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Open Offer

26th Mar 2010 07:00

RNS Number : 2394J
Public Service Properties Inv Ltd
26 March 2010
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE BELOW.

THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT, IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION AND THE SECURITIES DESCRIBED HEREIN WILL BE SOLD IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.

 

Public Service Properties Investments Limited

("PSPI", "the Group" or "the Company")

 

Open Offer to raise £25 million

 

The Board of Public Service Properties Investments Limited, the specialist real estate investment company, today announces an 8 for 15 Open Offer to raise gross proceeds of £25 million, by the issue of 35,631,326 Open Offer Shares at a price of 70 pence per Open Offer Share.

 

Highlights

 

·; 8 for 15 Open Offer of 35,631,326 Open Offer Shares at a price of 70 pence per Open Offer Share, representing a 6.7 per cent. discount to the closing middle market price of 75 pence per Ordinary Share on 25 March 2010 (being the last dealing day prior to this announcement) with a record date of 5.00 p.m. on 25 March 2010.

 

·; The net proceeds of the Open Offer of £24 million are intended to be used primarily to fund a capital expenditure programme to enable increased bed capacity in the UK investment property portfolio by building extensions, re-configuring and, in some cases, refurbishing existing properties. The Group expects the benefits of this capital expenditure programme to be:

 

·; annual rental income is expected to increase to produce an average yield of approximately 8 per cent. per annum of the gross capital expenditure;

 

·; fair value gains for the Group are expected as a result of the increase in rental income. Such gains should improve the loan to value cover for certain of the Group's facilities; and

 

·; on completion of the capital expenditure programme, it may be possible for the Group to increase its level of debt, which would permit further investments by the Company to generate incremental earnings.

 

·; Certain major Qualifying Holders have committed to take up all or part of their Basic Entitlements under the Open Offer and (where applicable) to apply for such number of Excess Shares (whereby Qualifying Shareholders are eligible to apply for up to a further two and a half times their Basic Entitlement) in aggregate as would ensure that the Open Offer will, subject to it becoming unconditional, be fully subscribed whether or not applications for Open Offer Shares are made by any other Shareholders.

 

·; A second interim cash dividend of 4.5 pence per share for the year ended 31 December 2009 will be payable on 10 May 2009 to Shareholders on the register on 9 April 2009. The payment of the second interim dividend is conditional on the completion of the Open Offer. The Open Offer Shares will not rank for the second interim cash dividend.

 

·; In conjunction with the Open Offer, the Company and the Asset Manager have agreed to amend the Asset Management Agreement so that the interests of the Company and the Asset Manager are more closely aligned in light of current market conditions.

 

·; The Group has secured an 18 million senior debt facility with CorealCredit Bank AG on a fixed rate, repayable in March 2013.

 

The Company will shortly publish a Prospectus in relation to the Open Offer and a further announcement will be made in due course.

 

Patrick Hall, Chairman of the Company, commented:

 

"Despite the challenges posed by the global economic crisis over the past 24 months, the Group's focus on care home property assets has resulted in less valuation volatility than other sectors in the wider commercial property market. However, the Group's ability to generate returns through acquisitions has been limited due to the lack of availability of debt finance on attractive terms.

 

Instead, we have identified an attractive opportunity to accelerate our capital expenditure programme which will allow us to create further value for PSPI's shareholders."

 

 

26 March 2010

 

 

Enquiries:

 

RP&C International (Asset Manager) Tel: 020 7766 7000Dr D Srinivas / Ralph Beney

 

Evolution Securities Limited Tel: 020 7071 4300

(Nominated Adviser, Financial Adviser and Broker)

Jeremy Ellis / Chris Clarke (Corporate Finance)

Chris Sim / Adam Strachan (Corporate Broking)

 

Tavistock Communications

Simon Hudson / Gemma Bradley Tel: 020 7920 3150

 

Disclaimer

 

This announcement has been issued by Public Service Properties Investments Limited (the "Company") in connection with an Open Offer by the Company. This announcement is not a prospectus or any other kind of financial promotion. This announcement is a summary only and should be used solely for information purposes. This announcement does not constitute or form part of, and should not be construed as, an offer, invitation or inducement to purchase or subscribe for any securities in the Company nor shall it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This announcement does not take into account any recipient's individual objectives, financial situation or needs and all recipients are expressly warned of the requirement to carry out their own due diligence into the Company and this investment opportunity. Recipients should form their own assessment and take independent professional advice on the merits of investment and the legal, regulatory, tax and investment consequences and risks of doing so. Any decision to purchase securities in any proposed offering should be made solely on the basis of publicly available information and the offering documentation.

