NewRiver REIT plc Capital & Regional - Statement re Possible Offer
23/05/2024 09:41
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RNS Number : 6541P NewRiver REIT PLC 23 May 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS
AND MERGERS (THE "CODE"). IT DOES NOT REPRESENT A FIRM INTENTION TO MAKE AN
OFFER UNDER RULE 2.7 OF THE CODE. ACCORDINGLY, THERE CAN BE NO CERTAINTY THAT
ANY FIRM OFFER WILL BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
23 May 2024
NewRiver REIT plc
("NewRiver" or the "Company")
Possible Offer for Capital & Regional plc ("Capital & Regional")
The Board of NewRiver notes the recent announcement by Capital & Regional
and confirms that it has made a proposal to Growthpoint Properties Limited
("Growthpoint") which holds 68.1% of the issued share capital of Capital &
Regional in regard to a possible offer in cash and shares for the entire
issued, and to be issued, share capital of Capital & Regional (the
"Possible Offer"). NewRiver also confirms that it has not communicated that
proposal to Capital & Regional. It is intended that this would occur if
Growthpoint confirms that it would be prepared to support the terms of that
Possible Offer. The Board of NewRiver of course recognises that the Board of
Capital & Regional must make its own fair and reasonable assessment of the
Possible Offer in the event that NewRiver makes the proposal to Capital &
Regional.
The Board of NewRiver believes that a combination with Capital & Regional,
on the terms of the Possible Offer proposed to Growthpoint, would be
significantly accretive to NewRiver's earnings and result in a pro-forma Loan
to Value ("LTV") ratio that is broadly in-line with NewRiver's guidance.
There can be no certainty that any offer will be made, nor as to the terms of
any such offer.
The Board of NewRiver has given significant consideration to the ways in which
a combination of NewRiver and Capital & Regional could generate value for
our respective shareholders. NewRiver's Board believes that, provided sensible
terms for a transaction can be agreed, the acquisition of Capital &
Regional would significantly accelerate NewRiver's growth ambitions, whilst
delivering significant value for both Capital & Regional and NewRiver
shareholders and also maintaining NewRiver's core operational expertise in
retail real estate.
The Board of NewRiver believes that a combination of Capital & Regional
and NewRiver (the "Combined Group") represents a highly attractive proposition
for all shareholders on account of:
· Capital & Regional's high quality and complementary
portfolio: Capital & Regional's portfolio comprises six community shopping
centres predominantly located in London and South East England, let to
essential and value-oriented retailers that would be highly complementary to
NewRiver's existing portfolio. NewRiver knows these assets well and believes
that the disposal of non-core assets in recent years and the acquisition of
The Gyle in Edinburgh in September 2023 have led to an improvement in the
quality and complementary nature of Capital & Regional's remaining
portfolio. Against this real estate background, the Board believes that the
financially accretive aspects of the combined business strategy can be readily
achieved;
· Combination expected to unlock substantial cost synergies and
deliver significant earnings accretion: NewRiver sees, inter alia, the
opportunity to unlock substantial cost synergies, including the elimination of
duplicative operational and public listing costs. NewRiver also anticipates
income growth opportunities through active asset management. NewRiver expects
the combination with Capital & Regional to deliver significant earnings
accretion, enabling the Combined Group to pay a materially higher, covered
dividend;
· Well-diversified portfolio with enhanced scale: the Combined
Group would have a retail focused portfolio with a comparable yield profile,
valued at c.£920 million (comprising 42 assets), and assets under management
of c.£1.7 billion (comprising 63 assets) based upon the last reported figures
for both companies. The combined portfolio would continue to benefit from a
well-diversified and complementary tenant base with low levels of tenant
concentration; and
· Increased trading liquidity: As a result of its enhanced scale,
it is expected the Combined Group would benefit from increased share trading
liquidity, enlarged index weightings, enhanced debt optionality and potential
cost of capital improvements.
Any firm intention to make an offer under Rule 2.7 of The City Code on
Takeovers and Mergers (the "Code"), would be contingent on securing the
support of Growthpoint and the satisfaction or waiver of certain customary
conditions, including completion of due diligence to the satisfaction of
NewRiver. The Board of NewRiver further confirms that in formulating a
Possible Offer, it would act with the necessary prudence to maintain
NewRiver's balance sheet strength. As stated above, the Board of NewRiver
anticipates that NewRiver's pro-forma LTV implied by a Possible Offer would
remain broadly in-line with previous guidance.
