Wrap Text
Recommended all-share offer by Hammerson plc for Intu Properties plc
Hammerson plc
(Incorporated in England and Wales)
(Company number 360632)
LSE share code: HMSO JSE share code: HMN
ISIN: GB0004065016
(“Hammerson” or “the Company”)
Recommended all-share offer by Hammerson plc for Intu Properties plc
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OR REGULATIONS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS
EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION
TO THE NEW HAMMERSON SHARES EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME
DOCUMENT, THE PROSPECTUS AND THE CIRCULAR WHICH ARE PROPOSED TO BE PUBLISHED IN DUE
COURSE.
FOR IMMEDIATE RELEASE
This Announcement contains inside information.
6 December 2017
The Boards of Hammerson plc (“Hammerson”) and Intu Properties plc (“Intu”) are pleased to announce that
they have reached agreement on the terms of a recommended all-share offer by Hammerson to acquire the
entire issued and to be issued share capital of Intu (the “Acquisition” to form the “Enlarged Group”).
The Boards of Hammerson and Intu believe that there is a compelling strategic rationale for the Acquisition,
which will bring together their high-quality retail property portfolios and their combined expertise to create
a leading European retail REIT with a strong income profile and superior growth prospects.
Both Boards believe that following the Acquisition, the Enlarged Group will be better placed to enhance its
position in its geographic markets and across its retail formats, with a more efficient and adaptable platform
allowing it to respond to fast changing consumer preferences and retail trends.
Hammerson and Intu believe that the Acquisition will:
- Create a £21 billion pan-European portfolio of high-quality retail and leisure destinations, with
enhanced exposure to high-growth markets and which will benefit from evolving consumer trends;
- Unlock growth and value creation opportunities for shareholders by bringing together
Hammerson’s and Intu's leading assets, which have strong fundamentals, under a superior
combined operating platform;
- Offer attractive growth prospects with exposure to two of Europe’s fastest growing economies of
Ireland and Spain and additional sources of capital to forge ahead with ambitions to expand the
Premium Outlets platform;
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- Provide the opportunity for significant rationalisation of the Enlarged Group’s property portfolio
through an anticipated disposal programme of at least £2 billion. This will both strengthen its
balance sheet and provide liquidity to reinvest in higher return opportunities;
- Allow the Enlarged Group to draw on its combined consumer know-how and apply both companies'
expertise in events, customer service and digital to drive footfall, delivering highly productive space
for retailers and attractive destinations for consumers;
- Allow the Enlarged Group to benefit from the intu brand and Intu's online experience;
- Bring opportunities to deploy Hammerson's strong track record in delivering successful
developments across an enlarged pipeline; and
- Provide opportunities to deliver synergy benefits through cost reductions and optimisation of the
Enlarged Group’s financing arrangements.
The Enlarged Group will be led by David Atkins, CEO, and Timon Drakesmith, CFO, will be called “Hammerson
plc”, and will harness the talent in both companies to optimise the benefits for shareholders of the Enlarged
Group.
David Tyler, the Chairman of Hammerson, will be the Chairman of the Enlarged Group. John Whittaker,
Deputy Chairman of Intu, will become Deputy Chairman of the Enlarged Group. John Strachan, Chairman of
Intu, will join the Board of the Enlarged Group as Senior Independent Director. The Enlarged Group overall
will have six directors nominated by Hammerson and four directors nominated by Intu.
Hammerson has received irrevocable undertakings or letters of intent from Intu Shareholders, including Peel
and the Intu Directors, to vote in favour of the Scheme at the Court Meeting and the resolutions proposed at
the Intu General Meeting in respect of 685,220,682 Intu Shares in aggregate, representing approximately
50.6 per cent. of Intu's issued share capital at close of business on 5 December 2017 (being the last Business
Day prior to the date of this Announcement).
Commenting on the Acquisition, David Tyler, Chairman of Hammerson, said:
“This transaction will deliver real value for shareholders. The financial strength of the Enlarged Group and its
strong leadership team will make it well-placed to take advantage of higher growth opportunities on a pan-
European scale."
David Atkins, Chief Executive of Hammerson, said:
“This marks an exciting milestone in the history of Hammerson. Bringing together the high-quality portfolios
of both companies establishes Hammerson as a larger, leading European retail REIT, enhances shareholder
returns and supports opportunities for long-term growth. The acquisition creates a leading pan-European
platform of desirable retail and leisure destinations which are better positioned to serve the needs of our
retailers, excite our customers and support our partners and communities. I hold Intu’s high-quality centres in
high regard and I look forward to working with a strengthened team to enhance the performance of our entire
portfolio.”
John Strachan, Chairman of Intu and proposed Senior Independent Director of the Enlarged Group, said:
"A combination of both Intu and Hammerson will create a more resilient, diversified and stronger group that
we believe will benefit all our stakeholders. Intu offers high-quality retail and leisure destinations in the UK
and Spain, which when merged with Hammerson’s own top-quality assets in the UK, in France and in Ireland,
present a highly attractive proposition for retailers and shoppers in Europe’s leading cities. I am proud of the
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financial and operational success that Intu’s management team has delivered and pleased to see that the intu
brand will continue.”
Analyst and investor presentation
Hammerson will host a conference call and webcast for investors and analysts at 9:00 a.m. (UK time) today
(6 December 2017) to discuss the Acquisition.
To participate in this conference call, please use the Access Code: 5333156 and the following dial in details:
Location Phone Number Location Phone Number
France +33 (0)1 76 77 22 57 United Kingdom +44 (0)330 336 9411
Ireland +353 (0)1 2465621 United States +1 720-543-0214
Netherlands +31 (0)20 703 8261
To access the webcast, please visit: https://edge.media-server.com/m6/p/3rwany96
Summary
- Under the terms of the Acquisition, Intu Shareholders will receive:
for each Intu Share: 0.475 New Hammerson Shares (the "Exchange Ratio")
- In arriving at the Exchange Ratio, Hammerson has taken into account a number of factors including
the published net asset values of each company, the recent share price performance of the two
companies, and the opportunity to combine two portfolios of high-quality retail properties with
good prospects for stronger combined growth, and to deliver cost and financing synergies.
- Based on the Closing Price of 534.5 pence per Hammerson Share on 5 December 2017 (being the
last Business Day before the date of this Announcement), the terms of the Acquisition represent:
- A value of approximately 253.9 pence per Intu Share, equivalent to £3.4 billion for the entire
issued and to be issued share capital of Intu;
- A premium of approximately 27.6 per cent. to the Closing Price of 199 pence per Intu Share on
5 December 2017 (being the last Business Day before the date of this Announcement);
- A premium of approximately 19.2 per cent. to the volume weighted average price of 213 pence
per Intu Share for the three month period ended on 5 December 2017 (being the last Business
Day before the date of this Announcement); and
- A premium of approximately 9.4 per cent. to the volume weighted average price of 232 pence
per Intu Share for the six month period ended on 5 December 2017 (being the last Business Day
before the date of this Announcement).
- The Acquisition will result in Hammerson Shareholders owning approximately 55 per cent. of the
issued share capital of the Enlarged Group and Intu Shareholders owning approximately 45 per
cent. of the issued share capital of the Enlarged Group (based on the fully diluted share capital of
Hammerson and the fully diluted share capital of Intu).
The Enlarged Group
- The Enlarged Group will draw on its broad expertise and harness the talent in both companies to
optimise the benefits for shareholders.
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- David Tyler, Chairman of Hammerson, will become Chairman of the Board of the Enlarged
Group;
- John Whittaker, Deputy Chairman of Intu, will become Deputy Chairman of the Enlarged Group;
- David Atkins, CEO of Hammerson, will become CEO and a director of the Enlarged Group;
- Timon Drakesmith, CFO of Hammerson, will become CFO and a director of the Enlarged Group;
- John Strachan, Chairman of Intu, will become Senior Independent Director of the Enlarged
Group; and
- the Board of the Enlarged Group will comprise six directors nominated by Hammerson and four
directors nominated by Intu.
- The Board of the Enlarged Group is expected to be in line with the UK Corporate Governance Code
and to have an effective balance of experience and diversity to guide the company to respond
effectively to external market dynamics.
- The Enlarged Group will be called “Hammerson plc” and will continue to utilise the “intu” consumer
brand within its shopping centre portfolio.
- Peel, which together with Cheeseden is expected to hold approximately 15 per cent. of the issued
share capital of the Enlarged Group at Completion, will enter into a Relationship Agreement with
the Enlarged Group effective from Completion, pursuant to which Peel will provide certain
undertakings in relation to supporting the Hammerson Board and maintaining its holding in the
Enlarged Group.
Synergies and financial benefits
- The Hammerson Board expects pre-tax synergies for the Enlarged Group to reach a run-rate of
approximately £25 million per annum by the end of the second year following Completion. It is
envisaged that the realisation of these quantified cost synergies will result in one-off integration
cash costs of approximately £40 million in aggregate.
- The pre-tax cost synergies, which are expected to originate from the cost bases of both Hammerson
and Intu, are to be derived from the rationalisation and streamlining of group and support
functions, including executive management, IT and digital platforms, and savings from reduced
premises costs and other corporate costs, such as professional services fees.
- In addition to these quantified cost synergies, the Hammerson Directors believe that there are
opportunities for further cost savings from operational efficiencies and refinancing.
- Hammerson expects the Acquisition to be accretive to earnings in the first full financial year
following Completion.
- The Hammerson Directors believe that the Acquisition will support Hammerson's positive like-for-
like net rental income growth through an enhanced combined operating platform.
- Hammerson anticipates that the dividend growth of the Enlarged Group will be at least in line with
Hammerson's historical dividend growth.
- Further details on synergies are set out in the Quantified Financial Benefits Statement in Appendix
4 to this Announcement, together with the reports from PricewaterhouseCoopers LLP,
Hammerson's reporting accountants, and Deutsche Bank, J.P. Morgan Cazenove and Lazard,
Hammerson's financial advisers.
Recommendations
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- The Intu Board, which has been so advised by Rothschild, BofA Merrill Lynch and UBS as to the
financial terms of the Acquisition, considers the terms of the Acquisition to be fair and reasonable.
In providing their advice to the Intu Board, Rothschild, BofA Merrill Lynch and UBS have taken into
account the commercial assessments of the Intu Board. In addition, the Intu Board believes that
the terms of the Acquisition are in the best interests of Intu Shareholders as a whole.
- Accordingly, the Intu Board intends unanimously to recommend that Intu Shareholders vote in
favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Intu General
Meeting which are to be convened to approve the Acquisition, as the Intu Directors have
irrevocably undertaken to do in respect of their own holdings of, in aggregate, 8,778,852 Intu
Shares, representing approximately 0.6 per cent. of the issued ordinary share capital of Intu on 5
December 2017 (being the last Business Day before the date of this Announcement).
- The Acquisition constitutes a Class 1 transaction for Hammerson for the purposes of the Listing
Rules. Accordingly, the Acquisition will be conditional on the approval of the Hammerson
Shareholders at the Hammerson General Meeting.
- The Hammerson Board considers the Acquisition to be in the best interests of Hammerson
Shareholders as a whole and intends unanimously to recommend that Hammerson Shareholders
vote in favour of the Hammerson Resolutions to be proposed at the Hammerson General Meeting
which is to be convened to approve the Acquisition, as the Hammerson Directors have irrevocably
undertaken to do in respect of their own holdings of, in aggregate, 1,402,494 Hammerson Shares
representing approximately 0.2 per cent. of the issued ordinary share capital of Hammerson on 5
December 2017 (being the last Business Day before the date of this Announcement).
- The Hammerson Board has received financial advice from Deutsche Bank, J.P. Morgan Cazenove
and Lazard in relation to the Acquisition. In providing their advice to the Hammerson Board,
Deutsche Bank, J.P. Morgan Cazenove and Lazard have taken into account the commercial
assessments of the Hammerson Board.
Shareholder support
- Hammerson has received irrevocable undertakings from Peel, Cheeseden and Crescent in respect
of 401,725,754 Intu Shares, and a letter of intent from Coronation in respect of 274,716,076 Intu
Shares, to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed
at the Intu General Meeting. When taken together with the irrevocable undertakings provided by
Intu’s Directors in respect of 8,778,852 Intu Shares, this represents total support in aggregate of
685,220,682 Intu Shares, representing 50.6 per cent. of Intu's issued share capital as at 5 December
2017 (being the last Business Day before the date of this Announcement).
- Hammerson has received irrevocable undertakings from Peel and Cheeseden in respect of
36,275,591 Hammerson Shares, and a letter of intent from Coronation in respect of 56,400,855
Hammerson Shares, to vote in favour of the resolutions to be proposed at the Hammerson General
Meeting. When taken together with the irrevocable undertakings provided by Hammerson’s
Directors in respect of 1,402,494 Hammerson Shares, this represents total support in aggregate of
94,078,940 Hammerson Shares, representing 11.9 per cent. of Hammerson's issued share capital
as at 5 December 2017 (being the last Business Day before the date of this Announcement).
General
- It is intended that the Acquisition will be implemented by way of a scheme of arrangement under
Part 26 of the Companies Act, further details of which are contained in the full text of this
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Announcement. Hammerson reserves the right to implement the Acquisition by way of a takeover
offer, subject to the Panel's consent and the terms of the Co-operation Agreement.
- The Acquisition is subject to, inter alia, the satisfaction or waiver of the Conditions set out in
Appendix 1 to this Announcement. The Acquisition is also subject to the further terms set out in
Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the
Scheme Document.
- The Scheme Document will contain full details of the Acquisition and notices of the Court Meeting
and Intu General Meeting, and will specify the action to be taken by Intu Shareholders. It is expected
that the Scheme Document will be dispatched to Intu Shareholders (together with the Forms of
Proxy) during or prior to April 2018.
- It is expected that the Prospectus, containing information about the New Hammerson Shares, will
be published at or around the same time as the Scheme Document is posted to Intu Shareholders.
It is also expected that the Hammerson Circular, containing details of the Acquisition and notice of
the Hammerson General Meeting, will be posted to Hammerson Shareholders at or around the
same time as the Scheme Document is posted to Intu Shareholders, with the Hammerson General
Meeting being held at or around the same time as the Intu General Meeting and the Court Meeting.
- The Scheme is expected to become Effective in Q4 2018, subject to the satisfaction or waiver of the
Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full
terms and conditions set out in the Scheme Document.
This summary should be read in conjunction with, and is subject to, the full text of the following
Announcement, including its Appendices. The Acquisition is subject to, inter alia, the satisfaction or waiver
of the Conditions set out in Appendix 1 to this Announcement. The Acquisition is also subject to the further
terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set
out in the Scheme Document. Appendix 2 to this Announcement contains the sources and bases of certain
information contained in this summary and the following Announcement. Appendix 3 to this
Announcement contains details of the irrevocable undertakings and letters of intent received by
Hammerson and by Intu. Appendix 4 to this Announcement contains the Quantified Financial Benefits
Statement, together with the reports from PricewaterhouseCoopers LLP, Hammerson’s reporting
accountants, and Deutsche Bank, J.P. Morgan Cazenove and Lazard, Hammerson's financial advisers, as
required under Rule 28.1(a) of the Code. Each of PricewaterhouseCoopers LLP, Deutsche Bank, J.P. Morgan
Cazenove and Lazard has given and not withdrawn its consent to the publication of its report in this
Announcement in the form and context in which it is included. Appendix 5 to this Announcement contains
the definitions of certain terms used in this summary and the following Announcement.
For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement contained in Appendix
4 to this Announcement is the responsibility of Hammerson and the Hammerson Directors. Any statement
of intention, belief or expectation for the Enlarged Group following the Effective Date is an intention, belief
or expectation of the Hammerson Directors and not of the Intu Directors.
The person responsible for making this Announcement is Sarah Booth, General Counsel and Company
Secretary.
Analyst and investor presentation
Hammerson will host a conference call and webcast for investors and analysts at 9:00 a.m. (UK time) today
(6 December 2017) to discuss the Acquisition.
To participate in this conference call, please use the Access Code: 5333156 and the following dial in details:
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Location Phone Number Location Phone Number
France +33 (0)1 76 77 22 57 United Kingdom +44 (0)330 336 9411
Ireland +353 (0)1 2465621 United States +1 720-543-0214
Netherlands +31 (0)20 703 8261
To access the webcast, please visit: https://edge.media-server.com/m6/p/3rwany96
Enquiries:
Hammerson +44 20 7887 1000
David Atkins, CEO
Timon Drakesmith, CFO
Rebecca Patton, Head of Investor Relations
Lindsay Dunford, Head of Corporate Communications
Deutsche Bank (Financial Adviser and Corporate Broker to Hammerson) +44 (0)20 7545 8000
Charles Wilkinson
James Arculus
Rishi Bhuchar
Samantha Forbes (South Africa) +27 (0)11 775 7000
J.P. Morgan Cazenove (Financial Adviser and Corporate Broker to Hammerson) +44 (0)20 7742 4000
Edmund Byers
Massimo Saletti
Paul Hewlett
Adam Laursen
Lazard (Financial Adviser to Hammerson) +44 (0)20 7187 2000
William Rucker
Patrick Long
Max von Hurter
FTI Consulting (PR adviser to Hammerson) +44 (0)20 7979 7400
John Waples +44 7717 814 520
Dido Laurimore + 44 780 165 4424
Tom Gough +44 7583 863 025
Intu +44 (0)20 7960 1200
David Fischel, CEO
Matthew Roberts, CFO
Adrian Croft, Head of Investor Relations
Amanda Campbell, Communications Director
Rothschild (Lead Financial Adviser and Rule 3 Adviser to Intu) +44 (0)20 7280 5000
Alex Midgen
Robert Waddingham
Sam Green
BofA Merrill Lynch (Joint Financial Adviser, Corporate Broker and +44 (0) 20 7628 1000
Rule 3 Adviser to Intu)
Simon Mackenzie-Smith
Ed Peel
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Geoff Iles
UBS (Joint Financial Adviser, Corporate Broker and Rule 3 Adviser to Intu) +44 (0)20 7568 0000
Hew Glyn Davies
Thomas Raynsford
Aadhar Patel
Powerscourt (PR adviser to Intu) +44 (0)20 7250 1446
Victoria Palmer-Moore
Justin Griffiths
Instinctif Partners (PR adviser to Intu) +27 (0)11 447 3030
Frédéric Cornet
Herbert Smith Freehills LLP is acting as legal adviser to Hammerson. Linklaters LLP is acting as legal adviser to
Intu.
This Announcement is for information purposes only and is not intended to and does not constitute, or form
part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for or otherwise acquire or
dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. This Announcement does not constitute a prospectus or a prospectus
equivalent document.
