20th May 2009 07:01
NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, JAPAN, THE REPUBLIC OF SOUTH AFRICA, CANADA OR SINGAPORE
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO ANY OF THE JURISDICTIONS ABOVE OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT
THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, NOR SHALL THERE BE ANY SALE OR PURCHASE OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THE
AVAILABILITY OF THE RIGHTS ISSUE TO PERSONS NOT RESIDENT IN THE UNITED KINGDOM MAY BE AFFECTED BY THE LAWS OF THE RELEVANT JURISDICTIONS. SUCH PERSONS SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY APPLICABLE REQUIREMENTS.
20 May 2009
Shaftesbury PLC
PROPOSED 2 FOR 3 RIGHTS ISSUE
OF UP TO 90,329,134 NEW ORDINARY SHARES AT 175 PENCE EACH
TO RAISE NET PROCEEDS OF APPROXIMATELY £149.1 MILLION
The Board of Directors of Shaftesbury PLC today announces a fully underwritten Rights Issue to raise net proceeds of £149.1 million, through the issue of up to 90,329,134 New Ordinary Shares. The Rights Issue is subject to, inter alia, approval by Shareholders at a General meeting to be held on 5 June 2009.
The Board believes that the current unsettled property market represents an exceptional opportunity for the Group to acquire further properties in its chosen locations within London's West End, which are rarely offered for sale when the economic outlook is more buoyant.
The net proceeds of the Rights Issue will provide the Group with the financial resources required to exploit these strategic acquisition opportunities.
The Board of Directors of Shaftesbury today also announces:
its results for the six months ended 31 March 2009, which demonstrate the resilience of the Group's portfolio in out-performing the wider UK property market in capital values, growing net property income and maintaining high occupancy levels;
that Shaftesbury has started to acquire properties in and around Berwick Street in Soho, with the aim of establishing a cluster of property ownerships in this area. Berwick Street has features of fragmented ownership, under-utilised buildings and rental levels which are significantly below passing rents in comparable streets within the Group's existing portfolio. To date, the Group has acquired 18 properties in this area with a market value as at 31 March 2009 of £27.7 million; and
that the Group has already taken advantage of the opportunities to acquire properties within existing Villages provided by the current market conditions. Since 31 March 2009, the Group has agreed to purchase or purchased a number of properties in Chinatown at a cost of £14.8 million.
Rothschild is acting as Financial Adviser and Joint Sponsor. The Rights Issue is fully underwritten by J.P. Morgan Securities Ltd. (on behalf of J.P. Morgan Cazenove) and Merrill Lynch. J.P. Morgan Cazenove and Merrill Lynch are also acting as Joint Bookrunners and Joint Sponsors.
Jonathan Lane, Chief Executive of Shaftesbury said:
"This rights issue will allow us to take advantage of excellent opportunities that are emerging to make strategic acquisitions in keeping with our long term investment strategy. We believe that the acquisitions funded by this rights issue will deliver good returns for our shareholders."
Analyst presentation
Shaftesbury will be holding a presentation for analysts and investors today. The details of the meeting are as follows:
Venue: J.P. Morgan Cazenove, 20 Moorgate, London EC2R 6DA
Date & Time: 20 May 2009 at 8:30 a.m. (London time)
Registration will commence at 8:15 a.m. (London time)
Participants Dial-In details: +44 (0)1452 587 536
Participants will need to provide the Conference ID: 11055056
The presentation for analysts will be available at www.shaftesbury.co.uk shortly before the meeting.
Expected timetable
Each of the times and dates in the table below is indicative only and may be subject to change.
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Expected publication of the Prospectus |
20 May 2009 |
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Expected despatch of the Prospectus1
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20 May 2009
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General Meeting |
10:00 a.m. on 5 June 2009 |
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Dealings in New Shares, nil paid, commence on the London Stock Exchange |
8 June 2009 |
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Latest time and date for acceptance, payment in full and registration of renunciation of Provisional Allotment Letters |
11:00 a.m. on 30 June 2009 |
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Dealings in New Shares, fully paid, commence on the London Stock Exchange |
8:00 a.m. on 1 July 2009 |
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Notes: |
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The times and dates set out in the expected timetable of principal events above and mentioned throughout this Announcement may be adjusted by Shaftesbury in consultation with the Banks, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Shareholders. |
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References to times in this timetable are to London times unless otherwise stated. |
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This summary should be read in conjunction with the full text of this Announcement.