As required by Rule 2.6(a) of the Code, NewRiver is required, by not later
than 5.00 p.m. on 20 June 2024, either to announce a firm intention to make an
offer for the Company in accordance with Rule 2.7 of the Code or to announce
that it does not intend to make an offer, in which case the announcement will
be treated as a statement to which Rule 2.8 of the Code applies. This deadline
may be extended with the consent of the Panel on Takeovers and Mergers
("Takeover Panel") in accordance with Rule 2.6(c) of the Code. For the
purposes of Rule 2.5(a) of the Code, NewRiver reserves the right to vary the
form and mix of the consideration and/or to introduce other forms of
consideration.
A further announcement will be made if and when appropriate. There can be no
certainty any offer will be made, even if the pre-conditions are satisfied or
waived, nor as to the terms of any offer.
This announcement is being made without the consent of Capital & Regional
or Growthpoint.
For further information
NewRiver REIT plc +44 (0)20 3328 5800
Allan Lockhart (Chief Executive)
Will Hobman (Chief Financial Officer)
Jefferies International Limited (Lead Financial Adviser and Joint +44 (0)20 7029 8600
Corporate Broker)
Philip Noblet
Rishi Bhuchar
Ed Matthews
+44 (0)20 3100 2000
Liberum Capital Limited (Joint Corporate Broker)
Jamie Richards
Nikhil Varghese
Shore Capital Stockbrokers Limited (Joint Corporate Broker) +44 (0)20 7408 4090
Mark Percy
Malachy McEntyre
Ben Canning
FTI Consulting +44 (0)20 3727 1000
Dido Laurimore
Giles Barrie
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 as it forms part of the law of England and Wales by virtue
of the European Union (Withdrawal) Act 2018. This announcement has been
authorised for release by the Board of Directors of NewRiver.
Important Notices
This announcement does not constitute a prospectus or prospectus equivalent
document. This announcement is not intended to, and does not, constitute or
form part of any offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any jurisdiction,
pursuant to this announcement or otherwise. Any offer, if made, will be made
solely by certain offer documentation which will contain the full terms and
conditions of any offer, including details of how it may be accepted or a vote
submitted in favour of it.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore, any person who is subject to the laws of any
jurisdiction other than the United Kingdom will need to inform themselves
about, and observe, any applicable requirements. Any failure to comply with
such requirements may constitute a violation of the securities laws or
regulations of the relevant jurisdictions.
Notices Related to Financial Advisers
Jefferies International Limited ("Jefferies"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively for NewRiver and no one else in connection with the Possible Offer
and shall not be responsible to anyone other than NewRiver for providing the
protections afforded to clients of Jefferies, nor for providing advice in
connection with the Possible Offer or any matter referred to herein. Neither
Jefferies nor any of its affiliates (nor any of its or their respective
directors, officers, employees, representatives or agents) owes or accepts any
duty, liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Jefferies in connection with the Possible
Offer, this announcement, any statement contained herein or otherwise.
Kinmont Limited ("Kinmont"), which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively for NewRiver
and no one else in connection with the Possible Offer and shall not be
responsible to anyone other than NewRiver for providing the protections
afforded to clients of Kinmont, nor for providing advice in connection with
the Possible Offer or any matter referred to herein. Neither Kinmont nor any
of its affiliates (nor any of its or their respective directors, officers,
employees, representatives or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Kinmont in connection with the Possible Offer, this announcement,
any statement contained herein or otherwise.
Liberum Capital Limited ("Liberum"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively for NewRiver and no one else
in connection with the matters described in this announcement. Liberum will
not regard any other person (whether or not a recipient of this announcement)
as its client in relation to the matters described in this announcement and
will not be responsible to anyone other than NewRiver for providing the
protections afforded to its clients or for providing any advice in relation to
matters or arrangements referred to herein. Neither Liberum nor any of its
affiliates (nor any of its or their respective directors, officers, employees,
representatives or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Liberum in connection with the Possible Offer, this announcement,
any statement contained herein or otherwise.
Shore Capital Stockbrokers Limited ("Shore Capital"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively for NewRiver and no one else in connection with the Possible Offer
and shall not be responsible to anyone other than NewRiver for providing the
protections afforded to clients of Shore Capital, nor for providing advice in
connection with the Possible Offer or any matter referred to herein. Neither
Shore Capital nor any of its affiliates (nor any of its or their respective
directors, officers, employees, representatives or agents) owes or accepts any
duty, liability or responsibility whatsoever (whether direct, indirect,
consequential, whether in contract, in tort, under statute or otherwise) to
any person who is not a client of Shore Capital in connection with the
Possible Offer, this announcement, any statement contained herein or
otherwise.
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, (https://www.thetakeoverpanel.org.uk/) including
details of the number of relevant securities in issue, when the offer period
commenced and when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any
doubt as to whether you are required to make an Opening Position Disclosure or
a Dealing Disclosure.
Rule 26.1 Disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available at www.nrr.co.uk by no later than 12 noon (London time) on 24 May
2024.
