TIDMLXI
RNS Number : 9191C
LXI REIT PLC
24 June 2021
24 June 2021
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND,
CANADA, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY
MEMBER STATE OF THE EEA (OTHER THAN ANY MEMBER STATE OF THE EEA
WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED), OR ANY
OTHER JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL.
This Announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this Announcement, this inside information
is now considered to be in the public domain.
LXi REIT plc
(the "Company" or "LXi REIT")
Proposed Placing
and
Portfolio valuation and Estimated Net Asset Value
The board of Directors (the "Board") of LXi REIT (ticker: LXI),
the specialist inflation-protected long income REIT, today
announces its intention to raise approximately GBP75 million by way
of a placing pursuant to its existing Share Issuance Programme at a
price of 133 pence per New Ordinary Share (the "Placing" ).
Highlights
-- Placing of approximately 56.4 million New Ordinary Shares at
133 pence per New Ordinary Share (the "Placing Price" ) by way of a
Placing pursuant to the Company's existing Share Issuance
Programme;
-- The Placing Price of 133 pence represents a 2.3 per cent.
premium to the Company's estimated IFRS net asset value ("Estimated
NAV") and estimated EPRA net tangible assets ("Estimated EPRA NTA")
of 130 pence per Ordinary Share as at 1 June 2021, and, a discount
of 7.9 per cent. to the Company's closing share price of 144.4
pence per Ordinary Share on 23 June 2021 (being the last business
day prior to this announcement);
-- The Investment Advisor, on behalf of the Company, has
identified a significant pipeline of attractive investment
opportunities, valued at approximately GBP125 million. The vast
majority of these assets have been sourced off-market through the
Investment Advisor's extensive contacts and relationships;
-- The pipeline has an average net initial yield of 5.5 per
cent, a long WAULT to first break of over 25 years and benefits
from rents which are all either inflation linked or contain fixed
uplifts. The pipeline includes:
o Two sale and leaseback portfolios focused on the education
sector which the Investment Advisor has identified as a new long
income sub-sector for the Company which currently benefits from
attractive investment fundamentals;
o Long lease, forward funding grocery assets pre-let to Lidl,
Co-Op and Sainsbury's which the Investment Advisor believes are
available at attractive net initial yields and benefit from long
inflation linked leases with low and sustainable underlying rental
levels; and
o A forward funding portfolio of drive-thru coffee assets which
will add further scale to the Company's existing investments in
this space.
-- The Investment Advisor expects all of these opportunities to
be available in the near-term. However, the Investment Advisor will
also continue to explore other opportunities across the market to
provide additional visibility on current pricing as well as
optionality if acceptable terms cannot be reached with the
preferred vendors.
The Placing is being conducted under the Company's existing
Share Issuance Programme in accordance with the prospectus dated 18
February 2021, as supplemented by the supplementary prospectus
dated 23 June 2021.
Commenting on today's announcement, Stephen Hubbard, Chairman of
LXi REIT plc, said:
"This Placing will enable the Company to capitalise on a near
term pipeline of sale and leaseback and other long income, forward
funding opportunities. The properties in the pipeline are
diversified across a range of defensive and structurally supported
sub-sectors and let to high-quality tenant covenants.
We are delighted to see the strong valuation gains across the
portfolio over the last few months. We specifically note that the
Company's purchases since our 31 March 2021 results have risen in
value by an average of 9 per cent. which demonstrates our ability
to create additional value for shareholders by sourcing attractive
off-market properties and forward funding opportunities.
At a time when inflation concerns are rising, the value in our
long leases with embedded indexation and strong property and
covenant fundamentals is becoming clearer to all. We expect the
portfolio to continue to deliver attractive and resilient returns
to our shareholders going forward."
Background to the Placing
The Company listed on the London Stock Exchange in 2017 with the
objective of delivering inflation-protected income, as well as
ongoing capital growth, by investing in a diversified portfolio of
UK property that benefits from long term index-linked leases with
institutional-grade tenants.
The Company currently has a portfolio of approximately GBP1.1
billion(1) , across over 140 assets and is further diversified by
multiple long income real estate sub-sectors including Industrial
and Logistics, Grocery and Healthcare. 95 per cent. of the
Company's rent is linked to RPI/CPI or benefits from fixed
increases and the weighted average unexpired lease term to first
break across the portfolio is 22 years(2) .
