarged Company will be
well placed to deliver attractive cash returns for investors and growth over the
long term."
Financial Terms and Ownership
- Wichford is expected to make an all share offer for the entire issued and
to be issued share capital of Redefine at an exchange ratio of 7.2 Wichford
shares for every Redefine share (the "Exchange Ratio").
- On completion of the Merger, based on the existing number of Redefine
shares in issue, approximately 2,973 million new Wichford shares would be
issued to Redefine shareholders. It is intended that Redefine`s existing
shareholding of approximately 231 million shares in Wichford would be
cancelled and so the net increase in the issued share capital of Wichford
would be approximately 2,742 million. The Enlarged Company would therefore
have approximately 3,804 million shares in issue.
- Following cancellation of Redefine`s existing shareholding of approximately
231 million shares in Wichford and based on the undiluted issued share
capital on 22 March 2011, being the last trading day prior to this
announcement:
- existing Redefine shareholders would hold approximately 78 per cent. of the
issued shares of the Enlarged Company;
- existing Wichford shareholders (other than Redefine as a shareholder in
Wichford) would hold approximately 22 per cent. of the issued shares of the
Enlarged Company; and
- Redefine Properties International Limited (which is listed on the
Johannesburg Stock Exchange ("JSE")) ("Redefine Properties International")
would become the majority shareholder in the Enlarged Company with a
shareholding of approximately 64 per cent.
- Redefine Properties International is approximately 57 per cent. owned by
Redefine Properties Limited ("Redefine Properties"), which is also listed
on the JSE and currently has a market capitalisation of R19.6 billion
(approximately GBP1.7 billion).
- Based on 51.5 pence, being the closing price of Redefine shares on 22 March
2011, the Exchange Ratio values each Wichford share at approximately 7.2
pence, representing a premium of approximately:
- 7 per cent. to the closing price of approximately 6.7 pence per Wichford
share on 22 March 2011, being the last trading day prior to the release of
this announcement; and
- 2 per cent. to the average closing price of approximately 7.0 pence per
Wichford Share for the one month period to 22 March 2011.
- Based on approximately 6.7 pence being the closing price of Wichford shares
on 22 March 2011, the Exchange Ratio values each Redefine share at
approximately 48.2 pence, representing a discount of approximately:
- 6 per cent. to the closing price of 51.5 pence per Redefine share, being
the closing price of Redefine shares on 22 March 2011, being the last
trading day prior to the release of this announcement; and
- 10 per cent. to the average closing price of approximately 53.6 pence per
Redefine Share for the one month period to 22 March 2011.
- The value placed by the Exchange Ratio on Wichford`s shares of
approximately 7.2 pence per share also represents:
- a premium of approximately 29 per cent. to the net asset value ("NAV")
of 5.56 pence per Wichford share, being the last reported NAV prior to
the release of this announcement; and
- a discount of approximately 17 per cent. to the European Public Real
Estate Association ("EPRA") NAV of 8.67 pence per Wichford share,
being the last reported EPRA NAV prior to the release of this
announcement.
- Wichford shareholders on the shareholder register on the record date (which
would be before the completion of the Merger) would receive an interim
dividend of no less than 0.32 pence per share for the six month period
ended 31 March 2011.
- Redefine shareholders on the shareholder register on the record date (which
would be before the completion of the Merger) would receive an interim
dividend for the period ended 28 February 2011 consistent with Redefine`s
existing dividend policy.
Strategic Rationale
- The Merger would create an enlarged, income-focused property company with a
large, well diversified investment property portfolio, listed on the main
market of the LSE. The Enlarged Company would have an improved capital
structure, benefiting from Redefine`s attractive long term debt facilities,
as well as the commitment from Redefine Properties International and
Redefine Properties to support a fully pre-emptive capital raise by the
Enlarged Company in the future (see Capital Commitment).