The Acquisition will be made solely pursuant to the terms of the Scheme Document, which, together with the
forms of proxy, will contain the full terms and conditions of the Scheme, including details of how to vote in
respect of the Acquisition. Any decision in respect of, or other response to, the Acquisition by Intu Shareholders
should be made only on the basis of the information contained in the Scheme Document.
This Announcement has been prepared for the purpose of complying with English law and the Takeover Code
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 jurisdictions outside the
United Kingdom.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel, the London
Stock Exchange, the FCA and the UK Listing Authority.
Intu will prepare the Scheme Document to be distributed to the Intu Shareholders and Hammerson will prepare
the Hammerson Circular to be distributed to Hammerson Shareholders and will also publish the Hammerson
Prospectus containing information about the New Hammerson Shares. Hammerson urges Intu Shareholders
to read the Scheme Document and the Hammerson Prospectus carefully when they become available because
they will contain important information in relation to the Acquisition and the New Hammerson Shares.
Hammerson urges Hammerson Shareholders to read the Hammerson Circular carefully when it becomes
available because it will contain important information in relation to the Acquisition and the New Hammerson
Shares. Any vote in respect of the resolutions to be proposed at the Court Meeting, the Intu General Meeting
or the Hammerson General Meeting to approve the Acquisition and related matters, should be made only on
the basis of the information contained in the Scheme Document, the Hammerson Prospectus and, in the case
of Hammerson Shareholders, the Hammerson Circular.
Please be aware that addresses, electronic addresses and certain other information provided by Intu
Shareholders, persons with information rights and other relevant persons in connection with the receipt of
communications from Intu may be provided to Hammerson during the offer period as required under Section
4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
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Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank)
and, in the United Kingdom, by the Prudential Regulation Authority. It is subject to supervision by the European
Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority, and is subject to limited
regulation in the United Kingdom by the Prudential Regulation Authority and FCA. Details about the extent of
its authorisation and regulation by the Prudential Regulation Authority, and regulation by the FCA, are
available on request or from www.db.com/en/content/eu_disclosures.htm. Deutsche Bank AG, acting through
its London branch (“DB London”) is acting as financial adviser and corporate broker to Hammerson and no
other person in connection with this Announcement or any of its contents. DB London will not be responsible
to any person other than Hammerson for providing any of the protections afforded to clients of DB London,
nor for providing any advice in relation to the Acquisition or any other matter referred to herein. Neither DB
London nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct
or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of DB
London in connection with this Announcement, any statement contained herein or otherwise.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove, is
authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation
Authority in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to
Hammerson and no one else in connection with the matters set out in this Announcement and will not regard
any other person as its client in relation to the matters set out in this Announcement and will not be responsible
to anyone other than Hammerson for providing the protections afforded to clients of J.P. Morgan Cazenove
or its affiliates, or for providing advice in relation to the contents of this Announcement or any other matter
referred to herein.
Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively
as financial adviser to Hammerson and no one else in connection with the Acquisition and will not be
responsible to anyone other than Hammerson for providing the protections afforded to clients of Lazard &
Co., Limited nor for providing advice in relation to the Acquisition or any other matters referred to in this
Announcement. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Lazard & Co., Limited in connection with this Announcement, any
statement contained herein or otherwise.
N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated by the FCA in the United
Kingdom, is acting exclusively for Intu and for no one else in connection with the subject matter of this
Announcement and will not be responsible to anyone other than Intu for providing the protections afforded
to its clients or for providing advice in connection with the subject matter of this Announcement.
BofA Merrill Lynch, which is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for
Intu and no one else in connection with the subject matter of this announcement and will not be responsible
to anyone other than Intu for providing the protections afforded to its clients or for providing advice in
connection with the subject matter of this announcement.
UBS Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as corporate
broker and financial adviser to Intu and no one else in connection with the Offer. In connection with such
matters, UBS Limited, its affiliates and their respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in relation to the Offer, the contents of this
Announcement or any other matter referred to herein.
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Overseas jurisdictions
The availability of the New Hammerson Shares in, and the release, publication or distribution of this
Announcement in or into, jurisdictions other than the United Kingdom may be restricted by law and therefore
persons into whose possession this Announcement comes who are not resident in the United Kingdom should
inform themselves about, and observe, any applicable restrictions. Intu Shareholders who are in any doubt
regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without
delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such
jurisdiction.
This Announcement has been prepared for the purposes of complying with English law and the Code 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 of jurisdictions outside the United Kingdom.
Notes to US investors in Intu
Shareholders in the United States should note that the Acquisition relates to the shares of an English company
and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, the
law of England and Wales. Neither the proxy solicitation nor the tender offer rules under the US Securities
Exchange Act of 1934, as amended, (the “US Exchange Act”) will apply to the Scheme. Moreover the Scheme
will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement,
which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules.
However, if Hammerson were to elect to implement the Acquisition by means of a takeover offer, such
takeover offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of
the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by
Hammerson and no one else. In addition to any such takeover offer, Hammerson, certain affiliated companies
and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase,
shares in Intu outside such takeover offer during the period in which such takeover offer would remain open
for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside
the United States and would comply with applicable law, including the US Exchange Act. Any information
about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information
Service of the UK Listing Authority and will be available on the London Stock Exchange website at
www.londonstockexchange.com.
Financial information included in this Announcement and the Scheme Document and the Prospectus has been
or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable
to financial information of US companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the United States.
Intu and Hammerson are each organised under the laws of England and Wales. All of the officers and directors
of Intu and Hammerson are residents of countries other than the United States. It may not be possible to sue
Intu and Hammerson in a non-US court for violations of US securities laws. It may be difficult to compel Intu,
Hammerson and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.
Notes regarding New Hammerson Shares
The New Hammerson Shares to be issued pursuant to the Scheme have not been and will not be registered
under the US Securities Act of 1933 (as amended) (the “US Securities Act”) or under the relevant securities
laws of any state or territory or other jurisdiction of the United States or the relevant securities laws of Japan
and the relevant clearances have not been, and will not be, obtained from the securities commission of any
province of Canada. No prospectus in relation to the New Hammerson Shares has been, or will be, lodged
with, or registered by, the Australian Securities and Investments Commission. Accordingly, the New
Hammerson Shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or
indirectly in or into the United States, Canada, Australia or Japan or any other jurisdiction if to do so would
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constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant
to an exemption, if available, from any applicable registration requirements or otherwise in compliance with
all applicable laws).
It is expected that the New Hammerson Shares will be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by Section 3(a)(10) thereof.
Rule 2.9 information
In accordance with Rule 2.9 of the Code, Hammerson confirms that, as at close of business on 5 December
2017, being the last Business Day before the date of this Announcement, it has 793,226,418 ordinary shares
of £0.25 each in issue and admitted to trading on the London Stock Exchange. Hammerson currently holds no
ordinary shares in treasury.
In accordance with Rule 2.9 of the Code, Intu confirms that, as at close of business on 5 December 2017, being
the last Business Day before the date of this Announcement, it has 1,355,040,243 ordinary shares of £0.50
each in issue and admitted to trading on the London Stock Exchange. Intu currently holds no ordinary shares
in treasury. In addition, Intu has: (i) £160,400,000 Intu Convertible Bonds due 2018 listed on the London Stock
Exchange (Professional Securities Market); and (ii) £375,000,000 Intu Convertible Bonds due 2022 listed on
the International Stock Exchange and Open Market of the Frankfurt Stock Exchange. The Intu Convertible
Bonds due 2018 and the Intu Convertible Bonds due 2022 are each convertible into fully paid ordinary shares
of 50 pence each in the capital of Intu. The International Securities Identification Number for the Intu
Convertible Bonds due 2018 is XS0834486796 and the International Securities Identification Number for the
Intu Convertible Bonds due 2022 is XS1511910025.
Disclosure requirements
Under Rule 8.3(a) of the 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 securities exchange 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 securities exchange 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 securities exchange 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 p.m. (London time)
on the 10th business day following the commencement of the offer period and, if appropriate, by no later than
3.30 p.m. (London time) on the 10th business day following the Announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of
relevant securities of the offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange
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 securities exchange offeror(s), 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 p.m. (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 securities exchange offeror,
they will be deemed to be a single person for the purpose of Rule 8.3.
11
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. You should contact the
Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure.
Forward-looking statements
This Announcement contains certain forward-looking statements, beliefs or opinions, with respect to the
financial condition, results of operations and business of Hammerson and Intu. These forward-looking
statements 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”, “target”, “expect”, “estimate”, “intend”, “plan”,
“goal”, “believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other words of
similar meaning. These statements are based on assumptions and assessments made by Intu, and/or
Hammerson, in light of their experience and their perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their nature, forward-looking statements involve
risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future
and the factors described in the context of such forward-looking statements in this document could cause
actual results and developments to differ materially from those expressed in or implied by such forward-
looking statements. Although it is believed that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations will prove to have been correct and you are
therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at
the date of this Announcement. Neither Intu nor Hammerson assumes any obligation to update or correct the
information contained in this section of the website (whether as a result of new information, future events or
otherwise), except as required by applicable law.
THERE ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING
STATEMENTS ARE CHANGES IN GLOBAL, POLITICAL, ECONOMIC, BUSINESS, COMPETITIVE, MARKET AND
REGULATORY FORCES, FUTURE EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly,
figures shown for the same category presented in different tables may vary slightly and figures shown as totals
in certain tables may not be an arithmetic aggregation of the figures that precede them.
No Profit Forecasts or Estimates
No statement in this Announcement (including any statement of estimated synergies) is intended as a profit
forecast or estimate for any period and no statement in this Announcement should be interpreted to mean
that earnings or earnings per share or dividend per share for Hammerson, Intu or the Enlarged Group, as
appropriate, for the current or future financial years would necessarily match or exceed the historical
published earnings or earnings per share or dividend per share for Hammerson, Intu or the Enlarged Group as
appropriate.
Quantified Financial Benefits Statement
12
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances
which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject
to consultation with employees or their representatives. The synergies and cost savings referred to may not
be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially
different from those estimated. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits
Statement contained in this Announcement is the responsibility of Hammerson and the Hammerson Directors.
Publication of this Announcement
A copy of this Announcement will be available on Hammerson's website at www.hammerson.com/investors
and Intu's website at www.intugroup.co.uk by no later than 12 noon (London time) on 7 December 2017 (being
the first Business Day following the day of this Announcement).
The contents of Hammerson's website and Intu's website are not incorporated into and do not form part of
this Announcement.
Hammerson Shareholders may request a hard copy of this Announcement by contacting Link Asset Services
during business hours on +44 (0) 20 3367 8200 (or, in the case of shareholders resident in South Africa,
Computershare Investor Services on +27 (0) 86 110 0950) or by submitting a request in writing to Link Asset
Services at 6th Floor, 65 Gresham Street, London EC2V 7NQ (or, in the case of shareholders resident in South
Africa, Computershare Investor Services at PO Box 61051, Marshalltown, 2107, South Africa). If you have
received this Announcement in electronic form, copies of this Announcement and any document or
information incorporated by reference into this document will not be provided unless such a request is made.
Hammerson Shareholders may also request that all future documents, announcements and information to be
sent to them in relation to the Acquisition should be in hard copy form.
Intu Shareholders may request a hard copy of this Announcement by contacting Link Asset Services during
business hours on +44 (0) 371 664 0300 (or, in the case of shareholders resident in South Africa, Terbium
Financial Services on +27 (0) 86 010 4191) or by submitting a request in writing to Link Asset Services at 6th
Floor, 65 Gresham Street, London EC2V 7NQ (or, in the case of shareholders resident in South Africa, Terbium
Financial Services at PO Box 61272, Marshalltown, 2107, South Africa). If you have received this
Announcement in electronic form, copies of this Announcement and any document or information
incorporated by reference into this document will not be provided unless such a request is made. Intu
Shareholders may also request that all future documents, announcements and information to be sent to them
in relation to the Acquisition should be in hard copy form.
If you are in any doubt about the contents of this Announcement or the action you should take, you are
recommended to seek your own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
International Securities Identification Number and Legal Entity Identifier ("LEI")
The International Securities Identification Number for Hammerson's ordinary shares is GB0004065016 and
Hammerson's LEI number is 213800G1C9KKVVDN1A60.
The International Securities Identification Number for Intu's ordinary shares is GB0006834344 and Intu’s LEI
number is 213800JSNTERD5CJZO95.
13
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OR REGULATIONS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS
EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION
TO THE NEW HAMMERSON SHARES EXCEPT ON THE BASIS OF THE INFORMATION IN THE SCHEME
DOCUMENT, THE PROSPECTUS AND THE CIRCULAR WHICH ARE PROPOSED TO BE PUBLISHED IN DUE
COURSE.
FOR IMMEDIATE RELEASE
This Announcement contains inside information.
6 December 2017
Recommended all-share offer
By
Hammerson plc for Intu Properties plc
1. Introduction
The Boards of Hammerson and Intu are pleased to announce that they have reached agreement on the terms
of a recommended all-share offer by Hammerson to acquire the entire issued and to be issued share capital
of Intu, to be effected by way of a court-sanctioned scheme of arrangement of Intu under Part 26 of the
Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which will be conditional on the Conditions set out in Appendix 1 to this
Announcement, and subject to full terms and conditions which will be set out in the Scheme Document, Intu
Shareholders will be entitled to receive:
for each Intu Share: 0.475 New Hammerson Shares
Based on the Closing Price of 534.5 pence per Hammerson Share on 5 December 2017 (being the last Business
Day before the date of this Announcement), the terms of the Acquisition represent:
- a value of approximately 253.9 pence per Intu Share, equivalent to £3.4 billion for the entire issued
and to be issued share capital of Intu;
- a premium of approximately 27.6 per cent. to the Closing Price of 199 pence per Intu Share on 5
December 2017 (being the last Business Day before the date of this Announcement);
- a premium of approximately 19.2 per cent. to the volume weighted average price of 213 pence per
Intu Share for the three month period ended on 5 December 2017 (being the last Business Day
before the date of this Announcement); and
- a premium of approximately 9.4 per cent. to the volume weighted average price of 232 pence per
Intu Share for the six month period ended on 5 December 2017 (being the last Business Day before
the date of this Announcement).
In arriving at the Exchange Ratio, Hammerson has taken into account a number of factors including the
published net asset values of each company, the recent share price performance of the two companies, and
the opportunity to combine two portfolios of high-quality retail properties with good prospects for stronger
combined growth, and to deliver cost and financing synergies.
14
The Acquisition will result in Hammerson Shareholders owning approximately 55 per cent. of the issued share
capital of the Enlarged Group and Intu Shareholders owning approximately 45 per cent. of the issued share
capital of the Enlarged Group (based on the fully diluted share capital of Hammerson and the fully diluted
share capital of Intu).
It is intended that the Acquisition will be implemented by means of a court-sanctioned scheme of
arrangement of Intu under Part 26 of the Companies Act, further details of which are contained in paragraph
14 below.
The New Hammerson Shares will be issued credited as fully paid and will rank pari passu in all respects with
the Hammerson Shares in issue at the time the New Hammerson Shares are issued, including the right to
receive and retain dividends and other distributions declared, made or paid by reference to a record date
falling after the Scheme Record Time. Application will be made to the UK Listing Authority and to the London
Stock Exchange for the New Hammerson Shares to be admitted to the premium segment of the Official List
of the UK Listing Authority and to trading on the Main Market. Application will also be made for the New
Hammerson Shares to be admitted to trading, as a secondary (inward) listing, on the main board of the JSE.
The Intu Shares will be acquired pursuant to the Acquisition fully paid and free from all liens, equitable
interests, charges, encumbrances, rights of pre-emption and other third party rights of any nature
whatsoever and together with all rights attaching to them as at the date of this Announcement or
subsequently attaching or accruing to them, save for the Permitted Dividends.
3. Background to and reasons for the Acquisition
The Boards of Hammerson and Intu believe that there is a compelling strategic rationale for the Acquisition,
which will bring together their high-quality retail property portfolios and their combined expertise to create
a leading European retail REIT with a strong income profile and superior growth prospects.
Both Boards believe that following the Acquisition, the Enlarged Group will be better placed to enhance its
position in its geographic markets and across its retail formats, with a more efficient and adaptable platform
allowing it to respond to fast changing consumer preferences and retail trends.
Creates a pan-European, leading portfolio of high-quality retail and leisure property, well positioned to
take advantage of evolving international consumer and retail trends
- Upon Completion, Hammerson will become a leading European retail REIT with GAV of
approximately £21 billion.
- In line with Hammerson’s strategy to focus on growing consumer markets, the Acquisition will
increase ownership of high-quality destination shopping centres including intu Trafford Centre,
Manchester; intu Lakeside, Essex; and intu Metrocentre, Gateshead.
- The Acquisition will create a larger, diversified, pan-European portfolio of retail destinations across
major growth cities and catchments more relevant to retailers expanding across Europe.
- The Acquisition will support Hammerson's positive like-for-like net rental income growth through
an enhanced combined operating platform.
Improved value creation opportunities through combining two high-quality portfolios under a superior
combined operating and development platform
- The Enlarged Group will be led by David Atkins, CEO, and Timon Drakesmith, CFO, ensuring
continuity of an existing high-performance track record.
15
- A depth of talent from across the Enlarged Group will adopt an enhanced operating and
development platform including:
- maintaining Hammerson’s rigorous focus on curating the best retailer and brand mix;
- applying combined expertise in delivering variety and innovation in food and beverage offering;
and;
- enlivening malls with engaging pop-ups and events and an improved digital experience.
- Management will apply an income-focused strategy across all assets in the Enlarged Group.
- Hammerson’s track record of successful development and expertise will be deployed across the
Enlarged Group’s development pipeline.
Enhanced growth prospects with attractive exposure to two of Europe’s fastest growing economies of
Ireland and Spain and sources of capital to forge ahead with ambitions to expand the Premium Outlets
platform
- Hammerson is the only European REIT with meaningful strategic investment in European Premium
Outlets; the Enlarged Group will have a deeper pool of capital to grow this faster.
- The addition of a portfolio in Spain is aligned with Hammerson’s strategy of focusing on growing
consumer markets and adds three new top Spanish shopping centres, as well as allowing retail
partners exposure to a new European market.
- The Enlarged Group will be in a better position to build out its attractive development pipeline in
the UK and Ireland and the significant Spanish development pipeline.
Provide significant opportunities for rationalisation and optimisation of the property portfolio and wider
business, strengthening the Enlarged Group’s balance sheet, as well as providing additional liquidity to
invest in higher growth opportunities
- The Enlarged Group allows for a larger capital recycling programme, in line with Hammerson’s
disciplined approach to portfolio allocation, to refine quality and create a more resilient and
adaptive business.
- Hammerson has carried out a detailed preliminary assessment of the combined portfolio and has
identified at least £2 billion of disposals from across both portfolios and primarily within the UK
which will be carried out over the short to medium term, further enhancing the quality of the
portfolio.
