6th May 2005 07:21
Land Securities Group Plc06 May 2005 6 May 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN Recommended cash offers (with Loan Note Alternative) by Citigroup Global Markets Limited on behalf of Retail Property Holdings Trust Limited (a wholly-owned subsidiary of Land Securities Group PLC) for Tops Estates PLC Summary The Boards of Land Securities Group PLC ("Land Securities") and Tops Estates PLC("Tops Estates") announce that they have reached unanimous agreement on theterms of recommended offers for the Shares in and convertible unsecured loanstock of Tops Estates. Citigroup will make the Offers on behalf of RetailProperty Holdings Trust Limited, a wholly-owned subsidiary of Land Securities(the "Offeror"). The Offers represent an enterprise value for Tops Estates ofapproximately £517.2 million, including net debt (excluding the CULS) at 30September 2004 of approximately £207.3 million. Tops Estates is a specialist investor in town and city centre shopping centres.Tops Estates' property portfolio comprises shopping centres with a total grossarea of approximately 230,000 sq. m. in seven locations - three in the North ofEngland, three in the Midlands and one in London. Tops Estates' propertyportfolio was independently valued as at 31 March 2005 at £566.7 million, basedon current annual net rental income of £30.4 million and estimated annual netmarket rental value of £40.7 million. The acquisition of Tops Estates will strengthen further Land Securities'position in the retail sector and the shopping centres being acquired offer LandSecurities management and development opportunities to create value. Inparticular, the Clayton Square Shopping Centre consolidates Land Securities'position in Liverpool; Tops Estates' sites in Corby provide a longer-termdevelopment opportunity; and its properties in Leeds provide Land Securitieswith an entry into one of the top 10 city centre retail markets in the UK. LandSecurities will also continue to deliver the asset management programmes alreadyinitiated at Tops Estates' sites in Stafford, Harrogate, Worcester andShepherd's Bush. The Offers comprise: (a) The Share Offer The Share Offer of 515 pence per Share in cash (with a Loan Note Alternative)values the existing issued share capital of Tops Estates at approximately £236.8 million. The Share Offer represents a discount of 7.9 per cent. to AdjustedDiluted Net Asset Value, as set out in Appendix II, and a premium of 11.3 percent. to Adjusted Diluted Triple Net Asset Value, as set out in Appendix II, ineach case as at 31 March 2005. It also represents a premium of 16.4 per cent. tothe Share price of 442.5 pence on 5 May 2005 (the last dealing date prior to theannouncement of the Offers). The Adjusted Diluted Net Asset Value reflects theconsolidated net asset value of Tops Estates as at 30 September 2004, adjustedfor the revaluation of its property portfolio as at 31 March 2005. The AdjustedDiluted Triple Net Asset Value also reflects the estimated (post-tax) FRS13liability as at 31 March 2005 and the estimated contingent tax liabilities whichwould accrue if the property portfolio were sold at the 31 March 2005 valuation. (b) The CULS Offer The CULS Offer of 322.92 pence per £1 nominal of CULS in cash (with a Loan NoteAlternative) values the CULS at approximately £73.1 million, representing apremium of 17.2 per cent. to the CULS price of 275.5 pence on 5 May 2005 (thelast dealing date prior to the announcement of the Offers). The CULS Offerprice of 322.92 pence per £1 nominal value of CULS has been calculated inaccordance with the terms of the trust deed constituting the CULS and,accordingly, takes account of the adjusted conversion rate which would apply ona takeover offer for Tops Estates becoming wholly unconditional on or before 30June 2005. CULS holders who validly accept the CULS Offer will also be entitledto accrued but unpaid interest on the CULS up to (but excluding) the date onwhich the Offers become or are declared unconditional in all respects. The Offeror has conditionally agreed to acquire (through the acquisition of theChairman's Family Holding Companies) 17,806,834 Shares, representingapproximately 38.7 per cent. of the issued share capital of Tops Estates, and£2,538,678 nominal value of CULS, representing approximately 11.2 per cent. ofthe outstanding CULS. The conditional agreements to acquire the Chairman'sFamily Holding Companies will remain binding on the respective vendors in theevent of a competing offer for Tops Estates. In addition, the Chairman's FamilyHolding Companies have undertaken not to accept any Third Party Offer for theirShares or CULS. A subsidiary of Comet Investments Limited, one of the Chairman's Family HoldingCompanies, owns the freehold interest in the Clayton Square Shopping Centre,Liverpool and part of the purchase price payable by the Offeror upon theacquisition of Comet Investments Limited will represent the market value of thatfreehold interest. The indirect acquisition of the freehold interest in theClayton Square Shopping Centre by the Offeror will be subject to the approval ofthe independent Shareholders of Tops Estates and Tops Estates will convene anextraordinary general meeting of the independent Shareholders in order toconsider a resolution to approve the terms on which the freehold interest willbe acquired. The terms of the acquisition of the freehold interest areconsidered by Rothschild to be fair and reasonable so far as other Tops EstatesShareholders are concerned. The Offeror has received irrevocable undertakings to accept or procure theacceptance of the Offers from the Chairman of Tops Estates, Mina Goodman, theEverard and Mina Goodman Charitable Foundation, Evermina Investments Limited andother Tops Estates Directors in respect of 2,023,513 Shares, representingapproximately 4.4 per cent. of the issued share capital of Tops Estates and£14,505 nominal value of CULS, representing approximately 0.1 per cent. of theoutstanding CULS. These irrevocable undertakings will remain binding in theevent of a competing offer being made for Tops Estates and will cease to bebinding only if the Offers lapse. In addition, the Chairman of Tops Estates,Mina Goodman, the Everard and Mina Goodman Charitable Foundation and EverminaInvestments Limited have undertaken not to accept any Third Party Offer fortheir Shares or CULS. The Offeror has also received an irrevocable undertaking to accept or procurethe acceptance of the Share Offer from Trust of Property Shares plc ("T.O.P.S.")in respect of 2,150,000 Shares, representing approximately 4.7 per cent. of theissued share capital of Tops Estates. This undertaking is conditional on theapproval of the shareholders of T.O.P.S. at an extraordinary general meeting.The Chairman and persons connected to him, who together own 55.6 per cent. ofthe issued share capital of T.O.P.S., have undertaken to approve the irrevocableundertaking at the extraordinary general meeting. The Offeror has also received a non-binding letter of intent from AberforthPartners stating that it intends to accept or procure the acceptance of theOffers