- In particular, the Boards of Wichford and Redefine believe that the
Merger represents a clear and strong complementary fit, creating a
company in the mid-tier of the UK listed property sector with:
- good growth prospects, an improved capital structure and better access
to capital;
- complementary income focused portfolios, diversified by geography,
asset and tenant type;
- an enlarged shareholder base which may enhance trading liquidity for
shares in the Enlarged Company; and
- potential for reduced combined expenses as a result of the elimination
of certain public company costs.
Capital Commitment
- It is expected that the Enlarged Company would, in due course, seek to
raise equity capital (a "Capital Raising") on a fully pre-emptive basis to
improve the gearing of the Enlarged Company and to assist, inter alia, with
the refinancing of Wichford`s existing debt maturities in October 2012. The
Board of the Enlarged Company would decide the terms of any Capital Raising
at the appropriate time, with regard to the interests of all shareholders
in the Enlarged Company. It is currently expected that the preferred route
for a Capital Raising would involve issuing new equity at a tight discount,
on a fully pre-emptive basis.
- Redefine Properties International, with the support of its parent company,
Redefine Properties, has agreed that it would subscribe to at least its pro
rata share of any Capital Raising (as may be agreed by the Board of the
Enlarged Company and undertaken prior to 31 October 2012) of up to GBP100
million of gross proceeds. Based on the undiluted issued share capital on
22 March 2011, Redefine Properties International`s pro forma shareholding
in the Enlarged Company would be approximately 64 per cent..
- Redefine Properties International would be committed to increasing
liquidity and broadening institutional ownership of the Enlarged Company.
Dependent on the terms of the Capital Raising, and at its sole discretion,
Redefine Properties International would accommodate additional demand for
any Capital Raising from existing and new shareholders, to the extent that
its shareholding in the Enlarged Company remains at a minimum of 50.1 per
cent..
- While the preferred route for a Capital Raising would involve issuing new
equity at a tight discount on a fully pre-emptive basis, as part of the
terms of the Merger and in the event that a Capital Raising cannot be
successfully completed, Redefine Properties has agreed to support a
backstop capital raising ("Backstop Capital Raising"). The Backstop Capital
Raising would provide the Enlarged Company with the ability to conduct a
deeply discounted rights issue of up to GBP100 million of gross proceeds,
at an issue price not less than the nominal value of the shares of the
Enlarged Company. Redefine Properties has agreed it would provide
underwriting to any Backstop Capital Raising of an amount equivalent to
Redefine Properties International`s shareholding in the Enlarged Company at
the time of completion of the Merger multiplied by GBP100 million, being
the maximum size of such Backstop Capital Raising. Based on the undiluted
issued share capital on 22 March 2011, Redefine Properties International
would own 64 per cent. of the Enlarged Company and as such its underwriting
commitment would be GBP64 million for any Backstop Capital Raising up to
GBP100 million.
- The Backstop Capital Raising would be callable at any time following
completion of the Merger by a majority of the members of the Board of the
Enlarged Company entitled to vote on the relevant Board resolution.
- The Backstop Capital Raising commitment would terminate on 31 October 2012
if not called by that date.
- If the Merger is completed, an underwriting fee of 2.5 per cent. would be
payable to Redefine Properties for its underwriting commitment in respect
of the Backstop Capital Raising by the Enlarged Company on the earlier of
31 October 2012 or the completion of a Capital Raising (or the Backstop
Capital Raising, as may be applicable). Based on the undiluted share
capital in issue on 22 March 2011, the underwriting fee payable would be
GBP1.6 million, being 2.5 per cent. of the GBP64 million commitment of
Redefine Properties, being Redefine Properties International`s 64 per cent.
share of the maximum GBP100 million Backstop Capital Raising. No other fees
would be payable to Redefine Properties, Redefine Properties International
or their affiliates upon grant or exercise of the call option associated
with the Backstop Capital Raising or in relation to a Capital Raising.
Management Team and Board of Directors
- It is proposed that, immediately following the Merger, the Board of the
Enlarged Company would consist of nine directors including:
- four former Wichford non-executive directors, one of whom will be the
Chairman of the Enlarged Company;
- two former Redefine independent non-executive directors;
- one new non-executive director;
- one non-executive director appointed by Redefine Properties
International; and
- one executive director of Wichford Property Management Limited, which
is 76 per cent. owned by Redefine Properties.
