TIDMLXI
RNS Number : 4805Z
LXI REIT PLC
20 May 2019
20 May 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014)
("MAR")
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE
REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH
THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD
BE UNLAWFUL.
This announcement is an advertisement for the purposes of the
Prospectus Rules of the UK Financial Authority ("FCA") and does not
constitute a prospectus. Investors must subscribe for or purchase
any shares referred to in this announcement only on the basis of
information contained in a prospectus expected to be published
later today by LXi REIT plc (the "Prospectus") in its final form
and not in reliance on this announcement. Copies of the Prospectus
may, subject to any applicable law, shortly be obtained from the
registered office of the Company. A copy of the Prospectus will,
following publication, be available for inspection from the
Company's registered office and on its website (www.lxireit.com).
This announcement does not constitute, and may not be construed as,
an offer to sell or an invitation or recommendation to purchase,
sell or subscribe for any securities or investments of any
description, or a recommendation regarding the issue or the
provision of investment advice by any party.
LXi REIT plc
(the "Company" or "LXi REIT")
Proposed Placing, Open Offer, Offer for Subscription and
Intermediaries Offer and Notice of General Meeting
Further to its announcement on 18 April 2019, the board of
Directors (the "Board") of LXi REIT (ticker: LXI), the specialist
inflation-protected long income REIT, today announces the proposed
issue of further ordinary shares ("New Ordinary Shares") in the
Company to raise gross proceeds of approximately GBP100 million
(the "Issue"), the details of which will be set out in the
Prospectus, expected to be published by the Company later today.
The Issue will comprise a Placing, Open Offer, Offer for
Subscription and Intermediaries Offer.
The Company was launched as a closed-ended investment company in
February 2017. The Company has successfully deployed the GBP544
million of equity and debt capital raised both on and since its IPO
in February 2017 and, consequently, on 18 April 2019, the Company
announced that it has been considering a further equity fundraise
to fund further investments in line with its investment policy and
with a view to delivering further value creation for its
Shareholders.
Summary
-- Issue of up to 84,555,569 New Ordinary Shares pursuant to a
Placing, Open Offer, Offer for Subscription and Intermediaries
Offer, targeting gross proceeds of approximately GBP100 million
-- Qualifying Shareholders are being offered the opportunity to
participate in the Open Offer on the basis of 6 New Ordinary Shares
for every 25 Existing Ordinary Shares
-- Qualifying Shareholders are also being offered the
opportunity to subscribe for New Ordinary Shares in addition to
their Open Offer Entitlement under the Excess Application
Facility
-- The Board have reserved the right to increase the size of the
Issue by up to 84,555,569 New Ordinary Shares
-- The Issue Price is 118 pence per New Ordinary Share. This
represents a premium of 3 per cent. to the audited Net Asset Value
per Ordinary Share as at 31 March 2019 of 114.6 pence per Ordinary
Share
-- The Issue Price represents a discount of 9.5 per cent. to the
closing price per Ordinary Share on 17 May 2019 of 130.4 pence per
Ordinary Share
-- The Company will be subject to a 90 day lock-up on the issue
of further Ordinary Shares from the date of Admission, subject to
waiver by the Bookrunner
-- The Investment Advisor, on behalf of the Company, has
identified a significant pipeline of additional assets which meet
the Company's investment objective and investment policy, including
off-market assets identified through the Investment Advisor's
extensive contacts and relationships
-- The pipeline assets, which total over GBP200 million in
value, are diversified by location and leased to a range of
institutional-grade tenants with strong financial covenants, with
98% of rents containing either inflation-linked or fixed uplift
reviews, and with a good mix within the pipeline of built assets
and forward funded structures. They benefit from a long weighted
average unexpired lease term to first break of 25 years and a
blended net initial yield of 5.6 per cent. and are structured as
both pre-let forward funding and standing investments
-- Although there can be no assurance that any of these
properties will be purchased by the Company, the Investment Advisor
is confident that it will substantially invest or commit the net
proceeds resulting from the proposed Issue within three months
following Admission
-- As also announced today, the Company is now targeting a
dividend of 5.75 pence per Ordinary Share for the year ending March
2020(1) (an increase of 4.5 per cent. from the previous target of
5.50 pence per Ordinary Share)
-- The results of the Issue are expected to be announced on 13 June 2019
Applications will be made to the Financial Conduct Authority and
the London Stock Exchange for all of the New Ordinary Shares to be
issued pursuant to the Issue to be admitted to the premium listing
segment of the Official List and to trading on the Main Market. It
is expected that Admission will become effective and dealings in
the New Ordinary Shares will commence at 8.00 a.m. on 17 June
2019.
Terms not otherwise defined in this announcement have the
meanings that will be given to them in the Prospectus. This summary
should be read in conjunction with the full text of the
announcement and the Prospectus, when available.
