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Recommended cash acquisition of RDI REIT
RDI REIT P.L.C.
("RDI" or the "Company" or the "Group")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00BH3JLY32
LEI: 2138006NHZUMMRYQ1745
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
26 February 2021
RECOMMENDED CASH ACQUISITION
of
RDI REIT P.L.C.
by
SOF-12 CAMBRIDGE BIDCO LIMITED
(a newly formed company owned by Starwood Funds)
to be implemented by means of a Scheme of Arrangement
under Part X of the Isle of Man Companies Act 2006
Summary
- The board of SOF-12 Cambridge BidCo Limited ("Bidco") and the independent
directors of RDI REIT P.L.C. ("RDI REIT") are pleased to announce that they have
reached agreement on the terms of a recommended cash offer to be made by Bidco for
the entire issued and to be issued share capital of RDI REIT, other than RDI REIT
Shares already owned or controlled by Starwood Funds (the "Acquisition"). As at
25 February 2021 (being the last Business Day prior to the date of this announcement) Starwood
Funds owned or controlled 112,597,728 RDI REIT Shares, representing 29.59 per
cent. of RDI REIT's issued share capital at such date.
- It is intended that the Acquisition will be implemented by way of a court-sanctioned
scheme of arrangement under Chapter 2 of Part X of the IOM Act (although Bidco
reserves the right to effect the Acquisition by way of an Offer, subject to the consent of
the Panel).
- Under the terms of the Acquisition, each RDI REIT Shareholder will be entitled to
receive:
for each RDI REIT Share: 121.35 pence in cash (the "Cash Consideration")
- The price per RDI REIT Share represents a premium of approximately:
- 33.1 per cent. to the Closing Price of 91.2 pence per RDI REIT Share on 25 February 2021
(being the last Business Day prior to the date of this announcement);
- 39.2 per cent. to the three month volume weighted average price of 87.2 pence per
RDI REIT Share to 25 February 2021 (being the last Business Day before the date of this
announcement);
- 38.2 per cent. to the six month volume weighted average price of 87.8 pence per
RDI REIT Share to 25 February 2021 (being the last Business Day before the date of this
announcement); and
- 19.9 per cent. discount to the last reported EPRA NAV of 151.5 pence per RDI
REIT Share at 31 August 2020; and
- 16.8 per cent. discount to the last reported EPRA NNNAV of 145.9 pence per
RDI REIT Share at 31 August 2020.
- It should be noted that a revised valuation for the value of RDI REIT's property
portfolio as at 28 February 2021 will be published pursuant to Rule 29 of the Takeover
Code in the Scheme Document.
- The Acquisition values the entire issued and to be issued share capital of RDI REIT at
approximately GBP467.9 million on a fully diluted basis.
- The Cash Consideration payable to RDI REIT Shareholders under the terms of the
Acquisition will be financed entirely by equity to be invested by Starwood Funds.
- If, on or after the date of this announcement, any dividend and/or other distribution
and/or other return of capital is declared, made or paid or becomes payable in respect
of the RDI REIT Shares, the Cash Consideration shall automatically be reduced by an
amount equal to the amount of such dividend and/or distribution and/or return of
capital, in which case any reference in this announcement to the Cash Consideration
will automatically be deemed to be a reference to the Cash Consideration as so reduced
by the amount of such dividend and/or distribution and/or return of capital. In such
circumstances, RDI REIT Shareholders would be entitled to receive and retain any such
dividend or other distribution and/or return of capital. Any reduction in the Cash
Consideration pursuant to this paragraph shall not be regarded as constituting any
revision or variation of the terms of the Acquisition or the Scheme. In accordance with
the requirements of the UK REIT regime, the RDI REIT Directors intend to declare and
pay a dividend after the date of this announcement, but prior to the Scheme Record Time.
- The Cash Consideration is priced in pounds sterling. However, RDI REIT Shareholders
on the South African register will, as is required, receive any Cash Consideration due to
them under the terms of the Acquisition in South African Rand. The Scheme Document
will include further details in relation to this currency exchange.
- The RDI REIT Shares owned or controlled by Starwood Funds (being 112,597,728
RDI REIT Shares as at 25 February 2021 (being the last Business Day prior to the date of this
announcement) will not be Scheme Shares and will not require to be acquired by Bidco
pursuant to the Acquisition. Starwood Funds will not be permitted to vote such RDI
REIT Shares at the Court Meeting, but will be permitted to vote such RDI REIT Shares
at the General Meeting.
Background to and reasons for the Acquisition
- Starwood Funds have maintained a significant strategic shareholding in RDI REIT
since July 2020.
- Starwood believes that RDI REIT is well-managed and has an attractive and high-
quality real estate portfolio.
- However, Starwood also notes the persistent discount to EPRA NAV on which RDI
REIT has traded over the last 3 years.
- Given RDI REIT's scale and constrained access to capital, Starwood therefore believes
the next stage of RDI REIT's evolution will be better suited to ownership under the
control of Starwood.
- Starwood and Bidco have committed to fully safeguard the existing employment rights
of the management and employees of RDI REIT, including regarding pensions, in
accordance with applicable law.
Recommendation
- The Independent RDI REIT Directors, who have been so advised by J.P. Morgan
Cazenove and Peel Hunt as to the financial terms of the Acquisition, consider the terms
of the Acquisition to be fair and reasonable. In providing their financial advice to the
Independent RDI REIT Directors, J.P. Morgan Cazenove and Peel Hunt have taken into
account the commercial assessments of the Independent RDI REIT Directors. Peel Hunt
is providing independent financial advice to the Independent RDI REIT Directors for
the purposes of Rule 3 of the Takeover Code.
- Accordingly, the Independent RDI REIT Directors intend to recommend unanimously
that, in the case of the Court Meeting, the Scheme Shareholders vote in favour of the
Scheme and, in the case of the General Meeting, RDI REIT Shareholders vote in favour
of the RDI REIT Resolutions (or, in the event that the Acquisition is implemented by
way of an Offer, to accept or procure acceptance of such Offer), as all Independent RDI
REIT Directors who hold RDI REIT Shares have irrevocably undertaken to do in
respect of their own beneficial holdings totalling 393,847 RDI REIT Shares
(representing approximately 0.10 per cent. of the existing issued ordinary share
capital of RDI REIT and approximately 0.15 per cent. of the Scheme Shares eligible
to vote at the Court Meeting, each as at 25 February 2021, being the last Business Day
prior to this announcement). Further details of these irrevocable undertakings (including the
circumstances in which they cease to be binding) are set out in Appendix 3 to this
announcement.
- Matthew Parrott is a director of RDI REIT but was appointed as a representative of Starwood Funds
and is also employed by Starwood and therefore has taken no part in the consideration of the Acquisition
by the Independent RDI REIT Directors.
Irrevocable undertakings
- With the irrevocable undertakings from the Independent RDI REIT Directors described
above, Bidco has procured irrevocable commitments to vote in favour of:
- the Scheme at the Court Meeting, including those from the Independent RDI
REIT Directors who own RDI REIT Shares, in respect of, in aggregate, 393,847 RDI
REIT Shares (representing approximately 0.10 per cent. of the existing issued
ordinary share capital of RDI REIT and approximately 0.15 per cent. of the
Scheme Shares eligible to vote at the Court Meeting, in each case as at 25 February 2021,
being the last Business Day prior to this announcement).
- the RDI REIT Resolutions (or in the event that the Acquisition is implemented
by an Offer, to accept or procure acceptance of such Offer), including those
from the Independent RDI REIT Directors who own RDI REIT Shares, in
respect of, in aggregate, 393,847 RDI REIT Shares (representing approximately 0.10
per cent. of the existing issued ordinary share capital of RDI REIT as at 25 February
2021, being the last Business Day prior to this announcement).
- Further details of these irrevocable undertakings (including the circumstances in which
they cease to be binding) are set out in Appendix 3 to this announcement.
Information on Bidco and Starwood
- Bidco is a newly incorporated company, formed on behalf of Starwood Funds for the
purposes of the Acquisition.
- Starwood Capital Group is a private investment firm with a core focus on global real
estate, energy infrastructure and oil & gas. Starwood Capital Group and its affiliates maintain 16
offices in seven countries around the world, and currently have approximately 4,100
employees. Since its inception in 1991, Starwood Capital Group has raised over $55
billion of equity capital, and currently has in excess of $70 billion of assets under
management. Starwood Capital Group has invested in virtually every category of real estate on a global
basis, opportunistically shifting asset classes, geographies and positions in the capital
stack as it perceives risk/reward dynamics to be evolving. Over the past 29 years,
Starwood Capital Group and its affiliates have successfully executed an investment
strategy that involves building enterprises in both the private and public markets.
Additional information can be found at starwoodcapital.com.
Timetable and Conditions
- It is intended that the Acquisition will be implemented by way of a court-sanctioned
scheme of arrangement under Chapter 2 of Part X of the IOM Act (although Bidco
reserves the right to effect the Acquisition by way of an Offer, subject to the consent of
the Panel). In order to become Effective, the Scheme must be approved by a majority
in number of the Scheme Shareholders voting at the Court Meeting, either in person or
by proxy, representing at least 75 per cent. in value of the Scheme Shares voted and be
sanctioned by order of the Court. The implementation of the Scheme must also be
approved by the requisite majority of RDI REIT Shareholders at the General Meeting,
and a certified copy of the Court Order, together with a copy of the Scheme Document
and all documents required to be annexed thereto (if any), must be delivered to the
Companies Registry for registration within seven days after the making of the Court
Order, and the Companies Registry must register such documents on RDI REIT's file,
upon which the Scheme will become Effective.
- The Conditions to the Acquisition are set out in full in Appendix 1 to this
announcement, together with certain other terms. The full terms and conditions will be
provided in the Scheme Document.
- It is expected that the Scheme Document, containing further information about the
Acquisition and notices of the Court Meeting and General Meeting, together with the
associated forms of proxy, will be posted to RDI REIT Shareholders within 28 days of
this announcement (or such later time as RDI REIT, Bidco and the Panel agree) and the
Meetings are expected to be held shortly thereafter. The Acquisition is currently
expected to complete during the second quarter of 2021, subject to approval of the RDI
REIT Shareholders, satisfaction or (where capable of waiver) the waiver of the
Conditions and the sanction of the Scheme by the Court. An expected timetable of key
events relating to the Acquisition will be provided in the Scheme Document.
Commenting on the Acquisition, Gavin Tipper, Chairman of RDI REIT said:
"Collectively the Board has carefully assessed Starwood's proposed offer, taking into account
all relevant factors including the Company's historic share price performance; the short to
medium term outlook for the real estate sectors in which the portfolio is invested, in particular
hotels and flexible workspace; and, given where we are in the cycle, the future ability of the
management to effectively implement the portfolio strategy and recycle capital to deliver on
the strategy in the current market.
While the Board believes in the quality of the portfolio and the strength of the management
team, the significant uncertainty regarding a market recovery, strategy execution and any
narrowing of the share price discount to NAV, means that we believe that recommending this
cash offer provides certainty of value and is in the best interest of our shareholders."
Commenting on the Acquisition, Krysto Nikolic, Managing Director of Starwood and
Starwood's Head of Real Estate Europe said:
"We are pleased to announce this Acquisition, which we believe represents an attractive
opportunity for investors to realise liquidity and a significant premium to the three month
volume weighted average price of 87.2 pence per RDI REIT Share. We look forward to supporting
RDI REIT and its management team going forward."
This summary should be read in conjunction with the following announcement and the
Appendices. The Conditions to, and certain further terms of, the Acquisition are set out
in Appendix 1. The bases and sources for certain financial information contained in this
announcement are set out in Appendix 2. Details of the irrevocable undertakings received
by Bidco are set out in Appendix 3. Certain definitions and terms used in th
announcement are set out in Appendix 4.
Enquiries:
RDI REIT Tel: +44 (0) 207 811 0100
Stephen Oakenfull
Donald Grant
J.P. Morgan Cazenove (Lead Financial Tel: +44 (0) 207 742 4000
Adviser and Joint Corporate Broker to
RDI REIT)
Bronson Albery
Celia Murray
Tara Morrison
Peel Hunt (Joint Financial Adviser and Tel: +44 (0) 20 7418 8900
Joint Corporate Broker to RDI REIT)
Capel Irwin
Carl Gough
Michael Nicholson
James Britton
Java Capital Proprietary Limited (JSE Tel: +27 11 722 3075
Sponsor and Corporate Adviser to RDI
REIT)
Kevin Joselowitz
Jean Tyndale-Biscoe
FTI Consulting (PR adviser to RDI REIT) Tel: +44 (0) 20 3727 1000
Dido Laurimore
Claire Turvey
rdireit@fticonsulting.com
Instinctif Partners (South Africa PR Tel: +27 (0) 11 447 3030
adviser to RDI REIT)
Frederic Cornet
RDI@instinctif.com
Bidco / Starwood
Neil Bennett of Maitland/AMO (PR Adviser Tel: +44 (0)7900 000 777
to Bidco and Starwood)
Rhys Jones of Maitland/AMO (PR Adviser to Tel: +44 (0)7881 996 460
Bidco and Starwood)
Eastdil Secured (Financial Adviser to Bidco Tel: +44 (0)20 7074 4950
and Starwood)
Max von Hurter
Tomas Ribeiro
Kirkland & Ellis International LLP is acting as legal adviser to Starwood and Bidco, with
assistance from Appleby (Isle of Man) LLC as to matters of Isle of Man law.
CMS Cameron McKenna Nabarro Olswang LLP is acting as legal adviser to RDI REIT, with
assistance from Simcocks Advocates Limited as to matters of Isle of Man law.
Further information
This announcement is for information purposes only and is not intended to and does not
constitute, or form part of, an 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 (or, if the
Acquisition is implemented by way of an Offer, the Offer 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. RDI REIT Shareholders are advised to read the
Scheme Document (including the associated forms of proxy) (or, if the Acquisition is
implemented by way of an Offer, the Offer Document) carefully when it becomes available
because it will contain important information in relation to the Acquisition. Any decision in
respect of, or other response to, the Acquisition by RDI REIT Shareholders should be made
only on the basis of the information contained in the Scheme Document (and/or, in the event
that the Acquisition is to be implemented by way of an Offer, the Offer Document).
This announcement has been prepared for the purpose of complying with English and Isle of
Man 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 and the Isle of Man.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel,
the London Stock Exchange, the JSE and the FCA.
RDI REIT will prepare the Scheme Document to be distributed to the RDI REIT Shareholders.
RDI REIT urges RDI REIT Shareholders to read the Scheme Document carefully when it
becomes available because it will contain important information in relation to the Acquisition.
Any vote in respect of the resolutions to be proposed at the Court Meeting or the 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 statements contained in this announcement are made as at the date of this announcement,
unless some other time is specified in relation to them, and service of this announcement shall
not give rise to any implication that there has been no change in the facts set forth in this
announcement since such date.
Important notices about financial advisers
Eastdil Secured International Limited ("Eastdil Secured"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial
adviser for Bidco and Starwood and no one else in connection with the Acquisition and other
matters set out in this announcement and will not be responsible to anyone other than Bidco
and Starwood for providing the protections afforded to clients of Eastdil Secured, or for providing
advice in connection with the Acquisition, the content of this announcement or any matter
referred to herein. Neither Eastdil Secured nor any of its subsidiaries, affiliates or branches
owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Eastdil Secured in connection with the Acquisition, this announcement, any
statement or other matter or arrangement referred to herein or otherwise.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan
Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the PRA and
regulated by the PRA and the FCA. J.P. Morgan Cazenove is acting as financial adviser
exclusively for RDI REIT 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 Acquisition
and will not be responsible to anyone other than RDI REIT for providing the protections
afforded to clients of J.P. Morgan Cazenove nor its affiliates, nor for providing advice in
connection with the Acquisition or any matter referred to herein.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting as financial adviser exclusively for RDI REIT and
for no one else in connection with the matters referred to in this announcement and will not be
responsible to anyone other than RDI REIT for providing the protections afforded to clients of
Peel Hunt or for providing advice in relation to the contents of, or matters referred to in, this
announcement.