- The Board of the Enlarged Company would comply with the recommendations of
the UK Corporate Governance Code.
- It is expected that, other than one non-executive director appointed by
Redefine Properties International and one executive of Wichford Property
Management Limited, the appointment of directors would be subject to the
approval of a nominations committee of the Board of the Enlarged Company,
comprising two former Wichford non-executive directors and the new
independent non-executive director.
- The executive director and non-executive director appointed by Redefine
Properties International would not be entitled to vote on any Board
resolution to call on the Backstop Capital Raising commitment.
Corporate Structure of the Enlarged Entity
- The Enlarged Company would continue to be managed by Wichford Property
Management Limited.
- It is expected that, following the completion of the Merger, the Board of
the Enlarged Company would conduct a review of the management and tax
structure of the Enlarged Company.
Relationship Agreement
- In connection with the Merger, Redefine Properties International (as the
majority shareholder) and the Enlarged Company propose to enter into a
relationship agreement setting out the governance arrangements for the
Enlarged Company (the "Relationship Agreement").
- Subject to compliance with all regulatory requirements (including the rules
of the JSE), it is intended that the Relationship Agreement would contain
certain corporate governance arrangements to facilitate the independent
operation of the Enlarged Company. The Relationship Agreement would limit
the ability of Redefine Properties International and/or its associates from
taking control of the Board of the Enlarged Company and would prevent
Redefine Properties International from taking actions that could result in
the de-listing of the Enlarged Company (other than as a result of
underwriting a Backstop Capital Raising if the same were called upon by the
Board of the Enlarged Company as set forth above).
The Relationship Agreement is also expected to:
- limit the ability of Redefine Properties International and its
associates from voting on matters not permitted under Chapter 11 of
the UKLA Listing Rules or otherwise not complying with the Listing
Rules;
- ensure that all transactions between the Enlarged Company and Redefine
Properties International and/or its associates are conducted on an
arm`s length basis; and
- prevent Redefine Properties International from modifying the Enlarged
Company`s articles of association in any manner that is inconsistent
with the Relationship Agreement.
- Redefine Properties International has committed that, from the date of this
announcement, which commitment is intended to be reflected under the terms
of the Relationship Agreement, it would not dispose of any shares held by
it prior to the Merger in the capital of either Wichford or Redefine or,
following the Merger, in the Enlarged Company in the period up to the
earlier of 31 October 2012 or the completion of the Capital Raising or
Backstop Capital Raising (as relevant).
- The Relationship Agreement is expected to apply to Redefine Properties
International and, to the extent that any shares in the Enlarged Company
which are beneficially owned by Redefine Properties International are
transferred to one or more of its associates, Redefine Properties
International would be required to procure that such associates enter into
parallel obligations prior to the transfer of shares.
- The obligations of Redefine Properties International and its
associates under the Relationship Agreement would only terminate if the
beneficial ownership of Redefine Properties International and its
associates in the Enlarged Company either falls below 30 per cent., or the
Enlarged Company is no longer admitted to listing on the Official List of
the London Stock Exchange.
Pre-conditions and Conditions to the Announcement of a Firm Offer and to the
Merger
- Proceeding with the proposed Merger, and any announcement pursuant to Rule
2.5 of the Takeover Code by Wichford of a firm intention to make an offer
for Redefine, is subject, inter alia, to the following pre-conditions:
(i) the completion of due diligence satisfactory to Wichford;
(ii) the unanimous recommendation of the Board of Redefine;
(iii) the unanimous recommendation of the Board of Wichford;
(iv) the agreement of Redefine and Wichford to the terms of an
implementation agreement;
(v) the agreement by Redefine Properties International, Redefine
Properties and Wichford to the terms of the Capital Raising and
Backstop Capital Raising commitments;
(vi) agreement being reached regarding satisfactory governance arrangements
for the Enlarged Company to be set out in the Relationship Agreement;
(vii) Redefine shareholders receiving any interim dividend payable for the
period ended 28 February 2011 consistent with Redefine`s existing
dividend policy;
(viii) Wichford shareholders receiving an interim dividend for the six month
period ended 31 March 2011 of no less than the level of the 2010
interim dividend of 0.32 pence per share; and
(ix) all required UKLA, Takeover Panel, JSE, South African Reserve Bank
Takeover Regulation Panel in South Africa (currently the Securities
Regulation Panel) and other required regulatory approvals having been
obtained, including Takeover Panel consent in principle to a waiver of
Rule 9 of the Takeover Code, given Redefine Properties International`s
shareholding in the Enlarged Company would exceed 29.9 per cent.
