REG - LXI REIT PLC LondonMetric - Recommended all Share Merger Announcement
11/01/2024 07:15
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RNS Number : 3790Z LXI REIT PLC 11 January 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE
TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS, PROSPECTUS
EQUIVALENT DOCUMENT OR SCHEME DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE MERGER OR THE NEW LONDONMETRIC SHARES
EXCEPT ON THE BASIS OF INFORMATION IN THE SCHEME DOCUMENT AND THE COMBINED
CIRCULAR AND PROSPECTUS WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE.
FOR IMMEDIATE RELEASE
11 January 2024
RECOMMENDED ALL-SHARE MERGER OF
LXI REIT PLC ("LXI")
AND
LONDONMETRIC PROPERTY PLC ("LONDONMETRIC")
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
The boards of directors of LondonMetric and LXi are pleased to announce that
they have reached agreement on the terms of a recommended all-share merger
pursuant to which LondonMetric will acquire the entire issued and to be issued
ordinary share capital of LXi (the "Merger" forming the "Combined Group"). It
is intended that the Merger will be effected by means of a scheme of
arrangement under Part 26 of the Companies Act.
Under the terms of the Merger, each LXi Shareholder will be entitled to
receive:
for each LXi Share held: 0.55 New LondonMetric Shares (the "Exchange Ratio")
((1))
On the basis of the Undisturbed Closing Price per LondonMetric Share of 197.4
pence on 15 December 2023 (being the last Business Day before the Offer Period
began), the Merger values the entire issued and to be issued ordinary share
capital of LXi at approximately £1.9 billion and:
· represents a premium of approximately 9 per cent. to the Undisturbed
Closing Price per LXi Share of 99.5 pence;
· represents a premium of approximately 13 per cent. to the volume
weighted average Closing Price per LXi Share for the one-month period ended on
15 December 2023 of 95.7 pence; and
· implies an NTA discount of 4 per cent. based on each of the
LondonMetric and LXi Rolled-Forward Unaudited EPRA NTAs((2)).
Following completion of the Merger, existing LondonMetric Shareholders will
hold approximately 54 per cent. and LXi Shareholders will hold approximately
46 per cent. of the enlarged issued share capital of LondonMetric.
______________________
((1))( )The Exchange Ratio is based on an adjusted NTA to adjusted NTA
approach, taking into account the fair value of debt and derivatives,
potential liabilities in respect of German taxation and the termination of
LXi's management contract.
((2))( ) When applying the Exchange Ratio to the LondonMetric
Rolled-Forward Unaudited EPRA NTA.
Highlights of the Merger
The boards of directors of each of LondonMetric and LXi believe that the
Merger would build on the strengths and strong track records of both companies
to create a new major UK REIT, aligned to structurally supported sectors with
high barriers to entry and income security, with a low cost base, better
access to capital through greater scale, and enhanced scope for capital
recycling and asset management to drive compounding income growth and total
returns for shareholders. Specifically, the Merger would result in:
· The creation of a new major UK REIT, with the Combined Group
having a EPRA NTA of approximately £4.1 billion, becoming the fourth largest
UK REIT, providing better access to capital and increasing share liquidity;
· The establishment of a UK-focused triple net lease REIT of scale,
with a highly efficient structure delivering reliable, repetitive and growing
income through the cycle. The Combined Group will be structured to continue
both companies' long track records of dividend growth, with LondonMetric
currently on track for a ninth consecutive year of dividend progression;
· The formation of a combined £6.2 billion portfolio aligned to
structurally supported sectors, with 93 per cent. exposure to the logistics,
healthcare, convenience, entertainment and leisure sectors, and with a strong
exposure to key operating assets that are mission critical to the occupiers'
businesses;
· Substantial cost and operating synergies,((3)) driving faster
earnings growth combined with dividend progression through economies of scale,
the removal of duplicative costs and increased operating margins and
efficiencies, targeting an EPRA cost ratio of 7 to 8 per cent. in the medium
term;
· Leadership by a highly regarded management team with strong
shareholder alignment, with the Combined Group drawing on the strengths of
both companies under the leadership of LondonMetric's highly experienced board
and senior management team to create a leading internal management platform
holding material shareholdings with deep market knowledge and strong occupier
relationships. The Combined Group will benefit from a highly disciplined
approach to capital allocation through pursuing identified opportunities
within the combined portfolio for asset and investment management, recycling
capital and seizing new and accretive growth opportunities;
· Strong income longevity and security, with a sector leading WAULT
of 19 years on FRI leases, 99 per cent. occupancy and high quality occupier
covenants. Strong income compounding prospects will be delivered through
index-linked and fixed uplift leases (which together total 80 per cent. of the
rent roll) and reversionary open market rent reviews (20 per cent. of the rent
roll) in sectors that enjoy high barriers to entry and strong levels of
occupier demand;
· Delivery of a Combined Group with a resilient capital structure,
with well staggered debt maturities and a conservative LTV of approximately 31
per cent., on a pro forma basis taking into account LXi's announced £210
million disposal of Travelodge assets((4)), with weighted average cost of debt
of 3.9 per cent., weighted average debt maturity of 5.6 years and, following
the arrangement of £700 million of unsecured debt facilities to replace £625
million of secured LXi facilities, £740 million of undrawn headroom;
· Enhanced and robust credit characteristics, with improved credit
metrics including net debt / EBITDA of 7.2x and ICR of 3.8x as at 30 September
2023; a conservative financial policy combined with increased scale puts the
Combined Group firmly on the path to a strong investment grade credit rating
thereby enhancing access to a broader range of funding sources; and
· The bringing together of two highly complementary strategic
approaches, with a key focus on income compounding, with reliable, repetitive
and growing earnings underpinning a progressive dividend with a strong
management platform to access new opportunities and deliver enhanced total
shareholder returns.
______________________
((3))( ) The statement regarding cost and operating synergies
resulting from the Merger is not intended as a quantified financial benefit
statement and should not be construed as such and is not subject to the
requirements of Rule 28 of the Takeover Code. The statement should not be
interpreted to mean that the cost and operating synergies will necessarily
result in a quantifiable benefit to the Combined Group.
((4))( ) Excluding the impact of disposal costs.
Recommendations
The LXi Directors, who have been so advised by Lazard and Jefferies as to the
financial terms of the Merger, unanimously consider the terms of the Merger to
be fair and reasonable. In providing their advice to the LXi Directors, Lazard
and Jefferies have each taken into account the commercial assessments of the
LXi Directors. Lazard and Jefferies are providing independent financial advice
to the LXi Directors for the purpose of Rule 3 of the Takeover Code.
Accordingly, the LXi Directors intend to recommend unanimously that LXi
Shareholders vote in favour of the Scheme at the Court Meeting and vote in
favour of the LXi Resolution to be proposed at the LXi General Meeting (or, in
the event that the Merger is implemented by way of a Takeover Offer, to accept
or procure acceptance of the Takeover Offer) as they have irrevocably
undertaken to do in respect of their, and their connected persons', beneficial
holdings of, in aggregate, 96,878,432 LXi Shares representing, in aggregate,
approximately 5.65 per cent. of the issued ordinary share capital of LXi as at
the Latest Practicable Date.
The Merger constitutes a reverse takeover for LondonMetric for the purposes of
the Listing Rules. Accordingly, the Merger will be conditional on the approval
by the LondonMetric Shareholders of the Merger and related matters at the
LondonMetric General Meeting.
The LondonMetric Directors have received financial advice from Barclays, Peel
Hunt and J.P. Morgan Cazenove in relation to the Merger. In providing their
advice to the LondonMetric Directors, each of Barclays, Peel Hunt and J.P.
Morgan Cazenove have relied upon the LondonMetric Directors' commercial
assessments of the Merger.
The LondonMetric Directors consider the Merger to be in the best interests of
LondonMetric Shareholders as a whole and, accordingly, the LondonMetric
Directors intend to recommend unanimously to LondonMetric Shareholders to vote
in favour of the LondonMetric Resolution to be proposed at the LondonMetric
General Meeting which is to be convened to approve the Merger and related
matters, as the LondonMetric Directors have irrevocably undertaken to do in
respect of their own beneficial holdings of, in aggregate, 9,334,273
LondonMetric Shares, representing approximately 0.85 per cent. of the issued
ordinary share capital of LondonMetric as at the Latest Practicable Date.
Proposed director for the Combined Group
Following completion of the Merger, it is expected that Nick Leslau will join
the LondonMetric Board as a non-executive director. The LondonMetric Board
believes that this appointment will deliver an appropriately-sized and
balanced board, with the complementary experience and skills necessary to
drive the Combined Group forward following the Merger and to provide good
continuity for LXi Shareholders together with very strong shareholder
alignment through the approximately 2.58 per cent. holding in the Combined
Group to be held by Nick Leslau and certain entities associated with him of
52,788,123 LondonMetric Shares following completion of the Merger.
Shareholder support and Lock-in Commitments
In addition to the irrevocable undertakings received from the LXi Directors,
LondonMetric has also received a letter of intent from Artemis Investment
Management LLP to vote in favour of the Scheme at the Court Meeting and to
vote in favour of the LXi Resolution to be proposed at the LXi General Meeting
(or, in the event that the Merger is implemented by way of a Takeover Offer,
to accept or procure acceptance of the Takeover Offer), in respect of a total
of 128,066,087 LXi Shares, representing approximately 7.46 per cent of the
issued ordinary share capital of LXi as at the Latest Practicable Date.
In total, therefore, LondonMetric has received irrevocable undertakings and a
letter of intent representing, in aggregate, approximately 13.12 per cent. of
the issued ordinary share capital of LXi on the Latest Practicable Date.
In addition, Nick Leslau has agreed that, subject to certain customary
exceptions, during the period of 12 months following the Effective Date, he
and certain entities associated with him will not offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, 39,591,092 New
LondonMetric Shares (or any interest therein or in respect thereof) issued on
completion of the Merger or enter into any transaction with the same economic
effect as any of the foregoing.
Further details of these irrevocable undertakings and the letter of intent are
set out in Appendix 3 to this Announcement.
Dividends
LXi Shareholders will be entitled to receive and retain LXi's third quarterly
dividend in respect of the quarter ended 31 December 2023, which is expected
to be declared in January 2024 and paid in February 2024 to LXi Shareholders
on LXi's register of members on a record date set prior to the expected Scheme
Record Time.
LondonMetric Shareholders will be entitled to receive and retain
LondonMetric's third quarterly dividend in respect of the quarter ended 31
December 2023 (the "LondonMetric Third Quarterly Interim Dividend"), which is
expected to be declared in February 2024 and paid in April 2024 to
LondonMetric Shareholders on LondonMetric's register of members on a record
date set on or prior to the expected Scheme Record Time. On the expected
dividend payment timetable only existing LondonMetric Shareholders will be
entitled to this dividend.
Based on the expected timetable for the Merger to become Effective, Scheme
Shareholders who retain their New LondonMetric Shares following completion of
the Merger would receive the LondonMetric fourth quarterly interim dividend in
respect of the Combined Group for the quarter ending 31 March 2024, which is
expected to be paid in July 2024. It is anticipated that the value of the
dividend received by such Scheme Shareholders in respect of their New
LondonMetric Shares for the quarter ending 31 March 2024 would be
approximately equivalent to the value of the quarterly dividend paid by LXi in
respect of the corresponding holding of LXi Shares in each of the first three
quarters of the financial year ending 31 March 2024, with LondonMetric
targeting a FY24 dividend increase of 7.4 per cent. to 10.2p per share. ((5))
______________________
((5))( ) This is a target and not a profit forecast.
Timetable and conditions
· It is intended that the Merger will be implemented by way of a scheme
of arrangement under Part 26 of the Companies Act 2006. However, subject to
the Panel's consent, LondonMetric reserves the right to elect to implement the
Merger by way of a Takeover Offer.
· Under the terms of the Merger certain resolutions related to the
Merger will be put to (i) the LXi Shareholders at the Court Meeting and at the
LXi General Meeting and (ii) the LondonMetric Shareholders at the LondonMetric
General Meeting, and the Merger is conditional upon such resolutions being
passed by the requisite majorities. In order to become Effective, the Scheme
must be approved by a majority in number of Scheme Shareholders present and
voting at the Court Meeting, either in person or by proxy, representing at
least 75 per cent. in value of the Scheme Shares held by those Scheme
Shareholders. In addition, at the LXi General Meeting, the LXi Resolution must
be passed by LXi Shareholders representing at least 75 per cent. of the votes
validly cast on that resolution, whether in person or by proxy. The LXi
General Meeting will be held immediately after the Court Meeting.
· At the LondonMetric General Meeting, the LondonMetric Resolution
requires the approval of a simple majority of votes cast, in person or by
proxy, in order to be passed. The LondonMetric General Meeting will be held on
or around the same date as the LXi Meetings.
· The Merger will be implemented in accordance with the Takeover Code
and on the terms and subject to the Conditions which are set out in Appendix 1
to this Announcement and on the further terms and conditions that will be set
out in the Scheme Document.
· It is expected that the Scheme Document, containing further
information about the Merger and notices of the LXi Meetings, together with
the Forms of Proxy and the Combined Circular and Prospectus containing further
information on LondonMetric and the Combined Group and notice of the
LondonMetric General Meeting, will be published as soon as practicable and, in
any event, within 28 days of this Announcement, unless LondonMetric and LXi
otherwise agree, and the Panel consents, to a later date.
· It is expected that the Scheme will become Effective by 31 March
2024, subject to the satisfaction or waiver (as applicable) of the Conditions
and the further terms set out in Appendix 1 to this Announcement and to the
full terms and conditions of the Merger which will be set out in the Scheme
Document. An expected timetable of principal events will be included in the
Scheme Document.
· This Announcement contains property valuations supported by reports
from the external valuers (as defined by the Royal Institution of Chartered
Surveyors' Valuation - Global Standards (2022)) for both LXi and LondonMetric
as at 31 December 2023 pursuant to the requirements of Rule 29 of the Takeover
Code.
Commenting on the Merger, Andrew Jones, Chief Executive of LondonMetric, said:
"This is a compelling transaction which creates the UK's leading triple net
lease REIT and underscores our ambitions to leverage our management platform
and access exciting new opportunities across the UK real estate market.
The deal gives us access to a very well let triple net portfolio of key
operating assets and brings together two highly complementary
investment approaches that embrace the qualities of income compounding.
The combined £6.2 billion portfolio will have no legacy assets, full
occupancy, high occupier contentment and exceptional income longevity with a
high certainty of growth - both organically and contractually.
In the world of income compounding, bigger is better and the deal will deliver
economies of scale, substantial cost savings, better liquidity and improved
terms in both debt and equity markets which will drive accelerated earnings
and dividend progression. Increased scale will allow us to look at the widest
possible range of opportunities and we will have more tools at our disposal to
carry on our trade, which will allow further operating synergies.
Our team is strongly aligned to shareholders and has deep real estate
experience with a strong track record for capital allocation, asset recycling
and active management. This strategy will not change and our proactive culture
will remain intact, and whilst we will undoubtedly look to reposition parts of
the portfolio, this will be more of a tilt than a pivot with logistics
remaining our strongest conviction call for organic growth."
Commenting on the Merger, Cyrus Ardalan, Chairman of LXi, said:
"LXi has delivered strong growth and outperformance since its IPO in 2017
thanks to its high quality, resilient and actively managed long income
portfolio. The Board of LXi would like to thank the LXi REIT Advisors team for
the important contribution they have made to the company's success.
The merger with LondonMetric will build on the strengths and track records of
both LXi and LondonMetric. It will create the UK's leading triple net lease
REIT with an enlarged and more diversified portfolio aligned to structurally
supported sectors, a robust and predominantly unsecured capital structure,
broader appeal to investors and enhanced share liquidity, and a highly
regarded internal management team.
The Merger will position the Combined Group for continued growth and
outperformance and the delivery of reliable, sustainable and progressive
dividends through the cycle, thereby underpinning superior total shareholder
returns."
The above summary should be read in conjunction with, and is subject to, the
full text of this Announcement and its Appendices. The Merger will be subject
to the Conditions and further terms set out in Appendix 1 to this Announcement
and to the full terms and conditions which will be set out in the Scheme
Document. Appendix 2 to this Announcement contains the sources of information
and bases of calculation of certain information contained in this
Announcement. Appendix 3 to this Announcement contains a summary of the
irrevocable undertakings and letter of intent received in relation to the
Merger. Property valuation reports for LXi and LondonMetric (each as at 31
December 2023) are set out in Appendix 4 to this Announcement pursuant to Rule
29 of the Takeover Code. Appendix 5 to this Announcement contains definitions
of certain expressions used in this summary and in this Announcement.
LondonMetric and LXi will hold a briefing for analysts at 08:30am (UK time)
today to discuss the Merger at FTI Consulting, 200 Aldersgate, Aldersgate
Street, EC1A 4HD. To attend, please contact FTI Consulting per the details
below. If you are unable to attend in person, a live audio webcast will be
available at the below link:
https://brrmedia.news/LMP_CA24
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fbrrmedia.news%2FLMP_CA24&data=05%7C02%7Ckieran.obrien%40cms-cmno.com%7C74e0739fd3314b909b8808dc11dc2a94%7C8ddab29711af4f76b704c18a1d2b702f%7C0%7C0%7C638404884517523679%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=L77f4ZYXi2QCdAXK9zLGDzCGbWuIpZGfJrkLy6JXNrw%3D&reserved=0)
An on demand recording will also be available shortly after the meeting from
the same link, as well as at: https://www.londonmetric.com/investors
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.londonmetric.com%2Finvestors&data=05%7C02%7Ckieran.obrien%40cms-cmno.com%7C74e0739fd3314b909b8808dc11dc2a94%7C8ddab29711af4f76b704c18a1d2b702f%7C0%7C0%7C638404884517523679%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=eX2HnmVxR0T9dEd6%2B8I00dYd46bc85uraaTcoYoVobg%3D&reserved=0)
.
Enquiries
LondonMetric Property plc Tel: +44 (0) 20 7484 9000
Andrew Jones, Chief Executive
Martin McGann, Finance Director
Gareth Price, Investor Relations
Barclays Bank PLC, acting through its Investment Bank +44 (0) 20 7623 2323
(Lead Financial Adviser and Joint Corporate Broker)
Bronson Albery
Tom Macdonald
Callum West
Patrick Colgan
Peel Hunt (Financial Adviser and Joint Corporate Broker) +44 (0) 20 7418 8900
Capel Irwin
Carl Gough
Michael Nicholson
Henry Nicholls
J.P. Morgan Cazenove (Financial Adviser and Joint Corporate Broker) +44 (0) 20 3493 8000
Ashish Agrawal
Jonty Edwards
Dipayan Chakraborty
FTI Consulting (Communications Adviser) +44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
Andrew Davis
LXi REIT plc via H/Advisors Maitland
Cyrus Ardalan, Non-Executive Chairman
Hugh Seaborn, Non-Executive Senior Independent Director
Ismat Levin, Non-Executive Independent Director
Sandy Gumm, Non-Executive Director
Nick Leslau, Non-Executive Director
Lazard & Co., Limited (Lead Financial Adviser) +44 (0) 20 7187 2000
Patrick Long
Jolyon Coates
Sebastian O'Shea-Farren
Jefferies International Limited (Financial Adviser and Corporate Broker) +44 (0) 20 7029 8000
Rishi Bhuchar
Tom Yeadon
Ed Matthews
Paul Bundred
Santander Corporate & Investment Banking (Financial Adviser) +44 (0) 78 4071 7114
Oliver Tucker
Ting Le Deng
Benni Azaria
H/Advisors Maitland (Communications Adviser) +44 (0) 20 7379 5151
James Benjamin
Rachel Cohen
Market Abuse Regulation
This Announcement contains inside information for the purposes of Article 7 of
MAR. Market soundings (as defined in MAR) were taken in respect of a potential
offer with the result that certain persons became aware of inside information
(as defined in MAR) as permitted by MAR. This inside information is set out in
this Announcement. Therefore, those persons that received inside information
in a market sounding are no longer in possession of such inside information
relating to LondonMetric, LXi, the Merger and their respective securities.
For the purposes of MAR, this Announcement is being made on behalf of
LondonMetric by Jadzia Duzniak, Company Secretary, and on behalf of LXi by LDC
Nominee Secretary Limited, Company Secretary.
Financial advisers
Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is
authorised by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for LondonMetric and no one else in
connection with the matters set out in this Announcement and will not be
responsible to anyone other than LondonMetric for providing the protections
afforded to clients of Barclays nor for providing advice in relation to the
matters set out in or referred to in this Announcement.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays and its affiliates will continue to act
as exempt principal trader in LondonMetric and LXi securities on the London
Stock Exchange. These purchases and activities by exempt principal traders
which are required to be made public in the United Kingdom pursuant to the
Code will be reported to a Regulatory Information Service and will be
available on the London Stock Exchange website at www.londonstockexchange.com.
This information will also be publicly disclosed in the United States to the
extent that such information is made public in the United Kingdom.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United
Kingdom by the FCA, is acting exclusively for LondonMetric and for no one else
in connection with the matters referred to in this Announcement and will not
be responsible to any person other than LondonMetric for providing the
protections afforded to clients of Peel Hunt, nor for providing advice in
relation to the matters referred to herein. Neither Peel Hunt nor any of its
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Peel Hunt in connection with
the matters referred to in this Announcement, or otherwise.
J.P. Morgan Securities PLC, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in
the United Kingdom by the Prudential Regulation Authority (the "PRA") and
regulated by the PRA and the Financial Conduct Authority, is acting as
financial adviser exclusively for LondonMetric and no one else in connection
with the Merger and will not regard any other person as its client in relation
to the Merger and will not be responsible to anyone other than LondonMetric
for providing the protections afforded to clients of J.P. Morgan Cazenove or
its affiliates, nor for providing advice in relation to the Merger or any
other matter or arrangement referred to in this Announcement.
Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively as financial adviser to LXi
and no one else in connection with the Merger and will not be responsible to
anyone other than LXi for providing the protections afforded to clients of
Lazard nor for providing advice in relation to the Merger or any other matters
referred to in this Announcement. Neither Lazard nor any of its affiliates
(nor any of their respective directors, officers, employees or agents), owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Lazard in connection with the Merger, this
Announcement, any statement contained herein or otherwise.
Jefferies International Limited ("Jefferies"), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively for LXi and
no one else in connection with the matters referred to in this Announcement
and will not regard any other person as its client in relation to the matters
in this Announcement and will not be responsible to anyone other than LXi for
providing the protections afforded to clients of Jefferies nor for providing
advice in relation to any matter referred to in this Announcement or any
transaction or arrangement referred to herein. Neither Jefferies nor any of
its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Jefferies in
connection with this Announcement, any statement contained herein, any
transaction or arrangement referred to herein, or otherwise.
Banco Santander, S.A. ("Santander") is a credit institution which is
registered with the Bank of Spain with number 0049. Banco Santander, S.A.,
London Branch is a branch of Santander with its principal place of business
located at 2 Triton Square, Regent's Place, London NW1 3AN and is authorised
by the Bank of Spain and is subject to regulatory oversight on certain matters
in the UK by the Financial Conduct Authority and the Prudential Regulatory
Authority. Santander is acting exclusively as financial adviser to LXi and no
one else in connection with the matters referred to in this Announcement and
will not be responsible to anyone other than LXi for providing the protections
afforded to clients of Santander or any of its affiliates, or for providing
advice in relation to any matter referred to in this Announcement. Neither
Santander, nor any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Santander in connection with this Announcement or any matter referred to
herein.
Legal advisers
CMS Cameron McKenna Nabarro Olswang LLP is retained as legal adviser to
LondonMetric. Bryan Cave Leighton Paisner LLP is retained as legal adviser to
LXi.
Important Notices
This Announcement is for information purposes only. It 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 the Merger or otherwise, nor shall
there be any purchase, sale, acquisition issuance, exchange or transfer of
securities or such solicitation pursuant to the Merger or otherwise in any
jurisdiction in contravention of applicable law. The Merger will be
implemented solely by means of the Scheme Document (or, in the event that the
Merger is to be implemented by means of a Takeover Offer, any document by
which the Takeover Offer is made) and the accompanying Forms of Proxy (or
forms of acceptance, if applicable) which will contain the full terms and
conditions of the Merger, including details of how to vote in respect of the
resolutions proposed in connection with the Merger.
LXi will prepare the Scheme Document to be distributed to LXi Shareholders.
LXi and LondonMetric urge LXi Shareholders to read the Scheme Document and the
Combined Circular and Prospectus carefully when they become available as each
will contain important information relating to the Merger, the New
LondonMetric Shares and the Combined Group.
LondonMetric will prepare the Combined Circular and Prospectus to be
distributed to LondonMetric Shareholders. LondonMetric urges LondonMetric
Shareholders to read the Combined Circular and Prospectus when it becomes
available as it will contain important information relating to the Merger, the
New LondonMetric Shares and the Combined Group. Any approval, decision or
other response to the Merger should be made only on the basis of the
information in the Combined Circular and Prospectus. LondonMetric Shareholders
are strongly advised to read the formal documentation in relation to the
Merger once it has been despatched.
Any vote, approval, decision in respect of, or other response to, the Merger
should only be made on the basis of the information contained in the Scheme
Document (or any other document by which the Merger is made by way of a
Takeover Offer) and the Combined Circular and Prospectus.
This Announcement does not constitute a prospectus or prospectus equivalent
document. The New LondonMetric Shares to be issued pursuant to the Merger are
not being offered to the public by means of this Announcement.
No person should construe the contents of this Announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA, or another appropriately authorised independent
financial adviser, if you are in a territory outside the United Kingdom.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation, the Disclosure Guidance
and Transparency Rules and the Listing Rules and the information disclosed may
not be the same as that which would have been disclosed if this Announcement
had been prepared in accordance with the laws of jurisdictions outside the
United Kingdom. Nothing in this Announcement should be relied on for any other
purpose.
The availability of the New LondonMetric Shares (and the ability of persons to
hold such shares) in, and the release, publication or distribution of this
Announcement in or into, jurisdictions other than the United Kingdom may be
restricted by the laws and/or regulations of those jurisdictions. Persons into
whose possession this Announcement comes who are not resident in the United
Kingdom, or who are subject to the laws and/or regulations of any jurisdiction
other than the United Kingdom, should inform themselves of, and observe, any
such applicable laws and/or regulations. In particular, the ability of persons
who are not resident in the United Kingdom or who are subject to the laws of
another jurisdiction to participate in the Merger or to vote their Scheme
Shares in respect of the Scheme at the Court Meeting, or to appoint another
person as proxy to vote at the Court Meeting on their behalf, may be affected
by the laws of the relevant jurisdictions in which they are located or to
which they are subject. Any failure to comply with the applicable requirements
may constitute a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law, the companies
and persons involved in the Merger disclaim any responsibility or liability
for the violation of such restrictions by any person.
Unless otherwise determined by LondonMetric or required by the Takeover Code
and permitted by applicable law and regulation, participation in the Merger
will not be made, and the New LondonMetric Shares to be issued pursuant to the
Merger will not be made, available, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Merger by any such use,
means, instrumentality or form from within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Accordingly, copies of this Announcement and all
documentation relating to the Merger are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent in, into or
from a Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving this Announcement and all documents
relating to the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such jurisdictions
as doing so may invalidate any purported vote in respect of the Merger.
If the Merger is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, facsimile, e-mail or
other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or any facility of a national, state or other securities exchange
of, any Restricted Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or from
within any Restricted Jurisdiction.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Additional information for US investors
LXi Shareholders located in the United States should note that the Merger
relates to the securities of an English company with a listing on the London
Stock Exchange and is proposed to be implemented pursuant to a scheme of
arrangement provided for under English law. A transaction effected by means of
a scheme of arrangement is not subject to the tender offer rules or the proxy
solicitation rules under the US Exchange Act. Accordingly, the Scheme is
subject to procedural and disclosure requirements and practices applicable to
a scheme of arrangement involving a target company in England listed on the
London Stock Exchange, which are different from the disclosure requirements of
the US tender offer and proxy solicitation rules.