LXi REIT will shortly be publishing a Prospectus in connection
with the Issue and a circular (the "Circular") to convene a General
Meeting to approve certain matters necessary to implement the
Issue. The Prospectus and Circular will, when published, be
available, subject to certain access restrictions, on the Company's
website (www.lxireit.com), at the Company's registered office at
Mermaid House, 2 Puddle Dock, London EC4V 3DB, and at the National
Storage Mechanism via www.morningstar.co.uk/uk/NSM.
Background to, and reasons for, the Issue
As stated above, the Company has successfully deployed the
GBP544 million of equity and debt capital raised on and since its
IPO in February 2017 and, consequently, has been considering a
further equity raise to fund further investments in line with its
investment policy and objective and with a view to delivering
further value for its Shareholders.
The Investment Advisor, on behalf of the Company, has identified
a significant pipeline of additional assets which meet the
Company's investment policy and objective, including off-market
assets identified through the Investment Advisor's extensive
contacts and relationships.
The Investment Advisor has already commenced negotiations and
discussions concerning the acquisition of such assets for the
Company. Furthermore, the Investment Advisor has entered into
exclusivity agreements on behalf of the Company in relation to the
acquisition of a number of assets.
These assets are diversified by location and leased to a range
of institutional-grade tenants with strong financial covenants,
with rental uplifts linked to inflation and with a good mix within
the pipeline of built assets and forward funded structures.
The assets, which total over GBP200 million in capital value,
are diversified across a wide range of defensive and robust sub
sectors. They benefit from a long weighted average unexpired lease
term to first break of 25 years and a blended net initial yield of
5.6 per cent. (net of expected acquisition costs). 98 per cent. of
the rents contain either inflation-linked or fixed uplifts.
These acquisitions are subject to on-going due diligence by the
Investment Advisor and its professional advisers. The Company
currently has no binding contractual obligations with potential
vendors (other than assets on whch the Company had exchanged
contracts to acquire but had not completed as at 31 March 2019,
which will be funded using the Company's existing resources) and,
although there can be no assurance that any of these properties
will be purchased by the Company, the Investment Advisor is
confident that it will substantially invest or commit the net
proceeds resulting from the proposed Issue within three months
following Admission.
Benefits of the Issue
The Board believes that the Issue will have the following
benefits for the Company:
-- the additional assets forming the pipeline identified by the
Investment Advisor, if acquired, are expected to be accretive and
to further diversify the Company's portfolio of properties in terms
of tenant, geographic and sector exposures;
-- raising new equity is expected to broaden the Company's
investor base, and enhance the size and liquidity of the Company's
share capital; and
-- growing the Company will spread the fixed operating costs
over a larger capital base, thereby reducing the Company's ongoing
charges ratio.
Overview of the Issue
The Company is targeting an issue of approximately GBP100
million (gross) or approximately GBP98 million (net of expenses)
through the issue of 84,555,569 New Ordinary Shares pursuant to the
Issue at the Issue Price of 118 pence per New Ordinary Share. If
the overall demand exceeds this target the Directors have reserved
the right, following consultation with Peel Hunt, to increase the
size of the Issue to a maximum of approximately GBP200 million
(gross). The actual number of New Ordinary Shares to be issued
pursuant to the Issue, and therefore the Gross Issue Proceeds, are
not known as at the date of this announcement but will be notified
by the Company via a Regulatory Information Service prior to
Admission. The Directors intend to use the net proceeds of the
Issue to acquire investments in accordance with the Company's
investment policy and objective, as more fully set out in the
Prospectus.
The New Ordinary Shares will, following Admission, rank pari
passu in all respects with the Existing Ordinary Shares and will
carry the right to receive all dividends and distributions
declared, made or paid in respect of the Ordinary Shares by
reference to a record date after Admission.
The Issue Price is calculated by reference to the NAV per
Ordinary Share as at 31 March 2019 (audited) of 114.60 pence,
reduced by the dividend of 1.375 pence per Ordinary Share announced
on 20 May 2019 with a record date of 31 May 2019, in respect of the
period from 1 January to 31 March 2019 and increased to reflect the
costs and expenses of the Issue, which have been capped at 2 per
cent. of the Gross Issue Proceeds. Holders of New Ordinary Shares
will not be entitled to receive any dividends declared with a
record date prior to the date of their issue (please see further
details below, including with regards to the first interim dividend
for the year to 31 March 2020).
Placing
Peel Hunt has agreed to use its reasonable endeavours to procure
subscribers pursuant to the Placing for the New Ordinary Shares.
The terms and conditions which shall apply to any subscription for
New Ordinary Shares pursuant to the Placing are set out more fully
in the Prospectus.
Open Offer
New Ordinary Shares are being offered to Qualifying Shareholders
by way of the Open Offer. The Open Offer provides an opportunity
for Qualifying Shareholders to participate in the fundraising by
subscribing for their Open Offer Entitlements, being 6 New Ordinary
Shares for every 25 Existing Ordinary Shares held and registered in
their name at the Record Date.
If the Issue proceeds, valid applications under the Open Offer
will be satisfied in full up to applicants' Open Offer
Entitlements. Any New Ordinary Shares not taken up under the Open
Offer will be made available under the Excess Application Facility,
the Placing, the Offer for Subscription and the Intermediaries
Offer. Open Offer Entitlements will be rounded down to the nearest
whole number and any fractional entitlements to New Ordinary Shares
will be disregarded in calculating Open Offer Entitlements.