- The Merger is expected to be subject, inter alia, to the approval by
ordinary resolution of Wichford shareholders excluding those shares held by
Redefine and its affiliates, the approval by special resolution of all
Wichford shareholders, the approval by both ordinary and special resolution
of Redefine Properties International shareholders, and valid acceptances
from shareholders representing at least 90 per cent. of the issued share
capital of Redefine (Redefine Properties International`s shareholding of
approximately 82 per cent. improves the prospects of reaching this
threshold). Any offer for Redefine would be subject to terms and
conditions customary for a recommended offer for a public company governed
by the Takeover Code.
- Wichford reserves the right to waive any of the above pre-conditions and
conditions which apply to it. Wichford reserves the right, with the consent
of the Board of Redefine, to vary (i) the share exchange ratio set out
above and/or (ii) the form and/or mix of the consideration.
Indicative Timetable
- It is anticipated that, subject to the satisfaction or waiver of all pre-
conditions and obtaining all required regulatory and shareholder approvals
or acceptances, the Merger could be announced under Rule 2.5 of the
Takeover Code during the second quarter of 2011 and completed during the
third quarter of 2011.
Proposed Transaction Structure, Regulatory Approvals and Listing Status
- If the Merger proceeds it is expected that it would be implemented by way
of a reverse takeover of Redefine by Wichford under the Listing Rules of
the UKLA, with Redefine`s existing shareholding in Wichford being cancelled
following the Merger. There will be no suspension of Redefine or Wichford
ordinary shares following publication of this announcement.
- Since the Merger would be classified as a reverse takeover under the
Listing Rules of the UKLA, applications would need to be made to the UKLA
and the LSE for the ordinary shares of the Enlarged Company to be admitted
to the Official List and to trading on the LSE respectively. A prospectus
would be required to be published in relation to the application for
admission to the Official List. The eligibility of the Enlarged Company has
not yet been agreed with the UKLA.
- The Merger is also conditional on Takeover Panel consent to a waiver of
Rule 9 of the Takeover Code and associated Wichford ordinary resolution (on
which Redefine and its affiliates cannot vote) given Redefine Properties
International`s shareholding in the Enlarged Company would exceed 29.9 per
cent.
- The Enlarged Company would change its name to Redefine International plc.
Further Information regarding the Wichford Strategic Review
- The Board of Wichford announced on 15 November 2010 that it had retained
Rothschild to conduct a strategic review of Wichford`s options. The
strategic review has been completed and the Board of Wichford believes that
pursuing a combination with Redefine on the proposed terms is in the best
interests of Wichford`s shareholders.
- The review of options by the Board of Wichford covered, inter alia, a
liquidation strategy, de-leveraging through asset sales, a fundamental
change in the management and structural arrangements of Wichford, an equity
issuance to assist with the refinancing of the Delta and Gamma facilities
which mature in October 2012, a CMBS restructuring facilitated through the
servicer of the Windermere CMBS conduits, and a merger with Redefine
coupled with a capital raising. Although each of these strategies
individually may have merit, and some could be pursued by the Enlarged
Company post merger, the Board of Wichford considers that the merger of
Redefine and Wichford would provide a stronger basis from which to pursue
such strategies, as well as a supportive and well-capitalised major
shareholder to facilitate the capital raising that may be required.