Contacts
For further information, please contact:
Shaftesbury PLC: +44 (0)20 7333 8118
Jonathan Lane, Chief Executive
Brian Bickell, Finance Director
Rothschild (Financial Adviser and Joint Sponsor): +44 (0)20 7280 5000
Alex Midgen
Nigel Himsworth
Duncan Wilmer
J.P. Morgan Cazenove (Joint Bookrunner and Joint Sponsor): +44 (0)20 7588 2828
Ian Hannam
Robert Fowlds
Bronson Albery
Merrill Lynch (Joint Bookrunner and Joint Sponsor): +44 (0)20 7628 1000
Rupert Hume-Kendall
David Church
Andrew Tusa
City Profile: +44(0)20 7448 3244
Simon Courtenay
William Attwell
A prospectus relating to the Rights Issue (the "Prospectus") is expected to be published and posted to Shareholders today provided that it will not be posted or sent to any shareholders residing in Canada, the Republic of South Africa, Singapore and, subject to certain exceptions, the United States and Japan or any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law.
The Prospectus will give further details of the nil paid rights (the "Nil Paid Rights"), the fully paid rights (the "Fully Paid Rights") (together, the "Securities") to be offered pursuant to the Rights Issue.
A copy of the Prospectus when published will be available from the registered office of Shaftesbury at Pegasus House, 37-43 Sackville Street, London W1S 3DL and at the offices of Lovells LLP, Atlantic House, 50 Holborn Viaduct, London EC1A 2FG during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays excepted) up to 31 July 2009.
Each of N M Rothschild & Sons Limited, J.P. Morgan Cazenove Limited, J.P. Morgan Securities Ltd. and Merrill Lynch International are acting exclusively for the Group and for no one else in relation to the Rights Issue and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Rights Issue and will not be responsible to any other person for providing the protections afforded to their respective clients nor for providing advice in connection with the Rights Issue, or any other matters referred to in this Announcement.
Proposed Rights Issue
1. Introduction
The Board of Shaftesbury today announces that the Company is proposing to raise £149.1 million (net of expenses) by way of a Rights Issue. The Rights Issue has been fully underwritten by J.P. Morgan Securities Ltd. (on behalf of its affiliate, J.P. Morgan Cazenove) and Merrill Lynch.
The purpose of the Rights Issue is to provide the Company with the financial resources to exploit the opportunities, which are now appearing as a result of current economic conditions, to add to its unique portfolio of over 400 properties in London's West End.
2. Background to and reasons for the Rights Issue
Overview of the Group
Shaftesbury has a distinctive strategy of only investing in properties located in London's West End. The Group currently wholly owns a portfolio of over 400 mixed use buildings with an aggregate area of 1.385 million sq. ft., on land extending to approximately 11 acres, together with a 50% interest in the Longmartin Joint Venture, which owns an island site of 1.9 acres in Covent Garden. The Group's property portfolio was valued at £1,102 million as at 31 March 2009.
The Group's properties are mainly located in its three established Villages of Carnaby (representing 37% of the Group's portfolio by value as at 31 March 2009), Covent Garden (representing 27% of the Group's portfolio by value as at 31 March 2009) and Chinatown (representing 26% of the Group's portfolio by value as at 31 March 2009). The Group also owns properties on Charlotte Street (representing 2% of the Group's portfolio by value as at 31 March 2009) and its interest in the Longmartin Properties through its 50% share in the Longmartin Joint Venture (representing 5% of the Group's portfolio by value as at 31 March 2009).
Further, the Group has started to acquire properties in and around Berwick Street in Soho, with the aim of establishing a cluster of property ownerships in this area. Berwick Street has features of fragmented ownership, under-utilised buildings and rental levels which are significantly below passing rents in comparable streets within the Group's existing portfolio. To date, the Group has acquired 18 properties in this area with a market value as at 31 March 2009 of £27.7 million. The Group's holdings in Berwick Street represent 3% of its portfolio by value as at 31 March 2009.
The Group's net rental income is principally derived from retail, restaurant and leisure uses, which represented 70% of the Group's current gross income from wholly owned properties as at 31 March 2009.
In conjunction with the Rights Issue, the Group has undertaken a valuation of both its wholly owned property portfolio and the Longmartin Properties as at 15 April 2009, which was the latest practicable date at which the property portfolio could be valued prior to this Announcement. The valuation undertaken as at 15 April 2009 in respect of the wholly owned portfolio showed an increase in value of £175,000 from the valuation as at 31 March 2009, whilst the valuation undertaken in respect of the Longmartin Properties as at 15 April 2009 showed no change in value from the valuation as at 31 March 2009.