The Company has a conservative approach to gearing, with a
medium term target LTV of 30 per cent. The Company has recently
agreed terms to expand its revolving credit facility by GBP65
million at an attractive 1.55 per cent. margin over SONIA providing
additional operational flexibility.
Despite difficult trading conditions, the Company has performed
well over the last year with very high levels of rent collection
and the Company now has a market capitalisation of approximately
GBP900 million. Since its IPO the Company has delivered a total
accounting return of 11 per cent. per annum, comprising compounded
annual NAV growth and dividends paid to shareholders(2) .
As a REIT, the Company is focused on delivering high-quality and
stable dividends to its shareholders which will grow in line with
the Company's inflation linked rental streams. The Company has a
dividend target of 6.0 pence per Ordinary Share for the financial
year to 31 March 2022(3) , which represents a dividend yield of 4.5
per cent. at the Placing Price.
Estimated Net Asset Value
The Company's portfolio has been valued by its independent third
party valuer as at 1 June 2021 at GBP1.08 billion reflecting a 4.7
per cent. net initial yield.
On a like-for-like basis the Company's real estate sub-sectors
have all experienced valuation gains since the Company's
independent valuation on 31 March 2021 with the largest contributor
being the Company's industrial and logistics portfolio which
continues to benefit from strong investment markets, good covenants
and attractive supply and demand fundamentals. In addition, the
Company's recent purchases acquired since 31 March 2021 have also
benefited from increases in value with an average increase from
acquisition cost to the 1 June 2021 valuation of 9 per cent. This
demonstrates the Investment Advisor's ability to create additional
value for shareholders by sourcing off-market properties and
forward funding opportunities at attractive valuations.
The updated portfolio valuation results in an unaudited
Estimated NAV and Estimated EPRA NTA of 130 pence per Ordinary
Share(4) , as at 1 June 2021. This represents an increase of 3.4
per cent. since the Company's last results for the 12 months ended
31 March 2021 which were announced on 19 May 2021.
Use of proceeds
The Company has established a strong track record of sourcing
high-quality assets in advance of a fundraise and efficiently
executing acquisitions afterwards, thereby minimising the
potentially negative effect of cash drag on financial returns as
well as providing investors with visibility on the use of proceeds.
Indeed, following the Company's last fundraise in February 2021,
the Company has successfully acquired GBP170 million of assets, the
majority of which had been identified by the Investment Advisor
prior to the February 2021 equity raise, which helped to ensure
that the equity from this fundraise was invested within eight
weeks.
The Investment Advisor has identified approximately GBP125
million of attractive, long income opportunities which it expects
to be available for acquisition in the near term and which meet the
Company's stringent acquisition criteria (the "Pipeline" ). The
Pipeline has an average net initial yield of 5.5 per cent., a long
WAULT to first break of over 25 years and benefits from rents which
are all either inflation linked or contain fixed uplifts.
The Pipeline includes two sale and leaseback transactions in the
education sector. This sector continues to enjoy strong levels of
government support whilst changing lifestyles and consumer
expectations has created additional demand for education assets,
especially at the nursery level. The education focused Pipeline
assets consist of:
-- An off-market, nursery school portfolio with new 30 year,
annual RPI linked leases, a substantial group covenant, and strong
rent covers; and
-- An off-market, special education day school portfolio with
new 35 year, annual RPI linked leases, government linked income and
strong rent covers.
The Pipeline also includes six further opportunities which are
currently in due diligence and include:
-- Long lease grocery assets pre-let to Lidl, Co-Op and
Sainsbury's. All four of the assets are forward funding
opportunities which benefit from modern and well-designed buildings
with good EPC ratings, low transaction costs, attractive net
initial yields averaging 5.23 per cent. and an average WAULT of 18
years; and
-- A forward funding portfolio of drive-thru coffee assets with
15 year, RPI linked leases. The Company continues to add scale in
the drive thru sub-sector which benefits from strong property and
credit fundamentals and this transaction would allow the Company to
control a portfolio of 41 drive-thrus with a total value of
approximately GBP60 million.
As with prior fundraise pipelines, the Company does not
necessarily intend to invest in all the identified opportunities.
However, the size and diversification of the Pipeline allows it to
exercise pricing discipline when negotiating with vendors as well
as helping to ensure efficient and timely deployment of
capital.