 

While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forecasts, opinions and expectations contained herein are fair and reasonable, in each case at the date stated in this announcement, the Company has not verified the contents hereof and, accordingly, the Company nor any of its directors, officers or employees, shall be in any way responsible for the contents hereof, and no reliance should be placed on the accuracy, fairness or completeness of the information contained in this announcement. No person (including the Company and its directors, employees, shareholders, officers, agents or professional advisers) accepts any liability whatsoever for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. Past performance information contained in this announcement is not an indication of future performance. Any projections, opinions, forecasts, estimates or projected returns herein constitute a judgement as at the date of this announcement and there can be no assurance that future results or events will be consistent with any such projections, opinions, forecasts, estimates or projected returns. Receipt of this announcement does not imply or create any duty or other obligation on the Company to inform recipients as to any amendments, changes or other modifications relating to matters contained in the announcement.

 

Other than in accordance with its legal or regulatory obligations (including under the Prospectus Rules and/or AIM Rules) and as required by the FSA or the London Stock Exchange, the Company does not undertake any obligation to update or revise publicly any forward looking statement, whether as a result of new information, future events or otherwise.

 

No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of PSPI for the current or future financial years would necessarily match or exceed the historical published earnings per share of PSPI.

 

Important notice

 

THIS ANNOUNCEMENT IS AN ADVERTISEMENT. IT IS NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN THE PROSPECTUS WHICH IS TO BE PUBLISHED IN DUE COURSE. THE PROSPECTUS, WHEN PUBLISHED, WILL BE MADE AVAILABLE ON PSPI'S WEBSITE AND WILL BE AVAILABLE FOR INSPECTION AT THE UK LISTING AUTHORITY'S DOCUMENT VIEWING FACILITY.

 

Neither the content of PSPI's website nor any website accessible by hyperlinks on PSPI's website is incorporated in, or forms part of, this announcement.

 

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire any New Shares to any person in Australia, Canada, Japan or the United States or any Excluded Territory or in any jurisdiction to whom or in which such offer or solicitation is unlawful, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the Open Offer or otherwise.

 

The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the United States, Australia, Canada or Japan or any Excluded Territory. The securities referred to herein may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act") or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or any Excluded Territory or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan or any Excluded Territory. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan or any Excluded Territory. There will be no public offer of the securities in the United States.

 

The offering of the Open Offer Shares pursuant to the Open Offer does not require the Company to hold a licence for collective investment schemes granted by the AFM (Autoriteit Financiële Markten) and the Company does not fall under the supervision of collective investment schemes as enacted by the Dutch Act on the Financial Supervision (Wet op het financieel toezicht).

 

The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

 

The availability of the Open Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

 

Any person receiving this announcement is advised to exercise caution in relation to the Open Offer. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

 

This summary should be read in conjunction with the full text of the announcement.

 

1. Introduction

 

Your Board has today announced an Open Offer to raise approximately £25 million (before expenses) by the issue of 35,631,326 Open Offer Shares (representing approximately 53.3 per cent. of the existing issued share capital of the Company) at the Issue Price of 70 pence per Open Offer Share.

 

The Issue Price of 70 pence per Open Offer Share represents a discount of approximately 6.7 per cent. to the Closing Price of 75 pence per Ordinary Share on 25 March 2010 (being the last dealing day prior to announcement of the Open Offer).

 

Certain major Qualifying Holders have, pursuant to the Irrevocable Undertakings, committed to take up all or part of their Basic Entitlements under the Open Offer and (where applicable) to apply for such number of Excess Shares in aggregate as would ensure that the Open Offer will, subject to it becoming unconditional, be fully subscribed whether or not applications for Open Offer Shares are made by any other Shareholders.

 

Further details of the Open Offer and how Qualifying Holders can apply for Open Offer Shares are set out in Part VIII of the Prospectus ("Terms and Conditions of the Open Offer") and, where relevant, in the Application Form.