The Merger may, in circumstances provided for in this Announcement, instead be
carried out by way of a Takeover Offer under English law. If in the future
LondonMetric exercises its right to implement the Merger by way of a Takeover
Offer, such Takeover Offer will be made in compliance with applicable US
tender offer and securities laws and regulations, including the exemptions
therefrom. Such Takeover Offer would be made in the United States by
LondonMetric and no one else. In addition to any such Takeover Offer, in
accordance with normal practice in the United Kingdom, LondonMetric, certain
affiliated companies, and their nominees or brokers (acting as agents) may
make certain purchases of, or arrangements to purchase, LXi Shares outside the
United States, other than pursuant to the Takeover Offer, until the date on
which such Takeover Offer would become effective, lapses or is otherwise
withdrawn. If such purchases or arrangements to purchase were to be made, they
would be made outside the United States and would comply with applicable law,
including the US Exchange Act. These purchases may occur either in the open
market at prevailing prices or in private transactions at negotiated prices.
Any information about such purchases will be disclosed, as required in the
United Kingdom, will be reported to a Regulatory Information Service of the
FCA and will be available on the London Stock Exchange website:
http://www.londonstockexchange.com/.
The financial information included in this Announcement and other
documentation related to the Merger has been or will have been prepared in
accordance with International Financial Reporting Standards and thus may not
be comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.
The New LondonMetric Shares to be issued under the Scheme have not been and
will not be registered under the US Securities Act or under the securities
laws of any state or other jurisdiction of the United States and may not be
offered or sold in the United States absent registration or an available
exemption from the registration requirements under the US Securities Act and
applicable US state securities laws. If LondonMetric effects the Merger by way
of a scheme of arrangement under English law, the New LondonMetric Shares to
be issued in the Merger will be issued in reliance on the exemption from the
registration requirements of the US Securities Act provided by Section
3(a)(10) thereof. LXi will advise the Court that its sanction of the Scheme
will be relied upon by LondonMetric as an approval of the scheme of
arrangement following a hearing on its fairness to LXi Shareholders at which
hearing all such LXi Shareholders are entitled to attend in person or through
counsel to support or oppose the sanctioning of the Scheme and with respect to
which notification has been given to all LXi Shareholders.
The New LondonMetric Shares to be issued to LXi Shareholders in the Merger
pursuant to a scheme of arrangement under English law may generally be resold
without restriction under the US Securities Act, except for resales by persons
who are or will be affiliates (within the meaning of Rule 144 under the US
Securities Act). "Affiliates" of a company are generally defined as persons
who directly, or indirectly through one or more intermediaries, control, or
are controlled by, or are under common control with, that company. Whether a
person is an affiliate of a company for purposes of the US Securities Act
depends on the circumstances, but affiliates can include certain officers,
directors and significant shareholders. LXi Shareholders who are or will be
affiliates of LondonMetric or LXi prior to, or of LondonMetric after, the
Effective Date will be subject to certain US transfer restrictions relating to
the New LondonMetric Shares received pursuant to the Scheme as will be further
described in the Scheme Document. LXi Shareholders who believe that they may
be or will be affiliates for purposes of the US Securities Act should consult
their own legal advisors prior to any resale of New LondonMetric Shares
received under the Scheme.
None of the securities referred to in this Announcement have been approved or
disapproved by the SEC or any US state securities commission, nor have any
such authorities passed judgment upon the fairness or the merits of the Merger
or determined if this Announcement is accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
US holders of LXi Shares also should be aware that the transaction
contemplated herein may have tax consequences in the United States and that
such consequences, if any, are not described herein. US holders of LXi Shares
are urged to consult with independent professional advisors regarding the
legal, tax and financial consequences of the Merger applicable to them,
It may be difficult for US holders of LXi Shares to enforce their rights and
claims arising out of the US federal securities laws since LondonMetric and
LXi are organized in countries other than the United States and some or all of
their officers and directors may be residents of, and some or all of their
assets may be located in, jurisdictions other than the United States. US
holders of LXi Shares may have difficulty effecting service of process within
the United States upon those persons or recovering against judgments of US
courts, including judgments based upon the civil liability provisions of the
US federal securities laws. US holders of LXi Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for violations
of US securities laws. Further, it may be difficult to compel a non-US company
and its affiliates to subject themselves to a US court's judgment.
Further details in relation to US investors will be contained in the Scheme
Document.
Forward looking statements
This Announcement (including information incorporated by reference into this
Announcement), any oral statements made by LondonMetric or LXi in relation to
the Merger and other information published by LondonMetric or LXi may contain
statements about LondonMetric, LXi and/or the Combined Group that are or may
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", "goals", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "estimates", "projects", hopes",
"continues", "would", "could", "should" 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; (ii) business and management strategies and the expansion and
growth of LondonMetric's or LXi's or the Combined Group's operations and
potential synergies resulting from the Merger; and (iii) the effects of
government regulation on LondonMetric's or LXi's or the Combined Group's
business.
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 risks and uncertainties that could significantly affect
expected results and/or the operations of LondonMetric, LXi or the Combined
Group and are based on certain assumptions and assessments made by
LondonMetric and LXi in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate.
There are several factors which could cause actual results to differ
materially from those projected, expressed or implied in forward looking
statements. Among the factors that could cause actual results to differ
materially from those described in the forward looking statements are the
satisfaction of or failure to satisfy all or any of the conditions to the
Merger, as well as additional factors, such as changes in the global,
political, economic, business, competitive, market and regulatory forces,
fluctuations in exchange and interest rates, changes in tax rates and future
business acquisitions or disposals, the success of business and operating
initiatives and restructuring objectives and the outcome of any litigation.
Such statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Except as expressly provided in
this Announcement, they have not been reviewed by the auditors of LondonMetric
or LXi. Neither LondonMetric or LXi, nor any of their respective associates 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.
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. All subsequent oral or written forward-looking
statements attributable to LondonMetric or LXi or any of their respective
members, directors, officers, employees or advisers or any persons acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. LondonMetric and LXi disclaim any obligation to 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.
No profit forecasts and estimates
No statement in this Announcement is intended to constitute a profit forecast
or profit estimate and no statement in this Announcement should be interpreted
to mean that the earnings or earnings per share or dividend per share for
LondonMetric, LXi or the Combined Group, as appropriate, for the current or
future financial periods would necessarily match or exceed the historical
published earnings or earnings per share or dividend per share for
LondonMetric, LXi or the Combined Group, as appropriate.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
LondonMetric reserves the right to elect, with the consent of the Panel, to
implement the Merger by way of a Takeover Offer for the entire issued and to
be issued ordinary share capital of LXi as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same terms or, if
LondonMetric so decides, on such other terms being no less favourable (subject
to appropriate amendments), so far as applicable, as those which would apply
to the Scheme and subject to the amendments referred to in paragraph 12 of
Part B of Appendix 1 to this Announcement.
Electronic Communications
Please be aware that addresses, electronic addresses and certain other
information provided by LXi Shareholders, persons with information rights and
other relevant persons for the receipt of communication from LXi may be
provided to LondonMetric during the Offer Period as required by Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and Requesting Hard Copy Documents
A copy of this Announcement and the documents required to be published
pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on LXi's website at www.lxireit.com and
LondonMetric's website at https://www.londonmetric.com by no later than 12.00
p.m. on the Business Day following the date of this Announcement.
In accordance with Rule 30.3 of the Takeover Code, LXi Shareholders and
persons with information rights may request a hard copy of this Announcement
by contacting LXi's registrars, Link Group, Corporate Actions, Central Square,
29 Wellington Street, Leeds, LS1 4DL, United Kingdom or by calling Link Group
on +44 (0) 371 664 0321. Calls are charged at the standard geographical rate
and will vary by provider. Calls outside the United Kingdom will be charged at
the applicable international rate. Lines are open between 8.30 a.m. to 5.30
p.m. (London time), Monday to Friday (except public holidays in England and
Wales). Please note that Link Group cannot provide any financial, legal or tax
advice. Calls may be recorded and monitored for security and training
purposes. For persons who receive a copy of this Announcement in electronic
form or via a website notification, a hard copy of this Announcement will not
be sent unless so requested. Such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Merger should be in hard copy form.
For the avoidance of doubt, the contents of the aforementioned websites, and
any websites accessible from hyperlinks on those websites, are not
incorporated into and do not form part of this Announcement.
Rounding
Certain figures included in this Announcement have been subject to rounding
adjustments. Accordingly, figures shown for the same category presented in
different places may vary slightly and figures shown as totals in certain
tables may not be an exact arithmetic aggregation of the figures that precede
them.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION WHERE
TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS, PROSPECTUS
EQUIVALENT DOCUMENT OR SCHEME DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE MERGER OR THE NEW LONDONMETRIC SHARES
EXCEPT ON THE BASIS OF INFORMATION IN THE SCHEME DOCUMENT AND THE COMBINED
CIRCULAR AND PROSPECTUS WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE.
FOR IMMEDIATE RELEASE
11 January 2024
RECOMMENDED ALL-SHARE MERGER OF
LXI REIT PLC ("LXI")
AND
LONDONMETRIC PROPERTY PLC ("LONDONMETRIC")
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of directors of LondonMetric and LXi are pleased to announce that
they have reached agreement on the terms of a recommended all-share merger
pursuant to which LondonMetric will acquire the entire issued and to be issued
ordinary share capital of LXi (the "Merger" forming the "Combined Group"). It
is intended that the Merger is to be effected by means of a scheme of
arrangement under Part 26 of the Companies Act.
2. The Merger
Under the terms of the Merger, each LXi Shareholder will be entitled to
receive:
for each LXi Share held: 0.55 New LondonMetric Shares (the "Exchange
Ratio")((1))
On the basis of the Undisturbed Closing Price per LondonMetric Share of 197.4
pence on 15 December 2023 (being the last Business Day before the Offer Period
began), the Merger values the entire issued and to be issued ordinary share
capital of LXi at approximately £1.9 billion and:
· represents a premium of approximately 9 per cent. to the Undisturbed
Closing Price per LXi Share of 99.5 pence;
· represents a premium of approximately 13 per cent. to the volume
weighted average Closing Price per LXi Share for the one-month period ended on
15 December 2023 of 95.7 pence; and
· implies an NTA discount of 4 per cent. based on each of the
LondonMetric and LXi Rolled-Forward Unaudited EPRA NTAs((2)).
Following completion of the Merger, existing LondonMetric Shareholders will
hold approximately 54 per cent. and LXi Shareholders will hold approximately
46 per cent. of the enlarged issued share capital of LondonMetric.
Appendix 4 to this Announcement contains property valuations supported by
reports from the external valuers (as defined by the Royal Institution of
Chartered Surveyors' Valuation - Global Standards (2022)) for both
LondonMetric as at 31 December 2023 and LXi as at 31 December 2023 pursuant to
the requirements of Rule 29 of the Takeover Code. These property valuation
reports will be reproduced in full in the Combined Circular and Prospectus and
the Scheme Document.
______________________
((1))( ) The Exchange Ratio is based on an adjusted NTA to adjusted
NTA approach, taking into account the fair value of debt and derivatives,
potential liabilities in respect of German taxation and the termination of
LXi's management contract.
((2))( ) When applying the Exchange Ratio to the LondonMetric
Rolled-Forward Unaudited EPRA NTA.
3. Background to and reasons for the Merger
The boards of directors of each of LondonMetric and LXi believe that the
Merger will build on the strengths and strong track records of both companies
to create a new major UK REIT, aligned to structurally supported sectors with
high barriers to entry and income security, with a low cost base, better
access to capital through greater scale, and enhanced scope for capital
recycling and asset management to drive compounding income growth and total
returns for shareholders. Specifically, the Merger would result in:
· The creation of a new major UK REIT, with the Combined Group
having a EPRA NTA of approximately £4.1 billion, becoming the fourth largest
UK REIT, providing better access to capital and increasing share liquidity;
· The establishment of a UK-focused triple net lease REIT of scale,
with a highly efficient structure delivering reliable, repetitive and growing
income through the cycle. The Combined Group will be structured to continue
both companies' long track records of dividend growth, with LondonMetric
currently on track for a ninth consecutive year of dividend progression;
· The formation of a combined £6.2 billion portfolio aligned to
structurally supported sectors, with 93 per cent. exposure to the logistics,
healthcare, convenience, entertainment and leisure sectors, and with a strong
exposure to key operating assets that are mission critical to the occupiers'
businesses;
· Substantial cost and operating synergies expected,((3)) driving
faster earnings growth combined with dividend progression through economies of
scale, the removal of duplicative costs and increased operating margins and
efficiencies, targeting an EPRA cost ratio of 7 to 8 per cent. in the medium
term;
· Leadership by a highly regarded management team with strong
shareholder alignment, with the Combined Group drawing on the strengths of
both companies under the leadership of LondonMetric's highly experienced board
and senior management team to create a leading internal management platform
holding material shareholdings with deep market knowledge and strong occupier
relationships. The Combined Group will benefit from a highly disciplined
approach to capital allocation through pursuing identified opportunities
within the combined portfolio for asset and investment management, recycling
capital and seizing new and accretive growth opportunities;
· Strong income longevity and security, with a sector leading WAULT
of 19 years on FRI leases, 99 per cent. occupancy and high quality occupier
covenants. Strong income compounding prospects will be delivered through
index-linked and fixed uplift leases (which together total 80 per cent. of the
rent roll) and reversionary open market rent reviews (20 per cent. of rent
roll) in sectors that enjoy high barriers to entry and strong levels of
occupier demand;
· Delivery of a Combined Group with a resilient capital structure,
with well staggered debt maturities and a conservative LTV of approximately 31
per cent., on a pro forma basis taking into account LXi's announced £210
million disposal of Travelodge assets((4)), with weighted average cost of debt
of 3.9 per cent., weighted average debt maturity of 5.6 years and, following
the arrangement of £700 million of unsecured debt facilities to replace £625
million of secured LXi facilities, £740 million of undrawn headroom;
· Enhanced and robust credit characteristics, with improved credit
metrics including net debt / EBITDA of 7.2x and ICR of 3.8x as at 30 September
2023; a conservative financial policy combined with increased scale puts the
Combined Group firmly on the path to a strong investment grade credit rating
thereby enhancing access to a broader range of funding sources; and
· The bringing together of two highly complementary strategic
approaches, with a key focus on income compounding, with reliable, repetitive
and growing income underpinning a progressive dividend policy with a strong
management platform to access new opportunities and deliver enhanced total
shareholder returns.
______________________
((3))( ) The statement regarding cost and operating synergies
resulting from the Merger is not intended as a quantified financial benefit
statement and should not be construed as such and is not subject to the
requirements of Rule 28 of the Takeover Code. The statement should not be
interpreted to mean that the cost and operating synergies will necessarily
result in a quantifiable benefit to the Combined Group. The statement
regarding the targeted EPRA cost ratio is a target and not a profit forecast.
((4))( ) Excluding the impact of disposal costs.
4. Recommendations
The LXi Directors, who have been so advised by Lazard and Jefferies as to the
financial terms of the Merger, unanimously consider the terms of the Merger to
be fair and reasonable. In providing their advice to the LXi Directors, Lazard
and Jefferies have each taken into account the commercial assessments of the
LXi Directors. Lazard and Jefferies are providing independent financial advice
to the LXi Directors for the purpose of Rule 3 of the Takeover Code.
Accordingly, the LXi Directors intend to recommend unanimously that LXi
Shareholders vote in favour of the Scheme at the Court Meeting and vote in
favour of the LXi Resolution to be proposed at the LXi General Meeting (or, in
the event that the Merger is implemented by way of a Takeover Offer, to accept
or procure acceptance of the Takeover Offer) as they have irrevocably
undertaken to do in respect of their, and their connected persons', beneficial
holdings of, in aggregate, 96,878,432 LXi Shares representing, in aggregate,
approximately 5.65 per cent. of the issued ordinary share capital of LXi as at
the Latest Practicable Date. Further details of these irrevocable undertakings
are set out in Appendix 3 to this Announcement.
The Merger constitutes a reverse takeover for LondonMetric for the purposes of
the Listing Rules. Accordingly, the Merger will be conditional on the approval
by the LondonMetric Shareholders of the Merger and related matters at the
LondonMetric General Meeting.
The LondonMetric Directors have received financial advice from Barclays, Peel
Hunt and J.P. Morgan Cazenove in relation to the Merger. In providing their
advice to the LondonMetric Directors, each of Barclays, Peel Hunt and J.P.
Morgan Cazenove have relied upon the LondonMetric Directors' commercial
assessments of the Merger.
The LondonMetric Directors consider the Merger to be in the best interests of
LondonMetric Shareholders as a whole and, accordingly, the LondonMetric
Directors intend to recommend unanimously to LondonMetric Shareholders to vote
in favour of the LondonMetric Resolution to be proposed at the LondonMetric
General Meeting which is to be convened to approve the Merger and related
matters, as the LondonMetric Directors have irrevocably undertaken to do in
respect of their own beneficial holdings of, in aggregate, 9,334,273
LondonMetric Shares, representing approximately 0.85 per cent. of the issued
ordinary share capital of LondonMetric as at the Latest Practicable Date.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this Announcement.
5. Background to and reasons for the LXi Board
recommendation
Since its IPO in February 2017, LXi has sought to deliver inflation-protected
income and total returns through acquiring a diversified portfolio of
predominantly UK commercial property assets, let or pre-let to a broad range
of tenants with strong covenants on very long and predominantly index-linked
leases. Between IPO and the half year ended 30 September 2023, LXi delivered
an average compounded annual dividend growth of approximately 9 per cent. and
an average annualised total accounting return of approximately 6 per cent..
This has resulted in outperformance versus the FTSE 350 Real Estate index.
Following a period of significant growth and outperformance in the five years
since its IPO, the merger with Secure Income REIT plc ("SIR") in 2022 further
strengthened the attractive, inflation-protected characteristics of the
portfolio while also enabling the combined company to benefit from enhanced
scale and greater access to acquisition and asset management opportunities,
together with expanding and enhancing the management resources by adding
certain senior members of the SIR management team to LXi's management team and
adding two of SIR's non-executive directors to LXi's Board. At the same time,
LXi stated its intention to continue actively recycling capital and
re-positioning the portfolio in light of consumer trends and property market
developments, which has led to a number of transactions including
value-enhancing disposals, lease re-gears and other initiatives since the
merger.
Today, LXi has a high quality, resilient, and actively managed long income
portfolio that provides reliable and growing income with the potential for
capital growth. This notable collection of assets is diversified across 13
sub-sectors with high barriers to entry, strong underlying property
fundamentals and low starting rents. The portfolio offers secure income which
benefits from 98 per cent. indexed or fixed uplifts, a WAULT of 26 years and
100 per cent. occupancy, financed by a debt portfolio with a weighted average
term to maturity of 5.2 years and a weighted average cost of 4.7 per cent.,
which combined with one of the lowest cost ratios in the sector, has
contributed to the robust operational and financial performance that the
business continues to deliver.
Over the last two years interest rates have risen to levels not seen since
before the global financial crisis, with very significant implications for
property and capital markets. While the full impact will take time to
materialise, it is clear that UK REITs must work harder than ever to offer
differentiated investment propositions that are attuned to the current
macroeconomic environment and appeal to a broad array of investors and
lenders. In the Board of LXi's view, this further underscores the importance
of scale, diversification, income security, proactive capital recycling and
the use of asset management opportunities to drive both income and total
returns for shareholders.
Against this background, the Board of LXi has considered a wide range of
strategic options that would further enhance LXi's positioning and long-term
shareholder returns. The Board firmly believes that the proposed merger with
LondonMetric is the best available option, building on the track records of
both companies to create the UK's leading triple net lease REIT of scale which
will offer reliable, sustainable and progressive dividends through the cycle,
thereby underpinning superior total shareholder returns. In particular, the
Board of LXi notes:
· The two companies' complementary strategic approaches, with their
shared focus on delivering income-led, compounding returns through reliable,
repetitive and growing income which underpin a progressive dividend policy,
with strong prospects for capital growth. Accordingly, the Combined Group's
dividend policy will benefit from enhanced earnings growth potential and
greater security through improved portfolio diversification;
· The compatibility of the two portfolios, with LondonMetric's
assets sharing many of the same characteristics as LXi's, including exposure
to a range of real estate sectors with strong fundamentals, very high
occupancy and a focus on long, predominantly upward-only, index-linked leases
with regular reviews, while broadening the tenant base and thereby providing
enhanced diversification of tenant and sector exposures;
· The introduction of other structurally supported sectors that enjoy
among the strongest levels of occupier demand, reversionary potential and
rental growth, such as distribution (urban assets in particular), with leases
in those sectors structured to enable the Combined Group to capture
reversionary potential through active asset management while preserving income
security;
· The shared emphasis on active investment management, with both
companies continually seeking opportunities to improve their portfolios and
financing through asset management initiatives, capital recycling and a
disciplined approach to capital allocation;
· The scope for substantial cost synergies((5)) through economies
of scale, the removal of duplicative costs, and the fact that the Combined
Group (unlike LXi) will not be subject to AIFMD and PRIIPs, freeing LXi
shareholders from costly reporting;
· The further strengthening of the capital structure with the Combined
Group benefiting from prudent leverage (31 per cent. on a pro forma basis
taking into account LXi's announced £210 million disposal of Travelodge
assets as at 30 September 2023) and significantly higher liquidity versus LXi
on a standalone basis, predominantly unsecured facilities, well staggered
maturities and a superior ability to address these;
· The likelihood of broader appeal to investors, with increased
share liquidity and higher index weightings, leading to superior access to
capital from a wider universe of potential investors as the Combined Group
looks to take advantage of the continued dislocation in property markets; and
· The Combined Group's internalised management platform under the
leadership of LondonMetric's highly experienced senior management team, with
strong shareholder alignment of interest including through a combined 3.42 per
cent. shareholding in the Combined Group with a value of £129 million at the
Latest Practicable Date.
______________________
((5))( ) The statement regarding cost synergies resulting from the
Merger is not intended as a quantified financial benefit statement and should
not be construed as such and is not subject to the requirements of Rule 28 of
the Takeover Code. The statement should not be interpreted to mean that the
cost synergies will necessarily result in a quantifiable benefit to the
Combined Group.
In conclusion, the Board of LXi believes that the proposed merger with
LondonMetric will position the Combined Group for continued growth and
outperformance with an investment proposition that is well suited to the
macroeconomic environment, consumer trends and property market developments.
The Combined Group, with its proactive strategic approach and portfolio of
very long leases with a very high proportion of fixed and index-linked rental
uplifts and 99 per cent. occupancy, together with a robust and predominantly
unsecured capital structure and a strongly aligned internal management
platform holding material shareholdings, will be well positioned to deliver
enhanced earnings growth potential and superior total shareholder returns.
6. Irrevocable undertakings, letter of intent and
Lock-in Commitments
LXi irrevocable undertakings and letter of intent
LondonMetric has received irrevocable undertakings from each of the LXi
Directors who are interested in LXi Shares to vote in favour of the Scheme at
the Court Meeting and vote in favour of the LXi Resolution to be proposed at
the LXi General Meeting (or, in the event that the Merger is implemented by
way of a Takeover Offer, to accept or procure acceptance of the Takeover
Offer), in respect of a total of, in aggregate, 96,878,432 LXi Shares
representing, in aggregate, approximately 5.65 per cent. of the issued
ordinary share capital of LXi as at the Latest Practicable Date.
In addition to the irrevocable undertakings referred to above received from
the LXi Directors, LondonMetric has also received a letter of intent from
Artemis Investment Management LLP to vote in favour of the Scheme at the Court
Meeting and to vote in favour of the LXi Resolution to be proposed at the LXi
General Meeting (or, in the event that the Merger is implemented by way of a
Takeover Offer, to accept or procure acceptance of the Takeover Offer) in
respect of a total of 128,066,087 LXi Shares, representing approximately 7.46
per cent of the issued ordinary share capital of LXi on the Latest Practicable
Date.
In total, therefore, LondonMetric has received irrevocable undertakings and a
letter of intent representing, in aggregate, approximately 13.12 per cent. of
the issued ordinary share capital of LXi on the Latest Practicable Date.
Lock-in Commitment
In addition, Nick Leslau has agreed, pursuant to the abovementioned
irrevocable undertaking, that, subject to certain customary exceptions, during
the period of 12 months following the Effective Date, he and certain entities
associated with him will not offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, 39,591,092 New LondonMetric Shares (or any
interest therein or in respect thereof) issued on completion of the Merger or
enter into any transaction with the same economic effect as any of the
foregoing.
LondonMetric irrevocable undertakings
LondonMetric has also received irrevocable undertakings from each of the
LondonMetric Directors to vote in favour of the LondonMetric Resolution to be
proposed at the LondonMetric General Meeting which is to be convened in
relation to the Merger and related matters, in respect of a total of, in
aggregate, 9,334,273 LondonMetric Shares, representing, in aggregate,
approximately 0.85 per cent. of the ordinary share capital of LondonMetric in
issue on the Latest Practicable Date.
Further details of these irrevocable undertakings are set out in Appendix 3 to
this Announcement.
7. Information on LondonMetric
LondonMetric is a public limited company incorporated in England and Wales and
is the holding company of the LondonMetric Group. The LondonMetric Group was
formed out of a merger between London & Stamford Property Plc and Metric
Property Investments Plc, which completed on 25 January 2013, and is a UK REIT
that invests in commercial property, namely distribution, convenience and long
income property in the UK. The LondonMetric Group's objective is to own and
manage desirable real estate that can deliver reliable, repetitive and growing
income-led total returns and outperform over the long term. LondonMetric has
consistently delivered attractive compound led returns through monetising
assets, reinvestment and intensive asset management.
As at the Latest Practicable Date, LondonMetric had a market capitalisation of
£2 billion and a Rolled-Forward Unaudited EPRA NTA per LondonMetric Share of
195.4 pence as at 31 December 2023. LondonMetric's property valuations,
supported by valuation reports pursuant to the requirements of Rule 29 of the
Takeover Code, have been published in this Announcement and will be reproduced
in the Scheme Document and the Combined Circular and Prospectus.
LondonMetric Shares have traded at an average premium to NTA of 9 per cent.
over the 5 year period to 31 December 2023 and it has a 9 year track record of
uninterrupted dividend growth.
8. Information on LXi
LXi is a public limited company incorporated in England and Wales and is the
holding company of the LXi Group. The Company listed in 2017 with an
investment strategy focused on diversified real estate let on long-term,
inflation-linked leases. LXi seeks to provide its shareholders with regular,
attractive income, with the potential to grow the dividend sustainably in
absolute terms through upward-only, inflation-protected, very long-term
leases, together with capital growth. In July 2022, LXi merged with Secure
Income REIT Plc to create a larger and more scaled business benefiting from
increased growth opportunities and a lower cost structure. LXi has grown from
an EPRA NTA of £135.4 million at IPO to £1,920 million on a rolled-forward,
unaudited basis as at 31 December 2023.
As at the Latest Practicable Date, LXi had a market capitalisation of £1.8
billion and a Rolled-Forward Unaudited EPRA NTA per LXi Share of 112.0 pence
as at 31 December 2023. LXi's property valuations, supported by valuation
reports pursuant to the requirements of Rule 29 of the Takeover Code, have
been published in this Announcement and will be reproduced in the Scheme
Document and the Combined Circular and Prospectus.
9. Dividends
LXi dividends
LXi Shareholders will be entitled to receive and retain LXi's third quarterly
dividend in respect of the quarter ended 31 December 2023 (the "LXi Third
Quarterly Interim Dividend"), which is expected to be declared in January 2024
and paid in February 2024 to LXi Shareholders on LXi's register of members on
a record date set prior to the expected Scheme Record Time.
In addition, for each subsequent calendar quarter which ends before the
Effective Date, LXi Shareholders will be entitled to receive and retain any
quarterly dividend announced, declared or paid by LXi in respect of such
period in the ordinary course and consistent with past practice of LXi as to
timing and amount (provided that any LXi Permitted Dividend must be announced
sufficiently prior to the Scheme Record Time to give LondonMetric sufficent
time for it to declare a LondonMetric Permitted Dividend). Any dividend that
is permissible under this criteria is a "LXi Permitted Dividend".