- The Board of Wichford has previously announced that it would consider an
orderly exit from Wichford`s Continental European assets. Wichford is
continuing to explore options to exit these assets, including but not
limited to a sale of the VBG portfolio. As at 30 September 2010, the VBG
portfolio, which is financed with non-recourse debt facilities, had a
negative net asset value position of approximately 2.1 pence per share
which was consolidated into Wichford`s financial statements.
Enquiries:
Wichford Redefine
Philippe de Nicolay, Chairman Gavin Tipper, Chairman
Tel: +55 (11) 9636 7979 Tel: +27 (0) 21 683 3829
Rothschild (Financial Adviser to Deutsche Bank (Financial Adviser and
Wichford) Corporate Broker to Redefine)
Duncan Wilmer, Indy Flore Omar Faruqui, Ben Lawrence
Tel: +44 (0) 20 7280 5000 Tel: +44 (0) 20 7545 8000
Evolution Securities (Joint Singer Capital (Nominated Adviser to
corporate broker to Wichford) Redefine)
Chris Sim, Jeremy Ellis Jeff Keating
Tel: +44 (0) 20 7071 4300 Tel: +44 (0) 20 3205 7500
Peel Hunt (Joint corporate broker to
Wichford)
Capel Irwin, Nicholas Marren, Hugh
Preston
Tel: +44 (0) 20 7418 8900
Citigate Dewe Rogerson (Public
Relations adviser to Wichford)
George Cazenove, Kate Lehane
Tel: +44 (0) 20 7638 9571
About Redefine
Redefine is a diversified, income-focused property investment company quoted on
AIM with a market capitalisation of approximately GBP213 million and gross
assets of GBP428 million (comprising a diverse commercial portfolio of UK and
European assets, including shopping centres and hotels). It currently holds
approximately 21.7 per cent. shareholding in Wichford. Redefine`s ultimate
parent company, Redefine Properties Limited, which is listed on the JSE,
indirectly owns a shareholding in Wichford Property Management Limited,
Wichford`s property manager. Further information about Redefine, including
public announcements and financial results, is available on Redefine`s website
at http://www. redefineinternational.je/.
About Wichford
Wichford is a property investment company quoted on the LSE with a market
capitalisation of approximately GBP71 million and gross assets of GBP627 million
comprising a portfolio focused on investment property occupied primarily by
Central and State Government bodies. Over three quarters of the portfolio
comprises public sector rented properties in the UK with the remainder in
Germany and the Netherlands.
As at 30 September 2010, Wichford owned 81 properties in the UK and Continental
Europe (five in Germany and one in The Netherlands) totalling 350,000 square
metres (3.8 million square feet), valued by external valuers at GBP573.5
million.
Summary of Wichford`s debt facilities as at 30 September 2010
Facility Delta Gamma Zeta Halle Hague VBG1 VBG2
Maturity Oct-12 Oct-12 May-13 Apr-14 Jul-14 Jan-12 Apr-11
Currency GBP GBP GBP Euro Euro Euro Euro
Principal 114.6 199.7 46 37.1 21.9 67.1 53.6
Swap rate 4.95% 4.77% 2.73% 4.20% 4.89% 2.5% cap 3.93%
Margin 0.75% 0.75% 1.15% 0.85% 2.30% 1.10% 1.10%
Total Interest 5.69% 5.52% 3.88% 5.05% 7.19% Variable 5.03%
LTV (covenant) na na 65% na na na* na*
LTV (actual) 90% 90% 59% 96% 93% 124% 128%
ICR (covenant) 125% 115% 140% 140% na 120% 115%
ICR (last actual) 135% 155% 361% 172% 149% 229% 170%
WAULT (covenant) 4.5 6 na na na na na
WAULT (latest) 9.3 9.3 6 na na na na
*note: VBG1 and VBG2 LTV covenants waived - previously 85% and 86% respectively
IMPORTANT NOTICES
THIS ANNOUNCEMENT DOES NOT CONSTITUTE, OR FORM PART OF, AN OFFER OR INVITATION
TO PURCHASE ANY SECURITIES AND DOES NOT AMOUNT TO A FIRM INTENTION TO MAKE AN
OFFER. THERE IS NO CERTAINTY THAT ANY OFFER WILL BE MADE EVEN IF THE PRE-
CONDITIONS ARE SATISFIED OR WAIVED. THIS ANNOUNCEMENT HAS BEEN PREPARED IN
ACCORDANCE WITH ENGLISH LAW AND THE TAKEOVER CODE AND INFORMATION DISCLOSED MAY
NOT BE THE SAME AS THAT WHICH WOULD HAVE BEEN PREPARED IN ACCORDANCE WITH THE
LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED KINGDOM.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law. Persons who are not resident in the
United Kingdom or who are subject to other jurisdictions should inform
themselves of, and observe, any applicable requirements.