Java Capital Proprietary Limited, which is authorised and regulated in South Africa by the
JSE, is acting as JSE sponsor and corporate advisor exclusively for RDI REIT and for no one
else in connection with the matters referred to in this announcement and will not be responsible
to anyone other than RDI REIT for providing the protections afforded to clients of Java Capital
or for providing advice in relation to the contents of, or matters referred to in, this
announcement.
Overseas Shareholders
This announcement has been prepared in accordance with English and Isle of Man law, the
Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which would have been prepared
in accordance with the laws of jurisdictions outside the UK and the Isle of Man. The release,
publication or distribution of this announcement in or into jurisdictions other than the UK, the
Isle of Man or South Africa may be restricted by law and therefore any persons who are subject
to the law of any jurisdiction other than the UK, the Isle of Man or South Africa should inform
themselves about, and observe, any applicable legal or regulatory requirements.
The availability of the Acquisition to RDI REIT Shareholders who are not resident in and
citizens of the UK, the Isle of Man or South Africa may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons who are not
resident in the UK, the Isle of Man or South Africa should inform themselves of, and observe,
any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability
of persons who are not resident in the United Kingdom, the Isle of Man or South Africa to vote
their RDI REIT Shares with respect to the Scheme at the Court Meeting and/or the General
Meeting, or to appoint another person as proxy to vote at the Court Meeting and/or the General
Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they
are located or to which they are subject. Any failure to comply with the applicable restrictions
may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in the Acquisition disclaim
any responsibility or liability for the violation of such restrictions by any person. Further
details in relation to Overseas Shareholders will be contained in the Scheme Document.
Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by
applicable law and regulation, the Acquisition will not be made available, directly or
indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and no person may vote in favour of the Scheme by any such use, means,
instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Copies of this announcement and
any formal documentation relating to the Acquisition are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent (including without limitation
by electronic means) in or into or from any Restricted Jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid
any related purported vote in respect of the Acquisition. If the Acquisition is implemented by
way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may
not be made directly or indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction and the Offer may
not be capable of acceptance by any such use, means, instrumentality or facilities.
Notice to US investors in RDI REIT
The US holders of RDI REIT Shares should note that the Acquisition is being made by means
of a scheme of arrangement provided for under the laws of the Isle of Man. A transaction
effected by means of a scheme of arrangement is not subject to the tender offer or proxy
solicitation rules under the Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK and the Isle of Man to schemes of
arrangement which differ from the disclosure requirements of the US tender offer and proxy
solicitation rules.
The financial information included in this announcement or that may be included in the Scheme
Document has been (or will be) prepared in accordance with generally accepted accounting
principles of the UK and thus 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.
Bidco reserves the right, subject to obtaining the prior consent of the Panel, to elect to
implement the Acquisition by way of an Offer. If, in the future, Bidco exercises its right to
implement the Acquisition by way of an Offer, and determine to extend the Offer into the United
States, such Offer and the Acquisition will be made in compliance with the applicable US laws
and regulations including to the extent applicable Section 14(e) of the US Exchange Act and
Regulation 14E thereunder, and in accordance with the Takeover Code. Accordingly, the
Acquisition would be subject to disclosure and other procedural requirements, including with
respect to withdrawal rights, offer timetable, settlement procedures and timing of payments
that are different from those applicable under US domestic tender offer procedures and law.
Such an Offer would be made in the United States by Bidco and no one else.
It may be difficult for US holders of RDI REIT Shares to enforce their rights and any claim
arising out of the US federal laws in connection with the Acquisition, since each of Bidco and
RDI REIT are located in a non-US jurisdiction, and some or all of their officers and directors
may be residents of a non-US jurisdiction. US holders of RDI REIT Shares may not be able to
sue a non-US company or its officers or directors in a non-US court for violations of the US
securities laws. Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.
Neither the US Securities and Exchange Commission nor any US state securities commission
has approved or disapproved or passed judgement upon the fairness or the merits of the
Acquisition, or determined if the information contained in this announcement is adequate,
accurate or complete. Any representation to the contrary is a criminal offence in the US.
US RDI REIT Shareholders also should be aware that the transaction contemplated herein
(including the receipt of consideration pursuant to the Acquisition) may have tax consequences
in the US and that such consequences, if any, are not described herein. US RDI REIT
Shareholders are urged to consult their independent legal, tax and financial advisers in
connection with making a decision regarding this transaction.
In accordance with the Takeover Code and to the extent permitted under Rule 14e-5(b) under
the Exchange Act, Bidco, certain affiliated companies or their respective nominees, or brokers
(acting as agents) may from time to time make certain purchases of, or arrangements to
purchase, RDI REIT securities other than pursuant to the Acquisition, either in the open market
at prevailing prices or through privately negotiated purchases at negotiated prices outside the
US until the date on which the Scheme becomes Effective, lapses or is otherwise withdrawn
(or, if the Acquisition is implemented by way of an Offer, before or during the period in which
such Offer would remain open for acceptance). To the extent required by Rule 14e-5(b), such
purchases, or arrangements to purchase, must comply with English law, the Takeover Code,
the Listing Rules and the JSE Listings Requirements. Any information about such purchases
will be disclosed to the Panel and, to the extent that such information is required to be publicly
disclosed in the United Kingdom in accordance with applicable regulatory requirements, will
be made available to all investors (including US investors) via the Regulatory Information
Service on the London Stock Exchange website at www.londonstockexchange.com and via SENS.
Forward Looking Statements
This announcement (including information incorporated by reference in this announcement),
oral statements made regarding the Acquisition, and other information published by Bidco and
RDI REIT contain statements which are, or may be deemed to be, "forward-looking
statements". Forward-looking statements are statements of future expectations which are
prospective in nature and are not based on historical facts, but rather on current expectations,
projections and assumptions of the management of Bidco and RDI REIT about future events,
and are therefore subject to risks and uncertainties which could cause actual results,
performance or events to differ materially from those expressed or implied in these statements.
The forward-looking statements contained in this announcement include statements relating to
the expected effects of the Acquisition on Bidco and RDI REIT (including their future prospects,
developments and strategies), the expected timing and scope of the Acquisition and other
statements other than historical facts. All statements other than statements of historical fact
are, or may be deemed to be, forward looking statements. Often, but not always, forward-
looking statements can be identified by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget", "projects",
"strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases and statements that certain
actions, events or results "may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved.
All forward looking statements contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section. Although Bidco
and RDI REIT believe that the expectations reflected in such forward-looking statements are
reasonable, Bidco and RDI REIT (and their respective associates, directors, officers and
advisers) can give no representation, assurance or guarantee that such expectations will prove
to be correct. 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. There are a
number of factors that could cause actual results and developments to differ materially from
those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the Acquisition; the ability
to obtain requisite regulatory and shareholder approvals and the satisfaction of other
Conditions on the proposed terms and schedule; future market conditions, changes in general
economic and business conditions, the behaviour of other market participants, the anticipated
benefits from the proposed transaction not being realised as a result of changes in general
economic and market conditions in the countries in which Bidco and RDI REIT operate, weak,
volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and
currency value fluctuations, the degree of competition in the geographic and business areas in
which Bidco and RDI REIT operate, the impact of COVID-19 and changes in laws or in
supervisory expectations or requirements. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking statements. Such
forward-looking statements should therefore be construed in the light of such factors. Neither
Bidco nor RDI REIT, nor any of their respective associates or directors, officers or advisers,
provides any representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this announcement will actually
occur. You are cautioned not to place any reliance on these forward-looking statements.
Specifically, statements of estimated cost savings and synergies, if any, relate to future actions
and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a
result, any cost savings and synergies referred to may not be achieved, may be achieved later
or sooner than estimated, or those achieved could be materially different from those estimated.
Each forward looking statement speaks only as of the date of this announcement. Other than
in accordance with their legal or regulatory obligations, neither Bidco nor RDI REIT is under
any obligation, and Bidco and RDI REIT expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit estimate or quantified
benefits statement for any period and no statement in this announcement should be interpreted
to mean that earnings or earnings per share for RDI REIT for the current or future financial
years would necessarily match or exceed the historical published earnings or earnings per
share for RDI REIT.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% 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 pm (London time) on the 10th Business Day following the commencement of
the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
Business Day following the announcement in which any 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 Takeover Code, any person who is, or becomes, interested in 1% 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 pm (London time) on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be deemed to be a single person for the
purpose of Rule 8.3 of the Takeover Code.
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 of the Takeover Code).
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.
Publication on a website
This announcement and the documents required to be published pursuant to Rule 26.1 of the
Takeover Code will be available, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on RDI REIT's website at www.rdireit.com and on Bidco's website at
www.projectcambridge.com promptly and in any event by no later than 12 noon on the
Business Day following the date of this announcement. The content of the websites referred to
in this announcement is not incorporated into and does not form part of this announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, RDI REIT Shareholders, persons with
information rights and participants in RDI REIT Share Plans may request a hard copy of this
announcement by contacting RDI REIT's Company Secretary, during business hours on +44
(0)207 811 0100 or at info@rdireit.com. In accordance with Rule 30.3 of the Takeover Code,
a person so entitled may also request that all future documents, announcements and
information be sent to them in relation to the Acquisition should be in hard copy form. For
persons who receive a copy of this announcement in electronic form or via a website
notification, a hard copy of this announcement will not be sent unless so requested. Such
persons 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 from an independent financial adviser
duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the UK or duly authorised under the Financial Advisory and Intermediary Services
Act 37 of 2002 (as amended) if you are resident in South Africa or, if not, from an appropriately
authorised independent financial adviser.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other information provided
by RDI REIT Shareholders, persons with information rights and other relevant persons for the
receipt of communications from RDI REIT may be provided to Bidco during the offer period
as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c).
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
figures that precede them.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, RDI REIT confirms that, as at 25 February 2021
(being the last Business Day prior to the date of this announcement), it had in issue
380,590,061 ordinary shares of 40 pence each (excluding shares held in treasury). The ISIN
for the shares is IM00BH3JLY32.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
26 February 2021
RECOMMENDED CASH ACQUISITION
of
RDI REIT P.L.C.
by
SOF-12 CAMBRIDGE BIDCO LIMITED
(a newly formed company owned by Starwood Funds)
to be implemented by means of a Scheme of Arrangement
under Part X of the Isle of Man Companies Act 2006
1. Introduction
The board of SOF-12 Cambridge BidCo Limited ("Bidco") and the independent
directors of RDI REIT P.L.C. ("RDI REIT") are pleased to announce that they have
reached agreement on the terms of a recommended cash offer to be made by Bidco for
the entire issued and to be issued share capital of RDI REIT, other than RDI REIT
Shares already owned or controlled by Starwood Funds (the "Acquisition"). As at 25 February
2021 (being the last Business Day prior to the date of this announcement) Starwood
Funds owned or controlled 112,597,728 RDI REIT Shares, representing 29.59 per
cent. of RDI REIT's issued share capital at such date.
It is intended that the Acquisition will be implemented by way of a court-sanctioned
scheme of arrangement under Chapter 2 of Part X of the IOM Act (although Bidco
reserves the right to effect the Acquisition by way of an Offer, subject to the consent of
the Panel). The Conditions to the Acquisition are set out in full in Appendix 1 to this
announcement.
2. The Acquisition
The Acquisition, which will be on the terms and subject to the conditions set out below
and in Appendix 1, and to be set out in the Scheme Document, will be made on the
following basis:
for each RDI REIT Share: 121.35 pence in cash (the "Cash Consideration")
- The price per RDI REIT Share represents a premium of approximately:
- 33.1 per cent. to the Closing Price of 91.2 pence per RDI REIT Share on 25 February 2021
(being the last Business Day prior to the date of this announcement);
- 39.2 per cent. to the three month volume weighted average price of 87.2 pence per
RDI REIT Share to 25 February 2021 (being the last Business Day before the date of this
announcement);
- 38.2 per cent. to the six month volume weighted average price of 87.8 pence per
RDI REIT Share to 25 February 2021 (being the last Business Day before the date of this
announcement); and
- 19.9 per cent. discount to the last reported EPRA NAV of 151.5 pence per RDI
REIT Share at 31 August 2020; and
- 16.8 per cent. discount to the last reported EPRA NNNAV of 145.9 pence per
RDI REIT Share at 31 August 2020.
- It should be noted that a revised valuation for the value of RDI REIT's property
portfolio as at 28 February 2021 will be published pursuant to Rule 29 of the Takeover
Code in the Scheme Document.
- The Acquisition values the entire issued and to be issued share capital of RDI REIT at
approximately GBP467.9 million on a fully diluted basis.
- The Scheme Shares will be acquired pursuant to the Acquisition fully paid and free
from all liens, charges, equities, encumbrances, rights of pre-emption and any other
interests of any nature whatsoever and together with all rights attaching thereto,
including without limitation voting rights and the right to receive and retain in full all
dividends and other distributions (if any) announced, declared, made or paid, or any
other return of capital (whether by way of reduction of share capital or share premium
account or otherwise) made, on or after the Scheme Record Time other than any
dividend or distribution in respect of which the Cash Consideration has been reduced
in accordance with the terms of the Acquisition and as set out in this announcement.
- If, on or after the date of this announcement, any dividend and/or other distribution
and/or other return of capital is declared, made or paid or becomes payable in respect
of the RDI REIT Shares, the Cash Consideration shall automatically be reduced by an
amount equal to the amount of such dividend and/or distribution and/or return of
capital, in which case any reference in this announcement to the Cash Consideration
will automatically be deemed to be a reference to the Cash Consideration as so reduced
by the amount of such dividend and/or distribution and/or return of capital. In such
circumstances, RDI REIT Shareholders would be entitled to receive and retain any such
dividend or other distribution and/or return of capital. Any reduction in the Cash
Consideration pursuant to this paragraph shall not be regarded as constituting any
revision or variation of the terms of the Acquisition or the Scheme. In accordance with
the requirements of the UK REIT regime, the RDI REIT Directors intend to declare and
pay a dividend after the date of this announcement, but prior to the Scheme Record Time.
- The Cash Consideration is priced in pounds sterling. However, RDI REIT Shareholders
on the South African register will, as is required, receive any Cash Consideration due to
them under the terms of the Acquisition in South African Rand. The Scheme Document
will include further details in relation to this currency exchange.
- The RDI REIT Shares owned or controlled by Starwood Funds (being 112,597,728
RDI REIT Shares as at 25 February 2021 (being the last Business Day prior to the date of this
announcement)) will not be Scheme Shares and will not require to be acquired by Bidco
pursuant to the Acquisition. Starwood Funds will not be permitted to vote such RDI
REIT Shares at the Court Meeting, but will be permitted to vote such RDI REIT Shares
at the General Meeting.
3. Background to and reasons for the Acquisition
Starwood Funds have maintained a significant strategic shareholding in RDI REIT
since July 2020.
Starwood believes that RDI REIT is well-managed and has an attractive and high-
quality real estate portfolio.
However, Starwood also notes the persistent discount to EPRA NAV on which RDI
REIT has traded over the last 3 years.
Given RDI REIT's scale and constrained access to capital, Starwood therefore believes
the next stage of RDI REIT's evolution will be better suited to ownership under the
control of Starwood.
Starwood has committed to fully safeguard the existing employment rights of the
management and employees of RDI REIT, including regarding pensions, in accordance
with applicable law.