Other than the LXi Third Quarterly Interim Dividend and any LXi Permitted
Dividend, if any dividend or other distribution is authorised, declared, made
or paid in respect of LXi Shares on or after the date of this Announcement and
with a record date on or before the Effective Date, LondonMetric reserves the
right to reduce the consideration payable for each LXi Share under the Merger
accordingly by reference to the amount per LXi Share of all or part of any
such dividend or other distribution.
To the extent that such a dividend or distribution has been declared but not
paid prior to the Effective Date, and such dividend or distribution is
cancelled, then the Exchange Ratio shall not be subject to change in
accordance with this paragraph.
Any exercise of rights referred to in this paragraph shall be the subject of
an announcement and, for the avoidance of doubt, shall not be regarded as
constituting any revision or variation of the terms of the Merger.
LondonMetric dividends
LondonMetric Shareholders will be entitled to receive and retain
LondonMetric's third quarterly dividend in respect of the quarter ended 31
December 2023 (the "LondonMetric Third Quarterly Interim Dividend"), which is
expected to be declared in February 2024 and paid in April 2024 to
LondonMetric Shareholders on LondonMetric's register of members on a record
date set on or prior to the Scheme Record Time. On the expected dividend
payment timetable only existing LondonMetric Shareholders will be entitled to
this dividend.
In addition, for each subsequent calendar quarter which ends before the
Effective Date, LondonMetric Shareholders will also be entitled to receive any
quarterly dividend announced, declared or paid by LondonMetric in respect of
such period in the ordinary course and consistent with past practice of
LondonMetric as to amount. Any dividend that is permissible under this
criteria is a "LondonMetric Permitted Dividend". LondonMetric will only
declare a LondonMetric Permitted Dividend if LXi declares a LXi Permitted
Dividend and LondonMetric will ensure that the record date of any LondonMetric
Permitted Dividend will be set sufficiently prior to the Scheme Record Time,
such that LXi Shareholders will not be entitled to receive that LondonMetric
Permitted Dividend in addition to the relevant LXi Permitted Dividend.
Save in respect of the LondonMetric Third Quarterly Dividend and a
LondonMetric Permitted Dividend, LondonMetric has agreed not to authorise,
declare, make or pay any dividend or other distribution on or after the date
of this Announcement and prior to the Effective Date.
The New LondonMetric Shares will be issued credited as fully paid-up and will
rank pari passu in all respects with the LondonMetric Shares in issue at the
time the New LondonMetric Shares are issued, including the right to receive
and retain dividends and other distributions declared, made or paid by
reference to a record date on or after the Effective Date. Accordingly, based
on the expected timetable for the Merger to become Effective, Scheme
Shareholders who retain their New LondonMetric Shares following completion of
the Merger would receive the LondonMetric fourth quarterly interim dividend in
respect of the Combined Group for the period January to March 2024, which is
expected to be paid in July 2024. It is anticipated that the value of the
dividend received by such Scheme Shareholders in respect of their New
LondonMetric Shares for the quarter ending 31 March 2024 would be
approximately equivalent to the value of the quarterly dividend paid by LXi in
respect of the corresponding holding of LXi Shares in each of the first three
quarters of the financial year ending 31 March 2024, with LondonMetric
targeting a FY24 dividend increase of 7.4 per cent. to 10.2p per share.((6))
______________________
((6))( ) This is a target and not a profit forecast.
Following the Effective Date, the Company will continue to adopt a progressive
dividend policy, increasing the level of dividends paid as its earnings grow.
The LondonMetric Directors expect that the dividend will continue to be paid
quarterly and that a scrip alternative will continue to be offered.
10. Intentions for the Combined Group
As set out in paragraph 3 (Background to and reasons for the Merger),
LondonMetric believes that the Combined Group will be well placed to deliver
reliable, repetitive and growing income-led total returns that outperform over
the long term through its programme of prudent financing, active asset
management and capital recycling. This strategy will be delivered by
LondonMetric's highly regarded management team. The Combined Group will own
and manage UK property specialising in logistics, healthcare, convenience and
leisure sectors with no material exposure to legacy retail and office segments
of the market which have recently performed poorly.
Board composition and governance arrangements
Following completion of the Merger, it is expected that Nick Leslau will join
the LondonMetric Board as a non-executive director. The LondonMetric Board
believes that this appointment will deliver an appropriately-sized and
balanced board, with the complementary experience and skills necessary to
drive the Combined Group forward following the Merger and to provide good
continuity for LXi Shareholders together with very strong shareholder
alignment through the approximately 2.58 per cent. holding in the Combined
Group to be held by Nick Leslau and certain entities associated with him of
52,788,123 LondonMetric Shares following completion of the Merger.
Management and employees
As LXi is an externally-managed REIT, LXi does not have any employees and
therefore does not operate any pension scheme, nor does it have any
arrangements in place for any employee involvement in its capital.
Following completion of the Merger it is intended that, in accordance with the
Heads of Terms, LondonMetric will acquire LRA, and/or the management contract
between LXi and LRA will be terminated, in either case, for an initial sum of
£26 million with a further performance related payment, capped at £4
million. If either of these transactions occur, the employees of LRA will
become employees of the Combined Group (including by way of TUPE transfer).
LondonMetric attaches great importance to the skill and experience of the LRA
team and recognises the important contribution they have made to the business.
Should LondonMetric acquire LRA and/or the management contract is terminated
then the intention is that the majority of LRA's employees will be retained by
LondonMetric to support the delivery of the strategy of the Combined Group,
save that immediately on completion of the Merger the Senior Management of LRA
will be replaced by LondonMetric.
Following completion of the Merger, certain reporting functions which exist
within LRA in relation to LXi's status as a publicly traded company may no
longer be required or may be reduced in size reflecting the new structure
within the Combined Group which could result in limited rationalisation of
roles for LRA employees that join the Combined Group in the instance that
LondonMetric acquires LRA and/or the management contract is terminated.
LondonMetric does not intend to otherwise make changes to the conditions of
employment or balance of skills and functions of such employees of LRA.
Listing and registered office
LondonMetric intends to delist LXi immediately following the Effective Date.
Consequently, LXi will not require listed company governance structures and
accordingly, it is intended that the LXi Directors will cease to be directors
of LXi and its subsidiaries (as applicable) following completion of the
Merger.
LXi has no place of business, fixed assets (other than its property
portfolio), research and development function or headquarters and headquarters
function.
Following the Effective Date, LondonMetric will remain listed on the premium
listing segment of the Official List and admitted to trading on the Main
Market. The registered office of LondonMetric will remain in London.
REIT status
Both the LondonMetric Group and the LXi Group fall within the UK REIT regime
and benefit from the tax efficiencies provided by that regime. The Combined
Group is expected to fall within the UK REIT regime and the relevant tax
efficiencies will continue to apply to the Combined Group.
Trading Facilities
The LXi Shares are currently admitted to trading on the London Stock
Exchange's Main Market and, as set out in paragraph 15 below, subject to the
Scheme becoming Effective, an application will be made to the London Stock
Exchange to cancel the admission of the LXi Shares to trading on the Main
Market.
The LXi Directors have given due consideration to LondonMetric's stated
intentions and assurances noted above in deciding to recommend the Merger.
No statements in this paragraph 10 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
11. Offer related arrangements
Confidentiality Agreement
LondonMetric and LXi entered into a Confidentiality Agreement (which contains
mutual confidentiality obligations) pursuant to which each party has
undertaken to keep confidential, and to procure that certain of its
representatives keep confidential, information relating to the other party
and/or to the Merger, to use such information solely for the agreed purposes
in relation to the Merger and not to disclose it to third parties (other than
to permitted disclosees) unless required by law or regulation.
Heads of Terms
LondonMetric, AlTi RE and AlTi entered into non-binding Heads of Terms
pursuant to which each party has agreed the principal terms and conditions in
relation to the proposed acquisition by LondonMetric of LRA and/or the
termination of the management arrangements between, amongst others, LXi and
LRA, in either case, for an initial sum of £26 million with a further
performance related payment, capped at £4 million. LondonMetric will carry
out its due diligence as soon as practicable and the parties will look to
complete due diligence and agree transaction documents as soon as possible.
Each party will bear its own costs.
12. Disclosure of interests in LXi
As at the close of business on the Latest Practicable Date, 59,600 LXi Shares
in aggregate are held by or on behalf of Robert Fowlds (Non-Executive Director
of LondonMetric), his close relatives and related trusts, who are deemed to be
acting in concert with LondonMetric for the purposes of the Merger.
As at the close of business on the Latest Practicable Date, save as set out
above and save for the irrevocable undertakings referred to in paragraph 6 of
this Announcement, neither LondonMetric, nor any LondonMetric Director, nor,
so far as LondonMetric is aware, any person acting in concert (within the
meaning of the Takeover Code) with it for the purposes of the Merger has:
1. any interest in or right to subscribe for any relevant securities of
LXi;
2. any short positions in respect of relevant securities of LXi (whether
conditional or absolute and whether in the money or otherwise), including any
short position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take delivery of
relevant securities of LXi;
3. borrowed or lent any relevant securities of LXi (including, for these
purposes, any financial collateral arrangements of the kind referred to in
Note 4 on Rule 4.6 of the Takeover Code) relating to relevant securities of
LXi, save for any borrowed relevant securities of LXi which had been either
on-lent or sold; nor
4. entered into any dealing arrangement of the kind referred to in Note
11 on the definition of acting in concert in the Takeover Code, in relation to
any relevant securities of LXi.
For these purposes:
"interests in securities" arise, in summary, when a person has long economic
exposure, whether absolute or conditional, to changes in the price of
securities (and a person who only has a short position in securities is not
treated as interested in those securities). In particular, a person will be
treated as having an 'interest' by virtue of the ownership, voting rights or
control of securities, or by virtue of any agreement to purchase, option in
respect of, or derivative referenced to, securities; and
"relevant securities of LXi" are LXi Shares or securities convertible or
exchangeable into LXi Shares.
13. Structure of the Merger
Scheme of Arrangement and New LondonMetric Shares
It is intended that the Merger will be effected by means of a scheme of
arrangement between LXi and LXi Shareholders under Part 26 of the Companies
Act, full details of which will be set out in the Scheme Document to be
published by LXi in due course.
The procedure involves, among other things, an application by LXi to the Court
to sanction the Scheme, in consideration for which Scheme Shareholders who are
on the register of members at the Scheme Record Time will receive
consideration on the basis set out in paragraph 2 above. The purpose of the
Scheme is to provide for LondonMetric to become the holder of the entire
issued and to be issued ordinary share capital of LXi.
The New LondonMetric Shares will be issued in registered form, credited as
fully paid, and will be capable of being held in both certificated and
uncertificated form. They will rank pari passu in all respects with the
existing LondonMetric Shares, including the rights to receive all dividends
and other distributions (if any) declared, made or paid by LondonMetric by
reference to a record date falling after the Effective Date.
Fractions of New LondonMetric Shares will not be allotted or issued pursuant
to the Merger and entitlements of Scheme Shareholders will be rounded down to
the nearest whole number of New LondonMetric Shares. All fractional
entitlements to New LondonMetric Shares will be aggregated and sold in the
market as soon as practicable after the Effective Date. The net proceeds of
such sale (after deduction of all expenses and commissions incurred in
connection with the sale) will be distributed by LondonMetric in due
proportions to Scheme Shareholders who would otherwise have been entitled to
such fractions provided that individual entitlements to amounts of less than
£5.00 will not be paid to Scheme Shareholders but will be retained for the
benefit of Combined Group.
Conditions
The implementation of the Merger will be subject to the Conditions and further
terms which are set out in Appendix 1 to this Announcement and the full terms
and conditions to be set out in the Scheme Document and the Scheme will only
become Effective if, among other things, the following events occur on or
before the Long-stop Date:
(a) a resolution to approve the Scheme is passed by a majority in number of
the Scheme Shareholders who are present and voting (and entitled to vote),
either in person or by proxy, at the Court Meeting or at any adjournment
thereof and who represent not less than 75 per cent. in value of the Scheme
Shares held by such Scheme Shareholders;
(b) the LXi Resolution is passed by the requisite majority (whether in
person or by proxy) at the LXi General Meeting;
(c) the LondonMetric Resolution is passed by the requisite majority (whether
in person or by proxy) at the LondonMetric General Meeting;
(d) the FCA having acknowledged to LondonMetric or its agent (and such
acknowledgement not having been withdrawn) that the application for the
admission of the New LondonMetric Shares to the Official List with a premium
listing has been approved and (after satisfaction of any conditions to which
such approval is expressed to be subject ("Listing Conditions")) admission
will become effective as soon as a dealing notice has been issued by the FCA
and any Listing Conditions having been satisfied;
(e) the London Stock Exchange having acknowledged to LondonMetric or its
agent (and such acknowledgement not having been withdrawn) that the New
LondonMetric Shares will be admitted to trading on the Main Market;
(f) following the LXi Meetings and the LondonMetric General Meeting, the
Scheme is sanctioned by the Court (without modification, or with modification
on terms agreed by LondonMetric and LXi with the consent of the Panel); and
(g) following the sanction of the Scheme, a copy of the Court Order is
delivered to the Registrar of Companies.
The Scheme will lapse and the Merger will not take place if:
· either the Court Meeting or the LXi General Meeting are not
held by the 22(nd) day after the expected date of such meeting to be set out
in each case in the Scheme Document in due course (or such later date(s) as
may be agreed between LondonMetric and LXi with the consent of the Panel and
as the Court may allow, if applicable); or
· the Court Hearing to approve the Scheme is not held by the
22(nd) day after the expected date of the Court Hearing to be set out in the
Scheme Document in due course (or such later date as may be agreed between
LondonMetric and LXi with the consent of the Panel and as the Court may allow,
if required); or
· the Scheme does not become Effective on or before 11.59 pm on
the Long-stop Date,
provided, however, that the deadlines for the timing of the Court Meeting, the
LXi General Meeting and the Court Hearing, to be set out in the Scheme
Document in due course, may be waived by LondonMetric, and the Long-stop Date
may be extended by agreement in writing between LondonMetric and LXi (with the
Panel's consent and as the Court may allow, if such consent and/or approval
is/are required). If any of the deadlines for the timing of the Court Meeting
or the LXi General Meeting change, the revised dates and/or times will be
notified to LXi Shareholders by announcement through a Regulatory Information
Service, with such announcement being made available on LXi's website at
www.lxireit.com.
Upon the Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the LXi General Meeting (and if they attended and voted,
whether they voted in favour of the resolutions proposed at such meetings).
Further details of the Scheme, including an indicative timetable for its
implementation, will be set out in the Scheme Document, which, together with
the Forms of Proxy, is expected to be despatched to LXi Shareholders as soon
as practicable and, in any event, within 28 days of the date of this
Announcement. The timing of events which relate to the implementation of the
Merger is, however, subject to the approval of the Court and is therefore
subject to change. It is expected that the Court Meeting and the LXi General
Meeting will be held in or around February 2024 and that, subject to the
satisfaction of the Conditions and the further terms set out in Appendix 1 to
this Announcement and the further terms and conditions to be set out in full
in the Scheme Document, the Scheme is expected to become Effective by 31 March
2024.
The Scheme will be governed by English law and will be subject to the
jurisdiction of the Court. The Scheme will be subject to the applicable
requirements of the Takeover Code, the Panel, the London Stock Exchange and
the FCA.
Election to switch
LondonMetric has reserved the right to elect, subject to the consent of the
Panel, for the Merger to be implemented by way of a Takeover Offer. In this
event, the Takeover Offer will be implemented on the same terms, so far as
applicable, as those which would apply to the Scheme. If LondonMetric does
elect to implement the Merger by way of a Takeover Offer, and if sufficient
acceptances of such Takeover Offer are received and/or sufficient LXi Shares
are otherwise acquired, it is the intention of LondonMetric to apply the
provisions of sections 979 to 982 (inclusive) of the Companies Act to acquire
compulsorily any outstanding LXi Shares to which such Merger relates.
14. Delisting of LXi Shares
Prior to the Scheme becoming Effective, applications will be made to the FCA
for the cancellation of the listing of LXi Shares on the Official List, and to
the London Stock Exchange to cancel the trading of the LXi Shares on the Main
Market, in each case to take effect from or shortly after the Effective Date.
The last day of dealings in LXi Shares on the Main Market is expected to be
the Business Day immediately prior to the Effective Date and no transfers will
be registered after 6.00 p.m. on that date.
On the Effective Date, LXi will become a wholly-owned subsidiary of
LondonMetric and share certificates in respect of LXi Shares will cease to be
valid and should be destroyed. In addition, entitlements to LXi Shares held
within the CREST system will be cancelled on the Effective Date.
Upon the Scheme becoming Effective, LondonMetric (and/or its nominee(s)) will
acquire the LXi Shares fully paid and free from all liens, equitable
interests, charges, encumbrances and other third party rights of any nature
whatsoever and together with all rights attaching to them including the right
to receive and retain all dividends and distributions (if any) declared after
the Effective Date.
15. Admission of, and commencement of dealings in, the New
LondonMetric Shares
Applications will be made to the FCA for the New LondonMetric Shares to be
issued in consideration for the Merger to be admitted to the premium listing
segment of the Official List and to the London Stock Exchange for the New
LondonMetric Shares to be admitted to trading on the Main Market.
It is expected that Admission will become effective and that unconditional
dealings in the New LondonMetric Shares will commence on the London Stock
Exchange at 8.00 a.m. (London time) on the first Business Day following the
date on which the Scheme becomes Effective.
Details of how LXi Shareholders can hold, access and trade in LondonMetric
Shares will be set out in the Scheme Document. LXi Shareholders resident in
the United Kingdom will be able to hold their LondonMetric Shares through any
of the ways currently available to LondonMetric Shareholders, including
through an intermediary of their own choice should they wish to do so.
16. LondonMetric Shareholder approval
The Merger constitutes a reverse takeover for LondonMetric for the purposes of
the Listing Rules. Accordingly, LondonMetric will be required to seek the
approval of LondonMetric Shareholders for the Merger at the LondonMetric
General Meeting. The Merger will be conditional on, among other things, the
LondonMetric Resolution being passed by the requisite majority of LondonMetric
Shareholders at the LondonMetric General Meeting.
Pursuant to the Listing Rules, LondonMetric is required to prepare and send to
its shareholders, as soon as is reasonably practicable, an explanatory
circular summarising the background to and reasons for the Merger.
LondonMetric is also required to publish a prospectus in connection with the
issue of the New LondonMetric Shares.
Accordingly, LondonMetric will prepare the Combined Circular and Prospectus
which will contain a notice convening the LondonMetric General Meeting and
information relating to, amongst other things, the Combined Group and the New
LondonMetric Shares.
It is expected that the Combined Circular and Prospectus will be published and
posted to LondonMetric Shareholders at the same time as the Scheme Document is
posted to LXi Shareholders. The Combined Circular and Prospectus
will be made available by LondonMetric on its website at
www.londonmetric.com and by LXi on its website at www.lxireit.com. LXi and
LondonMetric urge LXi Shareholders to read the Scheme Document and the
Combined Circular and Prospectus carefully as each will contain important
information relating to the Merger. LXi Shareholders are also advised to read
the Combined Circular and Prospectus, as it will contain important information
relating to the New LondonMetric Shares. Any vote, decision in respect of or
other response to the Merger (or the Scheme, if applicable) should only be
made on the basis of the information contained in the Scheme Document and the
Combined Circular and Prospectus.
17. General
The bases and sources for certain financial information contained in this
Announcement are set out in Appendix 2 to this Announcement. A summary of the
irrevocable undertakings and the letter of intent given in relation to the
Merger is set out in Appendix 3 to this Announcement. Property valuation
reports for LXi and LondonMetric (each as at 31 December 2023) are set out in
Appendix 4 to this Announcement pursuant to Rule 29 of the Takeover Code.
Certain terms used in this Announcement are defined in Appendix 5 to this
Announcement.
In the event that either LXi's or LondonMetric's property portfolio was to be
sold at the valuations contained in the valuation reports set out in Appendix
4 to this Announcement, any gains realised on such disposals may be subject to
taxation in the UK or, in respect of the assets located in Germany, German
tax.
Generally, disposals by a UK REIT of assets located in the UK held for the
purpose of a property rental business should be exempt from UK corporation
tax; however, there are specific rules which can result in assets held as part
of the property rental business being subject to tax on disposal (for example
when a property is materially developed and sold within three years of
completion of that development). In connection with the Merger it is not
contemplated that the aforementioned liability to taxation will crystallise.
In relation to LXi's assets located in Germany, if the relevant assets were to
be sold at the valuation contained in the valuation report set out in Appendix
4 to this Announcement, the LXi Directors estimate that a tax liability of
£9.7 million would arise.
In connection with the Merger, it is not expected that the aforementioned tax
liability will crystallise.
For the purposes of Rule 29.5 of the Takeover Code, the board of directors of
LondonMetric confirms that CBRE has confirmed to it that an updated valuation
as at the date of this Announcement of that part of LondonMetric's property
portfolio valued by CBRE would not be materially different to the valuation
given by CBRE as at 31 December 2023 and contained in the CBRE valuation
report set out in Appendix 4 to this Announcement.
For the purposes of Rule 29.5 of the Takeover Code, the board of directors of
LondonMetric also confirms that Savills has confirmed to it that an updated
valuation as at the date of this Announcement of that part of LondonMetric's
property portfolio valued by Savills would not be materially different to the
valuation given by Savills as at 31 December 2023 and contained in the Savills
valuation report set out in Appendix 4 to this Announcement.
For the purposes of Rule 29.5 of the Takeover Code, the board of directors of
LXi confirms that Knight Frank has confirmed to it that the value of LXi's
property portfolio as at the date of this Announcement would not be materially
different from the valuation given by Knight Frank as at 31 December 2023 and
contained in Knight Frank's valuation report set out in Appendix 4 to this
Announcement.
Each of Barclays, Peel Hunt, J.P. Morgan Cazenove, Lazard, Jefferies and
Santander has given and not withdrawn its consent to the publication of this
Announcement with the inclusion herein of the references to its name in the
form and context in which it is included.
Each of CBRE, Savills and Knight Frank has given and not withdrawn its consent
to the publication of its valuation report in this Announcement and the
inclusion herein to the references to its name, in each case,in the form and
context in which it is included.
18. Documents on display
In accordance with Rule 26.2 of the Takeover Code, copies of the following
documents will be made available on LondonMetric and LXi's websites at
www.londonmetric.com and www.lxireit.com, respectively by no later than 12
noon London time on the Business Day following this Announcement until the end
of the Offer Period:
(a) a copy of this Announcement;
(b) the irrevocable undertakings and letter of intent referred to in
paragraph 6 above and summarised in Appendix 3 to this Announcement;
(c) the written consents of Barclays, Peel Hunt, J.P. Morgan Cazenove,
Lazard, Jefferies, Santander, CBRE, Savills and Knight Frank to being named in
this Announcement;
(d) the property valuation reports set out in Appendix 4 to this
Announcement from each of CBRE, Savills and Knight Frank;
(e) no material change letters from each of CBRE, Savills and Knight
Frank;
(f) the Confidentiality Agreement; and
(g) the Heads of Terms.
The contents of LondonMetric's website and LXi's website, and any website
accessible from hyperlinks, are not incorporated into and do not form part of
this Announcement.
Enquiries
LondonMetric Property plc Tel: +44 (0) 20 7484 9000
Andrew Jones, Chief Executive
Martin McGann, Finance Director
Gareth Price, Investor Relations
Barclays Bank PLC, acting through its Investment Bank +44 (0) 20 7623 2323
(Lead Financial Adviser and Joint Corporate Broker)
Bronson Albery
Tom Macdonald
Callum West
Patrick Colgan
Peel Hunt (Financial Adviser and Joint Corporate Broker) +44 (0) 20 7418 8900
Capel Irwin
Carl Gough
Michael Nicholson
Henry Nicholls
J.P. Morgan Cazenove (Financial Adviser and Joint Corporate Broker) +44 (0) 20 3493 8000
Ashish Agrawal
Jonty Edwards
Dipayan Chakraborty
FTI Consulting (Communications Adviser) +44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
Andrew Davis
LXi REIT plc via H/Advisors Maitland
Cyrus Ardalan, Non-Executive Chairman
Hugh Seaborn, Non-Executive Senior Independent Director
Ismat Levin, Non-Executive Independent Director
Sandy Gumm, Non-Executive Director
Nick Leslau, Non-Executive Director
Lazard & Co., Limited (Lead Financial Adviser) +44 (0) 20 7187 2000
Patrick Long
Jolyon Coates
Sebastian O'Shea-Farren
Jefferies International Limited (Financial Adviser and Corporate Broker) +44 (0) 20 7029 8000
Rishi Bhuchar
Tom Yeadon
Ed Matthews
Paul Bundred
Santander Corporate & Investment Banking (Financial Adviser) +44 (0) 78 4071 7114
Oliver Tucker
Ting Le Deng
Benni Azaria
H/Advisors Maitland (Communications Adviser) +44 (0) 20 7379 5151
James Benjamin
Rachel Cohen
Market Abuse Regulation
This Announcement contains inside information for the purposes of Article 7 of
MAR. Market soundings (as defined in MAR) were taken in respect of a potential
offer with the result that certain persons became aware of inside information
(as defined in MAR) as permitted by MAR. This inside information is set out in
this Announcement. Therefore, those persons that received inside information
in a market sounding are no longer in possession of such inside information
relating to LondonMetric, LXi, the Merger and their respective securities.
For the purposes of MAR, this Announcement is being made on behalf of
LondonMetric by Jadzia Duzniak, Company Secretary, and on behalf of LXi by LDC
Nominee Secretary Limited, Company Secretary.
Financial advisers
Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is
authorised by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for LondonMetric and no one else in
connection with the matters set out in this Announcement and will not be
responsible to anyone other than LondonMetric for providing the protections
afforded to clients of Barclays nor for providing advice in relation to the
matters set out in or referred to in this Announcement.
In accordance with the Code, normal United Kingdom market practice and Rule
14e-5(b) of the Exchange Act, Barclays and its affiliates will continue to act
as exempt principal trader in LondonMetric and LXi securities on the London
Stock Exchange. These purchases and activities by exempt principal traders
which are required to be made public in the United Kingdom pursuant to the
Code will be reported to a Regulatory Information Service and will be
available on the London Stock Exchange website at www.londonstockexchange.com.
This information will also be publicly disclosed in the United States to the
extent that such information is made public in the United Kingdom.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United
Kingdom by the FCA, is acting exclusively for LondonMetric and for no one else
in connection with the matters referred to in this Announcement and will not
be responsible to any person other than LondonMetric for providing the
protections afforded to clients of Peel Hunt, nor for providing advice in
relation to the matters referred to herein. Neither Peel Hunt nor any of its
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Peel Hunt in connection with
the matters referred to in this Announcement, or otherwise.
J.P. Morgan Securities PLC, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in
the United Kingdom by the Prudential Regulation Authority (the "PRA") and
regulated by the PRA and the Financial Conduct Authority, is acting as
financial adviser exclusively for LondonMetric and no one else in connection
with the Merger and will not regard any other person as its client in relation
to the Merger and will not be responsible to anyone other than LondonMetric
for providing the protections afforded to clients of J.P. Morgan Cazenove or
its affiliates, nor for providing advice in relation to the Merger or any
other matter or arrangement referred to in this Announcement.
Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively as financial adviser to LXi
and no one else in connection with the Merger and will not be responsible to
anyone other than LXi for providing the protections afforded to clients of
Lazard nor for providing advice in relation to the Merger or any other matters
referred to in this Announcement. Neither Lazard nor any of its affiliates
(nor any of their respective directors, officers, employees or agents), owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Lazard in connection with the Merger, this
Announcement, any statement contained herein or otherwise.
Jefferies International Limited ("Jefferies"), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively for LXi and
no one else in connection with the matters referred to in this Announcement
and will not regard any other person as its client in relation to the matters
in this Announcement and will not be responsible to anyone other than LXi for
providing the protections afforded to clients of Jefferies nor for providing
advice in relation to any matter referred to in this Announcement or any
transaction or arrangement referred to herein. Neither Jefferies nor any of
its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Jefferies in
connection with this Announcement, any statement contained herein, any
transaction or arrangement referred to herein, or otherwise.
