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Acquisition

13th Apr 2006 07:01

Medical Property Investment Fd Ltd13 April 2006 For release at 7.00 a.m. on 13 April 2006 Not for release, publication or distribution in whole or in part, in or into theUnited States of America, Canada, Australia, the Republic of South Africa, Japanor any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction The Medical Property Investment Fund Limited ("MPIF" or the "Company") Proposed acquisition of the Berrington Parties ("Berrington") and Placing and Open Offer HIGHLIGHTS The Medical Property Investment Fund Limited announces proposals to acquireBerrington, its investment manager, and to raise approximately £110 million bymeans of a placing and open offer. • The recent NHS White Paper reinforces the MPIF Board's view that the opportunities for investment in primary and community healthcare are considerable • The proposed acquisition of Berrington brings the Company's investment team in-house and will allow MPIF to capitalise on these opportunities more effectively • The proposed fundraising will allow MPIF to continue its successful programme of investment and development of primary healthcare properties and finance the roll out of its Pharmacy and Assura businesses across its portfolio of properties • The proposed consideration for the acquisition of Berrington is £37.4 million comprising £8.8 million in cash and £28.6 million (at 170p) in locked-up new Ordinary Shares • The Placing and Open Offer will raise £110.0 million (approximately £105.6 million after expenses) via the issue of 64,729,021 new Ordinary Shares at 170p per share • The Company also proposes: o a new equity incentive plan to retain and attract key employees; o to continue managing the £198 million Westbury Property Fund Limited which is managed by Berrington; and o certain changes to the Company's Articles to enable the enlarged group to comply with its regulatory requirements A prospectus setting out further details of the Proposals and convening an EGMwill be posted to shareholders as soon as practicable. Dr Mark Jackson, Chairman of the Medical Property Investment Fund Limitedcommented: "Richard Burrell and his team have done a tremendous job for MPIF since itsformation and are now committing themselves to the Company to enable us to takefull advantage of the opportunities in primary care which drove the Company'sformation and which the NHS White Paper has reinforced". Richard Burrell, Chief Executive of Berrington commented: "The NHS White Paper has confirmed our vision of primary and communityhealthcare in the UK and underpinned MPIF's business plan. The strong supportof MPIF's shareholders for the fundraising and the integration of Berringtonwill enable MPIF to build on the lead it has created in the primary healthcaremarket and capitalise on the opportunities for both property investment and the development and growth of the Pharmacy and Assura businesses. We believe this is a time of enormous opportunity for traditional GeneralPractice to transform itself with the help of a strong GP focused businesspartner capable of delivering the necessary investment skills and support todeliver highly accessible services for patients. This environment wheresecondary care is shifting to primary care, supported by Practice BasedCommissioning will create further opportunities for us to improve the patientexperience" Enquiries Richard Burrell Berrington Fund Management Limited 020 7659 6271Tony Langham Lansons Communications 020 7294 3617 [email protected] 07979 692 287James Horsman Lansons Communications 020 7294 3686 [email protected] 07730 989 699Charlotte Edgar Lansons Communications 020 7294 3622 [email protected] 07734 929 219 Cenkos Securities Limited, which is authorised and regulated by the FinancialServices Authority, is acting for The Medical Property Investment Fund Limitedand no one else in connection with the matters referred to in this announcementand will not be responsible to anyone other than The Medical Property InvestmentFund Limited for providing the protections afforded to its customers or forproviding advice to any other person in relation to the matters referred to inthis announcement. BDO Stoy Hayward Corporate Finance, a division of BDO Stoy Hayward LLP,Chartered Accountants, which is authorised and regulated by the FinancialServices Authority, is acting for The Medical Property Investment Fund Limitedand no one else in connection with the matters referred to in this announcementand will not be responsible to anyone other than The Medical Property InvestmentFund Limited for providing the protections afforded to its customers or forproviding advice to any other person in relation to the matters referred to inthis announcement. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to acquire, purchase orsubscribe for any securities. This announcement has not been examined orapproved by the FSA or the London Stock Exchange or any other regulatoryauthority. The distribution for this announcement in certain jurisdictions maybe restricted by law and therefore persons into whose possession thisannouncement comes should inform themselves about and observe any suchrestrictions. Any failure to comply with these restrictions may constitute aviolation of the securities laws of any such jurisdiction. Any purchase of orapplication for shares in the Placing and the Open Offer should only be made onthe basis of information contained in the formal prospectus to be issued inconnection with the Placing and the Open Offer and any supplement thereto. The information contained herein is not for publication or distribution in orinto the United States of America. These materials are not an offer ofsecurities for sale in the United States. The securities referred to hereinhave not been and will not be registered under the U.S. Securities Act of 1933(the "Act"), as amended, and may not be offered or sold in the United Statesabsent registration under the Act or an available exemption from registration.No public offering of the securities referred to herein will be made in theUnited States. The information contained in this announcement is not for publication ordistribution to persons in Australia, Canada, Japan or the Republic of SouthAfrica. The shares referred to herein may not, directly or indirectly, beoffered, sold, taken up or delivered in, into or from Australia, Canada, Japanor the Republic of South Africa. Certain statements in this announcement are forward looking statements. Bytheir nature, forward looking statements involve a number of risks,uncertainties and assumptions because they relate to events and/or depend oncircumstances that may or may not occur in the future and could cause actualresults to differ materially from those expressed in, or implied by, the forwardlooking statements. These include, among other factors: the Group's ability toobtain capital/additional finance; the limitations of the Group's internalfinancial controls; any increase in competition; an unexpected decline inturnover; legislative, fiscal and regulatory developments including, but notlimited to, changes in environmental and safety regulations; and currency andinterest rate fluctuations. These and other factors could adversely affect theoutcome and financial effects of the plans and events described herein. Forwardlooking statements contained in this announcement based on past trends oractivities should not be taken as a representation that such trends oractivities will continue in the future. Subject to any requirement under theListing Rules of the UK Listing Authority, neither the Company nor CenkosSecurities Limited nor BDO Stoy Hayward Corporate Finance undertakes anyobligation to update or revise any forward looking statements, whether as aresult of new information, future events or otherwise. You should not placeundue reliance on forward looking statements, which speak only as of the date ofthis announcement. Not for release, publication or distribution in whole or in part, in or into theUnited States of America, Canada, Australia, the Republic of South Africa, Japanor any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction The Medical Property Investment Fund Limited ("MPIF" or the "Company") Proposed acquisition of the Berrington Parties and Placing and Open Offer 1 Introduction The Medical Property Investment Fund Limited announces that it has entered intoconditional agreements to acquire the Berrington Parties (comprising Berringtonand Strategis) for a consideration of £37.4 million (including the cost ofdischarging certain obligations) which will be satisfied by the issue of16,826,360 new Ordinary Shares and the payment of approximately £8.8 million incash. The Company also announces a placing and open offer of 64,729,021 newOrdinary Shares at 170 pence per share to raise £110.0 million before expenses(approximately £105.4 million net of expenses) for the Enlarged Group. Of theproceeds, approximately £96.6 million will be used to enable MPIF to continueits programme of investing in the primary healthcare market in the UK and £8.8million will be applied to fund the cash element of the consideration for theAcquisitions. Berrington is the Company's investment manager and Strategis is a sub-adviser.The acquisition of Berrington is a related party transaction for the purposes ofthe Listing Rules, which require that the Berrington Acquisition be approved byShareholders in general meeting. An EGM will be convened at which resolutions to approve the Acquisitions and thePlacing and Open Offer will be proposed, along with resolutions to approve,inter alia, changes to the Company's Articles and the establishment of anemployee equity incentive plan, each as described below. 2 Background to and reasons for the Acquisitions and the Placing and Open Offer Like many investment entities quoted on the UK's stockmarkets, MPIF hashistorically been dependent upon the services of an independent investmentmanager, a structure suited to companies whose sole activity is investment. The Board considers that the opportunities for the Company in the evolving UKprimary care market are considerable and it believes that these opportunities,which could extend beyond pure property investment into development andoperation of healthcare facilities and pharmacy activities, can be capitalisedupon more effectively with a management team employed by the Company. MPIF's operating businesses are in their start-up phase and will requireinvestment and management attention over the next few years in order to drivegrowth and returns. The Board considers that these businesses can be managedmore effectively by an in-house team than by sub-contracted management. The Board believes that the Acquisitions will provide the Company with a capableand committed investment management team with the ability to generate value forShareholders through growth of MPIF's business and management of WPF, for whichBerrington is also the investment manager. The Board believes the team hasproved its ability to innovate within the medical property sector and expectsthat performance to continue for the benefit of Shareholders in what the Boardregards as a supportive healthcare marketplace. MPIF has successfully invested or committed approximately £340 million and has astrong pipeline of investment opportunities. The Board considers that theCompany can expect to experience increasing demand for the primary carefacilities in which it plans to invest. Accordingly the Company proposes to useapproximately £96.6 million of the net proceeds of the Placing and Open Offer tofund its investment plans. 