4. Recommendation
The Independent RDI REIT Directors, who have been so advised by J.P. Morgan
Cazenove and Peel Hunt as to the financial terms of the Acquisition, consider the terms
of the Acquisition to be fair and reasonable. In providing their financial advice to the
Independent RDI REIT Directors, J.P. Morgan Cazenove and Peel Hunt have taken into
account the commercial assessments of the Independent RDI REIT Directors. Peel Hunt
is providing independent financial advice to the Independent RDI REIT Directors for
the purposes of Rule 3 of the Takeover Code.
Accordingly, the Independent RDI REIT Directors intend to recommend unanimously
that, in the case of the Court Meeting, the Scheme Shareholders vote in favour of the
Scheme and, in the case of the General Meeting, RDI REIT Shareholders vote in favour
of the RDI REIT Resolutions (or, in the event that the Acquisition is implemented by
way of an Offer, to accept or procure acceptance of such Offer), as all Independent RDI
REIT Directors who hold RDI REIT Shares have irrevocably undertaken to do in
respect of their own beneficial holdings totalling 393,847 RDI REIT Shares
(representing approximately 0.10 per cent. of the existing issued ordinary share capital
of RDI REIT and approximately 0.15 per cent. of the Scheme Shares eligible to vote
at the Court Meeting, each as at 25 February 2021, being the last Business Day prior to this
announcement). Further details of these irrevocable undertakings (including the
circumstances in which they cease to be binding) are set out in Appendix 3 to this
announcement.
Matthew Parrott is a director of RDI REIT but was appointed as a representative of Starwood Funds
and is also employed by Starwood and therefore has taken no part in the consideration of the Acquisition
by the Independent RDI REIT Directors.
5. Background to and reasons for the Recommendation
RDI REIT is an established UK REIT focused on delivering long term sustainable
income returns, backed by strong real estate fundamentals. RDI REIT has historically
invested in a diversified portfolio and employed above average levels of leverage to
drive income returns and generate distributions to shareholders.
Since 23 February 2018 RDI REIT has traded at a persistent discount to its EPRA NAV, averaging 35.4
per cent. In the Board's opinion, this discount existed for a number of reasons including:
- A diversified portfolio that included a material exposure to the retail sector and
the related negative structural trends impacting the sector;
- Above average levels of leverage relative to the wider UK REIT sector;
- The historic high pay-out ratio of dividends relative to sustainable earnings;
- The share ownership structure; and
- Relatively low levels of liquidity in the Company's shares.
In 2019 RDI REIT took a decision to rationalise the portfolio, reduce leverage and
implement a more sustainable dividend policy in order to deliver a simpler investment
proposition, a higher quality portfolio and a more sustainable dividend. RDI REIT has
made considerable progress in this regard.
Retail exposure has been reduced to 9.5 per cent of the portfolio through a strategic
disposal programme and investment activity has increased exposure to the distribution
and industrial sector to 28.8 per cent of the portfolio. At the same time, pro-forma
leverage has reduced to approximately 27.6 per cent, with RDI REIT having access to
cash and available facilities of approximately GBP275 million.
Based on 31 August 2020 valuations, the portfolio currently totals GBP857.4 million
comprised of Hotels (36.1 per cent), Industrial & Distribution (28.8 per cent),
Offices (25.6 per cent) and Retail (9.5 per cent), on a pro-forma basis, reflecting
disposals completed post 31 August 2020, and disposals exchanged but not yet completed
(including Bahnhof Altona, Hamburg).
Notwithstanding the progress against the strategic objectives and the significant
proportion of the balance sheet comprised of cash balances and the industrial and
distribution portfolio, the share price has continued to trade at a persistent discount to
RDI REIT's EPRA NAV. The Covid-19 pandemic has had a material impact on the
operations of the Hotel and London serviced office portfolios which comprise 53.4 per
cent of the RDI REIT Group's portfolio.
RDI REIT's share price has traded at the following average discounts to its prevailing
EPRA NAV per share:
- 35.4% discount to EPRA NAV per share over the last 3 years;
- 48.1% discount to EPRA NAV per share over the last 1 year;
- 40.9% discount to EPRA NAV per share over the last 6 months; and
- 40.8% discount to EPRA NAV per share over the last 3 months.
The Independent RDI REIT Directors have carefully considered the long-term
prospects for the business and its assets, and expect that over time the performance of
RDI REIT may recover and the current share price discount to its EPRA NAV per share
may narrow.
In addition, the Independent RDI REIT Directors have assessed the current state of the
business and the opportunities to deploy capital in order to create value over the
medium term, as well as the possibility of returning capital to shareholders.
In considering these options, the Independent RDI REIT Directors have been mindful
that some of the strategic initiatives they would like to pursue may not have the support
of Starwood Funds, which have a 29.59 per cent shareholding and are represented on
the Board.
The Independent RDI REIT Directors also recognise the short and medium term risks
posed by the uncertain trajectory of the recovery from the Covid-19 pandemic and the
associated macro-economic risks, as well as the risks specific to RDI REIT including:
- a potential continuation of the persistent discount to EPRA NAV per share at
which RDI REIT's shares have historically traded;
- the execution risk attached to a medium term business plan, including the ability
to make attractive investments in RDI REIT's preferred sectors;
- a reduction in scale and liquidity as a result of any capital return strategy; and
- continuing uncertainty over the shape and speed of any recovery in Hotels and
Serviced Offices, following the lifting of Covid-19 restrictions.
In arriving at its recommendation, the Independent RDI REIT Directors have carefully
assessed the risk-adjusted returns that may be generated as an independent company
against the certainty of execution of the Acquisition, which would provide RDI REIT's
shareholders with a full cash exit at a significant premium of approximately 33.1 per cent.
to RDI REIT's Closing Price of 91.2 pence on 25 February 2021 (being the last Business Day prior
to the date of this Announcement).
6. Irrevocable undertakings
Independent RDI REIT Directors
As described above, Bidco has received irrevocable undertakings to vote (or, where
applicable, procure voting) in favour of the resolutions relating to the Acquisition at the
Meetings (or in the event that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer) from all of the Independent RDI REIT Directors who
own RDI REIT Shares, in respect of their own beneficial holdings totalling 393,847
RDI REIT Shares (representing approximately 0.10 per cent. of the existing issued
ordinary share capital of RDI REIT and approximately 0.15 per cent. of the Scheme
Shares eligible to vote at the Court Meeting, in each case as at 25 February 2021, being
the last Business Day prior to this announcement).
In total therefore, Bidco has procured irrevocable commitments to vote in favour of:
- the Scheme at the Court Meeting, including those from the Independent RDI
REIT Directors who own RDI REIT Shares, in respect of, in aggregate, 393,847 RDI
REIT Shares (representing approximately 0.10 per cent. of the existing issued
ordinary share capital of RDI REIT and approximately 0.15 per cent. of the
Scheme Shares eligible to vote at the Court Meeting, in each case as at 25 February 2021,
being the last Business Day prior to this announcement).
- the RDI REIT Resolutions (or in the event that the Acquisition is implemented
by an Offer, to accept or procure acceptance of such Offer), including those
from the Independent RDI REIT Directors who own RDI REIT Shares, in
respect of, in aggregate, 393,847 RDI REIT Shares (representing approximately 0.10
per cent. of the existing issued ordinary share capital of RDI REIT as at 25 February
2021, being the last Business Day prior to this announcement).
Further details of these irrevocable undertakings are set out in Appendix 3 to this
announcement.
7. Information relating to Bidco and Starwood
Bidco
Bidco is a newly incorporated Guernsey private limited company, formed on behalf of
Starwood Funds for the purposes of the Acquisition. Bidco has not traded since the date
of its incorporation, nor has it entered into any obligations other than in connection with
the Acquisition.
Starwood
Starwood Capital Group is a private investment firm with a core focus on global real
estate, energy infrastructure and oil & gas. Starwood Capital Group and its affiliates
maintain 16 offices in seven countries around the world, and currently have approximately
4,100 employees. Since its inception in 1991, Starwood Capital Group has raised over
$55 billion of equity capital, and currently has in excess of $70 billion of assets under
management. Starwood Capital Group has invested in virtually every category of real estate
on a global basis, opportunistically shifting asset classes, geographies and positions in
the capital stack as it perceives risk/reward dynamics to be evolving.
Over the past 29 years, Starwood Capital Group and its affiliates have successfully
executed an investment strategy that involves building enterprises in both the private
and public markets. Additional information can be found at starwoodcapital.com.
Starwood Funds control or own, 112,597,728 RDI REIT Shares representing
approximately 29.59 per cent. of RDI REIT's issued share capital at close of business
on 25 February 2021 (being the last Business Day prior to the date of this announcement).
For more information, visit starwoodcapital.com.
8. Information relating to RDI REIT
RDI REIT is incorporated and registered in the Isle of Man as a company limited by
shares under the IOM Act. RDI REIT has a primary listing on the Official List, is
admitted to trading on the London Stock Exchange, and has a secondary listing and
admission to trading on the Main Board of the JSE.
RDI REIT is a UK Real Estate Investment Trust with a diversified portfolio invested
principally in the UK. It is the holding company of the RDI REIT Group, which has
historically invested in a diversified portfolio of real estate assets and employed above
average levels of leverage to drive income returns and generate dividends to
shareholders.
Current trading
Trading update
Portfolio occupancy, excluding RBH managed hotels and London Serviced Offices,
remains high at 98.3 per cent. Asset management activity across the Office, Distribution
and Industrial portfolios has been largely unaffected by the market backdrop, with a
number of positive lease re-gears being completed since 31 August 2020. With UK
Retail exposure now limited to 5.3 per cent. of the RDI REIT Group's portfolio on a
pro-forma basis, the impact of Covid-19 related restrictions in that sector has been modest.
The restrictions imposed in November 2020 have deferred the anticipated recovery in
the RDI REIT Group's operating assets, which has impacted earnings for the first six
months of the year. Revenue from operating assets is expected to remain under pressure
while strict travel restrictions remain in place. However, the roll-out of a Covid-19
vaccine provides greater visibility on a progressive recovery in occupancy in the second
half of the year.
Hotels
Trading across the Hotel portfolio has been set back as a result of the renewed
restrictions. Of the RDI REIT Group's 13 RBH managed hotels, 4 are currently closed
to reduce operating costs. However, this is being constantly reviewed against local
demand, particularly for NHS related requirements as well as construction contracts.
Occupancy is anticipated to remain limited during the current lockdown, but experience
from the first lockdown has shown a relatively quick improvement in occupancy and
profitability once restrictions are lifted.
Rental income based on the CVA terms agreed with Travelodge continues to be paid in
full. The aggregate annual rent increased to GBP1.5 million from GBP1.1 million in January
2021 and will revert to the full pre CVA rent of GBP2.5 million in January 2022.
Distribution and Industrial
A number of key leasing deals have been completed since 31 August 2020.
A lease re-gear and a new lease has been completed with an existing tenant at
Kingsthorne Park, Kettering for an unexpired term of 15 years. The new rent of GBP0.2
million p.a. reflects an increase of 20.4 per cent. above the previous passing rent and
1.7 per cent. above ERV.
On the Kwik Fit portfolio, 24 leases were regeared to new 20-year unexpired terms,
with no rent free incentives and five yearly rent reviews to the higher of open market
rent and 1 per cent. compounded annually. All such leases were transferred into
European Tyre Enterprise Limited (ETEL), the parent company, further strengthening
the covenant. The leases on two units, with a total rent of GBP60,275 p.a., were surrendered
as part of the transaction and the units are in the process of being sold with vacant
possession.
Offices
Occupancy across the London Serviced Office portfolio is currently 66.9 per cent. (31
August 2020: 76.0 per cent.) with sales and renewal activity impacted by Covid-19
related restrictions. Following a positive increase in enquiries subsequent to the initial
lockdown, activity is expected to remain subdued until restrictions are relaxed. Clients
have been offered a 33 per cent. licence fee discount from January to March 2021 to
provide support whilst the Government's work from home guidance remains in place.
Encouragingly, a number of clients who have not renewed licence fees have maintained
virtual office contracts and have indicated an intention to return once restrictions are eased.
The remaining office portfolio has been largely unaffected with rent collection for the
December quarter now over 90 per cent.
Retail
Exposure to the retail sector has reduced to 9.5 per cent. of the RDI REIT Group's
portfolio on a pro-forma basis, with only one retail asset, St George's, Harrow,
remaining in the UK, representing 5.3 per cent of the portfolio by market value. The
remaining three retail assets in Germany are all subject to an ongoing disposal strategy
and are at various stages of negotiation.
Rent collection levels across both the UK and German retail portfolios have remained
broadly unchanged when compared to the September quarter at 54.1 per cent. and 93.5
per cent. respectively.
Rent collection
Approximately 87.9 per cent. of gross rental income or income due and demanded has
been collected for either the December quarter or the month of December where rents
are billed monthly.
Collection rates for past periods have continued to improve following negotiations and
the receipt of delayed payments. Average collection rates for rents due and demanded
(excluding RBH managed hotels) for all prior periods impacted by Covid-19 up to
September 2020 now exceeds 95 per cent.
Annualised gross % of rent collected
Rent collection summary rental income - adjusted(2)
December quarter GBPm(1) 31 December 2020
Offices 7.1 90.5
Distribution and Industrial 15.3 90.8
Retail 6.3 54.1
UK total (excl. UK Hotels and LSO) 28.7 86.5
Europe 7.3 93.1
Total (excl. UK Hotels and LSO) 36.0 87.1
RBH Managed Hotels 8.9 -
Travelodge portfolio 1.5 100.0
London Serviced Offices 8.5 93.5
Total(3) 54.9 87.9
(1) Annualised gross rental income as at 31 December 2020. RBH Managed Hotels and London
Serviced Offices annualised gross rental income is based on prior year EBITDA.
(2) Rent collections adjusted for certain tenants which have indicated they are paying monthly and have
paid one third of quarterly rent demanded.
(3) % of rent collected excludes RBH managed hotels.
Valuations
The RDI REIT Group's portfolio will be revalued as at 28 February 2021 and it is
intended that the valuations will be included in the Scheme Document, in accordance
with the requirements of Rule 29 of the Takeover Code.
Since 31 August 2020, there has been continued divergence in performance between
different real estate sectors, in large part as a result of the ongoing Covid-19 pandemic
and national lockdown in the UK.
RDI REIT anticipates a moderate reduction in value for the portfolio as a whole
reflecting a decline in capital values for Hotels, London Serviced Offices and the
remaining UK retail exposure, partially offset by an increase in value for Distribution
and Industrial portfolio.
9. Strategic plans, management, employees, pensions, research and development and
locations
Strategic plans
Starwood intends to leverage its experience as a global real estate investor across a
range of sectors to assist RDI REIT in navigating the challenging circumstances and
outlooks to which its diverse holding of assets (such as retail, hospitality and serviced
offices) are currently exposed. This will allow RDI REIT to focus on the effective
management of its business and assets, supported by Starwood's access to capital. As
a public company, RDI REIT's access to capital has been constrained due its persistent
discount to NAV, and has suffered from the costs and constraints associated with being
a publicly owned company.
Consistent with market practice, Bidco has been granted access to RDI REIT's senior
management for the purposes of confirmatory due diligence and have worked as closely
as permissible with the RDI REIT management team to understand the key areas of
their strategy and plans for the business. Following completion of the Acquisition of
RDI REIT, Bidco intends to work with RDI REIT's management team to undertake a
detailed evaluation of the RDI REIT Group. Bidco expects that this evaluation will be
completed within approximately six months from the Effective Date. The evaluation
will include:
- reviewing RDI REIT management's ongoing rationalisation strategy
to dispose of non-core assets;
- supporting RDI REIT management's ongoing strategic review of the hotel
portfolio and considering both the short and long term objectives of the hotel
business;
- reviewing the serviced office and industrial portfolios and opportunities for
further capital allocation; and
- assessing potential value accretion that will support RDI REIT's rationalisation
and overall strategy.