- The disposal programme is broadly in line with Hammerson's historic run-rate and will reduce
leverage, whilst the Enlarged Group will remain a sector leader in terms of size.
- The proceeds from disposals will provide financial flexibility to invest in higher return opportunities
in Spain, Ireland and Premium Outlets, and the Enlarged Group’s development pipeline.
Better positioned to apply its superior combined expertise and consumer know-how to drive footfall and
dwell-time, realise operational efficiencies and drive benefits for consumers, brands, retailers,
communities and shareholders
- Recognising the evolving role of retail and leisure destinations, the Enlarged Group will be better
positioned to invest meaningful resources into enhancing and differentiating its destinations
through events, customer services and improved digital capabilities.
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- The 'intu' brand has consistently produced a high net promoter score, to the benefit of shoppers
and retailers.
- Access to shared data and customer insights will further improve the Enlarged Group’s consumer
knowledge and help provide insights to retailers.
- The Enlarged Group will draw on its complementary digital strategies, including Intu's affiliate
website and Hammerson's bespoke apps, to deliver highly productive space that enables retailers
to succeed in its centres in a multichannel landscape.
Robust governance structure and breadth of new opportunities for employees
- Building on Hammerson’s highly-regarded governance credentials, the Enlarged Group expects to
have a Board composition in line with the UK Corporate Governance Code, with an effective balance
of experience and diversity to guide the Enlarged Group to respond effectively to external market
dynamics.
- Peel, which together with Cheeseden is expected to hold approximately 15 per cent. of the issued
share capital of the Enlarged Group at Completion, will enter into a Relationship Agreement with
the Enlarged Group effective from Completion, pursuant to which Peel will provide certain
undertakings in relation to supporting the Hammerson Board and maintaining its holding in the
Enlarged Group.
- The Enlarged Group will have a wide range of roles, and employees with a breadth of skills and
experiences, allowing for the creation of additional opportunities for employees of both
Hammerson and Intu. It is expected that as a result of the Acquisition, the Enlarged Group will be
able to provide exciting personal development and growth opportunities for employees.
Combined balance sheet strength and resilient financial profile
- Opportunity to optimise capital structure and cost of funding through adapting Intu's facilities to
Hammerson's cheaper and more flexible unsecured financing structure.
- The Hammerson Board expects the Enlarged Group to maintain its investment grade credit rating.
- Combined market capitalisation of approximately £6.9 billion which should increase shareholder
liquidity and result in the Enlarged Group achieving higher indices weightings.
- Hammerson financing policies to remain unchanged.
- Combined net debt of approximately £8.2 billion and LTV of approximately 41 per cent. as at 30
June 2017, adjusted for subsequent property acquisitions and disposals.
Deliver attractive financial benefits, reflecting the material synergy potential of the Acquisition
- Hammerson believes there is potential to achieve significant synergies across the Enlarged Group,
reflecting the complementary nature of the two businesses.
- The Hammerson Directors expect pre-tax cost synergies of approximately £25 million per annum
from the rationalising and streamlining of group and support functions, including executive
management, IT and digital platforms, and savings from reduced premises costs and other
corporate costs, such as professional services fees. It is expected that the synergies will achieve
such a run-rate by the end of the second year after Completion and there is an expected
implementation cost of approximately £40 million.
17
- In addition, the Hammerson Directors believe that there are opportunities for further cost savings,
including by capturing enhanced value opportunities through complementary asset management
capabilities as well as further synergies in time through the optimisation of the Enlarged Group’s
financing arrangements.
- The Acquisition is expected to be accretive to earnings in the first full financial year following
Completion.
- Hammerson anticipates that the dividend growth of the Enlarged Group will be at least in line with
Hammerson's historical dividend growth.
Summary
The Hammerson Board believes that the Acquisition represents a compelling opportunity for shareholders of
both Hammerson and Intu to benefit from the value creation that will arise from bringing together these two
highly complementary businesses.
Synergies
The Hammerson Board expects pre-tax synergies for the Enlarged Group to reach a run-rate of approximately
£25 million per annum by the end of the second year following Completion. It is envisaged that the realisation
of these quantified cost synergies will result in one-off integration cash costs of approximately £40 million in
aggregate.
The constituent elements of the quantified cost synergies, which are expected to originate from the cost
bases of both Hammerson and Intu, principally include:
O rationalisation of group and support functions including the executive management,
representing approximately 70 per cent. of the identified synergies;
O consolidation of IT and digital platforms, representing approximately 15 per cent. of the
identified synergies; and
O further savings from reduced premises costs and other corporate costs, such as
professional services fees, representing the remaining 15 per cent. of the identified
synergies.
In addition to these quantified cost synergies, the Hammerson Directors believe that there are opportunities
for further cost savings from operational efficiencies and refinancing.
Based on the analysis to date and aside from the one-off integration cash costs referred to above, the
Hammerson Directors do not expect material dis-synergies to arise in connection with the Acquisition.
These statements of identified synergies and estimated savings relate to future actions and circumstances
which by their nature involve risks, uncertainties and contingencies. As a consequence, the identified
synergies and estimated savings referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those estimated.
The identified synergies will accrue as a direct result of the Acquisition and would not be achieved on a
standalone basis.
Further information on the bases of belief supporting the Quantified Financial Benefits Statement, including
the principal assumptions and sources of information, is set out in Part A of Appendix 4 to this Announcement.
These estimated synergies have been reported on under the City Code by PricewaterhouseCoopers LLP, and
by Hammerson's financial advisers, Deutsche Bank, J.P. Morgan Cazenove and Lazard. Copies of their letters
18
are included in Parts B and C of Appendix 4. References in this Announcement to those estimated synergies
should be read in conjunction with those parts of Appendix 4.
4. Recommendations
The Intu Board, which has been so advised by Rothschild, BofA Merrill Lynch and UBS, considers the terms of
the Acquisition to be fair and reasonable. Rothschild, BofA Merrill Lynch and UBS are providing independent
financial advice to the Intu Board for the purposes of Rule 3 of the Code. In providing their financial advice,
Rothschild, BofA Merrill Lynch and UBS have taken into account the commercial assessments of the Intu
Board.
For the reasons summarised below, the Intu Board believes that the terms of the Acquisition are in the best
interests of Intu Shareholders as a whole and intends unanimously to recommend that Intu Shareholders
vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Intu General
Meeting which are to be convened to approve the Acquisition, as the Intu Directors have irrevocably
undertaken to do in respect of their own beneficial shareholdings in Intu which amount in aggregate to
8,778,852 Intu Shares, representing approximately 0.6 per cent. of the existing issued share capital of Intu on
5 December 2017 (being the Business Day immediately prior to the date of this Announcement). Further
details of the irrevocable undertakings are set out in Appendix 3 to this Announcement.
The Acquisition constitutes a Class 1 transaction for Hammerson for the purposes of the Listing Rules.
Accordingly, the Acquisition will be conditional on the approval of the Hammerson Shareholders at the
Hammerson General Meeting.
The Hammerson Board considers the Acquisition to be in the best interests of Hammerson and the
Hammerson Shareholders as a whole and unanimously intend to recommend that Hammerson Shareholders
vote in favour of the Hammerson Resolutions to be proposed at the Hammerson General Meeting which will
be convened in connection with the Acquisition, as the Hammerson Directors have irrevocably undertaken
to do, or procure, in respect of their own beneficial holdings of 1,402,494 Hammerson Shares representing,
in aggregate, approximately 0.2 per cent. of Hammerson’s ordinary share capital in issue on 5 December 2017
(being the Business Day immediately prior to the date of this Announcement).
The Hammerson Board has received financial advice from Deutsche Bank, J.P. Morgan Cazenove and Lazard
in relation to the Acquisition. In providing their advice to the Hammerson Board, Deutsche Bank, J.P. Morgan
Cazenove and Lazard have relied upon the Hammerson Directors' commercial assessments of the Acquisition.
Each of Deutsche Bank, J.P. Morgan Cazenove, and Lazard has given and not withdrawn its consent to the
inclusion in this Announcement of reference to its advice to the Hammerson Directors in the form and context
in which it appears.
Each of Rothschild, BofA Merrill Lynch and UBS have given and not withdrawn their consent to the inclusion
in this Announcement of reference to their advice to the Intu Directors in the form and context in which it
appears.
5. Background to and reasons for the Intu Recommendation
As a leading owner, manager and developer of shopping centres, Intu owns many of the UK's most popular
retail and leisure destinations, including centres such as intu Trafford Centre, intu Lakeside, intu Watford and
intu Eldon Square, and has a growing presence in Spain.
Intu's assets are managed with a view to delivering attractive long-term total property returns. The business
has strong, stable income streams from long-term lease structures, and benefits from development potential
and capital appreciation, which all deliver value for investors.
19
In recent years, Intu has been successfully recycling its capital into Spain and its UK development pipeline,
through divestments and introducing JV partners to its assets - more than £750 million of disposals in the last
two years (including the disposal of 50 per cent. of intu Chapelfield which remains subject to completion).
As a dynamic operator in an evolving retail environment, Intu understands the multichannel requirements
retailers need in order to flourish, and Intu takes an innovative approach to connecting retailer requirements
with customer demands with, for example, one of the UK’s only affiliate model shopping centre website.
The business continues to make progress against four key strategic priorities: optimising asset performance,
delivering UK developments, promoting the intu brand and seizing the growth opportunity in Spain.
Accordingly the Board of Intu believes that Intu remains well positioned to succeed as an independent
business.
However, the Board of Intu recognises that the efficiencies associated with greater scale, diversification, and
exposure to high-growth retail in other markets will improve its potential to succeed and deliver attractive
shareholder returns, especially in a fast changing retail environment. A combination with Hammerson,
resulting in Intu’s shareholders owning approximately 45 per cent. of the Enlarged Group, represents a
compelling opportunity to create an Enlarged Group capable of achieving significant strategic, financial and
operational benefits, including:
- Establishing a £21 billion pan-European portfolio of high-quality retail and leisure destinations, well
positioned to take advantage of evolving international consumer and retailer trends;
- Offering strong diversification benefits and growth prospects with exposure to two of Europe’s
fastest growing economies of Ireland and Spain and to the Premium Outlets platform;
- Unlocking further value creation opportunities through combining and optimising Intu’s and
Hammerson’s portfolios;
- Combined balance sheet strength and enhanced liquidity from potential disposals to reinvest in
higher growth opportunities and improvements to existing assets, and optimisation of the Enlarged
Group’s financing arrangements;
- Combining the superior experience, digital expertise and consumer know-how from both
management teams to drive footfall and dwell time to deliver highly productive and valuable retail
space and differentiated leisure destinations for consumers; and
- Providing significant opportunities to derive synergy benefits through cost reductions.
The Board of Intu believes that the terms of the Acquisition fairly reflect Intu and Hammerson’s respective
standalone businesses, prospects, balance sheet metrics and an appropriate sharing of the expected
synergies. In particular, the Board of Intu notes that the Exchange Ratio represents an exchange of Intu shares
for shares in the offeror at a level which is close to last reported 30-June-2017 EPRA NNNAV for both
companies.
Following consideration of the above factors, the Intu Directors believe that the terms of the Acquisition are
in the best interests of Intu Shareholders as a whole and unanimously intend to recommend that Intu
Shareholders vote in favour of the Acquisition.
6. Conditions
The Acquisition will be subject to the Conditions set out in Appendix 1 to this Announcement and to the full
terms and conditions set out in the Scheme Document, including, amongst other things: (i) approval by a
majority in number representing not less than 75 per cent. in value of the Intu Shareholders who are on the
register of members of Intu at the Scheme Voting Record Time, and are present and voting, whether in person
or by proxy, at the Scheme Court Meeting; (ii) the passing of all resolutions required to approve and
implement the Scheme and to approve certain related matters by the requisite majority of Intu Shareholders
at the Intu General Meeting; (iii) the Scheme becoming Effective by no later than the Long Stop Date; (iv) the
passing of all resolutions required to approve and implement the Scheme and acquisition of the Intu Shares
20
and to approve certain related matters by the requisite majority of Hammerson Shareholders at the
Hammerson General Meeting; and (v) Admission.
7. Peel
It is expected that following Completion, the Wider Peel Group will hold approximately 15 per cent. of the
issued share capital of the Enlarged Group.
Peel has agreed to enter into a relationship agreement with Hammerson, effective from Completion,
pursuant to which Peel has agreed:
- certain undertakings intended to ensure that Hammerson maintains independence from Peel;
- not to dispose of any shares in the Enlarged Group for a period of three years from Completion,
subject to certain exceptions;
- for a period of two years from Completion, not to acquire interests in the Enlarged Group (i)
representing more than 3 per cent. of the issued share capital of the Enlarged Group in any rolling
12 month period and (ii) which would in aggregate result in Peel holding more than 20 per cent. of
the issued share capital of the Enlarged Group, subject to certain exceptions; and
- to vote in accordance with the Enlarged Group's board's recommendation on ordinary course
resolutions and resolutions to approve Class 1 transactions under Chapter 10 of the Listing Rules.
The undertakings may cease to apply earlier if neither John Whittaker nor any person nominated by Peel is a
member of the board of the Enlarged Group.
Peel and Cheeseden have irrevocably undertaken to vote all of the Intu Shares and Hammerson Shares of
which they and their subsidiaries are the beneficial owners in favour of the Scheme at the Court Meeting and
the resolutions proposed at the Intu General Meeting, and the resolutions proposed at the Hammerson
General Meeting respectively. Further details of the irrevocable undertakings given by Peel and Cheeseden
are set out in paragraph 10 and Appendix 3 of this Announcement below.
8. Information on Hammerson
Hammerson is a FTSE 100 owner, manager and developer of retail destinations in Europe. Hammerson's
portfolio of high-quality retail property has a value of around £10.4 billion and includes 23 shopping centres,
17 convenient retail parks and investments in 20 premium outlet villages, through its partnership with Value
Retail and the VIA Outlets joint venture. Key investments include: Bullring, Birmingham; Bicester Village,
Oxfordshire; Dundrum Town Centre, Dublin; and Les Terrasses du Port, Marseille.
9. Information on Intu
Intu is a FTSE 250 company and is a leading UK owner, manager and developer of shopping centres. Intu’s
portfolio has a value of around £10.2 billion and comprises many of the UK’s most popular retail destinations,
with centres such as intu Trafford Centre, intu Lakeside, intu Watford and intu Eldon Square. Intu also has a
growing presence in Spain (including Madrid Xanadú, Puerto Venecia and intu Asturias).
10. Irrevocable undertakings and letters of intent to vote in favour of the Acquisition
Intu Directors
Hammerson and Intu have received irrevocable undertakings from the Intu Directors to vote (or to procure
the vote) in favour of the Scheme at the Court Meeting and the resolutions proposed at the Intu General
Meeting in respect of all of the Intu Shares (other than those held under the Intu JSOP) of which they are sole
beneficial holders or in which they are solely interested totalling 8,778,852 Intu Shares, representing in
aggregate approximately 0.6 per cent. of Intu's issued share capital at close of business on 5 December 2017
(being the last Business Day prior to the date of this Announcement).
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These irrevocable undertakings remain binding if a competing offer for Intu is made but will cease to be
binding on the date on which the Acquisition is withdrawn or lapses in accordance with its terms.
Intu Shareholders
Hammerson has also received irrevocable undertakings from Peel, Cheeseden and Crescent to vote in favour
of the Scheme at the Court Meeting and the resolutions proposed at the Intu General Meeting in respect of
their entire beneficial holdings and those of their subsidiaries of 360,686,356 Intu Shares, 5,585,334 Intu
Shares and 35,454,064 Intu Shares respectively, representing in aggregate approximately 29.6 per cent. of
Intu's issued share capital at close of business on 5 December 2017 (being the last Business Day prior to the
date of this Announcement).
These irrevocable undertakings remain binding if a competing offer for Intu is made but will cease to be
binding on the date on which the Acquisition is withdrawn or lapses in accordance with its terms.
In addition, Hammerson has received a non-binding, revocable letter of intent to vote in favour of the Scheme
at the Court Meeting and the resolutions proposed at the Intu General Meeting from Coronation in respect
of 274,716,076 Intu Shares, representing approximately 20.3 per cent. of Intu's issued share capital at close
of business on 5 December 2017 (being the last Business Day prior to the date of this Announcement).
Hammerson Directors
Hammerson and Intu have received irrevocable undertakings from the Hammerson Directors to vote (or to
procure the vote) in favour of the Hammerson Resolutions proposed at the Hammerson General Meeting in
respect of all of the Hammerson Shares of which they are beneficial holders or in which they are interested
totalling 1,402,494 Hammerson Shares, representing in aggregate approximately 0.2 per cent. of
Hammerson's issued share capital at close of business on 5 December 2017 (being the last Business Day prior
to the date of this Announcement).
These irrevocable undertakings remain binding if a competing offer for Intu or Hammerson is made but will
cease to be binding on the date on which the Acquisition is withdrawn or lapses in accordance with its terms.
Hammerson Shareholders
Hammerson has also received irrevocable undertakings from Peel and Cheeseden to vote in favour of the
Hammerson Resolutions proposed at the Hammerson General Meeting in respect of their entire beneficial
holdings of 36,230,050 Hammerson Shares and 45,541 Hammerson Shares respectively, representing in
aggregate approximately 4.6 per cent. of Hammerson's issued share capital at close of business on 5
December 2017 (being the last Business Day prior to the date of this Announcement).
These irrevocable undertakings remain binding if a competing offer for Intu is made but will cease to be
binding on the date on which the Acquisition is withdrawn or lapses in accordance with its terms.
In addition, Hammerson has received a non-binding, revocable letter of intent to vote in favour of the
resolutions proposed at the Hammerson General Meeting from Coronation in respect of 56,400,855
Hammerson Shares, representing approximately 7.1 per cent. of Hammerson's issued share capital at close
of business on 5 December 2017 (being the last Business Day prior to the date of this Announcement).
Further details of these irrevocable undertakings and letters of intent are set out in Appendix 3 to this
Announcement.
11. Management and employees
Under the terms of the Acquisition, David Tyler will become chairman of the Board of the Enlarged Group,
with David Atkins and Timon Drakesmith becoming CEO and CFO of the Enlarged Group, respectively.
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John Strachan and John Whittaker will become Senior Independent Director and Deputy Chairman of the
Enlarged Group respectively.
It is envisaged that, at Completion, the Board of the Enlarged Group would be comprised of six directors
nominated by Hammerson and four directors nominated by Intu.
The Enlarged Group will harness the talent in both companies to optimise the benefits for shareholders of
the Enlarged Group. The Board of the Enlarged Group intends to restructure the merged operational and
administrative structure of the combined business in order to achieve the expected benefits of the
Acquisition. The detailed steps for such a restructuring are not yet known but the Board of the Enlarged
Group will aim to retain the best talent across the Enlarged Group.