Banco Santander, S.A. ("Santander") is a credit institution which is
registered with the Bank of Spain with number 0049. Banco Santander, S.A.,
London Branch is a branch of Santander with its principal place of business
located at 2 Triton Square, Regent's Place, London NW1 3AN and is authorised
by the Bank of Spain and is subject to regulatory oversight on certain matters
in the UK by the Financial Conduct Authority and the Prudential Regulatory
Authority. Santander is acting exclusively as financial adviser to LXi and no
one else in connection with the matters referred to in this Announcement and
will not be responsible to anyone other than LXi for providing the protections
afforded to clients of Santander or any of its affiliates, or for providing
advice in relation to any matter referred to in this Announcement. Neither
Santander, nor any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Santander in connection with this Announcement or any matter referred to
herein.
Legal advisers
CMS Cameron McKenna Nabarro Olswang LLP is retained as legal adviser to
LondonMetric. Bryan Cave Leighton Paisner LLP is retained as legal adviser to
LXi.
Important notices
This Announcement is for information purposes only. It 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 the Merger or otherwise, nor shall
there be any purchase, sale, acquisition issuance, exchange or transfer of
securities or such solicitation pursuant to the Merger or otherwise in any
jurisdiction in contravention of applicable law. The Merger will be
implemented solely by means of the Scheme Document (or, in the event that the
Merger is to be implemented by means of a Takeover Offer, any document by
which the Takeover Offer is made) and the accompanying Forms of Proxy (or
forms of acceptance, if applicable) which will contain the full terms and
conditions of the Merger, including details of how to vote in respect of the
resolutions proposed in connection with the Merger.
LXi will prepare the Scheme Document to be distributed to LXi Shareholders.
LXi and LondonMetric urge LXi Shareholders to read the Scheme Document and the
Combined Circular and Prospectus carefully when they become available as each
will contain important information relating to the Merger, the New
LondonMetric Shares and the Combined Group.
LondonMetric will prepare the Combined Circular and Prospectus to be
distributed to LondonMetric Shareholders. LondonMetric urges LondonMetric
Shareholders to read the Combined Circular and Prospectus when it becomes
available as it will contain important information relating to the Merger, the
New LondonMetric Shares and the Combined Group. Any approval, decision or
other response to the Merger should be made only on the basis of the
information in the Combined Circular and Prospectus. LondonMetric Shareholders
are strongly advised to read the formal documentation in relation to the
Merger once it has been despatched.
Any vote, approval, decision in respect of, or other response to, the Merger
should only be made on the basis of the information contained in the Scheme
Document (or any other document by which the Merger is made by way of a
Takeover Offer) and the Combined Circular and Prospectus.
This Announcement does not constitute a prospectus or prospectus equivalent
document. The New LondonMetric Shares to be issued pursuant to the Merger are
not being offered to the public by means of this Announcement.
No person should construe the contents of this Announcement as legal,
financial or tax advice. If you are in any doubt about the contents of this
Announcement or the action you should take, you are recommended to seek your
own independent financial advice immediately from your stockbroker, bank
manager, solicitor, accountant or from an independent financial adviser duly
authorised under FSMA, or another appropriately authorised independent
financial adviser, if you are in a territory outside the United Kingdom.
Overseas Shareholders
This Announcement has been prepared for the purpose of complying with English
law, the Takeover Code, the Market Abuse Regulation, the Disclosure Guidance
and Transparency Rules and the Listing Rules and the information disclosed may
not be the same as that which would have been disclosed if this Announcement
had been prepared in accordance with the laws of jurisdictions outside the
United Kingdom. Nothing in this Announcement should be relied on for any other
purpose.
The availability of the New LondonMetric Shares (and the ability of persons to
hold such shares) in, and the release, publication or distribution of this
Announcement in or into, jurisdictions other than the United Kingdom may be
restricted by the laws and/or regulations of those jurisdictions. Persons into
whose possession this Announcement comes who are not resident in the United
Kingdom, or who are subject to the laws and/or regulations of any jurisdiction
other than the United Kingdom, should inform themselves of, and observe, any
such applicable laws and/or regulations. In particular, the ability of persons
who are not resident in the United Kingdom or who are subject to the laws of
another jurisdiction to participate in the Merger or to vote their Scheme
Shares in respect of the Scheme at the Court Meeting, or to appoint another
person as proxy to vote at the Court Meeting on their behalf, may be affected
by the laws of the relevant jurisdictions in which they are located or to
which they are subject. Any failure to comply with the applicable requirements
may constitute a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law, the companies
and persons involved in the Merger disclaim any responsibility or liability
for the violation of such restrictions by any person.
Unless otherwise determined by LondonMetric or required by the Takeover Code
and permitted by applicable law and regulation, participation in the Merger
will not be made, and the New LondonMetric Shares to be issued pursuant to the
Merger will not be made, available, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Merger by any such use,
means, instrumentality or form from within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the laws of
that jurisdiction. Accordingly, copies of this Announcement and all
documentation relating to the Merger are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent in, into or
from a Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction, and persons receiving this Announcement and all documents
relating to the Merger (including custodians, nominees and trustees) must not
mail or otherwise distribute or send them in, into or from such jurisdictions
as doing so may invalidate any purported vote in respect of the Merger.
If the Merger is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made, directly or indirectly, in or into or by use of the mails or any other
means or instrumentality (including, without limitation, facsimile, e-mail or
other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or any facility of a national, state or other securities exchange
of any Restricted Jurisdiction and the Takeover Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or from
within any Restricted Jurisdiction.
Further details in relation to Overseas Shareholders will be contained in the
Scheme Document.
Additional information for US investors
LXi Shareholders located in the United States should note that the Merger
relates to the securities of an English company with a listing on the London
Stock Exchange and is proposed to be implemented pursuant to a scheme of
arrangement provided for under English law. A transaction effected by means of
a scheme of arrangement is not subject to the tender offer rules or the proxy
solicitation rules under the US Exchange Act. Accordingly, the Scheme is
subject to procedural and disclosure requirements and practices applicable to
a scheme of arrangement involving a target company in England listed on the
London Stock Exchange, which are different from the disclosure requirements of
the US tender offer and proxy solicitation rules.
The Merger may, in circumstances provided for in this Announcement, instead be
carried out by way of a Takeover Offer under English law. If in the future
LondonMetric exercises its right to implement the Merger by way of a Takeover
Offer, such Takeover Offer will be made in compliance with applicable US
tender offer and securities laws and regulations, including the exemptions
therefrom. Such Takeover Offer would be made in the United States by
LondonMetric and no one else. In addition to any such Takeover Offer, in
accordance with normal practice in the United Kingdom, LondonMetric, certain
affiliated companies, and their nominees or brokers (acting as agents) may
make certain purchases of, or arrangements to purchase, LXi Shares outside the
United States, other than pursuant to the Takeover Offer, until the date on
which such Takeover Offer would become effective, lapses or is otherwise
withdrawn. If such purchases or arrangements to purchase were to be made, they
would be made outside the United States and would comply with applicable law,
including the US Exchange Act. These purchases may occur either in the open
market at prevailing prices or in private transactions at negotiated prices.
Any information about such purchases will be disclosed, as required in the
United Kingdom, will be reported to a Regulatory Information Service of the
FCA and will be available on the London Stock Exchange website:
http://www.londonstockexchange.com/.
The financial information included in this Announcement and other
documentation related to the Merger has been or will have been prepared in
accordance with International Financial Reporting Standards and thus may not
be comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.
The New LondonMetric Shares to be issued under the Scheme have not been and
will not be registered under the US Securities Act or under the securities
laws of any state or other jurisdiction of the United States and may not be
offered or sold in the United States absent registration or an available
exemption from the registration requirements under the US Securities Act and
applicable US state securities laws. If LondonMetric effects the Merger by way
of a scheme of arrangement under English law, the New LondonMetric Shares to
be issued in the Merger will be issued in reliance on the exemption from the
registration requirements of the US Securities Act provided by Section
3(a)(10) thereof. LXi will advise the Court that its sanction of the Scheme
will be relied upon by LondonMetric as an approval of the scheme of
arrangement following a hearing on its fairness to LXi Shareholders at which
hearing all such LXi Shareholders are entitled to attend in person or through
counsel to support or oppose the sanctioning of the Scheme and with respect to
which notification has been given to all LXi Shareholders.
The New LondonMetric Shares to be issued to LXi Shareholders in the Merger
pursuant to a scheme of arrangement under English law may generally be resold
without restriction under the US Securities Act, except for resales by persons
who are or will be affiliates (within the meaning of Rule 144 under the US
Securities Act) "Affiliates" of a company are generally defined as persons
who directly, or indirectly through one or more intermediaries, control, or
are controlled by, or are under common control with, that company. Whether a
person is an affiliate of a company for purposes of the US Securities Act
depends on the circumstances, but affiliates can include certain officers,
directors and significant shareholders. LXi Shareholders who are or will be
affiliates of LondonMetric or LXi prior to, or of LondonMetric after, the
Effective Date will be subject to certain US transfer restrictions relating to
the New LondonMetric Shares received pursuant to the Scheme as will be further
described in the Scheme Document. LXi Shareholders who believe that they may
be or will be affiliates for purposes of the US Securities Act should consult
their own legal advisors prior to any resale of New LondonMetric Shares
received under the Scheme.
None of the securities referred to in this Announcement have been approved or
disapproved by the SEC or any US state securities commission, nor have any
such authorities passed judgment upon the fairness or the merits of the Merger
or determined if this Announcement is accurate or complete. Any representation
to the contrary is a criminal offence in the United States.
US holders of LXi Shares also should be aware that the transaction
contemplated herein may have tax consequences in the United States and that
such consequences, if any, are not described herein. US holders of LXi Shares
are urged to consult with independent professional advisors regarding the
legal, tax and financial consequences of the Merger applicable to them,
It may be difficult for US holders of LXi Shares to enforce their rights and
claims arising out of the US federal securities laws since LondonMetric and
LXi are organized in countries other than the United States and some or all of
their officers and directors may be residents of, and some or all of their
assets may be located in, jurisdictions other than the United States. US
holders of LXi Shares may have difficulty effecting service of process within
the United States upon those persons or recovering against judgments of US
courts, including judgments based upon the civil liability provisions of the
US federal securities laws. US holders of LXi Shares may not be able to sue a
non-US company or its officers or directors in a non-US court for violations
of US securities laws. Further, it may be difficult to compel a non-US company
and its affiliates to subject themselves to a US court's judgment.
Further details in relation to US investors will be contained in the Scheme
Document.
Forward looking statements
This Announcement (including information incorporated by reference into this
Announcement), any oral statements made by LondonMetric or LXi in relation to
the Merger and other information published by LondonMetric or LXi may contain
statements about LondonMetric, LXi and/or the Combined Group that are or may
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", "goals", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "estimates", "projects", hopes",
"continues", "would", "could", "should" 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; (ii) business and management strategies and the expansion and
growth of LondonMetric's or LXi's or the Combined Group's operations and
potential synergies resulting from the Merger; and (iii) the effects of
government regulation on LondonMetric's or LXi 's or the Combined Group's
business.
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 risks and uncertainties that could significantly affect
expected results and/or the operations of LondonMetric, LXi or the Combined
Group and are based on certain assumptions and assessments made by
LondonMetric and LXi in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate.
There are several factors which could cause actual results to differ
materially from those projected, expressed or implied in forward looking
statements. Among the factors that could cause actual results to differ
materially from those described in the forward looking statements are the
satisfaction of or failure to satisfy all or any of the conditions to the
Merger, as well as additional factors, such as changes in the global,
political, economic, business, competitive, market and regulatory forces,
fluctuations in exchange and interest rates, changes in tax rates and future
business acquisitions or disposals, the success of business and operating
initiatives and restructuring objectives and the outcome of any litigation.
Such statements are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Except as expressly provided in
this Announcement, they have not been reviewed by the auditors of LondonMetric
or LXi. Neither LondonMetric or LXi, nor any of their respective associates 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.
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. All subsequent oral or written forward-looking
statements attributable to LondonMetric or LXi or any of their respective
members, directors, officers, employees or advisers or any persons acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. LondonMetric and LXi disclaim any obligation to 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.
No profit forecasts and estimates
No statement in this Announcement is intended to constitute a profit forecast
or profit estimate and no statement in this Announcement should be interpreted
to mean that the earnings or earnings per share or dividend per share for
LondonMetric, LXi or the Combined Group, as appropriate, for the current or
future financial periods would necessarily match or exceed the historical
published earnings or earnings per share or dividend per share for
LondonMetric, LXi or the Combined Group, as appropriate.
Disclosure requirements of the Takeover Code (the "Code")
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s), save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Right to switch to a Takeover Offer
LondonMetric reserves the right to elect, with the consent of the Panel, to
implement the Merger by way of a Takeover Offer for the entire issued and to
be issued ordinary share capital of LXi as an alternative to the Scheme. In
such an event, the Takeover Offer will be implemented on the same terms or, if
LondonMetric so decides, on such other terms being no less favourable (subject
to appropriate amendments), so far as applicable, as those which would apply
to the Scheme and subject to the amendments referred to in paragraph 12 of
Part B of Appendix 1 to this Announcement.
Electronic Communication
Please be aware that addresses, electronic addresses and certain other
information provided by LXi Shareholders, persons with information rights and
other relevant persons for the receipt of communication from LXi may be
provided to LondonMetric during the Offer Period as required by Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and Requesting Hard Copy Documents
A copy of this Announcement and the documents required to be published
pursuant to Rules 26.1 and 26.2 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on LXi 's website at www.lxireit.com and
LondonMetric's website at https://www.londonmetric.com by no later than 12.00
p.m. on the Business Day following the date of this Announcement.
In accordance with Rule 30.3 of the Takeover Code, LXi Shareholders and
persons with information rights may request a hard copy of this Announcement
by contacting LXi's registrars, Link Group, Corporate Actions, Central Square,
29 Wellington Street, Leeds, LS1 4DL, United Kingdom or by calling Link Group
on +44 (0) 371 664 0321. Calls are charged at the standard geographical rate
and will vary by provider. Calls outside the United Kingdom will be charged at
the applicable international rate. Lines are open between 8.30 a.m. to 5.30
p.m. (London time), Monday to Friday (except public holidays in England and
Wales). Please note that Link Group cannot provide any financial, legal or tax
advice. Calls may be recorded and monitored for security and training
purposes. For persons who receive a copy of this Announcement in electronic
form or via a website notification, a hard copy of this Announcement will not
be sent unless so requested. Such persons may also request that all future
documents, announcements and information to be sent to them in relation to the
Merger should be in hard copy form.
For the avoidance of doubt, the contents of the aforementioned websites, and
any websites accessible from hyperlinks on those websites, are not
incorporated into and do not form part of this Announcement.
Rounding
Certain figures included in this Announcement have been subject to rounding
adjustments. Accordingly, figures shown for the same category presented in
different places may vary slightly and figures shown as totals in certain
tables may not be an exact arithmetic aggregation of the figures that precede
them.
Appendix 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE MERGER
Part A: The Conditions
Long-stop Date
1. The Merger will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the provisions of the
Takeover Code, by not later than 11.59 p.m. on the Long-stop Date.
Conditions of the Scheme
2. The Scheme will be conditional upon:
(a)
(i) its approval by a majority in number representing not less
than 75 per cent. in value of the Scheme Shareholders (or the relevant class
or classes thereof, if applicable) who are on the register of members of LXi
at the Scheme Voting Record Time, present and voting (and entitled to vote),
whether in person or by proxy, at the Court Meeting, and at any separate class
meeting which may be required, or, in each case, at any adjournment of any
such meeting; and
(ii) the Court Meeting and any separate class meeting which may be
required or, in each case, any adjournment of any such meeting being held on
or before the 22(nd) day after the expected date of the Court Meeting, to be
set out in the Scheme Document in due course (or such later date as may be
agreed by LondonMetric and LXi with the consent of the Panel and (if required)
the Court may allow);
(b)
(i) the LXi Resolutions being duly passed by the requisite
majority or majorities at the LXi General Meeting (or at any adjournment of
that meeting); and
(ii) the LXi General Meeting (or any adjournment of that meeting)
being held on or before the 22(nd) day after the expected date of the LXi
General Meeting, to be set out in the Scheme Document in due course (or such
later date as may be agreed by LondonMetric and LXi with the consent of the
Panel and (if required) the Court may allow);
(c)
(i) the sanction of the Scheme (with or without modification, but
subject to any such modification being on terms acceptable to LondonMetric and
LXi) by the Court and the delivery of a copy of the Court Order to the
Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22(nd) day after
the expected date of the Court Hearing to be set out in the Scheme Document
(or such later date as may be agreed by LondonMetric and LXi with the consent
of the Panel and (if required) that the Court may allow).
General Conditions to the Scheme
3. In addition, subject to (i) the terms of Part B of this
Appendix 1 and (ii) the requirements of the Panel in accordance with the
Takeover Code, LondonMetric and LXi have agreed that the Merger will be
conditional upon the following Conditions and, accordingly, the necessary
actions to make the Scheme Effective will not be taken unless the following
Conditions (as amended if appropriate) have been satisfied or, where relevant,
waived prior to the Scheme being sanctioned by the Court:
LondonMetric Shareholder approval
(a) the passing at the LondonMetric General Meeting (or at any
adjournment of that meeting), in each case by the requisite majority of
LondonMetric Shareholders, of the LondonMetric Resolution;
FCA and London Stock Exchange
(b) the FCA having acknowledged to LondonMetric or its agent (and
such acknowledgement not having been withdrawn) that the application for the
admission of the New LondonMetric Shares to listing on the premium listing
segment of the Official List has been approved and (after satisfaction of any
conditions to which such approval is expressed to be subject ("Listing
Conditions")) admission will become effective as soon as a dealing notice has
been issued by the FCA and any Listing Conditions having been satisfied;
(c) the London Stock Exchange having acknowledged to LondonMetric or
its agent (and such acknowledgement not having been withdrawn) that the New
LondonMetric Shares will be admitted to trading on the Main Market;
General regulatory
(d) no Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and, in each case, not having withdrawn the same), or
having enacted, made or proposed any statute, regulation, decision or order,
or change to published practice and there not continuing to be outstanding any
statute, regulation, decision or order which in each case would or would
reasonably be expected to:
(i) make the Merger, its implementation or the acquisition or the
proposed acquisition by LondonMetric or any member of the Wider LondonMetric
Group of any shares or other securities in, or control or management of, LXi
or any member of the Wider LXi Group void, illegal or unenforceable under the
laws of any jurisdiction, or otherwise directly or indirectly restrain,
prohibit, prevent, restrict, delay or otherwise materially interfere with the
same or impose additional adverse conditions or obligations or require
material amendment to the terms with respect thereto to an extent which is or
could be material in the context of the Combined Group taken as a whole or
material in the context of the Merger;
(ii) limit or delay the ability of any member of the Wider
LondonMetric Group to acquire or to hold or to exercise effectively, directly
or indirectly, all or any rights of ownership in respect of shares or other
securities in, or to exercise voting or management control over, any member of
the Wider LXi Group or any member of the Wider LondonMetric Group, as the case
may be, to the extent which, in any such case, is or could be material in the
context of the Combined Group taken as a whole or material in the context of
the Merger;
(iii) require, prevent or materially delay any divestiture or
materially alter the terms envisaged for any proposed divestiture, by any
member of the Wider LondonMetric Group or by any member of the Wider LXi Group
of all or any part of their respective businesses, assets or properties or
impose any limitation on the ability of any of them to conduct their
respective businesses or to own or control or manage any of their respective
assets or properties or any part thereof, to an extent which, in any such
case, is material in the context of the Wider LondonMetric Group or the Wider
LXi Group taken as a whole;
(iv) except pursuant to the implementation of the Merger or, if
applicable, sections 974 to 991 of the Companies Act, require any member of
the Wider LondonMetric Group or of the Wider LXi Group to acquire, or to offer
to acquire, any shares or other securities (or the equivalent) in any member
of the Wider LXi Group or the Wider LondonMetric Group owned by any third
party or to sell, or offer to sell, any shares or other securities (or their
equivalent) or any interest in any of the assets owned by any member of the
Wider LondonMetric Group or the Wider LXi Group;
(v) limit the ability of any member of the Wider LondonMetric Group
or of the Wider LXi Group to conduct, integrate or co-ordinate its business,
or any part of it, with the businesses of any other members of the Wider
LondonMetric Group and/or of the Wider LXi Group which is material in the
context of, the Wider LondonMetric Group and/or the Wider LXi Group, as the
case may be, taken as a whole or in the context of the Merger;
(vi) result in any member of the Wider LondonMetric Group or the Wider
LXi Group ceasing to be able to carry on business under any name under which
it presently does so; or
(vii) otherwise adversely affect any or all of the business, assets,
profits, financial or trading position of any member of the Wider LondonMetric
Group or of any member of the Wider LXi Group to an extent which is material
in the context of the Wider LondonMetric Group or the Wider LXi Group in
either case, taken as a whole,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such antitrust regulator or Third Party could decide
to take, institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under any
applicable legislation or regulation of any relevant jurisdiction or otherwise
intervene having expired, lapsed or been terminated (as the case may be);
Notifications, waiting periods and Authorisations
(e) all necessary, notifications, filings or applications having
been made, all necessary waiting and other time periods (including any
extensions of such waiting and other time periods) under any applicable
legislation or regulation of any relevant jurisdiction having expired, lapsed
or been terminated (as appropriate) and all statutory or regulatory
obligations in any relevant jurisdiction having been complied with, in each
case in connection with the Merger or the acquisition of any shares or other
securities (or the equivalent) in, or of control of, any member of the Wider
LXi Group by any member of the Wider LondonMetric Group where the direct
consequence of a failure to make such a notification or filing or to wait for
the expiry, lapse, or termination of any such waiting or time period would be
unlawful in any relevant jurisdiction or have a material adverse effect on the
Wider LondonMetric Group, or the ability of LondonMetric to implement the
Scheme;
(f) all Authorisations required for the proposed acquisition of any
shares or other securities (or the equivalent) in, or of control or management
of, LXi or any other member of the Wider LXi Group by any member of the Wider
LondonMetric Group having been obtained, in terms and in a form satisfactory
to LondonMetric from all necessary Third Parties or persons with whom any
member of the Wider LXi Group has entered into contractual arrangements or
other material business relationships and all such Authorisations together
with all authorisations necessary to carry on the business of any member of
the Wider LXi Group remaining in full force and effect and all filings
necessary for such purpose having been made, and there being no notice or
other intimation of any intention to revoke, suspend, restrict, modify or not
to renew any of the same at the time at which the Merger becomes otherwise
unconditional and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with in each case which is or could be
material in the context of the Combined Group taken as a whole or material in
the context of the Merger;
Certain matters arising as a result of any arrangement, agreement, etc.