Fractions will be aggregated and made available to Qualifying
Shareholders under the Excess Application Facility. Qualifying
Shareholders who wish to subscribe for more New Ordinary Shares
than their Open Offer Entitlement could make an application under
the Excess Application Facility, the Offer for Subscription, the
Intermediaries Offer or, if appropriate, the Placing. Shareholders
should be aware that the Open Offer is not a rights issue and Open
Offer Entitlements cannot be traded.
The latest time and date for receipt of completed Open Offer
Application Forms and payment in full under the Open Offer and
settlement of relevant instructions (as appropriate) is expected to
be 11.00 a.m. on 12 June 2019 with admission and commencement of
dealings in New Ordinary Shares expected to take place at 8.00 a.m.
on 17 June 2019.
Further details as to how Shareholders can apply for New
Ordinary Shares are set out in the Prospectus. Shareholders should
not subscribe for or purchase any New Ordinary Shares except on the
basis of information set out in the Prospectus.
Offer for Subscription
The Directors are also proposing to offer New Ordinary Shares
under the Offer for Subscription, subject to the terms and
conditions set out in the Prospectus. The Offer for Subscription is
being made available in the United Kingdom, Guernsey, Jersey and
the Isle of Man. Individual applications must be for a minimum
subscription of 1,000 New Ordinary Shares and then in multiples of
1,000 New Ordinary Shares thereafter, although the Board has
discretion to accept applications below these minimum amounts.
Multiple subscriptions under the Offer for Subscription by
individual investors will not be accepted.
Intermediaries Offer
Prospective investors may also subscribe for New Ordinary Shares
pursuant to the Intermediaries Offer. Only the Intermediaries'
retail investor clients in the United Kingdom, Guernsey, Jersey and
the Isle of Man are eligible to participate in the Intermediaries
Offer. Investors may apply to any one of the Intermediaries to be
accepted as their client.
No New Ordinary Shares allocated under the Intermediaries Offer
will be registered in the name of any person whose registered
address is outside the United Kingdom, the Channel Islands or the
Isle of Man. A minimum application of 1,000 New Ordinary Shares per
Underlying Applicant will apply. Allocations to Intermediaries will
be determined solely by the Company (following consultation with
Peel Hunt, in its capacity as intermediaries offer adviser).
Scaling back and allocation
The Directors have reserved the right, following consultation
with Peel Hunt, to increase the size of the Issue by up to
84,555,569 New Ordinary Shares if overall demand exceeds 84,555,569
New Ordinary Shares.
In the event that commitments under the Issue exceed the maximum
number of New Ordinary Shares available, applications under the
Issue (other than applications up to Qualifying Investors' full
entitlement under the Open Offer) will be scaled back at the
Company's discretion in consultation with Peel Hunt. The basis of
allocation of New Ordinary Shares under the Issue will be:
(i) to each Qualifying Shareholder who applies, up to his full
entitlement under the Open Offer (New Ordinary Shares issued to
Qualifying Shareholders under the Open Offer are not subject to
scaling back to satisfy valid applications under the Placing, the
Offer for Subscription or the Intermediaries Offer);
(ii) any New Ordinary Shares not taken up under the Open Offer,
to applicants under the Placing, the Offer for Subscription, the
Intermediaries Offer and the Excess Application Facility, with
applications scaled back at the discretion of the Company following
consultation with Peel Hunt.
There will be no priority given to applications under the
Placing, applications under the Offer for Subscription,
applications under the Intermediaries Offer or applications under
the Excess Application Facility pursuant to the Issue.
Dilution
Assuming 84,555,569 New Ordinary Shares are issued pursuant to
the Issue:
-- Qualifying Shareholders who take up their full Open Offer
Entitlement (excluding any New Ordinary Shares acquired through the
Excess Application Facility) will not suffer any dilution to their
ownership and voting interests in the Company by virtue of the
issue of New Ordinary Shares pursuant to the Issue;
-- Qualifying Shareholders who do not take up any of their Open
Offer Entitlement and Shareholders who are not eligible to
participate in the Open Offer, will suffer a maximum dilution of
approximately 19.4 per cent. to their ownership and voting
interests in the Company by virtue of the issue of New Ordinary
Shares pursuant to the Issue; and
-- the New Ordinary Shares will represent approximately 19.4 per
cent. of the Enlarged Share Capital.
In the event that the Directors exercise their right to increase
the size of the Issue up to 169,111,138 New Ordinary Shares:
-- Qualifying Shareholders who take up their full Open Offer
Entitlement (excluding any New Ordinary Shares acquired through the
Excess Application Facility) will suffer a maximum dilution of 16.2
per cent. to their ownership and voting interests in the Company by
virtue of the issue of New Ordinary Shares pursuant to the
Issue;
-- Qualifying Shareholders who do not take up any of their Open
Offer Entitlement and Shareholders who are not eligible to
participate in the Open Offer, will suffer a maximum dilution of
approximately 32.4 per cent. to their ownership and voting
interests in the Company by virtue of the issue of New Ordinary
Shares pursuant to the Issue; and
-- the New Ordinary Shares will represent approximately 32.4 per
cent. of the Enlarged Share Capital.