Bidco has not yet formulated a detailed assessment of the expected impacts of this
review but any headcount reductions that result as a consequence will be mainly
targeted at operational and administrative functions and are not expected to be
significant.
Employees and management
Bidco recognises the quality of RDI REIT's management team and employees and their
importance to the future success of RDI REIT. Bidco also believes that RDI REIT's
management team has been an integral component of its historical success, and their
continued participation will be a key element to the success of RDI REIT following
completion of the Acquisition. Bidco also attaches great importance to the skills and
experience of the existing employees of RDI REIT and believes they will continue to
contribute to the success of the RDI REIT Group following completion of the Acquisition.
As part of the post-Acquisition evaluation referred to above, Bidco intends to carry out
a review of RDI REIT's organisational structure and headquarters functions in order to
assess the efficiency of RDI REIT's business operations which could include a
reallocation or reduction in headcount. In addition, once RDI REIT ceases to be listed
on both the London Stock Exchange and the JSE, there may be certain corporate and
support functions associated with operating the business which are no longer required
or are reduced in scope under ownership of Bidco, which will potentially require
reduced headcount in these areas. However, Bidco has not yet developed detailed
proposals in respect thereof.
The finalisation and implementation of any such workforce reductions or reallocations
will be subject to comprehensive planning and appropriate engagement with relevant
stakeholders before any proposals are finalised, including with affected employees and any
appropriate employee representative bodies in accordance with the legal obligations of
the RDI REIT Group. Any headcount reductions resulting from such rationalisation
will be mainly targeted at operational and administrative functions and are not expected
to be significant.
Bidco will discuss and explore with the RDI REIT management team whether it is
possible for individuals in affected roles to be reassigned or relocated to other
appropriate roles within RDI REIT. Any affected individuals will be treated with utmost
respect and dignity, in line with RDI REIT's high standards and strong
corporate values.
The non-executive directors of RDI REIT will each be expected to resign from his or
her office as an RDI REIT Director upon the Scheme becoming Effective.
Save as set out above, BidCo does not expect any material change in the balance of
skills and functions of employees and management of RDI REIT.
Existing rights and pensions
Bidco confirms that following completion of the Acquisition, the existing contractual
and statutory employment rights, including in relation to pensions, of all RDI REIT
employees and management will be fully safeguarded in accordance with applicable
law and, save as set out above, Bidco does not intend to make any material changes to
the conditions of employment, unless otherwise agreed with the relevant employee.
Incentive arrangements
Bidco has not entered into, and has not had discussions on any proposal to enter into,
any form of incentivisation or other arrangements with members of RDI REIT's
management team. It is Bidco's intention to put in place appropriate arrangements for
the management of RDI REIT following completion of the Acquisition but Bidco does
not intend to have any such discussions prior to completion of the Acquisition.
Headquarters, locations, fixed assets and research and development
Following the Acquisition, Bidco intends that RDI REIT will continue to operate as a
standalone business group. Bidco does not intend to make any material restructurings
or changes in the location of RDI REIT's headquarters and headquarter functions, and
intends to maintain such headquarters in the UK.
Fixed assets
As noted above, Bidco intends to evaluate the RDI REIT management team's ongoing
rationalisation strategy to dispose of non-core assets. Bidco expects that, should any
disposals be made, such disposals will be consistent with RDI REIT's current strategy.
Research & Development
RDI REIT has no research and development function and Bidco has no plans in this regard.
Trading facilities
RDI REIT has a primary listing on the Official List, is admitted to trading on the
London Stock Exchange, and has a secondary listing and admission to trading on the
Main Board of the JSE. As set out in paragraph 15 below, a request will be made to:
(a) the London Stock Exchange and the FCA respectively to cancel trading in RDI REIT
Shares and de-list RDI REIT from the Official List; (b) the JSE for the cancellation of
the listing of RDI REIT Shares on the Main Board of the JSE, each with effect from or
shortly after the Effective Date and (c) The International Stock Exchange Authority
Limited for the RDI REIT Shares to be admitted to trading on The International Stock
Exchange in Guernsey (or another "recognised stock exchange" (as defined in section
1137 of the Corporation Tax Act 2010)).
The Independent RDI REIT Directors have given due consideration to Bidco's stated
intentions and assurances noted above in deciding to recommend the Acquisition.
No statements in this paragraph 9 are "post-offer undertakings" for the purposes of Rule
19.5 of the Takeover Code.
10. Financing of the Acquisition
The Cash Consideration payable to the Scheme Shareholders under the terms of the
Acquisition will be financed entirely by equity to be invested by funds managed and/or
advised by Starwood pursuant to the terms of the Equity Commitment Letter.
Eastdil Secured as Financial Adviser to Bidco is satisfied that sufficient resources are
available to Bidco to satisfy in full the Cash Consideration payable to the Scheme
Shareholders under the terms of the Acquisition.
11. Offer-related arrangements
Confidentiality Agreement
On 19 February 2021, RDI REIT and Starwood Capital European Operations Limited
("Starwood Europe") entered into a confidentiality agreement (the "Confidentiality
Agreement") in relation to the Acquisition, pursuant to which, amongst other things,
both parties have undertaken to: (a) subject to certain exceptions, keep information
relating to the other and the Acquisition confidential and not to disclose it to third
parties; and (b) use such confidential information only in connection with the
Acquisition. These confidentiality obligations will remain in force for a period of 18
months from the date of the Confidentiality Agreement (or, if earlier, the completion of
the Acquisition). The Confidentiality Agreement contains standstill provisions which
restricted Starwood Europe and controlled affiliates of Starwood and any person acting
in concert with Starwood from acquiring or offering to acquire interests in certain
securities of RDI REIT; those restrictions ceased to apply on the making of this
announcement.
12. Disclosure of interests in RDI REIT securities
As at the close of business on 25 February 2021 (being the last Business Day prior to the date of
this announcement), other than: (i) the disclosures set out in this paragraph 12; and (ii)
the irrevocable undertakings referred to in paragraph 6 of this announcement, neither
Bidco nor any director of Bidco nor, so far as Bidco is aware, any person acting, or
deemed to be acting, in concert with Bidco, had:
(a) an interest in, or right to subscribe for, relevant securities of RDI REIT;
(b) any short position in (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 purchase or
take delivery of, relevant securities of RDI REIT;
(c) procured an irrevocable commitment or letter of intent to accept the terms of
the Acquisition in respect of relevant securities of RDI REIT; or
(d) borrowed, lent or entered into any financial collateral arrangements (save for
any borrowed shares which had been either on-lent or sold) or dealing
arrangements of the kind referred to in Note 11 on the definition of acting in
concert in the Takeover Code in respect of any relevant securities of RDI REIT.
Other than the irrevocable undertakings described in paragraph 6 of this announcement,
no arrangement exists between Bidco or RDI REIT or any person acting in concert with
Bidco or RDI REIT in relation to RDI REIT Shares. For these purposes, an arrangement
includes any indemnity or option arrangement, and any agreement or any
understanding, formal or informal, of whatever nature, relating to RDI REIT Shares
which may be an inducement to deal or refrain from dealing in such securities.
In this paragraph 12, "relevant securities of RDI REIT" means RDI REIT Shares and
securities convertible into, or rights to subscribe for, options (including traded options)
in respect thereof and derivatives referenced thereto.
Holdings in RDI REIT by Starwood
Starwood Funds own or control 112,597,728 RDI REIT Shares, representing
approximately 29.59 percent. of the voting rights attributable to RDI REIT's issued
share capital as at 25 February 2021 (being the last Business Day prior to the date of this
announcement).
13. RDI REIT Share Plans
Participants in the RDI REIT Share Plans will be contacted regarding the effect of the
Acquisition on their options and awards, as relevant, under the RDI REIT Share Plans
and an appropriate proposal will be made to such participants which reflects their
options and/or awards under the RDI REIT Share Plans in due course.
14. Scheme process and Conditions to the Acquisition
It is intended that the Acquisition shall be implemented by way of a Court-sanctioned
scheme of arrangement between RDI REIT and the Scheme Shareholders under
Chapter 2 of Part X of the IOM Act. Bidco reserves the right to effect the Acquisition
by way of an Offer, subject to the consent of the Panel.
The effect of the Scheme is to provide for Bidco to become the holder
of the entire issued and to be issued ordinary share capital of RDI REIT not already
owned or controlled by Starwood Funds. This is to be achieved by the transfer of the
Scheme Shares to Bidco, in consideration for which the Scheme Shareholders who are
on the register of members at the Scheme Record Time shall receive the Cash
Consideration on the basis set out in paragraph 2 above. The procedure involves,
among other things, an application by RDI REIT to the Court to sanction the Scheme.
To become Effective, the Scheme requires, among other things, the approval of a
majority in number representing not less than 75 per cent. in value of the relevant
Scheme Shareholders present and voting in person or by proxy at the Court Meeting,
which is convened by order of the Court, and the passing of the RDI REIT Resolutions
by the requisite majority of RDI REIT Shareholders at the General Meeting (which will
require the approval of RDI REIT Shareholders representing at least 75 per cent. of the
votes cast at the General Meeting either in person or by proxy). The Scheme must also
be sanctioned by the Court (with or without modification, on terms agreed by Bidco
and RDI REIT) and, following such sanction, a certified copy of the Court Order,
together with a copy of the Scheme Document and all documents required to be
annexed thereto (if any), must be delivered to the Companies Registry for registration
within seven days after the making of the Court Order, and the Companies Registry
must register such documents on RDI REIT's file, upon which the Scheme will become
Effective.
The Conditions in paragraph 2 of Appendix 1 of to this announcement provide that the
Scheme will lapse if:
- the Court Meeting and the General Meeting are not held by 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 as may be agreed between Bidco and RDI
REIT, and as the Court may allow);
- the Sanction Hearing to approve the Scheme is not held by the 22nd day after
the expected date of the Sanction Hearing to be set out in the Scheme Document
in due course (or such later date as may be agreed between Bidco and RDI
REIT, and as the Court may allow); and
- the Scheme does not become effective by 11.59 p.m. on the Long Stop Date (or
such later date as may be agreed between Bidco and RDI REIT and the Panel
and as the Court may allow).
If any Condition in paragraph 2 of Appendix 1 to this announcement is not capable of
being satisfied by the date specified therein, Bidco shall make an announcement
through a Regulatory Information Service as soon as practicable and, in any event, by
not later than 8.00 a.m. on the Business Day following the date so specified, stating
whether Bidco has invoked that Condition other than the third bullet above, (where
applicable) waived that Condition or, with the agreement of RDI REIT, specified a new
date by which that Condition must be satisfied.
Once the necessary approvals from RDI REIT Shareholders and Scheme Shareholders
have been obtained and the other Conditions have been satisfied or (where applicable)
waived and the Scheme has been sanctioned by the Court, a certified copy of the Court
Order , together with a copy of the Scheme Document and all documents required to be
annexed thereto (if any), must be delivered to the Companies Registry for registration
within seven days after the making of the Court Order, and the Companies Registry
must register such documents on RDI REIT's file, upon which the Scheme will become
Effective. Subject to the satisfaction or (where applicable) waiver of the Conditions,
the Scheme is currently expected to become Effective during the second quarter of
2021. An expected timetable of key events relating to the Acquisition and details of
actions to be taken by RDI REIT Shareholders will be provided in the Scheme Document.
Upon the Scheme becoming Effective: (i) it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the Court Meeting
or the General Meeting (and if they attended and voted, whether or not they voted in
favour); and (ii) share certificates in respect of Scheme Shares will cease to be valid
and entitlements to RDI REIT Shares held within the CREST system or the STRATE
system will be cancelled and RDI REIT Shares will cease trading on the London Stock
Exchange and JSE.
The Cash Consideration will be despatched by or on behalf of Bidco to Scheme
Shareholders no later than 14 days after the Effective Date.
It is expected that the Scheme Document, containing further information about the
Acquisition and notices of the Court Meeting and General Meeting, together with the
associated forms of proxy, will be posted to RDI REIT Shareholders and, for
information only, to persons with information rights and to holders of awards granted
under the RDI REIT Share Plans, in March 2021 (or such later time as RDI REIT, Bidco
and the Panel agree) and the Meetings are expected to be held as soon as practicable
thereafter.
Any RDI REIT Shares issued before the Scheme Record Time will be subject to the
terms of the Scheme. The resolution(s) to be proposed at the General Meeting will,
amongst other matters, provide that the Articles be amended to incorporate provisions
requiring any RDI REIT Shares issued after the Scheme Record Time (other than to
Bidco and/or its nominees) to be automatically transferred to Bidco on the same terms
as the Acquisition (other than terms as to timings and formalities). The provisions of
the Articles (as amended) will avoid any person (other than Bidco and its nominees)
holding shares in the capital of RDI REIT after the Effective Date.
Right to switch to an Offer
Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an
alternative to the Scheme, subject to obtaining the consent of the Panel.
In such event, the Acquisition will be implemented on the same terms and conditions,
so far as applicable, as those which would apply to the Scheme (subject to appropriate
amendments for an acquisition being made by way of an Offer, including (without
limitation) the inclusion of an acceptance condition set at 75 per cent. of the voting rights
normally exercisable at a general meeting of RDI REIT (or such lesser percentage
as may be determined by Bidco after consultation with the Panel (if necessary), being in
any case more than 50 per cent. of the voting rights normally exercisable at a general
meeting of RDI REIT, including, for this purpose, any such voting rights attaching to
RDI REIT Shares that are issued before the Offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise). Further, if sufficient acceptances of the Offer are
received and/or sufficient RDI REIT Shares are otherwise acquired, it is the intention of
Bidco to apply the provisions of the IOM Act to compulsorily acquire any outstanding RDI REIT
Shares to which the Offer relates, and for the listing of RDI REIT Shares on the London
Stock Exchange and JSE to be cancelled.
15. Delisting, and cancellation of trading and re-listing
It is currently intended that the last day of dealings in, and for registration of transfers
of, RDI REIT Shares (other than the registration of the transfer of the Scheme Shares
to Bidco pursuant to the Scheme) will be the last Business Day prior to the Effective
Date (or, in the case of the JSE, three Business Days prior to the Effective Date),
following which all RDI REIT Shares will be suspended from the Official List and from
trading on the Main Market of the London Stock Exchange, and RDI REIT Shares will
be disabled in CREST and also suspended from trading on the Main Board of the JSE
and disabled in the STRATE system.
It is further intended that an application will be made to The International Stock
Exchange Authority Limited for the RDI REIT Shares to be admitted to trading on The
International Stock Exchange in Guernsey (or another "recognised stock exchange" (as
defined in section 1137 of the Corporation Tax Act 2010)), which admission is expected
to take place at 8:00 a.m. on the Business Day after the Effective Date, or shortly
thereafter.
Share certificates in respect of Scheme Shares will cease to be valid and should be
destroyed on the Effective Date. In addition, entitlements held within CREST or
STRATE to RDI REIT Shares will be cancelled on the Effective Date.
Applications will be made: (i) to the FCA for the cancellation of the listing of the RDI
REIT Shares on the Official List and to the London Stock Exchange for the cancellation
of the admission to trading of RDI REIT Shares on the Main Market of the London
Stock Exchange and (ii) the Main Board of the JSE for the cancellation of the listing
and trading of RDI REIT Shares on the JSE. It is expected that such delisting and
cancellation of admission to trading would take effect on the second Business Day after
the Effective Date or shortly thereafter.
No RDI REIT Shares were held as treasury shares as at the close of business on 25 February
2021 (being the last Business Day prior to the date of this announcement). If any RDI
REIT Shares are held as treasury shares as at the time the Scheme is sanctioned, such
treasury shares will be cancelled prior to the Scheme becoming Effective.