The Hammerson Board has confirmed that the existing statutory and contractual employment rights,
including accrued pension rights of all Hammerson and Intu employees, will be fully safeguarded upon and
following Completion.
12. Intu Share Plans and Intu Convertible Bonds
Participants in the Intu Share Plans will be contacted regarding the effect of the Acquisition on their rights
under the Intu Share Plans and appropriate proposals will be made to such participants in due course.
Holders of the Intu Convertible Bonds will be contacted regarding the effect of the Acquisition on their rights
in respect of the Intu Convertible Bonds and appropriate proposals will be made to such bondholders in due
course. Details of the proposals will be set out in the Scheme Document and in a document containing the
full terms and conditions of an appropriate proposal which will be made available to holders of the Intu
Convertible Bonds in due course.
The Acquisition will extend to any Intu Shares which are unconditionally allotted or issued before the Scheme
Record Time, including those allotted, issued or transferred to satisfy the exercise of options or vesting of
awards under the Intu Share Plans. Intu Shares held under the Intu SIP and Intu JSOP at the Scheme Record
Time will participate in the Acquisition in the same way as other Intu Shareholders.
The Scheme will not extend to Intu Shares issued after the Scheme Record Time. However, it is proposed to
amend Intu's articles of association at the Intu General Meeting to provide that, if the Acquisition becomes
effective, any Intu Shares issued to any person after the Scheme Record Time (including in satisfaction of an
option exercised under one of the Intu Share Plans) will be automatically transferred to Hammerson in
consideration for the payment by Hammerson to such persons of 0.475 New Hammerson Shares for each
Intu Share so transferred.
13. Offer-related arrangements
Confidentiality Agreement
Hammerson and Intu have entered into the Confidentiality Agreement, dated 13 November 2017, pursuant
to which each of Hammerson and Intu has undertaken, amongst other things: (a) to keep confidential
information relating to the Acquisition and to the other party confidential and not to disclose it to third parties
(other than certain permitted parties) other than as required by law or regulation; and (b) to use the
confidential information for the sole purpose of considering, evaluating, advising on or furthering the
Acquisition. These confidentiality obligations will remain in force following Completion. The agreement also
contains certain provisions pursuant to which each party has agreed not to solicit employees of the other
party, subject to customary carve-outs, for a period of 6 months.
Confidentiality and Joint Defense Agreement
Hammerson and Intu have also entered into the Confidentiality and Joint Defense Agreement, dated 21
November 2017, the purpose of which is to ensure that the exchange and disclosure of certain materials
23
relating to the parties and between their respective legal counsel for the purposes of the preliminary
assessment and preparation of necessary anti-trust filings is ring-fenced and preserves the confidentiality of
such materials and does not result in a waiver of any privilege, right or immunity that might otherwise be
available.
Peel Confidentiality Agreement
Hammerson and Peel have entered into the Peel Confidentiality Agreement, dated 1 December 2017,
pursuant to which each of Hammerson and Peel has undertaken, amongst other things: (a) to keep
confidential information relating to the Acquisition and to the other party confidential and not to disclose it
to third parties (other than certain permitted parties) other than as required by law or regulation; and (b) to
use the confidential information for the sole purpose of considering, evaluating, advising on or furthering the
Acquisition. These confidentiality obligations will remain in force following Completion. The agreement also
contains certain provisions pursuant to which each party has agreed not to solicit employees of the other
party, subject to customary carve-outs, for a period of 6 months.
Co-operation Agreement
Hammerson and Intu have entered into the Co-operation Agreement, pursuant to which Hammerson has
agreed to use its reasonable endeavours to secure the regulatory clearances and authorisations necessary to
satisfy the CMA Conditions.
Hammerson and Intu have agreed to certain undertakings to co-operate and provide each other with
reasonable information, assistance and access in relation to the filings, submissions and notifications to be
made in relation to such regulatory clearances and authorisations. Hammerson and Intu have also agreed to
provide each other with reasonable information, assistance and access for the preparation of the key
shareholder documentation.
Hammerson has also agreed to consent to certain potential transactions disclosed to it by Intu, to the extent
that the Panel requires Hammerson's consent in order to waive any requirement for Intu to require Intu
Shareholders to approve such transactions under Rule 21.1 of the Code.
Hammerson has agreed to certain limited restrictions on its conduct of business in respect of material matters
pending Completion.
The Co-operation Agreement shall be terminated with immediate effect if Hammerson and Intu so agree in
writing.
Hammerson has the right to terminate the Co-operation Agreement, inter alia, if: (i) the Acquisition is, with
the permission of the Panel, withdrawn or lapses in accordance with its terms; (ii) the Court Meeting or the
Intu General Meeting is not held by the 22nd day after the expected date of such meetings as set out in the
Scheme Document or such later date as Hammerson and Intu agree; (iii) the Court refuses to sanction the
Scheme; (iv) the Scheme is not implemented on or before the Long Stop Date; (v) the Scheme Document does
not include the Intu Board's recommendation of the Scheme or the Intu Board withdraws, intends adversely
to modify or adversely modifies its recommendation of the Scheme; or (vi) the Scheme Court Hearing is not
held by the 22nd day after the expected date of such hearing as set out in the Scheme Document or such
later date as Hammerson and Intu agree.
Intu has the right to terminate the Co-operation Agreement if the Hammerson Circular does not include the
Hammerson Board's recommendation of the Acquisition or the Hammerson Board withdraws, intends
adversely to modify or adversely modifies its recommendation of the Acquisition.
The Co-operation Agreement records Hammerson's and Intu's intention to implement the Acquisition by way
of the Scheme, subject to the ability of Hammerson to proceed by way of a takeover offer.
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The Co-operation Agreement also contains provisions that will apply in respect of the Intu Share Plans and
certain other employee incentive arrangements.
14. Structure of the Acquisition
It is intended that the Acquisition will be implemented by means of a court-sanctioned scheme of
arrangement of Intu under Part 26 of the Companies Act.
It is expected that the Scheme Document will be posted to Intu Shareholders during or prior to April 2018.
For the purposes of paragraph 3(a) of Appendix 7 to the Code, and with the agreement of the Intu Directors,
the Panel has consented to this arrangement.
The purpose of the Scheme is to provide for Hammerson to become the owner of the entire issued and to be
issued share capital of Intu. In order to achieve this, the Scheme Shares will be transferred to Hammerson
under the Scheme. In consideration for this transfer, the Scheme Shareholders will receive New Hammerson
Shares on the basis set out in paragraph 2 above. The transfer to Hammerson of the Scheme Shares will result
in Intu becoming a wholly owned subsidiary of Hammerson.
The Scheme requires approval by Intu Shareholders by the passing of a resolution at the Court Meeting. This
resolution must be approved by a majority in number of the holders of Intu Shares present and voting, either
in person or by proxy, representing not less than 75 per cent. in value of the Intu Shares held by such holders.
In addition, a special resolution to deal with certain ancillary matters must be passed at the Intu General
Meeting to be held immediately after the Court Meeting.
The Scheme must also be sanctioned by the Court. Any Intu Shareholder is entitled to attend the Scheme
Court Hearing in person or through counsel to support or oppose the sanctioning of the Scheme. The Scheme
will only become Effective upon delivery to the Registrar of Companies of a copy of the Court Order.
The Scheme will also be subject to certain Conditions and certain further terms referred to in Appendix 1 of
this Announcement and to be set out in the Scheme Document. The Conditions in Appendix 1 provide that
the Acquisition will lapse if, amongst other things:
(a) the Court Meeting and General Meeting are not held on or before the 22nd day after the
expected date of the meetings, which will be set out in the Scheme Document in due
course (or such later date as may be agreed by Hammerson and Intu);
(b) the Scheme Court Hearing is not held on or before the 22nd day after the expected date
of the hearing, which will be set out in the Scheme Document in due course (or such later
date as may be agreed by Hammerson and Intu); or
(c) the Scheme does not become Effective by 31 December 2019 (or such later date as may
be agreed by Hammerson and Intu),
provided that these deadlines may be waived by Hammerson.
Once the Scheme becomes Effective: (i) it will be binding on all Scheme Shareholders, whether or not they
voted at the Court Meeting and the Intu General Meeting and, if they did vote, whether or not they voted in
favour of or against the resolutions proposed at those meetings; and (ii) share certificates in respect of Intu
Shares will cease to be valid and entitlements to Intu Shares held within the CREST system will be cancelled.
The terms of the Scheme will provide that the Intu Shares will be acquired under the Scheme fully paid and
free from all liens, equitable interests, charges, encumbrances, options, rights of pre-emption and any other
third party rights or interests of any nature whatsoever and together with all rights attaching thereto,
including the right to receive and retain all dividends and other distributions and returns of value declared,
paid or made with a record date after the Scheme Record Time.
Hammerson reserves the right, subject to the prior consent of the Panel and the terms of the Co-operation
Agreement, to elect to implement the acquisition of the Intu Shares by way of a takeover offer (as such term
is defined in section 974 of the Companies Act). In such event, such takeover offer will be implemented on
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the same terms (subject to appropriate amendments as described in Part 2 of Appendix 1 to this
Announcement), so far as applicable, as those which would apply to the Scheme. Furthermore, if such offer
is made and sufficient acceptances of such offer are received, when aggregated with Intu Shares otherwise
acquired by Hammerson, it is the intention of Hammerson to apply the provisions of section 979 of the
Companies Act to acquire compulsorily any outstanding Intu Shares to which such offer relates.
15. Dividends
If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable
by Intu in respect of an Intu Share or by Hammerson in respect of a Hammerson Share on or after the date of
this Announcement and with a record date on or before the Scheme Record Time the Exchange Ratio will be
adjusted accordingly by reference to the aggregate amount of the distribution that has been declared, made,
paid or is payable, save for the Permitted Dividends.
In the event that:
a) the aggregate value per share of all Permitted Dividends Declared by Intu in respect of an Intu Share
on or after the date of this Announcement and with a record date on or before the Scheme Record
Time (the "Intu Declared Dividends") is greater than
b) the aggregate value per share of all Permitted Dividends Declared by Hammerson in respect of a
Hammerson Share on or after the date of this Announcement and with a record date on or before
the Scheme Record Time (the "Hammerson Declared Dividends") multiplied by 0.475,
Hammerson will be entitled to declare an equalisation dividend in respect of Hammerson Shares of an
amount per share equal to the difference between the Intu Declared Dividends divided by 0.475 and the
Hammerson Declared Dividends with a record date of the Scheme Record Time (the "Hammerson
Equalisation Dividend").
In the event that:
a) the aggregate value per share of all Intu Declared Dividends is less than
b) the aggregate value per share of all Hammerson Declared Dividends multiplied by 0.475,
Intu will be entitled to declare an equalisation dividend in respect of Intu Shares of an amount per share equal
to the difference between the Hammerson Declared Dividends multiplied by 0.475 and the Intu Declared
Dividends with a record date of the Scheme Record Time (the "Intu Equalisation Dividend").
If any such dividend, distribution or return of value is paid or made by Intu after the date of this
Announcement, save for the Permitted Dividends, and Hammerson exercises its rights described above, any
reference in this Announcement to the consideration payable under the Scheme shall be deemed to be a
reference to the consideration as so reduced. Any exercise by Hammerson of its rights referred to in this
paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as
constituting any revision or variation of the terms of the Scheme.
16. Hammerson Shareholder approval and Prospectus
The Acquisition constitutes a Class 1 transaction for Hammerson for the purposes of the Listing Rules.
Accordingly, Hammerson will be required to seek the approval of Hammerson Shareholders for the
Acquisition at the Hammerson General Meeting. The Hammerson Directors intend unanimously to
recommend Hammerson Shareholders vote in favour of the Hammerson Resolutions, as all Hammerson
Directors who hold Hammerson Shares have irrevocably undertaken to do in respect of their own holdings
of, in aggregate, 1,402,494 Hammerson Shares (representing approximately 0.2 per cent. of the issued share
capital of Hammerson as at 5 December 2017, being the Business Day immediately prior to the date of this
Announcement).
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Hammerson will prepare and send to Hammerson Shareholders the Hammerson Circular summarising the
background to and reasons for the Acquisition which will include a notice convening the Hammerson General
Meeting. The Acquisition is conditional on, among other things, the Hammerson Resolutions being passed by
the requisite majority of Hammerson Shareholders at the Hammerson General Meeting.
It is expected that the Hammerson Circular will be posted to Hammerson Shareholders at or around the same
time as the Scheme Document is posted to Intu Shareholders which is expected to be during or prior to April
2018. The Hammerson General Meeting will be held at or around the same time as the Court Meeting and
the Intu General Meeting.
Hammerson will also be required to produce the Prospectus in connection with the issue of the New
Hammerson Shares. The Prospectus will contain information relating to the Acquisition, the Enlarged Group
and the New Hammerson Shares. It is expected that the Prospectus will be published at or around the same
time as the Scheme Document is posted to Intu Shareholders.
17. De-listing and re-registration
It is intended that the last day of dealings in, and for registration of transfers of, Intu Shares (other than the
registration of the transfer of the Scheme Shares to Hammerson pursuant to the Scheme) will be the last
Business Day prior to the Effective Date, following which all Intu Shares will be suspended from the Official
List and from trading on the Main Market, and Intu Shares will be disabled in CREST.
After the Scheme Record Time and before the Scheme becomes effective, entitlements to Intu Shares in
CREST will be cancelled and such entitlements rematerialised. On the Effective Date, all share certificates in
respect of Intu will cease to be valid and should be destroyed.
Applications will be made to: (i) the UK Listing Authority for the cancellation of the listing of the Intu Shares
on the Official List and to the London Stock Exchange for the cancellation of the admission to trading of Intu
Shares on the Main Market and (ii) the JSE for the cancellation of the listing and trading of Intu Shares on the
JSE. It is expected that such delisting and cancellation of admission to trading would take effect on the
Business Day after the Effective Date.
If the Scheme is sanctioned, any Intu Shares held in treasury will be cancelled prior to the Scheme becoming
Effective.
Hammerson intends, as soon as reasonably practicable following the Effective Date, to re-register Intu as a
private company under the relevant provisions of the Companies Act.
18. Settlement, listing and dealing of New Hammerson Shares
Once the Scheme has become Effective, New Hammerson Shares will be allotted to former Intu Shareholders.
It is intended that applications will be made to: (i) the UK Listing Authority and to the London Stock Exchange
for the New Hammerson Shares to be admitted to the premium segment of the Official List and to trading on
the London Stock Exchange's Main Market for listed securities; and (ii) the JSE for the secondary (inward)
listing and admission to trading of the New Hammerson Shares on the main board of the JSE. It is expected
that Admission will become effective, and that dealings for normal settlement in the New Hammerson Shares
will commence, at 8.00 a.m. on the first Business Day after the date on which the Scheme becomes Effective.
The existing Hammerson Shares are admitted to CREST. It is expected that all of the New Hammerson Shares,
when issued and fully paid, will be capable of being held and transferred by means of CREST. It is expected
that the New Hammerson Shares will trade under ISIN GB0004065016.
Further details on listing, dealing and settlement will be included in the Scheme Document.
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19. Overseas shareholders
The availability of the New Hammerson Shares under the terms of the Acquisition to persons not resident in
the United Kingdom or the ability of those persons to hold such shares may be affected by the laws and
regulations of the relevant jurisdiction in which they are resident. Such persons should inform themselves
about and observe any applicable legal and regulatory requirements of their jurisdiction. Intu Shareholders
who are in doubt about such matters should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay. Further details in relation to overseas shareholders will be contained in
the Scheme Document.
This Announcement does not constitute an offer for sale of any securities or invitation to purchase any
securities.
20. Disclosure of interests in Intu Shares
As at close of business on 5 December 2017 (being the latest practicable date prior to the date of this
Announcement), neither Hammerson, nor any of the Hammerson Directors or any member of the
Hammerson Group, nor, so far as the Hammerson Directors are aware, any person acting in concert with
Hammerson for the purposes of the Acquisition had any interest in, right to subscribe for, or had borrowed
or lent any Intu Shares or securities convertible or exchangeable into Intu Shares, nor did any such person
have any short position (whether conditional or absolute and whether in the money or otherwise), including
any short position under a derivative, any agreement to sell or any delivery obligation or right to require
another person to take delivery, or any dealing arrangement of the kind referred to in Note 11 of the
definition of acting in concert in the Code, in relation to Intu Shares or in relation to any securities convertible
or exchangeable into Intu Shares.
In the interests of secrecy prior to this Announcement, Hammerson has not made any enquiries in respect of
the matters referred to in this paragraph of certain parties who may be deemed by the Panel to be acting in
concert with Hammerson for the purposes of the Scheme. Enquiries of such parties will be made as soon as
practicable following the date of this Announcement and any disclosure in respect of such parties will be
disclosed as soon as possible via a Regulatory Information Service.
21. Documents available on website
Copies of the following documents will shortly be available at www.hammerson.com/investors until the
Scheme has become Effective or has lapsed or been withdrawn:
(a) this Announcement;
(b) the irrevocable undertakings and letters of intent listed in Appendix 3; and
(c) the Confidentiality Agreement, the Confidentiality and Joint Defense Agreement and the Co-operation
Agreement referred to in paragraph 13 above.
22. General
The Acquisition is subject to the satisfaction or waiver of the Conditions and on the terms contained in
Appendix 1 to this Announcement and on the further terms and Conditions to be set out in the Scheme
Document. The Scheme will be governed by English law and subject to the applicable rules and regulations
of the London Stock Exchange, the Panel and the FCA.
The Acquisition is subject to, inter alia, the satisfaction or waiver of the Conditions set out in Appendix 1
to this Announcement. The Acquisition is also subject to the further terms set out in Appendix 1 to this
Announcement and to the full terms and conditions which will be set out in the Scheme Document.
Appendix 2 to this Announcement contains the sources and bases of certain information contained in this
summary and the following Announcement. Appendix 3 to this Announcement contains details of the
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irrevocable undertakings received by Hammerson and by Intu. Appendix 4 to this Announcement contains
the Quantified Financial Benefits Statement, together with the reports from PricewaterhouseCoopers LLP,
Hammerson’s reporting accountants, and Deutsche Bank, J.P. Morgan Cazenove and Lazard, Hammerson's
financial advisers, as required under Rule 28.1(a) of the Code. Each of PricewaterhouseCoopers LLP,
Deutsche Bank, J.P. Morgan Cazenove and Lazard has given and not withdrawn its consent to the
publication of its report in this Announcement in the form and context in which it is included. Appendix 5
to this Announcement contains the definitions of certain terms used in this summary and the following
Announcement.
The person responsible for making this Announcement is Sarah Booth, General Counsel and Company
Secretary.
Further information
This Announcement is for information purposes only and is not intended to and does not constitute, or form
part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for or otherwise acquire or
dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Intu in any jurisdiction
in contravention of applicable law. This Announcement does not constitute a prospectus or a prospectus
equivalent document.