in respect of 4,082,000 Shares, representing approximately 8.9 per cent.of the issued share capital of Tops Estates, and £3,446,000 nominal value ofCULS, representing approximately 15.2 per cent. of the outstanding CULS. The Offeror therefore has either conditionally agreed to acquire, or hasreceived irrevocable undertakings to accept or procure the acceptance of theOffers in respect of, 21,980,347 Shares, representing approximately 47.8 percent. of the issued share capital of Tops Estates, and £2,553,183 nominal valueof CULS, representing approximately 11.3 per cent. of the outstanding CULS.Together with the letter of intent to accept the Offers from Aberforth Partners,this represents approximately 56.7 per cent. of the issued share capital of TopsEstates and 26.5 per cent. of the outstanding CULS. The Share Offers will be conditional upon, inter alia (a) receipt of validacceptances in respect of not less than 90 per cent. (or such lower percentageas the Offeror may decide) of the Shares to which the Share Offer relates, and(b) receipt of valid acceptances in respect of not less than 75 per cent. (orsuch lower percentage as the Offeror may decide) in nominal value of the CULS orthe CULS Resolution being passed by the requisite majority at the CULS Meetingor any adjournment thereof. The CULS Offer will be conditional upon the ShareOffer becoming or being declared unconditional in all respects. In addition the Offeror has agreed with Tops Estates that, if condition (b)above is satisfied in relation to the CULS, it will waive down the acceptancecondition in relation to the Share Offer from 90 per cent. of the Shares towhich the Share Offer relates to such number of valid acceptances in relation tothe Offers which, together with the Shares and CULS held by the Chairman'sFamily Holding Companies and other Shares and CULS held, or acquired orcontracted to be acquired by the Offeror and its associates (together, the "Acquired Tops Estates Securities"), represents not less than 75 per cent. of theShares on a fully diluted basis. If on any closing date of the Offers: (i) the acceptance condition in relation to the CULS has beensatisfied or the CULS Resolution has been approved by the requisite majority butthe Acquired Tops Estates Securities represent less than 75 per cent. of thefully diluted share capital of Tops Estates, or (ii) the Acquired Tops Estates Securities represent at least 75per cent. of the fully diluted share capital of Tops Estates but the acceptancecondition in relation to the CULS has not been satisfied and the CULS Resolutionhas not been approved by the requisite majority, then in either case the Offeror will extend the Offers beyond that closing date. However, the Offeror shall not extend the Offers beyond any time, as specifiedby the Code, by which an Offer must become or be declared unconditional as toacceptances. The Tops Estates Directors, who have been so advised by Rothschild, consider theterms of the Offers to be fair and reasonable and unanimously recommend theOffers to Shareholders and CULS Holders. In providing advice to the TopsEstates Directors, Rothschild has taken into account the commercial assessmentsof the Tops Estates Directors. Commenting on the Offers, Francis Salway, CEO of Land Securities, said: "Land Securities has one of the leading property businesses in the UK, with over£8 billion currently invested. The acquisition of Tops Estates will furtherstrengthen our position in the retail sector, enabling us to capitalise on thesynergies arising from managing an enlarged portfolio of shopping centres. TopsEstates' portfolio is located in medium to large sized conurbations across theUK and offers ongoing asset enhancement opportunities of a type on which bothTops Estates and Land Securities have successful track records." Everard Goodman, Chairman of Tops Estates, said: "The Offers give Shareholders and CULS Holders a price which I recommend theyaccept as it reflects the value created by the Tops Estates team through itsasset management, development and regeneration initiatives and allows theShareholders and CULS Holders an excellent opportunity to benefit from arealisation of their investment in cash today. Land Securities is well placedto continue to develop further the assets of Tops Estates and to capitalise onits existing resources, knowledge and experience in the town and city centreshopping centre development market. I would like to thank all members of theTops Estates team for their dynamic approach, dedication and great enthusiasm todeliver growth and also our professional advisers for the positive andprogressive roles that they have played throughout the years". This summary should be read in conjunction with the full text of thisannouncement. The conditions to and certain further terms of the Offers are set out inAppendix I to this announcement. Appendix III to this announcement containsdefinitions of certain terms used in this announcement. Land Securities is holding a conference call for equity analysts and investors(other than those in any Restricted Jurisdiction) at 9.00 a.m. today. The call is to be hosted by: Francis Salway, Group Chief ExecutiveMark Collins, Chief Operating Officer A live audio webcast of the conference call will be available on the company'swebsite (www.landsecurities.com). An archive copy and a transcript will then beavailable at the same address later today. General Enquiries Land Securities Group PLCFrancis SalwayTel: +44 (0) 20 7413 9000 Mark CollinsTel: +44 (0) 20 7413 9000 Emma DenneTel: +44 (0) 20 7024 5460 www.landsecurities.com Citigroup Global Markets Limited (Financial Adviser to Land Securities and theOfferor) David WormsleyTel: +44 (0)20 7986 6000 Ian Hart Tel: +44 (0)20 7986 6000 Nicholas Tinworth Tel: +44 (0)20 7986 6000 JPMorgan Cazenove Limited (Joint Corporate Broker to Land Securities and theOfferor) Richard Cotton Tel: +44 (0)20 7588 2828 Roger Clarke Tel: +44 (0)20 7588 2828 UBS Limited (Joint Corporate Broker to Land Securities and the Offeror) James Geary Tel: +44 (0)20 7568 2308 Financial Dynamics (Public Relations Adviser to Land Securities and the Offeror) Stephanie Highett Tel: +44 (0) 20 7831 3113 Dido Laurimore Tel: +44 (0) 20 7831 3113 Tops Estates PLC Everard Goodman Tel: +44 (0) 20 7355 3000 Adam Cohen Tel: +44 (0) 20 7355 3000 Rothschild (Financial Adviser to Tops Estates) Robert Leitao Tel: +44 (0)20 7280 5000 Kevin Ramsden Tel: +44 (0)20 7280 5000 Oriel Securities Limited (Corporate Broker to Tops Estates) Simon Bragg Tel: +44 (0) 20 7710 7600 Scott Richardson Brown Tel: +44 (0) 20 7710 7600 Citigroup, which is authorised and regulated by the Financial Services Authorityin the United Kingdom, is acting as financial adviser to Land Securities and theOfferor and no one else in connection with the Offers and will not beresponsible to anyone other than Land Securities and the Offeror for providingthe protections afforded to clients of Citigroup, nor for providing advice inrelation to the Offers. JPMorgan Cazenove, which is authorised and regulated by the Financial ServicesAuthority in the United Kingdom, is