New Ordinary Shares
The Directors have considered the potential impact of the Issue
on the payment of dividends to existing holders of Ordinary Shares
and will take steps to ensure that it will not result in any
material dilution of the dividends attributable to existing
Shareholders. Holders of New Ordinary Shares will not be entitled
to receive any dividends declared with a record date prior to the
date of their issue. Whilst the Directors ordinarily seek to pay
dividends quarterly, the Directors currently intend to declare a
first interim dividend in line with the new dividend target for the
year to 31 March 2020 in respect of a two-month period ending 31
May 2019 in an amount equal to one quarter of the new dividend
target with a record date prior to the issue of the New Ordinary
Shares. Accordingly, holders of New Ordinary Shares will not be
entitled to receive the final interim dividend in respect of the
period to 31 March 2019 nor the dividend intended to be paid in
respect of the two-month period to 31 May 2019, should one be
declared. Subsequently, it is the current intention of the
Directors to declare three further equal interim dividends in
respect of the periods to 30 September 2019, 31 December 2019 and
31 March 2020, each with a record
date after the issue of the New Ordinary Shares.
Authority to allot the New Ordinary Shares pursuant to the
Issue
Pursuant to the requirements of the Companies Act, Shareholders
are being asked to approve the following Issue Resolutions:
-- Resolution 1 (which will be proposed as an ordinary
resolution) to grant the Directors authority to allot up to
169,111,138 New Ordinary Shares (representing approximately 48 per
cent. of the issued share capital (excluding treasury shares) of
the Company at the date of this announcement) pursuant to the
Issue. If approved, this authority will lapse immediately following
Admission; and
-- Resolution 2 (which will be proposed as a special resolution
and which is conditional on the passing of Resolution 1) to grant
the Directors authority to allot up to 169,111,138 New Ordinary
Shares (representing approximately 48 per cent. of the issued share
capital of the Company at the date of this announcement) on a
non-pre-emptive basis. If approved, this authority will lapse
immediately following Admission.
The Issue is conditional on the passing of both of the Issue
Resolutions at the General Meeting.
An ordinary resolution requires a simple majority of members
entitled to vote and present in person or by proxy to vote in
favour in order for it to be passed. A special resolution requires
a majority of at least 75 per cent. of members entitled to vote and
present in person or by proxy to vote in favour in order for it to
be passed.
Applications will be made to the Financial Conduct Authority and
the London Stock Exchange for all of the New Ordinary Shares to be
issued pursuant to the Issue to be admitted to the premium listing
segment of the Official List and to trading on the Main Market. It
is expected that Admission will become effective and dealings in
the New Ordinary Shares will commence at 8.00 a.m. on 17 June
2019.
Treasury shares
No Ordinary Shares were held in treasury at the date of this
announcement.
CREST
The New Ordinary Shares will be issued in registered form. CREST
is a paperless settlement procedure enabling securities to be
evidenced otherwise than by a certificate and transferred otherwise
than by written instrument. The Articles permit the holding of
shares under the CREST system. Settlement of transactions in the
New Ordinary Shares may take place within the CREST system if any
Shareholder so wishes. CREST is a voluntary system and Shareholders
who wish to receive and retain share certificates will be able to
do so. Shareholders applying for New Ordinary Shares may elect to
receive New Ordinary Shares in uncertificated form if such investor
is a system-member (as defined in the CREST Regulations) in
relation to CREST.
Costs of the Proposals
The total net proceeds of the Issue will depend on the level of
subscriptions received pursuant to the Issue and the aggregate
costs and expenses of the Issue. Such aggregate costs and expenses
have been capped at 2 per cent. of the Gross Issue Proceeds.
For illustrative purposes only, assuming that 84,555,569 New
Ordinary Shares are issued pursuant to the Issue at the Issue
Price:
-- the Gross Issue Proceeds are expected to be approximately GBP100 million;
-- the costs and expenses of the Issue are expected to be approximately GBP2 million; and
-- the net proceeds of the Issue are expected to be approximately GBP98 million.
Considerations associated with the Proposals
Shareholders should have regard to the following when
considering the Proposals:
-- The past performance of the Company or of the Investment
Advisor is not necessarily indicative of likely future
performance.