Given the size and compelling nature of the current Pipeline,
the Board and the Investment Advisor believe that it is now an
appropriate time for the Company to issue new equity from its
ongoing Share Issuance Programme in order to take advantage of
these opportunities.
The consideration for the purchase of any of the Pipeline, if
made, will be met from the net proceeds from the Placing with any
balance to be funded from debt financing and/or assets sales as
appropriate.
Benefits of the placing
The Board believes that proceeding with the Placing will have
the following benefits for the Company:
-- the net proceeds will be used to invest in an identified
pipeline of long income real estate opportunities, further
diversifying the portfolio, supplementing the Company's growing,
inflation linked, income stream and capitalising on the Company's
growing position in the long income real estate market;
-- create the potential to enhance the NAV per share of the
existing Ordinary Shares through the issuance of New Ordinary
Shares at a premium to NAV, after the related costs have been
deducted;
-- spread the Company's fixed running costs across a wider base
of shareholders thereby reducing the total expense ratio; and
-- an increase in the Company's equity should improve liquidity
and enhance the marketability of the Company's shares and result in
a broader investor base over the longer term.
Further information on the Placing
The Company is proposing to raise gross issue proceeds of
approximately GBP 75 million by way of the Placing of 56,390,977
New Ordinary Shares pursuant to the Share Issuance Programme, at
the Placing Price of 133 pence per New Ordinary Share.
Peel Hunt LLP ("Peel Hunt") and Jefferies International Limited
("Jefferies") are acting as joint global co-ordinators and
bookrunners to the Company in connection with the Placing with Peel
Hunt also acting as the Company's Sponsor. Peel Hunt and Jefferies
will today commence a bookbuild process in respect of the Placing
at the Placing Price. The Placing will be non-pre-emptive pursuant
to the terms set out in the Prospectus and is expected to close no
later than 4pm on 30 June 2021 but may be closed earlier or later
at the absolute discretion of Jefferies, Peel Hunt and the
Company.
The Placing is conditional, inter alia, on the New Ordinary
Shares being admitted to listing on the premium listing segment of
the Official List of the FCA, and to trading on the main market for
listed securities of the London Stock Exchange (together, "
Admission " ). It is expected that Admission will become effective
on, and that dealings for normal settlement in the New Ordinary
Shares will commence on the London Stock Exchange by, 8.00 a.m. on
5 July 2021.
The New Ordinary Shares issued pursuant to the Placing will rank
pari passu in all respects with the existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid by reference to a record date
after the date of issue. For the avoidance of doubt, investors in
the Placing will not be entitled to receive the interim quarterly
dividend in respect of the quarter ended 31 March 2021 of 1.46
pence per Ordinary Share, payable on 16 July 2021 to shareholders
on the register at 25 June 2021. However, investors will be
entitled to receive the quarterly dividend declared by the Company
for the three-month period to 30 June 2021, which is expected to be
declared in September 2021.
The target number of New Ordinary Shares to be issued pursuant
to the Placing is approximately 56.4 million but the Board may
increase the number of New Ordinary Shares to be issued under the
Placing if it, in consultation with Jefferies, Peel Hunt and the
Investment Advisor, believes there is sufficient investor demand
for those shares and suitable assets available for investment in
which to deploy the Placing proceeds in a timely and efficient
manner.
The Placing is not being underwritten. The Placing may be scaled
back by the Company for any reason, including where it is necessary
to scale back allocations to ensure the Placing proceeds align with
the Company's post fundraise acquisition targets. Details of the
number of New Ordinary Shares to be issued pursuant to the Placing
will be determined by the Board (following consultation with
Jefferies, Peel Hunt and the Investment Advisor) and will be
announced as soon as practicable after the close of the
Placing.
The Company has not entered into any legally binding contractual
arrangements to acquire any of the Pipeline properties. There can
therefore be no assurance that any of the properties identified in
the Company's pipeline will be purchased by the Company. 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 equity and debt raised on and since the Company's
IPO cannot therefore be taken as an indication of the speed of
deployment of the net proceeds of the Placing.
The Placing Price is 133 pence per New Ordinary Share. The
Placing Price has been set by the Board following their assessment
of market conditions and represents a 2.3 per cent. premium to the
Company's Estimated NAV and Estimated EPRA NTA of 130 pence per
Ordinary Share as at 1 June 2021 and, a discount of 7.9 per cent.
to the Company's closing share price of 144.4 pence per Ordinary
Share on 23 June 2021 (being the last business day prior to this
announcement).