London's West End
London was one of the world's most popular destination city for overseas visitors in 2008 and over 20 million people in England are within easy access for making day trips to London. The Group's property portfolio is in the heart of London's West End, surrounded by a world famous concentration and wide choice of theatres, cinemas, museums, galleries, historic buildings and public spaces, as well as an extensive range of shops, restaurants and bars. London attracts on average more than two million visitors every month and more than 25 million visitors per year.2 The number of overseas visitors coming to London has increased by almost four million since 2002.3 This gives London a broad-based visitor economy which is not wholly reliant on the UK economy for its prosperity.
In the five years to April 2009, Central London retail sales grew by an average of 5.9% per annum, compared with 0.8% per annum for the UK as a whole.4 Further, despite the current difficult economic environment, Central London continues to demonstrate growth in visitor numbers and strong consumer spending relative to the rest of the UK. Like-for-like spending growth in Central London in the 12 months to February 2009, March 2009 and April 2009 was 5.8%, 5.2% and 5.4% respectively, significantly stronger than the rest of the UK, which decreased by 1.8% and 1.2% in the 12 months to February 2009 and March 2009, respectively, and increased by 4.6% in the 12 months to April 2009.5 It is the Board's view, based on previous experience, that consumer spending in London's West End is even more resilient than consumer spending in the rest of London during an economic downturn.
Property ownership in the areas of London's West End where the Group operates is generally fragmented. Within these areas, the number of properties available to purchase at any given time that meet the Group's investment criteria is usually limited. Resilient tenant demand in London's West End for retail, restaurant and residential accommodation, reflected in stable occupancy and rental levels, means that existing owners are reluctant to sell their investments and, in buoyant markets, competition to invest in these locations is strong.
Despite the general economic downturn, the Group's business is performing well, with continuing good demand for its shops, restaurants and residential units and occupancy and rental levels for these uses remaining firm. The Group's net rental income was £27.2 million for the six months ended 31 March 2009 (an increase of £1.2 million (4.6%) compared with the six months ended 31 March 2008). The ERV of the Group's shops and restaurants has remained firm throughout the current economic downturn.
Property values
The uncertainties that continue to affect global capital markets have had a significant adverse impact on the value and liquidity of all asset classes. The availability of finance for property acquisitions and investment has been severely limited resulting in a decline in the demand for most property assets and a consequent fall in property values. In addition, in the United Kingdom and in global economies generally, the slowdown in activity is leading to a reduction in occupancy levels and tenancy demand, partly due to an increase in tenant failures, which is resulting in expectations of lower rental levels.
Whilst the Group is not immune from these wider trends, its property portfolio has been much less affected, principally due to the resilience of tenant demand in its locations within London's West End. The value of the Group's property portfolio declined by approximately 10.0% over the six months ended 31 March 2009, compared with a fall of 22.6% in the IPD UK Monthly Property Index: Capital Growth over the same period. Between September 2007, when property values generally began to decline, and 31 March 2009, the Group's property portfolio declined in value by approximately 25%, compared with a decline of 40% in the IPD UK Monthly Property Index: Capital Growth over the same period.
The Group intends to exploit current market conditions to acquire properties in its chosen locations
In previous economic downturns, the Group exploited periods of weaker prices or greater property availability to acquire properties to advance its long-term investment strategy. For example, in September 1996, the Group acquired a number of properties in the western part of Chinatown for approximately £31 million and, in February 1997, it acquired the majority of its current holdings in Carnaby for approximately £90 million. Both of these investments were funded in part by the raising of new equity.
The Board believes that the current unsettled property market represents another exceptional opportunity for the Group to acquire further properties in its chosen locations within London's West End, which are rarely offered for sale when the economic outlook is more buoyant.
The Group has already taken advantage of current market conditions. Since 31 March 2009, the Group has agreed to purchase or purchased a number of freehold interests in Chinatown at a cost of £14.8 million. These properties, which the Board believes have been in the same ownership for up to 70 years, include two restaurants and two shops with a mix of retail, office and residential uses on the upper floors and adjoin properties already owned by the Group.