 

2. Background to and Reasons for the Open Offer

 

Despite the challenges posed by the global economic crisis over the past 24 months, the Group's focus on care home property assets has resulted in less valuation volatility than other sectors in the wider commercial property market. However, the Group's ability to generate returns through acquisitions has been limited due to the lack of availability of debt finance on attractive terms. The Group's loan to value ratio as at 30 June 2009 was 54 per cent. which is significantly lower than the level contemplated in the annual report and accounts for the year ended 31 December 2008, being up to 70 per cent.

 

As a result of the lack of availability of debt finance for acquisitions, the Group has adopted a strategy of using its existing resources to invest in the development of additional bed capacity at its UK care homes, by funding the construction and development of extensions and the redevelopment of existing facilities. The capital expenditure is funded by the Group and the level of rental income is typically proportionately increased to reflect the amount spent. Such investment is considered by the Board to be particularly attractive because it should result in an improvement in the physical environment of the affected care homes which will assist operators in maintaining or improving occupancy rates. Since May 2008, the Group has undertaken four such developments in the UK which have resulted, and are expected to continue to result in increased rental income which is expected to provide an average yield of approximately 8 per cent. per annum on the gross capital expenditure. They are also expected to result in fair value gains for the Group.

 

3. Capital Expenditure Programme

 

The Group has identified a significant pipeline of investment projects for the expansion and development of existing properties and believes that there exists an attractive opportunity to accelerate its capital expenditure programme, particularly in the UK, which, in the near term absence of the availability of debt finance on attractive terms, can most effectively be financed by new equity capital. These investment projects are in the UK and would involve aggregate capital expenditure of approximately £20 million before any capitalised costs. The investment projects include:

 

·; Hawkesgarth Lodge, Whitby where the investment proposal is to build an extension to create a 57 bed long term care home with all rooms having ensuite facilities, at a development cost of approximately £2.0 million (including VAT);

 

·; Meadow View, Gateshead where the investment proposal is to build an extension to create a 29 bed long term care home, with all rooms having ensuite facilities, at a development cost of approximately £1.2 million (including VAT); and

 

·; Pavillion Lodge, Houghton le Spring where the investment proposal is to build an extension to create a 70 bed long term care home, with all rooms having ensuite facilities, at a development cost of approximately £2.4 million (including VAT).

 

The Group has also targeted several other properties for expansion and/or refurbishment which it intends to progress once the above projects are at an advanced stage of completion. Estimated expenditures on these additional projects total approximately £14 million before any capitalised costs. The Group will review the rest of the UK investment portfolio for additional opportunities to increase bed capacity once these targeted projects have been completed.

 

The Group expects the benefits of this capital expenditure programme to be as follows:

 

·; annual rental income is expected to increase to produce an average yield of approximately 8 per cent. per annum of the gross capital expenditure;

 

·; fair value gains for the Group are expected as a result of the increase in rental income. Such gains should improve the loan to value cover for certain of the Group's facilities; and

 

·; on completion of the capital expenditure programme, it may be possible for the Group to increase its level of debt, which would permit further investments by the Company to generate incremental earnings.

 

4. Use of Proceeds

 

It is currently expected that the net proceeds of the Open Offer of £24 million will be applied as follows:

 

·; £4 million to part repay the Group's borrowings that fall due within the next 12 months, together with amounts available to be drawn down under the Group's debt facilities. Up to an additional £3.2 million of proceeds from the Open Offer may be required to repay such borrowings if the Group's other cash resources at the time are lower than expected. If the Group is able to refinance such borrowings, these proceeds will instead be used to increase cash balances which have been depleted through investment in existing capital expenditure projects during the last eighteen months at properties located in South Yorkshire and near Durham; and

 

·; Up to £20 million to fund the capital expenditure programme referred to above, primarily to enable increased bed capacity in the UK investment property portfolio by building extensions, re-configuring existing properties and, in some cases, refurbishing existing properties where a larger capital expenditure project is planned.

