Issue of Equity

21st Nov 2006 16:57

Liberty International PLC21 November 2006 21 November 2006 LIBERTY INTERNATIONAL PLC PLACING OF UP TO 25 MILLION NEW ORDINARY SHARES AND PROPOSED CONVERSION TO A REAL ESTATE INVESTMENT TRUST ("REIT") Attached is the full text of an announcement issued by Liberty International PLCtoday. Enquiries: Liberty International PLC:Sir Robert Finch Chairman +44 (0)20 7960 1273David Fischel Chief Executive +44 (0)20 7960 1207Aidan Smith Finance Director +44 (0)20 7960 1210 Merrill Lynch InternationalRupert Hume Kendall +44 (0)20 7996 2441Simon Fraser +44 (0)20 7996 2606Mark Gwynne +44 (0)20 7995 3700 UBS Investment BankOliver Pawle +44 (0)20 7568 2164John Woolland +44 (0)20 7568 2336Tim Guest +44 (0)20 7568 2549Adrian Lewis +44 (0)20 7568 2240 Public relations:UK: Michael Sandler, Hudson Sandler +44 (0)20 7796 4133SA: Matthew Gregorowski, College Hill Associates +44 (0)20 7457 2020 Nicholas Williams, College Hill Associates +27 (0)11 447 3030 Not for release, publication or distribution in, or into, the United States,Australia, Canada or Japan 21 November 2006 LIBERTY INTERNATIONAL PLC PLACING OF UP TO 25 MILLION NEW ORDINARY SHARES AND PROPOSED CONVERSION TO A REAL ESTATE INVESTMENT TRUST ("REIT") Liberty International PLC ("Liberty International" or the "Company") todayannounces it is placing up to 25 million new ordinary shares (the "Placing")representing up to 7.4 per cent of Liberty International's issued ordinary sharecapital immediately prior to the Placing and that it will be sending tomorrow acircular to shareholders in relation to the proposed conversion of the LibertyInternational group (the "Group") into a REIT. Expected benefits of the Placing The Placing will enable the Group to reduce borrowings incurred in connectionwith the £421 million acquisition of the Covent Garden Estate in August 2006,thereby providing Liberty International with increased financial flexibility topursue its £1.2 billion development pipeline and other potential investmentopportunities (after taking into account the REIT conversion charge ofapproximately £146 million referred to below). In addition, the Placing will benefit shareholders of Liberty International byenabling the Group to: • maintain and improve its leading position in the UK regional shoppingcentre industry through its wholly-owned subsidiary, Capital Shopping Centres ("CSC"), whose ownership interests include, inter alia, nine of the UK's toptwenty-five regional shopping centres; • consolidate and enhance the strong presence which the Group hasestablished in the Central London retail and leisure market, through thecombination of the Covent Garden Estate with the Group's existing ownership inLondon's West End including holdings in Covent Garden, Piccadilly, RegentStreet, The Strand and High Street, Kensington; • maintain sound financial ratios, in particular its interest cover anddebt to asset ratios; and • continue to deliver superior returns to shareholders, adding valuethrough development and active management. Details of the Placing Liberty International intends to place up to 25 million new ordinary shares,representing up to 7.4 per cent of Liberty International's issued ordinary sharecapital immediately prior to the Placing, with institutional and other investors(the "Placing Shares"). The Placing is being conducted, subject to thesatisfaction of certain conditions, through an accelerated book-building processto be carried out by Merrill Lynch International ("Merrill Lynch") and UBSLimited ("UBS" or "UBS Investment Bank"). The books will open with immediateeffect. The timing of the closing of the books, pricing and allocations is atthe discretion of Liberty International, Merrill Lynch and UBS although thebook-building is expected to close not later than 4.30 pm (London time)tomorrow. However, Merrill Lynch and UBS may accept further bids after initialallocations have been made on the basis explained in Appendix One. The numberof Placing Shares and the price at which the Placing Shares are to be placed(the "Placing Price") will be agreed by Liberty International with Merrill Lynchand UBS at the close of the book-building process. Details of the Placing Pricewill be announced as soon as practicable after the close of the book-buildingprocess. As part of the Placing, the family interests of Sir Donald Gordon, the Presidentfor Life of Liberty International, and a connected person of Mr Graeme Gordon (aDirector of Liberty International) and as such a related party for the purposesof the Listing Rules, have agreed to acquire and be allotted 1.4 million PlacingShares at the Placing Price. The acquisition by the Gordon family interestsrepresents 0.4 per cent of Liberty International's current issued share capital.The existing shareholdings of the Gordon family interests amounted to 71.3million Ordinary Shares (21.1 per cent of Liberty International's issuedordinary share capital) at the close of business on 21 November 2006 and wouldamount to 20.1 per cent on the basis of the above subscription and a Placing of25 million shares. The Placing Shares will be issued credited as fully paid and will rank paripassu with the Company's existing ordinary shares, including the right toreceive all dividends and other distributions declared, made or paid on or inrespect of such shares after the date of issue of the Placing Shares. TheCompany will apply for admission of the Placing Shares to the Official List ofthe Financial Services Authority and to listing on the London Stock Exchange'smarket for listed securities ("Admission"). It is expected that Admission willtake place and that trading will commence on 29 November 2006. Application willalso be made to JSE Ltd in South Africa for the Placing Shares to be admitted tothe Johannesburg Stock Exchange. Settlement of the Placing Shares will be on a T + 5 basis and is expected tooccur on 29 November 2006. Appendix One to this announcement (which forms part of this announcement) setsout the terms and conditions of the Placing. The Covent Garden Estate In August 2006, Liberty International acquired, for a cash consideration of £421million, a substantial 7 acre Central London investment in the prime retail andleisure location of Covent Garden. This purchase added over 450,000 sq.ft. ofsubstantially freehold, retail, restaurant, office, leisure and residentialspace to the Group's existing £54 million interests on Long Acre and FloralStreet. The investment, of a size and quality seldom available on the open market inLondon's West End, included the iconic Covent Garden Market and surroundingPiazza as well as properties around the Market in King Street, Henrietta Street,Floral Street, James Street, Long Acre, Tavistock Street, Wellington Street andMaiden Lane. Net rental income on the properties acquired was approximately £17.2 million perannum increasing, once lettings of currently vacant space have been concluded,to provide a running yield on cost of around 4.5 per cent. The Covent Garden acquisition provided the Group with a unique Central Londoninvestment fitting in with the strengths of the Group which focuses on qualityretail assets of scarcity value, requiring active management and creativity. The Covent Garden Estate represents a core holding of the Group. The Group isenergetically engaged in unlocking the full value of the investment throughcreative management and community involvement, whilst steadily increasing itspresence in the area, through further acquisitions and joint ventures asappropriate. The Group aims to elevate and substantially improve Covent Garden's status as aworld class urban destination where entertainment, heritage, architecture, foodand fun combine to create a vibrant retailing and leisure environment in a spaceof character and history. The Group believes Covent Garden to be aninternationally recognised destination of choice both for residents of thecapital and for visitors with the potential to become the heart of London's WestEnd. Details of the Group's Covent Garden holdings are set out in Appendix Two. Proposed conversion of Liberty International to a Real Estate Investment Trust("REIT") Liberty International will also be sending tomorrow a circular to shareholderscontaining a proposal to amend its Articles of Association as part of itsproposed conversion to a REIT. The Board expects to convert the Group to a REITwith effect from 1 January 2007. A REIT is a company or group that invests inproperty and enjoys a measure of protection from corporation tax in return foran obligation to distribute a significant amount of the REIT's cash flows toshareholders. The Group's UK tax exempt business under the new UK REIT regime is currentlyexpected to amount to around 90 per cent of its aggregate business. Theprinciple underlying the REIT regime is that, in return for profits of thisbusiness not being taxed, a dividend from this business will generally be taxedin the hands of shareholders as if it was rental income. However, in the caseof South African resident shareholders, such dividend will constitute a foreigndividend which is exempt from South African income tax. The Group will remainliable for tax on its profits from other activities. Overall the amount of tax paid, whether by the Company or the shareholders,should reduce as a result of the conversion to a REIT. This saving in tax willbe partly offset by the interest expense resulting from payment of the entrycharge on conversion to a REIT which has been set at 2 per cent of the aggregatemarket value of qualifying properties at the time of conversion. Based on thevaluations at 30 June 2006 and the Covent Garden acquisition, the entry chargefor Liberty International would amount to around £146 million resulting in aone-time reduction in adjusted net assets per share of 41p and, at currentinterest rates, an annual interest charge of approximately £8.0 million (2.4pper share). The amount of the entry charge will