(g) save as Disclosed, there being no provision of any arrangement,
agreement, licence, permit, or other instrument to which any member of the
Wider LXi Group is a party, or by or to which any such member or any of its
assets is or may be bound, entitled or subject, or any circumstance which, in
each case as a consequence of the Scheme, the Merger or the acquisition or
proposed acquisition by any member of the Wider LondonMetric Group of any
shares or other securities (or the equivalent) in LXi, or because of a change
of control or management of, LXi, would or would reasonably be expected to,
result in any of the following (in any case, to an extent which is material in
the context of the Wider LXi Group taken as a whole or in the context of the
Merger):
(i) any monies borrowed by or any other indebtedness or liabilities
(actual or contingent) of, or any grant available to any member of the Wider
LXi Group, being or becoming repayable or capable of being declared repayable
immediately or earlier than their or its stated maturity date or repayment
date, or the ability of any such member of the Wider LXi Group to borrow
monies or incur any indebtedness being withdrawn or inhibited or becoming
capable of being withdrawn or inhibited;
(ii) the creation (other than in the ordinary course of business) or
enforcement of any mortgage, charge or other security interest over the whole
or any part of the business, property, assets or interest of any member of the
Wider LXi Group or any such mortgage, charge or other security interest
(whenever arising or having arisen) becoming enforceable;
(iii) any asset or interest of any member of the Wider LXi Group being
or falling to be disposed of or charged or any right arising under which any
such asset or interest could be required to be disposed of or charged or could
cease to be available to any member of the Wider LXi Group otherwise in the
ordinary course of business;
(iv) any member of the Wider LXi Group ceasing to be able to carry on
business under any name under which it presently does so;
(v) the creation or acceleration of any material liability (actual or
contingent) by any member of the Wider LXi Group other than trade creditors or
other liabilities incurred in the ordinary course of business or in connection
with the Merger;
(vi) the rights, liabilities, obligations or interests of any member of
the Wider LXi Group or the business of any such member with any other person,
firm, company or body (or any arrangement, agreement, licence, permit, or
other instrument relating to any such interests or business) being, or being
likely to become terminated, adversely modified or affected or any onerous
obligation or liability arising thereunder; and
(vii) the value or financial or trading position of any member of the
Wider LXi Group being prejudiced or adversely affected,
and, save as Disclosed, no event having occurred which, under any provision of
any arrangement, agreement, license, permit or other instrument to which any
member of the Wider LXi Group is a party, or by or to which any such member or
any of its assets may be bound, entitled or subject, would or would reasonably
be expected to result in any of the events or circumstances which are referred
to in sub-paragraphs (i) to (vii) of this Condition 3(g), in each case, to the
extent material in the context of the Wider LXi Group taken as a whole or in
the context of the Merger;
Certain events occurring since 30 September 2023
(h) save as Disclosed, no member of the Wider LXi Group having since
30 September 2023:
(i) save as between LXi and wholly-owned subsidiaries and
subsidiary undertakings of LXi or between such wholly-owned subsidiaries and
subsidiary undertakings, issued or agreed to issue, or authorised or proposed
the issue of, additional shares or securities of any class (or the
equivalent), or securities convertible into or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares, securities
or the equivalent;
(ii) purchased, redeemed or repaid or announced its intention to
purchase, redeem or repay any of its own shares or other securities (or their
equivalent) or reduced or, save in respect of matters mentioned in
sub-paragraph (i) above, made any other change to any part of its share
capital;
(iii) save as between LXi and wholly-owned subsidiaries of LXi or
between such wholly-owned subsidiaries and subsidiary undertakings and save
for LXi Permitted Dividends, recommended, declared, paid or made, or agreed to
recommend, declare, pay or make, any bonus issue, dividend or other
distribution, whether payable in cash or otherwise;
(iv) save for intra- LXi Group transactions, made, authorised,
proposed or announced an intention to make, propose or authorise any change in
its loan capital other than in the ordinary course of business and to the
extent which is material in the context of the Wider LXi Group taken as a
whole;
(v) save for intra-LXi Group transactions, merged or demerged with
any body corporate, partnership or business or acquired or disposed of or
transferred, mortgaged or charged or created any security interest over any
assets or any right, title or interest in any asset (including shares and
trade investments) or authorised or announced any intention to effect any
reconstruction, amalgamation, scheme, merger, demerger, disposal, transfer,
mortgage, charge or security interest, in each case, to the extent which is
material in the context of the Wider LXi Group taken as a whole;
(vi) issued, authorised or announced its intention for the issue of,
or made any change in or to, any debentures or (save for intra-LXi Group
transactions) incurred or increased any indebtedness (other than trade credit
incurred in the ordinary course of business) or become subject to any
liability (actual or contingent) to an extent which is material in the context
of the Wider LXi Group taken as a whole;
(vii) entered into, varied or authorised any agreement, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which:
(A) is of a long term, onerous or unusual nature or magnitude or which
is reasonably likely to involve an obligation of such nature or magnitude
(save in the ordinary course of business); or
(B) would, or would reasonably be likely to, restrict the business of
any member of the Wider LXi Group other than to a nature and extent which is
normal in the context of the business concerned,
and, in either case, which is or would or would reasonably be expected to be
material and adverse in the context of the Wider LXi Group taken as a whole;
(viii) entered into or materially varied or made an offer (which remains
open for acceptance) to materially vary the terms of any contract, service
agreement, letter of appointment, commitment or arrangement with any director
of any member of the Wider LXi Group;
(ix) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or steps or had any
legal proceedings started or threatened against it, or petition presented or
order made, in relation to the suspension of payments, a moratorium of any
indebtedness, or for its winding-up, dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of all or any of its assets or revenues or any analogous
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(x) been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling, putting a moratorium on, compromising or restructuring
any of its indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business to an extent which is
material in the context of the Wider LXi Group taken as a whole;
(xi) other than claims between LXi and its wholly-owned subsidiaries
or between such wholly-owned subsidiaries, waived, settled, abandoned or
compromised any claim (otherwise than in the ordinary and usual course of
business) which is material in the context of the Wider LXi Group taken as a
whole;
(xii) terminated or varied the terms of any agreement or arrangement
between any member of the Wider LXi Group and any other person in a manner
which would or would reasonably be expected to have a material adverse effect
on the financial position of the Wider LXi Group taken as a whole other than
as directed, required and/or requested by, or with the agreement of,
LondonMetric;
(xiii) made any alteration to its articles of association (other than as
required in connection with the Merger or the Scheme);
(xiv) put in place any pension schemes for any director of any member of
the Wider LXi Group or their dependants;
(xv) proposed or agreed to provide any share option incentive scheme or
other benefit relating to the employment or termination of employment of any
director of any member of the Wider LXi Group;
(xvi) entered into, implemented or authorised the entry into, of any joint
venture, asset or profit-sharing arrangement;
(xvii) except with the consent of LondonMetric, taken (or agreed or
proposed to take) any action which requires, or would require, the consent of
the Panel or the approval of LXi Shareholders at a general meeting of LXi in
accordance with, or as contemplated by, Rule 21.1 of the Takeover Code;
(xviii) entered into any contract, agreement, commitment or arrangement or
passed any resolution or made any offer (which remains open for acceptance)
with respect to, or announced, any of the transactions, matters or events
referred to in this Condition (h);
No material adverse change
(i) save as Disclosed, since 30 September 2023:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or operational
performance of any member of the Wider LXi Group or any member of the Wider
LondonMetric Group which, in any such case, is or could be material in the
context of the Wider LXi Group taken as a whole or the Wider LondonMetric
Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider LXi Group or any member of
the Wider LondonMetric Group is or may become a party (whether as plaintiff,
defendant or otherwise) and (other than as a result of, or in connection with
the Merger) no enquiry, review or investigation by, or complaint or reference
to, any Third Party against or in respect of any member of the Wider LXi Group
or any member of the Wider LondonMetric Group having been announced or
threatened in writing by or against or remaining outstanding in respect of any
member of the Wider LXi Group or any member of the Wider LondonMetric Group,
which in any such case has had or would reasonably be expected to have a
material adverse effect on the Wider LXi Group taken as a whole or the Wider
LondonMetric Group taken as a whole;
(iii) no contingent or other liability of any member of the Wider LXi
Group or of any member of the Wider LondonMetric Group having arisen or become
apparent or increased (other than in the ordinary course of business), which
has had or might reasonably be expected to have a material adverse effect on
the Wider LXi Group taken as a whole or the Wider LondonMetric Group taken as
a whole;
(iv) no member of the Wider LXi Group nor any member of the Wider
LondonMetric Group having conducted its business in breach of any applicable
laws and regulations which in any case is material in the context of the Wider
LXi Group taken as a whole or the Wider LondonMetric Group taken as a whole;
and
(v) no steps having been taken which are reasonably likely to result
in the withdrawal, cancellation, termination or modification of any licence or
permit held by any member of the Wider LXi Group or any member of the Wider
LondonMetric Group which is necessary for the proper carrying on of its
business and the withdrawal, cancellation, termination or modification of
which would reasonably be expected to have a material adverse effect on the
Wider LXi Group taken as a whole or the Wider LondonMetric Group taken as a
whole;
No discovery of certain matters
(j) save as Disclosed, LondonMetric not having discovered that (in
each case to an extent which is or could be material in the context of the
Wider LXi Group taken as a whole or material in the context of the Merger):
(i) any financial or business or other information concerning the
Wider LXi Group as contained in the information publicly disclosed at any time
by or on behalf of any member of the Wider LXi Group is materially misleading,
contains a material misrepresentation of fact or omits to state a fact
necessary to make that information not misleading and which has not been
subsequently corrected before the date of this Announcement by disclosure
either publicly or otherwise;
(ii) any member of the Wider LXi Group is subject to any liability
(actual or contingent), other than in the ordinary course of business;
(iii) any past or present member of the Wider LXi Group has failed to
comply with any applicable legislation, regulations or common law of any
jurisdiction with regard to the use, treatment, handling, storage, release,
disposal, discharge, presence, spillage, leak or emission of any waste or
hazardous or harmful substance or any substance likely to impair the
environment (including property) or harm human or animal health, or otherwise
relating to environmental matters or the health and safety of any person, or
that there has otherwise been any such use, treatment, handling, storage,
release, disposal, discharge, presence, spillage, leak or emission (whether or
not the same constituted a non-compliance by any person with any legislation,
regulations or law and wherever the same may have taken place) which, in any
case, non-compliance would be reasonably likely to give rise to any liability
(whether actual or contingent) or cost (including any penalty) on the part of
any member of the Wider LXi Group; or
(iv) there is, or is reasonably likely to be, any material obligation
or liability, whether actual or contingent or requirement to make good,
repair, reinstate, remedy or clean up any property now or previously owned,
occupied, operated or made use of by any past or present member of the Wider
LXi Group under any environmental legislation, regulation, common law, notice,
circular or order or Third Party in any jurisdiction;
(k) save as Disclosed, LondonMetric not having discovered that:
(i) any:
(A) past or present member, director or officer of the Wider LXi Group
is or has at any time, in connection with their position in the Wider LXi
Group, engaged in any activity, practice or conduct which would constitute an
offence under the Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption or anti-bribery legislation; or
(B) any person that performs or has performed services for or on
behalf of the Wider LXi Group is or has at any time engaged in any activity,
practice or conduct in connection with the performance of such services which
would constitute an offence under the Bribery Act 2010, the U.S. Foreign
Corrupt Practices Act of 1977 or any other applicable anti-corruption or
anti-bribery legislation;
(ii) any asset of any member of the Wider LXi Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition) or proceeds of crime
under any other applicable law, rule, or regulation concerning money
laundering or proceeds of crime or any member of the Wider LXi Group is found
to have engaged in activities constituting money laundering;
(iii) any past or present member, director or officer of the Wider LXi
Group is or has engaged in any conduct or business which would violate any
economic sanctions or dealt with, made any investments in, made any funds or
assets available to or received any funds or assets from: (a) any government,
entity or individual in respect of which US, UK or European Union persons, or
persons operating in those territories, are prohibited from engaging in
activities or doing business, or from receiving or making available funds or
economic resources, by applicable US or European Union laws or regulations,
including the economic sanctions administered by the United States Office of
Foreign Assets Control or HM Treasury & Customs in the United Kingdom; or
(b) any government, entity or individual targeted by any of the economic
sanctions of the United Nations, the United States, the UK, the European Union
or any of their respective member states;
(iv) any past or present member, director or officer of the Wider LXi
Group:
(A) has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act;
(B) has engaged in conduct which would violate any relevant
anti-boycott law, rule, or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State;
(C) has engaged in conduct which would violate any relevant laws,
rules, or regulations concerning human rights, including but not limited to
any law, rule, or regulation concerning false imprisonment, torture or other
cruel and unusual punishment, or child labour;
(D) is debarred or otherwise rendered ineligible to bid for or to
perform contracts for or with any government, governmental instrumentality, or
international organisation or found to have violated any applicable law, rule,
or regulation concerning government contracting or public procurement; or
(v) any member of the Wider LXi Group has been or is engaged in any
transaction which would cause the Wider LondonMetric Group to be in breach of
any law or regulation upon its acquisition of LXi, including but not limited
to the economic sanctions of the United States Office of Foreign Assets
Control or HM Treasury & Customs in the United Kingdom, or any other
relevant government authority.
Part B: Waiver of Conditions and further terms of the Merger and the Scheme
1. Conditions 2(a), 2(b) and 3(a) to 3(k) (inclusive) of
Part A of this Appendix 1 must each be fulfilled or (if capable of waiver) be
waived by no later than 11.59 p.m. (London time) on the date immediately
preceding the date of the Court Hearing (or such later date as LondonMetric,
LXi, the Panel and, if required, the Court may allow), failing which the
Merger will lapse, or if the Merger is implemented by way of Takeover Offer,
no later than as permitted by the Panel.
2. Notwithstanding the paragraph above and subject to
the requirements of the Panel in accordance with the Takeover Code,
LondonMetric reserves the right, in its sole discretion, to waive:
(a) any of the deadlines set out in paragraph 2 of Part A for
the timing of the Court Meeting, LXi General Meeting and the Court Hearing. If
any such deadline is not met, LondonMetric shall make an announcement by 8.00
a.m. (London time) on the Business Day following such deadline confirming
whether it has invoked or waived the relevant Condition or agreed with LXi to
extend the relevant deadline; and
(b) in whole or in part all or any of the Conditions set out in
paragraphs 3(d) to 3(k) inclusive of Part A (but in relation to the Conditions
in paragraph 3(i) in Part A of this Appendix 1, only in so far as they relate
to LXi, the Wider LXi Group or any part thereof).
3. Subject to the requirements of the Panel, LXi
reserves the right in its sole discretion to waive in whole or in part (only
so far as it relates to LondonMetric, the Wider LondonMetric Group or any part
thereof) the Condition in paragraph 3(i) in Part A of this Appendix 1.
4. Conditions 1, 2(a)(i), 2(b)(i), 2(c)(i) and 3(a) to
3(c) (inclusive) may not be waived.
5. The Merger will lapse if the Scheme does not become
Effective by no later than 11.59 p.m. (London time) on the Long-stop Date.
6. If LondonMetric is required by the Panel to make a
Takeover Offer for LXi Shares under the provisions of Rule 9 of the Takeover
Code, LondonMetric may make such alterations to any of the above Conditions
and terms of the Merger as are necessary to comply with the provisions of that
Rule.
7. Neither LondonMetric nor LXi will be under any
obligation to waive (if capable of waiver), to determine to be or remain
satisfied or fulfilled, or to treat as satisfied or fulfilled any of the
Conditions by a date earlier than the latest date specified above for the
fulfilment or waiver thereof, notwithstanding that the other Conditions may,
at such earlier date, have been waived or fulfilled and that there are, at
such earlier date, no circumstances indicating that any of such Conditions may
not be capable of satisfaction or fulfilment.
8. The LXi Shares will be acquired under the Scheme,
fully paid and free from all liens, equities, charges, encumbrances, options,
rights of pre-emption and any other third party rights and interests of any
nature and together with all rights now or hereafter attaching or accruing to
them, including, without limitation, voting rights and the right to receive
and retain in full all dividends and other distributions (if any) declared,
made or paid, or any other return of capital (whether by reduction of share
capital or share premium account or otherwise) made, on or after the date of
this Announcement, save for any LXi Permitted Dividends.
9. Subject to the terms of the Scheme, if, on or after
the date of this Announcement and prior to the Merger becoming Effective, any
dividend (other than a LXi Permitted Dividend), distribution or other return
of value is announced, declared, made, paid or becomes payable by LXi in
respect of the LXi Shares, LondonMetric reserves the right (without prejudice
to any right of LondonMetric to invoke Condition 3(h)(iii) in Part A of this
Appendix 1) to reduce the consideration payable by the amount of any such
dividend, distribution or other return of value, in which case: (a) any
reference in this Announcement or in the Scheme Document to the consideration
payable for the LXi Shares will be deemed to be a reference to the
consideration payable as so reduced; and (b) the relevant eligible LXi
Shareholders will be entitled to receive and retain such dividend,
distribution or return of value. To the extent that any such dividend,
distribution or other return of value announced, declared, made or paid is:
(x) transferred pursuant to the Merger on a basis which entitles LondonMetric
to receive the dividend or distribution and to retain it; or (y) cancelled,
the consideration payable will not be subject to change in accordance with
this paragraph. Any exercise by LondonMetric of its rights referred to in this
paragraph shall be the subject of an announcement and, for the avoidance of
doubt, shall not be regarded as constituting any revision or variation of the
Merger.
10. Under Rule 13.5(a) of the Takeover Code, LondonMetric
may only invoke a Condition so as to cause the Merger not to proceed, to lapse
or to be withdrawn with the consent of the Panel. The Panel will normally only
give its consent if the circumstances which give rise to the right to invoke
the Condition are of material significance to LondonMetric in the context of
the Merger. This will be judged by reference to the facts of each case at the
time that the relevant circumstances arise. The conditions contained in
Conditions 1, 2(a), 2(b), 2(c), 3(a), 3(b) and 3(c) of Part A above
(and, if applicable, any Takeover Offer Acceptance Condition (as defined
below) adopted on the basis specified in paragraph 6 of this Part B) are
not subject to this provision of the Takeover Code. Any Condition that is
subject to Rule 13.5(a) (save for, so far as it relates to LondonMetric, the
Wider LondonMetric Group or any part thereof, the Condition in paragraph 3(i)
in Part A of this Appendix 1) may be waived by LondonMetric.
11. Under Rule 13.6 of the Takeover Code, LXi may only
invoke a Condition so as to cause the Merger not to proceed, to lapse or to be
withdrawn if the circumstances which give rise to the right to invoke the
Condition are of material significance to LXi Shareholders in the context of
the Merger.
12. LondonMetric reserves the right to elect (with the
consent of the Panel) to implement the Merger by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Merger will be implemented on
the same terms and conditions (subject to appropriate amendments to reflect
the change in method of effecting the Merger, including (without limitation)
an acceptance condition set at 90 per cent. of the issued share capital of LXi
(or such lower percentage (being more than 50 per cent.) of the issued share
capital of LXi as LondonMetric may, subject to the rules of the Takeover Code
and with the consent of the Panel, decide) as those which would apply to the
Scheme (the "Takeover Offer Acceptance Condition"). Further, if sufficient
acceptances of such Takeover Offer are received and/or sufficient LXi Shares
are otherwise acquired, it is the intention of LondonMetric to apply the
provisions of Chapter 3 of Part 28 of the Companies Act to compulsorily
acquire any outstanding LXi Shares to which such Takeover Offer relates.
13. In the event that the Merger is implemented by way of a
Takeover Offer, the issued share capital of LXi acquired shall be acquired
with full title guarantee, fully paid and free from all liens, equities,
charges, encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all rights now or
hereafter attaching or accruing to them, save for any LXi Permitted Dividends.
14. The availability of the Merger to LXi Shareholders not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom should
inform themselves about and observe any applicable requirements. Further
details in relation to overseas shareholders will be contained in the Scheme
Document in due course. The New LondonMetric Shares to be issued under the
Merger have not been and will not be registered under the US Securities Act or
under any laws or with any securities regulatory authority of any State or
other jurisdiction of the United States or under any of the relevant
securities laws of any other Restricted Jurisdiction. Accordingly, the New
LondonMetric Shares may not be offered, sold or delivered, directly or
indirectly, in or into the United States, or any other Restricted
Jurisdiction, except pursuant to exemptions from applicable securities law
requirements of any such jurisdictions, including, without limitation, the
exemption from the registration requirements of the US Securities Act provided
by Section 3(a)(10) thereof.
15. The Merger is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any Restricted Jurisdiction where to do so would violate the laws of that
jurisdiction.
16. The Merger and the Scheme will be governed by the laws
of England and be subject to the jurisdiction of the Court and to the
conditions and further terms set out in this Appendix 1 and the full terms and
conditions to be set out in the Scheme Document to be published in due course.
The Merger will be subject to the applicable requirements of the Takeover
Code, the Panel, the Listing Rules and the London Stock Exchange.
17. Fractions of the New LondonMetric Shares will not be
allotted or issued pursuant to the Merger, but entitlements of Scheme
Shareholders will be rounded down to the nearest whole number of New
LondonMetric Shares and all fractions of New LondonMetric Shares will be
aggregated and sold in the market as soon as practicable after the Merger
becomes Effective. The net proceeds of such sale (after deduction of all
expenses and commissions incurred in connection with the sale) will be
distributed in due proportions to LXi Shareholders who would otherwise have
been entitled to such fractions provided that individual entitlements to
amounts of less than £5.00 will not be paid to Scheme Shareholders but will
be retained for the benefit of LondonMetric.
18. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Appendix 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used:
1. All Closing Prices for LondonMetric Shares and LXi
Shares have been derived from the Daily Official List and represent the
Closing Price of the relevant shares on the relevant date.
2. All Undisturbed Closing Prices for LondonMetric
Shares and LXi Shares represent the Closing Price of the relevant shares on 15
December 2023.
3. All volume weighted average share prices for LXi
Shares are derived from Bloomberg.
4. As at the close of business on the Latest Practicable
Date, there were 1,089,596,222 LondonMetric Shares in issue and admitted to
trading on the Main Market of the London Stock Exchange under the ISIN code
GB00B4WFW713.
5. As at the close of business on the Latest Practicable
Date, there were 1,714,473,236 LXi Shares in issue and admitted to trading on
the Main Market of the London Stock Exchange under the ISIN code GB00BYQ46T41.
6. The financial information relating to LondonMetric is
extracted from the unaudited consolidated interim financial statements
contained in the interim results of LondonMetric for the period ended 30
September 2023.
7. The financial information relating to LXi is
extracted from the unaudited consolidated interim financial statements
contained in the interim results of LXi for the period ended 30 September
2023.
8. Combined portfolio statistics have been derived from
figures in the sources referenced above.
9. Combined sector exposure statistics have been derived
from the reclassification of both LondonMetric's and LXi's historic asset
classes (each as set out in the interim results of each company for the period
ended 30 September 2023) into revised asset classes using criteria which
LondonMetric would propose to use for the combined portfolio following the
Merger.
10. For the purposes of Rule 29.1(d) of the Takeover Code,
an updated valuation of LondonMetric's property portfolio has been obtained.
This has been used to calculate the Rolled-Forward Unaudited EPRA NTA per
LondonMetric Share as at 31 December 2023:
£'000 unless stated EPRA NTA as at 30 September 2023 Adjustment for Disposals and Acquisitions ((7)) Adjustment for 31 December 2023 Revaluation((8)) Rolled-Forward Unaudited EPRA NTA as at 31 December 2023
Property value((1)) 3,177 (24) (44) 3,109
Gross debt((2)) (974) 22 - (951)
Cash((3)) 28 - - 28
Other net liabilities((4)) (53) - - (53)
EPRA NTA((5)) 2,179 (2) (44) 2,133
Number of ordinary shares - fully diluted((6)) 1,092 - - 1,092
EPRA NTA per share (pence) 199.6 (0.1) (4.0) 195.4
((1) Consists of investment property, investment properties held for sale and
trading property)
((2) Consists of borrowings prior to the deduction of unamortised loan
arrangement fees)
((3) Consists of cash and cash equivalents, excluding restricted cash)
((4) Consists of other assets / (liabilities) and the EPRA adjustment (which
removes the fair value of derivatives))
((5) The LondonMetric Directors confirm that the aggregate of other movements
in EPRA NTA between 30 September 2023 and 31 December 2023 is not material)
((6) Total diluted shares as at 30 September 2023 and 31 December 2023)
((7) Represents the change in property value and consideration associated with
any material disposals / acquisitions between 30 September 2023 and 31
December 2023)
((8) Represents the revaluation adjustment for the market valuation of
investment properties as at 31 December 2023)
11. For the purposes of Rule 29.1(d) of the Takeover Code,
an updated valuation of LXi's property portfolio has been obtained. This has
been used to calculate the Rolled-Forward Unaudited EPRA NTA per LXi Share as
at 31 December 2023:
£'000 unless stated EPRA NTA as at 30 September 2023 Adjustment for Disposals and Acquisitions Adjustment for 31 December 2023 Revaluation((7)) Rolled-Forward Unaudited EPRA NTA as at 31 December 2023
Property value((1)) 3,191 - (28) 3,164
Gross debt((2)) (1,271) - - (1,271)
Cash((3)) 112 - (8) 104
Other net liabilities((4)) (76) - - (76)
EPRA NTA((5)) 1,956 - (36) 1,920
Number of ordinary shares((6)) 1,714 - - 1,714
EPRA NTA per share (pence) 114.1 - (2.1) 112.0
((1) Consists of investment property and investment properties held for sale)
((2) Consists of borrowings prior to the deduction of unamortised loan
arrangement fees)
((3) Consists of cash and cash equivalents, excluding restricted cash)
((4) Consists of other assets / (liabilities) and the EPRA adjustment (which
removes the fair value of derivatives))
((5) The LXi Directors confirm that the aggregate of other movements in EPRA
NTA between 30 September 2023 and 31 December 2023 is not material)
((6) Total shares as at 30 September 2023 and 31 December 2023)
((7) Represents the revaluation adjustment for the market valuation of
investment properties as at 31 December 2023, adjusted for approximately £8
million of capital expenditure)
12. Certain figures in this Announcement have been subject
to rounding adjustments.
Appendix 3
IRREVOCABLE UNDERTAKINGS
Part A: Director irrevocable undertakings
1. Irrevocable undertakings from the LXi Directors in
respect of LXi Shares
The following LXi Directors have given irrevocable undertakings in respect of
their entire beneficial holdings of LXi Shares to vote or procure votes in
favour of the Scheme at the Court Meeting and the LXi Resolution to be
proposed at the LXi General Meeting, amounting in aggregate to 96,878,432 LXi
Shares, representing approximately 5.65 per cent. of LXi's existing issued
ordinary share capital as at close of business on the Latest Practicable Date:
Name Number of LXi Shares in respect of which undertaking is given Percentage of LXi Shares in issue at the Latest Practicable Date
%
Cyrus Ardalan 206,000 0.01%
Hugh Seaborn 40,595 0.00%
Ismat Levin 14,084 0.00%
Sandy Gumm 639,346 0.03%
Nick Leslau 3,714,356 0.21%
Prestbury entities associated with Nick Leslau and Sandy Gumm
Prestbury Incentives Ltd((1)) 47,962,486 2.79%
Prestbury Investment Holdings Ltd((2)) 44,301,565 2.58%
______________________
((1))( Nick Leslau and Sandy Gumm are shareholders and directors of
the immediate parent entity of Prestbury Incentives Ltd)
((2))( Nick Leslau is a director and holds a circa 95 per cent.
indirect interest in Prestbury Investment Holdings Ltd and Sandy Gumm is also
a director and shareholder of Prestbury Investment Holdings Ltd)
These irrevocable undertakings will cease to be binding if:
1. the Merger terminates, lapses or is withdrawn in accordance with its
terms;
2. the Scheme has not become effective, or the Takeover Offer has not been
declared unconditional in all respects (as the case may be), in accordance
with the requirements of the Takeover Code by 6.00 p.m. on the Long-stop Date
or such later time or date as agreed between LondonMetric and LXi with the
approval of the Court and/or the Panel, if required; or
3. the LondonMetric Board withdraws, amends or changes its recommendation
for the LondonMetric Shareholders to vote in favour of any resolutions
required by LondonMetric for the purposes of implementing the Merger.
Further, the undertakings provided by Nick Leslau and Sandy Gumm will cease to
be binding if, prior to the Scheme becoming Effective (or the Takeover Offer
becoming wholly unconditional, as the case may be), a competing offeror
announces a firm intention to make an all-cash offer for the entire issued
ordinary share capital of LXi, provided that:
· the competing offer is at a cash price at least 15 per cent.
more than the Closing Price for each LXi Share as at 10 January 2024;
· LXi, having taken advice from its financial advisers, agrees
and resolves to recommend the competing offer to LXi Shareholders; and
· LondonMetric has not announced a firm intention to make a
revised offer for all of the issued ordinary share capital of LXi not already
owned by it (or by persons acting in concert with it), which is not subject to
any pre-conditions, for an equivalent or improved consideration (in the
reasonable opinion of LXi's financial advisers) to that available under such
competing offer by 5.00 p.m. on the date falling ten Business Days after the
date of the relevant announcement made by the competing offeror, unless the
competing offer lapses or is withdrawn by 5.00 p.m. on such date.
In addition, Nick Leslau has agreed to the Lock-in Commitment.
2. Irrevocable undertakings from the LondonMetric Directors in
respect of LondonMetric Shares
The following LondonMetric Directors have given irrevocable undertakings in
respect of their entire beneficial holdings of LondonMetric Shares to vote in
favour of the LondonMetric Resolution to be proposed at the LondonMetric
General Meeting, amounting in aggregate to 9,334,273 LondonMetric Shares,
representing approximately 0.85 per cent. of LondonMetric's existing issued
ordinary share capital as at close of business on the Latest Practicable Date:
Name Number of LondonMetric Shares in respect of which undertaking is given Percentage of LondonMetric Shares in issue at the Latest Practicable Date
%
Andrew Jones 5,473,411 0.50%
Martin McGann 3,501,114 0.32%
Alistair Elliott 80,000 0.00%
Suzanne Avery 27,050 0.00%
Robert Fowlds 104,000 0.00%
Andrew Livingston 106,830 0.00%
Katerina Patmore 5,000 0.00%
Suzy Neubert 36,868 0.00%
These irrevocable undertakings will cease to be binding if:
1. the Merger terminates, lapses or is withdrawn in accordance with its
terms;
2. the Scheme has not become effective, or the Takeover Offer announced
has not been declared unconditional in all respects (as the case may be), in
accordance with the requirements of the Code by 6.00 p.m. on the Long-stop
Date, or such later time or date as agreed between LondonMetric and LXi, with
the approval of the Court and/or the Panel if required; or
3. the board of LondonMetric withdraws, amends or changes its
recommendation for the shareholders of LondonMetric to vote in favour of any
resolutions required by LondonMetric for the purposes of implementing the
Merger.
Part B: Letter of intent
§ LXi Shareholder letter of intent
Name Number of LXi Shares Percentage of LXi Shares in issue at the Latest Practicable Date
%
Artemis Investment Management LLP 128,066,087 7.46%
Appendix 4
Valuation reports
Title
In respect of:
Portfolio of 157 properties held by LondonMetric Property Plc
On behalf of:
the Addressees as set out below
Date of valuation:
31 December 2023
Report Date 11 January 2024
Valuation Date 31 December 2023
Addressees LondonMetric Property Plc
1 Curzon Street
London
W1J 5HB
(hereinafter referred to as "LondonMetric" or the "Company")
and
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
(in their capacity as joint financial adviser and broker to the Company)
and
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
(in their capacity as lead financial adviser and broker to the Company)
and
J.P. Morgan Securities Plc
25 Bank Street
Canary Wharf
London
E14 5JP
(in their capacity as joint financial adviser and broker to the Company)
and
LXi REIT Plc
8th Floor, 100 Bishopsgate
London
EC2N 4AG
(hereinafter referred to as "LXi")
and
Lazard & Co., Limited
50 Stratton Street
London
W1J 8LL
(in their capacity as lead financial adviser to LXi)
and
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
(in their capacity as financial adviser and corporate broker to LXi)
(and all the above collectively referred to as "the Addressees")
The Properties 157 properties held by LondonMetric Property Plc, as set out in the Schedule
of Properties below in Appendix A.
Instruction To value without re-inspecting the unencumbered freehold and leasehold
interests (as applicable) of the Properties on the basis of Market Value as at
the Valuation Date in accordance with Terms of Engagement entered into between
CBRE and the Addressees dated TBC.
Status of Valuer You have instructed us to act as an External valuer as defined in the current
version of the RICS Valuation - Global Standards.
Please note that the Valuation may be investigated by the RICS for the
purposes of the administration of the Institution's conduct and disciplinary
regulations in order to ensure compliance with the Valuation Standards.
Purpose and Basis of Valuation The Valuation has been prepared for a Regulated Purpose as defined in the RICS
Valuation - Global Standards (2022) and the UK national supplement current as
at the Valuation Date (the "Red Book").
We understand that our valuation report and the Appendices to it (together the
"Valuation Report") are required for inclusion in an announcement to be issued
by the Company in connection with the proposed recommended offer by the
Company for the entire issued and to be issued ordinary share capital of LXi
(the "Transaction") pursuant to Rule 2.7 of the City Code on Takeovers and
Mergers (the "Code") (the "Announcement)
The Valuation is on the basis of Market Value as defined in the current
edition of the RICS Valuation - Global Standards and as in Valuation
Assumptions set out below.