 

5. Changes to the Asset Management Agreement

 

In conjunction with the Open Offer, the Company and the Asset Manager have agreed to amend the Asset Management Agreement so that the interests of the Company and the Asset Manager are more closely aligned in light of current market conditions. These amendments will take effect on the closing of the Open Offer. Under the revised agreement, the annual asset management fee is to be reduced from 2 per cent. of the consolidated net asset value (less 1 per cent. of cash) to 1.5 per cent. of the consolidated net asset value (less 1 per cent. of cash). The performance fee formula is also to be amended so that the quantum reduces from 20 per cent. to 15 per cent. of share price outperformance over a 10 per cent. hurdle rate for each relevant period but the minimum share price by reference to which a performance fee is payable is reduced from £1.65 to £1.10. The performance fee, if paid in Shares, has been capped at 3 per cent. of the average number of Shares in issue during the relevant period. One third of any performance fee is payable immediately and two thirds vests in two equal amounts at the end of the following two performance fee calculation periods, subject to (a) the share price at the time of vesting remaining above the share price by reference to which the performance fee became payable, and (b) the agreement not having been terminated for cause. In addition, the notice period for termination of the agreement without cause will reduce from 3 years to 2 years.

 

The amendments to the Asset Management Agreement constitute a related party transaction under Rule 13 of the AIM Rules for Companies. The Directors, having consulted with the Company's Nominated Adviser, Evolution Securities Limited, consider that the terms of the transaction are fair and reasonable insofar as Shareholders are concerned.

 

6. Principal Terms of the Open Offer

 

The Board is keen that all Qualifying Holders are offered the opportunity to participate in the issue of the new equity and has therefore decided to implement the fundraising by way of the Open Offer.

 

The Issue Price of 70 pence per Open Offer Share represents a 6.7 per cent. discount to the closing middle market price of 75 pence per Existing Ordinary Share on 25 March 2010, the last business day before the announcement of the Open Offer.

 

The Open Offer is being made to (i) Qualifying Shareholders, being eligible holders of Existing Ordinary Shares as set out on the register of members of the Company on the Record Date, and (ii) Qualifying DI Holders, being eligible holders of Depositary Interests representing Existing Ordinary Shares as set out on the register of Depositary Interest holders of the Depositary on the Record Date. If you are a Qualifying Shareholder, the procedure for participating in the Open Offer is set out in paragraph 2.1 of Part VIII of the Prospectus. If you are a Qualifying DI Holder, the procedure for participating in the Open Offer is set out in paragraph 2.2 of Part VIII of the Prospectus.

 

Qualifying Holders are invited to apply to subscribe for Open Offer Shares, subject to the terms and conditions in Part VIII of the Prospectus, at a price of 70 pence per share (payable in full on application and free of all expenses), in respect of their Basic Entitlements on the following basis:

 

8 Open Offer Shares for every 15 Existing Ordinary Shares

 

registered in the names of Qualifying Shareholders or in respect of which Qualifying DI Holders are registered in the DI register at the Record Date.

 

Basic Entitlements of Qualifying Holders will be rounded down to the nearest whole number of Open Offer Shares. Fractions representing Open Offer Shares which would otherwise have arisen will not be allotted to Qualifying Shareholders and Qualifying DI Holders, but will be aggregated and subscribed pursuant to the Excess Application Facility. Accordingly, Qualifying Shareholders and Qualifying DI Holders holding fewer than 15 Existing Ordinary Shares or DIs will have no entitlement to subscribe under the Open Offer.

 

Qualifying Shareholders, other than those with registered addresses, subject to certain exceptions, in the United States and the Excluded Territories will have received an Application Form with the Prospectus which sets out the Basic Entitlement of Existing Shares for which they can apply. Qualifying DI Holders, other than those with registered addresses, subject to certain exceptions, in the United States and the Excluded Territories (none of whom will receive an Application Form) will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements and Excess CREST Open Offer Entitlements as soon as possible after 8.00 a.m. on 29 March 2010. Applications by Qualifying Holders will be satisfied in full up to the amount of their individual Basic Entitlements.

 

In addition to any application for Excess Shares as described below, Qualifying Holders may apply for any number of Open Offer Shares up to their Basic Entitlement which, in the case of Qualifying Shareholders, is equal to the number of Open Offer Entitlements as shown in Box B on their Application Form or, in the case of Qualifying DI Holders, is equal to the number of Open Offer Entitlements standing to the credit of their stock account in CREST. Holdings of Existing Ordinary Shares and holdings of Ordinary Shares represented by Depositary Interests will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer.