however depend on anyacquisitions or disposals of properties prior to conversion and the valuationsat the date of conversion. In terms of Liberty International's balance sheet, conversion to a REIT willmean that the provision for deferred tax on UK property revaluation surplusesand capital allowances (amounting to £930 million at 30 June 2006) will nolonger be required. This will remove substantially all of the difference betweenthe basic net assets per share of 966p at 30 June 2006, calculated from thebalance sheet prepared under International Financial Reporting Standards, andthe net assets per share (diluted, adjusted*), the standard property industrymeasure, of 1268p at 30 June 2006. One requirement of the REIT regime is that a REIT must distribute toshareholders by way of a dividend at least 90 per cent. of the profits from itsUK tax exempt business in the form of a Property Income Distribution ("PID").Any further distribution will either be designated as a PID or ordinary dividend("Non-PID Dividend") at the company's option. A PID will generally be subject towithholding tax at the basic rate of UK income tax, currently 22 per cent.Non-PID Dividends will be taxed in the same way as dividends paid prior to entryinto the REIT regime. Under the REIT regime, the minimum distribution requirement is determined aftertaking account of tax deductions such as capital allowances arising from aGroup's capital expenditure. The level of Liberty International's recentdividend distributions has been around one and a half times the amount whichwould have been required to meet the minimum distribution requirement. TheDirectors expect a proportion of the annual dividend to be payable as a Non-PIDDividend which will not be subject to withholding tax. To date, the Board has pursued a progressive dividend policy distributingsubstantially all of the Group's recurring income. The Directors intend tocontinue a relatively full and progressive dividend policy and expect thedividend for 2007 to include an extra increase out of the net savings fromconversion to a REIT. As a result, dividends are expected to be higher than theywould be if the Group did not convert to a REIT. The principal benefits for Liberty International of converting to a REIT are: • greater flexibility in asset management decisions, without tax being aconstraining factor; • tax transparency for shareholders and the removal of the taxinefficiencies of the current structure. These inefficiencies particularlydisadvantage UK tax exempt institutions; • a globally recognised structure as a REIT which should broaden thepotential investor base; and • elimination of the current contingent taxation on unrealised UKcapital gains in exchange for the payment of the entry charge. Under the REIT regime, a tax charge may be levied if Liberty International makesa distribution to a company which is beneficially entitled (directly orindirectly) to 10 per cent. or more of the shares or dividends of LibertyInternational or controls (directly or indirectly) 10 per cent. or more of thevoting rights of Liberty International unless Liberty International has takenreasonable steps to avoid such a distribution being paid. The amendmentsproposed to be made to the Articles are intended to give the Board the powers itneeds in order to be able to demonstrate to HM Revenue & Customs that such "reasonable steps" have been taken. At the current time, Liberty Internationaldoes not have any single shareholder with a holding of 10 per cent. or more forthe purposes of this rule. The Board considers the proposal to amend the Articles of Association to enablethe Group to convert to a REIT to be in the best interests of LibertyInternational and its shareholders as a whole and is recommending thatshareholders vote in favour of the proposal at the Extraordinary General Meetingon 18 December 2006. Further information concerning the detailed conditions which a company mustsatisfy to be a REIT, the operation of the REIT regime and the details of theproposed changes to the Articles of Association can be found in the circular tobe sent to shareholders, a copy of which will be published on the Company'swebsite. The conversion is being proposed on the basis of the Board's current expectationas to how the legislation and guidance on the REIT regime will be finalised. Thedetailed guidance on the REIT regime has not yet been finalised by HM Revenue &Customs. The Board will review the guidance when it is finalised, which isexpected before the end of the year. The Board will not proceed with conversionto a REIT if, contrary to expectations, there are, or are expected to be,material implications that it considers would be adverse for the Company orwould have materially different consequences from those described in theCircular. * Adjusted for deferred tax in respect of revaluation surpluses andcapital allowances, fair value movements on interest rate hedges, net of tax,and valuation surpluses on trading properties, in accordance with UK propertyindustry practice. Development programme Liberty International has maintained an active development programme with themajor events of the last few years being the opening by CSC of the Red Mall atMetroCentre, Gateshead (371,000 sq.ft. of new retail space, 2004); Chapelfield,Norwich (530,000 sq.ft., 2005); Manchester Arndale Northern Extension (95 percent joint ownership, 550,000 sq.ft., 2005 and 2006) and Xscape, Braehead (50per cent joint venture, 460,000 sq.ft. retail and leisure, 2006). At 30 June 2006, the Group had a £1.2 billion development programme. The largest three components are all regional shopping centres in primelocations extending established high quality retail destinations; St David's,Cardiff; Westgate, Oxford and Eldon Square, Newcastle. In addition, CSC has incremental projects at a number of existing centres, suchas the Boardwalk development at Lakeside, Thurrock, while Capital & Counties hasa £150 million retail and commercial redevelopment and regeneration programme. Details of the major components of the development pipeline are set out inAppendix Three. Financial position At 30 June 2006, the Group's total properties amounted to £7.3 billion by marketvalue. Net assets (diluted, adjusted*) amounted to £4.5 billion and netborrowings amounted to £2.9 billion. Regional shopping centres represented 87 per cent of total investment propertiesand retail in aggregate amounted to 94 per cent. In addition to the Covent Garden acquisition, the Group has since 30 June 2006continued to incur expenditure on its development programme, estimated to amountto around £200 million by 31 December 2006, including a £115 million payment toequalise its interests with its joint venture partner in the Cardiff site,including the existing St David's Centre, prior to commencing the St David's 2development. The Board of Liberty International has always placed a high priority onmaintaining sound financial ratios. The two key internal corporate guidelinesare (i) interest cover, measured before valuation and exceptional items, to bemaintained at a level in excess of 1.6 times and (ii) the debt to assets ratio,to be maintained at less than 50 per cent. Interest cover for the period ended30 June 2006 was around 1.7 times and the ratio of net debt to assets at 30 June2006 amounted to 39 per cent. Net assets per share Net assets per share (diluted, adjusted*) amounted to 1268p at 30 June 2006. The average true equivalent yield used by the valuers of the Group's prime UKregional shopping centres reduced in the six month period from 31 December 2005to 30 June 2006 by eight basis points overall from 5.30 per cent to 5.22 percent (approximately 5.06 per cent on a nominal equivalent yield basis assumingrent is received annually in arrears). This represents a relativelyconservative yield compared with other retail asset classes at that date withprime high street shops valued on nominal equivalent yields around 4 per centand prime retail parks valued below the 4 per cent mark. Furthermore, iOWhOnvestment properties are valued after deducting notionalacquisition costs including stamp duty, which in the case of LibertyInternational amounted in aggregate to £330 million at 30 June 2006, equivalentto 93p per share. These notional costs assume each asset is sold individuallyon the open market at that date, whereas in the case of a listed propertycompany such as Liberty International, the purchase and sale of shares is thepredominant mode of exchange of ownership and value for shareholders, not thesale of each underlying individual property. Net assets per share would haveamounted to 1361p at 30 June 2006 if adjustment had been made for this factor. Current trading and prospects Since 30 June 2006, CSC has continued to maintain a high level of occupancywithin the Group's established regional shopping centres at over 98.5 per cent,excluding the recently opened developments. CSC's immediate priority is to complete lettings at the recently openedManchester Arndale Northern Extension where 80 per cent of total anticipatedincome from the extension is now committed. Beyond that point, CSC has nomaterial development letting exposure until the opening of St David's 2, Cardiffexpected in 2009 and of the last and largest phase of the Eldon Square,Newcastle extension, also scheduled for 2009. Retailers are generally maintaining selective expansion plans and the earlyindications of retailer enthusiasm for CSC's attractive major developments areencouraging. CSC continues to make good progress with the rent review programme, primarilyinvolving 2005 reviews at Lakeside Thurrock, and 2006 reviews at MetroCentre andThe Chimes, Uxbridge, with settlements in line with expectations. The steady recovery, as measured by national statistics, in UK non-food retailsales which began in the second quarter of 2006 has continued into the secondhalf year. Trade appears to have improved overall at CSC's centres