3 Information on the Berrington Parties The Berrington Parties comprise Berrington and Strategis. Berrington was formedas an investment manager of property funds and related businesses and it aims toprovide above-average returns to investors from both of the funds it manages.In order to enable Berrington to operate most effectively, its owners havecreated a group comprising BFML (a Guernsey-based company which holds theinvestment management contract with MPIF) and BFMLLP (a limited liabilitypartnership to which BFML has delegated many of its obligations under itsinvestment management agreements). The Directors regard Berrington as,essentially, a single business. Berrington employed 23 full-time employees and6 consultants as at 31 March 2006. Berrington derives its income in the form of monthly management fees andperformance fees from the two funds it manages. It is paid an annual managementfee by WPF of 1.2 per cent. of gross assets under management and a similarmanagement fee by MPIF of 2 per cent. of MPIF's net asset value (each payablemonthly). It is also entitled to performance fees based respectively on WPF'snet asset value and MPIF's total shareholder return. As well as being MPIF's investment manager, Berrington also manages the funds ofWPF. As with MPIF, BFML is the investment manager and delegates many of itsobligations to BFMLLP. WPF is a closed-ended property investment company listed on the Official Listinvesting in commercial properties in the retail, industrial and office sectors.At 31 March 2006 it had gross assets of £198 million. WPF also has a policy thatits venture portfolio is limited to 10 per cent. of its gross assets. Over thelast three years, WPF has produced an un-geared total return of 18.4 per cent.per annum which has outperformed its IPD Benchmark by 2.3 per cent. per annum.Over the same period, the fund was ranked 9th out of 53 peer group propertyfunds (These figures are taken from a report prepared by International PropertyData Bank Limited and are calculated on a hypothetical basis given that some ofWPF's assets do not qualify for inclusion in the IPD indices.). Richard Burrell, Chief Executive of Berrington, was a director of MSS, formerlyWestbury Asset Management Limited, which began managing WPF's funds on itsadmission to the Official List in April 2002. In September 2003, Richard Burrellleft MSS and formed Berrington together with EAIL and in September 2003Berrington took over the investment management of WPF. Berrington began managingMPIF's funds on MPIF's flotation in November 2003. The report and accounts of BFML and BFMLLP for the year ended 30 September 2005show that Berrington generated an aggregate net profit of £1.06 million (2004:£0.8 million) on turnover of £4.1 million (2004: £3.2 million) and that at 30September 2005 it had gross assets of £3.2 million (2004: £2.6 million). Strategis provides sub-advisory investment management services to Berrington andis owned by Nigel Rawlings, chief financial officer of Berrington. For the yearended 30 April 2005, Strategis generated a profit before tax of £0.1 million andas at that date had negligible net assets. As Chief Executive and Chief Financial Officer respectively of Berrington,Richard Burrell and Nigel Rawlings are key members of the Company's investmentmanagement team and will become key employees of the Enlarged Group. Berrington has historically had arrangements with certain sub-advisers who havecontracted to provide property investment management and other services toBerrington and who are entitled to payments, including interests in theperformance fees earned by Berrington. These sub-advisers include TarncourtLimited, a company previously owned by Peter Dickson, a co-founder of MPIF,which provided Peter's services until his death at the end of last year. TheCompany has agreed to conclude the financial interest of Peter's estate in thefinancial performance of MPIF by acquiring Tarncourt Limited and thereby itsentitlement to future payments. Berrington has brought certain sub-advisoryarrangements to an end by agreeing to make final settlement payments. Theaggregate cost to the Company of discharging these obligations will be £7.5million, including the allotment of 588,235 of the Consideration Shares. 