TIDMEPIC
RNS Number : 0176X
Ediston Property Inv Comp PLC
20 November 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN WHOLE OR IN PART, IN OR INTO OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA,
THE REPUBLIC OF SOUTH AFRICA AND JAPAN
This announcement is an advertisement and not
a prospectus. This announcement does not constitute
or form part of, and should not be construed
as, any offer for sale or subscription of, or
solicitation of any offer to buy or subscribe
for, any securities in Ediston Property Investment
Company PLC (the "Company") or securities in
any other entity, in any jurisdiction, including
the United States, 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, any contract or investment decision whatsoever,
in any jurisdiction. This announcement does
not constitute a recommendation regarding any
securities. Any investment decision must be
made exclusively on the basis of the final prospectus
published by the Company and any supplement
thereto.
20 November 2017
PUBLICATION OF PROSPECTUS AND CIRCULAR
The Proposals
Further to the announcements made by the Company
on 6 October 2017 and 15 November 2017, the
Board of Directors of the Company is pleased
to announce that the Prospectus and Circular
have been published in respect of the Open Offer,
Initial Placing, Offer for Subscription and
Intermediaries Offer (the "Share Issue") and
the Acquisition.
Proceeds of the Share Issue will be used, in
conjunction with cash from the Company's existing
cash resources, new debt facilities and the
issue of New Shares to the Stadium Group, to
fund the acquisition of the New Portfolio of
four high quality, well located UK retail warehouse
parks, with an aggregated value of approximately
GBP144 million (the "Acquisition").
The Acquisition is conditional, inter alia,
upon minimum proceeds of approximately GBP37
million being raised under the Share Issue,
Shareholders voting in favour of the Acquisition
and the issue of New Shares on a non pre-emptive
basis. The Proposals are expected to complete
on 8 December 2017.
The Board is proposing to issue up to 150 million
New Shares, pursuant to the Share Issue and
the Vendor Issue, at a Share Issue Price of
111.75 pence per New Share. The adjusted NAV
per Share as at 31 October 2017, used for pricing
the Share Issue, was 110.21 pence once the accrued
dividend for the month ending 31 October 2017
which is payable in November and the costs that
would be incurred if the Proposals did not complete
have been deducted.
Priority will be given to Existing Shareholders
who wish to participate through the Open Offer.
The entitlements of Existing Shareholders to
participate in the Open Offer will be calculated
on the basis of one New Share for every two
Ordinary Shares held on the Record Date.
The Stadium Group has agreed to subscribe for
a maximum of, in aggregate, GBP36.5 million
of New Shares pursuant to the Vendor Issue.
The Vendor Shares will be issued at the Share
Issue Price. As a result of the Vendor Issue,
the Vendors are expected to hold, in aggregate,
a significant shareholding in the Company and
have undertaken to retain their shareholding
for a period of not less than 12 months and
to have orderly marketing arrangements in place
for 12 months thereafter.
The Board is also putting in place a Placing
Programme for up to 60 million New Shares which,
if separately approved, will commence following
the completion of the Acquisition and Share
Issue and will be used to help finance further
property acquisition opportunities over the
next twelve months.
The Prospectus and Circular provide further
details of the Acquisition, the Vendor Issue,
the Share Issue and the subsequent 12 month
Placing Programme. The Circular will also provide
Shareholders with notice of the General Meeting
of the Company at which Shareholders will be
asked to consider and, if thought fit, pass
the Resolutions to approve the Acquisition and
issue of New Shares on a non pre-emptive basis
pursuant to the Proposals.
The Board and its advisers have consulted with
a significant proportion of Existing Shareholders
and a number of potential new investors on the
Proposals. The outcome of these discussions
continues to be positive, both in terms of support
for the Acquisition and the fundraising by the
Company. The Board considers the Proposals to
be an important next step in the development
of the Company and is encouraging support for
them.
Benefits of the Proposals
The Board believes that the Proposals offer
the following significant benefits for all Shareholders.
* The rental income generated from the New Portfolio is
accretive to the overall income per Share and should
therefore enhance the dividend cover over the medium
term from its already fully covered position.
* Over the past 18 months the Manager has looked at a
number of different opportunities all of which would
have been dependent on raising equity in advance with
the risk of income dilution before the capital was
invested. The proposed Acquisition significantly
reduces that risk.
* The Acquisition will increase the Group's exposure to
the retail warehouse sector which the Board and the
Manager consider offers attractive value relative to
other sectors within the property market.
* The Acquisition will further diversify the tenant
base and geographical exposure of the Property
Portfolio, with the new leases expected to reduce the
impact of the Group's exposure to its top ten tenants
from 62 per cent. to 46 per cent. of total rental
income.
* The Acquisition is expected to improve the quality of
income by increasing the weighted average unexpired
lease term in the Property Portfolio from 6.19 years
to 6.78 years.
* Existing Shareholders will benefit from lower
transaction costs through, inter alia, the
structuring of the costs attributable to the Share
Issue and the acquisition of the SPVs which currently
hold the New Portfolio compared to the typical costs
of transactions of a similar nature and, in
particular, the typical costs of acquiring UK
commercial real estate.