16. Documents
Copies of the following documents will be available promptly on Bidco's and RDI
REIT's websites, subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, at www.projectcambridge.com and www.rdireit.com respectively and
in any event by no later than noon on the Business Day following the date of this
Announcement:
(a) this announcement;
(b) the Confidentiality Agreement;
(c) the irrevocable undertakings referred to in paragraph 6 above;
(d) the written consents of J.P. Morgan Cazenove, Peel Hunt, Java Capital
Proprietary Limited and Eastdil Secured referred to in paragraph 17 below; and
(e) the Equity Commitment Letter.
The content of the websites referred to in this announcement is not incorporated into
and does not form part of this announcement.
17. General
The Acquisition will be on the terms and subject to the conditions set out herein and in
Appendix I, and to be set out in full in the Scheme Document. The formal Scheme
Document will be sent to shareholders of RDI REIT within 28 days of this
announcement (or on such later date as may be agreed with the Panel). The sources
and bases of calculation of certain information contained in this announcement are set
out in Appendix 2. Details of the irrevocable undertakings given in relation to the
Acquisition are set out in Appendix 3. Certain definitions and terms used in this
announcement are set out in Appendix 4.
This announcement and any rights or liabilities arising hereunder and the Acquisition
will be governed by English law and/or Isle of Man law (as applicable) and subject to
the applicable requirements of the Takeover Code, the Panel, the London Stock
Exchange, the JSE and the FCA.
J.P. Morgan Cazenove, Peel Hunt, Java Capital Proprietary Limited and Eastdil
Secured have each given and not withdrawn their consent to the publication of this
announcement with the inclusion herein of the references to their names in the form
and context in which they appear.
This announcement does not constitute an offer or an invitation to purchase or subscribe
for any securities.
Enquiries:
RDI REIT Tel: +44 (0) 207 811 0100
Stephen Oakenfull
Donald Grant
J.P. Morgan Cazenove (Lead Financial Tel: +44 (0) 207 742 4000
Adviser and Joint Corporate Broker to
RDI REIT)
Bronson Albery
Celia Murray
Tara Morrison
Peel Hunt (Joint Financial Adviser and Tel: +44 (0)20 7418 8900
Joint Corporate Broker to RDI REIT)
Capel Irwin
Carl Gough
Michael Nicholson
James Britton
Java Capital Proprietary Limited (JSE Tel: +27 11 722 3075
Sponsor and Corporate Adviser to RDI
REIT)
Kevin Joselowitz
Jean Tyndale-Biscoe
FTI Consulting (PR adviser to RDI REIT) Tel: +44 (0) 20 3727 1000
Dido Laurimore
Claire Turvey
rdireit@fticonsulting.com
Instinctif Partners (South Africa PR Tel: +27 (0) 11 447 3030
adviser to RDI REIT)
Frederic Cornet
RDI@instinctif.com
Bidco / Starwood
Neil Bennett of Maitland/AMO (PR Adviser Tel: +44 (0)7900 000 777
to Bidco and Starwood)
Rhys Jones of Maitland/AMO (PR Adviser to Tel: +44 (0)7881 996 460
Bidco and Starwood)
Eastdil Secured (Financial Adviser to Tel: +44 (0)20 7074 4950
Bidco and Starwood)
Max von Hurter
Tomas Ribeiro
Kirkland & Ellis International LLP is acting as legal adviser to Starwood and Bidco, with
assistance from Appleby (Isle of Man) LLC as to matters of Isle of Man law.
CMS Cameron McKenna Nabarro Olswang LLP is acting as legal adviser to RDI REIT, with
assistance from Simcocks Advocates Limited as to matters of Isle of Man law.
Further information
This announcement is for information purposes only and is not intended to and does not
constitute, or form part of, an 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 (or, if the
Acquisition is implemented by way of an Offer, the Offer 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. RDI REIT Shareholders are advised to read the
Scheme Document (including the associated forms of proxy) (or, if the Acquisition is
implemented by way of an Offer, the Offer Document) carefully when it becomes available
because it will contain important information in relation to the Acquisition. Any decision in
respect of, or other response to, the Acquisition by RDI REIT Shareholders should be made
only on the basis of the information contained in the Scheme Document (and/or, in the event
that the Acquisition is to be implemented by way of an Offer, the Offer Document).
This announcement has been prepared for the purpose of complying with English and Isle of
Man 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 and the Isle of Man.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the Panel,
the London Stock Exchange, the JSE and the FCA.
RDI REIT will prepare the Scheme Document to be distributed to the RDI REIT Shareholders.
RDI REIT urges RDI REIT Shareholders to read the Scheme Document carefully when it
becomes available because it will contain important information in relation to the Acquisition.
Any vote in respect of the resolutions to be proposed at the Court Meeting or the 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 statements contained in this announcement are made as at the date of this announcement,
unless some other time is specified in relation to them, and service of this announcement shall
not give rise to any implication that there has been no change in the facts set forth in this
announcement since such date.
Important notices about financial advisers
Eastdil Secured International Limited ("Eastdil Secured"), which is authorised and regulated by
the Financial Conduct Authority in the United Kingdom, is acting exclusively as financial adviser
for Bidco and Starwood and no one else in connection with the Acquisition and other matters set
out in this announcement and will not be responsible to anyone other than Bidco and Starwood
for providing the protections afforded to clients of Eastdil Secured, or for providing advice in
connection with the Acquisition, the content of this announcement or any matter referred to
herein. Neither Eastdil Secured nor any of its subsidiaries, affiliates or branches owes or
accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any person who is not a client of
Eastdil Secured in connection with the Acquisition, this announcement, any statement or other
matter or arrangement referred to herein or otherwise.
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan
Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the PRA and
regulated by the PRA and the FCA. J.P. Morgan Cazenove is acting as financial adviser
exclusively for RDI REIT 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 Acquisition
and will not be responsible to anyone other than RDI REIT for providing the protections
afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in
connection with the Acquisition or any matter referred to herein.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting as financial adviser exclusively for RDI REIT and
for no one else in connection with the matters referred to in this announcement and will not be
responsible to anyone other than RDI REIT for providing the protections afforded to clients of
Peel Hunt or for providing advice in relation to the contents of, or matters referred to in, this
announcement.
Java Capital Proprietary Limited, which is authorised and regulated in South Africa by the
JSE, is acting as JSE sponsor and corporate advisor exclusively for RDI REIT and for no one
else in connection with the matters referred to in this announcement and will not be responsible
to anyone other than RDI REIT for providing the protections afforded to clients of Java Capital
or for providing advice in relation to the contents of, or matters referred to in, this
announcement.
Overseas Shareholders
This announcement has been prepared in accordance with English and Isle of Man law, the
Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which would have been prepared
in accordance with the laws of jurisdictions outside the UK and the Isle of Man. The release,
publication or distribution of this announcement in or into jurisdictions other than the UK, the
Isle of Man or South Africa may be restricted by law and therefore any persons who are subject
to the law of any jurisdiction other than the UK, the Isle of Man or South Africa should inform
themselves about, and observe, any applicable legal or regulatory requirements.
The availability of the Acquisition to RDI REIT Shareholders who are not resident in and
citizens of the UK, the Isle of Man or South Africa may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons who are not
resident in the UK, the Isle of Man or South Africa should inform themselves of, and observe,
any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability
of persons who are not resident in the United Kingdom, the Isle of Man or South Africa to vote
their RDI REIT Shares with respect to the Scheme at the Court Meeting, or to appoint another
person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located or to which they are subject. Any failure to
comply with the applicable restrictions may constitute a violation of the securities laws of any
such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by
applicable law and regulation, the Acquisition will not be made available, directly or
indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction and no person may vote in favour of the Scheme by any such use, means,
instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction. Copies of this announcement and
any formal documentation relating to the Acquisition are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent (including without limitation
by electronic means) in or into or from any Restricted Jurisdiction and persons receiving such
documents (including custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid
any related purported vote in respect of the Acquisition. If the Acquisition is implemented by
way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may
not be made directly or indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction and the Offer may
not be capable of acceptance by any such use, means, instrumentality or facilities.
Notice to US investors in RDI REIT
The US holders of RDI REIT Shares should note that the Acquisition is being made by means
of a scheme of arrangement provided for under the laws of the Isle of Man. A transaction
effected by means of a scheme of arrangement is not subject to the tender offer or proxy
solicitation rules under the Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK and the Isle of Man to schemes of
arrangement which differ from the disclosure requirements of the US tender offer and proxy
solicitation rules.
The financial information included in this announcement or that may be included in the Scheme
Document has been (or will be) prepared in accordance with generally accepted accounting
principles of the UK and thus 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.
Bidco reserves the right, subject to obtaining the prior consent of the Panel, to elect to
implement the Acquisition by way of an Offer. If, in the future, Bidco exercises its right to
implement the Acquisition by way of an Offer, and determine to extend the Offer into the United
States, such Offer and the Acquisition will be made in compliance with the applicable US laws
and regulations including to the extent applicable Section 14(e) of the US Exchange Act and
Regulation 14E thereunder, and in accordance with the Takeover Code. Accordingly, the
Acquisition would be subject to disclosure and other procedural requirements, including with
respect to withdrawal rights, offer timetable, settlement procedures and timing of payments
that are different from those applicable under US domestic tender offer procedures and law.
Such an Offer would be made in the United States by Bidco and no one else.
It may be difficult for US holders of RDI REIT Shares to enforce their rights and any claim
arising out of the US federal laws in connection with the Acquisition, since each of Bidco and
RDI REIT are located in a non-US jurisdiction, and some or all of their officers and directors
may be residents of a non-US jurisdiction. US holders of RDI REIT Shares may not be able to
sue a non-US company or its officers or directors in a non-US court for violations of the US
securities laws. Further, it may be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's judgement.
Neither the US Securities and Exchange Commission nor any US state securities commission
has approved or disapproved or passed judgement upon the fairness or the merits of the
Acquisition, or determined if the information contained in this announcement is adequate,
accurate or complete. Any representation to the contrary is a criminal offence in the US.
US RDI REIT Shareholders also should be aware that the transaction contemplated herein
(including the receipt of consideration pursuant to the Acquisition) may have tax consequences
in the US and, that such consequences, if any, are not described herein. US RDI REIT
Shareholders are urged to consult their independent legal, tax and financial advisers in
connection with making a decision regarding this transaction.
In accordance with the Takeover Code and to the extent permitted under Rule 14e-5(b) under
the Exchange Act, Bidco, certain affiliated companies or their respective nominees, or brokers
(acting as agents) may from time to time make certain purchases of, or arrangements to
purchase, RDI REIT securities other than pursuant to the Acquisition, either in the open market
at prevailing prices or through privately negotiated purchases at negotiated prices outside the
US until the date on which the Scheme becomes Effective, lapses or is otherwise withdrawn
(or, if the Acquisition is implemented by way of an Offer, before or during the period in which
such Offer would remain open for acceptance). To the extent required by Rule 14e-5(b), such
purchases, or arrangements to purchase, must comply with English law, the Takeover Code,
Listing Rules and the JSE Listings Requirements. Any information about such purchases will
be disclosed to the Panel and, to the extent that such information is required to be publicly
disclosed in the United Kingdom in accordance with applicable regulatory requirements, will
be made available to all investors (including US investors) via the Regulatory Information
Service on the London Stock Exchange website at www.londonstockexchange.com.
Forward Looking Statements
This announcement (including information incorporated by reference in this announcement),
oral statements made regarding the Acquisition, and other information published by Bidco and
RDI REIT contain statements which are, or may be deemed to be, "forward-looking
statements". Forward-looking statements are statements of future expectations which are
prospective in nature and are not based on historical facts, but rather on current expectations,
projections and assumptions of the management of Bidco and RDI REIT about future events,
and are therefore subject to risks and uncertainties which could cause actual results,
performance or events to differ materially from those expressed or implied in these statements.
The forward-looking statements contained in this announcement include statements relating to
the expected effects of the Acquisition on Bidco and RDI REIT (including their future prospects,
developments and strategies), the expected timing and scope of the Acquisition and other
statements other than historical facts. All statements other than statements of historical fact
are, or may be deemed to be, forward looking statements. Often, but not always, forward-
looking statements can be identified by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget", "projects",
"strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases and statements that certain
actions, events or results "may", "could", "should", "would", "might" or "will" be taken,
occur or be achieved.
All forward looking statements contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section. Although Bidco
and RDI REIT believe that the expectations reflected in such forward-looking statements are
reasonable, Bidco and RDI REIT (and their respective associates, directors, officers and
advisers) can give no representation, assurance or guarantee that such expectations will prove
to be correct. 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. There are a
number of factors that could cause actual results and developments to differ materially from
those expressed or implied by such forward-looking statements.
These factors include, but are not limited to: the ability to complete the Acquisition; the ability
to obtain requisite regulatory and shareholder approvals and the satisfaction of other
Conditions on the proposed terms and schedule; future market conditions, changes in general
economic and business conditions, the behaviour of other market participants, the anticipated
benefits from the proposed transaction not being realised as a result of changes in general
economic and market conditions in the countries in which Bidco and RDI REIT operate, weak,
volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and
currency value fluctuations, the degree of competition in the geographic and business areas in
which Bidco and RDI REIT operate, the impact of COVID-19 and changes in laws or in
supervisory expectations or requirements. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the forward-looking statements. Such
forward-looking statements should therefore be construed in the light of such factors. Neither
Bidco nor RDI REIT, nor any of their respective associates or directors, officers or advisers,
provides any representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this announcement will actually
occur. You are cautioned not to place any reliance on these forward-looking statements.
Specifically, statements of estimated cost savings and synergies, if any, relate to future actions
and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a
result, any cost savings and synergies referred to may not be achieved, may be achieved later
or sooner than estimated, or those achieved could be materially different from those estimated.
Each forward looking statement speaks only as of the date of this announcement. Other than
in accordance with their legal or regulatory obligations, neither Bidco nor RDI REIT is under
any obligation, and Bidco and RDI REIT expressly disclaim any intention or obligation, to
update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise.
No profit forecasts, estimates or quantified benefits statements
No statement in this announcement is intended as a profit forecast, profit estimate or quantified
benefits statement for any period and no statement in this announcement should be interpreted
to mean that earnings or earnings per share for RDI REIT for the current or future financial
years would necessarily match or exceed the historical published earnings or earnings per
share for RDI REIT.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% 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 pm (London time) on the 10th Business Day following the commencement of
the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
Business Day following the announcement in which any 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 Takeover Code, any person who is, or becomes, interested in 1% 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 pm (London time) on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire or control an interest in relevant securities of an offeree
company or a securities exchange offeror, they will be deemed to be a single person for the
purpose of Rule 8.3 of the Takeover Code.
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 of the Takeover Code).
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.
Publication on a website
This announcement and the documents required to be published pursuant to Rule 26.1 of the
Takeover Code will be available, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on RDI REIT's website at www.rdireit.com and on Bidco's website at
www.projectcambridge.com promptly and in any event by no later than 12 noon on the
Business Day following the date of this announcement. The content of the websites referred to
in this announcement is not incorporated into and does not form part of this announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Takeover Code, RDI REIT Shareholders, persons with
information rights and participants in RDI REIT Share Plans may request a hard copy of this
announcement by contacting RDI REIT's Company Secretary, during business hours on
+44 (0)207 811 0100 or at info@rdireit.com. For persons who receive a copy of this announcement
in electronic form or via a website notification, a hard copy of this announcement will not be
sent unless so requested. Such persons 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 from an independent financial adviser
duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the UK or duly authorised under the Financial Advisory and Intermediary Services
Act 37 of 2002 (as amended) if you are resident in South Africa or, if not, from an appropriately
authorised independent financial adviser.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other information provided
by RDI REIT Shareholders, persons with information rights and other relevant persons for the
receipt of communications from RDI REIT may be provided to Bidco during the offer period
as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c).
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
figures that precede them.