-- All existing Shareholders not participating in the Issue will
be diluted. Assuming 84,555,569 New Ordinary Shares are issued
pursuant to the Issue, Qualifying Shareholders who take up their
full Open Offer Entitlement (excluding any New Ordinary Shares
acquired through the Excess Application Facility) will not suffer
any dilution to their ownership and voting interests in the Company
by virtue of the issue of New Ordinary Shares pursuant to the
Issue. In the event that the Directors exercise their right to
increase the size of the Issue up to 169,111,138 New Ordinary
Shares, Qualifying Shareholders who take up their full Open Offer
Entitlement (excluding any New Ordinary Shares acquired through the
Excess Application Facility) will suffer a maximum dilution of
approximately 16.2 per cent. to their ownership and voting
interests in the Company. Qualifying Shareholders who do not take
up any of their Open Offer Entitlement and Shareholders who are not
eligible to participate in the Open Offer, will suffer a maximum
dilution of approximately 19.4 per cent. to their ownership and
voting interests in the Company if 84,555,569 New Ordinary Shares
are issued pursuant to the Issue and a maximum dilution of
approximately 32.4 per cent. to their ownership and voting
interests in the Company if 169,111,138 New Ordinary Shares are
issued pursuant to the Issue.
-- The Company has not entered into any legally binding
contractual arrangements to acquire any further properties from any
potential vendors (other than assets on which the Company had
exchanged contracts to acquire but had not completed as at 31 March
2019, which will be funded using the Company's existing resources).
There can be no assurance as to how long it will take for the
Company to invest the proceeds of the Issue. Even where the
Company, acting on advice from the Investment Advisor, has
identified and approved the acquisition of a property in line with
its investment objective and investment policy it may encounter a
number of delays before the property is finally acquired. The past
performance of the Investment Advisor in terms of the speed of
deployment of the GBP544 million of equity and debt raised on and
since the Company's IPO cannot be taken as an indication of the
speed of deployment of the Gross Issue Proceeds.
General Meeting
The Issue is conditional on the approval by Shareholders of the
Issue Resolutions to be proposed at the General Meeting of the
Company which has been convened for 9.15 a.m. on 12 June 2019.
All Shareholders are entitled to attend and vote at the General
Meeting. In accordance with the Articles, all Shareholders present
in person or by proxy shall upon a show of hands have one vote and
upon a poll shall have one vote in respect of each Ordinary Share
held. In order to ensure that a quorum is present at the General
Meeting, it is necessary for two Shareholders entitled to vote to
be present, whether in person or by proxy (or, if a corporation, by
a representative).
The Company does not currently have any existing authority to
issue Ordinary Shares. It is proposed that the authorities sought
at the General Meeting, if approved, will lapse on Admission.
The formal notice convening the General Meeting is set out at
the end of the Circular. The General Meeting will be held at the
offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M
7SH.
Action to be taken in respect of the General Meeting
Whether or not Shareholders propose to attend the General
Meeting, if they would like to vote on the Issue Resolutions they
may vote:
-- by logging on to www.signalshares.com and following the instructions;
-- by requesting a hard copy form of proxy directly from the registrars; or
-- in the case of CREST members, by utilising the CREST electronic proxy appointment service.
In order for a proxy appointment to be valid, Shareholders
should ensure that they have recorded proxy details with the
Company's registrar, Link Asset Services, by 9.15 a.m. on 10 June
2019.
Recipients of the Circular who are the beneficial owners of
Ordinary Shares held through a nominee should follow the
instructions provided by their nominee or their professional
adviser if no instructions have been provided.
Recommendation
The Board considers that the Proposals are in the best interests
of the Company and its Shareholders as a whole. Accordingly, the
Board unanimously recommends that Shareholders vote in favour of
the Issue Resolutions to be proposed at the General Meeting. The
Directors intend to vote in favour of the Issue Resolutions in
respect of their holdings of Ordinary Shares; amounting to 393,168
Ordinary Shares in aggregate (representing approximately 0.11 per
cent. of the issued share capital of the Company as at the date of
this announcement).
Company Overview
-- The Company's current portfolio:
o has a long weighted average unexpired lease term to first
break of 22 years, with 96% of its rental income being index-linked
or containing fixed uplifts;
o was acquired at an attractive average net initial yield of
5.8%, which is 286 basis points above its cost of debt, through a
mix of pre-let forward fundings and built asset acquisitions;
o is 100% let or pre-let to 38 institutional-grade tenants
across nine sectors; and
o is leveraged at 29% LTV, with a weighted average of 12 years
unexpired on the loan terms at a fixed average rate of 2.94% per
annum
-- The Company has delivered an average annual shareholder
return of 18.6% p.a. since IPO and a total shareholder return from
IPO to 31 March 2019 of 38.8%
-- The Company delivered a 12.1% total NAV return in its
financial year to March 2019 and a total NAV return of 25.2% over
the period from IPO to March 2019. The Company has effected
selective asset disposals generating an average geared IRR of 32%
per annum
-- The Company is targeting a dividend of 5.75 pence per share
for the year ending 31 March 2020 (an increase of 4.5% on the 2019
level)*
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Maitland/AMO
John White
Simon Lee
Jamie Beale
Peel Hunt LLP (Sole Sponsor, Broker, Tel: 020 7418 8900
Bookrunner and Intermediaries Offer
Adviser)
Luke Simpson / Liz Yong (Corporate
Broking)
Mark Thompson (Sales)
Sohail Akbar (Intermediaries)
----------------------------------------
Maitland/AMO (Communications Adviser) Tel: 020 7379 5151
James Benjamin Email: lxireit-maitland@maitland.co.uk
----------------------------------------
The Company's LEI is: 2138008YZGXOKAXQVI45
NOTES:
LXi REIT plc invests in UK commercial property assets let, or
pre-let, on very long (typically 20 to 30 years to first break),
inflation-linked leases to a wide range of strong tenant covenants
across a diverse range of robust property sectors.