N M Rothschild & Sons plc ("Rothschild"), which is authorised and regulated in
the United Kingdom by The Financial Services Authority is acting exclusively for
Wichford and no-one else in connection with the Merger and accordingly will not
be responsible to anyone other than Wichford for providing the protections
afforded to clients of Rothschild nor for providing advice in relation to the
matters described in this announcement.
Evolution Securities Limited ("Evolution"), which is authorised and regulated in
the United Kingdom by The Financial Services Authority is acting exclusively for
Wichford and no-one else in connection with the Merger and accordingly will not
be responsible to anyone other than Wichford for providing the protections
afforded to clients of Evolution nor for providing advice in relation to the
matters described in this announcement.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United
Kingdom by The Financial Services Authority is acting exclusively for Wichford
and no-one else in connection with the Merger and accordingly will not be
responsible to anyone other than Wichford for providing the protections afforded
to clients of Peel Hunt nor for providing advice in relation to the matters
described in this announcement.
Deutsche Bank AG is authorised under German Banking Law (competent authority:
BaFin - Federal Financial Supervisory Authority) and authorised and subject to
limited regulation in the United Kingdom by the Financial Services Authority.
Details about the extent of Deutsche Bank AG`s authorisation and regulation by
the Financial Services Authority are available on request. Deutsche Bank AG,
London Branch is acting as financial adviser to Redefine and no one else in
connection with the Merger and will not be responsible to anyone other than
Redefine for providing the protections afforded to clients of Deutsche Bank AG,
London Branch nor for providing advice in relation to any matter referred to
herein.
Singer Capital Markets ("Singer"), which is authorised and regulated in the
United Kingdom by The Financial Services Authority is acting exclusively for
Redefine and no-one else in connection with the Merger and accordingly will not
be responsible to anyone other than Redefine for providing the protections
afforded to clients of Singer nor for providing advice in relation to the
matters described in this announcement.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any paper offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any paper offeror is
first identified. An Opening Position Disclosure must contain details of the
person`s interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any paper
offeror (s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th business day following the
announcement in which any paper offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a paper offeror
prior to the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1per cent. or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any paper
offeror. A Dealing Disclosure must contain details of the dealing concerned and
of the person`s interests and short positions in, and rights to subscribe for,
any relevant securities of each of (i) the offeree company and (ii) any paper
offeror, save to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must
be made by no later than 3.30 pm (London time) on the business day following the
date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a paper offeror, they will be deemed to be a
single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see Rules 8.1,
8.2 and 8.4). Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing Disclosures must be
made can be found in the Disclosure Table on the Takeover Panel`s website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to make
an Opening Position Disclosure or a Dealing Disclosure, you should contact the
Panel`s Market Surveillance Unit on +44 (0)20 7638 0129.
Publication on Website
A copy of this announcement will be available at
http://www.redefineinternational.je/proposed_merger.html and at
www.wichford.com.
The content of the websites referred to in this announcement are not
incorporated into and do not form part of this announcement.
Rule 2.10
The following information is given in accordance with Rule 2.10 of the Takeover
Code.