4 Principal terms of the Acquisitions The Company and MHL has entered into conditional agreements to acquire theissued and to be issued share capital of BFML, the members' interests in BFMLLPand the entire issued share capital of Strategis. The total cost to MPIF ofmaking the Acquisitions will be £37.4 million which will be satisfied by theissue of 16,826,360 of the Consideration Shares and the payment of £8.8 millionin cash. Of this amount, cash and new Ordinary Shares with a value ofapproximately £7.5 million will be used to discharge certain obligations ofBerrington to sub-advisers, as described above, and the remainder, estimated tobe approximately £29.9 million, will be paid to the Vendors. Richard Burrell, the holder of the majority of the interests in Berrington, andNigel Rawlings, the owner of Strategis, will each receive 90 per cent. of theirpayments in the form of new Ordinary Shares which they have committed to retainfor periods of between 2 and 5 years following Completion. In addition, each ofRichard Burrell and Nigel Rawlings has entered into a new long-term servicecontract with MPIF. The Acquisitions and the Placing and Open Offer are interconditional. Theconditions include Shareholder approval at the EGM, the Placing Agreementbecoming unconditional (save for any condition relating to Admission) and nothaving been terminated prior to Admission, receipt of the required regulatoryapprovals from the GFSC and the FSA and Admission becoming effective on the dayfollowing the EGM or such later date as Cenkos and the Company may determine(being not later than 22 May 2006). 5 Financial and other effects of the Acquisitions The principal effect of the Acquisitions will be to bring into MPIF the income(comprising management and performance fees) generated from the management ofWPF and the costs of Berrington's investment management team and to retainwithin the Company the fees (both the regular monthly fees and the performancefees) that would otherwise have been payable to Berrington under the InvestmentManagement Agreement between MPIF and Berrington. As a consequence of the incentive fee arrangements in the Investment ManagementAgreement and the strong performance of the MPIF share price during the courseof 2005, MPIF's accounts for the year ended 31 December 2005 disclose aprovision for the performance fee amounting to some £13.1 million. Following theAcquisitions, the performance fee provision will be eliminated from MPIF'saccounts. 6 Additional proposals Executive Equity Incentive Plan The Board considers that the Company's personnel, including those responsiblefor the establishment of HCP, the team to be acquired with Berrington and theadditional staff that it is anticipated will be required to maintain theCompany's growth, are key to the Company's development and should beappropriately incentivised. Accordingly, it is proposed that the Company shouldadopt the Incentive Plan to retain key employees and to attract new employees.The proposed Incentive Plan provides for a series of share-based payments whichwill vest in two tranches following the financial years to 31 December 2008 and31 December 2010, subject to achievement of a variety of performance criteria.The maximum number of Ordinary Shares which may be awarded under the IncentivePlan is 8,066,768. Establishment of the Incentive Plan is subject toShareholder approval. Neither the Directors nor Richard Burrell and Nigel Rawlings, chief executiveand chief financial officer respectively of BFMLLP, who will receiveConsideration Shares in consideration for the Berrington Acquisition and theStrategis Acquisition, will participate in the Incentive Plan. PEL Arrangement PEL has provided the initial business plan and related services in connectionwith the establishment of the Company's pharmacy business, HCP, and has agreedin principle to receive an interest in the business rather than cash in paymentfor the business plan and services. It is proposed that PEL will receive 650,000new Ordinary Shares. PEL has committed to retaining the 325,000 new OrdinaryShares which are attributable to Dr Curran until 2008 and the remainder for 6months following completion. PEL has agreed to enter into the PEL Arrangementin order to ensure that its interests, and thereby those of Dr Curran, aretransparent and fully aligned with those of Shareholders. The PEL Arrangement isconditional upon Shareholder approval but not on the completion of theAcquisitions or the Placing and Open Offer. Changes to the Articles As BFML is regulated by the GFSC and BFMLLP by the FSA, the acquisition of BFMLby the Company gives rise to certain regulatory requirements for MPIF. Followingcompletion of the Acquisitions these regulatory requirements mean that MPIF must(i) notify the GFSC of any shareholder holding 5 per cent. or more of theCompany; and (ii) obtain GFSC consent to any shareholder holding 15 per cent. ormore of the Company. It is therefore proposed that the Articles be amended toprovide that (i) any shareholder holding 5 per cent. or more be required tonotify the Company of that fact; and (ii) any shareholder holding 15 per cent.or more be required to notify the Company of that fact and, in either such case,any shares held by such Shareholder in excess of the threshold bedisenfranchised until such time as the required consent of the GFSC is obtained.If such consent is not obtained then the shareholder would be required to sellthe shares. These changes to the Articles require Shareholder approval. Other The Company has agreed heads of terms (subject to contract) to purchase theminority interests in BHE, the LIFT development company in which the Companycurrently has a 70 per cent. interest, for a consideration of £3,038,100, whichwill be satisfied by the allotment of new Ordinary Shares at the Issue Price. It is the intention of the Company to become a member of the FTSE All Shareindex at the next opportunity and, upon meeting the qualifying criteria, theFTSE 250 Index. 