For the avoidance of doubt, the content of the website referred to in this
announcement is not incorporated into and does not form part of this
announcement.
No profit forecasts, profit estimates or quantified financial benefits
statements
Nothing in this announcement (including any statement of estimated synergies)
is intended as a profit forecast, profit estimate or quantified financial
benefit statement for any period and no statement in this announcement should
be interpreted to mean that earnings or earnings per share or dividend per
share for NewRiver or Capital & Regional, as appropriate, for the current
or future financial years would necessarily match or exceed the historical
published earnings or earnings per share or dividend per share for NewRiver or
Capital & Regional, as appropriate.
Forward-looking statements
This announcement and certain oral statements made regarding the Possible
Offer and other information published by NewRiver containing statements about
NewRiver, Capital & Regional and/or the Combined Group are or may be
deemed to be forward-looking statements. All statements other than statements
of historical facts included in this announcement, may be forward-looking
statements. Without limitation, any statements preceded or followed by or that
include the words "targets", "plans", "believes", "expects", "aims",
"intends", "hopes", "continues", "would", "could", "should", "will", "may",
"anticipates", "estimates", "projects" or words or terms of similar substance
or the negative thereof, are forward-looking statements. Forward-looking
statements include statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and future
prospects; and (ii) business and management strategies and the expansion and
growth of NewRiver, Capital & Regional or the Combined Group's operations
and potential cost and operating synergies resulting from the Possible Offer.
These forward-looking statements are not based on historical fact and are not
guarantees of future performance. By their nature, such forward-looking
statements involve known and unknown risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ materially from
those projected or implied in any forward-looking statements. Many of these
risks and uncertainties relate to factors that are beyond the entities'
ability to control or estimate precisely. These factors include, but are not
limited to, changes in political and economic conditions, changes in levels of
capital investment, success of business and operating initiatives, the impact
of any acquisitions or similar transactions, changes in tenants' strategies
and stability, changes in the regulatory environment and fluctuations of
rates, and changes in tax rates. They have not been reviewed by the auditors
of NewRiver or Capital & Regional. Neither NewRiver, nor any of its
affiliates or directors, officers, employees or advisers, provides any
representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this announcement
will actually occur. Neither NewRiver, nor any of its affiliates or directors,
officers, employees or advisers assumes any obligation to update or correct
the information contained in this announcement except as required by
applicable law. Due to such uncertainties and risks, readers are cautioned not
to place undue reliance on such forward-looking statements, which speak only
as of the date of this announcement. NewRiver disclaims any obligation to
correct or update any forward-looking or other statements contained in this
announcement, except as required by applicable law or by the rules of any
competent regulatory authority, whether as a result of new information, future
events or otherwise.
Rule 2.4 Information
In accordance with Rule 2.4(c)(iii) of the Code, NewRiver confirms that it is
not aware of any dealings in Capital & Regional shares that would require
it to offer a minimum level, or a particular form, of consideration under Rule
6 or Rule 11 of the Code. However, it has not been practicable for NewRiver to
make enquiries of all persons acting in concert with it prior to the date of
this announcement in order to confirm whether any details are required to be
disclosed under Rule 2.4(c)(iii) of the Code. To the extent that any such
details are identified following such enquiries, NewRiver will make an
announcement disclosing such details as soon as practicable, and in any event
by no later than the time it is required to make its Opening Position
Disclosure under Rule 8.1 of the Code."
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, as at the close of business on 22 May
2024 (being the business day prior to the date of this announcement), NewRiver
confirms that its issued share capital consisted of 313,686,292 ordinary
shares of one penny each with voting rights, of which 3,317,219 ordinary
shares are held in the Employee Benefit Trust (EBT). Accordingly, the total
number of voting rights in the Company is 310,369,074. The Company does not
hold any shares in treasury. The International Securities Identification
Number (ISIN) of the ordinary shares is GB00BD7XPJ64.
About NewRiver
NewRiver REIT plc ("NewRiver") is a leading Real Estate Investment Trust
specialising in buying, managing and developing resilient retail assets
throughout the UK.
Our £0.54 billion UK wide portfolio covers 6.1 million sq ft and comprises 24
community shopping centres and 12 conveniently located retail parks occupied
by tenants predominately focused on essential goods and services. In addition,
we manage 18 retail parks and 5 shopping centres on behalf of Capital
Partners, taking our total Assets Under Management to £1.3 billion. Our
objective is to own and manage the most resilient retail portfolio in the UK,
focused on retail parks, core shopping centres, and regeneration opportunities
in order to deliver long term attractive recurring income returns and capital
growth for our shareholders.
NewRiver has a Premium Listing on the Main Market of the London Stock Exchange
(ticker: NRR). Visit www.nrr.co.uk for further information.
LEI Number: 2138004GX1VAUMH66L31
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