The Board has identified a number of properties that are either currently available, or are expected to become available, in the vicinity of its established Villages and in its newest location, Berwick Street. The Board believes these properties, if acquired, would deliver long-term rental and capital value growth through the Group's proven estate management strategy, which includes introducing more valuable uses where possible and refurbishment. In addition, the Board believes that the strategic location of some of these acquisition opportunities may provide further opportunities for the Group to achieve increased rental and capital value growth from its existing properties as a result of the synergies that are expected to be created when the new properties are integrated with the Group's existing properties.
Valuable long-term banking facilities
As a result of well publicised problems in the banking sector, the availability of finance for property investment remains extremely restricted and, where available, has become more expensive with shorter maturities.
Shaftesbury's financing policy is to match its long-term investment strategy with long-term committed bank facilities. The Group's committed bank facilities currently amount to £575 million, with no maturities before April 2016. As at 31 March 2009, the Group had committed unutilised banking facilities available for drawdown of £121.9 million. As at 31 March 2009, the Group had expenditure commitments relating to the balance of the REIT conversion charge of £14.6 million to be paid by January 2011, authorised capital expenditure of £8.4 million and £21.1 million relating to the Longmartin Joint Venture. One of the Group's facilities was reduced by £25 million following the renegotiation of the banking facilities described below.
In the 2008 Annual Report, the Group indicated that it had agreed or expected to agree amendments, with its lenders, to its gearing covenants (ratio of consolidated borrowings to consolidated tangible net worth). Separately from the Rights Issue, these amendments have now been concluded, and the Group's gearing covenants are now set at 175% rather than 125%. As part of the renegotiation of its banking facilities, the Group repaid and cancelled £25 million previously drawn under one of its existing facilities and additionally entered into certain de minimis arrangements. This repayment of £25 million was funded from amounts drawn from existing facilities and so did not impact the Group's total indebtedness position but it did reduce the size of the Group's available unutilised banking facilities.
Following the recent amendments to the banking facilities, if the Group were to fully draw down on all of its banking facilities as at the date of this announcement, the weighted average margin payable by the Group would be 0.89% over LIBOR (compared with 0.73% over LIBOR which the Group was paying on actual drawings prior to the amendments to the banking facilities). This is considerably lower than the level that it would expect to pay if those facilities were to be negotiated in today's markets.
The Group remains comfortably within the financial covenants in its bank facility agreements. At 31 March 2009, based on property securing and available to secure bank debt estimated at £926.2 million and bank debt of £478.1 million, the Group had an aggregate loan to value ratio of 52% having absorbed a fall of approximately 25% in the value of its property portfolio since September 2007. This compares with the maximum allowed under its loan to value covenants of 66⅔%. In addition, at 31 March 2009, based on adjusted net assets of £537.7 million and debt levels of £539.1 million, gearing stood at 100%. This compares with a maximum of 175% under its revised covenants, the relaxation from 125% described above having provided materially increased covenant headroom.
In addition to providing funds to take advantage of acquisition opportunities, the Rights Issue will further strengthen the Company's equity base, which will result in further improvements in the existing covenant headroom under the Group's banking facilities.
3. Use of proceeds
The Group intends to use the Rights Issue net proceeds of £149.1 million to:
- provide the Group with further funds, in addition to its available unutilised banking facilities, to allow it to take advantage of the strategic acquisition opportunities that are now emerging; and
- strengthen the Group's equity base, increase the headroom in its financial covenants and put the Group in a position where the Board may consider it prudent to utilise fully the Group's existing long term committed banking facilities.
Until such time as acquisition opportunities are identified and the net proceeds of the Rights Issue are used for such acquisitions, the Board intends to use the net proceeds to reduce the debt drawn under the banking facilities (although it is not required to do so), resulting in a corresponding increase in the amount available for re-drawing.
4. Summary of the principal terms of the Rights Issue
The Company is proposing to offer up to 90,329,134 New Shares by way of a rights issue. The New Shares will be offered to all Qualifying Shareholders other than to Shareholders with a registered address, or resident or located in, any of the Excluded Territories or, subject to certain exceptions, the United States or Japan. The Rights Issue will be made on the following basis:
2 New Shares at 175 pence each for every 3 Existing Shares
held and registered in the name of Qualifying Shareholders at the close of business on the Record Date.
Holdings of Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue, as will holdings under different designations or in different accounts. Entitlements to New Shares will be rounded down to the nearest whole number and resulting fractions of New Shares will not be allotted to any Qualifying Shareholders. Qualifying Shareholders with fewer than 3 Existing Shares are therefore not entitled to any New Shares.