7 Information on the Company History and Development of MPIF MPIF was incorporated on 7 October 2003 and it was admitted to listing on theOfficial List on 21 November 2003 as a property collective investmentundertaking, raising £140 million (before expenses) from institutional investorsfor the purpose of investing in primary healthcare facilities in the UK. Current trading Since flotation, the Company has acquired or exchanged contracts on 82 sites,currently has a further 23 in solicitors' hands and has a further 20 sites underdevelopment. Circa £340 million of capital has been invested or committed withan estimated average Net Initial Yield of approximately 6.5 per cent. Thesefigures are extracted from the management information of the Company and areunaudited. As at 31 December 2005, the Company's property portfolio was valuedat £131.6 million, including investment of £3.6 million in a property underdevelopment. When the Company commits to fund properties under development it isthe Company's practice to select developments that are substantially pre-letsuch that the properties generate rental income from practical completion. Theinvestments and commitments to date have been funded from the proceeds of theflotation and a £100 million revolving credit facility provided by NationalAustralia Bank. The Company is on target to invest or commit £400 million by theend of 2006. In addition to the Group's investment in property, in late 2004 the Companyestablished its own pharmacy business, HCP, in direct response to the increasedrole of pharmacies within primary healthcare centres. As the Company's propertyportfolio expands, it intends to apply for licences to operate pharmacies withinthose developments. As at 31 March 2006, MPIF had opened one pharmacy and aimsto open 20 by the end of 2007. In response to the introduction of Practice Based Commissioning and theGovernment's intention to relocate certain secondary care services to primarycare facilities, the Company has developed a serviced health platform businessunder the brand "Assura Health and Wellness Centres" ("Assura") to develop andlease additional space within its existing premises and developments to relatedhealth provider organisations, diagnostic providers and health professionalswith flexible space to be let on both a short term (including sessional) andlonger term basis. In addition, it is anticipated that Assura will provideenhanced medical and business support services to the GPs and healthprofessionals operating from its facilities. By 2010, Assura aims to serve 5 percent. of the UK population either as registered patients of Assura Health andWellness Centres or as registered patients of locality groups where an Assuralimited liability partnership has been formed. Strategy and prospects The Board believes that the Company's strategy is in line with the NHS WhitePaper and, following Completion, MPIF intends to focus its resources andgenerate income from three principal business divisions: Property, Pharmacy, andAssura. It is anticipated that the integration of Berrington with MPIF willcreate a strong, dedicated in-house management team to seek to achieve this. In addition, the Company welcomes forthcoming legislation to introduce RealEstate Investment Trusts and will assess whether it is in Shareholders'interests to apply for Real Estate Investment Trust status for all or part ofthe business if the legislation is enacted. 8 Financial information MPIF has reported a net profit after investment result of £4.0 million for theyear ended 31 December 2005 (2004: £2.2 million) and a loss before tax of £12.4million (2004: profit of £2.2 million). Provisions comprised charges of £13.1million and £3.5 million respectively in relation to an accrual of performancefees and a revaluation of a swap contract to fix the Company's interest ratewhich matures on 3 June 2025. On 31 December 2005 the Company had a net assetvalue of 82.8 pence per Ordinary Share (2004: 96.0 pence). Upon completion ofthe Acquisitions, whereupon the performance fee provision will be eliminated, ona pro forma basis, the net asset value per Ordinary Share would be 102.8 pence. 9 Dividend Policy An interim dividend of 1.33 pence per Ordinary Share was paid on 15 October 2004and a final dividend of 2.67 pence per Ordinary Share was paid on 11 April 2005making a total dividend of 4 pence per Ordinary Share for the financial yearended 31 December 2004. When the Company floated in November 2003 it committed to a progressive dividendpolicy. Shareholders were also advised that dividends would be paid out of grossrevenue. Although the Company suffered a loss for the year ended 31 December2005 of £12.4 million after the performance fee provision of £13.1 million andthe interest rate swap revaluation charge of £3.5 million, the Board, havinggiven due regard to the underlying profitability of the Company, has recommendeda final dividend of 3.34 pence (2004: 2.67 pence) per Ordinary Share making atotal of 5 pence per Ordinary Share for the year (2004: 4 pence). The payment ofthis dividend is subject to Shareholder approval at the Company's AGM on 12 May2006 and application to the Guernsey Royal Court immediately thereafter, toincrease the Company's distributable reserves by transferring reserves from theshare premium account to reserves available for distribution. FollowingShareholder and Guernsey Royal Court approval, it is expected that the finaldividend will be paid to Shareholders in early June 2006. The Board considers that the medium term prospects for MPIF are very positive.They believe that the addition of the HCP and Assura initiatives to the corebusiness of innovative primary healthcare property investment will enable theCompany to maximise the returns from its expertise in the primary care marketand grow its dividends accordingly. The Board's current intention is to declare a dividend of 6 pence for the yearending 31 December 2006. 