By choosing to participate in the Placing and by making an oral
and legally binding offer to subscribe for Ordinary Shares,
investors will be deemed to have read and understood this
announcement and the Prospectus in their entirety and to be making
such offer on the terms and subject to the conditions in the
Prospectus, and to be providing the representations, warranties and
acknowledgements contained therein.
A copy of the Prospectus and the Supplementary Prospectus is
available on National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism as well as
on the Company's website at www.lxireit.com. Full details of the
Terms and Conditions of the Placing are available in the
Prospectus.
In order to ensure that UK retail shareholders of the Company
can participate in the Company's fundraising plans, the Company
intends to also make a retail offer via PrimaryBid on a similar
timetable to the Placing. Details of the retail offer will be
announced later today via a regulatory information service.
Expected Timetable
Placing opens 24 June 2021
Latest time and date for applications 4pm on 30 June 2021
under the Placing
-------------------------
Results of the Placing announced 1 July 2021
-------------------------
Admission of the New Ordinary 8.00 a.m. on 5 July 2021
Shares to the Official List and
commencement of dealings on the
London Stock Exchange's main
market
-------------------------
The dates and times specified above are subject to change. In
particular, the Directors may (with the prior approval of Jefferies
and Peel Hunt) bring forward or postpone the closing time and date
for the Placing. In the event that a date or time is changed, the
Company will notify persons who have applied for New Ordinary
Shares by post, by electronic mail or by the publication of a
notice through a Regulatory Information Service. References to all
times are to London times unless otherwise stated.
Dealing codes
Ticker LXI
ISIN for the Ordinary GB00BYQ46T41
Shares
SEDOL for the Ordinary BYQ46T4
Shares
Legal Entity Identifier 2 138008YZGXOKAXQVI45
(LEI)
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Maitland/AMO
John White
Simon Lee
Freddie Brooks
Peel Hunt LLP (Sponsor, Joint Global Co-ordinator,
Joint Broker and Joint Bookrunner
Luke Simpson, Liz Yong, Huw Jeremy, Tom
Pocock (IBD)
Alex Howe, Chris Bunstead (Sales), Al Rae,
Sohail Akbar (Syndicate) 020 7418 8900
---------------------------------
J efferies International Limited 020 7029 8000
(Joint Global Co-ordinator, Joint Broker lxi@jefferies.com
and Joint Bookrunner)
Tom Yeadon
Ed Matthews
---------------------------------
Maitland/AMO (Communications Adviser) 07747 113 930
James Benjamin lxireit-maitland@maitland.co.uk
---------------------------------
References:
(1) As at 1 June 2021
(2) As at 31 March 2021
(3) These are guidance levels or targets only and not a profit
forecast. In setting this target the Board has applied
sensitivities to contracted rental income that reflect the possible
impact of the COVID-19 pandemic and assessed the effect of such
sensitivities on the net earnings and liquidity of the Group. The
target assumes that future rent collection is not materially lower
than that achieved so far throughout the pandemic and the Board
reserves the right to withdraw or amend guidance in the event that
rent collection materially worsens. There can be no assurance that
this target will be met and it should not be taken as an indication
of the Group's expected future results which may be impacted by
events or circumstances existing or arising after the date that the
Annual Dividend Target was announced.
(4) The Estimated NAV and Estimated EPRA NTA has been calculated
on an ex-dividend basis and therefore excludes the interim
quarterly dividend in respect of the quarter ended 31 March 2021 of
1.46 pence per Ordinary Share, payable on 16 July 2021 to
shareholders on the register at 25 June 2021.
Unless otherwise defined, capitalised terms used in this
announcement shall have the same meaning as set out in the
Prospectus.
Notes:
LXI REIT plc invests in UK commercial property assets let, or
pre-let, on long-term, triple-net, inflation-linked leases to a
wide range of strong tenant covenants across a diverse range of
robust property sectors.
The Company aims to provide shareholders with an attractive
return, in the form of quarterly income distributions and with the
potential for capital and income growth from key strategies which
include indexed rental uplifts, pre-let forward fundings, sale and
leasebacks, and off-market, value driven acquisitions and
sales.