The Acquisition will be made solely pursuant to the terms of the Scheme Document, which, together with the
forms of proxy, will contain the full terms and conditions of the Scheme, including details of how to vote in
respect of the Acquisition. Any decision in respect of, or other response to, the Acquisition by Intu Shareholders
should be made only on the basis of the information contained in the Scheme Document.
This Announcement has been prepared for the purpose of complying with English law and the Takeover Code
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 jurisdictions outside the
United Kingdom.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel, the London
Stock Exchange, the FCA and the UKLA.
Intu will prepare the Scheme Document to be distributed to the Intu Shareholders and Hammerson will prepare
the Hammerson Circular to be distributed to Hammerson Shareholders and will also publish the Hammerson
Prospectus containing information about the New Hammerson Shares. Hammerson urges Intu Shareholders
to read the Scheme Document and the Hammerson Prospectus carefully when they become available because
they will contain important information in relation to the Acquisition and the New Hammerson Shares.
Hammerson urges Hammerson Shareholders to read the Hammerson Circular carefully when it becomes
available because it will contain important information in relation to the Acquisition and the New Hammerson
Shares. Any vote in respect of the resolutions to be proposed at the Court Meeting, the Intu General Meeting
or the Hammerson General Meeting to approve the Acquisition and related matters, should be made only on
the basis of the information contained in the Scheme Document, the Hammerson Prospectus and, in the case
of Hammerson Shareholders, the Hammerson Circular.
Please be aware that addresses, electronic addresses and certain other information provided by Intu
Shareholders, persons with information rights and other relevant persons in connection with the receipt of
communications from Intu may be provided to Hammerson during the offer period as required under Section
4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank)
and, in the United Kingdom, by the Prudential Regulation Authority. It is subject to supervision by the European
Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority, and is subject to limited
29
regulation in the United Kingdom by the Prudential Regulation Authority and FCA. Details about the extent of
its authorisation and regulation by the Prudential Regulation Authority, and regulation by the FCA, are
available on request or from www.db.com/en/content/eu_disclosures.htm. Deutsche Bank AG, acting through
its London branch (“DB London”) is acting as financial adviser and corporate broker to Hammerson and no
other person in connection with this Announcement or any of its contents. DB London will not be responsible
to any person other than Hammerson for providing any of the protections afforded to clients of DB London,
nor for providing any advice in relation to the Acquisition or any other matter referred to herein. Neither DB
London nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct
or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of DB
London in connection with this Announcement, any statement contained herein or otherwise.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove, is
authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation
Authority in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to
Hammerson and no one else in connection with the matters set out in this Announcement and will not regard
any other person as its client in relation to the matters set out in this Announcement and will not be responsible
to anyone other than Hammerson for providing the protections afforded to clients of J.P. Morgan Cazenove
or its affiliates, or for providing advice in relation to the contents of this Announcement or any other matter
referred to herein.
Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively
as financial adviser to Hammerson and no one else in connection with the Acquisition and will not be
responsible to anyone other than Hammerson for providing the protections afforded to clients of Lazard &
Co., Limited nor for providing advice in relation to the Acquisition or any other matters referred to in this
Announcement. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Lazard & Co., Limited in connection with this Announcement, any
statement contained herein or otherwise.
N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated by the FCA in the United
Kingdom, is acting exclusively for Intu and for no one else in connection with the subject matter of this
Announcement and will not be responsible to anyone other than Intu for providing the protections afforded
to its clients or for providing advice in connection with the subject matter of this Announcement.
BofA Merrill Lynch, which is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for
Intu and no one else in connection with the subject matter of this announcement and will not be responsible
to anyone other than Intu for providing the protections afforded to its clients or for providing advice in
connection with the subject matter of this announcement.
UBS Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as corporate
broker and financial adviser to Intu and no one else in connection with the Offer. In connection with such
matters, UBS Limited, its affiliates and their respective directors, officers, employees and agents will not
regard any other person as their client, nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in relation to the Offer, the contents of this
Announcement or any other matter referred to herein.
Overseas jurisdictions
The availability of the New Hammerson Shares in, and the release, publication or distribution of this
Announcement in or into, jurisdictions other than the United Kingdom may be restricted by law and therefore
persons into whose possession this Announcement comes who are not resident in the United Kingdom should
inform themselves about, and observe, any applicable restrictions. Intu Shareholders who are in any doubt
30
regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without
delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such
jurisdiction.
This Announcement has been prepared for the purposes of complying with English law and the Code 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 of jurisdictions outside the United Kingdom.
Notes to US investors in Intu
Shareholders in the United States should note that the Acquisition relates to the shares of an English company
and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, the
law of England and Wales. Neither the proxy solicitation nor the tender offer rules under the US Exchange Act,
will apply to the Scheme. Moreover the Scheme will be subject to the disclosure requirements and practices
applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy
solicitation rules and tender offer rules. However, if Hammerson were to elect to implement the Acquisition
by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and
regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover
would be made in the United States by Hammerson and no one else. In addition to any such takeover offer,
Hammerson, certain affiliated companies and the nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in Intu outside such takeover offer during the period in
which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase
were to be made they would be made outside the United States and would comply with applicable law,
including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK,
will be reported to a Regulatory Information Service of the UKLA and will be available on the London Stock
Exchange website at www.londonstockexchange.com.
Financial information included in this Announcement and the Scheme Document and the Prospectus has been
or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable
to financial information of US companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the United States.
Intu and Hammerson are each organised under the laws of England and Wales. All of the officers and directors
of Intu and Hammerson are residents of countries other than the United States. It may not be possible to sue
Intu and Hammerson in a non-US court for violations of US securities laws. It may be difficult to compel Intu,
Hammerson and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.
Notes regarding New Hammerson Shares
The New Hammerson Shares to be issued pursuant to the Scheme have not been and will not be registered
under the US Securities Act or under the relevant securities laws of any state or territory or other jurisdiction
of the United States or the relevant securities laws of Japan and the relevant clearances have not been, and
will not be, obtained from the securities commission of any province of Canada. No prospectus in relation to
the New Hammerson Shares has been, or will be, lodged with, or registered by, the Australian Securities and
Investments Commission. Accordingly, the New Hammerson Shares/Loan Notes are not being, and may not
be, offered, sold, resold, delivered or distributed, directly or indirectly in or into the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or
require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any
applicable registration requirements or otherwise in compliance with all applicable laws).
It is expected that the New Hammerson Shares will be issued in reliance upon the exemption from the
registration requirements of the US Securities Act provided by Section 3(a)(10) thereof.
31
Rule 2.9 information
In accordance with Rule 2.9 of the Code, Hammerson confirms that, as at close of business on 5 December
2017, being the last Business Day before the date of this Announcement, it has 793,226,418 ordinary shares
of £0.25 each in issue and admitted to trading on the London Stock Exchange. Hammerson currently holds no
ordinary shares in treasury.
In accordance with Rule 2.9 of the Code, Intu confirms that, as at close of business on 5 December 2017, being
the last Business Day before the date of this Announcement, it has 1,355,040,243 ordinary shares of £0.50
each in issue and admitted to trading on the London Stock Exchange. Intu currently holds no ordinary shares
in treasury. In addition, Intu has: (i) £160,400,000 Intu Convertible Bonds due 2018 listed on the London Stock
Exchange (Professional Securities Market); and (ii) £375,000,000 Intu Convertible Bonds due 2022 listed on
the International Stock Exchange and Open Market of the Frankfurt Stock Exchange. The Intu Convertible
Bonds due 2018 and the Intu Convertible Bonds due 2022 are each convertible into fully paid ordinary shares
of 50 pence each in the capital of Intu. The International Securities Identification Number for the Intu
Convertible Bonds due 2018 is XS0834486796 and the International Securities Identification Number for the
Intu Convertible Bonds due 2022 is XS1511910025.
Disclosure requirements
Under Rule 8.3(a) of the 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 securities exchange 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 securities exchange 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 securities exchange 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 p.m. (London time)
on the 10th business day following the commencement of the offer period and, if appropriate, by no later than
3.30 p.m. (London time) on the 10th business day following the Announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company
or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must
instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of
relevant securities of the offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange
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 securities exchange offeror(s), 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 p.m. (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 securities exchange 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
32
issue, when the offer period commenced and when any offeror was first identified. You should contact the
Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure.
Forward-looking statements
This Announcement contains certain forward-looking statements, beliefs or opinions, with respect to the
financial condition, results of operations and business of Hammerson and Intu. These forward-looking
statements 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”, “target”, “expect”, “estimate”, “intend”, “plan”,
“goal”, “believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other words of
similar meaning. These statements are based on assumptions and assessments made by Intu, and/or
Hammerson, in light of their experience and their perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their nature, forward-looking statements involve
risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future
and the factors described in the context of such forward-looking statements in this document could cause
actual results and developments to differ materially from those expressed in or implied by such forward-
looking statements. Although it is believed that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations will prove to have been correct and you are
therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at
the date of this Announcement. Neither Intu nor Hammerson assumes any obligation to update or correct the
information contained in this section of the website (whether as a result of new information, future events or
otherwise), except as required by applicable law.
THERE ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING STATEMENTS. AMONG THE FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING
STATEMENTS ARE CHANGES IN GLOBAL, POLITICAL, ECONOMIC, BUSINESS, COMPETITIVE, MARKET AND
REGULATORY FORCES, FUTURE EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS.
Rounding
Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly,
figures shown for the same category presented in different tables may vary slightly and figures shown as totals
in certain tables may not be an arithmetic aggregation of the figures that precede them.
No Profit Forecasts or Estimates
No statement in this Announcement (including any statement of estimated synergies) is intended as a profit
forecast or estimate for any period and no statement in this Announcement should be interpreted to mean
that earnings or earnings per share or dividend per share for Hammerson, Intu or the Enlarged Group, as
appropriate, for the current or future financial years would necessarily match or exceed the historical
published earnings or earnings per share or dividend per share for Hammerson, Intu or the Enlarged Group as
appropriate.
Quantified Financial Benefits Statement
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances
which, by their nature, involve risks, uncertainties and contingencies and which may in some cases be subject
to consultation with employees or their representatives. The synergies and cost savings referred to may not
be achieved, or may be achieved later or sooner than estimated, or those achieved could be materially
33
different from those estimated. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits
Statement contained in this Announcement is the responsibility of Hammerson and the Hammerson Directors.
Publication of this Announcement
A copy of this Announcement will be available on Hammerson's website at www.hammerson.com/investors
and Intu's website at www.intugroup.co.uk by no later than 12 noon (London time) on 7 December 2017 (being
the first Business Day following the date of this Announcement).
The contents of Hammerson's website and Intu's website are not incorporated into and do not form part of
this Announcement.
Hammerson Shareholders may request a hard copy of this Announcement by contacting Link Asset Services
during business hours on +44 (0) 20 3367 8200 (or, in the case of shareholders resident in South Africa,
Computershare Investor Services on +27 (0) 86 110 0950) or by submitting a request in writing to Link Asset
Services at 6th Floor, 65 Gresham Street, London EC2V 7NQ (or, in the case of shareholders resident in South
Africa, Computershare Investor Services at PO Box 61051, Marshalltown, 2107, South Africa). If you have
received this Announcement in electronic form, copies of this Announcement and any document or
information incorporated by reference into this document will not be provided unless such a request is made.
Hammerson Shareholders may also request that all future documents, announcements and information to be
sent to them in relation to the Acquisition should be in hard copy form.
Intu Shareholders may request a hard copy of this Announcement by contacting Link Asset Services during
business hours on +44 (0) 371 664 0300 (or, in the case of shareholders resident in South Africa, Terbium
Financial Services on +27 (0) 86 010 4191) or by submitting a request in writing to Link Asset Services at 6th
Floor, 65 Gresham Street, London EC2V 7NQ (or, in the case of shareholders resident in South Africa, Terbium
Financial Services at PO Box 61272, Marshalltown, 2107, South Africa). If you have received this
Announcement in electronic form, copies of this Announcement and any document or information
incorporated by reference into this document will not be provided unless such a request is made. Intu
Shareholders may also request that all future documents, announcements and information to be sent to them
in relation to the Acquisition should be in hard copy form.
If you are in any doubt about the contents of this Announcement or the action you should take, you are
recommended to seek your own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
International Securities Identification Number and Legal Entity Identifier ("LEI")
The International Securities Identification Number for Hammerson's ordinary shares is GB0004065016 and
Hammerson's LEI number is 213800G1C9KKVVDN1A60.
The International Securities Identification Number for Intu's ordinary shares is GB0006834344 and Intu’s LEI
number is 213800JSNTERD5CJZO95.
34
APPENDIX 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
Part 1: Conditions of the Acquisition and the Scheme
Scheme approval
1. The Acquisition will be conditional upon: the Scheme becoming unconditional and becoming
Effective, subject to the Code, by no later than 31 December 2019 or such later date (if any) as
Hammerson and Intu may agree and (if required) the court may allow.
2. The Scheme will be conditional on:
(a) its approval by a majority in number of the Scheme Shareholders present, entitled to vote
and voting at the Court Meeting and at any separate class meeting which may be required
by the Court, or at any adjournment thereof, either in person or by proxy, representing
not less than 75 per cent. in value of the Scheme Shares voted by such Scheme
Shareholders (or the relevant class or classes thereof, if applicable), on or before the 22nd
day after the expected date of the Court Meeting to be set out in the Scheme Document
in due course (or such later date (if any) as Hammerson and Intu may, with the consent of
the Panel, agree and the Court may allow);
(b) all resolutions required to approve and implement the Scheme being duly passed by the
requisite majority or majorities of the Intu Shareholders at the Intu General Meeting, or
at any adjournment thereof on or before the 22nd day after the expected date of the Intu
General Meeting to be set out in the Scheme Document in due course (or such later date
(if any) as Hammerson and Intu may, with the consent of the Panel, agree and the Court
may allow);
(c) the sanction of the Scheme by the Court (with or without modifications, on terms
reasonably acceptable to Intu and Hammerson) on or before the 22nd day after the
expected date of the Scheme Court Hearing to be set out in the Scheme Document in due
course (or such later date (if any) as Hammerson and Intu may, with the consent of the
Panel, agree and the Court may allow); and
(d) an office copy of the Court Order being delivered for registration to the Registrar of
Companies.
Additional Conditions to the Scheme
3. Subject to the requirements of the Panel, the Acquisition is also conditional on the following
Conditions having been satisfied or, where applicable, waived and accordingly the necessary actions
to make the Scheme Effective will not be taken unless such conditions have been so satisfied or,
where applicable, waived:
Listing of New Hammerson Shares
(a) (i) the UK Listing Authority having acknowledged to Hammerson or its agent (and
such acknowledgement not having been withdrawn) that the application for the
admission of the New Hammerson Shares to the Official List with a premium
listing has been approved and (after satisfaction of any conditions to which such
approval is expressed to be subject (for the purpose of this paragraph, "listing
conditions")) will become effective as soon as a dealing notice has been issued
by the FCA and any listing conditions having been satisfied; and
35
(ii) the London Stock Exchange having acknowledged to Hammerson or its agent
(and such acknowledgement not having been withdrawn) that the New
Hammerson Shares will be admitted to trading;
(b) Hammerson or its agent having received confirmation from the JSE (and such confirmation
not having been withdrawn) that: (i) the application for the secondary listing of the New
Hammerson Shares on the main board of the JSE has been approved, subject to the
satisfaction of any conditions customary to transactions of this nature to which such
approval is expressed to be subject (for the purpose of this paragraph, “JSE listing
conditions”); and (ii) that the New Hammerson Shares will, subject to the satisfaction of
the JSE listing conditions, be admitted to trading on the main board of the JSE on or shortly
after the Effective Date;
Hammerson Shareholder approval
(c) the passing at the Hammerson General Meeting (or at any adjournment thereof) of the
Hammerson Resolutions by the requisite majority of Hammerson Shareholders;
CMA clearance
(d) insofar as the Acquisition constitutes a relevant merger situation for the purposes of the
Enterprise Act 2002, either of the following events having occurred:
(i) the period within which the CMA is required by section 34ZA of the Enterprise
Act 2002 to decide whether the duty to make a Phase 2 CMA Reference applies
has expired without such a decision having been made; or
(ii) the CMA has issued a decision in terms satisfactory to Hammerson, that it does
not intend to refer the Acquisition or any matters arising therefrom for a Phase
2 CMA Reference or the CMA has issued a decision accepting undertakings in lieu
of a Phase 2 CMA Reference under section 73 of the Enterprise Act 2002 on terms
satisfactory to Hammerson;
(e) insofar as the condition at paragraph (d) above has either been waived or not invoked as
unsatisfied by Hammerson, following a Phase 2 CMA Reference of the Acquisition or any
matters arising therefrom:
(i) the CMA having indicated in its Notice of Provisional Findings that it is
contemplating allowing the Acquisition to proceed without any undertakings,
conditions or orders; or
(ii) the CMA having indicated in its Notice of Possible Remedies that it is
contemplating seeking undertakings, conditions or orders on terms which are
satisfactory to Hammerson;
(f) insofar as the conditions at paragraph (d) above have either been waived or not invoked
as unsatisfied by Hammerson, following a Phase 2 CMA Reference of the Acquisition:
(i) the CMA having issued a decision that the Acquisition may proceed without any
undertakings, conditions or orders, or
(ii) the CMA having issued a decision that the Acquisition may proceed on terms
satisfactory to Hammerson subject to the giving of such undertakings by, or the
imposition of such conditions or orders on, Hammerson and/or Intu, and all
necessary approvals or consents for clearance having been provided by the CMA;
General antitrust and regulatory approvals
(g) no antitrust regulator or Third Party having decided to take, instituted, implemented or
threatened any action, proceedings, suit, investigation, enquiry or reference, or made,
36
proposed or enacted any statute, regulation, order or decision or taken any other steps
(and in each case, not having withdrawn the same) (in each case which would be material
in the context of the Wider Intu Group or the Wider Hammerson Group in each case taken
as a whole) and there not continuing to be outstanding any statute, regulation, order or
decision, which would or might reasonably be expected to:
(i) make the Acquisition or the acquisition of the Intu Shares, or control of Intu by
Hammerson void, illegal or unenforceable under the laws of any relevant
jurisdiction or otherwise restrict, restrain, prohibit or delay to a material extent
or otherwise materially interfere with the implementation thereof, or impose
material additional conditions or obligations with respect thereto, or require
material amendment thereof or otherwise challenge or interfere therewith the
Acquisition or the acquisition of any of the Intu Shares, or control of Intu by
Hammerson;
(ii) require or prevent the divestiture by any member of the Wider Intu Group or by
any member of the Wider Hammerson Group of all or any material portion of
their respective businesses, assets or property or impose any limitation on the
ability of any of them to conduct their respective businesses or own any of their
assets or property (in any case to an extent which is material in the context of the
Wider Intu Group or the Wider Hammerson Group, as the case may be, taken as
a whole);
(iii) impose any material limitation on or result in a material delay in the ability of any
member of the Wider Intu Group or the Wider Hammerson Group to acquire or
to hold or to exercise effectively any rights of ownership of shares or loans or
securities convertible into shares in any member of the Wider Intu Group or of
the Wider Hammerson Group held or owned by it or to exercise management
control over any member of the Wider Intu Group or of the Wider Hammerson
Group, in each case to an extent which is material in the context of the Wider
Intu Group or the Wider Hammerson Group, as the case may be, taken as a
whole;
(iv) except pursuant to Chapter 3 of Part 28 of the Companies Act, require any
member of the Wider Hammerson Group or the Wider Intu Group to acquire or
offer to acquire any shares or other securities in any member of the Wider Intu
Group (other than in connection with the implementation of the Acquisition); or
(v) otherwise materially and adversely affect the assets, business, profits or
prospects of any member of the Wider Hammerson Group or of any member of
the Wider Intu Group (in any case to an extent which is material in the context of
the Wider Intu Group or the Wider Hammerson Group, as the case may be, taken
as a whole);
and all applicable waiting and other time periods (including extensions thereof) during
which any such antitrust regulator or Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation, enquiry or
reference having expired, lapsed or been terminated;
Notifications, waiting periods and Authorisations
(h) all notifications, filings or applications which are necessary or reasonably considered
necessary by Hammerson having been made, all applicable waiting periods (including any
extensions thereof) under any applicable legislation or regulations of any jurisdiction
having expired, lapsed or been terminated, in each case in respect of the Acquisition and
the acquisition of any Intu Shares, or of control of Intu, by Hammerson, and all
Authorisations necessary or reasonably considered appropriate in any jurisdiction for, or
in respect of, the Acquisition and the proposed acquisition of any Intu Shares, or of control
of Intu, by Hammerson and to carry on the business of any member of the Wider
Hammerson Group or of the Wider Intu Group having been obtained, in terms and in a
37
form satisfactory to Hammerson, from all appropriate Third Parties and from any persons
or bodies with whom any member of the Wider Hammerson Group or the Wider Intu
Group has entered into contractual arrangements and all such Authorisations remaining
in full force and effect at the time at which the Acquisition becomes Effective and
Hammerson having no knowledge of an intention or proposal to revoke, suspend or
modify or not to renew any of the same and all necessary statutory or regulatory
obligations in any jurisdiction having been complied with where, in each case absence of
such Authorisation would have a material adverse effect on the Wider Intu Group or the
Wider Hammerson Group in each case taken as a whole;
Certain matters arising as a result of any arrangement, agreement, etc.