The Company may invest in fixed-price forward funded
developments, provided they are pre-let to an acceptable tenant and
full planning permission is in place. The Company will not
undertake any direct development activity nor assume direct
development risk.
The Company is targeting an annual dividend of 5.75 pence per
ordinary share, starting from the financial period commencing 1
April 2019, with the potential to grow the dividend in absolute
terms through upward-only inflation-protected long-term lease
agreements, and is targeting a total NAV return of a minimum of 8
per cent. per annum over the medium term.*
The Company, a real estate investment trust ("REIT")
incorporated in England and Wales, is listed on the premium listing
segment of the Official List of the Financial Conduct Authority and
was admitted to trading on the main market for listed securities of
the London Stock Exchange in February 2017. The Company is a
constituent of the FTSE EPRA/NAREIT index.
Further information on the Company is available at
www.lxireit.com
* These are targets only and not a profit forecast and there can
be no assurance that they will be met.
EXPECTED TIMETABLE
2019
Record Date for entitlements under close of business on 16 May
the Open Offer 20 May
Posting of the Circular and the Notice
of General Meeting
Prospectus published and Issue opens 20 May
Ex entitlement date for the Open 20 May
Offer
Open Offer Entitlements and Excess 21 May
CREST Open Offer Entitlements enabled
in CREST and credited to stock accounts 4.30 p.m. on 6 June
of Qualifying CREST Shareholders
Recommended latest time and date 3.00 p.m. on 7 June
for requesting withdrawal of Open
Offer Entitlements and Excess Open 9.15 a.m. on 10 June
Offer Entitlements from CREST
Recommended latest time and date 3.00 p.m. on 10 June
for depositing Open Offer Entitlements
and Excess Open Offer Entitlements
into CREST
Latest time and date for receipt
of proxy appointments for use at
the General Meeting
Recommended latest time for splitting
Open Offer Application Forms (to
satisfy bona fide market claims only)
General Meeting 9.15 a.m. on 12 June
Announcement of the results of the 12 June
General Meeting through a Regulatory
Information Service
Latest time and date for receipt 11.00 a.m. on 12 June
of completed Open Offer Application
Forms and payment in full under the
Open Offer or settlement of relevant
CREST instructions
Latest time and date for receipt 1.00 p.m. on 12 June
of completed Offer for Subscription
Application Forms and, if applicable,
Tax Residency Self-Certification
Forms, and payment in full under
the Offer for Subscription
Latest time and date for receipt 3.00 p.m. on 12 June
of completed applications from the
Intermediaries in respect of the
Intermediaries Offer
Latest time and date for commitments 5.00 p.m. on 12 June
under the Placing
Issue closes 12 June
Announcement of the results of the 13 June
Issue
Admission and dealings in New Ordinary 8.00 a.m. on 17 June
Shares commence
CREST accounts credited with uncertificated 17 June
New Ordinary Shares
Where applicable, definitive share 24 June
certificates despatched by post in
the week commencing**
** Underlying applicants who apply to Intermediaries for New
Ordinary Shares under the Intermediaries Offer will not receive
share certificates
The above times and/or dates may be subject to change and, in
the event of such change, the revised times and/or dates will be
notified to Shareholders by an announcement through a Regulatory
Information Service.
All references to times in this announcement are to London
times.
About the AIFM and LXI REIT Advisors Limited
The Company and LJ Administration (UK) Limited (acting as the
AIFM, the "AIFM") appointed LXI REIT Advisors Limited as the
Company's Investment Advisor pursuant to an investment advisory
agreement.
The AIFM is regulated in the conduct of investment business by
the FCA. The AIFM is, for the purposes of the AIFMD and the rules
of the FCA, a "full scope" UK AIFM with a Part 4A permission for
managing AIFs, such as the Company.
LXI REIT Advisors was appointed to provide certain services in
relation to the Company's portfolio, including sourcing investments
for acquisition by the Company and due diligence in relation to
proposed investments. LJ Administration (UK) Limited is owned by
Alvarium Investments Limited (formerly LJ Partnership). Alvarium
was established in 2009 and has grown to become a substantial,
international multi-family office and asset manager, supervising in
excess of US$15 billion of assets, for families, private
individuals and institutions. It has over 200 employees and 10
offices around the world.
The key individuals responsible for executing the Company's
investment strategy are (they also have access to members of the
wider Osprey and Alvarium teams):
John White
John entered the commercial property market in 1987 and after
qualifying as a chartered surveyor at Allsops moved to the
investment team at Cushman & Wakefield. There he became a
partner and spent the next 18 years advising a range of
institutional investor clients on their UK acquisitions and
disposals across the full range of real estate sub-sectors
including retail (in and out of town), offices (London, Thames
Valley and regional cities), logistics, and alternatives. John
moved into private equity real estate in 2007 and co-founded Osprey
Equity Partners in 2011 and LXi REIT Advisors Limited in 2016.