The New Shares will, when issued and fully paid, rank pari passu with the Existing Shares, including the right to receive all dividends or distributions declared, made or paid after the date of allotment and issue of the New Shares, save for the 2009 interim dividend of 7.5 pence per Share announced by the Company on 20 May 2009 which will be paid to Shareholders on the Register of Members at the close of business on 29 May 2009.
Application will be made to the UK Listing Authority for the New Shares (nil and fully paid) to be admitted to the Official List and to the London Stock Exchange for the New Shares (nil and fully paid) to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective and that dealings in the New Shares, nil paid, will commence on the London Stock Exchange at 8:00 a.m. on 8 June 2009 with dealings in the New Shares, fully paid, expected to commence at 8:00 a.m. on 1 July 2009.
The Issue Price of 175 pence per New Share represents a 53.1% discount to the Closing Price of an Existing Share of 373.25 pence on 19 May 2009 (being the latest practicable date prior to this Announcement) and a 39.5% discount to the theoretical ex-rights price based on that Closing Price, adjusted for the interim dividend of 7.5 pence per Share which will be paid to Shareholders on the Register of Members at close of business on 29 May 2009. If a Qualifying Shareholder does not take up the offer of New Shares, in whole or in part, his or her proportionate shareholding will be diluted by 40%. The Rights Issue is expected to raise £149.1 million (net of expenses).
The Company has arranged for the Rights Issue to be fully underwritten by J.P. Morgan Securities Ltd. (on behalf of its affiliate, J.P. Morgan Cazenove) and Merrill Lynch to provide certainty as to the amount of capital to be raised. The Underwriting Agreement is not subject to any right of termination after Admission (including in respect of any statutory withdrawal rights).
The Rights Issue is conditional, inter alia, upon:
(a) the Resolutions being passed without amendment (or with such amendments as the Company and the Banks may agree);
(b) the Underwriting Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and
(c) Admission having occurred not later than 8:00 a.m. on 8 June 2009 (or such
later time and/or date as the Banks and the Company may agree, being not later than 15 June 2009).
The structure of the Rights Issue is expected to have the effect of creating distributable reserves for the Company equal to the net proceeds of the Rights Issue less the nominal value of the New Shares. This is intended to provide the Company with greater flexibility as to its capital structure.
5. Current trading and prospects
The unaudited financial results for the Group as at and for the six months ended 31 March 2009 were announced today. The six months to 31 March 2009 have seen unprecedented turmoil in global financial markets which is now affecting all sectors of the wider economy, both in the United Kingdom and around the world. Property values have suffered as yields have risen and concerns about the occupational market have increased. Against this background, the Group's property portfolio has demonstrated resilience, out-performing the wider property market in capital values, continuing to increase net property income and maintaining high occupancy levels. This is reflected in the Group's results for the period which are, in summary:
- net property income for the six months ended 31 March 2009 was £27.2 million, an increase of £1.2 million (4.6%), compared with the six months ended 31 March 2008. Despite higher levels of debt, a reduction of £2.4 million in interest costs on the 25% of floating rate bank debt that is not hedged also contributed to an increase of 57% in adjusted profit before tax to £11.3 million for the six months ended 31 March 2009, compared with £7.2 million for the six months ended 31 March 2008;
- adjusted diluted net asset value per Share as at 31 March 2009 was 393 pence, compared with 578 pence as at 31 March 2008;
- adjusted profit before tax for the six months ended 31 March 2009 was £11.3 million, compared with £7.2 million for the six months ended 31 March 2008; and
- as at 31 March 2009, the Group's property portfolio was valued at £1,102 million and significantly out-performed the IPD UK Monthly Property Index: Capital Growth for the six months ended 31 March 2009; the Group's property portfolio declined by approximately 10% over the six months ended 31 March 2009, compared with a fall of 22.6% in the IPO UK Monthly Property Index Capital Growth over the same period.
Since 31 March 2009, the Group has continued to trade strongly and has continued to experience good tenant demand for its shops, restaurants and residential units and rents for these uses remain firm. The Board believes that, as a result of the Group's strategy and the location of its properties, demand for these uses will continue to be resilient, reflected in continuing growth in net property income. With regard to offices, where demand and rental levels are falling, the Group continues to pursue its long term strategy of reducing its exposure to this cyclical use, introducing other uses, particularly to its smaller and less valuable office units.