acting as joint corporate broker to LandSecurities and the Offeror and no one else in connection with the Offers andwill not be responsible to anyone other than Land Securities and the Offeror forproviding the protections afforded to clients of JPMorgan Cazenove, nor forproviding advice in relation to the Offers. UBS Limited, which is authorised and regulated by the Financial ServicesAuthority in the United Kingdom, is acting as joint corporate broker to LandSecurities and the Offeror and no one else in connection with the Offers andwill not be responsible to anyone other than Land Securities and the Offeror forproviding the protections afforded to clients of UBS Limited, nor for providingadvice in relation to the Offers. Rothschild, which is regulated by the Financial Services Authority for theconduct of designated investment business in the United Kingdom, is actingexclusively as financial adviser to Tops Estates and for no one else inconnection with the Offers and will not be responsible to anyone other than TopsEstates for providing the protections afforded to clients of Rothschild, nor forproviding advice in relation to the Offers. Oriel Securities Limited, which is authorised and regulated by the FinancialServices Authority in the United Kingdom, is acting as corporate broker to TopsEstates and no-one else in connection with the Offers and will not beresponsible to anyone other than Tops Estates for providing the protectionsafforded to clients of Oriel Securities Limited, nor for providing advice inrelation to the Offers. The availability of the Offers (including the Loan Note Alternative) to personswho are not resident in the United Kingdom may be affected by the laws of theirrelevant jurisdiction. Such persons should inform themselves of, and observe,any applicable legal or regulatory requirements. Further details in relation toOverseas Shareholders and Overseas CULS Holders will be contained in the OfferDocument. Unless otherwise determined by the Offeror, the Offers (including the Loan NoteAlternative) will not be made, directly or indirectly, in or into, or by use ofthe mails or any means or instrumentality (including, without limitation,facsimile transmission, telephone and internet) or interstate or foreigncommerce of, or any facilities of a national securities exchange of, anyRestricted Jurisdiction. The Offers (including the Loan Note Alternative) willnot be capable of acceptance from or within any Restricted Jurisdiction or byuse of any means, instrumentality or facilities. Accordingly, copies of thisannouncement are not being, and must not be, directly or indirectly, mailed orotherwise forwarded, distributed or sent in, into or from any RestrictedJurisdiction and persons receiving this announcement (including custodians,nominees and trustees) must not mail or otherwise distribute or send it in, intoor from such jurisdictions as doing so may invalidate any purported acceptanceof the Offers. Notwithstanding the foregoing, the Offeror will retain the rightto permit the Offers to be accepted and any sale of securities pursuant to theOffers to be completed if, in its sole discretion, it is satisfied that thetransaction in question can be undertaken in compliance with applicable law andregulation. The Loan Notes which may be issued pursuant to the Loan Note Alternative willnot be listed on any stock exchange and will not be registered or filed underany relevant laws of any Restricted Jurisdiction, and no prospectus or otherdocumentation which would otherwise be required to be prepared in respect of theLoan Notes pursuant to any relevant laws of a Restricted Jurisdiction has beenlodged with or registered by any securities commission or similar authority inany Restricted Jurisdiction. Accordingly, unless an exemption under relevantsecurities laws is available, the Loan Notes may not be offered, sold, re-soldor delivered, directly or indirectly, in, into or from any of the RestrictedJurisdictions, or to or for the account or benefit of any US person or residentof any of the Restricted Jurisdictions. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANOFFER TO SUBSCRIBE FOR OR BUY ANY SECURITY, NOR A SOLICITATION OF ANY VOTE ORAPPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFEROF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION INCONTRAVENTION OF APPLICABLE LAW. Any person who, alone or acting together with any other person(s) pursuant to anagreement or understanding (whether formal or informal) to acquire or controlsecurities of Tops Estates, owns or controls or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofTops Estates is generally required under the provisions of Rule 8 of the CityCode to notify a Regulatory Information Service as specified in the ListingRules and the Panel by no later than 12.00 noon (London time) on the businessday following the date of the transaction of every dealing in such securities(or in any option in respect of, or derivative referenced to, any suchsecurities) during the period to the date on which the Share Offer becomes or isdeclared unconditional as to acceptances or lapses. Dealings by the Offeror orTops Estates (or by their respective "associates", within the definition set outin the City Code) in any class of securities of Tops Estates until the end ofsuch period must also be disclosed (save where omission of such associates fromthis requirement has been approved by the Panel). Please consult your financialadviser immediately if you believe this Rule may be applicable to you. 6 May 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN Recommended cash offers (with Loan Note Alternative) by Citigroup Global Markets Limited on behalf of Retail Property Holdings Trust Limited (a wholly-owned subsidiary of Land Securities Group PLC) for Tops Estates PLC 1. Introduction The Boards of Land Securities Group PLC ("Land Securities") and Tops Estates PLC("Tops Estates") announce that they have reached unanimous agreement on theterms of recommended offers for the Shares in and convertible unsecured loanstock of Tops Estates. Citigroup will make the offers on behalf of RetailProperty Holdings Trust Limited, a wholly-owned subsidiary of Land Securities(the "Offeror"). 