Simon Lee
Simon trained and practised as a solicitor at City law firm,
Slaughter and May, from 1999 to 2006, following which he spent the
next 10 years in private equity real estate, co-founding Osprey
Equity Partners in 2011 and LXi REIT Advisors Limited in 2016.
Simon's role covers a wide range of areas, including formulating
Osprey's investment strategies and products, raising equity and
debt finance, asset selection, and negotiating and implementing
transactions with vendors, purchasers, developers, investors,
lenders and joint venture partners.
Freddie Brooks
Freddie trained and qualified as a chartered accountant in BDO
LLP's Real Estate and Construction team, gaining significant
experience in the sector, working with similar listed vehicles,
private property funds, developers and a number of the UK's top
contractors. Freddie worked with LXi REIT since the Company's IPO
whilst at BDO, before joining the LXi REIT Advisors management team
full time in early 2018. Freddie's role covers all historical and
strategic financial matters including annual and interim reporting,
budgeting and forecasting, treasury management and the monitoring
of internal controls.
Jamie Beale
Jamie has significant transaction management experience in the
long income and forward funding real estate space. Prior to joining
the Investment Advisor, Jamie spent five years in the city as a
real estate lawyer where he acted for leading developers and
property funds on a variety of deals, ranging from large scale
residential developments to substantial commercial property
transactions.
Directors of the Company
The Directors are as follows:
Stephen Hubbard, Non-Executive Chairman
Stephen Hubbard serves as Chairman of UK CBRE Group, the world's
largest property advisory firm. He joined Richard Ellis in 1976 and
served as Head of EMEA and UK Capital Markets from 1998 to 2012. He
is also a member of the Advisory Board for Redevco which is a
pan-European property holding company and a director of Cockwells
Modern and Classic Boatbuilding Ltd. Stephen has also been a
non-executive director of Workspace Group plc since July 2014
Colin Smith OBE, Non-Executive Director
Colin Smith OBE served for ten years as Chairman of Poundland
Group Holdings, Europe's largest single price discount retailer.
Prior to this, he was Chief Executive and Finance Director of
Safeway Plc, the national supermarket retailer. Colin served as
Chairman of Hilton Food Group plc between 2016 and 2018, having
previously served as a non-executive director since 2010. He also
has experience in the not for profit sector, formerly serving as
Chairman of The Challenge Network, as a trustee of Save the
Children and as Chairman of the food industry sponsored Red Tractor
assurance scheme.
Jan Etherden, Non-Executive Director
Jan Etherden has over 35 years' experience in the investment
industry, as an analyst, fund manager, then a non-executive
director. Previously head of UK equities for Confederation Life/Sun
Life of Canada, she joined Newton in 1996 as a director
specialising in multi-asset segregated portfolios and also was
their Investment COO from 1999 to 2001. Subsequently she worked
with Olympus Capital Management as business development manager for
specialist hedge fund products. She was a director of Ruffer
Investment Company Ltd until November 2016, a director of
TwentyFour Income Fund until March 2019 and is currently a director
of Miton UK MicroCap Trust plc.
John Cartwright, Non-Executive Director
John Cartwright is Chief Executive of The Association of Real
Estate Funds (AREF), a post he has held since late 2009. His
responsibilities are to represent and promote the interests of
members, promote best practice in fund governance and ensure the
smooth running of the association. Prior to this, John was with
M&G Real Estate (formerly PRUPIM) for nearly 35 years in a
variety of roles; latterly as Head of Institutional and Retail
Funds and a member of PRUPIM's Board and Investment Committee. He
has more than 20 years' experience of managing pooled and
segregated accounts for both retail and institutional investors.
John is also a member of the Investment Committee of Lothbury
Property Trust and a Fellow of the Royal Institution of Chartered
Surveyors.
Disclaimer
This announcement is an advertisement and does not constitute a
prospectus and investors must subscribe for or purchase any shares
referred to in this announcement only on the basis of information
contained in the Prospectus expected to be published by the Company
shortly and not in reliance on this announcement. Copies of the
Prospectus may, subject to any applicable law, be obtained from the
registered office of the Company and at the National Storage
Mechanism at http://www.morningstar.co.uk/NSM and on the Company's
website. This announcement does not constitute, and may not be
construed as, an offer to sell or an invitation to purchase
investments of any description or a recommendation regarding the
issue or the provision of investment advice by any party. No
information set out in this announcement is intended to form the
basis of any contract of sale, investment decision or any decision
to purchase shares in the Company.
This is a financial promotion and is not intended to be
investment advice. The content of this announcement, which has been
prepared by and is the sole responsibility of the Company, has been
approved by LJ Administration (UK) Limited, which is authorised and
regulated by the Financial Conduct Authority, solely for the
purposes of section 21(2)(b) of the Financial Services and Markets
Act 2000 (as amended).