 

Qualifying Shareholders are also entitled, pursuant to the terms of the Open Offer and provided they take up their Open Offer Entitlements in full, to apply for Excess Shares through the Excess Application Facility, up to a maximum number of Excess Shares equal to two and a half times their respective Basic Entitlements as at the Record Date, subject to availability. Qualifying Shareholders who wish to apply to acquire more than their Basic Entitlement should complete the relevant sections on the Application Form. Qualifying Shareholders should refer to paragraph 2.1.3 of Part VIII of the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility. The Company may, in its absolute discretion, treat as invalid any applications for Excess Shares not made in accordance with the terms and conditions of the Open Offer. Applications for Excess Shares which are not validly made will be disregarded. If valid applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take up of Basic Entitlements, such applications will be scaled back pro rata to the number of Excess Shares applied for by Qualifying Holders under the Excess Application Facility.

 

Further information on the terms and conditions of the Open Offer is set out in Part VIII of the Prospectus.

 

7. Impact of the Open Offer

 

The Open Offer will result in 35,631,326 new Ordinary Shares being issued (equivalent to approximately 53.3 per cent. of the existing issued share capital and which will represent approximately 34.8 per cent. of the Enlarged Ordinary Share Capital).

 

A pro forma statement of net assets of the Company illustrating the effect of the Open Offer on the Company's unaudited net assets as at 30 June 2009, as if it had been undertaken at that date, is set out in Part XII of the Prospectus. This information is unaudited and has been prepared for illustrative purposes only. Adjusting for the receipt of the net proceeds of the Open Offer of approximately £24 million, the pro forma net assets of the Company as at 30 June 2009 would have been approximately £126 million with pro forma net debt of approximately £120 million.

 

8. Current Trading and Prospects

 

The Company continues to perform in line with the Board's expectations, maintaining a fully-let investment property portfolio, primarily let on long term leases to a variety of tenants in multiple jurisdictions.

 

Between 30 June 2009 and 31 December 2009 the value of the investment properties in constant currency has shown a decrease of 0.5 per cent., which, taken with the valuation movements reported in the first half of the year, reflects an overall reduction of 0.9 per cent. in constant currency for the full year ended 31 December 2009.

 

The UK investment property portfolio, which represented 68 per cent. of the Group's total investment property portfolio at 31 December 2009, increased in value by £5.9 million during 2009. The increase primarily reflected the addition of £6.8 million of value attributable to the expanded facilities at two of the Group's properties in South Yorkshire where a major refurbishment was completed with bed capacity increasing by more than 50 per cent. The valuation of these properties at 31 December 2009 reflects a fair value gain of 33 per cent. over the cost of the gross capital expenditure of the project, following an increase in annual rent equivalent to 8 per cent. of that expenditure. The value of the balance of the UK investment property portfolio declined by 0.6 per cent. during the course of 2009, although rental income increased across the entire portfolio by the 1.5 per cent. minimum provided in the leases, despite negative RPI inflation during most of 2009. The average capitalisation rate for the UK investment portfolio was unchanged at 6.32 per cent. The Company plans to extend its capital expenditure programme to increase bed capacity at a number of other properties in its UK investment property portfolio in the short to medium term.

 

The value of the Group's German investment property portfolio, which represented 20 per cent. of the total portfolio value at 31 December 2009, declined by 2.2 per cent. in constant currency during the course of the year. The average capitalisation rate for the German portfolio was 6.75 per cent.

 

The US and Swiss property portfolios, each representing 6 per cent. of the total investment property portfolio at 31 December 2009 declined in value by 2.1 per cent. and 6.9 per cent. respectively in constant currency during the year.

 

As a result of the challenging conditions in the credit markets, there has been a scarcity of new senior debt on acceptable terms available to companies such as the Company. Notwithstanding this fact, the Company successfully raised €8 million in five year senior debt during 2009.