2. The Offers The Offers comprise the Share Offer of 515 pence per Share in cash (with a LoanNote Alternative) and the CULS Offer of 322.92 pence per £1 nominal of CULS incash (with a Loan Note Alternative). The Offers value the existing issued sharecapital of Tops Estates at approximately £236.8 million and the outstanding CULSat approximately £73.1 million. The Offers represent an enterprise value forTops Estates of approximately £517.2 million, including net debt (excluding theCULS) at 30 September 2004 of approximately £207.3 million. The Offers will be on the terms and subject to the Conditions set out inAppendix I and the further terms that will be set out in the Offer Document.Citigroup is acting as exclusive financial adviser to Land Securities and theOfferor in relation to the Offers. JPMorgan Cazenove and UBS Limited are actingas joint corporate brokers to Land Securities and the Offeror in relation to theOffers. Rothschild is acting as exclusive financial adviser to Tops Estates inrelation to the Offers and Oriel Securities is acting as corporate broker toTops Estates in relation to the Offers. Under the terms of the Offers, Shareholders and CULS Holders will be offered,respectively: For each Share 515 pence in cashFor each £1 nominal of CULS 322.92 pence in cash In assessing the Offers, the Tops Estates Directors have had regard, inter alia,to the net asset value of Tops Estates. Set out in Appendix II is a calculationof Adjusted Diluted Net Asset Value and Adjusted Diluted Triple Net Asset Value,in each case as at 31 March 2005 which has been prepared by the Tops EstatesDirectors (and which reflects, inter alia, the open market valuation of TopsEstates' properties as at 31 March 2005 in accordance with the report andvaluation prepared by Cluttons LLP). The estimate, for which the Tops EstatesDirectors are solely responsible, has been prepared for illustrative purposesonly and, because of its nature, cannot give a complete picture of the financialposition of Tops Estates, and does not constitute a profit forecast. The Share Offer of 515 pence per Share represents a discount of 7.9 per cent. toAdjusted Diluted Net Asset Value and a premium of 11.3 per cent. to AdjustedDiluted Triple Net Asset Value, in each case as at 31 March 2005. The AdjustedDiluted Net Asset Value reflects the consolidated net asset value of TopsEstates as at 30 September 2004, adjusted for the revaluation of its propertyportfolio as at 31 March 2005. The Adjusted Diluted Triple Net Asset Value alsoreflects the estimated (post-tax) FRS13 liability as at 31 March 2005 and theestimated contingent tax liabilities which would accrue if the propertyportfolio were sold at the 31 March 2005 valuation. The Share Offer alsorepresents a premium of 16.4 per cent. to the Share price of 442.5 pence on 5May 2005 (the last dealing date prior to the announcement of the Offers). The CULS Offer represents a premium of 17.2 per cent. to the CULS price of 275.5pence on 5 May 2005 (the last dealing date prior to the announcement of theOffers). The CULS Offer price of 322.92 pence per £1 nominal value of CULS hasbeen calculated in accordance with the terms of the trust deed constituting theCULS and, accordingly, takes account of the adjusted conversion rate which wouldapply on a takeover offer for Tops Estates becoming wholly unconditional on orbefore 30 June 2005. The sources of information and bases of calculation contained in thisannouncement are set out in Appendix II. Tops Estates intends to convene an extraordinary general meeting of CULS Holdersto amend the terms of the Trust Deed, conditionally upon the Share Offerbecoming or being declared unconditional in all respects, to allow the Offerorcompulsorily to acquire all of the outstanding CULS, or to permit Tops Estatesto redeem all of the outstanding CULS, in each case at the same price per £1nominal value of CULS as the price per £1 nominal value of CULS payable underthe CULS Offer. See paragraph 6 for further information. The Share Offers will be conditional upon, inter alia (a) receipt of validacceptances in respect of not less than 90 per cent. (or such lower percentageas the Offeror may decide) of the Shares to which the Share Offer relates, and(b) receipt of valid acceptances in respect of not less than 75 per cent. (orsuch lower percentage as the Offeror may decide) in nominal value of the CULS orthe CULS Resolution being passed by the requisite majority at the CULS Meetingor any adjournment thereof. The CULS Offer will be conditional upon the ShareOffer becoming or being declared unconditional in all respects. In addition the Offeror has agreed with Tops Estates that, if condition (b)above is satisfied in relation to the CULS, it will waive down the acceptancecondition in relation to the Share Offer from 90 per cent. of the Shares towhich the Share Offer relates to such number of valid acceptances in relation tothe Offers which, together with the Shares and CULS held by the Chairman'sFamily Holding Companies and other Shares and CULS held, or acquired orcontracted to be acquired by the Offeror and its associates (together, the "Acquired Tops Estates Securities"), represents not less than 75 per cent. of theShares on a fully diluted basis. If on any closing date of the Offers: (i) the acceptance condition in relation to the CULS has been satisfiedor the CULS Resolution has been approved by the requisite majority but theAcquired Tops Estates Securities represent less than 75 per cent. of the fullydiluted share capital of Tops Estates, or (ii) the Acquired Tops Estates Securities represent at least 75 percent. of the fully diluted share capital of Tops Estates but the acceptancecondition in relation to the CULS has not been satisfied and the CULS Resolutionhas not been approved by the requisite majority, then in either case the Offeror will extend the Offers beyond that closing date. However, the Offeror shall not extend the Offers beyond any time as specifiedby the Code, by which an Offer must become or be declared unconditional as toacceptances. 3. Share Dividend and CULS Interest The Shares will be acquired pursuant to the Share Offer fully paid and free fromall liens, charges, equitable interests, encumbrances, rights of pre-emption andany other rights and interests of any nature whatsoever and together with allrights now and hereafter attaching to the Shares, including voting rights andthe right to receive and retain all dividends and other distributions (if any)declared, made or paid on or after the date of this announcement. CULS Holders who validly accept the CULS Offer will be entitled to accrued butunpaid interest on the CULS up to (but excluding) the date on which the Offersbecome or are declared unconditional in all respects. Save for any such accruedinterest, the CULS will be acquired pursuant to the CULS Offer free from allliens, charges, equitable interests, encumbrances, rights of pre-emption and anyother rights and interests of any nature whatsoever and together with all rightsnow and hereafter attaching to the CULS. If any of the CULS are compulsorilyacquired or redeemed following the passing of the resolutions to be consideredat the general meeting of CULS Holders, such CULS will be acquired on the samebasis and at the same price payable for the CULS under the CULS Offer. 