Wichford has in issue a total of 1,062,095,584 Wichford Shares the ISIN for
which is GB00B01V9H13. It is not currently expected that any Wichford Shares
would be issuable under the management agreement between Wichford and Wichford
Property Management Limited, the external property management company which
manages Wichford and which is an affiliate of Redefine. The Wichford Shares are
admitted to trading on the Official List of the London Stock Exchange.
Redefine has in issue 412,898,995 Redefine Shares the ISIN for which is
GB00B13PT348. The Redefine Shares are admitted to trading on AIM and are listed
on the London Stock Exchange.
Neither Wichford nor Redefine hold any shares in treasury.
Cautionary and Forward-Looking Statements
Certain statements in this announcement are forward-looking statements with
respect to (amongst other things) the financial condition, results of operations
and business of Wichford and Redefine and certain plans and objectives of both
companies. These forward-looking statements, without limitation, can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as `anticipate`,
`expect`, `estimate`, `intend`, `plan`, `goal`, `believe`, `will`, `may`,
`should`, `would`, `could` or other words of similar meaning. These statements
are based on assumptions and assessments made by the respective Boards in light
of their experience and their perception of historical trends, current
conditions, expected future developments and other factors they believe
appropriate. By their nature, forward-looking statements involve a number of
risks, uncertainties or assumptions that could cause actual results or events to
differ materially from those expressed or implied by the forward-looking
statements. These risks, uncertainties or assumptions could adversely affect the
outcome and financial effects of the plans and events described in this
announcement. Forward-looking 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. You should not place
undue reliance on forward-looking statements, which speak only as of the date of
this Announcement. Except as required by the London Stock Exchange, the Takeover
Code or by law, the Boards of both Redefine and Wichford are under no obligation
to update or keep current the forward-looking statements contained in this
Announcement or other forward-looking statements it may make or to correct any
inaccuracies which may become apparent in such forward-looking statements.
No statement in this announcement is intended as a profit forecast or profit
estimate and no statement in this Announcement should be interpreted to mean
that the future earnings per share of the Enlarged Company, Redefine and/or
Wichford for current or future financial years will necessarily match or exceed
the historical or published earnings per share of Redefine or Wichford.
APPENDIX I
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated:
- the financial information concerning Wichford has been extracted or
derived without adjustment from the Wichford audited annual report and
accounts for Wichford of the year ended 30 September 2010;
- the financial information concerning Redefine has been extracted or
derived without adjustment from the Redefine audited annual report and
accounts for Redefine of the year ended 31 August 2010; and
- all stated number of shares in issue and percentage calculations are
as at 22 March 2011.
2. As at the close of business on 22 March 2011, being the last trading day
prior to the Announcement Date:
- Wichford had in issue 1,062,095,584 ordinary shares (being the number
of ordinary shares in issue according to Wichford`s total voting
rights announcement on 15 November 2010, as confirmed by Wichford).
The International Securities Identification Number for Wichford Shares
is GB00B01V9H13;
- Redefine had in issue 412,898,995 ordinary shares (being the number of
ordinary shares in issue following Redefine`s investment acquisition
of Kalihora Holdings Limited and issue of equity as confirmed and
announced by Redefine on 2 February 2011). The International
Securities Identification Number for Redefine Shares is GB00B13PT348;
and
- Redefine holds 230,772,000 ordinary shares in Wichford (being the
number of ordinary shares in issue according to Redefine`s
announcement on 15 November 2010, as confirmed by Redefine),
representing approximately 21.7 per cent. of the undiluted issued
share capital on 22 March 2011, being the last trading day prior to
this announcement.
3. On completion of the Merger:
- 2,972,872,764 new Wichford shares would be issued to Redefine
shareholders, calculated on the basis of:
(i) the number of issued ordinary Redefine shares referred to in paragraph
2 above; and
(ii) an exchange ratio of 7.2 Wichford shares for every Redefine share
4. On completion of the Merger, post cancellation of Redefine`s existing
shareholding in Wichford:
- 3,804,196,348 ordinary shares in the Enlarged Company would be issued
in aggregate to Wichford and Redefine shareholders, calculated on the
basis of:
(i) the total number of ordinary shares issued in Wichford referred to in
paragraph 2 above; plus
(ii) the total number of new Wichford shares issued to Redefine
shareholders referred to in paragraph 3 above; minus
(iii) Redefine`s existing holding of 230,772,000 ordinary shares in
Wichford referred to in paragraph 2 above which would be
cancelled.