The effective date of our Valuation is 31 December 2023 (the "Valuation
Date").
In accordance with the Red Book we have made certain disclosures in connection
with this valuation instruction and our relationship with the Addressees.
Market Value of the Properties as at 31 December 2023 (100%) £2,391,110,000 (TWO BILLION, THREE HUNDRED AND NINETY ONE MILLION, ONE
HUNDRED AND TEN THOUSAND POUNDS) exclusive of VAT, as shown in the Schedule of
Capital Values set out below.
For the avoidance of doubt, we have valued the Properties as real estate and
the values reported above represent 100% of the market values of the assets.
There are no negative values to report.
Our opinion of Market Value is based upon the Scope of Work and Valuation
Assumptions attached, and has been primarily derived using comparable recent
market transactions on arm's length terms.
The Properties are split by property type and tenure as follows.
Property Type Freehold Long Leasehold Total
Market Value of Properties held for Investment £2,360,420,000 £30,690,000 £2,391,110,000
(152 Properties) (5 Properties) (157 Properties)
Market Value of the Properties as at 31 December 2023 (at share) The Company has advised us that they have a joint venture share in some of the
Properties and the total arithmetical apportionment of the value taking into
account the relevant ownership share (as advised to us by the Company) on a
pro-rata basis is as follows:
£2,324,485,000 (Two Billion, Three Hundred and Twenty Four Million, Four
Hundred and Eighty Five Thousand Pounds) exclusive of VAT.
Where a Property is owned through an indirect investment structure or a joint
tenancy in a trust for sale, our Valuation represents the relevant apportioned
percentage of ownership of the value of the whole Property, assuming full
management control. Our Valuation therefore is unlikely to represent the value
of the interests in the indirect investment structure through which the
property is held.
Report Format Appendix A of this Valuation Report contains the Schedule of Properties.
Appendix B provides a split of the value of the Properties by use type.
Appendix C provides a split of the value of the Properties by location.
The Company has expressly instructed us not to disclose certain information
which is considered commercially sensitive, namely the individual values of
the Properties.
Market Conditions We draw your attention to a combination of global inflationary pressures
(leading to higher interest rates) and recent failures/stress in banking
systems which have increased the potential for constrained credit markets,
negative capital value movements and enhanced volatility in property markets
over the short-to-medium term.
Experience has shown that consumer and investor behaviour can quickly change
during periods of such heightened volatility. Lending or investment decisions
should reflect this heightened level of volatility and the potential for
deteriorating market conditions.
It is important to note that the conclusions set out in this report are valid
as at the valuation date only. Where appropriate, we recommend that the
valuation is closely monitored, as we continue to track how markets respond to
evolving events.
Portfolios and Aggregation We have valued the Properties individually and no account has been taken of
any discount or premium that may be negotiated in the market if all or part of
the portfolio was to be marketed simultaneously, either in lots or as a whole.
Valuation Approach for Properties in Course of Development In the case of development valuations, we would draw your attention to the
fact that, even in normal market conditions, the residual method of valuation
is very sensitive to changes in key inputs, with small changes in variables
(such as the timing of the development, finance/construction costs and sales
rates) having a disproportionate effect on land value.
Consequently, in reference to the Market Conditions section above it is
inevitable that there is even greater uncertainty, with site values being
susceptible to much more variance than normal.
Building Contracts Current supply issues associated with some building material shortages are
impacting on construction costs and timing.
Unexecuted construction / building contracts may be subject to price increases
and executed contracts may contain conditions which allow the builder to pass
on any increases to the instructing party.
We recommend you obtain appropriate advice to confirm there are no adverse
conditions within the final construction/building contract and/or ensure there
are additional funds available to cover potential cost escalations.
Rising building costs and shortages of labour and materials may also affect
the builder`s viability and/or ability to meet construction timeframes. In
this climate, we strongly recommend you verify the experience and financial
capability of the builder to complete the project on time and on budget.
Caution is advised in this regard.
In the absence of any information to the contrary, we have assumed that the
construction contract and any warranties will be assignable.
Construction Cost Volatility Material costs, labour costs and supply chains are unusually volatile with the
market experiencing price increases in some, or all of these areas during 2022
and continuing into 2023. This has created significant uncertainty in cost
estimates, which is likely to continue. In addition, there are significant
risks that delays may be encountered in sourcing materials and labour, and as
such, delivery risks are also heightened in this climate.
Furthermore, the likelihood of ongoing cost escalations and sourcing delays is
high. This may place additional pressure on both the developer's and builder's
profit margins and development viability.
These inherent risks should therefore be given careful consideration in
lending and investment decisions. Caution is advised in this regard.
Compliance with Valuation Standards The Valuation has been prepared in accordance with the latest version of the
RICS Valuation - Global Standards (incorporating the International Valuation
Standards) and the UK national supplement (the "Red Book") current as the
Valuation Date.
We confirm that the valuations have been prepared in accordance with the
requirements of Rule 29 of the Code.
The
Prope
rties
have
been
value
d by
a
value
r who
is
quali
fied
for
the
purpo
se
of
the
Valua
tion
in
accor
dance
with
the
Red
Book
and
Rule
29.3
(a)
(ii)
and
(iii)
of
the
Code.
We
confi
rm
that
we
have
suffi
cient
local
and
natio
nal
knowl
edge
of
the
parti
cular
prope
rty
marke
t
invol
ved
and
have
the
skill
s and
under
stand
ing
to
under
take
the
Valua
tion
compe
tentl
y.
Where
the
knowl
edge
and
skill
requi
remen
ts of
the
Red
Book
have
been
met
in
aggre
gate
by
more
than
one
value
r
withi
n
CBRE,
we
confi
rm
that
a
list
of
those
value
rs
has
been
retai
ned
withi
n the
worki
ng
paper
s,
toget
her
with
confi
rmati
on
that
each
named
value
r
compl
ies
with
the
requi
remen
ts of
the
Red
Book.
This
Valua
tion
is a
profe
ssion
al
opini
on
and
is
expre
ssly
not
inten
ded
to
serve
as a
warra
nty,
assur
ance
or
guara
ntee
of
any
parti
cular
value
of
the
subje
ct
Prope
rties
.
Other
value
rs
may
reach
diffe
rent
concl
usion
s as
to
the
value
of
the
subje
ct
Prope
rties
.
This
Valua
tion
is
for
the
sole
purpo
se of
provi
ding
the
inten
ded
user
with
the
value
r's
indep
enden
t
profe
ssion
al
opini
on
of
the
value
of
the
subje
ct
Prope
rties
as at
the
Valua
tion
Date.
Sustainability Considerations Wherever appropriate, sustainability and environmental matters are an integral
part of the valuation approach. 'Sustainability' is taken to mean the
consideration of such matters as environment and climate change, health and
well-being and corporate responsibility that can or do impact on the valuation
of an asset. In a valuation context, sustainability encompasses a wide range
of physical, social, environmental, and economic factors that can affect
value. The range of issues includes key environmental risks, such as flooding,
energy efficiency and climate, as well as matters of design, configuration,
accessibility, legislation, management, and fiscal considerations - and
current and historic land use.
Sustainability has an impact on the value of an asset, even if not explicitly
recognised. Valuers reflect markets, they do not lead them. Where we recognise
the value impacts of sustainability, we are reflecting our understanding of
how market participants include sustainability requirements in their bids and
the impact on market valuations.
Climate Risk Legislation From June 2019, the Climate Change Act 2008 (2050 Target Amendment) Order 2019
commits the UK Government to reducing greenhouse gas emissions by 100% from
1990 levels (i.e. a Net Zero position) by 2050. In 2021 an interim target was
set, to reduce emissions by 78% by 2035, by decarbonising electricity
generation. This means that fossil fuels used in building, such as natural
gas for heating, are incompatible with this commitment. The proposal to update
the Minimum Energy Efficiency Standards, to require all non-domestic
properties to a minimum epc rating of B in 2030 has not been ratified and in
the absence of any commentary from the current administration, we assume
landlords will continue to work towards this target.
We also note that the UK's introduction of mandatory climate related
disclosures (reporting climate risks and opportunities consistent with
recommendations by the "Task Force for Climate Related Financial Disclosure"
(TCFD)), including the assessment of so-called physical and transition climate
risks, will potentially have an impact on how the market views such risks and
incorporates them into the sale of letting of assets.
The European Union's "Sustainable Finance Disclosure Regulations" (SFDR) may
impact on UK asset values due to the requirements in reporting to European
investors.
Assumptions The Properties details on which each Valuation are based are as set out in
this report. We have made various assumptions as to tenure, letting, taxation,
town planning, and the condition and repair of buildings and sites - including
ground and groundwater contamination - as set out below.
If any of the information or assumptions on which the Valuation is based are
subsequently found to be incorrect, the Valuation figures may also be
incorrect and should be reconsidered.
Variations and/or None.
Departures from
Standard Assumptions
Independence The total fees, including the fee for this assignment, earned by CBRE Ltd (or
other companies forming part of the same group of companies within the UK)
from LondonMetric (or other companies forming part of the same group of
companies) is less than 5.0% of the total UK revenues.
It is not anticipated this situation will vary in the financial year to 31
December 2024.
We confirm that neither the valuers concerned nor CBRE have any personal
interest in the Company, LXi, any of the Properties or in the outcome of the
valuation.
Previous Involvement and Conflicts of Interest We confirm that we have valued the Properties on behalf of the Company on a
six monthly basis for financial reporting purposes for in excess of 10 years,
the most recent valuation being 30 September 2023.
From time to time, CBRE provides agency or professional services to the
Company.
We do not consider that this previous involvement represents a conflict of
interest and you have confirmed to us that it also considers this to be the
case.
We confirm that -we are not aware of any conflicts of interest that would
prevent us from exercising the required levels of independency and
objectivity.
Copies of our conflict of interest checks have been retained within the
working papers.
Disclosure The principal signatory of this report has continuously been the signatory of
valuations for the Company since March 2023.
CBRE has continuously been carrying out Valuation instructions for the Company
for in excess of 10 years.
CBRE Ltd has carried out Valuation, Agency and Professional services on behalf
of the Company for in excess of 10 years.
Responsibility We are responsible for this Valuation Report and accept responsibility for the
information contained in this Valuation Report and confirm that to the best of
our knowledge (having taken all reasonable care to ensure that such is the
case) the information contained in this Valuation Report is in accordance with
the facts and this Valuation Report makes no omissions likely to affect its
import.
Save for any responsibility arising under the Takeover Code to any person as
and to the extent there provided, to the fullest extent permitted by law we do
not assume any responsibility and will not accept any liability to any other
person for any loss suffered by any such other person as a result of, arising
out of, or in accordance with this Valuation Report or our statement above.
Reliance Save as set out in Responsibility above, the contents of this Report may only
be relied upon by:
i) Addressees of the Report; and
ii) Parties who have received prior written consent from
CBRE in the form of a reliance letter;
for the specific purpose set out herein and no responsibility is accepted to
any third party for the whole or any part of its contents.
No reliance may be placed upon the contents of this Valuation Report by any
party for any purpose other than in connection with the Purpose of Valuation.
Publication Neither the whole nor any part of our report nor any references thereto may be
included in any published document, circular or statement nor published in any
way without our prior written approval of the form and context in which it
will appear.
Such publication of, or reference to this report will not be permitted unless
it contains a sufficient contemporaneous reference to any departure from the
Red Book or the incorporation of the special assumptions referred to herein.
Yours faithfully Yours faithfully
Nick Butler Stephen Marshall
BSc (Hons) MRICS BSc (Hons) MRICS MCIArb
Executive Director Executive Director
RICS Registered Valuer RICS Registered Valuer
For and on behalf of CBRE Limited For and on behalf of CBRE Limited
+44 2071822526 +44 2071822672
Nick.Butler@cbre.com Stephen.marshall@cbre.com
Market Value of the Properties as at 31 December 2023 (at share)
The Company has advised us that they have a joint venture share in some of the
Properties and the total arithmetical apportionment of the value taking into
account the relevant ownership share (as advised to us by the Company) on a
pro-rata basis is as follows:
£2,324,485,000 (Two Billion, Three Hundred and Twenty Four Million, Four
Hundred and Eighty Five Thousand Pounds) exclusive of VAT.
Where a Property is owned through an indirect investment structure or a joint
tenancy in a trust for sale, our Valuation represents the relevant apportioned
percentage of ownership of the value of the whole Property, assuming full
management control. Our Valuation therefore is unlikely to represent the value
of the interests in the indirect investment structure through which the
property is held.
Report Format
Appendix A of this Valuation Report contains the Schedule of Properties.
Appendix B provides a split of the value of the Properties by use type.
Appendix C provides a split of the value of the Properties by location.
The Company has expressly instructed us not to disclose certain information
which is considered commercially sensitive, namely the individual values of
the Properties.
Market Conditions
We draw your attention to a combination of global inflationary pressures
(leading to higher interest rates) and recent failures/stress in banking
systems which have increased the potential for constrained credit markets,
negative capital value movements and enhanced volatility in property markets
over the short-to-medium term.
Experience has shown that consumer and investor behaviour can quickly change
during periods of such heightened volatility. Lending or investment decisions
should reflect this heightened level of volatility and the potential for
deteriorating market conditions.
It is important to note that the conclusions set out in this report are valid
as at the valuation date only. Where appropriate, we recommend that the
valuation is closely monitored, as we continue to track how markets respond to
evolving events.
Portfolios and Aggregation
We have valued the Properties individually and no account has been taken of
any discount or premium that may be negotiated in the market if all or part of
the portfolio was to be marketed simultaneously, either in lots or as a whole.
Valuation Approach for Properties in Course of Development
In the case of development valuations, we would draw your attention to the
fact that, even in normal market conditions, the residual method of valuation
is very sensitive to changes in key inputs, with small changes in variables
(such as the timing of the development, finance/construction costs and sales
rates) having a disproportionate effect on land value.
Consequently, in reference to the Market Conditions section above it is
inevitable that there is even greater uncertainty, with site values being
susceptible to much more variance than normal.
Building Contracts
Current supply issues associated with some building material shortages are
impacting on construction costs and timing.
Unexecuted construction / building contracts may be subject to price increases
and executed contracts may contain conditions which allow the builder to pass
on any increases to the instructing party.
We recommend you obtain appropriate advice to confirm there are no adverse
conditions within the final construction/building contract and/or ensure there
are additional funds available to cover potential cost escalations.
Rising building costs and shortages of labour and materials may also affect
the builder`s viability and/or ability to meet construction timeframes. In
this climate, we strongly recommend you verify the experience and financial
capability of the builder to complete the project on time and on budget.
Caution is advised in this regard.
In the absence of any information to the contrary, we have assumed that the
construction contract and any warranties will be assignable.
Construction Cost Volatility
Material costs, labour costs and supply chains are unusually volatile with the
market experiencing price increases in some, or all of these areas during 2022
and continuing into 2023. This has created significant uncertainty in cost
estimates, which is likely to continue. In addition, there are significant
risks that delays may be encountered in sourcing materials and labour, and as
such, delivery risks are also heightened in this climate.
Furthermore, the likelihood of ongoing cost escalations and sourcing delays is
high. This may place additional pressure on both the developer's and builder's
profit margins and development viability.
These inherent risks should therefore be given careful consideration in
lending and investment decisions. Caution is advised in this regard.
Compliance with Valuation Standards
The Valuation has been prepared in accordance with the latest version of the
RICS Valuation - Global Standards (incorporating the International Valuation
Standards) and the UK national supplement (the "Red Book") current as the
Valuation Date.
We confirm that the valuations have been prepared in accordance with the
requirements of Rule 29 of the Code.
The Properties have been valued by a valuer who is qualified for the purpose
of the Valuation in accordance with the Red Book and Rule 29.3 (a) (ii) and
(iii) of the Code. We confirm that we have sufficient local and national
knowledge of the particular property market involved and have the skills and
understanding to undertake the Valuation competently.
Where the knowledge and skill requirements of the Red Book have been met in
aggregate by more than one valuer within CBRE, we confirm that a list of those
valuers has been retained within the working papers, together with
confirmation that each named valuer complies with the requirements of the Red
Book.
This Valuation is a professional opinion and is expressly not intended to
serve as a warranty, assurance or guarantee of any particular value of the
subject Properties. Other valuers may reach different conclusions as to the
value of the subject Properties. This Valuation is for the sole purpose of
providing the intended user with the valuer's independent professional opinion
of the value of the subject Properties as at the Valuation Date.
Sustainability Considerations
Wherever appropriate, sustainability and environmental matters are an integral
part of the valuation approach. 'Sustainability' is taken to mean the
consideration of such matters as environment and climate change, health and
well-being and corporate responsibility that can or do impact on the valuation
of an asset. In a valuation context, sustainability encompasses a wide range
of physical, social, environmental, and economic factors that can affect
value. The range of issues includes key environmental risks, such as flooding,
energy efficiency and climate, as well as matters of design, configuration,
accessibility, legislation, management, and fiscal considerations - and
current and historic land use.
Sustainability has an impact on the value of an asset, even if not explicitly
recognised. Valuers reflect markets, they do not lead them. Where we recognise
the value impacts of sustainability, we are reflecting our understanding of
how market participants include sustainability requirements in their bids and
the impact on market valuations.
Climate Risk Legislation
From June 2019, the Climate Change Act 2008 (2050 Target Amendment) Order 2019
commits the UK Government to reducing greenhouse gas emissions by 100% from
1990 levels (i.e. a Net Zero position) by 2050. In 2021 an interim target was
set, to reduce emissions by 78% by 2035, by decarbonising electricity
generation. This means that fossil fuels used in building, such as natural
gas for heating, are incompatible with this commitment. The proposal to update
the Minimum Energy Efficiency Standards, to require all non-domestic
properties to a minimum epc rating of B in 2030 has not been ratified and in
the absence of any commentary from the current administration, we assume
landlords will continue to work towards this target.
We also note that the UK's introduction of mandatory climate related
disclosures (reporting climate risks and opportunities consistent with
recommendations by the "Task Force for Climate Related Financial Disclosure"
(TCFD)), including the assessment of so-called physical and transition climate
risks, will potentially have an impact on how the market views such risks and
incorporates them into the sale of letting of assets.
The European Union's "Sustainable Finance Disclosure Regulations" (SFDR) may
impact on UK asset values due to the requirements in reporting to European
investors.
Assumptions
The Properties details on which each Valuation are based are as set out in
this report. We have made various assumptions as to tenure, letting, taxation,
town planning, and the condition and repair of buildings and sites - including
ground and groundwater contamination - as set out below.
If any of the information or assumptions on which the Valuation is based are
subsequently found to be incorrect, the Valuation figures may also be
incorrect and should be reconsidered.
Variations and/or
Departures from
Standard Assumptions
None.
Independence
The total fees, including the fee for this assignment, earned by CBRE Ltd (or
other companies forming part of the same group of companies within the UK)
from LondonMetric (or other companies forming part of the same group of
companies) is less than 5.0% of the total UK revenues.
It is not anticipated this situation will vary in the financial year to 31
December 2024.
We confirm that neither the valuers concerned nor CBRE have any personal
interest in the Company, LXi, any of the Properties or in the outcome of the
valuation.
Previous Involvement and Conflicts of Interest
We confirm that we have valued the Properties on behalf of the Company on a
six monthly basis for financial reporting purposes for in excess of 10 years,
the most recent valuation being 30 September 2023.
From time to time, CBRE provides agency or professional services to the
Company.
We do not consider that this previous involvement represents a conflict of
interest and you have confirmed to us that it also considers this to be the
case.
We confirm that -we are not aware of any conflicts of interest that would
prevent us from exercising the required levels of independency and
objectivity.
Copies of our conflict of interest checks have been retained within the
working papers.
Disclosure
The principal signatory of this report has continuously been the signatory of
valuations for the Company since March 2023.
CBRE has continuously been carrying out Valuation instructions for the Company
for in excess of 10 years.
CBRE Ltd has carried out Valuation, Agency and Professional services on behalf
of the Company for in excess of 10 years.
Responsibility
We are responsible for this Valuation Report and accept responsibility for the
information contained in this Valuation Report and confirm that to the best of
our knowledge (having taken all reasonable care to ensure that such is the
case) the information contained in this Valuation Report is in accordance with
the facts and this Valuation Report makes no omissions likely to affect its
import.
Save for any responsibility arising under the Takeover Code to any person as
and to the extent there provided, to the fullest extent permitted by law we do
not assume any responsibility and will not accept any liability to any other
person for any loss suffered by any such other person as a result of, arising
out of, or in accordance with this Valuation Report or our statement above.
Reliance
Save as set out in Responsibility above, the contents of this Report may only
be relied upon by:
i) Addressees of the Report; and
ii) Parties who have received prior written consent from
CBRE in the form of a reliance letter;
for the specific purpose set out herein and no responsibility is accepted to
any third party for the whole or any part of its contents.
No reliance may be placed upon the contents of this Valuation Report by any
party for any purpose other than in connection with the Purpose of Valuation.
Publication
Neither the whole nor any part of our report nor any references thereto may be
included in any published document, circular or statement nor published in any
way without our prior written approval of the form and context in which it
will appear.
Such publication of, or reference to this report will not be permitted unless
it contains a sufficient contemporaneous reference to any departure from the
Red Book or the incorporation of the special assumptions referred to herein.
Yours faithfully
Nick Butler
BSc (Hons) MRICS
Executive Director
RICS Registered Valuer
For and on behalf of CBRE Limited
+44 2071822526
Nick.Butler@cbre.com
Yours faithfully
Stephen Marshall
BSc (Hons) MRICS MCIArb
Executive Director
RICS Registered Valuer
For and on behalf of CBRE Limited
+44 2071822672
Stephen.marshall@cbre.com
Source of Information and Scope of Works
Sources of Information We have carried out our work based upon information supplied to us by the
Company and their professional advisors, as set out within this report, which
we have assumed to be correct and comprehensive.
· Tenancy Schedule named CBRE Nov Prop Data and received on 24/11/2023
at 1141.
The Properties Our report contains a brief summary of the Property details on which our
Valuation has been based.
You have expressly instructed us not to disclose certain information which is
considered by the Company to be commercially sensitive, namely the individual
values of the Properties.
Inspection As part of our valuation instruction from the Company for financial reporting
purposes, the majority of the Properties have been subject to internal
inspections on a three year rolling basis. As instructed, we have not
re-inspected all the Properties for the purpose of this valuation.
With regard to those Properties which have not been subject to re-inspection,
the Company has confirmed that they are not aware of any material changes to
the physical attributes of the properties, or the nature of their location,
since the last inspection. We have assumed this advice to be correct.
Where properties have not been reinspected, the valuer will not carry out the
usual range of enquiries performed during a full inspection of these
properties and will make the appropriate assumptions based on the information
provided or available that, without a full inspection, cannot be verified. The
instructing parties acknowledge and accept the heightened and inherent
uncertainty and risks relying upon a valuation prepared on a desktop basis.
Areas We have not measured the Properties but have relied upon the floor areas
provided to us by you or your professional advisors, which we have assumed to
be correct and comprehensive, and which you have advised us have been
calculated using the: Gross Internal Area (GIA), Net Internal Area (NIA) or
International Property Measurement Standard (IPMS) 3 - Office, measurement
methodology as set out in the latest edition of the RICS Property Measurement
Standards.
Environmental Considerations We have not been instructed to make any investigations in relation to the
presence or potential presence of contamination in land or buildings or the
potential presence of other environmental risk factors and to assume that if
investigations were made to an appropriate extent then nothing would be
discovered sufficient to affect value.
We have not carried out investigation into past uses, either of the property
or of any adjacent lands, to establish whether there is any potential for
contamination from such uses or sites, or other environmental risk factors and
have therefore assumed that none exists.
Sustainability Considerations In carrying out this valuation, we have considered the impact of
sustainability factors on the value of the property. Based on our
inspections and our review of the information that was available to us, we
have not identified any risk factors which, in our opinion, would affect
value. However, CBRE gives no warranty as to the absence of such risk
factors in relation to sustainability.
Services and Amenities We understand that the Properties are located in an area served by mains gas,
electricity, water and drainage.
None of the services have been tested by us.
Enquiries regarding the availability of utilities/services to the development
schemes are outside the scope of our report.
Repair and Condition We have not carried out building surveys, tested services, made independent
site investigations, inspected woodwork, exposed parts of the structure which
were covered, unexposed or inaccessible, nor arranged for any investigations
to be carried out to determine whether or not any deleterious or hazardous
materials or techniques have been used, or are present, in any part of the
Properties. We are unable, therefore, to give any assurance that the
Properties are free from defect.
Town Planning We have not undertaken planning enquiries.
Titles, Tenures and Lettings Details of title/tenure under which the Properties are held and of lettings to
which it is subject are as supplied to us. We have not generally examined nor
had access to all the deeds, leases or other documents relating thereto. Where
information from deeds, leases or other documents is recorded in this report,
it represents our understanding of the relevant documents. We should
emphasise, however, that the interpretation of the documents of title
(including relevant deeds, leases and planning consents) is the responsibility
of your legal adviser.
We have not conducted credit enquiries on the financial status of any tenants.
We have, however, reflected our general understanding of purchasers' likely
perceptions of the financial status of tenants.
Valuation Assumptions
Introduction An Assumption is defined in the Red Book Glossary and VPS 4 to be a
"supposition taken to be true" (an "Assumption").
Assumptions are facts, conditions or situations affecting the subject of, or
approach to, a valuation that it has been agreed need not be verified by the
valuer as part of the valuation process. Assumptions are made when it is
reasonable for the valuer to accept that something is true without the need
for specific investigation.
The Company has confirmed and we confirm that our Assumptions are correct as
far as the Company and we, respectively, are aware. In the event that any of
these Assumptions prove to be incorrect then our valuations should be
reviewed. The principal Assumptions which we have made are stated within
this Valuation Report.
For the avoidance of doubt, the Assumptions made do not affect compliance with
the approach to Market Value under the Red Book.
Capital Values The Valuation has been prepared on the basis of "Market Value", which is
defined in the Red Book as:
"The estimated amount for which an asset or liability should exchange on the
Valuation Date between a willing buyer and a willing seller in an arm's length
transaction, after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion."
The Valuation represents the figure that would appear in a hypothetical
contract of sale at the Valuation Date. No adjustment has been made to this
figure for any expenses of acquisition or realisation - nor for taxation which
might arise in the event of a disposal.
No account has been taken of any inter-company leases or arrangements, nor of
any mortgages, debentures or other charge.
No account has been taken of the availability or otherwise of capital based
Government or European Community grants.
Taxation, Costs and Realisation Costs As stated above, no allowances have been made for any expenses of realisation
nor for taxation which might arise in the event of a disposal.
Our valuations reflect purchasers' statutory and other normal acquisition
costs.
VAT We have not been advised whether the properties are elected for VAT.
All rents and capital values stated in this report are exclusive of VAT.
Net Annual Rent Net annual rent is defined for the purposes of this transaction as "the
current income or income estimated by the valuer:
(i) ignoring any special receipts or deduction arising from the property;
(ii) excluding Value Added Tax and before taxation (including tax on profits
and any allowances for interest on capital or loans); and
(iii) after making deductions for superior rents (but not for amortisation),
and any disbursements including, if appropriate, expenses of managing the
property and allowances to maintain it in a condition to command its rent".
Estimated Net Annual Rental Value The estimated net annual rental value is based on the current rental value of
each of the Properties. The rental value reflects the terms of the leases
where the Properties, or parts thereof, are let at the date of valuation.
Where the Properties, or parts thereof, are vacant at the date of valuation,
the rental value reflects the rent we consider would be obtainable on an open
market letting as at the date of valuation.
Rental Values Unless stated otherwise rental values indicated in our report are those which
have been adopted by us as appropriate in assessing the capital value and are
not necessarily appropriate for other purposes, nor do they necessarily accord
with the definition of Market Rent in the Red Book, which is as follows:
"The estimated amount for which an interest in real property should be leased
on the Valuation Date between a willing lessor and a willing lessee on
appropriate lease terms in an arm's length transaction, after proper marketing
and where the parties had each acted knowledgeably, prudently and without
compulsion."