this year,although as ever with winners and losers among the Group's retail customers asthe process of dynamic change in UK retailing unfolds. The Covent Garden acquisition has substantially re-energised the Group's CentralLondon business. Central London retail sales have shown strong increases thisyear. The Group looks forward to capitalising on the estimated 50 millioncustomer visits per annum to Covent Garden, as it applies its active managementskills to this landmark international urban destination. Since 30 June 2006, the UK investment property market has continued to be strongand this has continued to drive market yields to lower levels. Barring anyunforeseen changes in market conditions, the valuation of LibertyInternational's major regional shopping centres and other UK assets at 31December 2006 would be expected to reflect some downward yield shift, implyingfurther capital appreciation and therefore an increase in LibertyInternational's net asset value per share from the 1268p (diluted, adjusted*)reported at 30 June 2006. General Merrill Lynch and UBS are acting for the Company and no-one else in relation tothe Placing and will not be responsible to any person other than the Company forproviding the protections afforded to clients of Merrill Lynch and UBS or forproviding advice in relation to the Placing or in relation to the contents ofthis announcement or any other transaction, arrangement or matter referred toherein. This announcement is for information purposes only and does not constitute anoffer to issue or sell, or the solicitation of an offer to acquire or buy, anysecurities to any person in any jurisdiction. In particular, this announcementdoes not constitute an offer to issue or sell, or the solicitation of an offerto acquire or buy, any securities in the United States, Canada, Australia orJapan. The Placing Shares have not been, nor will they be, registered under theSecurities Act or with any securities regulatory authority of any State or otherjurisdiction of the United States, and accordingly may not be offered or soldwithin the United States except pursuant to an exemption from, or in atransaction not subject to, registration under the Securities Act. No publicoffering of the Placing shares will be made in the United States. Any offeringto be made in the United States will be made to a limited number of QIBspursuant to an exemption from registration under the Securities Act in atransaction not involving any public offering. The Placing Shares are beingoffered and sold outside the United States in accordance with Regulation S underthe Securities Act. South African residents should be aware that South African Exchange ControlRegulations apply or may apply to a participation in the Placing. Accordingly,they should obtain through an authorised dealer any necessary approval orestablish that an existing exchange control approval or exemption applies tosuch investment. Within South Africa subscriptions can only be made for aminimum subscription amount of Rand 100,000 per single addressee acting asprincipal. Certain statements made in this announcement are forward looking statements.Such forward looking statements are based on current expectations and numerousassumptions regarding the Company's present and future business strategies andthe environments in which the Company will operate in the future. Suchassumptions may or may not prove to be correct and actual results andperformance could differ materially from any expected further results orperformances, express or implied, by the forward looking statements. Factorsthat might cause forward looking statements to differ materially from actualresults include, among other things, changes in global, political, economic,business, competitive, market and regulatory forces, future exchange andinterest rates and future business combinations or disposals. The Companyexpressly disclaims and assumes no responsibility to update or revise any of theforward looking statements contained in this announcement to reflect any changein the Company's expectations with regard thereto or any change in events,conditions or circumstances on which any such statement is based. Any indication in this announcement of the price at which Ordinary Shares havebeen bought or sold in the past cannot be relied upon as a guide to futureperformance. No statement in this announcement is intended to be a profitforecast and no statement in this announcement should be interpreted to meanthat earnings per share of the Company for the current or future financial yearswould necessarily match or exceed the historical published earnings per share ofthe Company. APPENDIX ONE TERMS AND CONDITIONS Important information on the Placing NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTOTHE UNITED STATES, CANADA, AUSTRALIA OR JAPAN IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THISAPPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY ATPERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGINGAND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIRBUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTSAND ARE (1) QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIALSERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANINGOF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUSDIRECTIVE") AND (2) IN THE UNITED KINGDOM FALL WITHIN ARTICLE 19(5) OF THEFINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, ASAMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER (ALLSUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIXAND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BYPERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TOWHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES ISAVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANTPERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE ORSUBSCRIPTION OF ANY SECURITIES IN LIBERTY INTERNATIONAL. This announcement and any offer if made subsequently is only addressed to anddirected at persons in member states of the European Economic Area ("EEA") whoare "qualified investors" within the meaning of Article 2(1)(e) of theProspectus Directive (Directive 2003/71/EC) ("Qualified Investors"). By participating in the bookbuilding procedure (the "Bookbuilding") and thePlacing, Placees will be deemed to have read and understood this Appendix One inits entirety, to be participating, making an offer and acquiring Placing Shareson the terms and conditions contained herein and to be providing therepresentations, warranties, acknowledgements and undertakings contained herein. In particular each such Placee represents, warrants and acknowledges that it: 1. is a Relevant Person and undertakes that it will acquire, hold, manage ordispose of any Placing Shares that are allocated to it for the purposes of itsbusiness; 2. in the case of a Relevant Person in a member state of the EEA which hasimplemented the Prospectus Directive (each a "Relevant Member State") whoacquires any Placing Shares pursuant to the Placing: (i) it is a Qualified Investor; and (ii) in the case of any Placing Shares acquired by it as a financialintermediary, as that term is used in Article 3(2) of the Prospectus Directive,(i) the Placing Shares acquired by it in the Placing have not been acquired onbehalf of, nor have they been acquired with a view to their offer or resale to,persons in any Relevant Member State other than Qualified Investors or incircumstances in which the prior consent of Merrill Lynch International and UBS(together, the "Managers") has been given to the offer or resale; or (ii) wherePlacing Shares have been acquired by it on behalf of persons in any member stateof the EEA other than Qualified Investors, the offer of those Placing Shares toit is not treated under the Prospectus Directive as having been made to suchpersons; and 3. is acquiring the Placing Shares for its own account or is acquiring thePlacing Shares for an account with respect to which it exercises sole investmentdiscretion and that it (and any such account) is outside the United States or itis a dealer or other professional fiduciary in the United States acting on adiscretionary basis for non-US beneficial owners (other than an estate ortrust), in reliance upon Regulation S under the US Securities Act of 1933 (the "Securities Act"); or if it is not outside the United States is a qualifiedinstitutional buyer ("QIB") as defined in Rule 144A under the Securities Act. This announcement (including this Appendix One) does not constitute an offer tosell or issue or the solicitation of an offer to buy or subscribe for PlacingShares in any jurisdiction including, without limitation, the United Kingdom,South Africa, the United States, Canada, Australia or Japan. This announcementand the information contained herein is not for publication or distribution,directly or indirectly, to persons in the United States, Canada, Australia,Japan or in any jurisdiction in which such publication or distribution isunlawful. The Placing Shares referred to in this announcement have not been and will notbe registered under the Securities Act or with any securities regulatoryauthority of any State or other jurisdiction of the United States, and may notbe offered, sold or transferred within the United States except pursuant to anexemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act. Any offering to be made in the UnitedStates will be made to a limited number of QIBs pursuant to an exemption fromregistration under the Securities Act in a transaction not involving any publicoffering. The Placing Shares are being offered and sold outside the UnitedStates in accordance with Regulation S under the Securities Act. South African residents should be aware that South African Exchange ControlRegulations apply or may apply to a participation in the Placing. Accordingly,they should obtain through an authorised dealer any necessary approval orestablish that an existing