(i) except as Disclosed, there being no provision of any arrangement, agreement, licence,
permit or other instrument to which any member of the Wider Intu Group is a party or by
or to which any such member or any of their assets is or may be bound, entitled or be
subject to and which, in consequence of the Acquisition or the acquisition or proposed
acquisition of any Intu Shares, or control of Intu, by Hammerson or otherwise, would or
might reasonably be expected to result in, to an extent in any such case which is material
in the context of the Wider Intu Group taken as a whole:
(i) any monies borrowed by, or other indebtedness actual or contingent of, any such
member of the Wider Intu Group being or becoming repayable or being capable
of being declared immediately or prior to its or their stated maturity or the ability
of any such member to borrow monies or incur any indebtedness being inhibited
or becoming capable of being withdrawn;
(ii) the creation, save in the ordinary course of business, or enforcement of any
mortgage, charge or other security interest over the whole or any part of the
business, property or assets of any such member or any such security (whenever
arising or having arisen) being enforced or becoming enforceable;
(iii) any such arrangement, agreement, licence or instrument being terminated or
adversely modified or any action being taken of an adverse nature or any
obligation or liability arising thereunder;
(iv) any assets of any such member being disposed of or charged, or right arising
under which any such asset could be required to be disposed of or charged, other
than in the ordinary course of business;
(v) the interest or business of any such member of the Wider Intu Group in or with
any firm or body or person, or any agreements or arrangements relating to such
interest or business, being terminated or adversely modified or affected;
(vi) any such member ceasing to be able to carry on business under any name under
which it presently does so;
(vii) the creation of liabilities (actual or contingent) by any such member other than
trade creditors or other liabilities incurred in the ordinary course of business; or
(viii) the financial or trading position of any such member being prejudiced or
adversely affected,
and no event having occurred which, under any provision of any arrangement, agreement,
licence or other instrument to which any member of the Wider Intu Group is a party, or
to which any such member or any of its assets may be bound, entitled or subject, could
result in any of the events or circumstances as are referred to in paragraphs (i) to (viii) of
this Condition (i);
Certain events occurring since 30 June 2017
(j) except as Disclosed, no member of the Wider Intu Group having, since 30 June 2017:
(i) issued, agreed to issue or proposed the issue of additional shares or securities of
any class, or securities convertible into, or exchangeable for or rights, warrants
38
or options to subscribe for or acquire, any such shares, securities or convertible
securities (save as between Intu and wholly-owned subsidiaries of Intu and save
for options, awards or Intu Shares granted, and for any Intu Shares allotted upon
exercise of options or vesting of awards granted under the Intu Share Plans, the
Intu SIP or the Intu JSOP (in each case in the ordinary course)), or redeemed,
purchased or reduced any part of its share capital;
(ii) sold or transferred or agreed to sell or transfer any Treasury Shares;
(iii) recommended, declared, paid or made or proposed to recommend, declare, pay
or make any bonus, dividend or other distribution other than (i) to Intu or a
wholly-owned subsidiary of Intu; (ii) the interim dividend of 4.6 pence per Intu
Share paid on 21 November 2017; and (iii) the Permitted Dividends;
(iv) save for intra-Intu Group transactions or pursuant to the Acquisition, agreed,
authorised, proposed or announced its intention to propose any merger or
demerger or acquisition or disposal of assets or shares which are material in the
context of the Wider Intu Group taken as a whole (other than in the ordinary
course of trading) or to any material change in its share or loan capital;
(v) save for intra-Intu Group transactions, issued, authorised or proposed the issue
of any debentures or incurred any indebtedness or contingent liability which is
material in the context of the Wider Intu Group taken as a whole;
(vi) save for intra-Intu Group transactions acquired or disposed of or transferred,
mortgaged or encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading) in a manner which is material in the
context of the Wider Intu Group taken as a whole;
(vii) entered into or varied or announced its intention to enter into or vary any
contract, arrangement or commitment (whether in respect of capital
expenditure or otherwise) which is of a long-term or unusual nature or involves
or could involve an obligation of a nature or magnitude, and in either case which
is material in the context of the Wider Intu Group taken as a whole;
(viii) (other than in respect of a member of the Wider Intu Group which is dormant
and was solvent at the time) entered into or proposed or announced its intention
to enter into any reconstruction, amalgamation, transaction or arrangement
(otherwise than in the ordinary course of business) which is material in the
context of the Wider Intu Group taken as a whole;
(ix) (other than in respect of a member of the Wider Intu Group which is dormant
and was solvent at the time) taken any action nor having had any steps taken or
legal proceedings started or threatened against it for its winding-up or dissolution
or for it to enter into any arrangement or composition for the benefit of its
creditors, or for the appointment of a receiver, administrator, trustee or similar
officer of it or any of its assets (or any analogous proceedings or appointment in
any overseas jurisdiction);
(x) been unable, or admitted in writing that it is unable, to pay its debts or having
stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial part of
its business;
(xi) entered into or varied or made any offer to enter into or vary the terms of any
service agreement or arrangement with any of the directors of Intu otherwise
than in the ordinary course of business and consistent with past practice and
Intu's remuneration policy;
(xii) waived, compromised or settled any claim which is material in the context of the
Wider Intu Group taken as a whole; or
(xiii) entered into or made an offer (which remains open for acceptance) to enter into
any agreement, arrangement or commitment or passed any resolution with
respect to any of the transactions or events referred to in this Condition 3(j);
39
(k) since 30 June 2017, except as Disclosed:
(i) there having been no adverse change in the business, assets, financial or trading
position or profits or prospects of any member of the Wider Intu Group which in
any such case is material in the context of the Wider Intu Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings
having been instituted, announced or threatened by or against or remaining
outstanding against any member of the Wider Intu Group and no enquiry or
investigation by or complaint or reference to any Third Party against or in respect
of any member of the Wider Intu Group having been threatened, announced or
instituted or remaining outstanding which in any such case is material in the
context of the Wider Intu Group taken as a whole; and
(iii) no contingent or other liability in respect of any member of the Wider Intu Group
having arisen or been incurred which might reasonably be expected to adversely
affect any member of the Wider Intu Group in a manner which is material in the
context of the Wider Intu Group;
No discovery of certain matters regarding information, liabilities and environmental issues
(l) Hammerson not having discovered that, save as Disclosed:
(i) the financial, business or other information concerning the Wider Intu Group
which has been disclosed at any time by or on behalf of any member of the Wider
Intu Group whether publicly (by the delivery of an announcement to a Regulatory
Information Service) or to Hammerson or its professional advisers, either
contains a material misrepresentation of fact or omits to state a fact necessary
to make the information contained therein not misleading;
(ii) any member of the Wider Intu Group is subject to any liability, contingent or
otherwise which is material in the context of the Wider Intu Group taken as a
whole;
(iii) any past or present member of the Wider Intu Group has not complied with all
applicable legislation or regulations of any jurisdiction or any notice or
requirement of any Third Party with regard to the storage, disposal, discharge,
spillage, leak or emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health which non-compliance
would be likely to give rise to any liability (whether actual or contingent) on the
part of any member of the Wider Intu Group in each case to an extent which is
material in the context of the Wider Intu Group taken as a whole;
(iv) there has been a disposal, spillage, emission, discharge or leak of waste or
hazardous substance or any substance likely to impair the environment or harm
human health on, or from, any land or other asset now or previously owned,
occupied or made use of by any past or present member of the Wider Intu Group,
or in which any such member may now or previously have had an interest, which
would be likely to give rise to any liability (whether actual or contingent) on the
part of any member of the Wider Intu Group in each case to an extent which is
material in the context of the Wider Intu Group taken as a whole; or
(v) there is or is likely to be any obligation or liability (whether actual or contingent)
to make good, repair, reinstate or clean up any property now or previously
owned, occupied or made use of by any past or present member of the Wider
Intu Group or in which any such member may now or previously have had an
interest under any environmental legislation or regulation or notice, circular or
order of any Third Party in any jurisdiction in each case to an extent which is
material in the context of the Wider Intu Group taken as a whole.
The Conditions contained in paragraphs 3(a) to (l) inclusive must be fulfilled, be determined by
Hammerson to be or remain satisfied or (if capable of waiver) be waived by Hammerson by 11.59
40
p.m. on the date immediately preceding the Scheme Court Hearing, failing which the Scheme shall
lapse.
To the extent permitted by law and subject to the requirements of the Panel, Hammerson reserves
the right to waive all or any of the Conditions contained in paragraphs 1, and 3(d) to (l) inclusive, in
whole or in part. Hammerson shall be under no obligation to waive or treat as fulfilled any of the
Conditions contained in paragraphs 3(d) to (l) inclusive by a date earlier than the date specified above
in the Condition contained in paragraph 1 for the fulfilment thereof notwithstanding that the other
Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there
are at such earlier date no circumstances indicating that any of such Conditions may not be capable
of fulfilment.
The Scheme will not proceed if the CMA makes a Phase 2 CMA Reference in respect of the Acquisition
before the date of the Court Meeting. In such event neither Intu, Hammerson nor any Intu
Shareholder will be bound by any term of the Scheme.
PART 2: IMPLEMENTATION BY WAY OF TAKEOVER OFFER
1. Hammerson reserves the right to elect to implement the Acquisition by way of a takeover offer (as
defined in section 974 of the Companies Act), subject to the consent of the Panel and the terms of
the Co-operation Agreement. In such event, such offer will (unless otherwise determined by the
Hammerson and subject to the consent of the Panel,) be implemented on the same terms and
conditions subject to appropriate amendments to reflect the change in method of effecting the
Acquisition, which may include changing the consideration structure under the terms of the
Acquisition and (without limitation and subject to the consent of the Panel) an acceptance condition
set at 90 per cent. (or such lesser percentage, being more than 50 per cent., as Hammerson may
decide) of the voting rights then exercisable at a general meeting of Intu, including, for this purpose,
any such voting rights attaching to Intu Shares that are unconditionally allotted or issued, and to any
Treasury Shares which are unconditionally transferred or sold by Intu, before the takeover offer
becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any
outstanding subscription or conversion rights or otherwise.
2. In the event that the Acquisition is implemented by way of a takeover offer, the Intu Shares acquired
shall be acquired with full title guarantee, fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third party rights and interests of any
nature and together with all rights nor or hereafter attaching or accruing to them.
PART 3: CERTAIN FURTHER TERMS OF THE ACQUISITION
1. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference
to any other Condition.
2. To the extent permitted by law and subject to the requirements of the Panel, Hammerson reserves
the right to waive:
(a) the deadline set out in the Conditions in paragraph 2 of Part 1 of this Appendix 1 for the
timing of the Court Meeting, Intu General Meeting and the Court Hearing. If any such
deadline is not met, Hammerson shall make an Announcement by 8.00 am on the Business
Day following such deadline confirming whether it has invoked or waived the relevant
Condition or agreed with Intu to extend the deadline in relation to the relevant Condition;
and
(b) in whole or in part, all or any of the Conditions in paragraph 3(d) to (l) (inclusive) of Part 1
of this Appendix 1.
41
3. Hammerson shall be under no obligation to waive (if capable of waiver), to determine to be or remain
satisfied or to treat as fulfilled any of the Conditions by a date earlier than the latest date for the
fulfilment of that Condition notwithstanding that the other Conditions may at such earlier date have
been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any
of the Conditions may not be capable of fulfilment.
4. The Scheme will not proceed if there is a Phase 2 CMA Reference in respect of the Acquisition before
date of the Court Meeting. In such event, neither Intu, Hammerson, nor any Intu Shareholder will be
bound by the terms of the Scheme.
5. If Hammerson is required by the Panel to make an offer for Intu Shares under the provisions of Rule
9 of the Code, Hammerson may make such alterations to any of the above conditions as are
necessary to comply with the provisions of that Rule.
6. The Scheme and the Acquisition and any dispute or claim arising out of, or in connection with, them
(whether contractual or non-contractual in nature) will be governed by English law and will be
subject to the jurisdiction of the Courts of England. The Acquisition will be made on and subject to
the Conditions and further terms set out in this Appendix 1 and to be set out in the Scheme
Document. The Acquisition will be subject to the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the FCA and the UK Listing Authority.
7. The Intu Shares will be acquired under the Acquisition fully paid and free from all liens, equitable
interests, charges, encumbrances, options, rights of pre-emption and any other third party rights or
interests of any nature whatsoever and together with all rights attaching thereto, including the right
to receive and retain all dividends and other distributions and returns of value declared, paid or
made with a record date after the Scheme Record Time.
8. If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes
payable by Intu in respect of an Intu Share on or after the date of this Announcement and with a
record date on or before the Scheme Record Time, other than any Permitted Dividend, Hammerson
will have the right to adjust the Exchange Ratio accordingly by reference to the aggregate amount of
the distribution that has been declared, made, paid or is payable. If any such dividend or distribution
or return of value is paid or made after the date of this Announcement and Hammerson exercises
its rights described above, any reference in this Announcement to the consideration payable under
the Scheme shall be deemed to be a reference to the consideration as so reduced. To the extent that
any such dividend, distribution, or other return of value is declared, made or paid or is payable and
is either (i) transferred pursuant to the Acquisition on a basis which entitles Hammerson to receive
the dividend or distribution and to retain it, or (ii) cancelled, the Exchange Ratio will not be subject
to change in accordance with this paragraph 8. Any exercise by Hammerson of its rights referred to
in this paragraph shall be the subject of an Announcement and, for the avoidance of doubt, shall not
be regarded as constituting any revision or variation of the terms of the Scheme.
9. In the event that:
9.1 the aggregate value per share of all Permitted Dividends Declared by Intu in respect of an Intu Share
on or after the date of this Announcement and with a record date on or before the Scheme Record
Time (the "Intu Declared Dividends") is greater than
9.2 the aggregate value per share of all Permitted Dividends Declared by Hammerson in respect of a
Hammerson Share on or after the date of this Announcement and with a record date on or before
the Scheme Record Time (the "Hammerson Declared Dividends") multiplied by 0.475,
Hammerson will declare an equalisation dividend in respect of Hammerson Shares of an amount per
share equal to the difference between the Intu Declared Dividends divided by 0.475 and the
Hammerson Declared Dividends with a record date of the Scheme Record Time (the "Equalisation
Dividend").
42
10. In the event that:
10.1 the aggregate value per share of all Intu Declared Dividends is less than
10.2 the aggregate value per share of all Hammerson Declared Dividends multiplied by 0.475,
Intu will declare an equalisation dividend in respect of Intu Shares of an amount per share equal to
the difference between the Hammerson Declared Dividends multiplied by 0.475 and the Intu
Declared Dividends with a record date of the Scheme Record Time (the "Intu Equalisation
Dividend").
11. The availability of the New Hammerson Shares to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United
Kingdom should inform themselves about and observe any applicable requirements.
12. The New Hammerson Shares to be issued under the Scheme will be issued credited as fully paid and
will rank pari passu with the issued ordinary shares in Hammerson, including the right to receive in
full all dividends and other distributions, if any, declared, made or paid with a record date after the
Scheme Record Time. Applications will be made to: (i) the UK Listing Authority for the New
Hammerson Shares to be admitted to the Official List with a premium listing and to the London Stock
Exchange for the New Hammerson Shares to be admitted to trading on the Main Market; and (ii) the
JSE for the secondary listing and admission to trading of the New Hammerson Shares on the main
board of the JSE.
13. Fractions of New Hammerson Shares will not be allotted or issued to accepting Intu Shareholders.
Fractional entitlements to New Hammerson Shares will be aggregated and sold in the market and
the net proceeds of sale distributed pro rata to the Intu Shareholders entitled thereto (rounded to
the nearest penny).
14. Under Rule 13.5 of the Code, Hammerson may not invoke a Condition to the Acquisition so as to
cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which
give rise to the right to invoke the Condition are of material significance to Hammerson in the context
of the Acquisition. The Conditions contained in paragraphs 1, 2 and 3(a), (b), (c), (d), (e) and (f) of
Part 1 of this Appendix are not subject to this provision of the Code.