Rule 2.9 of the Takeover Code
For the purposes of Rule 2.9 of the Takeover Code, RDI REIT confirms that, as at 25 February 2021
(being the last Business Day prior to the date of this announcement), it had in issue
380,590,061 ordinary shares of 40 pence each (excluding shares held in treasury). The ISIN
for the shares is IM00BH3JLY32.
APPENDIX 1
CONDITIONS AND FURTHER TERMS OF THE TRANSACTION
Part A: Conditions to the Scheme and Acquisition
1. The Acquisition will be conditional upon the Scheme becoming unconditional and
becoming effective, subject to the provisions of the Takeover Code, by no later than
11.59 p.m. on the Long Stop Date, or such later date (if any) as Bidco and RDI REIT
may, with the consent of the Panel, agree and (if required) the Court may allow.
Conditions of the Scheme
2. The Scheme will be subject to the following Conditions:
(a) (i) its approval by a majority in number of Scheme Shareholders who are on the
register of members of RDI REIT (or the relevant class or classes thereof) at the
Voting Record Time, present and voting, whether in person or by proxy, at the
Court Meeting and at any separate class meeting which may be required (or any
adjournment thereof) and who represent not less than 75 per cent. in value of
the Scheme Shares voted by those Scheme Shareholders, and (ii) such Court
Meeting being held 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 as may be agreed between Bidco and RDI REIT (and that the Court
may approve));
(b) (i) the RDI REIT Resolutions being duly passed by the requisite majority of
RDI REIT Shareholders at the General Meeting (or any adjournment thereof)
and (ii) such General Meeting being held on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme Document in
due course (or such later date as may be agreed between Bidco and RDI REIT
(and that the Court may approve)); and
(c) (i) the sanction of the Scheme by the Court (with or without modification (but
subject to any such modification being acceptable to Bidco and RDI REIT)) and
the delivery of a certified copy of the Court Order, together with a copy of the
Scheme Document and all documents required to be annexed thereto (if any),
to the Companies Registry for registration within seven days after the making
of the Court Order and registration of such documents by the Companies
Registry; and (ii) the Sanction Hearing being held on or before the 22nd day
after the expected date of the Sanction Hearing to be set out in the Scheme
Document in due course (or such later date as may be agreed between Bidco
and RDI REIT (and that the Court may approve)).
General Conditions
3. In addition, Bidco and RDI REIT have agreed that, subject as stated in Part B below
and to the requirements of the Panel and in accordance with the Takeover Code, the
Acquisition will be conditional upon the following conditions and, accordingly, the
necessary actions to make the Scheme effective will not be taken unless the following
conditions (as amended if appropriate) have been satisfied or, where relevant, waived:
Other Third Party clearances
(a) no central bank, government or governmental, quasi-governmental, state or
local government, supranational, statutory, regulatory, environmental,
administrative, fiscal or investigative body, court, agency, association,
institution, environmental body, employee representative body or any other
body or person whatsoever in any jurisdiction (each a "Third Party") having
given notice of a decision to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference, or having required any
action to be taken or otherwise having done anything or having enacted, made
or proposed any statute, regulation, decision, order or change to published
practice or having taken any other steps, and there not continuing to be
outstanding any statute, regulation, decision or order, which would or might
reasonably be expected to:
(i) make the Acquisition, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or management
of, any member of the Wider RDI REIT Group by any member of the
Wider Bidco Group void, illegal and/or unenforceable in any
jurisdiction, or otherwise directly or indirectly prevent, prohibit, or
restrain, restrict, impede, challenge, materially delay or otherwise
interfere with the implementation of, or impose material additional
conditions or obligations with respect to, the Acquisition or the
acquisition of any shares or other securities in, or control or management
of, any member of the Wider RDI REIT Group by any member of the
Wider Bidco Group or require amendment of the Scheme;
(ii) require, prevent or materially delay the divestiture or alter the terms
envisaged for such divestiture by any member of the Wider Bidco Group
or by any member of the Wider RDI REIT Group of all or any part of
their businesses, assets or property or impose any limitation on the
ability of all or any of them to conduct their respective businesses (or
any part thereof) or to own, control or manage any of their respective
assets or properties (or any part thereof) in each case to an extent which
is material in the context of the Wider RDI REIT Group or Wider Bidco
Group (as applicable) taken as a whole or in the context of the
Acquisition;
(iii) impose any material limitation on, or result in a material delay in, the
ability of any member of the Wider Bidco Group directly or indirectly
to acquire or hold or to exercise effectively all or any rights of ownership
in respect of shares or other securities in RDI REIT (or any member of
the Wider RDI REIT Group) or on the ability of any member of the
Wider RDI REIT Group or any member of the Wider Bidco Group
directly or indirectly to hold or exercise effectively any rights of
ownership in respect of shares or other securities (or the equivalent) in,
or to exercise management control over, any member of the Wider RDI
REIT Group to an extent which is material in the context of the Wider
RDI REIT Group or Wider Bidco Group (as applicable) taken as a whole
or in the context of the Acquisition;
(iv) except pursuant to section 160 of the IOM Act and other than pursuant
to the implementation of the Acquisition, require any member of the
Wider Bidco Group or the Wider RDI REIT Group to acquire or offer
to acquire any shares, other securities (or the equivalent) or interest in
any member of the Wider RDI REIT Group or any asset owned by any
third party;
(v) require, prevent or delay a divestiture by any member of the Wider
Bidco Group of any shares or other securities (or the equivalent) in any
member of the Wider RDI REIT Group;
(vi) result in any member of the Wider RDI REIT Group ceasing to be able
to carry on business under any name under which it presently carries on
business which is material in the context of the Wider RDI REIT Group
taken as a whole or in the context of the Acquisition;
(vii) impose any limitation on the ability of any member of the Wider Bidco
Group or any member of the Wider RDI REIT Group to conduct,
integrate or co-ordinate all or any part of their respective businesses with
all or any part of the business of any other member of the Wider Bidco
Group and/or the Wider RDI REIT Group in a manner which is adverse
and material to the Wider Bidco Group and/or the Wider RDI REIT
Group, in either case, taken as a whole or in the context of the
Acquisition; or
(viii) except as Disclosed, otherwise adversely affect the business, assets,
value, profits, prospects or operational performance of any member of
the Wider RDI REIT Group or any member of the Wider Bidco Group
to an extent which is material in the context of the Wider RDI REIT
Group taken as a whole;
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation, enquiry
or reference or take any other step under the laws of any jurisdiction in respect
of the Acquisition or proposed acquisition of any RDI REIT Shares or otherwise
intervene having expired, lapsed, or been terminated;
(b) all notifications, filings or applications which are necessary or reasonably
considered by Bidco to be appropriate having been made in connection with the
Acquisition and all necessary waiting and other time periods (including any
extensions thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as appropriate) and all
statutory and regulatory obligations in any jurisdiction having been complied
with in respect of the Acquisition in each case where the direct consequence of
a failure to make such notification, filing or application or to wait for the expiry,
lapse or termination of any such waiting or other time period would be unlawful
in any relevant jurisdiction or have a material adverse effect on the Wider RDI
REIT Group, any member of the Wider Bidco Group or the ability of Bidco to
implement the Scheme;
(c) all Authorisations necessary or reasonably considered by Bidco to be
appropriate in any jurisdiction for or in respect of the Acquisition or the
proposed acquisition of any shares or other securities in, or control of, RDI
REIT by any member of the Wider Bidco Group having been obtained in
terms and in a form reasonably satisfactory to Bidco from all appropriate
Third Parties or (without prejudice to the generality of the foregoing) from any
person or bodies with whom any member of the Wider RDI REIT Group or
the Wider Bidco Group has entered into contractual arrangements where the
direct consequence of a failure to obtain such Authorisation would be
unlawful in any relevant jurisdiction or have a material adverse effect on the
Wider RDI REIT Group, any member of the Wider Bidco Group or the ability
of Bidco to implement the Acquisition and all such Authorisations (together
with all Authorisations necessary to carry on the business of any member of
the Wider RDI REIT Group in any jurisdiction which is material in the context
of the Wider Bidco Group or the Wider RDI REIT Group as a whole or of the
financing of the Acquisition) remaining in full force and effect and there being
no notice or intimation of an intention to revoke, suspend, restrict, modify or
not to renew such Authorisations, in each case at the time at which the Scheme
becomes otherwise unconditional in all respects;
(d) no temporary restraining order, preliminary or permanent injunction,
preliminary or permanent enjoinment, or other order issued and being in effect
by a court or other Third Party which has the effect of making the Acquisition
or any acquisition or proposed acquisition of any shares or other securities or
control or management of, any member of the Wider RDI REIT Group by any
member of the Wider Bidco Group, or the implementation of either of them,
void, voidable, illegal and/or unenforceable under the laws of any relevant
jurisdiction, or otherwise directly or indirectly prohibiting, preventing,
restraining, restricting, delaying or otherwise interfering with the completion or
the approval of the Acquisition or any matter arising from the proposed
acquisition of any shares or other securities in, or control or management of,
any member of the Wider RDI REIT Group by any member of the Wider Bidco
Group;
Confirmation of absence of adverse circumstances
(e) except as Disclosed, there being no provision of any arrangement, agreement,
licence, permit, franchise, lease or other instrument to which any member of the
Wider RDI REIT Group is a party or by or to which any such member or any of
its assets is or may be bound, entitled or subject or any event or circumstance
which, as a consequence of the Acquisition or the proposed acquisition by any
member of the Wider Bidco Group of any shares or other securities in RDI REIT
or because of a change in the control or management of any member of the
Wider RDI REIT Group or otherwise, would or might reasonably be expected
to result in any of the following, in each case to an extent which is material in
the context of the Wider RDI REIT Group taken as a whole or in the context of
the Acquisition:
(i) any monies borrowed by, or any other indebtedness, actual or contingent
of, or any grant available to, any member of the Wider RDI REIT Group
being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment
date, or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or being capable of
becoming or being withdrawn or inhibited;
(ii) the rights, liabilities, obligations, interests or business of any member of
the Wider RDI REIT Group or any member of the Wider Bidco Group
under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider RDI
REIT Group or any member of the Wider Bidco Group in or with any
other firm or company or body or person (or any agreement or
arrangement relating to any such business or interests) being, or
becoming capable of being, terminated or adversely modified or affected
or any onerous obligation or liability arising or any adverse action being
taken or arising thereunder;
(iii) any member of the Wider RDI REIT Group ceasing to be able to carry
on business under any name under which it presently carries on business
which is material in the context of the Wider RDI REIT Group;
(iv) any assets or interests of, or any asset the use of which is enjoyed by,
any member of the Wider RDI REIT Group being or falling to be
disposed of or charged or ceasing to be available to any such member or
any right arising under which any such asset or interest could be required
to be disposed of or charged or could cease to be available to any such
member of the Wider RDI REIT Group otherwise than in the ordinary
course of business;
(v) other than in the ordinary course of business, the creation or enforcement
of any mortgage, charge or other security interest over the whole or any
part of the business, property, assets or interest of any member of the
Wider RDI REIT Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen), being or becoming
enforceable;
(vi) the business, assets, value, financial or trading position, profits,
prospects or operational performance of any member of the Wider RDI
REIT Group being prejudiced or adversely affected;
(vii) the creation or acceleration of any liability (actual or contingent) by any
member of the Wider RDI REIT Group (including any material tax
liability) other than trade creditors or other liabilities incurred in the
ordinary course of business;
(viii) any liability of any member of the Wider RDI REIT Group to make any
severance, termination, bonus or other payment to any of its directors or
other officers other than in the ordinary course of business; or
(ix) any requirement on any member of the Wider RDI REIT Group to
acquire, subscribe, pay up or repay any shares or other securities (or the
equivalent).