10 Information on the Placing and Open Offer Use of proceeds The Placing and Open Offer is expected to raise approximately £110.0 millionbefore expenses. Of the net proceeds of approximately £105.4 million, £96.6million will fund further development of the Company's continued investment inthe primary healthcare market, and £8.8 million will fund the cash paymentsassociated with the Acquisitions, being cash consideration of approximately £2.3million and approximately £6.5 million in aggregate to discharge certain cashobligations of BFML. Principal terms Cenkos has agreed, as agent for the Company, to invite Qualifying Shareholdersto apply for the Open Offer Shares to be issued pursuant to the Placing and OpenOffer at the Issue Price payable in full in cash on application and free of allexpenses on the basis of 5 Open Offer Shares for every 11 Ordinary Shares heldat the Record Date. Entitlements to Open Offer Shares will be rounded down to the nearest wholenumber of Open Offer Shares. Fractional entitlements to Open Offer Shares willbe aggregated and placed for the benefit of the Company. The Placing and Open Offer is conditional, inter alia, upon Shareholderapproval, the Acquisition Agreements becoming unconditonal (save for anyconditions relating to Admission) and Admission. The Placing and Open Offer is not underwritten but Cenkos has conditionallypre-placed all of the Open Offer Shares at the Issue Price (subject to clawbackby Qualifying Shareholders in order to satisfy valid applications under the OpenOffer). The pre-placing is conditional upon the Placing Agreement having becomeunconditional in all respects and not having been terminated prior to Admission. The new Ordinary Shares will, on Admission, rank in full for all dividends andother distributions declared, made or paid on the Ordinary Shares afterAdmission (save that they will not rank for the final dividend declared by theCompany for the 12 months ended 31 December 2005) and will otherwise rank paripassu in all respects with the Ordinary Shares in issue at the date of thisannouncement. A formal timetable will be published at the time of posting the prospectus toshareholders Enquiries Richard Burrell Berrington Fund Management Limited 020 7659 6271Tony Langham Lansons Communications 020 7294 3617 [email protected] 07979 692 287James Horsman Lansons Communications 020 7294 3686 [email protected] 07730 989 699Charlotte Edgar Lansons Communications 020 7294 3622 [email protected] 07734 929 219 Cenkos Securities Limited, which is authorised and regulated by the FinancialServices Authority, is acting for The Medical Property Investment Fund Limitedand no one else in connection with the matters referred to in this announcementand will not be responsible to anyone other than The Medical Property InvestmentFund Limited for providing the protections afforded to its customers or forproviding advice to any other person in relation to the matters referred to inthis announcement. BDO Stoy Hayward Corporate Finance, a division of BDO Stoy Hayward LLP,Chartered Accountants, which is authorised and regulated by the FinancialServices Authority, is acting for The Medical Property Investment Fund Limitedand no one else in connection with the matters referred to in this announcementand will not be responsible to anyone other than The Medical Property InvestmentFund Limited for providing the protections afforded to its customers or forproviding advice to any other person in relation to the matters referred to inthis announcement. This announcement does not constitute or form part of any offer or invitation tosell or issue, or any solicitation of any offer to acquire, purchase orsubscribe for any securities. This announcement has not been examined orapproved by the FSA or the London Stock Exchange or any other regulatoryauthority. The distribution for this announcement in certain jurisdictions maybe restricted by law and therefore persons into whose possession thisannouncement comes should inform themselves about and observe any suchrestrictions. Any failure to comply with these restrictions may constitute aviolation of the securities laws of any such jurisdiction. Any purchase of orapplication for shares in the Placing and the Open Offer should only be made onthe basis of information contained in the formal prospectus to be issued inconnection with the Placing and the Open Offer and any supplement thereto. The information contained herein is not for publication or distribution in orinto the United States of America. These materials are not an offer ofsecurities for sale in the United States. The securities referred to hereinhave not been and will not be registered under the U.S. Securities Act of 1933(the "Act"), as amended, and may not be offered or sold in the United Statesabsent registration under the Act or an available exemption from registration.No public offering of the securities referred to herein will be made in theUnited States. The information contained in this announcement is not for publication ordistribution to persons in Australia, Canada, Japan or the Republic of SouthAfrica. The shares referred to herein may not, directly or indirectly, beoffered, sold, taken up or delivered in, into or from