 

On 19 March 2010, two members of the Group entered into senior debt facilities with CorealCredit Bank AG under which the Group may borrow €18 million (approximately £16.2 million) secured against six investment properties located in Germany, which are all leased to the Marseille Kliniken Group. The investment properties were originally acquired at the end of June 2008. The facilities are repayable on 31 March 2013 and will bear fixed interest payable monthly in arrears at a spread of 1.9 per cent. per annum over the three year euro swap fixed at drawdown, with principal amortisation at the rate of 1.5 per cent. per annum of the original principal amount. The Group must maintain a cash maintenance reserve of €0.5 million throughout the duration of the loan and the Company will provide an additional guarantee of €1.5 million. Under the terms of the facilities, the Group must maintain an minimum interest cover ratio of 175 per cent., a minimum debt service ratio of 150 per cent. and a maximum loan to value ratio of 62.5 per cent. Based on the bank's own internal valuation, the loan will represent 56 per cent. of the mortgage value at drawdown. The Group has agreed a one off fee of €270,000, payable to the lender in respect of the facilities.

 

9. Overseas Shareholders

 

The Open Offer is not being made to Qualifying Shareholders or Qualifying DI Holders in any of the Excluded Territories (subject to certain exclusions set out in the Prospectus). The attention of Overseas Shareholders is drawn to the information which appears in paragraph 6 of Part VIII of the Prospectus.

 

The Prospectus has been sent to all Qualifying Shareholders on the register of members of the Company on the Record Date and to all Depositary Interest Holders on the register of Depositary Interest Holders of the Depositary on the Record Date. However, the Prospectus does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States or any other jurisdiction in which it may be unlawful to do so.

 

10. Taxation

 

Information regarding taxation in the UK in relation to the Ordinary Shares is set out in paragraph 16 of Part XIV of the Prospectus. Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult their appropriate professional adviser as soon as possible.

 

11. Irrevocable Undertakings and Relationship Agreement

 

Pursuant to the Irrevocable Undertakings, certain major Qualifying Holders have, committed (i) not to dispose of their Shares, or acquire additional Shares other than pursuant to the Open Offer, until after the issue of the Open Offer Shares and (ii) to take up all or part of their Basic Entitlements under the Open Offer and (where applicable) to apply for Excess Shares. The Open Offer Shares which they have committed to apply for subject, in the case of excess applications, to scaling back amount in aggregate to all the Open Offer Shares so that, subject to the Open Offer becoming unconditional, it will be fully subscribed whether or not applications for Open Offer Shares are made by any other Qualifying Holders. As a result of Elliott's current shareholding in the Company and commitment to take up their Basic Entitlement under the Open Offer and to apply for Excess Shares, Elliott's holding following implementation of the Open Offer is likely to increase to above 30 per cent. The Board have agreed not to exercise their rights under the Articles to suspend the voting rights attributable to Elliott's Shares which could arise as a result of this increase in Elliott's holding. However, given this anticipated increase in shareholding, the Company and Elliott have entered into the Relationship Agreement which addresses potential resultant conflicts of interest and seeks to ensure that the Company will be capable of operating independently of Elliott.

 

12. Dividends and dividend policy

 

On 29 September 2009, the Board announced an interim cash dividend of 2 pence per Share in respect of the year ended 31 December 2009, which was paid on 13 November 2009. The Board also announces a second interim cash dividend of 4.5 pence per Share for the year ended 31 December 2009. The second interim cash dividend will be paid on 10 May 2010 to Shareholders on the register on 9 April 2010 conditional on the completion of the Open Offer. The New Shares will rank pari passu in all respects with the Existing Ordinary Shares, save that they will not participate in the second interim cash dividend referred to above. The Board has decided in order to accelerate the timing of cashflow to Shareholders to pay interim rather than final dividends at the present time.

 

The Directors expect that, in the absence of any unforeseen circumstances, the Company will pay a dividend in respect of the year ending 31 December 2010, which will represent a yield of 10 per cent. on the Issue Price.* Subject to market conditions, the Directors intend to implement a progressive dividend thereafter. The Directors believe that the Group's existing portfolio provides a solid base for such a dividend policy.

 

* This forecast relates to dividends only and is not a profit forecast.