exchange control approval or exemption applies tosuch investment. Within South Africa subscriptions can only be made for aminimum subscription amount of Rand 100,000 per single addressee acting asprincipal. The distribution of this announcement and the Placing and/or issue of thePlacing Shares in certain jurisdictions may be restricted by law. No action hasbeen taken by the Company, the Managers, or any of their respective Affiliates,that would permit an offer of the Placing Shares or possession or distributionof this announcement or any other offering or publicity material relating tosuch Placing Shares in any jurisdiction where action for that purpose isrequired. Persons into whose possession this announcement comes are required bythe Company and the Managers to inform themselves about and to observe any suchrestrictions. In this Appendix, unless the context otherwise requires, the "Company" meansLiberty International PLC and "Placee" includes a person (including individuals,funds or others) on whose behalf a commitment to acquire Placing Shares has beengiven. No prospectus No prospectus or other offering document has been or will be submitted to beapproved by the FSA in relation to the Placing and the Placees' commitments willbe made solely on the basis of the information contained in this announcement,the Pricing Announcement and any information publicly announced to a RegulatoryInformation Service by or on behalf of the Company prior to the date of thisannouncement (the "Publicly Available Information"). Each Placee, byparticipating in the Placing, agrees that it has neither received nor relied onany other information, representation, warranty or statement made by or onbehalf of either the Managers or the Company and neither the Managers, theCompany nor any person acting on such person's behalf nor any of theirAffiliates has or shall have any liability for any Placee's decision to acceptthis invitation to participate in the Placing based on any other information,representation, warranty or statement. Each Placee acknowledges and agrees thatit has relied on its own investigation of the business, financial or otherposition of the Company in accepting a participation in the Placing. Nothing inthis paragraph shall exclude the liability of any person for fraudulentmisrepresentation. Details of the Placing Agreement and the Placing Shares The Managers have entered into a placing agreement (the "Placing Agreement")with the Company under which the Managers have undertaken, on the terms andsubject to the conditions set out in the Placing Agreement, acting severally,and not jointly or jointly and severally, to use their reasonable endeavours asagents of the Company to seek to procure Placees for the Placing Shares, orfailing which to acquire the Placing Shares themselves. The Placing Shares will, when issued, be credited as fully paid and will rankpari passu in all respects with the existing issued ordinary shares of 50 penceper share in the capital of the Company, including the right to receive alldividends and other distributions declared, made or paid in respect of suchordinary shares after the date of issue of the Placing Shares. Application for admission to listing and trading Application will be made to the Financial Services Authority (the "FSA") foradmission of the Placing Shares to the official list maintained by the FSA (the"Official List") and to the London Stock Exchange for admission to trading ofthe Placing Shares on the London Stock Exchange's market for listed securities(together "Admission"). Application will also be made to the JSE for the PlacingShares to be admitted to the JSE at the same time as Admission occurs. It isexpected that Admission will take place at 8.00 a.m. on 29 November 2006 andthat dealings in the Placing Shares on the London Stock Exchange's main marketfor listed securities will commence at that time. Bookbuilding The Managers will today commence the Bookbuilding to determine demand forparticipation in the Placing by Placees. This Appendix gives details of theterms and conditions of, and the mechanics of participation in, the Placing. Nocommissions will be paid to Placees or by Placees in respect of any PlacingShares. The Managers and the Company shall be entitled to effect the Placing by suchalternative method to the Bookbuilding as they may, in their sole discretion,determine. Principal terms of the Bookbuilding and Placing 1. Participation in the Placing will only be available to persons who maylawfully be, and are, invited to participate by the Managers. Each of theManagers is entitled to enter bids in the Bookbuilding. 2. The Bookbuilding will establish a single price (the "Placing Price")payable to the Managers by all Placees whose bids are successful. The PlacingPrice will be agreed between the Managers and the Company following completionof the Bookbuilding and any discount to the market price of the ordinary sharesof the Company will be determined in accordance with the Listing Rules and IPCguidelines. The Placing Price will be announced (the "Pricing Announcement") ona Regulatory Information Service following the completion of the Bookbuilding. 3. To bid in the Bookbuilding, Placees should communicate their bid bytelephone to their usual sales contact at Merrill Lynch or UBS. Each bid shouldstate the number of shares in the Company which a prospective Placee wishes toacquire at either the Placing Price which is ultimately established by theCompany and the Managers or at prices up to a price limit specified in its bid.Bids may be scaled down by the Managers on the basis referred to in paragraph 7below. Each of Merrill Lynch International and UBS is arranging the Placingseverally, and not jointly and severally as agent of the Company. 4. The Bookbuilding is expected to close no later than 4.30 p.m. on 22November 2006 but may be closed earlier at the sole discretion of the Managers.The Managers may, in agreement with the Company, accept bids that are receivedafter the Bookbuilding has closed. 5. Allocations will be confirmed orally by the relevant Manager as soon aspracticable following the close of the Bookbuilding. The relevant Manager's oralconfirmation of an allocation will give rise to a legally binding commitment bythe Placee concerned, in favour of the relevant Manager and the Company, underwhich it agrees to acquire the number of Placing Shares allocated to it on theterms and subject to the conditions set out in this Appendix One and theCompany's Memorandum and Articles of Association. 6. The Company will make a further announcement following the close of theBookbuilding detailing the number of such shares to be issued and the price atwhich such shares have been placed. 7. Subject to paragraphs 4 and 6 above, the Managers may choose to acceptbids, either in whole or in part, on the basis of allocations determined at itsdiscretion (in agreement with the Company) and may scale down any bids for thispurpose on such basis as they may determine. They may also, notwithstandingparagraphs 4 to 6 above, subject to the prior consent of the Company (a)allocate Placing Shares after the time of any initial allocation to any personsubmitting a bid after that time and (b) allocate Placing Shares after theBookbuilding has closed to any person submitting a bid after that time. Placeesshould note that the Trust, or its nominee, has agreed to acquire 1.4 millionPlacing Shares at the Placing Price and the Managers will allocate that numberof shares to it. 8. A bid in the Bookbuilding will be made on the terms and subject to theconditions in this Appendix One and will be legally binding on the Placee onbehalf of which it is made and except with the relevant Manager's consent willnot be capable of variation or revocation after the time at which it submitted.Each Placee will have an immediate, separate, irrevocable and bindingobligation, owed to the relevant Manager, to pay to it (or as it may direct) incleared funds an amount equal to the product of the Placing Price and the amountof Placing Shares such Placee has agreed to acquire. Each Placee's obligationswill be owed to the Company and to the relevant Manager. 9. Except as required by law or regulation, no press release or otherannouncement will be made by the Managers or the Company using the name of anyPlacee (or its agent), in its capacity as Placee (or agent), other than withsuch Placee's prior written consent. 10. Irrespective of the time at which a Placee's allocation(s) pursuant to thePlacing is/are confirmed, settlement for all Placing Shares to be acquiredpursuant to the Placing will be required to be made at the same time, on thebasis explained below under "Registration and Settlement". 11. All obligations under the Bookbuilding and Placing will be subject tofulfilment of the conditions referred to below under "Conditions of the Placing"and to the Placing not being terminated on the basis referred to below under "Termination of the Placing". 12. By participating in the Bookbuilding each Placee will agree that its rightsand obligations in respect of the Placing will terminate only in thecircumstances described below and will not be capable of rescission ortermination by the Placee. 