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Holding in International Hotel Properties Limited increased to 74.1%
REDEFINE INTERNATIONAL P.L.C.
(Incorporated in the Isle of Man)
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
LEI: 2138006NHZUMMRYQ1745
ISIN: IM00B8BV8G91
(“RDI” or “the Company”)
HOLDING IN INTERNATIONAL HOTEL PROPERTIES LIMITED INCREASED TO 74.1%
- Earnings and NAV enhancing deal to deliver c.10% yield on equity at lower leverage -
Redefine International P.L.C., the FTSE 250 income focused UK REIT, announces that it has increased its
shareholding in International Hotel Properties Limited ("IHL") to 74.1%. Further to the announcement on
10 November 2017, the Company has today acquired a further 8,498,652 IHL shares from Redefine Properties
Limited (the “Acquisition”). The Acquisition increases the Company’s shareholding in IHL from 58.9% to
74.1%, with the remaining 25.9% being held by Tsogo Sun, South Africa’s largest hotel chain. The
Acquisition removes Redefine Properties Limited, the Company’s major shareholder, as a shareholder in IHL.
The Company has no further related investments with Redefine Properties Limited.
The additional IHL shares were acquired on the same terms as the Scheme of Arrangement, previously
announced, and will be settled through an issuance of 2,496,630 new ordinary shares (“New Shares”) in RDI
(representing 0.13% of the current issued share capital) and a cash payment of £7.5 million. This will result
in Redefine Properties Limited holding 559,415,576 shares in RDI, being 29.62%.
Application will be made for these New Shares to be admitted to the Premium Segment of the Official List
and to trading on the London Stock Exchange’s Main Market and to be listed on the JSE (“Admission”). The
above Acquisition constitutes a smaller related party transaction which falls within LR 11.1.10 R of the UK
Listing Rules. Settlement of the Acquisition and Admission of the New Shares, which will rank pari passu
with the existing ordinary shares in the Company, is expected to occur on 24 November 2017.
Following Admission, the Company's issued share capital will comprise 1,888,914,697 ordinary shares with
one voting right per share. No shares are held in Treasury. The total number of voting rights will be
1,888,914,697. This figure may be used by shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or a change to their interest in, the Company
under the Disclosure Guidance and Transparency Rules.
Mike Watters, CEO of RDI commented:
“This opportunistic acquisition enhances our exposure to nine limited service UK hotel assets with strong
trading records and supports our strategic priority of achieving greater scale through investing in the right
earnings enhancing opportunities.
Our diversified portfolio provides us the ability to invest in assets with strong property fundamentals across
sectors where we see the best growth prospects. The acquisition is in line with our hotel strategy, which is
centred around well located limited service hotels. The market outlook for this sector remains positive and the
strong brands represented in this portfolio, including Holiday Inn Express and Hilton, provide a defensive
position in any economic downturn.
Material cost savings will be generated through the delisting of IHL and the integration of the hotel assets into
our existing hotel portfolio and REIT status. Furthermore, and in line with our strategy to reduce leverage,
this portfolio is currently financed at 41.5% to value, which is comfortably below our medium-term target of
between 45.0% and 50.0% loan to value.”
For further information:
Redefine International P.L.C.
Mike Watters, Stephen Oakenfull Tel: +44 (0) 20 7811 0100
FTI Consulting
UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Ellie Sweeney Tel: +44 (0) 20 3727 1000
Instinctif Partners
SA Public Relations Adviser
Frederic Cornet, Lizelle du Toit Tel: +27 (0) 11 447 3030
Java Capital
JSE Sponsor Tel: +27 (0) 11 722 3050
17 November 2017
Note to editors:
Transaction details
On 26 October 2017, the Company acquired 5.0 million shares in IHL from Redefine Properties Limited in
consideration for the issue of 12.5 million new RDI shares (representing 0.7% of the Company's issued share
capital). This increased the Company’s interest in IHL from 17.2% to 26.2%.