43
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement:
1. Unless otherwise stated:
- financial information relating to the Hammerson Group has been extracted or derived (without any
adjustment) from the unaudited results for the six months ended 30 June 2017; and
- financial information relating to the Intu Group has been extracted or derived (without any
adjustment) from the unaudited results for the six months ended 30 June 2017.
2. The value of the Acquisition per Intu share is calculated:
- by reference to the price of 534.5 pence per Hammerson Share, being the Closing Price on 5
December 2017, (being the last Business Day before the date of this Announcement); and
- the Exchange Ratio of 0.475 New Hammerson Shares for each Intu Share.
3. The premium calculations to the price per Intu Share have been calculated by reference to:
- the Closing Price of an Intu Share of 199 pence, as of 5 December 2017 (being the last Business Day
before the date of this Announcement);
- the volume weighted average price of an Intu Share of 213 pence for the three month period ended
on 5 December 2017 (being the last Business Day before the date of this Announcement); and
- the volume weighted average price of an Intu Share of 232 pence for the six month period ended
on 5 December 2017 (being the last Business Day before the date of this Announcement).
4. As at the close of business on 5 December 2017 (being the last Business Day before the date of this
Announcement) Hammerson had in issue 793,226,418 Hammerson Shares of 25 pence each and Intu had
in issue 1,355,040,243 Intu Shares of 50 pence each. The International Securities Identification Number
for Hammerson Shares is GB0004065016 and Intu Shares is GB0006834344.
5. The fully diluted share capital of Hammerson (being 794,412,746 Hammerson Shares) is calculated on the
basis of:
- the number of issued Hammerson Shares referred to in paragraph 4 above; and
- any further Hammerson Shares which may be issued on or after the date of this Announcement on
the exercise of options or vesting of awards under the Hammerson share schemes, amounting in
aggregate to 1,192,962 Hammerson Shares; less
- 6,634 Hammerson Shares held by the Hammerson ESOP.
6. The fully diluted share capital of Intu (being 1,350,991,103 Intu Shares) is calculated on the basis of:
- the number of issued Intu Shares referred to in paragraph 4 above; and
- any further Intu Shares which may be issued on or after the date of this Announcement on the
exercise of options or vesting of awards under the Intu Share Plans, amounting in aggregate to
7,587,121 Intu Shares; less
- 11,636,261 Intu Shares held by the Intu ESOP.
7. The combined GAV of Hammerson and Intu (being £21 billion) has been calculated by reference to:
- Hammerson’s adjusted GAV of £10,353 million, based on Hammerson’s reported GAV as at 30 June
2017 of £10,528 million, adjusted for the acquisition of Cergy 3, Paris and the disposal of Place des
Halles, Strasbourg; and
- Intu’s adjusted GAV of £10,200 million, based on Intu’s reported GAV as at 30 June 2017 of £10,584
million, adjusted for the disposal of 50 per cent. of Madrid Xanadú and 50 per cent. of intu
Chapelfield, Norwich.
44
8. The combined Net Debt of Hammerson and Intu as at 30 June 2017 adjusted for subsequent property
acquisitions and disposals (being approximately £8.2 billion) has been calculated by reference to:
- Hammerson’s adjusted Net Debt of £3,616 million, based on Hammerson’s reported Net Debt as at
30 June 2017 of £3,710 million, adjusted for the acquisition of Cergy 3, Paris and the disposal of
Place des Halles, Strasbourg; and
- Intu’s adjusted Net Debt of £4,597 million, based on Intu’s reported Net Debt as at 30 June 2017 of
£4,750 million, adjusted for the refinancing of intu Merry Hill, the additional intu Trafford Centre
debt, and the disposal of 50 per cent. of Madrid Xanadú and 50 per cent. of intu Chapelfield,
Norwich.
9. The combined LTV of Hammerson and Intu as at 30 June 2017 adjusted for subsequent property
acquisitions and disposals (being approximately 41 per cent.) has been calculated by reference to:
- The combined Net Debt of Hammerson and Intu referred to in paragraph 8 above;
- Hammerson’s adjusted GAV referred to in paragraph 7 above, excluding Premium Outlets and non-
controlling interests, but including Irish Loan Assets, the investment in VIA Outlets, and the
investment in Value Retail; and
- Intu’s adjusted GAV referred to in paragraph 7 above.
10. Unless otherwise stated, all prices and Closing Prices for Intu Shares and Hammerson Shares are closing
middle market quotations derived from the London Stock Exchange Daily Official List (SEDOL).
11. The volume weighted average prices of an Intu Share are derived from data provided by Bloomberg.
Certain figures included in this Announcement have been subject to rounding adjustments.
45
APPENDIX 3
IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
(A) Intu Directors and Shareholders
a. Irrevocable undertakings from Intu Directors
The following Intu Directors have given irrevocable undertakings to, amongst other things, vote in favour of
the Scheme at the Court Meeting and the resolutions to be proposed at the Intu General Meeting in relation
to the following Intu Shares currently held by them as well as any further Intu Shares which they may become
the registered or beneficial owner of or otherwise interested in:
Name Number of Intu Shares Percentage of issued share
capital of Intu (%)
John Strachan 30,000 0.00
Adèle Anderson 32,504 0.00
1
David Fischel 1,155,030 0.09
2
Matthew Roberts 341,992 0.03
Louise Patten 12,857 0.00
3
Richard Gordon 7,005,211 0.52
Rakhi Goss-Custard 7,383 0.00
4
Raymond Fine 169,308 0.01
5
Steven Underwood 24,567 0.00
TOTAL 8,778,852 0.65%
The obligations of the Intu Directors under the irrevocable undertakings they have given shall lapse and cease
to have effect if:
- the Scheme (or takeover offer, as applicable) is withdrawn or does not become effective on or
lapses in accordance with its terms before the Long Stop Date, provided that the reason is not
because Hammerson has elected to proceed by way of a takeover offer rather than by way of a
Scheme; or
- Hammerson announces, with the consent of the Panel, that it does not intend to make or proceed
with the Acquisition and no new replacement scheme or takeover offer is announced by
Hammerson; or
- the Co-operation Agreement is terminated in accordance with its terms.
b. Irrevocable undertakings from other Intu Shareholders
The following holders, controllers or beneficial owners of Intu shares have given irrevocable undertakings
that they shall or shall procure that the registered holder of such Intu shares shall, amongst other things, vote
in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Intu General Meeting
in relation to the following Intu Shares as well as any further Intu Shares which the relevant holders,
1 The obligations of David Fischel under the terms of his irrevocable undertaking with respect to the prohibition on
selling or otherwise transferring Intu Shares will cease to be binding in the event that his employment with Intu is
terminated prior to Completion.
2 The obligations of Matthew Roberts under the terms of his irrevocable undertaking with respect to the
prohibition on selling or otherwise transferring Intu Shares will cease to be binding in the event that his
employment with Intu is terminated prior to Completion.
3 The irrevocable undertaking given by Richard Gordon does not apply to any ordinary shares which Richard Gordon
holds through a trust holding other interests of the Gordon family.
4 Raymond Fine is an alternate director to Richard Gordon.
5 Steven Underwood is an alternate director to John Whittaker.
46
controllers or beneficial owners or their subsidiaries become the registered or beneficial owner of or become
otherwise interested in:
Name Number of Intu Shares Percentage of issued share
capital of Intu (%)
Peel Holdings (IoM) Limited 360,686,356 26.62
Cheeseden Investments Limited 5,585,334 0.41
Crescent Holding GmbH 35,454,064 2.62
TOTAL 401,725,754 29.65%
The obligations of Peel Holdings (IoM) Limited and Cheeseden Investments Limited under the irrevocable
undertakings they have given shall lapse and cease to have effect if:
- the Scheme does not become effective on or before 31 December 2019, provided that the reason
is not because Hammerson has elected to proceed by way of a takeover offer rather than by way
of a Scheme; or
- Hammerson announces that it does not intend to make or proceed with the Acquisition and no new
replacement scheme or takeover offer is announced by Hammerson.
The obligations of Crescent under the irrevocable undertakings it has given shall lapse and cease to have
effect if:
- the Scheme does not become effective on or before 31 October 2018, provided that the reason is
not because Hammerson has elected to proceed by way of a takeover offer rather than by way of
a Scheme; or
- Hammerson proceeds with the Acquisition by way of a takeover offer and the takeover offer does
not become wholly unconditional on or before 31 October 2018; or
- Hammerson announces that it does not intend to make or proceed with the Acquisition (or the
offer lapses or is otherwise withdrawn) and no new replacement scheme or takeover offer is
announced by Hammerson.
c. Letters of Intent from Intu Shareholders
The following holders, controllers or beneficial owners of Intu Shares have delivered to Hammerson non-
binding and revocable letters of intent to, amongst other things, vote in favour of the Scheme at the Court
Meeting and the resolutions to be proposed at the Intu General Meeting in relation to the Intu Shares to
which they currently hold the voting rights as well as any further Intu Shares in respect of which they become
entitled to exercise the voting rights.
Name Number of Intu Shares Percentage of issued share
capital of Intu (%)
Coronation Asset Managers (Pty) 274,716,076 20.27
Ltd
TOTAL 274,716,076 20.27%
(B) Hammerson Directors and Shareholders
a. Irrevocable undertakings from Hammerson Directors
The following Hammerson Directors have given irrevocable undertakings to, amongst other things, vote in
favour of the resolutions to be proposed at the Hammerson General Meeting in relation to the following
Hammerson Shares currently held by them as well as any further Hammerson Shares they may become the
registered or beneficial owner of or otherwise interested in:
47
Name Number of Hammerson Shares Percentage of issued share
capital of Hammerson
(%)
David Atkins 378,511 0.05
Pierre Bouchut 20,279 0.00
Gwyneth Burr 5,182 0.00
Peter Cole 324,778 0.04
Timon Drakesmith 238,871 0.03
Terrence Duddy 40,000 0.01
Andrew Formica 22,000 0.00
Judith Gibbons 4,115 0.00
Jean-Philippe Mouton 308,758 0.04
David Tyler 60,000 0.01
TOTAL 1,402,494 0.18%
The obligations of the Hammerson Directors under the irrevocable undertakings they have given shall lapse
and cease to have effect if:
- the Scheme does not become effective on or before 31 December 2019 provided that the reason
is not because Hammerson has elected to proceed by way of a takeover offer rather than by way
of a Scheme; or
- Hammerson proceeds with the Acquisition by way of a takeover offer and the takeover does not
become wholly unconditional on or before 31 December 2019; or
- Hammerson announces that it does not intend to make or proceed with the Acquisition and no new
replacement scheme or takeover offer is announced by Hammerson.
b. Irrevocable undertakings from other Hammerson Shareholders
The following holders, controllers or beneficial owners of Hammerson Shares have given irrevocable
undertakings that they shall or shall procure that the registered holder of such Hammerson Shares shall,
amongst other things, vote in favour of the resolutions to be proposed at the Hammerson General Meeting
in relation to the following Hammerson Shares as well as any further Hammerson Shares which the relevant
holders, controllers or beneficial owners or their subsidiaries become the registered or beneficial owner of
or become otherwise interested in:
Name Number of Hammerson Shares Percentage of issued share capital
of Hammerson (%)
Peel Holdings (IoM) Limited 36,230,050 4.57
Cheeseden Investments Limited 45,541 0.01
TOTAL 36,275,591 4.57%
The obligations of the holders, controllers or beneficial owners of the Hammerson Shares under the
irrevocable undertakings they have given shall lapse and cease to have effect if:
- the Scheme does not become effective on or before 31 December 2019, provided that the reason
is not because Hammerson has elected to proceed by way of a takeover offer rather than by way
of a Scheme; or
- Hammerson announces that it does not intend to make or proceed with the Acquisition and no new
replacement scheme or takeover offer is announced by Hammerson.
c. Letters of Intent from Hammerson Shareholders
The following holders, controllers or beneficial owners of Hammerson Shares have delivered to Hammerson
non-binding and revocable letters of intent to, amongst other things, vote in favour of the resolutions to be
proposed at the Hammerson General Meeting in relation to the Hammerson Shares to which they currently
48
hold the voting rights as well as any further Hammerson Shares in respect of which they become entitled to
exercise the voting rights.
Name Number of Hammerson Shares Percentage of issued share
capital of Hammerson
(%)
Coronation Asset Managers (Pty) 56,400,855 7.11
Ltd
TOTAL 56,400,855 7.11%
49
APPENDIX 4
QUANTIFIED FINANCIAL BENEFITS STATEMENT
PART A
Paragraph 3 of this Announcement (Background to and reasons for the Acquisition) includes statements of
estimated cost synergies arising from the Acquisition (the “Quantified Financial Benefits Statements”).
A copy of the Quantified Financial Benefits Statements is set out below:
Quantified Financial Benefits Statements
"The Hammerson Board expects pre-tax synergies for the Enlarged Group to reach a run-rate of approximately
£25 million per annum by the end of the second year following Completion. It is envisaged that the realisation
of these quantified cost synergies will result in one-off integration cash costs of approximately £40 million in
aggregate.
The constituent elements of the quantified cost synergies, which are expected to originate from the cost bases
of both Hammerson and Intu, principally include:
O rationalisation of group and support functions including the executive management,
representing approximately 70 per cent. of the identified synergies;
O consolidation of IT and digital platforms, representing approximately 15 per cent. of the
identified synergies; and
O further savings from reduced premises costs and other corporate costs, such as professional
services fees, representing the remaining 15 per cent. of the identified synergies.
In addition to these quantified cost synergies, the Hammerson Directors believe that there are opportunities
for further cost savings from operational efficiencies and refinancing.
Based on the analysis to date and aside from the one-off integration cash costs referred to above, the
Hammerson Directors do not expect material dis-synergies to arise in connection with the Acquisition.
These statements of identified synergies and estimated savings relate to future actions and circumstances
which by their nature involve risks, uncertainties and contingencies. As a consequence, the identified synergies
and estimated savings referred to may not be achieved, may be achieved later or sooner than estimated, or
those achieved could be materially different from those estimated.
The identified synergies will accrue as a direct result of the Acquisition and would not be achieved on a
standalone basis."
Bases of belief
Following initial discussions regarding the Acquisition, teams comprised of senior finance and commercial
personnel at Hammerson and Intu have worked collaboratively to identify and quantify potential synergies
available from the Acquisition as well as to estimate any associated costs.
The Hammerson team has since consulted with the relevant functional heads and other personnel at
Hammerson in order to test and refine the analysis undertaken by the Hammerson and Intu teams, and to
assess the nature and quantum of potential synergies available from the Acquisition, and estimate the timing
for the delivery of these synergies.
In preparing the Quantified Financial Benefits Statement, both Hammerson and Intu have shared certain
operating and financial information to facilitate a detailed analysis in support of evaluating the potential cost
synergies available from the Acquisition. In circumstances where the scope of data exchanged or the
individuals having access to it has been limited for commercial reasons, confidentiality considerations, legal
restrictions, or other reasons, Hammerson has made estimates and assumptions to aid its development of
individual synergy initiatives.
The Acquisition is subject to CMA approval. It is not possible to predict with certainty the outcome of the
CMA approval process and therefore any potential impact has not been quantified.
50
The synergy assumptions have been risk adjusted, exercising a degree of prudence in the calculation of the
estimated synergy benefit set out above.
In arriving at the Quantified Financial Benefits Statements, the Hammerson Board has assumed no material
change in macroeconomic, political, legal or regulatory conditions in the markets and regions in which
Hammerson and Intu operate and no material impact from divestments from either the Hammerson or Intu
existing businesses.
The baselines used for the quantified cost synergies were the actual operating expenses for each company
for the nine month period ending 30 September 2017, together with the forecast operating expenses for each
company for the remaining three month period ending 31 December 2017.
Reports
As required by Rule 28.1(a) of the Code, PricewaterhouseCoopers LLP, as reporting accountants to
Hammerson, has provided a report stating that, in their opinion, the Quantified Financial Benefits Statement
has been properly compiled on the basis stated. In addition Deutsche Bank, J.P. Morgan Cazenove and Lazard,
as financial advisers to Hammerson, have provided a report stating that, in their opinion, the Quantified
Financial Benefits Statement has been prepared with due care and consideration.
Copies of these reports are included in Parts B and C of this Appendix 4. PricewaterhouseCoopers LLP,
Deutsche Bank, J.P. Morgan Cazenove and Lazard have given and not withdrawn their consent to the
publication of their reports in the form and context in which they are included.
Notes
1. The statements of estimated synergies relate to future actions and circumstances which, by their
nature, involve risks, uncertainties and contingencies. As a result, the synergies referred to may not be
achieved, or may be achieved later or sooner than estimated, or those achieved could be materially different
from those estimated.
2. Due to the scale of the Enlarged Group, there may be additional changes to the Enlarged Group's
operations. As a result, and given the fact that the changes relate to the future, the resulting synergies may
be materially greater or less than those estimated.
3. No statement should be construed as a profit forecast or interpreted to mean that the Enlarged
Group's earnings in the first full year following implementation of the Acquisition, or in any subsequent
period, would necessarily match or be greater than or be less than those of Hammerson and / or Intu for the
relevant preceding financial period or any other period.
PART B
Report from PricewaterhouseCoopers LLP
The Directors
Hammerson plc
90 York Way
Kings Place
London
N1 9GE
J.P. Morgan Securities plc
25 Bank Street
Canary Wharf
London
E14 5JP
Deutsche Bank AG, (London Branch)
1 Great Winchester Street
51
London
EC2N 2DB
Lazard & Co., Limited
50 Stratton St
Mayfair
London
W1J 8LL
(J.P. Morgan Securities plc, Deutsche Bank AG (London Branch) and Lazard & Co., Limited together, the “Joint
Financial Advisors”)
6 December 2017
Dear Sirs
Quantified Financial Benefits Statement by Hammerson plc
We report on the quantified financial benefits statement (the “Statement”) by the Directors included in Part
A of Appendix 4 of the announcement dated 6 December 2017 (the “Announcement”) to the effect that:
"The Hammerson plc Board expects pre-tax synergies for the Enlarged Group to reach a run-rate of
approximately £25 million per annum by the end of the second year following Completion. It is envisaged that
the realisation of these quantified cost synergies will result in one-off integration cash costs of approximately
£40 million in aggregate.
The constituent elements of the quantified cost synergies, which are expected to originate from the cost bases
of both Hammerson plc and Intu Properties plc, principally include:
O rationalisation of group and support functions including the executive management,
representing approximately 70 per cent. of the identified synergies;
O consolidation of IT and digital platforms, representing approximately 15 per cent. of the
identified synergies; and
O further savings from reduced premises costs and other corporate costs, such as professional
services fees, representing the remaining 15 per cent. of the identified synergies.
This Statement has been made in the context of disclosure in the Announcement setting out the bases of
belief of the Directors supporting the Statement and their analysis and explanation of the underlying
constituent elements.
This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and Mergers (the “Code”) and is given
for the purpose of complying with that rule and for no other purpose.