Australia, Canada, Japanor the Republic of South Africa. Certain statements in this announcement are forward looking statements. Bytheir nature, forward looking statements involve a number of risks,uncertainties and assumptions because they relate to events and/or depend oncircumstances that may or may not occur in the future and could cause actualresults to differ materially from those expressed in, or implied by, the forwardlooking statements. These include, among other factors: the Group's ability toobtain capital/additional finance; the limitations of the Group's internalfinancial controls; any increase in competition; an unexpected decline inturnover; legislative, fiscal and regulatory developments including, but notlimited to, changes in environmental and safety regulations; and currency andinterest rate fluctuations. These and other factors could adversely affect theoutcome and financial effects of the plans and events described herein. Forwardlooking statements contained in this announcement based on past trends oractivities should not be taken as a representation that such trends oractivities will continue in the future. Subject to any requirement under theListing Rules of the UK Listing Authority, neither the Company nor CenkosSecurities Limited nor BDO Stoy Hayward Corporate Finance undertakes anyobligation to update or revise any forward looking statements, whether as aresult of new information, future events or otherwise. You should not placeundue reliance on forward looking statements, which speak only as of the date ofthis announcement. Notes to editors The Medical Property Investment Fund Limited ("MPIF") is listed on the LondonStock Exchange and invests in primary health care property, pharmacy and relatedoperating businesses. The Fund aims to develop and acquire fully let, modernprimary health care premises and existing GP owned surgeries capable of beingfurther developed to create larger primary care facilities, accommodatingenlarged GP partnerships and other complementary medical services includingpharmacy and its Assura activities. Assuming the Acquisitions and Placing and Open Offer complete, MPIF will have amarket capitalisation, based on a placing price of 170p, of circa £400m. The Westbury Property Fund Limited ("WPF") is a £198m closed ended propertyinvestment fund domiciled in Guernsey and listed on the London Stock Exchange asa property investment company. As at 31 March 2006, WPF had a direct, orbalanced, property portfolio of 21 properties with 68 tenancies comprising multilet offices, high street and out of town retail and industrial assets. Theproperties are geographically spread throughout the UK. The balanced portfoliohas a blend of core, growth and management intensive assets and benefits from aweighted average lease length of circa 10.1 years. Berrington Fund Management ("Berrington") is a property fund management companyspecialising in creating and managing property investment funds. It employsleading fund managers and property professionals and aims to produce totalreturns ahead of comparable property indices and other asset classes. Berringtonalso advises on and structures private property investments to suit specificinvestor needs which can benefit from Berrington's property deal flow andinvestor and financing relationships. DEFINITIONS The following definitions apply throughout this announcement, unless the contextotherwise requires: Acquisitions the Berrington Acquisition and the Strategis Acquisition Acquisition the Berrington Acquisition Agreements and the StrategisAgreements Acquisition Agreement Admission the admission of the New Ordinary Shares to (i) the Official List and (ii) to trading on the London Stock Exchange's market for listed securities becoming effective in accordance with the Listing Rules and the London Stock Exchange's Admission and Disclosure Standards Articles the articles of association of the Company Assura an early-stage business owned by the Group and run through the Company's wholly-owned subsidiary, Assura Medical Limited, which it is intended will provide serviced property and associated services to healthcare practitioners BDO Stoy BDO Stoy Hayward Corporate Finance, a division of BDO StoyHayward Hayward LLP, Chartered Accountants, which is authorised andCorporate regulated in the United Kingdom by the FSA to carry on investmentFinance business Berrington together, BFML and BFMLLP (or either of them as the context requires) Berrington the proposed acquisition by the Company either directly or via aAcquisition Subsidiary of the entire issued share capital of BFML and of the members' interests in BFMLLP pursuant to the Berrington Acquisition Agreements Berrington the conditional agreements between the Berrington Vendors and theAcquisition Company and/or one or more of the Subsidiaries relating to theAgreements Berrington Acquisition Berrington Berrington and StrategisParties Berrington the registered holders of:Vendors (i) the existing issued shares in the capital of BFML being Richard Burrell and EAIL; and (ii) the members interests in BFMLLP being Richard Burrell, Helen Burrell and EAIL BFML Berrington Fund Management Limited, the Company's investment manager BFMLLP Berrington Fund Management LLP, a sub investment manager to the Company BHE BHE Holdings Limited Board or the directors of the CompanyDirectors Business Day a day (other than a Saturday or Sunday or public holiday) on which banks are generally open for normal banking business in the City of London Cenkos