This announcement is not for release, publication or
distribution, directly or indirectly, in or into the United States
(including its territories and possessions, any state of the United
States and the District of Columbia, collectively, the "United
States"), Australia, Canada, the Republic of South Africa, Japan or
any other jurisdiction where such distribution is unlawful. This
announcement is not an offer of securities for sale in or into the
United States. The New Ordinary Shares have not been, and will not
be, registered under the US Securities Act 1933, as amended (the
"US Securities Act"), or with any securities regulatory authority
of any state or other jurisdiction of the United States, and may
not be offered or sold into or within the United States, absent
registration under, or except pursuant to an exemption from the
registration requirements of, the US Securities Act, and in
compliance with any applicable securities laws of any state or
other jurisdiction in the United States. No public offering of
securiteis is being made in the United States.
In addition the Company has not been and will not be registered
under the US Investment Company Act of 1940, as amended.
The distribution of this announcement may be restricted by law
in certain jurisdictions and persons into whose possession any
document or other information referred to herein 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. Peel
Hunt LLP ("Peel Hunt"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively for the Company
and for no-one else in connection with the Issue and Admission and
the other arrangements referred to in this announcement and will
not regard any other person as its client in relation to the Issue
and Admission and the other arrangements referred to in this
announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to its clients, nor
for providing advice in connection with the Issue and the other
arrangements referred to in this announcement.
The value of shares and the income from them is not guaranteed
and can fall as well as rise due to stock market and currency
movements. When you sell your investment you may get back less than
you originally invested. Figures refer to past performance and past
performance is not a reliable indicator of future results. Returns
may increase or decrease as a result of currency fluctuations.
This announcement contains forward looking statements,
including, without limitation, statements including the words
"believes", "estimates", "anticipates", "expects", "intends",
"may", "will" or "should" or, in each case, their negative or other
variations or comparable terminology. Such forward looking
statements involve unknown risks, uncertainties and other factors
which may cause the actual results, financial condition,
performance or achievements of the Company, or industry results, to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
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, the Investment Advisor, the AIFM and Peel
Hunt 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, the EU
Market Abuse Regulation or other applicable laws, regulations or
rules.
The information in this announcement is for background purposes
only and does not purport to be full or complete. None of Peel
Hunt, or any of its respective affiliates, accepts any
responsibility or liability whatsoever for, or makes any
representation or warranty, express or implied, as to this
announcement, including the truth, accuracy or completeness of the
information in this announcement (or whether any information has
been omitted from the announcement) or any other information
relating to the Company or associated companies, whether written,
oral or in a visual or electronic form, and howsoever transmitted
or made available or for any loss howsoever arising from any use of
the announcement or its contents or otherwise arising in connection
therewith. Peel Hunt, and its affiliates, accordingly disclaim all
and any liability whether arising in tort, contract or otherwise
which they might otherwise have in respect of this announcement or
its contents or otherwise arising in connection therewith.
In connection with the Issue, Peel Hunt, and any of its
affiliates, may take up a portion of the New Ordinary Shares in the
Issue as a principal position and in that capacity may retain,
purchase, sell, offer to sell for their own accounts such New
Ordinary Shares and other securities of the Company or related
investments in connection with the Issue or otherwise. Accordingly,
references in the Prospectus, once published, to the New Ordinary
Shares being issued, offered, subscribed, acquired, placed or
otherwise dealt in should be read as including any issue or offer
to, or subscription, acquisition, placing or dealing by, Peel Hunt
and any of its affiliates acting in such capacity. In addition Peel
Hunt, and any of its affiliates may enter into financing
arrangements (including swaps or contracts for differences) with
investors in connection with which Peel Hunt, and any of its
affiliates may from time to time acquire, hold or dispose of
Ordinary Shares. Peel Hunt does not intend to disclose the extent
of any such investment or transactions otherwise than in accordance
with any legal or regulatory obligations to do so.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the New
Ordinary Shares have been subject to a product approval process,
which has determined that such securities are: (i) compatible with
an end target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
distributors (such term to have the same meaning as in the MiFID II
Product Governance Requirements) should note that: the market price
of the New Ordinary Shares may decline and investors could lose
all or part of their investment; the New Ordinary Shares offer
no guaranteed income and no capital protection; and an investment
in the New Ordinary Shares is compatible only with investors who do
not need a guaranteed income or capital protection, who (either
alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any
losses that may result therefrom. The Target Market Assessment is
without prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Issue.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, Peel Hunt will only procure investors (pursuant to the
Placing) who meet the criteria of professional clients and eligible
counterparties. For the avoidance of doubt, the Target Market
Assessment does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of MiFID II; or (b) a
recommendation to any investor or group of investors to invest in,
or purchase, or take any other action whatsoever with respect to
the New Ordinary Shares. Each distributor is responsible for
undertaking its own target market assessment in respect of the New
Ordinary Shares and determining appropriate distribution
channels.
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
IOEALMFTMBJBBFL
(END) Dow Jones Newswires
May 20, 2019 02:00 ET (06:00 GMT)
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