 

 

APPENDIX

 

Expected Timetable of Principal Events

 

Record Date for entitlement under the Open Offer

5.00 p.m. on Thursday 25 March

 

Ex-entitlement date for the Open Offer

8.00 a.m. on Friday 26 March

 

Announcement of the Open Offer and the second interim dividend for the year ended 31 December 2009 (payment of which is conditional on completion of the Open Offer)

Friday 26 March

Basic Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying DI Holders into CREST

As soon as possible after 8.00 a.m. on Monday 29 March

 

Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements into CREST

4.30 p.m. on Thursday 1 April

 

Ex-dividend date for the second interim dividend for the year ended 31 December 2009

Wednesday 7 April

Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST

3.00 p.m. on Thursday 8 April

 

Record date for the second interim dividend for the year ended 31 December 2009

Friday 9 April

Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)

3.00 p.m. on Friday 9 April

 

Latest time and date for receipt of completed

Application Forms and payment in full under

the Open Offer or Settlement of relevant

CREST Instruction

11.00 a.m. on Tuesday 13 April

 

Admission and commencement of dealings in New Shares

8.00 a.m. on Wednesday 14 April

 

CREST members' accounts credited in respect of Depositary Interests representing New Shares

As soon as possible after 8.00 a.m. on Wednesday 14 April

 

Despatch of definitive share certificates for New Shares in certificated form

By Tuesday 20 April

 

Payment of second interim dividend for the year ended 31 December 2009

Monday 10 May

 

 

Notes:

 

(1) The times set out in the expected timetable of principal events above and mentioned throughout the Prospectus are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Evolution, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Holders.

 

(2) Subject to certain restrictions relating to certain Qualifying Holders with registered addresses, or who are resident, outside the UK. See Part VIII of the Prospectus.

 

If you have any queries on the procedure for application and payment then please call Computershare Shareholder helpline on 0870 707 1438 or, if telephoning from outside the UK, on +44 870 707 1438 between 9.00 a.m. and 5.00 p.m. Monday to Friday.

 

Calls to the Shareholder Helpline from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Computershare cannot provide advice on the merits of the Open Offer nor give any financial, legal or tax advice.

 

Definitions

 

The following definitions apply throughout this announcement, unless the context otherwise requires:

 

"Admission"

 

the admission of the Open Offer Shares to trading on AIM;

 

"AIM"

 

AIM, a market operated by the London Stock Exchange;

 

"AIM Rules for Companies"

 

the AIM Rules for companies published by the London Stock

Exchange (as amended or reissued from time to time);

 

"AIM Rules"

 

together the AIM Rules for Companies and AIM Rules for

Nominated Advisers;

 

"Application Form"

 

the application form accompanying this document on which

Qualifying Shareholders may apply for Open Offer Shares under the Open Offer (including under the Excess Application Facility);

 

"Articles"

 

the articles of association of the Company;

 

"Asset Manager"

 

RP&C International, Inc.;

 

"Asset Management Agreement"

 

the agreement dated 20 March 2007 between the Company and the Asset Manager, as amended;

 

"Basic Entitlement"

 

the pro rata entitlement of Qualifying Holders to subscribe for 8 Open Offer Shares for every 15 Existing Ordinary Shares in the case of Qualifying Shareholders, registered in their name, or in the case of Qualifying DI Holders, registered in the DI Register, in each case as at the Record Date;

 

"Board"

 

the board of directors of the Company;

 

"certificated" or in "certificated form"

 

a share or other security which is not held through CREST;

 

"Closing Price"

 

the closing, middle market quotation in pounds sterling of an

Ordinary Share, as published in the Daily Official List;

 

"Company"

 

Public Service Properties Investments Limited, a company

incorporated in the British Virgin Islands with registered number 430711;

 

"Computershare" or

"Receiving Agent"

 

Computershare Investor Services PLC;

 

"CREST"

 

the facilities and procedures for the time being of the relevant system of which Euroclear has been approved as the Operator pursuant to the CREST Regulations;

 

"CREST member"

 

a person who has been admitted by Euroclear UK as a system-member(as defined in the Euroclear Regulations);

 

"CREST Regulations"

 

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) as amended from time to time;

 

"Daily Official List"

 

the daily official list of the London Stock Exchange;

 

"Depositary"

 

Computershare;

 

"Depositary Interests" or "DIs"

 

the dematerialised Depositary Interests in respect of Ordinary Shares issued or to be issued by the Depositary;

 