Cenkos Securities Limited, which is authorised and regulated inSecurities or the United Kingdom by the FSA to carry on investment businessCenkos Committed where capital is referred to as Committed the transactions in question include those in solicitors' hands, those on which the Company is the preferred bidder and sites acquired where there is, as yet, no binding agreement to undertake construction Completion completion of the Acquisitions Consideration the 16,826,360 Ordinary Shares to be allotted and issued to theShares Vendors or in settlement of obligations to investment sub-advisers on or shortly after Completion EAIL Ethel Austin Investments Limited Enlarged Group the Group as enlarged by the Acquisitions Extraordinary the extraordinary general meeting of the CompanyGeneralMeeting or EGM FSA or the Financial Services Authority of the United KingdomFinancialServicesAuthority FSMA the Financial Services and Markets Act 2000, as amended GFSC Guernsey Financial Services Commission Group the Company and its Subsidiaries HCP Healthcare Pharmacies Limited, a company ultimately wholly-owned by the Company Incentive Plan the proposed executive equity incentive plan Incentive Plan the Ordinary Shares to be allotted and issued in connection withShares the Incentive Plan Issue Price 170 pence per New Ordinary Share LIFT or Local a government policy to improve primary care facilitiesImprovement through public private partnerships as set out in the July 2001Finance Department of Health document "Modernising Primary Care in theTrust NHS: NHS Local Improvement Finance Trusts" Listing Rules the listing rules issued by the UK Listing Authority (as amended from time to time) London Stock London Stock Exchange PlcExchange MHL Mpif Holdings Limited, a wholly owned subsidiary of the Company Mpif or the The Medical Property Investment Fund LimitedCompany MSS MSS Capital Limited, formerly Westbury Asset Management Limited New Ordinary the Consideration Shares, the Open Offer Shares, the PEL SharesShares and the Incentive Plan Shares Net Initial the estimated average net initial yield based on all propertiesYield within the current portfolio being completed and let or sold and taking account of the tenant's/purchaser's costs in connection with the letting or sale of the properties NHS White the Department of Health White Paper published on 30 January 2006Paper titled "Our health, our care, our say" Official List the Official List maintained by the FSA pursuant to Part VI of the FSMA Open Offer the conditional offer to Qualifying Shareholders to subscribe for Open Offer Shares at the Issue Price Open Offer an entitlement to subscribe for Open Offer Shares allocated to aEntitlements Qualifying Shareholder pursuant to the Open Offer Open Offer the 64,729,021 Ordinary Shares to be allotted and issued by theShares Company pursuant to the Placing and Open Offer Ordinary ordinary shares of 10p each in the capital of the CompanyShares PEL Pharma 'E' Limited (registered in Guernsey with registered number 36207), the company of which Dr John Curran is a shareholder and director PEL the proposal to allot the PEL Shares to PEL as consideration forArrangement the services provided by PEL PEL Shares the 650,000 Ordinary Shares to be issued to PEL pursuant to the PEL Arrangement Placing the conditional placing by Cenkos Securities (on behalf of the Company) of the Open Offer Shares on the terms and conditions of the Placing Agreement, subject to the right of Qualifying Shareholders to apply for such shares pursuant to the Open Offer Placing the conditional placing and open offer agreement dated 13 AprilAgreement 2006, between Cenkos Securities, BDO Stoy Hayward Corporate Finance and the Company relating to the Placing and Open Offer Practice-Based budgetary authority devolved to general practitioners to manageCommissioning the care of their patientsor PBC Proposals the Acquisitions, the Placing and Open Offer, the PEL Arrangement, the proposal to adopt the Incentive Plan and the proposed change to the Company's articles Qualifying holders of Ordinary Shares on the register of members of theShareholders Company at the Record Date, other than certain overseas Shareholders referred Record Date the record date for the Open Offer Resolutions the resolutions numbered to be proposed at the Extraordinary General Meeting Shareholders holders of Ordinary Shares from time to time Strategis Strategis Limited, a sub-adviser to Berrington Strategis the proposed acquisition by the Company of the entire issuedAcquisition share capital of Strategis pursuant to the terms of the Strategis Acquisition Agreement Strategis the conditional agreement dated 13 April 2006 between NigelAcquisition Rawlings and the Company relating to the Strategis AcquisitionAgreement Subsidiaries the subsidiaries of the Company at the date of this announcement UK Listing the Financial Services Authority acting in its capacity as theAuthority competent authority for the purposes of Part VI of the FSMA United Kingdom the United Kingdom of Great Britain and Northern Irelandor UK United States the United States of America, its territories and possessions,or USA any state of the United States of America and the district of Columbia and any other area subject to its jurisdiction WPF The Westbury Property Fund Limited Vendors the Berrington Vendors and Nigel Rawlings This information is provided by RNS The company news service from the London Stock Exchange

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