13. To the fullest extent permissible by law, none of the Managers nor any oftheir Affiliates shall have any liability to Placees (or to any other personwhether acting on behalf of a Placee or otherwise). In particular, none of theManagers nor any of their Affiliates shall have any liability (including, to theextent permissible by law, any fiduciary duties) in respect of the Managers'conduct of the Bookbuilding or of such alternative method of effecting thePlacing as the Managers and the Company may agree. Registration and Settlement If Placees are allocated any Placing Shares in the Placing they will be sent acontract note or electronic confirmation which will confirm the number ofPlacing Shares allocated to them, the Placing Price and the aggregate amountowed by them to the relevant Manager. Each Placee will be deemed to agree thatit will do all things necessary to ensure that delivery and payment is completedin accordance with either the standing CREST or certificated settlementinstructions which they have in place with the relevant Manager. Settlement of transactions in the Placing Shares following Admission will takeplace within the CREST system. Settlement through CREST will be on a T + 5basis unless otherwise notified by the Managers and is expected to occur on 29November 2006. Settlement will be on a delivery versus payment basis. However,in the event of any difficulties or delays in the admission of the PlacingShares to CREST or the use of CREST in relation to the Placing, the Company andthe Managers may agree that the Placing Shares should be issued in certificatedform. The Managers reserve the right to require settlement for the PlacingShares, and to deliver the Placing Shares to Placees, by such other means asthey deem necessary if delivery or settlement to Placees is not practicablewithin the CREST system or would not be consistent with regulatory requirementsin a Placee's jurisdiction. Interest is chargeable daily on payments not received on the due date inaccordance with the arrangements set out above, in respect of either CREST orcertificated deliveries, at the rate of 2 percentage points above prevailingLIBOR. If Placees do not comply with their obligations the relevant Manager may selltheir Placing Shares on their behalf and retain from the proceeds, for its ownaccount and benefit, an amount equal to the Placing Price of each share soldplus any interest due. Placees will, however, remain liable for any shortfallbelow the Placing Price and for any stamp duty or stamp duty reserve tax(together with any interest or penalties) which may arise upon the sale of theirPlacing Shares on their behalf. If Placing Shares are to be delivered to a custodian or settlement agent,Placees must ensure that, upon receipt, the conditional contract note is copiedand delivered immediately to the relevant person within that organisation. Conditions of the Placing The Placing is conditional upon the Placement Agreement becoming unconditionaland not having been terminated in accordance with its terms. The obligations of the Managers under the Placing Agreement are, and the Placingis, conditional on, inter alia: (a) Admission occurring by not later than 8 am (London time) on 1 December2006 (or such later time and/or date as the Managers may agree); (b) the warranties given by the Company in the Placing Agreement being trueand accurate and not misleading in any respect on and as of the date of thePlacing Agreement and at any time prior to Admission; and (c) the fulfilment by the Company of its obligations under the PlacingAgreement which are required to be performed or satisfied on or prior toAdmission, save to the extent that any non-compliance is not material in thecontext of the Placing. If the conditions in the Placing Agreement are not satisfied or waived inaccordance with the Placing Agreement within the stated time periods (or suchlater time and/or date as the Company and the Managers may agree), or thePlacing Agreement is terminated in accordance with its terms, the Placing willlapse and the Placee's rights and obligations shall cease and terminate at suchtime and each Placee agrees that no claim can be made by or on behalf of thePlacee (or any person on whose behalf the Placee is acting) in respect thereof. By participating in the Bookbuilding Process, each Placee agrees that its rightsand obligations cease and terminate only in the circumstances described aboveand under "Termination of the Placing" below and will not be capable ofrescission or termination by it. The Managers may, at their joint agreement and discretion and upon such terms asthey jointly think fit, waive compliance by the Company, or extend the time and/or date for fulfilment by the Company, with the whole or any part of any of theCompany's obligations in relation to the conditions in the Placing Agreement,save that certain conditions including the condition relating to Admissionreferred to in paragraph (a) above may not be waived. Any such extension orwaiver will not affect Placees' commitments as set out in this Appendix One. None of the Managers nor any of their Affiliates nor the Company shall have anyliability to any Placee (or to any other person whether acting on behalf of aPlacee or otherwise) in respect of any decision any of them may make as towhether or not to waive or to extend the time and/or date for the satisfactionof any condition to the Placing nor for any decision any of them may make as tothe satisfaction of any condition or in respect of the Placing generally. Termination of the Placing The Managers may, at their absolute discretion, by notice in writing to theCompany, terminate the Placing Agreement at any time prior to Admission if,inter alia: (a) they become aware that the Company is in breach of any of its obligationsunder the Placing Agreement save to the extent that any breach is not, in theopinion of the Managers, material in the context of the Placing; or (b) they become aware that any of the warranties given by the Company in thePlacing Agreement is, or if repeated at any time up to and including Admission(by reference to the facts and circumstances then existing) would be, untrue,inaccurate, incorrect or misleading; or (c) there has been a material adverse change in the condition (financial orotherwise) or prospects of the Company or the Group since the date of thePlacing Agreement; or (d) there has been, in the opinion of the Managers, since the date of thePlacing Agreement any change in national or international financial, politicalor economic conditions or currency exchange rates or exchange controls such aswould in the Managers' view be likely to prejudice materially the success of theoffering and distribution of the Placing Shares or dealings in the OrdinaryShares in the Secondary Market; or (e) they become aware of any matter which in good faith they consider likelyto have the effect that payment by the Trust will not be made to them inaccordance with this Appendix One in connection with the acquisition of PlacingShares by the Trust If the Placing Agreement is terminated in accordance with its terms, the rightsand obligations of each Placee in respect of the Placing as described in thisannouncement (including this Appendix) shall cease and terminate at such timeand no claim can be made by any Placee in respect thereof. By participating in the Placing, each Placee agrees with the Company and theManagers that the exercise by the Company or the Managers of any right oftermination or any other right or other discretion under the Placing Agreementshall be within the absolute discretion of the Company or the Managers (as thecase may be) and that neither the Company nor the Managers need make anyreference to such Placee and that neither the Company, the Managers nor any oftheir respective Affiliates shall have any liability to such Placee (or to anyother person whether acting on behalf of a Placee or otherwise) whatsoever inconnection with any such exercise. By participating in the Placing, each Placee agrees that its rights andobligations terminate only in the circumstances described above and will not becapable of rescission or termination by it after oral confirmation by theManagers following the close of the Bookbuilding. Representations and further terms By submitting a bid in the Bookbuilding, each prospective Placee (and any personacting on such Placee's behalf) represents, warrants, acknowledges and agreesthat: 1. it has read this announcement (including this Appendix) in its entiretyand that its purchase of the Placing Shares is subject to and based upon all theterms, conditions, representations, warranties, acknowledgements, agreements andundertakings and other information contained herein; 2. it has not received a prospectus or other offering document in connectionwith the Placing and acknowledges that no prospectus or other offering documenthas been prepared in connection with the Placing; 3. if the Placing Shares were offered to it in the United States, itrepresents and warrants that in making its investment decision, (i) it hasconsulted its own independent advisers or otherwise has satisfied itselfconcerning, without limitation, the effects of United States federal, state andlocal income tax laws and foreign tax laws generally and the US EmployeeRetirement Income Security Act of 1974, the US Investment Company Act of 1940and the Securities Act, (ii) it has received all information that it believes isnecessary or appropriate in order to make an investment decision in respect ofthe Company and the Placing Shares and (iii) it is aware and understands that aninvestment in the Placing Shares involves a considerable degree of risk and noUS federal or state or non-US agency has made any finding or determination as tothe fairness for investment or any recommendation or endorsement of the PlacingShares; 4. (i) it has made its own assessment of the Company, the Placing Shares andthe terms of the Placing based on Publicly Available Information, (ii) neitherof the Managers, their respective Affiliates or the Company has made anyrepresentation to it, express or implied, with respect to the Company, thePlacing or the Placing Shares or the accuracy, completeness or adequacy of thePublicly Available Information and (iii) it has made its own investigation ofthe business, financial and other position of the Company and the terms of thePlacing, satisfied itself that the information is still current and relied onthat investigation for the purposes of its decision to participate in thePlacing; 5. the content of this announcement is exclusively the responsibility of theCompany and that neither of the Managers nor any person