Certain events occurring since 31 August 2020
(f) except as Disclosed, no member of the Wider RDI REIT Group having, since
31 August 2020:
(i) save as between RDI REIT and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries and save for the issue or
transfer out of treasury of RDI REIT Shares on the exercise of options
or vesting of awards granted in the ordinary course under the RDI REIT
Share Plans, issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue of additional
shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities or transferred or sold
or agreed to transfer or sell or authorised or proposed the transfer or sale
of RDI REIT Shares out of treasury;
(ii) other than to another member of the RDI REIT Group, recommended,
declared, paid or made or agreed to recommend, declare, pay or make
any bonus issue, dividend or other distribution (whether payable in cash
or otherwise);
(iii) save as between RDI REIT and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries, merged with (by statutory
merger or otherwise) or demerged from or acquired any body corporate,
partnership or business or acquired or disposed of, or (other than in the
ordinary course of business) transferred, mortgaged or charged or
created any security interest over, any assets or any right, title or interest
in any asset (including shares and trade investments) or authorised,
proposed or announced any intention to do so, in each case to an extent
which is material in the context of the Wider RDI REIT Group taken as
a whole;
(iv) save as between RDI REIT and its wholly-owned subsidiaries or
between such wholly-owned subsidiaries, made, authorised, proposed or
announced an intention to propose any change in its loan capital to an
extent which is material in the context of the Wider RDI REIT Group
taken as a whole;
(v) issued, authorised or proposed or announced an intention to authorise or
propose the issue of, or made any change in or to the terms of, any
debentures or (save in the ordinary course of business and save as
between RDI REIT and its wholly-owned subsidiaries or between such
wholly-owned subsidiaries) incurred or increased any indebtedness or
become subject to any contingent liability to an extent which is material
in the context of the Wider RDI REIT Group taken as a whole or in the
context of the Acquisition;
(vi) entered into, varied, authorised or proposed entry into or variation of, or
announced its intention to enter into or vary, any contract, transaction,
arrangement or commitment (whether in respect of capital expenditure
or otherwise) (otherwise than in the ordinary course of business) which
is of a long term, unusual or onerous nature or magnitude or which
involves or could reasonably be expected to involve an obligation of
such nature or magnitude which is or would be reasonably likely to be
restrictive on the business of any member of the Wider RDI REIT Group
taken as a whole;
(vii) entered into any licence or other disposal of intellectual property rights
of any member of the Wider RDI REIT Group which are material in the
context of the Wider RDI REIT Group and outside the normal course of
business;
(viii) entered into, varied, authorised or proposed entry into or variation of, or
announced its intention to enter into or vary the terms of or made any
offer (which remains open for acceptance) to enter into or vary the terms
of, any contract, commitment, arrangement or any service agreement
with any director or senior executive of the Wider RDI REIT Group save
for salary increases, bonuses or variations of terms in the ordinary
course;
(ix) proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme, or other benefit relating to the employment
or termination of employment of any employee of the Wider RDI REIT
Group which, taken as a whole, are material in the context of the Wider
RDI REIT Group taken as a whole;
(x) (I) made, agreed or consented to or procured any change to: (a) the terms
of the trust deeds, rules, policy or other governing documents
constituting any pension scheme or other retirement or death benefit
arrangement established for the directors, former directors, employees
or former employees of any entity in the Wider RDI REIT Group or their
dependants and established by a member of the Wider RDI REIT Group
(a "Relevant Pension Plan"); (b) the basis on which benefits accrue,
pensions which are payable or the persons entitled to accrue or be paid
benefits, under any Relevant Pension Plan; (c) the basis on which the
liabilities of any Relevant Pension Plan are funded, valued or made; (d)
the manner in which the assets of any Relevant Pension Plan are
invested; (e) the basis or rate of employer contribution to a Relevant
Pension Plan; or
(II) entered into or proposed to enter into one or more bulk annuity
contracts in relation to any Relevant Pension Plan; or
(III) carried out any act: (a) which would or could reasonably be
expected to lead to the commencement of the winding up of any
Relevant Pension Plan; (b) which would or is reasonably likely to create
a material debt owed by an employer to any Relevant Pension Plan; (c)
which would or might accelerate any obligation on any employer to fund
or pay additional contributions to any Relevant Pension Plan; or (d)
which would or might, having regard to the published guidance of the
Pensions Regulator, give rise directly or indirectly to a liability in
respect of a Relevant Pension Plan arising out of the operation of
sections 38 and 38A of the Pensions Act 2004 in relation to a Relevant
Pension Plan,
in each case to an extent which is material in the context of the Wider
RDI REIT Group taken as a whole or in the context of the Acquisition
and other than as required in accordance with applicable law;
(xi) changed the trustee or trustee directors or other fiduciary of any Relevant
Pension Plan;
(xii) entered into, implemented or effected, or authorised, proposed or
announced its intention to implement or effect, any joint venture, asset
or profit sharing arrangement, partnership, composition, assignment,
reconstruction, amalgamation, commitment, scheme or other transaction
or arrangement (other than the Scheme) otherwise than in the ordinary
course of business which is material in the context of the Wider RDI
REIT Group taken as a whole or in the context of the Acquisition;
(xiii) purchased, redeemed or repaid or announced any proposal to purchase,
redeem or repay any of its own shares or other securities or reduced or,
save in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital to an extent which
(other than in the case of RDI REIT) is material in the context of the
Wider RDI REIT Group taken as a whole;
(xiv) other than with respect to claims between RDI REIT and its wholly
owned subsidiaries (or between such subsidiaries), waived,
compromised, abandoned or settled any claim or regulatory proceeding
(whether actual or threatened and whether by or against any member of
the Wider RDI REIT Group) otherwise than in the ordinary course of
business and which is material in the context of the Wider RDI REIT
Group taken as a whole or in the context of the Acquisition;
(xv) made any alteration to its articles of association or other constitutional
documents (in each case, other than in connection with the Acquisition)
which is material in the context of the Wider RDI REIT Group taken as
a whole or in the context of the Acquisition;
(xvi) (other than in respect of a member of the Wider RDI REIT Group which
is dormant and was solvent at the relevant time) taken or proposed any
steps, corporate action or had any legal proceedings instituted or
threatened against it in relation to the suspension of payments, a
moratorium of any indebtedness, its winding-up (voluntary or
otherwise), dissolution, reorganisation or for the appointment of any
administrator, receiver, manager, administrative receiver, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in
any jurisdiction or had any such person appointed which is material in
the context of the Wider RDI REIT Group taken as a whole or in the
context of the Acquisition;
(xvii) been unable or deemed unable under section 163(1) of the Isle of Man
Companies Act 1931, which applies to RDI REIT by virtue of section
182 of the IOM Act, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with
a view to rescheduling or restructuring any of its indebtedness, 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 which is material in the context of the
Wider RDI REIT Group taken as a whole;
(xviii) terminated or varied the terms of any agreement or arrangement between
any member of the Wider RDI REIT Group and any other person in a
manner which would or might reasonably be expected to have a material
adverse effect on the financial position of the Wider RDI REIT Group
taken as a whole;
(xix) having taken (or agreed or proposed to take) any action which requires,
or would require, the consent of the Panel or the approval of RDI REIT
Shareholders in general meeting in accordance with, or as contemplated
by, Rule 21 of the Takeover Code; or
(xx) entered into any contract, commitment, agreement or arrangement
otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with
respect to or announced an intention to, or to propose to, effect any of
the transactions, matters or events referred to in this Condition;
No material adverse change
(g) since 31 August 2020, and except as Disclosed, there having been:
(i) no adverse change or deterioration in the business, assets, value,
financial or trading position, profits, prospects or operational
performance of any member of the Wider RDI REIT Group to an extent
which is material to the Wider RDI REIT Group taken as a whole and
no circumstances have arisen which would or might reasonably be
expected to result in such adverse change or deterioration;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings including, without limitation, with regard to intellectual
property rights used by the Wider RDI REIT Group having been
threatened, announced, implemented or instituted by or against or
remaining outstanding against any member of the Wider RDI REIT
Group or to which any member of the Wider RDI REIT Group is or may
become a party (whether as claimant or defendant or otherwise) and no
enquiry, review, investigation or enforcement proceedings by, or
complaint or reference to, any Third Party against or in respect of any
member of the Wider RDI REIT Group having been threatened,
announced, implemented or instituted by or against, or remaining
outstanding in respect of, any member of the Wider RDI REIT Group
which, in any such case, has had or might be expected to have a material
adverse effect on the Wider RDI REIT Group taken as a whole;
(iii) no contingent or other liability having arisen, increased or become
apparent which has had or is reasonably likely to adversely affect the
business, assets, financial or trading position, profits, prospects or
operational performance of any member of the Wider RDI REIT Group to
an extent which is material to the Wider RDI REIT Group taken as a whole;
(iv) no steps having been taken and no omissions having been made which
are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any licence or permit held by any
member of the Wider RDI REIT Group, which is necessary for the
proper carrying on of its business and the withdrawal, cancellation,
termination or modification of which has had, or would reasonably be
expected to have, a material adverse effect on the Wider RDI REIT
Group taken as a whole; and
(v) no member of the Wider RDI REIT Group having conducted its business
in breach of any applicable laws and regulations which in any case is
material in the context of the Wider RDI REIT Group taken as a whole.
No discovery of certain matters
(h) except as Disclosed, Bidco not having discovered:
(i) that any financial, business or other information concerning the Wider
RDI REIT Group publicly announced or disclosed to any member of the
Wider Bidco Group at any time prior to this announcement by or on
behalf of any member of the Wider RDI REIT Group or to any of their
advisers is misleading, contains a misrepresentation of fact or omits to
state a fact necessary to make that information not misleading and which
was not subsequently corrected before the date of this announcement by
disclosure either publicly or otherwise to Bidco or its professional
advisers and which is, in any case, material in the context of the Wider
RDI REIT Group taken as a whole or in the context of the Acquisition;
(ii) that, since 31 August 2020, any member of the Wider RDI REIT Group
is subject to any liability, contingent or otherwise and which is material
in the context of the Wider RDI REIT Group taken as a whole; or
(iii) any information which affects the import of any information disclosed
at any time prior to this announcement by or on behalf of any member
of the Wider RDI REIT Group which is material in the context of the
Wider RDI REIT Group taken as a whole;
Environmental liabilities
(i) except as Disclosed, Bidco not having discovered that:
(i) any past or present member of the Wider RDI REIT Group has failed to
comply with any and/or all applicable legislation or regulation or other
requirements of any jurisdiction with regard to the use, treatment,
handling, storage, carriage, disposal, spillage, release, discharge, leak or
emission of any waste or hazardous substance or any substance likely to
impair the environment (including property) or harm human health or
animal health or otherwise relating to environmental matters or the
health and safety of humans, or that there has otherwise been any such
use, treatment, handling, storage, carriage, disposal, spillage, release,
discharge, leak or emission (whether or not the same constituted a non-
compliance by any person with any such legislation or regulations, and
wherever the same may have taken place) any of which disposal,
spillage, release, discharge, leak or emission would be likely to give rise
to any liability (actual or contingent) or cost on the part of any member
of the Wider RDI REIT Group; or
(ii) there is, or is likely to be, for that or any other reason whatsoever, any
liability (actual or contingent) of any past or present member of the
Wider RDI REIT Group to make good, remediate, repair, reinstate or
clean up any property or any controlled waters now or previously
owned, occupied, operated or made use of or controlled by any such past
or present member of the Wider RDI REIT Group (or on its behalf) or
by any person for which a member of the Wider RDI REIT Group is or
has been responsible, or in which any such member may have or
previously have had or be deemed to have had an interest, under any
environmental legislation, common law, regulation, notice, circular or
order of any Third Party or to contribute to the cost thereof or associated
therewith or indemnify any person in relation thereto,
in each case, which is or would be material in the context of the Wider RDI
REIT Group taken as a whole;
Intellectual Property
(j) no circumstance having arisen or event having occurred in relation to any
intellectual property owned or used by any member of the Wider RDI REIT
Group which would have a material adverse effect on the Wider RDI REIT
Group taken as a whole or is otherwise material in the context of the
Acquisition.
Anti-corruption and sanctions
(k) except as Disclosed, Bidco not having discovered that:
(i) any past or present member, director, officer or employee of the Wider
RDI REIT Group or any other person that performs or has performed
services for or on behalf of any such entity and for whom the Wider RDI
REIT Group is liable is or has at any time engaged in any activity,
practice or conduct (or omitted to take any action) in contravention of
the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977,
as amended or any other applicable anti-corruption or anti-bribery law,
rule or regulation or any other applicable law, rule, or regulation
concerning improper payments or kickbacks;
(ii) any member of the Wider RDI REIT Group is found to have engaged in
activities constituting money laundering under any applicable law, rule,
or regulation concerning money laundering;
(iii) any member of the Wider RDI REIT Group, or any of their respective
directors, officers or employees, is ineligible to be (or any past member
of the Wider RDI REIT Group was, or any past director, officer or
employee who was at any time during the course of their engagement
with any past or present member of the Wider RDI REIT Group,
ineligible to be) awarded any contract or business under section 57 of
the Public Contracts Regulations 2015 or section 80 of the Utilities
Contracts Regulations 2016 (each as amended);
(iv) any past or present member, director, officer or employee of the Wider
RDI REIT Group, or any other person for whom any such person may
be liable or responsible, is or has engaged in any business or activity
with, or made any investments in, or made any funds or assets available
to or received any funds or assets from: (a) any government, entity or
individual in respect of which US, UK or European Union persons, or
persons operating in those territories, are prohibited from engaging in
activities or doing business, or from receiving or making available funds
or economic resources, by United States, UK or European Union laws
or regulations, including the economic sanctions administered by the US
Office of Foreign Assets Control, or HM Treasury in the UK; or (b) any
government, entity or individual targeted by any of the economic
sanctions of the United Nations, the United States, the UK, the European
Union or any of its member states; or
(v) a member of the RDI REIT Group has engaged in a transaction which
would cause any member of the Wider Bidco Group to be in breach of
any law or regulation on completion of the Acquisition, including but
not limited to the economic sanctions administered by the United States
Office of Foreign Assets Control or HM Treasury & Customs or any
government, entity or individual targeted by any of the economic
sanctions of the United Nations, United States, the UK or the European
Union or any of its member states or any other relevant government
authority.
No criminal property
(l) except as Disclosed, Bidco not having discovered that any asset of any member
of the Wider RDI REIT Group constitutes criminal property as defined by
section 340(3) of the Proceeds of Crime Act 2002 (but disregarding
paragraph (b) of that definition).
Part B: Further terms of the Acquisition
1. The Scheme will not become Effective unless the Conditions have been fulfilled or (to
the extent capable of waiver) waived or, where appropriate, have been determined by
Bidco to be or remain satisfied by no later than 11.59 p.m. on the Long Stop Date (or
such later date as agreed between RDI REIT and Bidco with the approval of the Court
and with the agreement of the Panel if required).
2. Subject to the requirements of the Panel in accordance with the Takeover Code, Bidco
reserves the right to waive, in whole or in part, all or any of the Conditions in Part A
above, except for Conditions 2(a)(i), 2(b)(i) and 2(c)(i) (Conditions of the Scheme)
which cannot be waived.
3. If any of the deadlines set out in Condition 2 of Part A above for the timing of the Court
Meeting, General Meeting or the Sanction Hearing is not met, Bidco shall make an
announcement by 7.00 a.m. on the Business Day following such deadline confirming
whether they have invoked or waived the relevant Condition or agreed with RDI REIT
to extend the deadline in relation to the relevant Condition.
4. Conditions 3(a) to (l) (inclusive) must each be fulfilled, determined by Bidco to be or
to remain satisfied or (if capable of waiver) be waived by Bidco by no later than 11.59
p.m. on the date immediately preceding the date of the Sanction Hearing, failing which
the Acquisition will lapse.
5. Bidco shall be under no obligation to waive or treat as satisfied any of the Conditions
that it is entitled (with the consent of the Panel) to waive or treat as satisfied, by a date
earlier than the latest date specified above for the fulfilment or waiver thereof,
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
such Conditions may not be capable of fulfilment.
6. Each of the Conditions shall be regarded as a separate Condition and shall not be limited
by reference to any other Condition.
7. If Bidco is required by the Panel to make an offer for RDI REIT Shares under the
provisions of Rule 9 of the Takeover Code, Bidco may make such alterations to any of
the above Conditions as are necessary to comply with the provisions of that Rule.
8. Under Rule 13.5(a) of the Takeover Code, Bidco will not invoke a Condition 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 Bidco in the context of the Acquisition. The Conditions contained in
paragraphs 1 and 2 above and, if applicable, any acceptance condition in the event the
Acquisition is implemented by means of an Offer, are not subject to this provision of
the Takeover Code.
9. The Acquisition will lapse if: (a) in so far as the Acquisition or any matter arising from
or relating to the Scheme or Acquisition constitutes a concentration with a European Union
dimension within the scope of Council Regulation (EC) 139/2004, the European
Commission initiates proceedings under Article 6(1)(c) of Council Regulation (EC)
139/2004 or (b) the Acquisition or any matter arising from or relating to the Scheme or
Acquisition becomes subject to a Phase 2 CMA Reference, in either case before the
later of the Court Meeting and the General Meeting. In such events, RDI REIT will not
be bound by the terms of the Scheme.
10. Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an
alternative to the Scheme (subject to the Panel's consent). In such event, the Offer will
be implemented on the same terms and conditions, so far as applicable, as those which
would apply to the Scheme (subject to appropriate amendments for an acquisition being
made by way of an Offer, including (without limitation) compliance with JSE Listings
Requirements and the inclusion of an acceptance condition set at 75 per cent. of the
voting rights normally exercisable at a general meeting of RDI REIT (or such lesser
percentage as may be required by the Panel or determined by Bidco after consultation
with the Panel (if necessary), being in any case more than 50 per cent of the voting
rights normally exercisable at a general meeting of RDI REIT, including, for this
purpose, any such voting rights attaching to RDI REIT Shares that are issued before
the Offer becomes or is declared unconditional as to acceptances, whether pursuant
to the exercise of any outstanding subscription or conversion rights or otherwise).
Further, if Bidco implemented the Acquisition by the Offer and if sufficient acceptances
of the Offer are received and/or sufficient RDI REIT Shares are otherwise acquired, it is
the intention of Bidco to apply the provisions of the IOM Act to compulsorily acquire any
outstanding RDI REIT Shares to which the Offer related.
11. The Scheme and any proxies in respect thereof will be governed by Isle of Man law
and subject to the jurisdiction of the Isle of Man courts and to the Conditions and further
terms set out above and to be set out in full in the Scheme Document. The Acquisition
will be subject to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the JSE, the Listing Rules, the JSE Listings Requirements and
the FCA.
12. The Scheme Shares will be acquired under the Acquisition 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 now or hereafter
attaching or accruing to them, including (without limitation) voting rights and the right
to receive and retain in full all dividends and other distributions (if any) declared, made
or paid on or after the Scheme Record Time.
13. If, on or after the date of this announcement, any dividend and/or other distribution
and/or other return of capital is declared, made or paid or becomes payable in respect
of the RDI REIT Shares, the Cash Consideration shall automatically be reduced by an
amount equal to the amount of such dividend and/or distribution and/or return of
capital, in which case any reference in this announcement to the Cash Consideration
will automatically be deemed to be a reference to the Cash Consideration as so reduced
by the amount of such dividend and/or distribution and/or return of capital. In such
circumstances, RDI REIT Shareholders would be entitled to receive and retain any such
dividend or other distribution and/or return of capital. To the extent that any such
dividend and/or distribution and/or other return of capital announced, declared, made
or paid is: (i) transferred pursuant to the Acquisition on a basis which entitles Bidco to
receive the dividend or distribution or return of capital and to retain it; or (ii) cancelled,
then in either case the consideration payable in respect of the Acquisition will not be
subject to change in accordance with this paragraph. Any reduction in the Cash
Consideration pursuant to this paragraph shall not be regarded as constituting any
revision or variation of the terms of the Acquisition or the Scheme. In accordance with
the requirements of the UK REIT regime, the RDI REIT Directors intend to declare and
pay a dividend after the date of this announcement, but prior to the Scheme Record Time.
