TIDMLSR
RNS Number : 6416T
Local Shopping REIT (The) PLC
21 March 2019
The Thalassa Statement and Shareholder Update announcement
released today at 15:29 under RNS No 6356T has been amended.
Amendments are identified with an asterisk (*). The full amended
text is shown below.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY (IN WHOLE OR IN PART), IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
THAT JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A TAKEOVER
OFFER OR AN OFFER OF SECURITIES.
FOR IMMEDIATE RELEASE
The Local Shopping REIT plc (the "Company" or "LSR")
Thalassa Statement and Shareholder Update
21 March 2019
The board of The Local Shopping REIT plc (the "Board") notes the
statement issued by Thalassa Holdings Ltd ("Thalassa") on 19 March
2019 in response to the circular to shareholders issued by the
Board on 12 March 2019 (the "Circular").
In particular, the Board notes Thalassa's assertion that its
offer to LSR shareholders (the "Offer") represents a "deliverable
and certain exit" for LSR shareholders. The Board disputes this
assertion, as the majority of the consideration offered by Thalassa
is in Thalassa's ordinary shares. Accordingly, Thalassa's Offer
does not provide the full cash exit which LSR shareholders desire
and for which 99.98% of votes cast (other than Thalassa's) at the
Company's general meeting in December 2018 were voted in favour.
The Board remains committed to achieving this outcome, which is the
mandated investment policy of the Company.
The Board further notes that, whilst making much of its share
buy-back programme, Thalassa has given no guarantee that this will
provide an exit for LSR shareholders - or that, should it acquire
control of LSR, that it would have sufficient cash remaining to
enable it to do so.
Furthermore, the Board continues to believe that Thalassa's
ordinary shares, comprising the majority of the Offer, are
unacceptably risky, for the reasons set out in the Circular.
The Board considers that the content of Thalassa's statement is,
for the most part, wholly irrelevant to the simple decision before
LSR shareholders, which is whether it is in their best interests
to:
-- seek a full cash exit from LSR, at liquidation value; or
-- accept Thalassa's Offer, the majority of which is in Thalassa ordinary shares.
The Board continues strongly to advise LSR shareholders to seek
a full cash exit by ignoring Thalassa's Offer and voting in favour
of the resolution to be proposed at the general meeting of the
Company to be held on 5 April 2019, which authorises the Board to
take appropriate action to seek to liquidate LSR and make a full
cash return to LSR shareholders to achieve the mandated outcome of
the LSR investment policy, including petitioning the Court for the
winding-up of the Company.
LSR shareholders should note that the earliest date that
Thalassa could close its Offer as to acceptances (if it declared it
wholly unconditional as to acceptances on its first closing date of
27 March 2019) is 1.00 p.m. on 10 April 2019, after the general
meeting has taken place.
In considering their decision, the Board urges LSR shareholders
to consider carefully the contents of the Circular, including the
Board's reasons for considering Thalassa ordinary shares to be
unacceptably risky. In summary, these include the following:
-- Thalassa's past performance represents a less than compelling story due to:
o a poor record of investment returns;
o non-existent income returns;
o only one of its 7 investments has delivered a material
profit;
o a share price trading at a deep discount to NAV;
o the increase in its NAV per share has been driven by
fundraisings at significantly higher prices than Thalassa ordinary
shares currently trade at; and
o trading illiquidity (outside Thalassa's share buy-back
programme, about which there can be no guarantees)
-- without making further investments, Thalassa's future relies
on a pre-revenue technology subsidiary and an unfocused investment
strategy;
-- Thalassa's corporate governance falls short of UK guidelines;
-- Thalassa's Standard Listing offers fewer protections than
LSR's Premium Listing and its BVI incorporation offers fewer
shareholder protections than those available to shareholders under
English Law; and
-- by Thalassa's own admission, there can be no guarantee that
it will be able to maintain its Standard Listing if its Offer is
successful, which could mean that the Thalassa ordinary shares are
not capable of being traded on any exchange or market for quoted
for listed securities.
The Board recognises the desire of LSR shareholders for further
guidance in relation to the current value and the value they could
reasonably expect to achieve from the Company's liquidation in
order to inform their decision in relation to the Offer.
The most recent published net asset value of the Company was
contained in the Company's audited accounts for 30 September 2018,
published on 10 December 2018. Those accounts were prepared on a
liquidation basis. An updated net asset value figure would require
a revaluation of the Company's remaining property portfolio to RICS
standards by an independent valuer in accordance with Rule 29 of
the Takeover Code, which the Board considers is impracticable at
the present time.
The initial distribution which the Board believes shareholders
could by now have received if the Members' Voluntary Liquidation,
blocked by Thalassa, had gone ahead was GBP22 million, equating to
26.7p per share, with further distributions to follow.
The Company now has approximately GBP22.8 million in cash
reserves, equating to 27.6p per share.