On 13 November 2017, RDI completed the acquisition of an additional 29.34% shareholding in IHL, under a
scheme of arrangement and, post implementation of the scheme, a further 3.42% stake in IHL was acquired
from Redefine Properties Limited. A total of 45.9 million new RDI shares were issued as consideration for
the transactions, representing 2.49% of the Company’s issued share capital. This transaction resulted in the
Company’s interest in IHL increasing from 26.2% to a controlling interest of 58.9%.
Today, the Company acquired Redefine Properties Limited’s residual 15.2% holding in IHL on the same terms
as offered to minorities under the scheme of arrangement, taking the Company’s interest to 74.1%.
In total, an additional 56.9% interest in IHL has been acquired for a total consideration value of £31.8 million,
and has been settled through the issuance of 60.9 million new RDI shares (representing 3.3% of the Company’s
issued share capital) and a cash payment of £7.5 million.
The overall investment in IHL will be both earnings and NAV accretive and is expected to deliver a yield on
equity of over 10%.
IHL portfolio
The IHL portfolio comprises nine good quality UK hotels which were last valued in February 2017 at £104.4
million. The nine hotels complement RDI’s existing hotels portfolio.
Four of the hotels, valued at £29.0 million, are let on long term leases to Travelodge with an effective average
unexpired lease term of over 20 years. The Travelodge portfolio reflects a net initial yield of 5.3% and benefits
from five yearly uncapped CPI escalations providing attractive rental growth prospects in a higher inflationary
environment.
The remaining five hotels, valued at £75.4 million, will be managed by the Company's associate RedefineBDL
Hotel Group (“RBDL”), of which four hotels are franchised to Holiday Inn Express and one to Hampton by
Hilton. The hotels have a strong trading record and provide exposure to the Hampton by Hilton at Gatwick
airport, which is integrally linked to the airport terminal building, and the Holiday Inn Express, Edinburgh
which has shown strong growth since acquisition. The five franchised hotels are anticipated to deliver an
effective net initial yield of over 7.5%.
About RDI
RDI is a FTSE 250 UK Real Estate Investment Trust (UK-REIT) committed to becoming the UK’s leading
income focused REIT. The Company's income-led business model and strategic priorities are designed to offer
shareholders superior, sustainable and growing income returns, with a target growth in underlying earnings
per share of 3%-5% across the medium term.
Income sustainability is underpinned by a diversified portfolio and tenant base, with no overreliance on any
one sector or tenant, together with an efficient capital structure. The secure and growing income stream is
39% indexed and has a WAULT of 7.4 years to first break (8.5 years to expiry). This is complemented by an
average debt maturity of 7.3 years of which over 90% of interest costs are either fixed or capped. The Company
is focused on all aspects impacting shareholder distributions and reports one of the lowest cost ratios in the
industry whilst maintaining a low cost of debt. All figures as at 31 August 2017.
The Company owns properties independently valued at £1.5bn in the United Kingdom and Germany, Europe’s
two largest and most transparent property markets. RDI invests in assets with strong property fundamentals
spread across UK shopping centres, UK retail parks, UK offices, UK logistics, UK hotels and German retail.
RDI holds a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock
Exchange and is included within the FTSE 250, EPRA and GPR indices.
For more information on RDI, please refer to the Company’s website www.redefineinternational.com.
About RedefineBDL Hotel Group (“RBDL”)
RDI has a 30.4% holding in RBDL, the UK’s leading independent hotel management company and, following
the Acquisition, RBDL will operate 13 of the Company’s 18 hotel assets.
RBDL has an annual turnover under management in excess of £350 million, and manages 11,000 rooms across
75 branded and private label hotel properties, working in partnership with five of the most prestigious
international hotel brands, including IHG, Hilton, Accor, Marriott and Wyndham.
For more information on RBDL, please refer to the company’s website www.redefinebdl.com
Date: 17/11/2017 12:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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