Responsibilities
It is the responsibility of the Hammerson plc Board to make the Statement in accordance with the Code.
It is our responsibility to form our opinion as required by Rule 28.1(a)(i) of the Code, as to whether the
Statement has been properly compiled on the basis stated.
Save for any responsibility which we may have to those persons to whom this report is expressly addressed
or to the shareholders of Hammerson plc as a result of the inclusion of this report in the Announcement, and
for any responsibility arising under Rule 28.1(a)(i) of the Code to any person as and to the extent therein
provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any
liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in
connection with this report or our statement, required by and given solely for the purposes of complying with
Rule 23.3(b) of the Code, consenting to its inclusion in the Announcement.
Basis of Opinion
52
We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing
Practices Board in the United Kingdom. We have discussed the Statement together with the relevant bases
of belief (including sources of information and assumptions) with the Hammerson plc Board and with the
Joint Financial Advisers. Our work did not involve any independent examination of any of the financial or
other information underlying the Statement.
Since the Statement and the assumptions on which it is based relate to the future and may therefore be
affected by unforeseen events, we can express no opinion as to whether the actual benefits achieved will
correspond to those anticipated in the Statement and the differences may be material.
Our work has not been carried out in accordance with auditing or other standards and practices generally
accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as
if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion, on the basis of the foregoing, the Statement has been properly compiled on the basis stated.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH
T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk
PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number
OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH.
PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated
investment business.
PART C
Report from Deutsche Bank, J.P. Morgan Cazenove and Lazard
The Board of Directors
Hammerson plc
King’s Place
90 York Way
N1 9GE
6 December 2017
Dear Sirs,
Recommended All-Share Offer by Hammerson plc (“Hammerson”) for Intu Properties plc – Quantified
Financial Benefits Statement made by Hammerson
We refer to the Quantified Financial Benefits Statement, the bases of belief thereof and the notes thereto
(together, the “Statement”) made by Hammerson as set out in Part A of Appendix 4 to the announcement
dated 6 December 2017 of which this letter forms part (the “Announcement”), for which the board of
directors of Hammerson (the “Hammerson Board”) are solely responsible under Rule 28(a)(ii) of the City Code
on Takeovers and Mergers (the “Code”).
We have discussed the Statement (including the assumptions and sources of information referred to therein),
with the Hammerson Board and those officers and employees of Hammerson who developed the underlying
plans as well as with PricewaterhouseCoopers LLP. The Statement is subject to uncertainty as described in
53
the Announcement and our work did not involve an independent examination of any of the financial or other
information underlying the Statement.
We have also reviewed the work carried out by PricewaterhouseCoopers LLP and have discussed with them
the opinion set out in Part B of Appendix 4 to the Announcement addressed to yourselves and ourselves on
this matter and the accounting policies and bases of calculation for the Statement.
We have relied upon the accuracy and completeness of all the financial and other information provided to us
by, or on behalf of, Hammerson, or otherwise discussed with or reviewed by us, and we have assumed such
accuracy and completeness for the purposes of providing this letter.
We do not express any opinion as to the achievability of the quantified financial benefits identified by the
Hammerson Board.
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of the Code and for no other purpose.
We accept no responsibility to Hammerson or its shareholders or any person other than the Hammerson
Board (including, without limitation, the board and shareholders of Intu Properties plc) in respect of the
contents of this letter. Each of us is acting exclusively as financial adviser to Hammerson and no one else in
connection with the transaction between Hammerson and Intu Properties plc referred to in the
Announcement and it was solely for the purpose of complying with Rule 28.1(a)(ii) of the Code that
Hammerson requested us to prepare this letter relating to the Statement. No person other than the
Hammerson Board can rely on the contents of, or the work undertaken in connection with, this letter, and to
the fullest extent permitted by law, we exclude all liability (whether in contract, tort or otherwise) to any
other person, in respect of this letter, its contents, or the work undertaken in connection with this letter, or
any of the results or conclusions that can be derived from this letter or any written or oral information
provided in connection with this letter, and any such liability is expressly disclaimed except to the extent that
such liability cannot be excluded by law.
On the basis of the foregoing, we consider that the Statement, for which you as the Hammerson Board are
solely responsible, for the purposes of the Code has been prepared with due care and consideration.
Yours faithfully,
Deutsche Bank AG, London Branch
J.P. Morgan Securities plc
Lazard & Co., Limited
54
APPENDIX 5
DEFINITIONS
The following definitions apply throughout this document unless the context requires otherwise:
"Acquisition" the proposed acquisition by Hammerson of the entire
issued and to be issued share capital of Intu to be
implemented by the Scheme or, should Hammerson so
elect with the consent of the Panel and subject to the
terms of the Co-operation Agreement, by means of a
takeover offer
"Admission" admission of the New Hammerson Shares to the Official
List with a premium listing and to trading on the Main
Market
"Announcement" this announcement
"Australia" the Commonwealth of Australia, its states, territories
and possessions
"Authorisations" authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and
approvals
"BofA Merrill Lynch" Merrill Lynch International, a subsidiary of Bank of
America Corporation
"Business Day" a day (other than a Saturday or Sunday) on which banks
are open for general business in London
"Canada" Canada, its provinces and territories and all areas
subject to its jurisdiction and any political sub-division
thereof
"Cheeseden" Cheeseden Investments Limited
"Closing Price" the closing middle market quotations of a share derived
from the daily official list of the London Stock Exchange
"CMA" the Competition and Markets Authority of the UK
"CMA Conditions" the Conditions set out in paragraphs 3(d), (e) and (f) of
Part 1 of Appendix 1 of this Announcement
"Code" the City Code on Takeovers and Mergers
"Companies Act" the Companies Act 2006
"Completion" completion of the Acquisition
"Conditions" the conditions to the implementation of the Acquisition
(including the Scheme) which are set out in Appendix 1
to this announcement and to be set out in the Scheme
Document
"Confidentiality Agreement" the confidentiality agreement between Hammerson
and Intu dated 13 November 2017
"Confidentiality and Joint Defense the confidentiality and joint defense agreement
Agreement" entered into between Hammerson and Intu dated 21
November 2017
"Co-operation Agreement" the co-operation agreement dated 6 December 2017
between Hammerson and Intu and relating, among
other things, to the implementation of the Acquisition
"Coronation" Coronation Asset Managers (Pty) Ltd
55
"Court" Her Majesty's High Court of Justice in England and
Wales
"Court Meeting" the meeting of Intu Shareholders (or any class or classes
thereof) to be convened by an order of the Court under
the Companies Act, notice of which will be set out in
the Scheme Document, to consider, and if thought fit,
approve the Scheme (with or without amendment)
including any adjournment thereof, notice of which is
to be contained in the Scheme Document
"Court Order" the order of the Court sanctioning the Scheme under
Part 26 of the Companies Act
"Crescent" Crescent Holding GmbH
"CREST" the relevant system (as defined in the Uncertificated
Securities Regulations 2001 (SI 2001/3755)) in respect
of which Euroclear UK & Ireland Ltd is the operator
"Dealing Disclosure" an announcement pursuant to Rule 8 of the Code
containing details of dealings in interests in relevant
securities of a party to an offer
"Declared" proposed, declared, made, paid or becomes payable
"Deutsche Bank" Deutsche Bank AG, acting through its London branch
"Disclosed" the information fairly disclosed:
(i) by Intu in its published annual report and
accounts for the period ended 31 December 2016,
interim report for the period ended 30 June 2017 or the
trading update for the period ended 2 November 2017;
(ii) in any other public announcement made by
Intu in accordance with the Market Abuse Regulation,
Listing Rules, Disclosure Rules or Transparency Rules of
the FCA or otherwise after 30 June 2017;
(iii) by or on behalf of Intu to Hammerson (or its
respective officers, employees, agents or advisers in
their capacity as such) prior to the date of this
Announcement; or
(iv) in this Announcement
"Effective" in the context of the Acquisition:
(i) if the Acquisition is implemented by way of a
Scheme, means the Scheme having become
effective pursuant to its terms; or
(ii) if the Acquisition is implemented by way of a
takeover offer, such offer having become or
been declared unconditional in all respects in
accordance with its terms
"Effective Date" the date on which the Scheme becomes effective
pursuant to its terms
"Enlarged Group" the enlarged group following the Acquisition
comprising the Hammerson Group and the Intu Group
“Exchange Ratio” the exchange ratio of 0.475 New Hammerson Shares in
exchange for each Intu Share
"FCA" the Financial Conduct Authority
56
"Hammerson" Hammerson plc, incorporated in England with
registered number 360632
"Hammerson Circular" the document to be sent to Hammerson Shareholders
containing information in relation to the Acquisition
and, amongst other things, convening the Hammerson
General Meeting to approve the Hammerson
Resolutions
"Hammerson Declared Dividends" has the meaning set out in paragraph 15 (Dividends) of
this Announcement
"Hammerson Directors" or "Hammerson the board of directors of Hammerson and "Hammerson
Board" Director" means any of them
"Hammerson Equalisation Dividend" has the meaning set out in paragraph 15 (Dividends) of
this Announcement
"Hammerson General Meeting" the general meeting of Hammerson Shareholders to be
convened in connection with the Acquisition, notice of
which will be set out in the Hammerson Circular, to
consider, and if thought fit, approve various matters in
connection with the Acquisition, including any
adjournment thereof
"Hammerson Group" Hammerson and its subsidiary undertakings
"Hammerson Resolutions" the shareholder resolutions of Hammerson necessary
to implement the Acquisition, including without
limitation to approve, effect and implement the
Acquisition, to approve the Acquisition as a Class 1
transaction under the Listing Rules and to grant
authority to the Hammerson Directors to allot the New
Hammerson Shares (and any amendment(s) thereof)
"Hammerson Shareholders" holders of Hammerson Shares
"Hammerson Shares" the ordinary shares of 25 pence each in Hammerson
"Intu" Intu Properties plc, incorporated in England with
registered number 3685527
“Intu Convertible Bonds” the Intu Convertible Bonds due 2018 and the Intu
Convertible Bonds due 2022;
“Intu Convertible Bonds due 2018” £160,400,000 2.50 per cent. guaranteed convertible
bonds due 2018 issued by Intu (Jersey) Limited (a
wholly owned subsidiary of the Company), with ISIN
number XS0834486796
“Intu Convertible Bonds due 2022” £375,000,000 2.875 per cent. guaranteed convertible
bonds due 2022 issued by Intu (Jersey) 2 Limited (a
wholly owned subsidiary of the Company), with ISIN
number XS1511910025
"Intu Declared Dividends" has the meaning set out in paragraph 15 (Dividends) of
this Announcement
"Intu Directors" or "Intu Board" the board of directors of Intu and "Intu Director" means
any of them
"Intu Equalisation Dividend" has the meaning set out in paragraph 15 (Dividends) of
this Announcement
"Intu General Meeting" the general meeting of Intu Shareholders to be
convened in connection with the Acquisition, notice of
which will be set out in the Scheme Document, to
57
consider, and if thought fit, approve various matters in
connection with the Acquisition, including any
adjournment thereof
"Intu Group" Intu and its subsidiary undertakings
“Intu JSOP” the joint ownership arrangements operated by Intu in
connection with Intu Properties plc Performance Share
Plan and/or the Intu Properties plc Unapproved Share
Option Scheme
"Intu Share Plans" the Intu Properties plc Performance Share Plan, Intu
Properties plc Bonus Scheme, Intu Properties plc
Unapproved Share Option Scheme, Intu Properties plc
Approved Share Option Scheme and Intu Retail Services
Sharesave Plan 2016
"Intu Shareholders" holders of Intu Shares
"Intu Shares" ordinary shares of 50 pence each in the capital of Intu
“Intu SIP” the Intu Properties plc Share Incentive Plan
"J.P. Morgan Cazenove" J.P. Morgan Securities plc, which conducts its UK
investment banking business as J.P. Morgan Cazenove
"JSE" (i) JSE Limited, a public company incorporated in
accordance with the laws of South Africa and licensed
as an exchange under the South African Financial
Markets Act, 19 of 2012 or
(ii) the securities exchange operated by JSE Limited, as
the context indicates
"Lazard" Lazard & Co., Limited
"Listing Rules" the listing rules issued by the UK Listing Authority
pursuant to Part 6 of the Financial Services and Markets
Act 2000
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 31 December 2019 or such later date as may be agreed
in writing by Hammerson and Intu (with the Panel's
consent and as the Court may approve (if such
approval(s) are required))
"Main Market" the Main Market of the London Stock Exchange
“Market Abuse Regulation” Regulation (EU) No. 596/2014 of the European
Parliament and the Council of 16 April 2014 on market
abuse
"Merger Control Authority" any national, supra-national or regional, government or
governmental, quasi-governmental, statutory,
regulatory or investigative body or court, in any
jurisdiction, responsible for the review and/or approval
of mergers, acquisitions, concentrations, joint
ventures, or any other similar matter
"New Hammerson Shares" the new Hammerson Shares, to be allotted pursuant to
the Scheme
"Notice of Provisional Findings" the notice issued by the CMA under Rule 11 of the CMA
Rules of Procedure (CMA17)
"Notice of Possible Remedies" the notice issued by the CMA under Rule 12 of the CMA
Rules of Procedure (CMA17)
58
"Official List" the official list maintained by the UK Listing Authority
pursuant to Part 6 of the Financial Services and Markets
Act 2000
"Opening Position Disclosure" an announcement pursuant to Rule 8 of the Code
containing details of interests or short positions in, or
rights to subscribe for, any relevant securities of a party
to an offer
"Panel" or "Takeover Panel" the Panel on Takeovers and Mergers
"Peel" Peel Holdings (IOM) Limited
"Permitted Dividend" (a) in respect of Intu:
(i) any dividend in respect of Intu Shares Declared in the
ordinary course and consistent with the past practice of
Intu as to timing and amount; and
(ii) any Intu Equalisation Dividend; and
(b) in respect of Hammerson:
(i) any dividend in respect of Hammerson Shares
Declared in the ordinary course and consistent with the
past practice of Hammerson as to timing and amount;
and
(ii) any Hammerson Equalisation Dividend
"Phase 2 CMA Reference" a reference pursuant to Section 22 or 33 of the
Enterprise Act 2002 of the Acquisition to the chair of
the CMA for the constitution of a group under Schedule
4 to the Enterprise and Regulatory Reform Act 2013
"Prospectus" the prospectus or equivalent document to be published
by Hammerson under the Prospectus Rules in respect
of the New Hammerson Shares to be issued to Intu
Shareholders in connection with the Acquisition and for
the purpose of Admission
"Prospectus Rules" the prospectus rules issued by the UK Listing Authority
pursuant to Part 6 of the Financial Services and Markets
Act 2000
"Registrar of Companies" the Registrar of Companies in England and Wales
"Regulatory Information Service" a primary information provider which has been
approved by the FCA to disseminate regulated
information
"Rothschild" N.M. Rothschild & Sons Limited
"Scheme" or "Scheme of Arrangement" the Scheme of Arrangement proposed to be made
under Part 26 of the Companies Act between Intu and
the holders of the Scheme Shares to be set out in the
Scheme Document, with or subject to any modification,
addition or condition approved or imposed by the
Court
"Scheme Court Hearing" the hearing of the Court to sanction the Scheme
"Scheme Document" the document to be sent to Intu Shareholders setting
out, amongst other things, the Scheme and notices
convening the Court Meeting and the Intu General
Meeting
"Scheme Record Time" the time and date specified as such in the Scheme
Document, expected to be 6.00 p.m. on the Business
59
Day immediately preceding the Effective Date or such
other time as Hammerson and Intu may agree
"Scheme Shareholders" holders of Scheme Shares and a "Scheme Shareholder"
shall mean any one of those scheme shareholders
"Scheme Shares" the Intu Shares:
(i) in issue at the date of the Scheme Document
and which remain in issue at the Scheme
Record Time;
(ii) (if any) issued after the date of the Scheme
Document but before the Voting Record Time
and which remain in issue at the Scheme
Record Time; and
(iii) (if any) issued at or after the Voting Record
Time but at or before the Scheme Record Time
on terms that the holder thereof shall be
bound by the Scheme or in respect of which
the original or any subsequent holders thereof
are, or have agreed in writing to be, bound by
the Scheme and, in each case, which remain in
issue at the Scheme Record Time
excluding, in any case, any Intu Shares held in treasury
or held by or on behalf of Hammerson or any member
of the Hammerson Group at the Scheme Record Time
“Significant Interest” in relation to an undertaking, a direct or indirect
interest of 20 per cent. or more of (i) the total voting
rights conferred by the equity share capital (as defined
in section 548 of the Companies Act) of such
undertaking or (ii) the relevant partnership interest
"South Africa" the Republic of South Africa
"subsidiary" and "subsidiary undertaking" have the meanings given to them in the Companies Act
"Third Party" any government or governmental, quasi-
governmental, supra-national, statutory,
administrative or regulatory body, authority, court,
trade agency, association, institution, environmental
body or any other person or body in any jurisdiction
"Treasury Shares" shares held as treasury shares as defined in section
724(5) of the Companies Act
"UBS" UBS Limited
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"UK Listing Authority" the Financial Conduct Authority when it is exercising its
powers under Part 6 of the Financial Services and
Markets Act 2000 as amended
"United States" or "US" the United States of America, its territories and
possessions, any state of the United States of America,
the District of Columbia, and all other areas subject to
its jurisdiction
"Voting Record Time" the time and date specified in the Scheme Document
by reference to which entitlement to vote at the Court
Meeting will be determined, expected to be 6.30 p.m.
60
on the day which is two days before the date of the
Court Meeting or if the Court Meeting is adjourned,
6.30 p.m. on the day which is two days before such
adjourned meeting
“Wider Hammerson Group” Hammerson and its subsidiaries, subsidiary
undertakings, associated undertakings and any other
body corporate, partnership, joint venture or person in
which Hammerson and all such undertakings
(aggregating their interests) have a Significant Interest
“Wider Intu Group” Intu and its subsidiaries, subsidiary undertakings,
associated undertakings and any other body corporate,
partnership, joint venture or person in which Intu and
all such undertakings (aggregating their interests) have
a Significant Interest
"Wider Peel Group" Peel and Cheeseden and their respective subsidiaries
"£" or "Sterling" pounds sterling, the lawful currency for the time being
of the UK and references to "pence" and "p" shall be
construed accordingly
All times referred to are London time unless otherwise stated.
All references to statutory provision or law or to any order or regulation shall be construed as a reference to
that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and
all statutory instruments, regulations and orders from time to time made thereunder or deriving validity
therefrom.
Hammerson has its primary listing on the London Stock Exchange and a secondary inward listing
on the Johannesburg Stock Exchange.
Joint Sponsors:
Deutsche Securities (SA) Proprietary Limited
Java Capital
61
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