The Company usually only carries out property valuations for its annual (30 September) and half year (31 March) financial reports. However, in conjunction with the Rights Issue, the Group's wholly owned property portfolio and the Longmartin Properties were each revalued at 15 April 2009, which was the latest practicable date on which the property portfolio could be valued prior to the publication of this Announcement. The valuation undertaken in respect of the wholly owned property portfolio as at 15 April 2009 showed an increase in value of £175,000, compared with the valuation as at 31 March 2009, whilst the valuation undertaken in respect of the Longmartin Properties as at 15 April 2009 showed no change in value from the valuation as at 31 March 2009.
6. Dividends
The Board intends to maintain a dividend policy which meets the REIT status requirement that the Group distributes a minimum of 90% of its tax-exempt income profits (broadly calculated using normal tax rules) from its property rental business.
On 20 May 2009, the Board announced an interim dividend of 7.5 pence per Existing Share, which will be paid to Shareholders on the Register of Members as at 29 May 2009. The interim dividend will be paid entirely as a property income distribution (PID). The payment date for the interim dividend is 26 June 2009. The interim dividend will not be paid to the holders of the New Shares.
7. General Meeting
A General Meeting of the Company will be held at 10:00 a.m. on 5 June 2009 at the offices of Lovells LLP, Atlantic House, 50 Holborn Viaduct, London EC1A 2FG. The General Meeting is being held for the purpose of considering, and if thought fit, passing two ordinary resolutions necessary to authorise and carry out the Rights Issue. The first resolution is to increase the Company's authorised share capital in connection with the Rights Issue and the second resolution is to give the Directors the authority to allot the New Shares in connection with the Rights Issue.
Footnotes:
1 Subject to certain restrictions relating to Shareholders with registered addresses outside the United Kingdom, details of which are set out in the Prospectus.
2 Visit London website.
3 Visit London website.
4 British Retail Consortium/ KPMG Retail Sales Monitor
5 British Retail Consortium/ KPMG Retail Sales Monitor
DEFINITIONS
The definitions set out below apply throughout this Announcement, unless the context requires otherwise.
"2008 Annual Report" the 2008 Annual Report and Accounts for the Group, dated 3 December 2008;
"Admission" the admission of the New Shares, nil paid, to the Official List in accordance with the Listing Rules and to trading on the London Stock Exchange's main market for listed securities in accordance with the requirements contained in the publication ''Admission and Disclosure Standards'' dated 1 November 2007 (as amended from time to time) containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities;
"Banks" Rothschild, J.P. Morgan Cazenove, J.P. Morgan Securities Ltd. and Merrill Lynch;
"Board'' the board of directors of the Company;
''Carnaby'' the area centred on Carnaby Street, London W1 and the eleven surrounding streets bounded by Kingly Street, Great Marlborough Street, Marshall Street and Beak Street;
"Chinatown" the area between Shaftesbury Avenue and Leicester Square primarily located on Rupert Street, Wardour Street, Lisle Street, Gerrard Street and Little Newport Street, London W1;
''Company'' Shaftesbury PLC;
"Covent Garden" the area comprising the districts of Seven Dials, Coliseum and the Opera Quarter in London WC2;
"Directors" the Executive Directors and the Non-Executive Directors;
"Disclosure and Transparency Rules" the rules relating to the disclosure of information made in accordance with section 73A(3) of the FSMA;
"ERV" (estimated rental value) is the rental value of the properties in the Group's portfolio, or parts thereof, reflecting the terms of the relevant leases or, if appropriate, reflecting the fact that certain of the properties, or parts thereof, have been valued on the basis of vacant possession and the assumed grant of a new lease. ERV does not reflect any ground rents, head rents or rent charges, or estimated irrecoverable outgoings;
"Excluded Territories" Canada, the Republic of South Africa, Singapore and any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law;
"Executive Directors" Jonathan Stewart Lane, Brian Bickell, Simon John Quayle and Thomas James Chisnell Welton;
"Existing Shares" the Shares in issue at the date of this Announcement;
"Financial Adviser" Rothschild;
"Financial Services Authority" the Financial Services Authority of the UK;
"FSA" the Financial Services Authority;
"FSMA" the Financial Services and Markets Act 2000, as amended;
"Fully Paid Rights" rights to acquire New Shares, fully paid;
"General Meeting" the general meeting of the Company to be held at the offices of Lovells LLP, Atlantic House, 50 Holborn Viaduct, London EC1A 2FG at 10:00 a.m. on 5 June 2009;