14. The Acquisition will be subject, inter alia, to the Conditions and certain further terms
which are set out in this Appendix 1 and those terms which will be set out in the Scheme
Document and such further terms as may be required to comply with the Listing Rules,
the JSE Listings Requirements and the provisions of the Takeover Code.
15. The availability of the Acquisition to persons not resident in the United Kingdom, the
Isle of Man or South Africa may be affected by the laws of the relevant jurisdiction.
Any persons who are subject to the laws of, or are otherwise resident in, any jurisdiction
other than the United Kingdom, the Isle of Man or South Africa should inform
themselves about and observe any applicable requirements. Further information in
relation to Overseas Shareholders will be contained in the Scheme Document.
16. Unless otherwise determined by Bidco or required by the Takeover Code, the
Acquisition is not being made, directly or indirectly, in, into or from, or by use of the
mails of, or any means of instrumentality (including, without limitation, facsimile, e-
mail or other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or any facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and shall not be capable of acceptance by any such use, means,
instrumentality or facility or from within any Restricted Jurisdiction.
17. Bidco reserves the right, with the consent of RDI REIT, for any other entity directly or
indirectly owned by Bidco or by any fund managed or advised by Starwood from time
to time to implement the Acquisition.
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
Unless otherwise stated in this announcement:
1. the value attributed to the fully diluted issued share capital of RDI REIT is based on:
(a) 380,590,061 RDI REIT Shares in issue on 25 February 2021 (being the latest practicable date
prior to the date of this announcement); and
(b) 4,964,225 RDI REIT Shares which may be issued on or after the date of this
announcement to satisfy the exercise of options and vesting of awards outstanding
under the RDI REIT Share Plans as at 25 February 2021 (being the latest practicable date prior
to the date of this announcement for such figures); less
(c) 64,179 RDI REIT Shares as at 25 February 2021 (being the latest practicable date prior to the
date of this announcement for such figures) held by Redefine International Management
Holdings Limited which can be used to satisfy the exercise of options and vesting of
awards granted under the RDI REIT Share Plans;
2. all prices for RDI REIT Shares have been derived from the Daily Official List and
represent Closing Prices on the relevant date(s);
3. the six month daily Volume Weighted Average Price ("VWAP") per RDI REIT Share
of 87.8 pence from 25 August 2020 until 25 February 2021 is derived from data provided by Bloomberg;
4. the three month daily VWAP per RDI REIT Share of 87.2 pence from 25 November 2020 until 25 February 2021 is
derived from data provided by Bloomberg; and
5. the financial information relating to RDI REIT is extracted (without material
adjustment) from the 2020 RDI REIT Annual Report.
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
1. Directors
The following Independent RDI REIT Directors (being all Independent RDI REIT
Directors who hold RDI REIT Shares) have given irrevocable undertakings to vote in
favour of the resolutions relating to the Acquisition at the Meetings in respect of their
own beneficial holdings of RDI REIT Shares (or those RDI REIT Shares over which
they have control):
Name Percentage of
Total Number of existing issued
RDI REIT Shares(1) share capital
Gavin Tipper 101,726 0.03
Stephen Oakenfull 207,282 0.05
Donald Grant 84,839 0.02
Note:
(1.) These figures refer only to the RDI REIT Shares to which the relevant Independent RDI REIT Director
is beneficially entitled or otherwise able to control the exercise of the rights attaching thereto at
25 February 2021 (being the latest practicable date prior to the date of this announcement). Any options or
awards which are outstanding under the RDI REIT Share Plans are excluded, however, any shares awarded
under the RDI REIT Share Plans on or prior to the Effective Date would be included in the scope of
the irrevocable undertakings.
The irrevocable undertakings referred to in paragraph 1 above cease to be binding on
the earlier of the following occurrences (i) the Panel requires that Bidco not proceed, or
consents to Bidco not proceeding, with the Acquisition; (ii) the date on which any
competing offer for the entire issued and to be issued share capital of RDI REIT
becomes wholly unconditional or, if proceeding by way of a scheme or arrangement,
becomes effective; (iii) the Scheme or, if applicable, the Offer is withdrawn or, in the
case of a Scheme, does not become effective, or in the case of an Offer (if applicable)
does not become wholly unconditional, in each case in accordance with its terms,
provided that the reason is not because of Bidco electing to proceed by way of an Offer
rather than by way of a Scheme.
Except as set out above, the irrevocable undertakings described in paragraph 1 above
remain binding in the event of a competing offer.
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this document unless the context
otherwise requires:
"2006 Act" the Companies Act 2006, as amended from
time to time
"2020 RDI REIT Annual the annual report and audited accounts of the
Report" RDI REIT Group for the year ended 31
August 2020
"Acquisition" the proposed cash acquisition by Bidco of
the entire issued and to be issued share
capital of RDI REIT (other than RDI REIT
Shares already held by Bidco, Starwood
Funds or their affiliates, if any), by means of
the Scheme (and other matters to be
considered at the Meetings), or, should
Bidco so elect (with the consent of the
Panel), by means of an Offer
"Articles" the articles of association of RDI REIT from
time to time
"associated undertaking" shall be construed in accordance with
paragraph 19 of Schedule 6 to The Large and
Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008
(SI 2008/410) but for this purpose ignoring
paragraph 19(1)(b) of Schedule 6 to those
regulations)
"Authorisations" authorisations, orders, grants, recognitions,
confirmations, consents, licences,
clearances, certificates, permissions,
exemptions or approvals, in each case of a
Third Party
"Bidco" SOF-12 Cambridge BidCo Limited, a
company owned by funds managed and/or
advised by Starwood
"Bidco Group" Bidco and its subsidiary undertakings and
where the context permits, each of them
"Board" the board of directors of RDI REIT
"Business Day" a day, not being a public holiday, Saturday
or Sunday, on which clearing banks in
London, the Isle of Man and Guernsey are
open for normal business
"Closing Price" the closing middle market price of a RDI
REIT Share as derived from the Daily
Official List on any particular date
"Companies Registry" the Isle of Man Companies Registry
"Conditions" the conditions to the Acquisition, as set out
in Part A of Appendix 1, and to be set out in
the Scheme Document
"Court" the High Court of Justice of the Isle of Man
"Court Meeting" the meeting(s) of Scheme Shareholders to be
convened at the direction of the Court
pursuant to section 157 of the IOM Act at
which a resolution will be proposed to
approve the Scheme, including any
adjournment, postponement or reconvention
thereof
"Court Order" the order of the Court sanctioning the
Scheme under section 157 of the IOM Act
"CREST" the relevant system (as defined in the
Regulations) in respect of which Euroclear is
the operator (as defined in the Regulations)
"Daily Official List" the daily official list of the London Stock
Exchange
"Disclosed" the information fairly disclosed by or on
behalf of RDI REIT: (i) in the 2020 RDI
REIT Annual Report; (ii) in this
announcement; (iii) in any other
announcement to a Regulatory Information
Service prior to the date of this
announcement; and (iv) in writing (including
via the virtual data room operated by or on
behalf of RDI REIT in respect of the
Acquisition) prior to the date of this
announcement to Bidco or its advisers (in
their capacity as such)
"Effective" in the context of the Acquisition: (i) if the
Acquisition is implemented by way of the
Scheme, the Scheme having become
effective pursuant to its terms; or (ii) if the
Acquisition is implemented by way of the
Offer, the Offer having been declared or
having become unconditional in all respects
in accordance with the requirements of the
Takeover Code
"Effective Date" the date on which the Acquisition becomes
Effective
"EPRA" European Public Real Estate Association
"Equity Commitment Letter" the equity commitment letter entered into
between each of Starwood Distressed
Opportunity Fund XII Global, L.P. and SOF-
12 International Master Fund SCSp on the
one hand, and Bidco on the other hand, dated
on the date of this announcement
"Euroclear" Euroclear UK & Ireland Limited
"Exchange Act" the US Securities and Exchange Act of 1934,
as amended and the rules and regulations
promulgated thereunder
"Excluded Shares" any RDI REIT Shares which, at the relevant
time, are beneficially owned by Starwood
Funds or their affiliates or the Wider Bidco
Group
"FCA" Financial Conduct Authority or its successor
from time to time
"FCA Handbook" the FCA's Handbook of rules and guidance
as amended from time to time
"General Meeting" the general meeting of RDI REIT
Shareholders (including any adjournment,
postponement or reconvention thereof) to be
convened to consider and if thought fit pass
the RDI REIT Resolutions
"Independent RDI REIT the board of directors of RDI REIT other
Directors" than Matthew Parrott
"IOM Act" the Isle of Man Companies Act 2006, as
amended from time to time
"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
"JSE Listings Requirements" the Listings Requirements issued by the JSE
from time to time
"Listing Rules" the rules and regulations made by the FCA
under Part VI of the Financial Services and
Markets Act 2000, as amended, and
contained in the FCA's publication of the
same name (as amended from time to time)
"London Stock Exchange" the London Stock Exchange plc or its
successor from time to time
"Long Stop Date" 26 August 2021 or such later date as may be
agreed between Bidco and RDI REIT and, if
required, with the Panel's consent and as the
Court may allow
"Meetings" the Court Meeting and the General Meeting
"NAV" net asset value
"NNNAV" triple net asset value
"Offer" subject to the consent of the Panel, should
the Acquisition be implemented by way of a
takeover offer as defined in Chapter 3 of Part
28 of the 2006 Act, the offer to be made by
or on behalf of Bidco to acquire the entire
issued and to be issued share capital of RDI
REIT (reflecting any amendments made to
Chapter 1 of Part 28 of the 2006 Act as a
result of RDI REIT being a company
incorporated in the Isle of Man) and, where
the context admits, any subsequent revision,
variation, extension or renewal of such offer
"Offer Document" the document to be sent to Scheme
Shareholders and persons with information
rights containing the terms and conditions of
the Offer in the event Bidco effects the
Acquisition, with the consent of the Panel,
by way of an Offer
"Official List" the Official List of the FCA
"Overseas Shareholders" RDI REIT Shareholders (or nominees of, or
custodians or trustees for RDI REIT
Shareholders) who are resident in, ordinarily
resident in, or citizens of, jurisdictions
outside the United Kingdom or the Isle of Man
"Panel" the Panel on Takeovers and Mergers
"Phase 2 CMA Reference" a reference 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
"PRA" Prudential Regulation Authority or its
successor from time to time
"RBH" RBH Hotel Group Limited
"RDI REIT" RDI REIT P.L.C.
"RDI REIT Group" RDI REIT and its subsidiary undertakings
and where the context permits, each of them
"RDI REIT Resolutions" such shareholder resolutions of RDI REIT as
are necessary to approve, implement and
effect the Scheme and the Acquisition,
including (without limitation) a resolution to
amend the articles of association of RDI
REIT by the adoption of a new article (in
terms approved by Bidco) under which any
RDI REIT Shares issued or transferred after
the General Meeting shall either be subject
to the Scheme or (after the Effective Date)
shall be immediately transferred to Bidco (or
as it may direct) in exchange for the same
consideration as is due under the Scheme
"RDI REIT Share Plans" the RDI REIT Long Term Performance
Share Plan, the RDI REIT Restricted Stock
Plan and the RDI REIT Senior Management
Short Term Incentive Plan (which is
constituted by an addendum to the service
agreements of the executive directors of RDI
REIT)
"RDI REIT Share(s)" the existing unconditionally allotted or
issued and fully paid ordinary shares of 40p
each in the capital of RDI REIT and any
further shares which are unconditionally
allotted or issued before the Scheme
becomes Effective but excluding in both
cases any such shares held or which become
held in treasury
"RDI REIT Shareholder(s)" holders of RDI REIT Shares
"Regulations" the Isle of Man Uncertificated Securities
Regulations 2006, as amended from time to
time
"Regulatory Information a regulatory information service as defined
Service" in the FCA Handbook
"REIT" a UK Real Estate Investment Trust under
Part 12 of the Corporation Tax Act 2010
"relevant securities" as the context requires, RDI REIT Shares,
other RDI REIT share capital and any
securities convertible into or exchangeable
for, and rights to subscribe for, any of the
foregoing
"Restricted Jurisdiction" any jurisdiction where local laws or
regulations may result in a significant risk of
civil, regulatory or criminal exposure if
information concerning the Acquisition is
sent or made available to RDI REIT
Shareholders in that jurisdiction
"Sanction Hearing" the Court hearing to sanction the Scheme
"Scheme" the proposed scheme of arrangement under
Chapter 2 of Part X of the IOM Act between
RDI REIT and the Scheme Shareholders,
with or subject to any modification, addition
or condition approved or imposed by the
Court and agreed by RDI REIT and Bidco
"Scheme Document" the document to be sent to Scheme
Shareholders and persons with information
rights containing, amongst other things, the
Scheme and notices of the Meetings and
proxy forms in respect of the Meetings,
including the particulars required by section
157(2) of the IOM Act, and any
supplementary scheme document
"Scheme Record Time" the time and date to be specified in the
Scheme Document, expected to be 6.00 p.m.
on the Business Day immediately prior to the
date of the Sanction Hearing or such other
time as Bidco and RDI REIT may agree
"Scheme Shareholders" holders of Scheme Shares and a "Scheme
Shareholder" shall mean any one of those
Scheme Shareholders
"Scheme Shares" all RDI REIT 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 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 shall have
agreed in writing to be, bound by the Scheme
and which remain in issue at the Scheme
Record Time,
but excluding, in any case, any Excluded
Shares at the Scheme Record Time
"SENS" or "Stock Exchange the Stock Exchange News Service of the JSE
News Service"
"Starwood" Starwood Capital Group
"Starwood Funds" funds managed, controlled or advised by
Starwood or its affiliates
"STRATE" the settlement and clearing system used by
the JSE, managed by Strate Proprietary
Limited, a limited liability company duly
incorporated and registered under the laws of
South Africa under registration number
1998/022242/07, and licensed as a central
securities depository under the South
African Financial Markets Act, 19 of 2012
"subsidiary", "subsidiary shall be construed in accordance with the
undertaking" and "undertaking" 2006 Act
"Takeover Code" the City Code on Takeovers and Mergers,
issued by the Panel, as amended from time to
time
"UK" or "United Kingdom" United Kingdom of Great Britain and
Northern Ireland
"US" or "United States" 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 jurisdiction
"Voting Record Time" the time and date to be specified in the
Scheme Document by reference to which
entitlement to vote on the Scheme will be
determined
"Wider Bidco Group" Bidco and its subsidiaries, subsidiary
undertakings and associated undertakings
and any other body corporate, partnership,
joint venture or person in which Bidco
and/or such undertakings (aggregating their
interests) have a direct or indirect interest of
more than 20 per cent. of the voting or equity
capital or the equivalent
"Wider RDI REIT Group" RDI REIT Group and its subsidiaries,
subsidiary undertakings and associated
undertakings and any other body corporate,
partnership, joint venture or person in which
RDI REIT and/or such undertakings
(aggregating their interests) have a direct or
indirect interest of more than 20 per cent. of
the voting or equity capital or the equivalent
"GBP" or "Sterling" Pounds sterling, the lawful currency for the
time being of the UK and references to
"pence" and "p" shall be construed
accordingly
"$" or "dollars" US dollars, the lawful currency of the United
States and references to "cents" and "c" shall
be construed accordingly
All times referred to are London time unless otherwise stated.
All references to a 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 and deriving validity therefrom.
References to the singular include the plural and vice versa.
Date: 26-02-2021 09:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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