4. Loan Note Alternative Shareholders and CULS Holders (other than certain Overseas Shareholders andOverseas CULS Holders) who validly accept the Share Offer or the CULS Offer, asthe case may be, may elect to receive Loan Notes to be issued by the Offeror asan alternative to receiving any or all of the cash consideration which theywould otherwise receive under the Offers on the following basis: for every £1 of cash consideration under the Offers, £1 nominal value of Loan Notes The Loan Notes will be unsecured obligations of the Offeror and will be issued,credited as fully paid, in amounts and integral multiples of £1 in nominalvalue. The obligation to pay under the Loan Notes will be irrevocably andunconditionally guaranteed for three years from the date of the instrumentcreating the Loan Notes. The Loan Notes will not be transferable other than withthe prior written consent of the Offeror. All fractional entitlements will bedisregarded and not paid. The Loan Notes will be governed by English law. The Loan Notes will bear interest (from the date of issue) payable to therelevant holder of Loan Notes (subject to any requirement to deduct tax thereon)semi-annually in arrears on 30 September and 31 March at the rate of 0.55 percent. below LIBOR. The first interest payment will be made on 30 September 2005in respect of the period from and including the date of issue of the relevantLoan Notes up to (but excluding) that date. The Loan Note Alternative will be conditional upon the Share Offer becoming orbeing declared unconditional in all respects, and valid elections having beenreceived by such time for at least £5 million in nominal value of Loan Notes.The Loan Notes will have a term of 10 years and holders of Loan Notes will havethe opportunity to redeem them on each interest payment date falling on or after30 September 2006, provided that any Loan Notes issued after 30 September 2005will be redeemable only from the first interest payment date falling after thefirst anniversary of the issue of such Loan Notes. The Offeror will be entitledto redeem all outstanding Loan Notes if the aggregate nominal value ofoutstanding Loan Notes falls below £5 million at any time during their term. The Loan Note Alternative will remain open for acceptance for so long as theOffers remain open for acceptance. Further details of the Loan Note Alternativewill be set out in the Offer Document. 5. Conditional purchases of Shares and CULS and irrevocable undertakings Shares The Offeror has conditionally agreed to acquire (through the acquisition of theChairman's Family Holding Companies) 17,806,834 Shares, representingapproximately 38.7 per cent. of the issued share capital of Tops Estates. Theacquisition of the Chairman's Family Holding Companies, which are beneficiallyowned by the Chairman of Tops Estates, Mina Goodman, the Everard and MinaGoodman Charitable Foundation, will be effected pursuant to a share purchaseagreement in respect of each of the Chairman's Family Holding Companies. Exceptin the case of Comet Investments Limited, the only material assets of theChairman's Family Holding Companies are Shares and CULS and the purchase pricefor the Chairman's Family Holding Companies will be calculated based on theirrespective net asset values at the date the Offers become or are declaredunconditional as to acceptances. In determining the net asset values of theChairman's Family Holding Companies, the Shares and CULS held by them will bevalued at the price payable by the Offeror under the Offers. A subsidiary of Comet Investments Limited also owns the freehold interest in theClayton Square Shopping Centre, Liverpool and part of the purchase price payableby the Offeror upon the acquisition of Comet Investments Limited will representthe market value of that freehold interest. The indirect acquisition of thefreehold interest in the Clayton Square Shopping Centre by the Offeror will besubject to the approval of the independent Shareholders of Tops Estates and TopsEstates will convene an extraordinary general meeting of the independentShareholders in order to consider a resolution to approve the terms on which thefreehold interest will be acquired. The terms of the acquisition of thefreehold interest are considered by Rothschild to be fair and reasonable so faras other Shareholders are concerned. In the event that the acquisition of the freehold interest is not approved bythe independent shareholders, the freehold interest will not form part of theacquisition of the Chairman's Family Holding Companies and, in thosecircumstances, Everard Goodman has agreed with the Panel that he will procurethat the freehold interest is not sold to Land Securities within 12 months of 5May 2005 and that, if the freehold interest is sold within three years from 5May 2005, it will be sold through an auction process. In connection with the acquisition of the Chairman's Family Holding Companies,each of the Chairman of Tops Estates, Mina Goodman, the Everard and Mina GoodmanCharitable Foundation and the Chairman's Family Holding Companies has agreed,for so long as the Offers remain open for acceptance, not to, directly orindirectly, sell or otherwise dispose of any Shares or CULS held by them(respectively) or to acquire or enter into any agreement to acquire RelevantTops Estates Securities. Each of them also agrees that it will not accept anyThird Party Offer and that it will cast all votes which it has the power toexercise, or to direct the exercise of, in relation to any CULS in favour of theCULS Resolution and (to the extent permitted to do so by the Panel) in relationto the Shares in favour of any resolution which may be put to Shareholders inconnection with the Offers pursuant to Rule 16 of the Code. The Offeror has received irrevocable undertakings to accept or procure theacceptance of the Share Offer from the Chairman of Tops Estates, Mina Goodman,the Everard and Mina Goodman Charitable Foundation, Evermina Investments Limitedand other Tops Estates Directors in respect of 2,023,513 Shares, representingapproximately 4.4 per cent. of the issued share capital of Tops Estates. Theseirrevocable undertakings will remain binding in the event of a competing offerbeing made for Tops Estates and will cease to be binding only if the Offerslapse. In addition, Evermina Investments Limited has undertaken not to acceptany Third Party Offer for its Shares. The Offeror has also received an irrevocable undertaking to accept or procurethe acceptance of the Share Offer from T.O.P.S. in respect of 2,150,000 Shares,representing approximately 4.7 per cent. of the issued share capital of TopsEstates. This undertaking is conditional on the approval of the shareholders ofT.O.P.S. at an extraordinary general meeting. The Chairman and persons connectedto him, who together own 55.6 per cent. of the issued share capital of T.O.P.S.,have undertaken to approve the irrevocable undertaking at the extraordinarygeneral meeting. The Offeror has also received a non-binding letter of intent from AberforthPartners stating that it intends to accept or procure the acceptance of theShare Offer in respect of 4,082,000 Shares, representing approximately 8.9 percent. of the issued share capital of Tops Estates. The Offeror therefore has either conditionally agreed to acquire, or hasreceived irrevocable undertakings to accept or procure the acceptance of theShare Offer in respect of, 21,980,347 Shares, representing approximately 47.8per cent. of the issued share capital of Tops Estates. Together with the letterof intent to accept the Share Offer from Aberforth Partners, this representsapproximately 56.7 per cent. of the issued share capital of Tops Estates. CULS The Offeror has conditionally agreed to acquire (through the acquisition of theChairman's Family Holding