Fixtures, Fittings and Equipment Where appropriate we have regarded the shop fronts of retail and showroom
accommodation as forming an integral part of the building.
Landlord's fixtures such as lifts, escalators, central heating and other
normal service installations have been treated as an integral part of the
building and are included within our Valuations.
Process plant and machinery, tenants' fixtures and specialist trade fittings
have been excluded from our Valuations.
All measurements, areas and ages quoted in our report are approximate.
Environmental Matters In the absence of any information to the contrary, we have assumed that:
a) the Property/Properties is/are not contaminated and is not adversely
affected by any existing or proposed environmental law;
b) any processes which are carried out on the Property/Properties which
are regulated by environmental legislation are properly licensed by the
appropriate authorities;
c) in England and Wales, the Property/Properties possesses current
Energy Performance Certificates (EPCs) as required under the Government's
Energy Performance of Buildings Directive - and that they have an energy
efficient standard of 'E', or better. Under the Energy Efficiency (Private
Rented Property) (England and Wales) Regulations 2015 it became unlawful for
landlords to rent out business or residential premise from 1st April 2018 -
unless the site has reached a minimum EPC rating of an 'E', or secured a
relevant exemption. In Scotland, we have assumed that the Property/Properties
possesses current EPCs as required under the Scottish Government's Energy
Performance of Buildings (Scotland) Regulations - and that they meet energy
standards equivalent to those introduced by the 2002 building regulations. The
Assessment of Energy Performance of Non-Domestic Buildings (Scotland)
Regulations 2016 requires building owners to commission an EPC and Action Plan
for sale or new rental of non-domestic buildings bigger than 1,000 sq m that
do not meet 2002 building regulations energy standards. Action Plans contain
building improvement measures that must be implemented within 3.5 years,
subject to certain exemptions;
d) In January 2021 the Government set out proposals in England and Wales
for 'improving the energy performance of privately rented homes'. The key
tenets of the proposals are to; reduce emissions; tackle fuel poverty; improve
asset quality; reduce energy bills; enhance energy security; and support
associated employment. The proposals were wide ranging and included new
demands on residential landlords through Energy Performance Certificates
('EPCs').
Existing PRS Regulations set a minimum standard of EPC Band E for residential
units to be lettable. The Government proposals see this threshold being raised
to EPC Band C for all new tenancies created from 01 April 2025 and for all
existing tenancies by 01 April 2028.
The principle for relevant building works is to be 'fabric first' meaning
maximisation of components and materials that make up the building fabric to
enhance, for example, insulation, ventilation and air-tightness. The proposals
also cite; compliance measures and penalties for landlords, letting agents and
local authorities; and affordability support for carrying out necessary works.
The implication was (as with the existing EPC Band E requirement) that private
rented units may effectively be rendered unlettable if they failed to meet or
exceed the minimum EPC requirement.
On 20 September 2023 the Prime Minister announced revisions to the PRS
Regulations such that residential landlords will not be fined if they do not
meet these requirements. It was not specified if this denotes a delay to the
effective fates or the removal of the penalty.
In addition the Prime Minister announced that Boiler Upgrade Scheme subsidies
will be increased from £5,000 to £7,500, and the timeframe for removal of
gas fired boilers delayed until 2035.
The change in policy is more towards incentivising change as opposed to
enforcement.
The UK's Net Zero 2050 pledge is still being upheld although future revisions
are not out of the question, particularly in the event of a potential change
in Government. It is likely that institutional landlords in particular will
continue to target energy efficiency given policy change uncertainty and the
ever increasing focus on ESG; we therefore expect EPC ratings to continue to
be a focus for residential investors and occupiers in the UK
e) the Properties are either not subject to flooding risk or, if it is,
that sufficient flood defences are in place and that appropriate building
insurance could be obtained at a cost that would not materially affect the
capital value; and
f) invasive species such as Japanese Knotweed are not present on the
Properties.
High voltage electrical supply equipment may exist within, or in close
proximity of, the Properties. The National Radiological Protection Board
(NRPB) has advised that there may be a risk, in specified circumstances, to
the health of certain categories of people. Public perception may, therefore,
affect marketability and future value of the Properties. Our Valuation
reflects our current understanding of the market and we have not made a
discount to reflect the presence of this equipment.
Repair and Condition In the absence of any information to the contrary, we have assumed that:
a) there are no abnormal ground conditions, nor archaeological remains,
present which might adversely affect the current or future occupation,
development or value of the Properties;
b) the Properties are free from rot, infestation, structural or latent
defect;
c) no currently known deleterious or hazardous materials or suspect
techniques, including but not limited to Composite Panelling, ACM Cladding,
High Alumina Cement (HAC), Asbestos, Reinforced Autoclaved Aerated Concrete
(Raac), have been used in the construction of, or subsequent alterations or
additions to, the Properties; and
d) the services, and any associated controls or software, are in working
order and free from defect.
We have otherwise had regard to the age and apparent general condition of the
Properties. Comments made in the property details do not purport to express an
opinion about, or advise upon, the condition of uninspected parts and should
not be taken as making an implied representation or statement about such
parts.
Title, Tenure, Lettings, Planning, Taxation and Statutory & Local Unless stated otherwise within this report, and in the absence of any
Authority Requirements information to the contrary, we have assumed that:
a) the Properties possesses a good and marketable title free from any
onerous or hampering restrictions or conditions;
b) the building has been erected either prior to planning control, or in
accordance with planning permissions, and has the benefit of permanent
planning consents or existing use rights for their current use;
c) the Properties is not adversely affected by town planning or road
proposals;
d) the building complies with all statutory and local authority
requirements including building, fire and health and safety regulations, and
that a fire risk assessment and emergency plan are in place;
e) only minor or inconsequential costs will be incurred if any
modifications or alterations are necessary in order for occupiers of the
Properties to comply with the provisions of the Disability Discrimination Act
1995 (in Northern Ireland) or the Equality Act 2010 (in the rest of the UK);
f) all rent reviews are upward only and are to be assessed by
reference to full current market rents;
g) there are no tenant's improvements that will materially affect our
opinion of the rent that would be obtained on review or renewal;
h) tenants will meet their obligations under their leases, and are
responsible for insurance, payment of business rates, and all repairs, whether
directly or by means of a service charge;
i) there are no user restrictions or other restrictive covenants in
leases which would adversely affect value;
j) where more than 50% of the floorspace of the Properties is in
residential use, the Landlord and Tenant Act 1987 (the "Act") gives certain
rights to defined residential tenants to acquire the freehold/head leasehold
interest in the Properties. Where this is applicable, we have assumed that
necessary notices have been given to the residential tenants under the
provisions of the Act, and that such tenants have elected not to acquire the
freehold/head leasehold interest. Disposal on the open market is therefore
unrestricted;
k) where appropriate, permission to assign the interest being valued
herein would not be withheld by the landlord where required;
l) vacant possession can be given of all accommodation which is unlet
or is let on a service occupancy; and
m) Land Transfer Tax (or the local equivalent) will apply at the rate
currently applicable.
In the UK, Stamp Duty Land Tax (SDLT) in England and Northern Ireland, Land
and Buildings Transaction Tax (LABTT) in Scotland or Land Transaction Tax
(LTT) in Wales, will apply at the rate currently applicable
Appendices
Appendix A: Schedule of Properties as at 31 December 2023
Address Tenure Ownership Purpose
Pai Skincare, Acton, ACTON Freehold Investment
Ford Retail, ALPERTON Freehold Investment
Vitec, Flagstaff 42, ASHBY-DE-LA-ZOUCH Freehold Investment
Blue Chyp, Ashford 34, ASHFORD Freehold Investment
Allegion, Unit 1 Golden Cross, ASTON Freehold Investment
City Plumbing, Vantage 1, ASTON Freehold Investment
CHEP Unit, AVONMOUTH Freehold Investment
DSV Unit, AVONMOUTH Freehold Investment
3663 Unit, Chalker Way, BANBURY Freehold Investment
Burnt Mills Industrial Estate, BASILDON Freehold Investment
Unit 2 Juniper West, BASILDON Freehold Investment
Unit 3 Juniper West, BASILDON Freehold Investment
Bunzl, Unit K60, BASINGSTOKE Freehold Investment
Argos, BEDFORD Freehold Investment
Bedford Link - Phase 1, BEDFORD Freehold Investment
Bedford Link - Phase 2 Unit 1, BEDFORD Freehold Investment
Bedford Link - Phase 3 Unit 3, BEDFORD Freehold Investment
Unit 1 Bicester Distribution Park, BICESTER Freehold Investment
Unit B, Bicester Park, BICESTER Freehold Investment
John Wiley, BOGNOR REGIS Freehold Investment
1-2 Network, BRACKNELL Freehold Investment
Antolin, Barton Business Park, BURTON-ON-TRENT Freehold Investment
Fentiman Way, 130 Thamesview Business Park, CANVEY ISLAND Freehold Investment
Global Life Sciences, Longwood Drive, CARDIFF Freehold Investment
Land at Fforest Farm Industrial Estate (2.46 acres), CARDIFF Freehold Investment
Ceva Logistics, CASTLE DONINGTON Freehold Investment
Cleeve Business Park, CHELTENHAM Freehold Investment
Units 1-11, Coleshill Trade Park, COLESHILL Freehold Investment
Units 1-6, Roman Park, COLESHILL Freehold Investment
Development Site, 8 Prince George's Road, COLLIERS WOOD Freehold Investment
Fulham Timber Merchants, COLLIERS WOOD Freehold Investment
Heathrow Truck Centre, COLNBROOK Freehold Investment
Units 1-8, Lakeside Industrial Estate, COLNBROOK Freehold Investment
Units 1 & 2, Middlemarch, COVENTRY Freehold Investment
Jewson Cranleigh (The Common), CRANLEIGH Freehold Investment
Barker & Stonehouse, CRAWLEY Freehold Investment
Fed Ex, CRAWLEY Freehold Investment
Space Gatwick, CRAWLEY Freehold Investment
Units 1-6 Crompton Fields, CRAWLEY Freehold Investment
XPO Transport Solutions Unit, CRICK Freehold Investment
3B Princess Way, CROYDON Freehold Investment
Tesco, CROYDON Freehold Investment
Goresbrook Park, DAGENHAM Freehold Investment
Unit C3, DARTFORD Freehold Investment
Next RSC, DONCASTER Freehold Investment
Plot D, DONCASTER Freehold Investment
Amazon Car Park, Droitwich, DROITWICH Freehold Investment
Berry 185 Land, Droitwich, DROITWICH Freehold Investment
Units 1-5, Yorks Park, DUDLEY Freehold Investment
65-77 Malham Road, DULWICH Freehold Investment
Deralam Laminates, 10/10a Foster Avenue, DUNSTABLE Freehold Investment
Mega Marble, DUNSTABLE Freehold Investment
Airways 1 & 2, EASTLEIGH Freehold Investment
Unit H & Plot 2, EASTLEIGH Freehold Investment
Cambridge Commodities Ltd, ELY Freehold Investment
Royal Mail, EPSOM Freehold Investment
Jewson Builders Merchants, EXETER Freehold Investment
Specialist Computer Centres, FAREHAM Long Leasehold Investment
Iveco, Hawley Lane, FARNBOROUGH Freehold Investment
Plot A, FRIMLEY Freehold Investment
8-10 Heathmans Road, FULHAM Freehold Investment
Croda, GOOLE Freehold Investment
Unit 1, GREENFORD Freehold Investment
Mzuri, Henley Business Park, GUILDFORD Freehold Investment
16 Andre Street (Hackney), HACKNEY Freehold Investment
Jacuna, Hackney Oval, HACKNEY Freehold Investment
SkateHut, Amber Way, HALESOWEN Freehold Investment
Vee Bee, Coombeswood, HALESOWEN Freehold Investment
4 Marples Way, HAVANT Long Leasehold Investment
Boundary Point, HEMEL HEMPSTEAD Freehold Investment
Units A & B, Hemel Gateway, HEMEL HEMPSTEAD Freehold Investment
Jacuna, North Circular, HENDON Freehold Investment
Orange, Lampton House, HOUNSLOW Freehold Investment
AM Fresh, APS 2, Alconbury Weald, HUNTINGDON Freehold Investment
2 Anglia Parkway North, IPSWICH Freehold Investment
FDS Corporation, Port One Logistics Park, IPSWICH Freehold Investment
Irlam 136, IRLAM Freehold Investment
Unit 3, Kingley Park, KINGS LANGLEY Freehold Investment
Units 1-7, Tachbrook Link, LEAMINGTON SPA Freehold Investment
Ecco Safety Group (ESG), LEEDS Freehold Investment
Flender Limited, LEEDS Freehold Investment
Ross Care, Lockside Road, LEEDS Freehold Investment
Crosslink 646, LEICESTER Freehold Investment
Unit F, Meridian Business Park, LEICESTER Freehold Investment
Luton Enterprise Park, LUTON Freehold Investment
Bircholt Road, MAIDSTONE Freehold Investment
Crown House & Site E, MILTON KEYNES Freehold Investment
Mechline, MILTON KEYNES Freehold Investment
Oxfam, Milton Point, MILTON KEYNES Freehold Investment
Royal Mail, MILTON KEYNES Freehold Investment
Royal Mail, MILTON KEYNES Freehold Investment
SpeedyHire, MILTON KEYNES Freehold Investment
TalkTalk, Linford Wood, MILTON KEYNES Freehold Investment
Units 1-2, Star Gate, NECHELLS Freehold Investment
Feilo Sylvania, Newhaven, NEWHAVEN Freehold Investment
Norbury TE - Jacuna, NORBURY Long Leasehold Investment
My First Years, Unit 5 Grange Park, NORTHAMPTON Freehold Investment
Teknomek, NORWICH Freehold Investment
Eriks, Unit 1, Xpanse 120, OLDBURY Freehold Investment
Clipper Logistics, OLLERTON Freehold Investment
Double 4 Limited, PARK ROYAL Long Leasehold Investment
Unit 8, Nexus Point, PERRY BARR Freehold Investment
Pinnacle Distribution Centre, PETERBOROUGH Freehold Investment
Sainsbury's, Amethyst Court, PRESTON Freehold Investment
Heartbeat Distrbution, Velocity 42, REDDITCH Freehold Investment
Unit B, RUGBY Freehold Investment
SIRFT, SHEFFIELD Freehold Investment
2-72 Telford Drive Ground Rent, ST HELENS Freehold Investment
DSG, Bessemer Drive, STEVENAGE Freehold Investment
Fujitsu Data Centre, STEVENAGE Freehold Investment
205 Clapham Road, STOCKWELL Freehold Investment
Campbell Road, STOKE ON TRENT Freehold Investment
28 Maryland Road, STRATFORD Freehold Investment
Oak FurnitureLand, SWINDON Freehold Investment
Multi Packaging, Shannon Way, TEWKESBURY Freehold Investment
35.5 Cobalt, THAMESMEAD Freehold Investment
HSBC, Thamesmead, THAMESMEAD Freehold Investment
Bunzl, Maxi Centre, THEALE Freehold Investment
Units A & B, THEALE Freehold Investment
T2 Primark NDC, THRAPSTON Freehold Investment
Sabre House, TOTTENHAM Freehold Investment
Air Link Systems, Neo Park, TYSELEY Freehold Investment
Amazon - Unit 3, Mucklow Park (Phase 3&4), TYSELEY Freehold Investment
Decora, Mucklow Business Park (Phase 1), TYSELEY Freehold Investment
Hollywood Monster, Redfern, TYSELEY Freehold Investment
Plot 5, Mucklow Park (Land), TYSELEY Freehold Investment
Royal Mail, Redfern, TYSELEY Freehold Investment
Units A-G, Mucklow Park (Phase 2), TYSELEY Freehold Investment
Nyetimber, Unit 4 Ashdown Business Park, UCKFIELD Freehold Investment
Reynolds NDC, WALTHAM CROSS Freehold Investment
Ocado Car Park, WALTHAMSTOW Long Leasehold Investment
Ocado, WALTHAMSTOW Freehold Investment
Amazon Plot 7C, WARRINGTON Freehold Investment
Bonfiglioli, Unit 1, WARRINGTON Freehold Investment
Gemini Business Park, WARRINGTON Freehold Investment
The HUT Group, Skyline Drive, WARRINGTON Freehold Investment
Topgrade, Unit 2, WARRINGTON Freehold Investment
Units 1-6, Wednesbury One, WEDNESBURY Freehold Investment
Tesla Motors, WEYBRIDGE Freehold Investment
Phase 2, i54, WOLVERHAMPTON Freehold Investment
Tentec, i54, WOLVERHAMPTON Freehold Investment
Bosch, Apex Park II, WORCESTER Freehold Investment
Yamazaki, Knightsbridge Park, WORCESTER Freehold Investment
Bowers & Wilcox, Dale Road, WORTHING Freehold Investment
The Range, ALDERSHOT Freehold Investment
Dartford Heath Retail Park, DARTFORD Freehold Investment
Wickes, DARTFORD Freehold Investment
Lottbridge Drove Retail Park, EASTBOURNE Freehold Investment
Wickes & Dunelm, HEMEL HEMPSTEAD Freehold Investment
Madford Retail Park, HERTFORD Freehold Investment
DFS, INVERNESS Freehold Investment
Bubble Retail Park, LISKEARD Freehold Investment
Wickes, NEWMARKET Freehold Investment
Lidl + Carpetright, ORPINGTON Freehold Investment
Totton Retail Park, SOUTHAMPTON Freehold Investment
Fleming Way Retail Park, SWINDON Freehold Investment
Forge Island Retail Park, TELFORD Freehold Investment
Appendix B: Market Value of the Properties as at 31 December 2023 split by
property type (100%)
Property Type Market Value
Distribution £2,075,165,000
Multi-Let Industrial £133,425,000
Land £6,925,000
Retail Warehousing £133,250,000
Data Centres £42,345,000
Portfolio Total £2,391,110,000
Appendix C: Market Value of the Properties as at 31 December 2023 split by
property location (100%)
Property Location Market Value
London & South East £1,393,780,000
Midlands £532,235,000
North East including Yorkshire £116,225,000
North West £217,100,000
South West £113,295,000
Other £18,475,000
Portfolio Total £2,391,110,000
Project Sergio
Report and Valuation
11 January 2024
Report and Valuation
1.1.
RICS Registered Valuer
Director
1. Valuation Report
1.1. Addressees LondonMetric Property Plc
1 Curzon Street
London
W1J 5HB
(hereinafter referred to as the "Company")
Peel Hunt LLP
(in its capacity as financial adviser to the Company)
100 Liverpool Street
London
EC2M 2AT
Barclays Bank PLC, acting through its Investment Bank
(in its capacity as lead financial adviser to the Company)
1 Churchill Place
London
E14 5HP
J.P. Morgan Securities plc
(in its capacity as financial adviser to the Company)
25 Bank Street
Canary Wharf
London
E14 5JP
LXi REIT Plc
8th Floor, 100 Bishopsgate
London
EC2N 4AG
(hereinafter referred to as "LXi")
Lazard & Co., Limited
(in its capacity as lead financial adviser to LXi)
50 Stratton Street
London
W1J 8LL
Jefferies International Limited
(in its capacity as financial adviser and corporate broker to LXi)
100 Bishopsgate
London
EC2N 4JL
(and all the above collectively referred to as "the Addressees")
1.2. Project Name
1.3. Instructions and Purpose of Valuation In accordance with our instructions received from the Company and our terms of
engagement dated 9 January 2024 with the Company, Peel Hunt LLP, Barclays Bank
PLC, J.P. Morgan Securities plc, LXi, Lazard & Co., Limited, and Jefferies
International Limited, we have undertaken valuations (the "Valuations") of the
freehold and leasehold interests in the properties described in Schedule 2
(the "Properties" and each being a "Property") (together, the "Portfolio").
The Company has expressly instructed us not to disclose certain information
which is considered commercially sensitive, namely the individual values of
the properties.
This report (the "Report") has been prepared in accordance with the RICS
Valuation - Global Standards (incorporating the IVSC International Valuation
Standards) effective from 31 January 2022 together with the UK National
Supplement effective 14 January 2019, together the "Red Book''. The Valuation
has been prepared for a Regulated Purpose as defined by the Red Book. The
Report has been prepared in accordance with the requirements of Rule 29 of the
City Code on Takeovers and Mergers (the "Code") and the Financial Conduct
Authority's ("FCA") Prospectus Regulation Rules and the FCA's Listing Rules.
We understand that this Report is required for inclusion in (i) a firm offer
announcement to be issued by the Company pursuant to Rule 2.7 of the Code (the
"Announcement") in connection with a recommended offer by the Company for the
entire issued ordinary share capital of LXi (the "Transaction") (ii) a scheme
document to be published by LXi in connection with the Transaction and (iii) a
combined prospectus and circular to be issued by the Company in connection
with the Transaction (the "Combined Prospectus and Circular") and to the
Report being put on public display on the websites of the Company and/or LXi
dated, in each case, the date of the relevant document in which it appears.
1.4. Terms of Reference The Portfolio comprises 134 Properties, 12 of which are held on a leasehold
basis, one is held on a part freehold / part leasehold basis, whilst the
remainder are held on a freehold / heritable basis. The Properties are all
held for investment purposes and are located throughout the UK. All the
Properties are identified on the attached schedule at Section 2 of this Report
as are the dates on which the Properties were inspected.
The Company has provided us with floor areas for the Properties, which we
understand were calculated in accordance with the current RICS Property
Measurement standard and upon which we have relied. We have not remeasured the
office properties in the portfolio in accordance with International Property
Measurement Standard (IPMS) 3 - Offices and therefore our Valuations are based
on Net Internal Areas as defined in the RICS Property Measurement. We have
been provided with legal documents for the Properties and tenancy schedules
provided by the Company. In addition to this, we have received updates from
the Company's specialist advisors. We confirm that we have considered
sustainability features relevant to the Properties and the implications these
could have on our Valuations.
1.5. Conflicts of Interest In accordance with the RICS professional statement on Conflicts of Interest
(1(st) Edition, March 2017), we are not aware of any conflict of interest
preventing us from providing you with an independent valuation of the
Properties in accordance with the Red Book. We confirm that we undertake
valuations of the Properties on behalf of the Company for accounts purposes on
a bi-annual basis, the last of which was as at 30 September 2023. We confirm
we are acting as an "external valuer" as defined in the Red Book.
1.6. Date of Valuation and Changes to Value since the Our opinions of value are as at 31 December 2023 (the "Valuation Date"). The
Valuation Date importance of the Valuation Date must be stressed as property values can
change over a relatively short period.
We confirm that we are not aware of any other material changes in any matter
relating to the Properties since the Valuation Date, having made due and
careful enquiries of the Company, which have occurred and which would
materially affect our Valuations reported on the Valuation Date compared to
the date of this Report. Nor do we believe that market conditions have changed
sufficiently to materially alter the Valuations reported as at the Valuation
Date. As a result, we confirm that an updated valuation as at the date of this
Valuation Report would not be materially different from the Valuations as at
the Valuation Date.
1.7. Valuer Details These Valuations have been prepared by a number of valuers under the
supervision of Ollie King MRICS and Claire Magowan MRICS, both of whom are
RICS Registered Valuers. We confirm that they have sufficient current
knowledge of the relevant markets and the necessary skills and understanding
to undertake the Valuations competently in accordance with Rule 29 of the
Code.
We are required by RICS regulations to disclose the following:
· Ollie King MRICS and Claire Magowan MRICS commenced supervision
of the Valuation of this Portfolio in September 2021, when Savills (UK)
Limited was instructed to provide bi-annual valuations; and
· in the financial year ending 31 December 2022, the total fees
earned from the Addressees, and connected parties, was less than 5% of Savills
(UK) Limited's turnover.
We confirm that we do not have any material interest in the Company, LXi or
the Properties.
1.8. Basis of Valuation Our Valuations have been prepared on the basis of Market Value, the definition
of which is as follows:
"The estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm's length
transaction after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion."
Our Valuations have been arrived at predominantly by reference to market
evidence for comparable property. We have made no allowance for any Capital
Gains Tax or other taxation liability that might arise upon a sale of the
property, nor have we allowed for any adjustment to any of the properties'
income streams to take into account any tax liabilities that may arise. Our
Valuations are exclusive of VAT (if applicable). We have excluded from our
Valuations any additional value attributable to goodwill, or to fixtures and
fittings which are only of value in situ to the present occupiers.
No allowance has been made for rights, obligations or liabilities arising in
relation to fixed plant and machinery, and it has been assumed that all fixed
plant and machinery and the installation thereof complies with the relevant
EEC legislation, insofar that the latter is applicable.
We have made no variation from standard assumptions.
The valuations are compliant with Rule 29 of the Code, the FCA's Prospectus
Regulation Rules and Listing Rules and this report is prepared in accordance
with Rule 29, the FCA's Prospectus Regulation Rules (including paragraph 128
to 130 of the FCA's Primary Market/TN/619.1 "Guidelines on disclosure
requirements under the Prospectus Regulation and Guidance on specialist
issuers" (the "FCA Technical Note") and Listing Rules.
This valuation report is also compliant with paragraphs 128 to 130 of the FCA
Technical Note.
1.9. Market Conditions - Commercial Properties The UK economy continues to maintain a watch over inflationary pressures amid
sluggish economic growth with the possibility that the economy is already in
recession. In the first half of 2023, the UK witnessed a modest expansion,
leading the IMF to upgrade their forecasts and dismiss the possibility of a
recession in 2023. To combat inflation, the Bank of England has been
consistently raising interest rates, reaching a high of 5.25% in August 2023.
Whilst further increases cannot be ruled out, the prospect of interest rate
hikes in the short term appear to be subsiding as inflation has gradually
reduced over the course of 2023, albeit remains well above the Government and
Bank of England target. As a result, borrowing costs have increased,
surpassing prime real estate yields.
The commercial real estate market felt the impact of these developments and
experienced a sharp correction in prices. Many sales have been withdrawn as
vendors' price expectations were not met, while buyers have adopted an
opportunistic pricing approach. Real estate lenders are exercising caution
when it comes to financing new lending opportunities, except for the most
exceptional assets and sponsors. In the meantime, in several commercial real
estate sectors there is a positive occupational market which has offered
encouragement to investors in seeking out properties with good underlying
fundamentals and where there is the opportunity to deliver attractive returns
in the medium to longer term.
Consequently, transactional volumes and liquidity have significantly declined,
leading to a scarcity of comparable evidence to inform the valuation process.
Market sentiment has gained increased importance in making informed
assessments, given the limited availability of data. Notably, a divided market
is emerging, differentiating "best in class" properties from those facing
challenges due to locational factors and the overall quality of the real
estate. Stakeholders in the market, including occupiers, investors, and
lenders, are attaching heightened significance to environmental, social, and
governance (ESG) considerations and the associated costs, in their decision
making.
While there is still liquidity in the market, ongoing geopolitical
uncertainties, economic challenges, and the cost and accessibility of debt
finance are expected to further impact pricing. As a result, the potential for
future value erosion cannot be discounted, particularly for properties outside
prime markets where more significant declines can be anticipated as real
estate markets and values continue to recalibrate to elevated levels in the of
cost of capital, subdued transaction volumes and a cautious lending
environment.
It is therefore important to recognise that our valuation has been prepared
against the backdrop outlined above. Moreover, investor behaviour can change
quickly during such periods of heightened volatility. As such, the conclusions
set out in this report are only valid at the valuation date and we would
recommend that the value of the properties are kept under regular review. For
the avoidance of doubt, our valuation is not reported as being subject to
'material valuation uncertainty' as defined in the RICS Valuation - Global
Standards. The exception to this is the valuation of the property in Highbury
(see 1.10 below).
1.10. Material Uncertainty Clause - Residential Ground Rents The King's Speech on 8 November 2023 referenced reform in the residential
ground lease markets. On 9 November 2023, the Department for Levelling Up,
Housing & Communities (DLUHC) published a consultation paper 'Modern
leasehold: restricting ground rent for existing leases' which details an
intention to cap these rents, potentially at a peppercorn, with immediate
effect and with no compensation to freeholders.
The options put forward in the Government consultation are a challenge to the
valuation and the worst case scenario is that ground rents are reduced to a
peppercorn retrospectively.