acting on their behalfis responsible for or has or shall have any liability for any information orrepresentation relating to the Company contained in this announcement or thePublicly Available Information nor will be liable for any Placee's decision toparticipate in the Placing based on any information, representation, warranty orstatement contained in this announcement, the Publicly Available Information orotherwise. Nothing in this Appendix One shall exclude any liability of anyperson for fraudulent misrepresentation; 6. it is not, and at the time the Placing Shares are acquired will not be aresident of Australia, Canada or Japan, and each of it and the beneficial ownerof the Placing Shares is, and at the time the Placing Shares are acquired willbe, (i) not in the United States or (ii) a QIB, or (iii) acquiring the PlacingShares in an 'offshore transaction' in accordance with Rule 903 or Rule 904 ofRegulation S under the Securities Act, and has such knowledge and experience infinancial and business matters as to be capable of evaluating the merits andrisks of an investment in the Placing Shares, is able to bear the economic riskof an investment in the Placing Shares, is able to sustain a complete loss ofthe investment in the Placing Shares and has no need for liquidity with respectto its investment in the Placing Shares and represents and, in the case of (ii)above, warrants that it is acquiring the Placing Shares for its own account orfor one or more accounts as to each of which it exercises sole investmentdiscretion and each of which is a QIB, for investment purposes and not with aview to any distribution or for resale in connection with, the distributionthereof in whole or in part, in the United States; 7. the Placing Shares have not been registered or otherwise qualified foroffer and sale nor will a prospectus be cleared in respect of any of the PlacingShares under the securities laws of the United States, Australia, Canada orJapan and, subject to certain exceptions, may not be offered, sold, taken up,renounced or delivered or transferred, directly or indirectly, within the UnitedStates, Australia, Canada or Japan; 8. it and/or each person on whose behalf it is participating: (i) is entitled to acquire Placing Shares pursuant to the Placing under thelaws of all relevant jurisdictions; (ii) has fully observed such laws; (iii) has capacity and authority and is entitled to enter into and perform itsobligations as an acquirer of Placing Shares and will honour such obligations;and (iv) has obtained all necessary consents and authorities (including, withoutlimitation, in the case of a person acting on behalf of a Placee, all necessaryconsents and authorities to agree to the terms set out or referred to in thisAppendix) under those laws or otherwise and complied with all necessaryformalities; 9. the Placing Shares have not and will not be registered under theSecurities Act, or under the securities laws of any state of the United States,and are being offered and sold on behalf of the Company in offshore transactions(as defined in Regulation S under the Securities Act) and to QIBs in relianceupon Rule 144A or another exemption from the registration requirements under theSecurities Act; 10. the Placing Shares offered and sold in the United States are "restrictedsecurities" within the meaning of Rule 144(a)(3) under the Securities Act; 11. so long as the Placing Shares are "restricted securities" within themeaning of Rule 144(a)(3) under the Securities Act, it will not deposit thePlacing Shares into any depositary receipt facility maintained by any depositarybank in respect of the Company's Ordinary Shares; 12. a purchase of Placing Shares by an employee benefit plan subject to the USEmployee Retirement Income Security Act of 1974 ("ERISA") or a plan subject toSection 4975 of the US Internal Revenue Code of 1986, as amended (the "Code"),or by any entity whose assets are treated as assets of any such plan, couldresult in severe penalties or other liabilities for the Company; and itrepresents, warrants and agrees that it is not (i) an employee benefit plan asdescribed in Section 3(3) of ERISA and subject to ERISA, (ii) a plan subject toSection 4975 of the Code, (iii) a governmental plan or church plan which issubject to any federal, state or local law that is substantially similar to theprovisions of Section 406 of ERISA or Section 4975 of the Code or (iv) an entitywhose assets are treated as assets of any such plan (the entities referred to in(i)-(iv), being referred to as ERISA- Entities); 13. it will not reoffer, sell, pledge or otherwise transfer the Placing Sharesexcept (i) in an offshore transaction in accordance with Regulation S under theSecurities Act (and, if in a privately negotiated transaction, to a person thatis not an ERISA Entity); (ii) in the United States to QIBs that are not ERISAEntities pursuant to Rule 144A under the Securities Act; (iii) pursuant to Rule144 under the Securities Act (if available) or (iv) pursuant to an effectiveregistration statement under the Securities Act and that, in each such case,such offer, sale, pledge, or transfer will be made in accordance with anyapplicable securities laws of any state of the United States; 14. if it is acquiring Placing Shares for the account of one or more QIBs, ithas full power to make the acknowledgements, representations and agreementsherein on behalf of each such account; 15. if it will be a "US Holder" as defined below under the heading "PassiveForeign Investment Company", it acknowledges that it has read and understood thedisclosure thereunder; 16. it acknowledges that where it is acquiring the Placing Shares for one ormore managed accounts, it represents and warrants that it is authorised inwriting by each managed account to acquire the Placing Shares for each managedaccount; 17. if it is a pension fund or investment company, its acquisition of PlacingShares is in full compliance with applicable laws and regulations; 18. no representation has been made as to the availability of any otherexemption under the Securities Act for the reoffer, resale, pledge or transferof the Placing Shares; 19. participation in the Placing is on the basis that it is not and will not bea client of either of the Managers and that the Managers have no duties orresponsibilities to a Placee for providing protections afforded to theirrespective clients or for providing advice in relation to the Placing nor inrespect of any representations, warranties, undertakings or indemnitiescontained in the Placing Agreement; 20. it will make payment to the Managers in accordance with the terms andconditions of this announcement on the due times and dates set out in thisannouncement, failing which the relevant Placing Shares may be placed withothers on such terms as the Managers determine; 21. the person who it specifies for registration as holder of the PlacingShares will be (i) the Placee or (ii) a nominee of the Placee, as the case maybe. The Managers and the Company will not be responsible for any liability tostamp duty or stamp duty reserve tax resulting from a failure to observe thisrequirement. It agrees to acquire Placing Shares pursuant to the Placing on thebasis that the Placing Shares will be allotted to a CREST stock account of oneof the Managers who will hold them as nominee on behalf of the Placee untilsettlement in accordance with its standing settlement instructions with it; 22. the allocation, allotment, issue and delivery to it, or the personspecified by it for registration as holder, of Placing Shares will not give riseto a stamp duty or stamp duty reserve tax liability under (or at a ratedetermined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986(depository receipts and clearance services) and that it is not participating inthe Placing as nominee or agent for any person or persons to whom theallocation, allotment, issue or delivery of Placing Shares would give rise tosuch a liability; 23. it and any person acting on its behalf falls within Article 19(5) and/or 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order2005, as amended, and undertakes that it will acquire, hold, manage and (ifapplicable) dispose of any Placing Shares that are allocated to it for thepurposes of its business only; 24. it has not offered or sold and will not offer or sell any Placing Shares topersons in the United Kingdom prior to Admission except to persons whoseordinary activities involve them in acquiring, holding, managing or disposing ofinvestments (as principal or agent) for the purposes of their business orotherwise in circumstances which have not resulted and which will not result inan offer to the public in the United Kingdom within the meaning of section 85(1)of the Financial Services and Markets Act 2000 (the "FSMA"); 25. it is a qualified investor as defined in section 86(7) of FSMA, being aperson falling within Article 2.1(e)(i), (ii) or (iii) of the ProspectusDirective; 26. it has only communicated or caused to be communicated and it will onlycommunicate or cause to be communicated any invitation or inducement to engagein investment activity (within the meaning of section 21 of the FSMA) relatingto Placing Shares in circumstances in which section 21(1) of the FSMA does notrequire approval of the communication by an authorised person; 27. it has complied and it will comply with all applicable provisions of theFSMA with respect to anything done by it or on its behalf in relation to thePlacing Shares in, from or otherwise involving the United Kingdom; 28. it has not offered or sold and will not offer or sell any Placing Shares topersons in the European Economic Area prior to Admission except to persons whoseordinary activities involve them acquiring, holding, managing or disposing ofinvestments (as principal or agent) for the purpose of their business orotherwise in circumstances which have not resulted and which will not result inan offer to the