The Company is targeting an annual dividend of 6.0 pence per
Ordinary Share for the 12-months commencing 1 April 2021 (3) and
has delivered an average total NAV return of 10.1 per cent. per
annum since IPO to 31 March 2021. The Group's medium-term total
return target is a minimum of 8 per cent. per annum.
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 250, FTSE EPRA/NAREIT
and MSCI indices.
Further information on the Company is available at
www.lxireit.com .
Important Information
This announcement is an advertisement for the purposes of the
Prospectus Regulation Rules of the UK Financial Conduct 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 the
tripartite prospectus (comprising a summary, registration document
and securities note) published by LXi REIT plc on 18 February 2021,
as supplemented by the supplementary prospectus published by LXi
REIT plc on 23 June 2021 (together, the "Prospectus"), and not in
reliance on this announcement .
The Prospectus is available, subject to certain access
restrictions, on the Company's website
(www.lxireit.com/company-documents), at the Company's registered
office at 1st Floor Senator House, 85 Queen Victoria Street, London
EC4V 4AB, and at the National Storage Mechanism via
https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Approval of
the Prospectus by the FCA should not be understood as an
endorsement of the securities that are the subject of the
Prospectus. Potential investors are recommended to read the
Prospectus before making an investment decision in order to fully
understand the potential risks and rewards associated with a
decision to invest in the Company's securities. 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.
Neither the content of the Company's website, nor the content on
any website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of an RIS announcement,
should any such content be relied upon in reaching a decision as to
whether or not to acquire, continue to hold, or dispose of,
securities in the Company. 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. Approval of the
Prospectus by the FCA should not be understood as an endorsement of
the securities that are the subject of the Prospectus. Potential
investors are recommended to read the Prospectus before making an
investment decision in order to fully understand the potential
risks and rewards associated with a decision to invest in the
Company's securities.
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 Alvarium Fund Managers (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"). 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 securities 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.
Further, this announcement is not for release, publication or
distribution into Australia, New Zealand, Canada, Singapore, the
Republic of South Africa, Japan or any member state of the EEA
(other than any member state of the EEA where the Company's
securities may be lawfully marketed) or any other jurisdiction
where such distribution is unlawful.
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. Each of
Peel Hunt LLP ("Peel Hunt") and Jefferies International Limited
("Jefferies"), both of which are authorised and regulated in the
United Kingdom by the FCA, are acting exclusively for the Company
and for no-one else and will not regard any other person (whether
or not a recipient of this announcement or the Prospectus) as its
client in relation to the Placing, the Share Issuance Programme and
the other arrangements referred to in the Prospectus 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 Placing, the Share Issuance Programme, any
Admission and the other arrangements referred to in this
announcement and in the Prospectus.
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, Peel
Hunt and Jefferies 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 Regulation Rules of the Financial Conduct
Authority, the UK 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 Jefferies, or any of their 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 Jefferies, and their affiliates,
accordingly disclaim all and any liability whether arising in tort,
contract or otherwise which they might otherwise be found to have
in respect of this announcement or its contents or otherwise
arising in connection therewith.
In connection with the Placing and/or any other Subsequent
Issue, Peel Hunt and/or Jefferies, and any of their affiliates, may
take up a portion of the New Ordinary Shares 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 Placing, the relevant Subsequent Issue or otherwise.
Accordingly, references in the Prospectus 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 and/or Jefferies and any of its
affiliates acting in such capacity. In addition Peel Hunt and/or
Jefferies, and any of their affiliates may enter into financing
arrangements (including swaps or contracts for differences) with
investors in connection with which Peel Hunt and/or Jefferies, and
any of their affiliates may from time to time acquire, hold or
dispose of Ordinary Shares. Peel Hunt and Jefferies do 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) the UK's implementation of EU Directive
2014/65/EU on markets in financial instruments, as amended ("UK
MiFID II"); and (b) the UK's implementation of Articles 9 and 10 of
Commission Delegated Directive (EU) 2017/593 supplementing UK MiFID
II, and in particular Chapter 3 of the Product Intervention and
Product Governance Sourcebook of the FCA (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 UK MiFID II; and (ii) eligible for distribution
through all distribution channels as are permitted by UK 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 Placing and/or Share Issuance Programme. Furthermore, it is
noted that, notwithstanding the Target Market Assessment, Peel Hunt
and Jefferies will only procure investors (pursuant to the Placing
and Share Issuance Programme) who meet the criteria of professional
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