* The Acquisition will introduce a number of asset
management opportunities which should enhance returns
to Shareholders, being consistent with the Company's
and the Manager's investment style and income
strategy. The Manager believes that there is credible
growth potential within the New Portfolio and scope
to improve the income stream of each retail warehouse
park.
* In the event that the Company raises proceeds in
excess of the minimum required to complete the
Acquisition or issues New Shares under the Placing
Programme, the Company will have increased cash
resources that can be deployed in other property
acquisitions or other asset management opportunities
in line with the Manager's active style of investment
management.
* The Share Issue and the subsequent Placing Programme
provide the opportunity to increase the market
capitalisation of the Company which should increase
liquidity in the Ordinary Shares and the
attractiveness of the Company to new investors.
* Increasing the Company's issued share capital through
the Share Issue, the Vendor Issue and the subsequent
Placing Programme, will also result in the fixed
costs of the Group being spread over a larger asset
base. The ongoing charges ratio of the Group will,
therefore, be reduced.
For the reasons set out above, the Board is
recommending that Shareholders vote in favour
of the Proposals at the General Meeting of the
Company to be held at 9.30 a.m. on 7 December
2017 at 39 George Street, Edinburgh EH2 2HN.
Reduced management fees
As part of the Proposals, the Manager has agreed
to reduce future management fees payable on
any cash available for investment (being all
cash held by the Company except cash required
for working capital and capital expenditure)
by 50 per cent. while such cash remains uninvested.
The AIFM Agreement has been revised accordingly.
Increase in dividend
As announced on 15 November 2017, the Board
intends to increase the annualised dividend
level by 4.5 per cent., from 5.5p per Share
to 5.75 pence per Share, in the absence of unforeseen
circumstances. This new dividend level commences
with the dividend in respect of the month ending
31 January 2018 which will be paid in February
2018.
Further details of the Share Issue
The Company is proposing to issue up to 150
million New Shares under the Open Offer, Initial
Placing, Offer for Subscription and Intermediaries
Offer (representing approximately 89.57 per
cent. of the Company's current issued share
capital) to raise approximately GBP131.1 million.
The Share Issue has been structured to give
priority to Existing Shareholders who want to
participate in the fundraising, but also to
provide the opportunity for new investors to
subscribe, including retail investors through
the Offer for Subscription and the Intermediaries
Offer.
The Share Issue Price is 111.75 pence per New
Share representing a premium of 1.4 per cent.
to the Adjusted NAV per Share as at 31 October
2017.
The Directors intend to allocate 15 million
New Shares to the Intermediaries Offer, which
will not be subject to scaling back.
Under the Open Offer, up to approximately 65.45
million New Shares will be made available to
the Company's existing shareholders at the Share
Issue Price, pro rata to their holdings of Ordinary
Shares in the Company as at close of business
on 17 November 2017, being the Record Date.
The entitlements of the Company's Existing Shareholders
will be calculated on the basis of one New Share
for every two Ordinary Shares held as at the
Record Date. An excess application facility
is available under the Open Offer, where existing
Shareholders can apply for more than their basic
entitlement, satisfaction of which will depend
on other Shareholders applying for less than
their full entitlement.
The Open Offer is being made on a pre-emptive
basis to Qualifying Shareholders and is not
subject to scaling back in favour of any of
the Initial Placing, Offer for Subscription
or the Intermediaries Offer.
Any New Shares that are available under the
Open Offer and are not taken up by Qualifying
Shareholders pursuant to their Open Offer Entitlements
and under the Excess Application Facility may
be reallocated to the Initial Placing, Offer
for Subscription and/or the Intermediaries Offer.
Costs of the Proposals
The costs and expenses of the Share Issue, the
Vendor Issue and the Acquisition are partly
dependent on the level of subscriptions. Assuming
only the Minimum Issue Proceeds of approximately
GBP37 million are raised and that the maximum
number of Vendor Shares are issued (being approximately
32.6 million) the costs of the Share Issue,
the Vendor Issue and the Acquisition would be
approximately GBP2.4 million (of such costs
approximately GBP1 million relate to the Share
Issue). In the event the Proposals do not proceed,
the abortive costs would be approximately GBP0.85
million. These costs are lower than the typical
costs incurred in relation to transactions of
a similar nature and, in particular, the typical
costs of acquiring UK commercial real estate.
Indicative timetable
An indicative timetable of principal events
is as follows:
Event Indicative Timing
Record Date for entitlement close of business
under the Open Offer on 17 November 2017
Publication of Circular and 20 November 2017
Prospectus
Open Offer Initial Placing, 22 November 2017
Offer for Subscription and
Intermediaries Offer opens
Latest time and date for receipt 9.30 a.m. on 5 December
of forms of proxy 2017
Latest date for receipt of 11.00 a.m. on 6 December
Application Forms under the 2017
Open Offer and Offer for Subscription
Latest time and date for receipt 11.00 a.m. on 6 December
of application forms under 2017
the Intermediaries Offer
Latest date for receipt of 12.00 p.m. on 6 December
commitments under the Initial 2017
Placing
Results of the Share Issue By close of business
announced on 6 December 2017
General Meeting 9.30 a.m. on 7 December
2017
Results of the General Meeting 7 December 2017
announced
Admission and dealings in New 8 a.m. on 8 December
Shares commence and completion 2017
of the Acquisition
A more detailed timetable will be included in
the Prospectus.