"Group" Shaftesbury Group;
"Investment Property Database" Investment Property Databank Ltd, a company that produces an independent benchmark of property returns;
"IPD UK Monthly Property Index: Capital Growth" an independent investment index relating to the UK property market published by Investment Property Databank;
"IPD UK Monthly Property Index: Total Return" the UK monthly property index measuring returns to direct investment in commercial property published by Investment Property Databank;
"Issue Price" 175 pence per New Share;
"Joint Bookrunners" J.P. Morgan Cazenove and Merrill Lynch;
"Joint Sponsors" Rothschild, J.P. Morgan Cazenove and Merrill Lynch;
"J.P. Morgan Cazenove" J.P. Morgan Cazenove Limited, 20 Moorgate, London EC2R 6DA, acting as Joint Sponsor and Joint Bookrunner;
"J.P. Morgan Securities Ltd." J.P.Morgan Securities Ltd., 125 LondonWall, London EC2Y 5AJ, acting as Joint Underwriter (on behalf of its affiliate, J.P. Morgan Cazenove);
"Listing Rules" the listing rules made under Part VI of FSMA (as set out in the FSA Handbook), as amended from time to time;
"London Stock Exchange" London Stock Exchange plc or its successor(s);
"London's West End" an area of central London to the west of the City of London located around Leicester Square and Covent Garden;
"Longmartin Joint Venture" Longmartin Properties Limited, which is owned in equal parts by the Company and The Mercers' Company, and whose registered number is 05291183 and whose registered office is Pegasus House, 37-43 Sackville Street, London, W1S 3DL;
"Merrill Lynch" Merrill Lynch International, Merrill Lynch Financial Centre, 2 King Edward Street, London EC1A 1HQ, acting as Joint Sponsor, Joint Bookrunner and Joint Underwriter;
"New Shares" up to 90,329,134 Shares to be allotted and issued by the Company pursuant to the Rights Issue;
"Nil Paid Rights" New Shares in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue;
"Non-Executive Directors" the non-executive directors of the company being Peter John Manser CBE, John Richard Keith Emly, William Gordon McQueen and Patience Jane Wheatcroft;
"Official List" the Official List of the UK Listing Authority;
"Prospectus Rules" the prospectus rules of the UK Listing Authority made under section 73A of FSMA as amended;
"Provisional Allotment Letter" the renounceable provisional allotment letter expected to be sent to certain Qualifying Non-CREST Shareholders in respect of the New Shares to be provisionally allotted to them pursuant to the Rights Issue;
"Qualifying Shareholders" holders of Existing Shares on the Register of Members of the Company at the close of business on the Record Date;
"Record Date" close of business on 3 June 2009;
"Register of Members" the statutory register of all current holders of Shares, required to be maintained by the Company under section 352 of the Companies Act 1985;
"Resolutions" the resolutions to be proposed at the General Meeting;
"Rights Issue" the proposed offer by way of rights to Qualifying Shareholders to acquire New Shares, on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter;
"Rothschild" N M Rothschild & Sons Limited, a company incorporated in England and Wales with registered number 925279 whose registered office is at New Court, St Swithin's Lane, London,
EC4P 4DU acting as Joint Sponsor and Financial Advisor;
"Shaftesbury" a company incorporated in England and Wales with registered number 01999238, whose registered office is at Pegasus House, 37-43 Sackville Street, London W1S 3DL;
"Shaftesbury Group" the Company together with its subsidiaries and subsidiary undertakings;
"LIBOR" London Interbank Offered Rate;
"Shareholders" Shareholders whose Shares are registered on the Register of Members;
"Shares" ordinary shares of 25 pence each in the capital of the Company;
"Sterling" or "pounds Sterling" the lawful currency of the United Kingdom;
"UK Listing Authority" the Financial Services Authority acting in its capacity as the competent authority for listing under Part VI of the FSMA;
"Underwriters" J.P. Morgan Securities Ltd. (on behalf of its affiliate, J.P. Morgan Cazenove) and Merrill Lynch;
"Underwriting Agreement" the conditional underwriting agreement dated 20 May 2009 between the Company, Rothschild, J.P. Morgan Cazenove, J.P. Morgan Securities Ltd. and Merrill Lynch;
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland;
"United States" or "US" the United States of America, its territories and possessions, any State of the United States and the District of Columbia;
"US Securities Act" the US Securities Act of 1933, as amended; and
"Village" the distinctive destination established by the Group, over time, by applying its investment strategy of acquiring identifiable clusters of properties and "Villages" means all of the Group's Villages. The Group's established Villages are situated in Carnaby, Chinatown and Covent Garden.