"DI Holders"

 

holders of Depositary Interests in respect of Ordinary Shares of the Company;

 

"Director"

 

a member of the Board from time to time;

 

"Elliott"

 

Elliott International, L.P. and/or its affiliates;

 

"Enlarged Share Ordinary Capital"

 

the issued ordinary share capital of the Company following the issue of the Open Offer Shares pursuant to the Open Offer;

 

"Euroclear"

 

Euroclear UK & Ireland Limited;

 

"Euroclear Regulations"

 

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time;

 

"Excess Application Facility"

 

the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlements in accordance with the terms and conditions of the Open Offer;

 

"Excess CREST Open Offer Entitlements"

 

in respect of each Qualifying DI Holder, the entitlement (in addition to their Basic Entitlement) to apply for Open Offer Shares to be represented by Depositary Interests registered in the DI Register, pursuant to the Excess Application Facility;

 

"Excess Shares"

 

Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility;

 

"Excluded Territories"

 

the United States, Canada, Japan, Australia and the Republic of South Africa and any other jurisdiction where the extension or availability of the Open Offer (and/or any other transaction contemplated thereby) would breach any applicable law;

 

"ex-entitlement date"

 

the date upon which the Ordinary Shares are marked as ex-entitlement to the Open Offer by the London Stock Exchange;

 

"Existing Ordinary Shares"

 

the Ordinary Shares in issue as at the Record Date;

 

"Group"

 

the Company and its subsidiaries;

 

"Irrevocable Undertakings"

 

the irrevocable undertakings received from Elliott International L.P., The Liverpool Limited Partnership and USIGH Limited under which they have (inter alia) undertaken to take up all or part of their Basic Entitlements under the Open Offer and (where applicable) to apply for such number of Excess Shares in aggregate as would ensure that the Open Offer will be fully subscribed;

 

"Issue Price"

 

70 pence per Open Offer Share;

 

"London Stock Exchange"

 

London Stock Exchange plc;

 

"Marseille Kliniken"

 

Marseille Kliniken AG;

 

"New Shares" or "Open

Offer Shares"

 

the 35,631,326 new Ordinary Shares which the Company is proposing to allot and issue pursuant to the Open Offer;

"Open Offer"

 

the proposed issue of Open Offer Shares to all Qualifying Shareholders, on the terms and subject to the conditions set out in this document;

 

"Open Offer Entitlement"

 

an entitlement to apply to subscribe for one Open Offer Share, allocated to a Qualifying Holder pursuant to the Open Offer, further information on which is set out in Part VIII of the prospectus;

 

"Ordinary Shares"

 

ordinary shares of US$0.01 each in the capital of the Company;

 

"Overseas Shareholders"

 

holders of Ordinary Shares or, as the case may be, DI Holders, resident in, or citizens or nationals of, jurisdictions outside the United Kingdom;

 

"Prospectus"

 

the prospectus dated 26 March 2010, issued by the Company in respect of the Open Offer, together with any supplements or amendments thereto;

 

"Qualifying DI Holders"

 

holders of Depositary Interests representing Existing Ordinary Shares on the Record Date eligible to participate in the Open Offer;

 

"Qualifying Holders"

 

Qualifying DI Holders and Qualifying Shareholders;

 

"Qualifying Shareholders"

 

holders of Existing Ordinary Shares as set out in the register of members of the Company on the Record Date eligible to participate in the Open Offer;

 

"Relationship Agreement"

 

the conditional relationship agreement entered between the

Company and Elliott (as the Company's largest Shareholder)

addressing potential conflicts of interest given the proposed

substantial holding of Elliott in the Company following

implementation of the Open Offer and to seek to ensure that the Company will be capable of operating independently of Elliott;

 

"Shareholders"

 

shareholders of the Company, or as the context may permit, holders of DIs representing Ordinary Shares;

 

"stock account"

 

an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;

 

"UK Listing Authority" or

"UKLA"

 

the UK Listing Authority, being the FSA acting as the competent authority for the purposes of Part VI of the Financial Services and Market Act 2000;

 

"United Kingdom" or "UK"

 

the United Kingdom of Great Britain and Northern Ireland;

 

"United States" or "US"

 

United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;

 

"VAT"

 

value added tax.

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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