Companies) £2,538,678 nominal value of CULS,representing approximately 11.2 per cent. of the outstanding CULS, on the termsoutlined above. The Offeror has received irrevocable undertakings to accept or procure theacceptance of the CULS Offer from the Chairman of Tops Estates, Mina Goodman,the Everard and Mina Goodman Charitable Foundation, Evermina Investments Limitedand other Tops Estates Directors in respect of £14,505 nominal value of CULS,representing 0.1 per cent. of the outstanding CULS. These irrevocableundertakings will remain binding in the event of a competing offer being madefor Tops Estates and will cease to be binding only if the Offers lapse. Inaddition, Evermina Investments Limited has undertaken not to accept any ThirdParty Offer for its CULS. Under the non-binding letter of intent from Aberforth Partners, AberforthPartners has stated that it intends to accept or procure the acceptance of theCULS Offer in respect of £3,446,000 nominal value of CULS, representingapproximately 15.2 per cent. of the outstanding CULS, on the terms outlinedabove. Land Securities therefore has either conditionally agreed to acquire, or hasreceived irrevocable undertakings to accept the CULS offer in respect of,£2,553,183 nominal value of CULS representing 11.3 per cent. of the outstandingCULS. Together with the letter of intent to accept the CULS Offer fromAberforth Partners, this represents approximately 26.5 per cent. of theoutstanding CULS. 6. Information for CULS Holders An extraordinary general meeting of CULS Holders will be convened for thepurposes of considering and, if thought fit, passing a resolution, conditionallyupon the Share Offer becoming or being declared unconditional in all respects,to approve the amendment of the Trust Deed to include a provision permitting theOfferor compulsorily to acquire all of the outstanding CULS, or to permit TopsEstates to redeem all of the outstanding CULS, in each case at the same priceper £1 nominal value of CULS as the price per £1 nominal value of CULS payableunder the CULS Offer. In accordance with the terms of the Trust Deed, anextraordinary resolution will be passed if carried by a majority consisting ofnot less than 75 per cent. of the persons voting on a show of hands or, if apoll is demanded, by a majority consisting of not less than 75 per cent. of thevotes given on a poll at a meeting of CULS Holders (either in person or byproxy). 7. Background to and reasons for the Offers Land Securities announced last year that it would be focusing its activities onsectors in the UK commercial property markets where it had market leadingpositions. One of these core markets is retail, where it currently has aportfolio of 21 shopping centres and 24 retail parks, including properties heldin joint ventures. Its retail investment strategy is to acquire retail assetswhich provide opportunities to benefit from active management thereby creatinggrowth in rental income and asset value. Land Securities will also seekopportunities to create new assets through development. In light of thisstrategy Land Securities has been refocusing its retail portfolio and it hasbeen actively seeking opportunities to reinvest in the retail property market. Tops Estates is a specialist investor in town and city centre shopping centres.Tops Estates' property portfolio comprises shopping centres with a total grossarea of approximately 230,000 sq. m. in seven locations - three in the North ofEngland, three in the Midlands and one in London. The acquisition of Tops Estates will strengthen further Land Securities'position in the retail sector and the shopping centres being acquired offer LandSecurities management and development opportunities to create value. Inparticular, the Clayton Square Shopping Centre consolidates Land Securities'position in Liverpool; Tops Estates' sites in Corby provide a longer-termdevelopment opportunity; and its properties in Leeds provide Land Securitieswith an entry into one of the top-10 city centre retail markets in the UK. LandSecurities will also continue to deliver the asset management programmes alreadyinitiated at Tops Estates' sites in Stafford, Harrogate, Worcester andShepherd's Bush. 8. Information on Land Securities and the Offeror Land Securities is a FTSE 100 company, quoted on the London Stock Exchange. Ithas been active in the UK's commercial property industry for 60 years. Today,the Land Securities Group maintains its market leading position as the UK'slargest quoted property company by providing commercial accommodation andproperty services to a wide range of occupiers. The Land Securities Group'sobjective is to maximize long term total returns for its shareholders throughits activities, which include property investment, development and propertyoutsourcing. Land Securities holds a market leading position in three areas of the UKcommercial property market: • Retail • Central London offices • Property outsourcing. Its investment portfolio, valued in excess of £8 billion, includes more than800,000 sq m of office space in Central London and substantial retail holdingsin Oxford Street, Tottenham Court Road and Notting Hill Gate. In addition theLand Securities Group currently owns or has an interest in 21 shopping centresand 24 retail parks located across the UK. For the year ended 31 March 2004, Land Securities reported gross property incomeof £1,481 million, operating profit of £566 million and adjusted earnings pershare of 48 pence. As at 30 September 2004, shareholders' funds (includingnon-equity interests) were £6,577 million and adjusted diluted net assets pershare were 1443 pence. The Offeror, a wholly owned subsidiary of Land Securities incorporated in theUK, has been formed for the purposes of making the Offer. To date, the Offerorhas engaged in no activities other than those incidental to its organisation andthe making of the Offer. 9. Information on Tops Estates Tops Estates is a specialist investor in town and city centre shopping centres.Tops Estates' property portfolio comprises shopping centres with a total grossarea of approximately 230,000 sq. m. in seven locations: Corby (Town Centre andOasis Retail Park), Harrogate (Victoria Shopping Centre), Leeds (Shopping Plazaand City Exchange Offices), Liverpool (Clayton Square Shopping Centre), London(West 12 Shopping and Leisure Centre at Shepherds Bush), Stafford (GuildhallShopping Centre and Gaolgate Place Shopping Centre) and Worcester (CathedralPlaza). For the year ended 31 March 2004, Tops Estates reported rental income of £29.6million, operating profit of £25.3 million and diluted adjusted earnings pershare of 15.95 pence. Shareholders' funds were £250.9 million and adjusteddiluted net assets per share was 464 pence. As at 30 September 2004,shareholders' funds were £252.2 million and adjusted diluted net assets pershare was 471 pence. Tops Estates' property portfolio was independently valued as at 31 March 2005 at£566.7 million, based on current annual net rental income of £30.4 million andestimated annual net market rental value of £40.7 million. 