public in any member state of the European Economic Area withinthe meaning of the Prospectus Directive (which means Directive 2003/71/EC andincludes any relevant implementing measure in any member state); 29. it has complied with its obligations in connection with money launderingand terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act2000, and the Money Laundering Regulations (2003) (the "Regulations") and, ifmaking payment on behalf of a third party, that satisfactory evidence has beenobtained and recorded by it to verify the identity of the third party asrequired by the Regulations; 30. if it is resident in South Africa, it is acting as a principal in respectof the Placing for an aggregate subscription price of more than Rand 100,000; 31. if it is resident in South Africa, it has obtained the necessary approvalsfrom the South African Reserve Bank in order to participate in the Placing or isentitled to make use of an exemption to the South African Exchange ControlRegulations and accordingly is permitted to participate in the Placing; 32. the Company, the Managers and others will rely upon the truth and accuracyof the foregoing representations, warranties, acknowledgements and agreements; 33. the Placing Shares will be issued subject to the terms and conditions ofthis Appendix; and 34. this Appendix and all documents into which this Appendix is incorporated byreference or otherwise validly forms a part will be governed by and construed inaccordance with English law. All agreements to acquire shares pursuant to theBookbuilding and/or the Placing will be governed by English law and the Englishcourts shall have exclusive jurisdiction in relation thereto except thatproceedings may be taken by the Company or the Managers in any jurisdiction inwhich the relevant Placee is incorporated or in which any of its securities havea quotation on a recognised stock exchange. By participating in the Placing, each Placee (and any person acting on suchPlacee's behalf) agrees to indemnify and hold the Company and the Managersharmless from any and all costs, claims, liabilities and expenses (includinglegal fees and expenses) arising out of or in connection with any breach of therepresentations, warranties, acknowledgements, agreements and undertakings inthis Appendix and further agrees that the provisions of this Appendix shallsurvive after completion of the Placing. Please also note that the agreement to allot and issue Placing Shares to Placees(or the persons for whom Placees are contracting as agent) free of stamp dutyand stamp duty reserve tax in the UK relates only to their allotment and issueto Placees, or such persons as they nominate as their agents, direct from theCompany for the Placing Shares in question. Such agreement assumes that thePlacing Shares are not being acquired in connection with arrangements to issuedepositary receipts or to transfer the Placing Shares into a clearance service.If there were any such arrangements, or the settlement related to other dealingin the Placing Shares, stamp duty or stamp duty reserve tax may be payable, forwhich neither the Company nor the Managers would be responsible. If this is thecase, it would be sensible for Placees to take their own advice and they shouldnotify the relevant Manager accordingly. In addition, Placees should note thatthey will be liable for any capital duty, stamp duty and all other stamp, issue,securities, transfer, registration, documentary or other duties or taxes(including any interest, fines or penalties relating thereto) payable outsidethe UK by them or any other person on the acquisition by them of any PlacingShares or the agreement by them to acquire any Placing Shares. The representations, warranties, acknowledgements and undertakings contained inthis Appendix are given to the Managers for itself and on behalf of the Companyand are irrevocable. The Managers are acting exclusively for the Company and no one else inconnection with the Bookbuilding and the Placing and the Managers will not beresponsible to anyone (including Placees) other than the Company for providingthe protections afforded to their respective clients or for providing advice inrelation to the Bookbuilding or the Placing or any other matters referred to inthis press announcement. Each Placee and any person acting on behalf of the Placee acknowledges thatneither of the Managers owes fiduciary or other duties to any Placee in respectof any representations, warranties, undertakings or indemnities in the PlacingAgreement. Each Placee and any person acting on behalf of the Placee acknowledges andagrees that the each of the Managers may (at its absolute discretion) satisfyits obligations to procure Placees by itself agreeing to become a Placee inrespect of some or all of the Placing Shares or by nominating any connected orassociated person to do so. When a Placee or any person acting on behalf of the Placee is dealing witheither of the Managers, any money held in an account with either Manager onbehalf of the Placee and/or any person acting on behalf of the Placee will notbe treated as client money within the meaning of the relevant rules andregulations of the Financial Services Authority which therefore will not requirethe Managers to segregate such money, as that money will be held by it under abanking relationship and not as trustee. Past performance is no guide to future performance and persons needing adviceshould consult an independent financial adviser. All times and dates in this announcement may be subject to amendment. Therelevant Manager will notify Placees and any persons acting on behalf of thePlacees of any changes. Passive Foreign Investment Company The following discussion applies only to US Holders of the Company's OrdinaryShares. For this purpose, a US Holder is a beneficial owner of Ordinary Sharesthat is (i) a citizen or resident of the United States for US federal income taxpurposes; (ii) a corporation, or other entity treated as a corporation, createdor organised under the laws of the United States or any state thereof; (iii) anestate the income of which is subject to US federal income tax without regard toits source; or (iv) a trust if a court within the United States is able toexercise primary supervision over the administration of the trust and one ormore US persons have the authority to control all substantial decisions of thetrust. There is a risk that the Company may be considered to be a Passive ForeignInvestment Company (a "PFIC") for US federal income tax purposes because itholds rental properties in subsidiaries that are separate from the subsidiariesthrough which it conducts its property management activities. If the Company isa PFIC in any year during which a US Holder owns Ordinary Shares, and the USHolder has not made a mark to market or qualified electing fund ("QEF")election, the US Holder will generally be subject to special rules (regardlessof whether the Company continues to be a PFIC) with respect to (i) distributionsexceeding 125 per cent of the average annual distributions received from theCompany in the previous three taxable years or, if shorter, the US Holder'sholding period for the Ordinary Shares; and (ii) any gain realised on the saleor other disposition of Ordinary Shares. Under these rules (i) the distribution or gain will be allocated rateably overthe US Holder's holding period; (ii) the amount allocated to the current taxableyear and any taxable year prior to the first taxable year in which the Companywas a PFIC will be taxed as ordinary income; and (iii) the amount allocated toeach of the other taxable years will be subject to tax at the highest rate oftax applicable to the US Holder for that year and an interest charge for thedeemed deferral benefit will be imposed on the resulting tax attributable toeach of those other taxable years. If the Company is a PFIC, a US Holder willgenerally be subject to similar rules with respect to distributions to theCompany by, and dispositions by the Company of the shares of, any of theCompany's direct or indirect subsidiaries that are also PFICs. US Holders can avoid the interest charge by making a mark to market electionwith respect to the Ordinary Shares, provided that the shares are "marketable".Shares will be marketable if they are regularly traded on certain US stockexchanges, or on a foreign stock exchange that satisfies certain regulatoryrequirements. It is expected that the London Stock Exchange will satisfy theserequirements. For purposes of this election, the Ordinary Shares will beconsidered regularly traded during any calendar year during which they aretraded, other than in de minimis quantities, on at least 15 days during eachcalendar quarter. Any trades that have as their principal purpose meeting thisrequirement will be disregarded. US Holders should consult their tax advisersconcerning the availability and consequences of making a mark to market electionwith respect to the Ordinary Shares. In some cases a shareholder can avoid the interest charge and the other adversePFIC consequences described above by making a QEF election to be taxed currentlyon its share of the PFIC's undistributed income. The Company does not, however,expect to provide US Holders with the information regarding this income thatwould be necessary for a US Holder to make a QEF election with respect to itsOrdinary Shares. If the Company is a PFIC, each US Holder will be required to make an annualreturn on IRS Form 8621, reporting distributions received and gains realisedwith respect to each PFIC in which it holds a direct or indirect interest. US Holders should consult their tax advisers regarding the potential applicationof the PFIC regime. DEFINITIONS In this announcement: "Admission" means the admission of the Placing Shares to the Official List inaccordance with the Listing Rules and to trading on the London Stock Exchange'smain market for listed securities; "Affiliate" means any holding