This Announcement has been issued by and is the sole responsibility of Shaftesbury PLC.
This Announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Group in any jurisdiction.
This Announcement is an advertisement and does not constitute a prospectus. Nothing in this Announcement should be interpreted as a term or condition of the Rights Issue. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any Nil Paid Rights, Fully Paid Rights and/or New Shares must be made only on the basis of the information contained in and incorporated by reference into the Prospectus.
This Announcement and any materials distributed in connection with this Announcement are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This Announcement is not an offer of securities for sale in the United States. The Nil Paid Rights, the Fully Paid Rights, the New Shares and the Provisional Allotment Letters if and when issued in connection with the Rights Issue have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ''Securities Act''), or under the securities legislation of any state or territory or jurisdiction of the United States and may not be offered, sold taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States absent registration under, or an exemption from, the registration requirements of the Securities Act and in compliance with any relevant state securities laws. There will be no public offer of the securities mentioned herein in the United States. Neither this Announcement (including and any materials distributed in connection with this announcement) nor any part or copy of it may be transmitted into the United States, its territories or possessions or distributed, directly or indirectly, in the United States, its territories or possessions. Neither this Announcement nor any copy of it may be taken or transmitted into United States, Japan, The Republic of South Africa, Canada, Singapore or any other such jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of the securities laws of the United States, Japan, The Republic of South Africa, Canada or Singapore. The distribution of this Announcement in other jurisdictions may be restricted by law and persons into whose possession this Announcement comes should inform themselves about, and observe, any such restrictions. The Ordinary Shares (including Existing Ordinary Shares and New Shares) have not been and will not be registered under the applicable securities laws of the United States, Japan, The Republic of South Africa, Canada or Singapore and, subject to certain exemptions, may not be offered or sold within the United States, Japan, The Republic of South Africa, Canada or Singapore.
This Announcement and any materials distributed in connection with this Announcement may include forward-looking statements. These forward-looking statements are regarding the belief or current expectations of Shaftesbury or the Directors about the Group's businesses and the transactions described in this document, including statements relating to possible future write-downs or movements in property prices and the Group's capital and financial planning projections. Generally, words such as ''may'', ''could'', ''will'', ''expect'', ''intend'', ''estimate'', ''anticipate'', ''believe'', ''plan'', ''seek'', ''continue'' and similar expressions identify forward-looking statements.
These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and are difficult to predict, and which may cause the Group's actual results to materially differ from any future results or developments expressed by or implied from the forward-looking statements. Such risks and uncertainties include the effects of continued or increasing volatility in international financial markets, economic conditions both internationally and in London's West End, in which Shaftesbury operates, and other factors affecting the level of Shaftesbury's business activities and the costs and availability of financing for its activities. Any forward-looking statement contained in this document based on past or current trends or activities of Shaftesbury should not be taken as a representation that such trends or activities will continue in the future. No statement in this document is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years necessarily will match or exceed the historical or published earnings of the Group.
Each forward-looking statement speaks only as of the date of the particular statement. Except as required by the FSA, the Listing Rules, the Disclosure and Transparency Rules, the Prospectus Rules, the London Stock Exchange or otherwise by law, Shaftesbury expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in Shaftesbury's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based. Recipients of this Announcement and/or the Prospectus should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement and/or, if and when published, in the Prospectus.
Apart from the responsibilities and liabilities, if any, which may be imposed on any of the Banks by the FSMA, none of the Banks accept any responsibility whatsoever, and they make no representation or warranty, express or implied, for the contents of this Announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Group, the Nil Paid Rights, the Fully Paid Rights, the New Shares or the Rights Issue and nothing in this Announcement shall be relied upon as a promise or representation in this respect, whether as to the past or the future.
Each of the Banks accordingly disclaims to the fullest extent permitted by law all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which any of them might otherwise have in respect of this document or any such statement.
Neither the content of Shaftesbury's website nor any website accessible by hyperlinks on Shaftesbury's website is incorporated in, or forms part of, this Announcement.
Related Shares:
SHB.L