We are awaiting completion of the sale of two properties on
which we have exchanged contracts, for gross proceeds of GBP0.4
million. Excluding these, the remaining portfolio comprises twelve
assets. Of these, terms have been agreed with prospective
purchasers for the sale of six properties. Of the remaining six
properties, we plan to hold back three properties in order to
maintain the Company's REIT tax status until the Company enters
into the liquidation process. The net rental income from these
three properties will assist in defraying the Company's operational
costs, including those associated with maintaining its listed
status, until its liquidation.
The costs incurred by the Company in connection with the
Thalassa Offer are estimated at between GBP435,000 and
GBP520,000.
The Board has received advice on the likely costs of a Court
application to wind up the Company and believes these to be
reasonable. The costs associated with the Company's liquidation are
already incorporated in the 30 September 2018 net asset value
figure, referred to above. Whilst ordering the winding-up of the
Company will be at the Court's discretion, the Board continues to
believe, on the basis of the advice it has received from a leading
QC, that the prospects for this are good.
The Circular can be found on the Company's website at:
http://www.localshoppingreit.co.uk/investor-relations/offer-for-the-company-by-thalassa-holdings-ltd
The Circular contains the notice of the general meeting to be
held on 5 April 2019 and a form of proxy can be found at the same
location.
*If LSR shareholders have any questions in relation to the
resolution to be proposed at the general meeting, or on the form of
proxy they should contact the LSR Shareholder Helpline on 0800 014
8163 from within the UK or +44 (0)207 920 9700 from outside the
UK.* The LSR Shareholder Helpline is available between 9.00 a.m.
and 5.30 p.m. (London time) Monday to Friday (except English and
Welsh public holidays). Calls to the LSR Shareholder Helpline from
outside the UK will be charged at applicable international rates.
Different charges may apply to calls from mobile telephones and
calls may be recorded and randomly monitored for security and
training purposes. The LSR Shareholder helpline cannot provide any
financial, legal or tax advice and calls may be recorded and
monitored for security and training purposes.
S
Enquiries:
The Local Shopping REIT plc
William A Heaney
Company Secretary
020 7355 8800
BDO LLP (Independent Rule 3 Adviser to the Company)
John Stephan
Susan Jarram
020 7486 5888
Tavistock (Financial PR)
Jeremy Carey
Simon Hudson
020 7920 3150
Important Notices
BDO LLP ("BDO"), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively as financial adviser to the Company and no one else in
connection with the Offer and will not be responsible to anyone
other than the Company for providing the protections afforded to
clients of BDO or for providing advice in connection with the Offer
or any other matter referred to in this announcement.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or solicitation of any offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities or the solicitation of any vote or
approval in any jurisdiction. Any offer (if made) will be made
solely by certain offer documentation which will contain the full
terms and conditions of any offer (if made), including details of
how such offer may be accepted. This announcement has been prepared
in accordance with English law and the Code and information
disclosed may not be the same as that which would have been
prepared in accordance with laws outside the United Kingdom. The
release, distribution or publication of this announcement in
jurisdictions outside the United Kingdom may be restricted by the
laws of the relevant jurisdictions and therefore persons into whose
possession this announcement comes should inform themselves about,
and observe, any such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website
A copy of this announcement will, subject to certain
restrictions relating to persons resident in restricted
jurisdictions, be available on the Company's website at
www.localshoppingreit.co.uk by no later than 12 noon on the
Business Day following the date of this announcement. For the
avoidance of doubt, the content of the website referred to above is
not incorporated into and does not form part of this
announcement.
Forward-looking statements
This announcement contains statements that are or may be
forward-looking with respect to the financial condition, results of
operations and businesses and achievements of the Company. These
statements can be identified by the use of forward-looking
terminology such as "believe", "anticipate", "expect", "prospect",
"estimated", "should", "may" or the negative thereof, or other
variations thereof, or comparable terminology indicating
expectations or beliefs concerning future events. These
forward-looking statements include risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. There are a number of factors which could or may
cause actual results, achievements or developments to differ
materially from those expressed or implied by such forward-looking
statements. The Company assumes no obligation to update or correct
the information contained in this announcement, whether as a result
of new information, future events or otherwise, except to the
extent required by law or regulation. The statements contained in
this announcement are made as at the date of this announcement,
unless some other time is specified in relation to them, and
publication of this announcement shall not give rise to any
implication that there has been no change in the facts set out in
this announcement since such date. Unless expressly stated to the
contrary in this announcement, no statement in this announcement is
intended as a profit forecast or estimate for any period and no
statement in this document should be interpreted to mean that
earnings for the Company or earnings per LSR share, as appropriate,
for the current or further financial years would necessarily match
or exceed the historical published earnings for the Company or
earnings per LSR share.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCPGUCPWUPBGQG
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March 21, 2019 12:27 ET (16:27 GMT)
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