General
In deciding whether or not to vote in favour
of the Resolutions at the General Meeting to
implement the Proposals, Shareholders should
rely only on the information contained in, and
should follow the procedures described in, the
Circular and the Prospectus.
Copies of the Prospectus and Circular will shortly
be available for inspection at the National
Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm.do.
Copies of the Prospectus and Circular are also
available in electronic form on the Company's
website at www.ediston-REIT.com and are available
for collection, free of charge, during normal
business hours on any working day (Saturday,
Sunday and public holidays excepted) until 19
November 2018 from the offices of Dickson Minto
W.S., Broadgate Tower, 20 Primrose Street, London
EC2A 2EW.
Save as otherwise defined in this announcement
or where the context otherwise requires, terms
defined in the Prospectus shall bear the same
meaning in this announcement.
For further information please contact:
Ediston Properties Limited
Danny O'Neill
Calum Bruce 0131 225 5599
Canaccord Genuity Limited
Will Barnett
Robbie Robertson 020 7523 8000
Scott Harris UK Ltd
Jamie Blewitt 020 7653 0030
Notes:
The information contained within this announcement
is deemed by the Company to constitute inside
information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication
of this announcement via a Regulatory Information
Service this information is now considered to
be in the public domain.
This announcement is for information purposes
only and does not purport to be full or complete
and any decision regarding the Proposals should
be made only on the basis of the Circular and
the Prospectus.
The issue and the distribution of this announcement,
the Circular and/or the Prospectus in certain
jurisdictions may be restricted by law and persons
into whose possession any document or other
information referred to this announcement, the
Circular and/or the Prospectus comes should
inform themselves about and observe any such
restriction. Any failure to comply with these
restrictions may constitute a violation of the
securities laws of any such jurisdiction.
Neither the contents of the Company's website
nor the contents of any website accessible from
hyperlinks on the Company's website (or any
other website) is incorporated into, or forms
part of, this announcement
This announcement may include statements that
are, or may be deemed to be, "forward-looking
statements". These forward-looking statements
can be identified by the use of forward-looking
terminology, including the terms "believes",
"estimates", "anticipates", "expects", "intends",
"may", "will" or "should" or, in each case,
their negative or other variations or comparable
terminology. All statements other than statements
of historical facts included in this announcement,
including, without limitation, those regarding
the Company's financial position, strategy,
plans, proposed acquisitions and objectives,
are forward-looking statements.
Forward-looking statements are subject to risks
and uncertainties and, accordingly, the Company's
actual future financial results and operational
performance may differ materially from the results
and performance expressed in, or implied by,
the statements. These forward-looking statements
speak only as at the date of this announcement
and cannot be relied upon as a guide to future
performance. The Company, Ediston Investment
Services Limited, Ediston Properties Limited,
Canaccord Genuity Limited and Dickson Minto
W.S. expressly disclaim any obligation or undertaking
to update or revise any forward-looking statements
contained herein to reflect actual results or
any change in the assumptions, conditions or
circumstances on which any such statements are
based unless required to do so by the Financial
Services and Markets Act 2000, the Prospectus
Rules of the Financial Conduct Authority or
other applicable laws, regulations or rules.
Canaccord Genuity Limited ("Canaccord") is authorised
and regulated in the United Kingdom by the Financial
Conduct Authority. Canaccord is acting exclusively
for the Company and for no-one else in relation
to the Share Issue and the Placing Programme
and will not regard any other person as its
client. Apart from the responsibilities and
liabilities, if any, which may be imposed on
Canaccord by the Financial Services and Markets
Act 2000 or the regulatory regime established
thereunder, Canaccord will not be responsible
to anyone other than the Company for providing
the protections afforded to its clients or for
advising any other person in relation to the
Share Issue, the Placing Programme, or any transaction
contemplated in or by the Prospectus to be published
by the Company.
Dickson Minto W.S. is authorised and regulated
in the United Kingdom by the Financial Conduct
Authority. Dickson Minto W.S. is acting exclusively
for the Company and for no-one else in relation
to the Share Issue and the Placing Programme
and will not regard any other person as its
client. Apart from the responsibilities and
liabilities, if any, which may be imposed on
Dickson Minto W.S. by the Financial Services
and Markets Act 2000 or the regulatory regime
established thereunder, Dickson Minto W.S. will
not be responsible to anyone other than the
Company for providing the protections afforded
to its clients or for advising any other person
in relation to the Share Issue, the Placing
Programme, or any transaction contemplated in
or by the Prospectus to be published by the
Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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