- Redefine shareholders would hold approximately 78 per cent. of the issued
shares of the Enlarged Company, calculated on the basis of:
(i) 3,804,196,348 ordinary shares in the Enlarged Company issued in
aggregate as referred to above; and
(ii) the number of new Wichford shares issued to Redefine shareholders
referred to in paragraph 3 above.
- Wichford shareholders (other than Redefine as a shareholder in Wichford)
would hold approximately 22 per cent. of the issued shares of the Enlarged
Company, calculated on the basis of:
(i) 3,804,196,348 ordinary shares in the Enlarged Company issued in
aggregate as referred to above; and
(ii) the number of issued ordinary Wichford shares referred to in paragraph
2 above minus Redefine`s existing holding of 230,772,000 ordinary
shares in Wichford referred to in paragraph 2 above.
5. As at the close of business on 22 March 2011, being the last trading day
prior to the Announcement Date, Redefine is approximately 81.5 per cent.
owned by Redefine Properties International which is, in turn, approximately
57.2 per cent. owned by Redefine Properties.
6. On completion of the Merger, post cancellation of Redefine`s existing
shareholding in Wichford, Redefine Properties International would become
the majority shareholder in the Enlarged Company with a shareholding of
approximately 64 per cent., calculated on the basis of:
- Redefine`s shareholding of approximately 78 per cent. of the issued
shares of the Enlarged Company as referred to in paragraph 4;
multiplied by
- Redefine International Properties shareholding of approximately 81.5
per cent. in Redefine referred to in paragraph 5 above.
7. Market capitalisation of Redefine Properties based on an exchange rate of
approximately 11.29 Rand to GBP1.00 as at 22 March 2011.
8. Unless otherwise stated, all prices, closing prices and exchange rates for
Wichford and Redefine Shares are closing middle market quotations derived
from the Official List of the London Stock Exchange Daily, Datastream and
Bloomberg.
9. The implied offer price per Wichford share of approximately 7.2 pence is
calculated on the basis of:
(i) a Redefine share price of 51.5 pence on 22 March 2011, being the last
trading day prior to this announcement; and
(ii) an exchange ratio of 7.2 Wichford shares for every Redefine share.
10. The premium and discount calculations to the implied offer price per
Wichford share have been calculated by reference to:
- a price of approximately 6.7 pence per Wichford ordinary share, being
the closing price on 22 March 2011, the last business day prior to
announcement;
- the average closing price per Wichford ordinary share of approximately
7.0 pence for the one month period to 22 March 2011;
- last reported NAV as at 30 September 2010 of 5.56 pence per share; and
- last reported EPRA NAV as at 30 September 2010 of 8.67 pence per
share.
11. The implied offer price per Redefine share of approximately 48.2 pence is
calculated on the basis of:
(iii) a Wichford share price of approximately 6.7 pence on 22 March
2011, being the last trading day prior to this announcement; and
(iv) an exchange ratio of 7.2 Wichford shares for every Redefine share
12. The discount calculations to the implied offer price per Redefine Share
have been calculated by reference to:
- a price of 51.5 pence per Redefine ordinary share, being the closing
price on 22 March 2011, the last business day prior to the
Announcement Date; and
- the average closing price per Redefine ordinary share of approximately
53.6 pence for the one month period to 22 March 2011.
13. The negative net asset value on the VBG portfolio of 2.1 pence per share is
based on investment values, borrowings, derivative fair values and cash
balances withheld for amortisation as referenced in the full year to
September 2010 Results Presentation. "
23 March 2011
Sponsor to Redefine Properties International Limited
Java Capital
Date: 23/03/2011 10:16:01 Supplied by www.sharenet.co.za
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