10. Management and employees Land Securities has given the Board of Tops Estates assurances that the existingemployment rights, including pension rights, of the employees of Tops Estateswill be fully safeguarded upon the Offers becoming or being declaredunconditional in all respects. Everard Goodman will stand down as Chairman and, together with the otherdirectors of Tops Estates, will retire from the board of directors of TopsEstates upon the Offers becoming or being declared unconditional in allrespects. 11. Financing The Offers will be financed out of existing available facilities within the LandSecurities Group. 12. Compulsory acquisition, de-listing and cancellation of trading If the Offeror receives acceptances under the Share Offer in respect of, and/orotherwise acquires, 90 per cent. or more of the Shares, and assuming that all ofthe other conditions of the Share Offer have been satisfied or waived (ifcapable of being waived), the Offeror intends to exercise its rights pursuant tothe provisions of sections 428 to 430F of the Companies Act to acquirecompulsorily any remaining Shares on the same terms as the Share Offer. Assuming that the Offers become or are declared unconditional in all respects,the Offeror intends to procure that Tops Estates, to the extent it is able andentitled to do so, applies to the UKLA for cancellation of the listing of theShares on the Official List and to the London Stock Exchange for thecancellation of trading of the Shares on the London Stock Exchange's market forlisted securities. Cancellation of the listing and admission to trading of theShares would significantly reduce the liquidity and marketability of any Sharesnot assented to the Offeror under the Share Offer. 13. Inducement fee Land Securities and the Offeror have entered into an agreement under which TopsEstates has agreed to pay an inducement fee of approximately £3.1 million to theOfferor in the event that: (A) the Tops Estates Directors withdraw or adversely modify theirrecommendation of one or both of the Offers and thereafter one or both of theOffers lapses or is withdrawn; or (B) an announcement is made (i) by a third party, which is not acting inconcert with Offeror, of an intention to make an offer (whether or not subjectto pre-conditions) for the Shares and/or the outstanding CULS, pursuant to Rule2.5 of the Code or (ii) of any other proposal by Tops Estates or toShareholders, which involves, in any such case, a change of control of TopsEstates (other than the acquisition of control by the Offeror and/or a personacting in concert with the Offeror) or which involves the disposal of a materialpart of the business of Tops Estates, and the transaction referred to in suchannouncement, or any other transaction announced after the Offers have beenformally announced, subsequently becomes or is declared unconditional in allrespects or is otherwise completed. 14. Disclosure of interests in Tops Estates Save as disclosed in paragraph 5 above and save for four Shares held by VegaPlace Limited, a subsidiary of Land Securities, neither the Offeror nor any ofthe directors of the Offeror nor, so far as the Offeror is aware, any personacting in concert with the Offeror, owns or controls any Shares or anysecurities convertible or exchangeable into Shares or any rights to subscribefor or purchase the same, or holds any options (included traded options) inrespect of, or has any option to acquire, any Shares or has entered into anyderivatives referenced to Shares ("Relevant Tops Estates Securities") whichremains outstanding, nor does any such person have any arrangement in relationto Relevant Tops Estates Securities. For these purposes, "arrangement" includesany indemnity or option arrangement, any agreement or understanding, formal orinformal, of whatever nature, relating to Relevant Tops Estates Securities whichmay be an inducement to deal or refrain from dealing in such securities. 15. General The Offer Document, the Forms of Acceptance and any other ancillary documents(including the circulars for the extraordinary general meetings of Shareholdersand CULS Holders) will be posted to Shareholders and CULS Holders (other than,in the case of the Offer Document and the Forms of Acceptance, to persons withaddresses in Restricted Jurisdictions), as soon as practicable. The full termsand conditions of the Offers (including details of how the Offers may beaccepted) will be set out in the Offer Document and the Forms of Acceptance. Indeciding whether or not to accept the Offers in respect of their Shares andCULS, Shareholders and CULS Holders should rely on the information contained in,and follow the procedures described in, the Offer Document and the Forms ofAcceptance. The availability of the Share Offer and the CULS Offer to personsnot resident in the United Kingdom may be affected by the laws of the relevantjurisdiction in which they are located. Such persons should inform themselvesabout and observe any applicable requirements. Further details in relation toOverseas Shareholders and Overseas CULS Holders will be contained in the OfferDocument. The bases and sources of certain information contained in thisannouncement are set out in Appendix II. Appendix III contains definitions ofthe terms used in this announcement. 16. Recommendation The Tops Estates Directors, who have been so advised by Rothschild, consider theterms of the Offers to be fair and reasonable. In providing advice to the TopsEstates Directors, Rothschild has taken into account the commercial assessmentsof the Tops Estates Directors. Accordingly, the Tops Estates Directors intend unanimously to recommend thatShareholders and CULS Holders accept the Offers, as the Chairman of TopsEstates, persons affiliated with him and all of the other Tops Estates Directorshave irrevocably undertaken to do (or procure to be done) in respect of theirown beneficial holdings in aggregate of 21,980,347 Shares (which includes theChairman's Family Holding Companies' Shares and the T.O.P.S. Shares),representing approximately 47.8 per cent. of the issued share capital of TopsEstates and £2,553,183 nominal value of CULS (which includes the Chairman'sFamily Holding Companies' CULS), representing approximately 11.3 per cent. ofthe outstanding CULS. General Enquiries Land Securities Group PLC Francis Salway Tel: +44 (0) 20 7413 9000 Mark Collins Tel: +44 (0) 20 7413 9000 Emma Denne Tel: +44 (0) 20 7024 5460 www.landsecurities.com Citigroup Global Markets Limited (Financial Adviser to Land Securities and theOfferor) David Wormsley Tel: +44 (0)20 7986 6000 Ian Hart Tel: +44 (0)20 7986 6000 Nicholas Tinworth Tel: +44 (0)20 7986 6000 JPMorgan Cazenove Limited (Corporate Broker to Land Securities and the Offeror) Richard Cotton Tel: +44 (0)20 7588 2828 Roger Clarke Tel: +44 (0)20 7588 2828 UBS Limited (Joint Corporate Broker to Land Securities and the Offeror) James Geary Tel: +44 (0)20 7568 2308 Financial Dynamics (Public Relations Adviser to Land Securities and the Offeror) Stephanie Highett Tel: +44 (0) 20 7831 3113 Dido Laurimore Tel: +44 (0) 20 7831 3113 Tops Estates PLC Everard Goodman Tel: +44 (0) 20 7355 3000 Adam Cohen Tel: +44 (0) 20 7355 3000 Rothschild (Financial Adviser to Tops Estates) Robert Leitao Tel: +44 (0)20 7280 5000 Kevin Ramsden Tel: +44 (0)20 7280 5000 Oriel Securities Limited (Corporate Broker to Tops Estates) Simon Bragg Tel: +44 (0) 20 7710 7600 Scott Richardson Brown Tel: +44 (0) 20 7710 7600 Citigroup, which is authorised and regulated by the Financial Services Authorityin the United Kingdom, is acting as financial adviser to Land Securities and theOfferor and no one else in connection with the Offers and will not beresponsible to anyone other than Land Securities and the Offeror for providingthe protections afforded to clients of Citigroup, nor for providing advice inrelation to the Offers. JPMorgan Cazenove, which is authorised and regulated by the Financial ServicesAuthority in the United Kingdom, is acting as corporate broker to LandSecurities and the Offeror and no one else in connection with the Offers andwill not be responsible to anyone other than Land Securities and the Offeror forproviding the protections afforded to clients of JPMorgan Cazenove, nor forproviding advice in relation to the Offers. UBS Limited, which is authorised and regulated by the Financial ServicesAuthority in the United Kingdom, is acting as joint corporate broker to LandSecurities and the Offeror and no one else in connection with the Offers andwill not be responsible to anyone other than Land Securities and the Offeror forproviding the protections afforded to clients of UBS Limited, nor for providingadvice in relation to the Offers. Rothschild, which is regulated by the Financial Services Authority for theconduct of designated investment business in the United Kingdom, is actingexclusively as financial adviser to Tops Estates and for no one else inconnection with the Offers and will not be responsible to anyone other than TopsEstates for providing the protections afforded to clients of Rothschild, nor forproviding advice in relation to the Offers. Oriel Securities Limited, which is authorised and regulated by the FinancialServices Authority in the United Kingdom, is acting as corporate broker to TopsEstates and no-one else in connection with the Offers and will not beresponsible to anyone other than Tops Estates for providing the protectionsafforded to clients of Oriel Securities Limited, nor for providing advice inrelation to the Offers. The availability of the Offers (including the Loan Note Alternative) to personswho are not resident in the United Kingdom may be affected by the laws of theirrelevant jurisdiction. Such persons should inform themselves of, and observe,any applicable legal or regulatory requirements. Further details in relation toOverseas Shareholders and Overseas CULS Holders will be contained in the OfferDocument. Unless otherwise determined by the Offeror, the Offers (including the Loan NoteAlternative) will not be made, directly or indirectly, in or into, or by use ofthe mails or any means or instrumentality (including, without limitation,facsimile transmission, telephone and internet) or interstate or foreigncommerce of, or any facilities of a national securities exchange of, anyRestricted Jurisdiction. The Offers (including the Loan Note Alternative) willnot be capable of acceptance from or within any Restricted Jurisdiction or byuse of any means, instrumentality or facilities. Accordingly, copies of thisannouncement are not being, and must not be, directly or indirectly, mailed orotherwise forwarded, distributed or sent in, into or from any RestrictedJurisdiction and persons receiving this announcement (including custodians,nominees and trustees) must not mail or otherwise distribute or send it in, intoor from such jurisdictions as doing so may invalidate any purported acceptanceof the Offers. Notwithstanding the foregoing, the Offeror will retain the rightto permit the Offers to be accepted and any sale of securities pursuant to theOffers to be completed if, in its sole discretion, it is satisfied that thetransaction in question can be undertaken in compliance with applicable law andregulation. The Loan Notes which may be issued pursuant to the Loan Note Alternative willnot be listed on any stock exchange and will not be registered or filed underany relevant laws of any Restricted Jurisdiction, and no prospectus or otherdocumentation which would otherwise be required to be prepared in respect of theLoan Notes pursuant to any relevant laws of a Restricted Jurisdiction has beenlodged with or registered by any securities commission or similar authority inany Restricted Jurisdiction. Accordingly, unless an exemption under relevantsecurities laws is available, the Loan Notes may not be offered, sold, re-soldor delivered, directly or indirectly, in, into or from any of the RestrictedJurisdictions, or to or for the account or benefit of any US person or residentof any of the Restricted Jurisdictions. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANOFFER TO SUBSCRIBE FOR OR BUY ANY SECURITY, NOR A SOLICITATION OF ANY VOTE ORAPPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFEROF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION INCONTRAVENTION OF APPLICABLE LAW. Any person who, alone or acting together with any other person(s) pursuant to anagreement or understanding (whether formal or informal) to acquire or controlsecurities of Tops Estates, owns or controls or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofTops Estates is generally required under the provisions of Rule 8 of the CityCode to notify a Regulatory Information Service as specified in the ListingRules and the Panel by no later than 12.00 noon (London time) on the businessday following the date of the transaction of every dealing in such securities(or in any option in respect of, or derivative referred to, any such securities)during the period to the date on which the Share Offer becomes or is declaredunconditional as to acceptances or lapses. Dealings by the Offeror or TopsEstates (or by their respective "associates", within the definition set out inthe City Code) in any class of securities of Tops Estates until the end of suchperiod must also be disclosed (save where omission of such associates from thisrequirement has been approved by the Panel). Please consult your financialadviser immediately if you believe this Rule may be applicable to you. Appendix I: Conditions to and certain further terms of the Offers The Offers, which will be made by Citigroup on behalf of the Offeror, willcomply with the rules and regulations of the UKLA, the London Stock Exchange andthe City Code. The Offers will be governed by English law and will be subject tothe jurisdiction of the English courts and to the terms and conditions set outbelow and to the further terms set out in the Offer Document. Part A: Conditions to the Offers 1. The Share Offer will be subject to the following conditions: 1.1 valid acceptances being received (and not, where permitted,withdrawn) by not later than 3.00 p.m. on the first closing date of the ShareOffer (or such later time(s) and/or date(s) as the Offeror may, with the consentRelated Shares:
Land Securities