company, subsidiary, branch or associatedundertaking (including, without limitation, joint venture partners) of a Managerfrom time to time or any subsidiary, branch or associated undertaking(including, without limitation, joint venture partners) of any such holdingcompany from time to time; "Bookbuilding" means the Bookbuilding procedure to be carried out by theManagers in connection with the Placing; "Board" means the Board of Directors of the Company or a duly authorisedcommittee thereof; "Directors" means all the directors of the Company; "FSA" means the Financial Services Authority; "FSMA" means the Financial Services and Markets Act 2000, as amended; "Group" means the Company and its subsidiary undertakings; "JSE" means JSE Limited, a public company incorporated and registered in SouthAfrica (Registration number 2005/022939/06), licensed as a securities exchangein terms of the Securities Service Act, No 36 of 2004, as amended; "London Stock Exchange" means London Stock Exchange plc; "Liberty International" or the "Company" means Liberty International PLC; "Listing Rules" means the listing rules produced by the FSA under Part VI of theFSMA and forming part of the FSA's Handbook of rules and guidance, as from timeto time amending; "Managers" means Merrill Lynch International and UBS; "Official List" means the list maintained by the FSA in accordance with section74(1) of the FSMA for the purposes of Part VI of the FSMA; "Ordinary Shares" means ordinary shares of 50p each in the capital of theCompany; "Placees" means persons (including individuals, funds or others) on whose behalfa commitment to acquire Placing Shares has been given and Placee means any oneof them; "Placing" means the placing of the Placing Shares by the Managers withinstitutional and other investors on behalf of the Company; "Placing Agreement" means the agreement dated 21 November 2006 between theCompany, Merrill Lynch International and UBS in connection with the Placing; "Placing Price" means the price per Ordinary Share at which the Placing Sharesare to be placed with Placees; "Placing Shares" means the new Ordinary Shares which are to be issued inconnection with the Placing; "Regulatory Information Service" means any of the regulatory informationservices included within the list maintained on the London Stock Exchange'swebsite; "Securities Act" means the United States Securities Act of 1933, as amended; "Shareholders" means holders of Ordinary Shares; "Trust" means STC International Limited as trustee of trusts related to theGordon family; "United Kingdom" or "UK" means the United Kingdom of Great Britain and NorthernIreland; and "United States" means the United States of America, its territories andpossessions, any State of the United States and the District of Columbia. APPENDIX TWO COVENT GARDEN ACQUISITION IN AUGUST 2006 - FACT SHEET Summary Retail: 130,300 sq.ft.Restaurant/Bars: 98,250 sq.ft.Leisure: 109.700 sq.ft.Office: 113,300 sq.ft. 122 tenants 146 leases Average unexpired term to lease expiry 11.9 years. - Estimated one million visitors per week to the area- Unique Central London location- Diversity of uses and occupiers- Reversionary- Added value opportunities Details of property acquired The properties are in five principal blocks: • The Market - Located at the centre of the Estate, surrounded by the cobbled Piazza, the Market totals approximately 71,300 sq ft. There are four parallel arcades, with accommodation arranged over basement, ground and first floor levels. The Market includes small shop units, the Apple Market (market stalls), bars, restaurants and space for open air events. • South East Piazza - This is made up of the museum block and Jubilee Hall and totals approximately 154,500 sq ft of commercial space. The museum block includes the London Transport Museum and Theatre Museum, together with restaurants, retail, office and residential accommodation. Jubilee Hall includes market stalls, restaurants and leisure accommodation. • North West Piazza - This block includes: Bedford Chambers, which comprises offices, retail and restaurant space; 40-43 King Street in retail and residential use; and properties on Floral Street in retail, leisure, office and residential use. Tenants include, HMV, LK Bennett, French Connection, Ted Baker and The Sanctuary. The commercial space totals approximately 103,000 sq ft. • South West Piazza - This comprises thirteen properties fronting Henrietta Street and Maiden Lane, which are in mixed use, principally retail, restaurants/bars and offices. The commercial space totals approximately 70,000 sq ft. • Gateway Properties - Three separate properties, namely Regal House; nos. 1/3 Long Acre and Burleigh House, Burleigh Street which total 52,800 sq ft. Regal House is a trophy building with a prime retail frontage to James Street and with offices above. 1/3 Long Acre comprises a bar and modern offices on the upper floors at the gateway to Covent Garden. Burleigh House comprises retail and office accommodation. Details of other holdings of the Group in the Covent Garden area • Floral Place - a mixed use development of 52,600 sq.ft. formed around the Grade 2 listed Carriage Hall with frontages onto Floral Street and Long Acre. Held on 2 long leases from the Church Commissioners, the Long Acre block provides high quality new build office and retail accommodation whilst the Floral Street block is a mix of new build and refurbished retail, offices, residential and carparking. • 32-33 Long Acre - an attractive freehold period building providing 2,950 sq.ft. of retail and 2,600 sq.ft. of 'media style' office accommodation. APPENDIX THREE DEVELOPMENT PIPELINE OF LIBERTY INTERNATIONAL • St David's, Cardiff The St David's 2, Cardiff, project entails adding some 967,500 sq.ft. of retailspace, anchored by a John Lewis Partnership department store, to the existing StDavid's Centre, creating an overall centre of around 1.4 million sq.ft. ofspace, ranking amongst the UK's largest city centre regional shopping centres.We anticipate pooling of our existing interest with that of our partner, LandSecurities Group PLC, prior to the year end and commencing the main works on theSt David's 2 project in January 2007, for an opening in 2009. • Westgate Centre, Oxford The Westgate Partnership, a joint venture with LaSalle Investment Management,continues to progress this major city-centre regeneration project. The proposals include the refurbishment and extension of the existing centre toaround 750,000 sq.ft., including a John Lewis Partnership department store andaround 90 shops. Significant improvements to the surrounding environment willalso add to the increased vitality of this part of Oxford. Oxford City Council has resolved to grant planning permission for the WestgatePartnership's proposals which will now be referred to the Government Office forthe South East for final determination. Assuming a favourable outcome,construction is scheduled to start at the end of 2007 or early 2008. • Eldon Square, Newcastle At Eldon Square, Newcastle, two of the three schemes to improve and extend thecentre from 961,000 sq.ft. to a total of around 1.3 million sq.ft. havecommenced on site. Eldon Square West provides 22,000 sq.ft. of retail and restaurant spaceoverlooking Old Eldon Square and 74 per cent of the rental income is currentlycommitted, for opening prior to the end of 2006. Eldon Square North, the project to relocate the current bus station and provide48,000 sq.ft. of additional retail space, started on site in April this year andis due to complete, in phases, between 2007 and 2008. Progress has also been achieved on the third and largest of the schemes, EldonSquare South, which will provide 410,000 sq.ft. of retail space. Constructionis scheduled to start in 2007 for an opening in Autumn 2009. An agreement forlease has been completed with Debenhams for the 175,000 sq.ft. department store.This store, together with units currently under active negotiation, amount to57 per cent of Eldon Square South's anticipated rental income. • Manchester Arndale Northern Extension The final phase of the Manchester Arndale Northern Extension opened in September2006, creating the loop linking the new Northern Extension with the existingSouthern malls, with the centre now providing 1.4 million sq.ft. of retailspace, the largest city centre shopping centre in the UK. The 550,000 sq.ft.extension provides the large floor plates and well configured space required bymodern retailers and has attracted a range of top quality names, including theonly 150,000 sq.ft. Next store in the country and the largest Top Shop in the UKoutside London. 80 per cent of total anticipated income from the extension isnow committed. • Other major regional shopping centre projects: - Thurrock Lakeside Boardwalk project involving remodelling of the Lakeside pavilion providing 10new restaurants and further retail and leisure space, opening in 2007 - MetroCentre, Gateshead Ongoing mall refurbishment and centre reconfiguration at Europe's largestcovered shopping centre (1.81 million sq.ft.) - The Glades, Bromley 38,000 sq.ft. High Street redevelopment linking with the main centre (421,000sq.ft.) now under construction for 2008 opening - Medium term development and extension plans at a number of centresincluding The Potteries, Stoke-on-Trent; The Harlequin, Watford and TheVictoria Centre, Nottingham • Capital & Counties' £150 million retail and commercial redevelopmentand regeneration programme Projects include Wapping Riverside (110,000 sq.ft. offices), Metro building,Hammersmith (110,000 sq.ft. offices), 190 Strand WC2 (260,000 sq.ft. offices andresidential, joint venture with Prudential), Broad Gate, Leeds (120,000 sq.ft.retail, 160,000 sq.ft. offices and 23 residential apartments), Hagley Road,Birmingham (140,000 sq.ft. offices). This information is provided by RNS The company news service from the London Stock Exchange

---

Related Shares:

INTU.L