This means that less certainty, and a higher degree of caution, should be
attached to valuations of residential ground rents than would normally be the
case. The subject portfolio includes a ground rent investment in Highbury in
London. Given the unknown impact of the ground rent consultation on the ground
rent investment market it is recommended that you keep the valuation of this
element of the portfolio under frequent review.
1.11. Market Value We are of the opinion that the aggregate Market Value of the Properties in the
Portfolio, as at 31 December 2023, is:
Freehold / Heritable £739,110,000
Part Freehold / Part Leasehold £8,200,000
Leasehold £66,000,000
TOTAL £813,310,000
The total valuation figure reported is the aggregate total of the individual
Properties and not necessarily a figure that could be achieved if the
Portfolio was sold as a single holding. A schedule of properties and their
inspection dates is attached at Section 2 of this Report. Our Valuations
include standard purchaser's costs but do not include costs of realisation.
The Market Value of the Properties split by property type (based on the
Company's categorisations) is as follows:
Retail and Retail Warehouse £344,085,000
Trade £108,600,000
Supermarket £138,650,000
Leisure £62,625,000
Automotive £94,200,000
Industrial £12,700,000
Offices £38,750,000
Other £12,950,000
Residential £750,000
We set out below those Properties as at 31 December 2023 with a value in
excess of 5% of the aggregate Market Value of the Properties in the Portfolio:
Property Description and Tenure Tenancies Market Value
Cantium Retail Park, Old Kent Road, London A three unit retail park totalling 68,125 sq ft. Planning permission also The majority of the property (70% by floor area) is let to B&Q Limited on £43,900,000
exists for a 1,100 unit residential scheme on the site. a lease expiring in 2037. The other two units are let to Pets at Home Limited
(lease expiring in December 2037) and Tapi Carpets and Floors Limited (lease
expiring in December 2033, subject to a tenant break option in December 2028).
The details of the rents payable are confidential between the landlord and the
Freehold. tenants.
Additionally, we comment below regarding the development property held in the
Portfolio:
Property Description, Development Status and Tenure Valuation assumptions Market Value
Phase 3, Land east of Mercery Road, Weymouth The site forms part of a 12 acre site adjacent to a new four unit retail park Market Value on the assumption that the development has been completed (i.e. £2,150,000
which has recently been developed and known as Phase 2. The subject site is vacant at completion date): £13,000,000
known as Phase 3 and has been earmarked as a site for a potential 40,000 sq ft
retail unit or supermarket with electric vehicle charging points in the car
park. Negotiations are progressing with M&S as a potential pre-let for the
property on the basis of a term of 15 years at a rent of £883,750 per annum. Market Value on the assumption that the development has been completed and let
(rent frees expired): £15,400,000
The site does not benefit from detailed planning consent although a planning
application has been submitted. Furthermore originally (prior to the Estimated total costs to complete (including carrying charges and finance but
development of Phase 2) formed part of the planning consent granted under excluding profit amount): £9,590,000
reference WP/19/00778/FUL in September 2021 for the erection of a retail
development comprising five units with associated car parking.
Assumed timings:
Freehold 6 months planning / pre construction period
14 months construction period
6 months marketing void
1.12. FCA Technical Note paragraph 130 (vi) The FCA Technical Note 130 (vi) requires us to comment on any differences
between the valuation figure in this Report and the valuation figure included
in the Company's latest published annual accounts, which were as at 31 March
2023.
Differences between the published valuation figure as at 31 March 2023 and the
present valuation are attributable to a number of factors, including but not
limited to:
· The sale of a number of properties;
· Deterioration in market conditions leading to outward yield
movement in a number of properties in the retail warehousing, supermarket,
automotive and office sectors;
· Asset management initiatives involving new leases and
installation of electric vehicle charging points which are subject to third
party leases, which has led to increases in value;
· Market rental improvements at the Virgin Media units at New
Malden and Hayes as well as at the property in Orpington;
· Surrender of a lease at the property in Birstall, although the
fund received a surrender premium from the outgoing tenant;
· Completion of the retail warehouse development at Uckfield and
therefore capital expenditure incurred;
· The grant of planning permission for a supermarket at the
property in New Malden.
1.13. Responsibility For the purposes of the Prospectus Regulation Rule 5.3.2R(2)(f) and the Code,
we are responsible for this Valuation Report and accept responsibility for the
information contained in this Valuation Report and confirm that to the best of
our knowledge the information contained in this Valuation Report is in
accordance with the facts and this Valuation Report makes no omission likely
to affect its import. This Valuation Report complies with Rule 29 of the Code,
Rule 5.4.5G of the Prospectus Regulation Rules and paragraphs 128 to 130 of
the FCA Technical Note.
Save for any responsibility arising under the Code and Prospectus Regulation
Rule 5.3.2R(2)(f) to any person as and to the extent there provided, to the
fullest extent permitted by law we do not assume any responsibility and will
not accept any liability to any other person for any loss suffered by any such
other person as a result of, arising out of, or in accordance with this
Valuation Report or our statement, required by and given solely for the
purposes of complying with Annex 3 item 1.3 of the Prospectus Regulation
forming part of the UK's EU Retained Law.
1.14. Confidentiality In accordance with the recommendations of the RICS, this Report is provided
solely for the purpose stated in this Report. It is confidential to and save
as set out in paragraph 1.13 above, the contents of this Valuation Report for
the use only of the Addressees. Any other such parties rely upon this Report
at their own risk. Neither the whole nor any part of this Report or any
reference to it may be included now, or at any time in the future, in any
published document, circular or statement, nor published, referred to or used
in any way without our written approval of the form and context in which it
may appear.
We understand that the Report is for inclusion in the Announcement, the Scheme
Document and the Combined Prospectus and Circular and any further documents or
announcements to be published by the Company and/or LXi in accordance with the
Transaction. We consent to the publication and reproduction of the Report as
required subject to the provisions of our Terms of Engagement.
1.15. Portfolio Valuation General Assumptions and Conditions All valuation advice has been carried out on the basis of the General
Assumptions and Conditions (#Assumptions) set out in Section 3.
1.16. Reliance This report is addressed to and capable of being relied upon by:
(i) the Company;
(ii) Peel Hunt LLP (in its capacity as financial adviser
to the Company), 100 Liverpool Street, London EC2M 2AT;
(iii) Barclays Bank PLC (in its capacity as lead financial
adviser to the Company), acting through its Investment Bank, 1 Churchill
Place, London E14 5HP;
(iv) J.P. Morgan Securities plc (in its capacity as
financial adviser to the Company), 25 Bank Street, Canary Wharf, London E14
5JP;
(v) LXi REIT PLC, 8(th) Floor, 100 Bishopsgate, London
EC2N 4AG;
(vi) Lazard & Co. Limited (in its capacity as lead
financial adviser to LXi), 50 Stratton Street, London W1J 8LL; and
(vii) Jefferies International Limited (in its capacity as
financial adviser and corporate broker to LXi), 100 Bishopsgate, London EC2N
4JL,
(together, the Addressees) provided that, in relying on this report, each of
the Addressees acknowledges and agrees that:
this report refers to the position at the date it was originally issued and,
unless otherwise confirmed by us in writing, we have taken no action to review
or update this report since the date it was originally issued;
our aggregate liability to any one or more or all of the Addressees in respect
of this report shall be limited to the amount as set out in our letter of
engagement with the Company dated 9 January 2024; and
this report is subject to the terms and conditions set out in our letter of
engagement with the Company dated 9 January 2024.
Notwithstanding the above, we acknowledge that this report will also be for
the use of the shareholders of the Company and the shareholders of LXi for the
specific Purpose set out in this Valuation.
This Report is subject to the terms and conditions set out in our Terms of
Engagement dated 9 January 2024
1.17. Signatories
Claire Magowan MRICS Ollie King MRICS
RICS Registered Valuer
Director
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1.18. Date of Report [Date of Report]11 January 2024
The total valuation figure reported is the aggregate total of the individual
Properties and not necessarily a figure that could be achieved if the
Portfolio was sold as a single holding. A schedule of properties and their
inspection dates is attached at Section 2 of this Report. Our Valuations
include standard purchaser's costs but do not include costs of realisation.
The Market Value of the Properties split by property type (based on the
Company's categorisations) is as follows:
Retail and Retail Warehouse £344,085,000
Trade £108,600,000
Supermarket £138,650,000
Leisure £62,625,000
Automotive £94,200,000
Industrial £12,700,000
Offices £38,750,000
Other £12,950,000
Residential £750,000
We set out below those Properties as at 31 December 2023 with a value in
excess of 5% of the aggregate Market Value of the Properties in the Portfolio:
Property Description and Tenure Tenancies Market Value
Cantium Retail Park, Old Kent Road, London A three unit retail park totalling 68,125 sq ft. Planning permission also The majority of the property (70% by floor area) is let to B&Q Limited on £43,900,000
exists for a 1,100 unit residential scheme on the site. a lease expiring in 2037. The other two units are let to Pets at Home Limited
(lease expiring in December 2037) and Tapi Carpets and Floors Limited (lease
expiring in December 2033, subject to a tenant break option in December 2028).
The details of the rents payable are confidential between the landlord and the
Freehold. tenants.
Additionally, we comment below regarding the development property held in the
Portfolio:
Property Description, Development Status and Tenure Valuation assumptions Market Value
Phase 3, Land east of Mercery Road, Weymouth The site forms part of a 12 acre site adjacent to a new four unit retail park Market Value on the assumption that the development has been completed (i.e. £2,150,000
which has recently been developed and known as Phase 2. The subject site is vacant at completion date): £13,000,000
known as Phase 3 and has been earmarked as a site for a potential 40,000 sq ft
retail unit or supermarket with electric vehicle charging points in the car
park. Negotiations are progressing with M&S as a potential pre-let for the
property on the basis of a term of 15 years at a rent of £883,750 per annum. Market Value on the assumption that the development has been completed and let
(rent frees expired): £15,400,000
The site does not benefit from detailed planning consent although a planning
application has been submitted. Furthermore originally (prior to the Estimated total costs to complete (including carrying charges and finance but
development of Phase 2) formed part of the planning consent granted under excluding profit amount): £9,590,000
reference WP/19/00778/FUL in September 2021 for the erection of a retail
development comprising five units with associated car parking.
Assumed timings:
Freehold 6 months planning / pre construction period
14 months construction period
6 months marketing void
1.12. FCA Technical Note paragraph 130 (vi)
The FCA Technical Note 130 (vi) requires us to comment on any differences
between the valuation figure in this Report and the valuation figure included
in the Company's latest published annual accounts, which were as at 31 March
2023.
Differences between the published valuation figure as at 31 March 2023 and the
present valuation are attributable to a number of factors, including but not
limited to:
· The sale of a number of properties;
· Deterioration in market conditions leading to outward yield
movement in a number of properties in the retail warehousing, supermarket,
automotive and office sectors;
· Asset management initiatives involving new leases and
installation of electric vehicle charging points which are subject to third
party leases, which has led to increases in value;
· Market rental improvements at the Virgin Media units at New
Malden and Hayes as well as at the property in Orpington;
· Surrender of a lease at the property in Birstall, although the
fund received a surrender premium from the outgoing tenant;
· Completion of the retail warehouse development at Uckfield and
therefore capital expenditure incurred;
· The grant of planning permission for a supermarket at the
property in New Malden.
1.13. Responsibility
For the purposes of the Prospectus Regulation Rule 5.3.2R(2)(f) and the Code,
we are responsible for this Valuation Report and accept responsibility for the
information contained in this Valuation Report and confirm that to the best of
our knowledge the information contained in this Valuation Report is in
accordance with the facts and this Valuation Report makes no omission likely
to affect its import. This Valuation Report complies with Rule 29 of the Code,
Rule 5.4.5G of the Prospectus Regulation Rules and paragraphs 128 to 130 of
the FCA Technical Note.
Save for any responsibility arising under the Code and Prospectus Regulation
Rule 5.3.2R(2)(f) to any person as and to the extent there provided, to the
fullest extent permitted by law we do not assume any responsibility and will
not accept any liability to any other person for any loss suffered by any such
other person as a result of, arising out of, or in accordance with this
Valuation Report or our statement, required by and given solely for the
purposes of complying with Annex 3 item 1.3 of the Prospectus Regulation
forming part of the UK's EU Retained Law.
1.14. Confidentiality
In accordance with the recommendations of the RICS, this Report is provided
solely for the purpose stated in this Report. It is confidential to and save
as set out in paragraph 1.13 above, the contents of this Valuation Report for
the use only of the Addressees. Any other such parties rely upon this Report
at their own risk. Neither the whole nor any part of this Report or any
reference to it may be included now, or at any time in the future, in any
published document, circular or statement, nor published, referred to or used
in any way without our written approval of the form and context in which it
may appear.
We understand that the Report is for inclusion in the Announcement, the Scheme
Document and the Combined Prospectus and Circular and any further documents or
announcements to be published by the Company and/or LXi in accordance with the
Transaction. We consent to the publication and reproduction of the Report as
required subject to the provisions of our Terms of Engagement.
1.15. Portfolio Valuation General Assumptions and Conditions
All valuation advice has been carried out on the basis of the General
Assumptions and Conditions (#Assumptions) set out in Section 3.
1.16. Reliance
This report is addressed to and capable of being relied upon by:
(i) the Company;
(ii) Peel Hunt LLP (in its capacity as financial adviser
to the Company), 100 Liverpool Street, London EC2M 2AT;
(iii) Barclays Bank PLC (in its capacity as lead financial
adviser to the Company), acting through its Investment Bank, 1 Churchill
Place, London E14 5HP;
(iv) J.P. Morgan Securities plc (in its capacity as
financial adviser to the Company), 25 Bank Street, Canary Wharf, London E14
5JP;
(v) LXi REIT PLC, 8(th) Floor, 100 Bishopsgate, London
EC2N 4AG;
(vi) Lazard & Co. Limited (in its capacity as lead
financial adviser to LXi), 50 Stratton Street, London W1J 8LL; and
(vii) Jefferies International Limited (in its capacity as
financial adviser and corporate broker to LXi), 100 Bishopsgate, London EC2N
4JL,
(together, the Addressees) provided that, in relying on this report, each of
the Addressees acknowledges and agrees that:
this report refers to the position at the date it was originally issued and,
unless otherwise confirmed by us in writing, we have taken no action to review
or update this report since the date it was originally issued;
our aggregate liability to any one or more or all of the Addressees in respect
of this report shall be limited to the amount as set out in our letter of
engagement with the Company dated 9 January 2024; and
this report is subject to the terms and conditions set out in our letter of
engagement with the Company dated 9 January 2024.
Notwithstanding the above, we acknowledge that this report will also be for
the use of the shareholders of the Company and the shareholders of LXi for the
specific Purpose set out in this Valuation.
This Report is subject to the terms and conditions set out in our Terms of
Engagement dated 9 January 2024
1.17. Signatories
Claire Magowan MRICS
Ollie King MRICS
RICS Registered Valuer
Director
For and on behalf of Savills Advisory Services Limited, a subsidiary of
Savills Plc
Regulated by RICS
Registered in England No. 06215875
Registered Office: 33 Margaret Street, London, W1G 0JD
1.18. Date of Report
[Date of Report]11 January 2024
1.
2. Schedule of Properties
Property Address Town Inspection Date Tenure Use
Unit 1 & Unit 2 Southam Road Banbury 28/12/2023 FH Retail Warehouse
Boots UK Limited, 277/279 High Street Bangor 05/08/2022 FH Retail Warehouse
Brook Retail Park Bromsgrove 14/04/2022 FH Retail Warehouse
St Peters Retail Park, Lichfield Street Burton Upon Trent 22/05/2022 FH Retail Warehouse
Halls Mill Retail Park Bury 04/01/2024 FH Retail Warehouse
Airport Retail Park, London Road Coventry 12/08/2021 FH Retail Warehouse
Four Pools Retail Park, Four Pools Lane Evesham 20/05/2022 FH Retail Warehouse
Cantium Retail Park, Old Kent Road London 26/05/2023 FH Retail Warehouse
Bramingham Park, Enterprise Way Luton 28/12/2023 FH Retail Warehouse
B&Q Nelson 04/01/2024 FH Retail Warehouse
Beverley Way New Malden 18/12/2023 FH Retail Warehouse
Willowbeck Road North Allerton 15/12/2023 FH Retail Warehouse
64-67 High Street Stourbridge 11/09/2022 FH Retail Warehouse
Uckfield Retail Park, Batt's Bridge Road Uckfield 26/04/2023 FH Retail Warehouse
Weymouth Phase 2, Weymouth Gateway Mercery Road Weymouth 21/08/2022 FH Retail Warehouse
Halfords & Dunelm Birchley 13/08/2021 FH Retail
Apex Retail Park Birmingham 11/07/2023 FH Retail
DFS/ Sofology, John Kempe Way Middleway Birmingham 13/08/2021 FH Retail
DFS/ Sofology, Highwood Lane Patchway, Cribbs Causeway Bristol 28/07/2022 LH Retail
(97 yrs)
DFS Broadstairs, Westwood Junction Broadstairs 01/02/2022 FH Retail
DFS Carlisle 05/10/2023 FH Retail
DFS Store & Pets at Home, Metro Park West Gateshead Gateshead 11/05/2022 FH Retail
DFS/ Sofology/ Costa, 2029 London Road Tollcross Glasgow 11/06/2022 FH Retail
11 Church Street Kingston 18/12/2023 FH Retail
Dunstable Road Retail Park, Dunstable Road Luton 28/12/2023 FH Retail
Burlington Retail Park, Burlington Road New Malden 02/06/2023 FH Retail
DFS & former Mothercare Stores, Mariners Way Ashton-on-Ribble Preston 26/07/2021 FH Retail
DFS Store, 3 Hylton Grange Off Wessingham Way Sunderland 30/07/2021 FH Retail
The Range Truro 20/06/2023 FH Retail
Kwik Fit Aylesbury, Park Street Aylesbury 02/02/2023 FH Trade
STS Tyre Pros, 24/28 St Albans Road Barnet 08/08/2022 FH Trade
Cable & Wireless UK, Talbot Way Birmingham 12/08/2021 LH Trade
(91 yrs)
National Express Yardley Wood, Yardley Wood Road Yardley Wood Birmingham 12/08/2021 FH Trade
Southern Cross Trading Estate Bognor Regis 21/02/2022 FH Trade
Wickes Store, 34 Dukes Road Carlisle 05/10/2023 FH Trade
Halfords Autocentre Chelmsford 27/06/2023 FH Trade
Kwik Fit Colchester, 103 North Station Road Colchester 27/06/2023 FH Trade
Meggit, Swallow Road Off Holbrook Lane Coventry 12/08/2021 FH Trade
Halfords Autocentre, Unit 8 and 9, Orbital One Dartford 02/03/2023 FH Trade
Kwik Fit Dereham, Yaxham Road Dereham 10/08/2021 FH Trade
MKM, 71 Nuneaton Street Glasgow 11/06/2022 FH Trade
MKM Plot 4 Haverhill Business Cent, Iceni Way Haverhill 09/08/2021 FH Trade
Virgin Media, Connect House, Unit 2 Swallowfield Way Hayes 02/02/2023 FH Trade
Kwik Fit Hounslow, 213 Staines Road Hounslow 08/08/2022 FH Trade
Spenhill Retail Park, Anson Road Martlesham Heath Ipswich 22/02/2023 FH Trade
Kwik Fit Hammersmith, 332/336 Goldhawk Road Hammersmith London 29/07/2021 FH Trade
Kwik Fit Whetstone, 997/1003 High Road Whetstone London 08/08/2022 FH Trade
Kwik Fit Milton Keynes, Saxon Street Bletchley Milton Keynes 08/08/2022 FH Trade
Virgin Media, Unit 6 and 7. Shannon Commercial Centre Beverley Way New Malden 02/02/2023 FH Trade
Kwik Fit Norwich, Broadsman Close Norwich 10/08/2021 FH Trade
Selco, Cray Avenue Orpington 02/03/2023 FH Trade
Kwik Fit Rainham, 194-6 High Street Rainham 17/08/2023 FH Trade
Kwik Fit Slough, 1 Bath Road Slough 08/08/2022 FH Trade
Kwik Fit Stevenage, 100 High Street Stevenage 05/08/2022 FH Trade
Halfords Autocentre Tilbury 29/03/2022 FH Trade
MKM / Howden Trade Counter, Hithercroft Industrial Estate Wallingford 06/05/2022 FH Trade
Wickes, Blaby Road Wigston 06/08/2021 FH Trade
Kwik Fit Windsor, 22a Alma Road Windsor 08/08/2022 FH Trade
Costco Coventry 12/08/2021 FH Supermarket
Waitrose Harborne 13/08/2021 FH Supermarket
Waitrose Keynsham 02/08/2023 FH Supermarket
M&S Foodhall, Crown Square Matlock 23/09/2023 LH Supermarket
(85 yrs)
Waitrose Paddock Wood 08/02/2022 FH Supermarket
Booker, Edgington Way Sidcup 30/05/2023 FH Supermarket
428 Victoria Road South Ruislip 26/01/2022 FH Supermarket
Sainsburys, Boston Road Spilsby 15/07/2023 FH Supermarket
Booker Stirchley Stirchley 13/08/2021 FH Supermarket
Waitrose Towcester 28/12/2023 FH Supermarket
Waitrose, Tresham Crescent Yateley 03/08/2021 FH Supermarket
Owain Glyndwr, 10 St John's Street Cardiff 27/06/2023 FH Leisure
Odeon Chelmsford, Kings Head Walk Chelmsford 27/06/2023 LH Leisure
(119 yrs)
Odeon Luxe Hull, Kingston Park Hull 17/11/2022 LH Leisure
(117 yrs)
Gelderd Road, Birstall Leeds 01/09/2023 FH Leisure
Odeon Luxe Lee Valley, Lee Valley Leisure Complex Picketts Lock Lane, Edmonton London 30/07/2021 LH Leisure
(95 yrs)
Travelodge, 329-335 Clifton Drive Lytham St Annes 05/08/2022 FH Leisure
Odeon Luxe Tamworth, 50 Bolebridge Street Tamworth 18/08/2021 LH Leisure
(241 yrs)
Odeon Luxe Telford, Forgegate Telford Town Centre Telford 18/08/2021 FH Leisure
Co-op Food & Petrol - Barry, Pontypridd Road (B4266/A4226) Weycock Cross Barry 03/07/2023 FH Automotive
Co-op Food & Petrol - Basing, Grove Road (off A339) Basingstoke 05/04/2023 FH Automotive
Burger King Roadside, Bicester 'Gateway' Bicester 05/04/2023 FH Automotive
Starbucks Roadside, A34 Northbound Bicester 11/09/2022 FH Automotive
Bournemouth Service Station, Holdenhurst Road Bournemouth 08/12/2021 FH Automotive
Ingrave Service Station, 130 Brentwood Road Herongate Brentwood 20/07/2022 FH Automotive
IMO Car Wash, Picton Court Retail Park Waterton Bridgend 13/12/2021 FH Automotive
IMO Car Wash, Margate Road Broadstairs 05/04/2023 FH Automotive
IMO Car Wash - Chorley, Harpers Lane Chorley 25/10/2023 FH Automotive
Co-op Food & Petrol, Becontree Avenue Dagenham 20/07/2022 FH Automotive
MFG Glastonbury, Wirral Park Road Glastonbury 04/07/2023 FH Automotive
Co-op, 261/263 High Street Harborne 21/11/2023 FH Automotive
Co-op Hillingdon, Lees Corner Uxbridge Road Hillingdon Heath Hillingdon 04/10/2023 FH Automotive
IMO Car Wash, Hawes Street Ipswich 22/02/2023 FH Automotive
Malling Service Station, 96/106 Malling Street Lewes 20/07/2022 FH Automotive
Bow Road Service Station, 127/131 Bow Road London 18/04/2023 FH Automotive
Co-op, King Cross, Caledonian Service Station, 219/227 Caledonian Road London 18/04/2023 FH Automotive
Lakedale Service Station, Plumstead High Street Plumstead London 20/07/2022 FH Automotive
Co Op, Ampress Park Lymington 08/12/2021 FH Automotive
McDonalds, Picket Post New Forest 08/12/2021 FH Automotive
Co-op Food & Petrol, High Cross Road (B4266/A4226) High Cross/ Rogerston Newport 13/12/2021 FH Automotive
Pevensey Service Station, Bexhill Road Pevensey 20/07/2022 FH Automotive
IMO Car Wash, Glenside Rise Plympton Plymouth 30/07/2022 FH Automotive
IMO Car Wash, Cabot Lane Poole 08/12/2021 FH Automotive
Starbucks Roadside, Westbound Express Rhyl 11/09/2022 LH Automotive
(244 yrs)
Starbucks Roadside, Eastbound Express Rhyl 11/09/2022 LH Automotive
(244 yrs)
Daff-Y-Nant Services - PFS, A40 Southbound Whitchurch Ross on wye 13/12/2021 FH Automotive
Starbucks, John Clark Way (A5001) Rushden 20/09/2021 FH Automotive
Starbucks Roadside, A168 Northbound Thirsk 21/11/2023 FH Automotive
BP Filling Station, Hastings Road Matfield Tonbridge 05/04/2023 FH Automotive
McDonalds, Maresfield Bypass Uckfield 26/04/2023 FH Automotive
Zood, Brookside Road Uttoxeter 23/08/2023 FH Automotive
Sandford Service Station, Main Road Wareham 08/12/2021 FH Automotive
McDonalds, Clenchwarton Road West Lynn 13/12/2023 FH Automotive
IMO Car Wash 2, Weston Links Weston-Super-Mare 03/07/2023 FH Automotive
IMO Car Wash 1, New Bristol Road Weston-Super-Mare 03/07/2023 FH Automotive
McDonalds, A41 Wrexham Road Whitchurch 03/07/2023 FH Automotive
Starbucks/ Subway Road, Biggs Road Wisbech 13/12/2023 FH Automotive
Nunnery Park Service Station, Nunnery Way/ Horn Hill Road Worcester 04/07/2023 FH Automotive
Worthing Service Station, Nelson Road Worthing 20/07/2022 FH Automotive
McDonalds, Yarmouth Road Yarmouth 18/09/2021 FH Automotive
Forward Park Birmingham 10/08/2021 FH Industrial
Keens House, Anton Trading Estate Andover 18/12/2023 FH Offices
County House, London Road Chelmsford 20/12/2023 FH Offices
Compton Court Coventry 12/08/2021 LH Offices
(123 yrs)
Oak Tree Court Coventry 12/08/2021 LH Offices
(126 yrs)
One Lochside Way, Edinburgh Park Edinburgh 14/12/2023 Her Offices
Mercury House, Belshill Glasgow 14/12/2023 Her Offices
Mucklow Office Park Halesowen 11/08/2021 FH Offices
Glory Park High Wycombe 18/12/2023 FH Offices
15 London Road Redhill 19/12/2023 FH Offices
Land Mucklow Hill Halesowen 11/08/2021 FH Other
Land Bewdley Road, Bewdley Road Stirchley 13/08/2021 FH Other
Weymouth Phase 3, Weymouth Gateway Mercery Road Weymouth 21/08/2022 FH Other
Clifton Moor Gate York 05/05/2022 FH Other
Highbury Stadium Square, Avenell Road London - LH Residential
(238 yrs)
24 Haymarket London 18/12/2023 LH Mixed Use
(86 yrs)
3. Portfolio Valuation General Assumptions and Conditions
General Assumptions
Our reports and valuations are carried out on the basis of the following
General Assumptions:
Tenure and Tenancies
That the properties are not subject to any unusual or especially onerous
restrictions, encumbrances or outgoings contained in the Freehold Title. We
will not inspect the Title Deeds or Land Registry Certificate and shall rely
upon information provided by you or your solicitor relating to both tenure and
tenancy data. Should there be any mortgages or charges, we have assumed that
the Properties would be sold free of them.
Condition and Repair
That the buildings are structurally sound, and that there are no structural,
latent or other material defects, including rot and inherently dangerous or
unsuitable materials or techniques, whether in parts of the building we have
inspected or not, that would cause us to make allowance by way of capital
repair. Our inspection of the properties and this report do not constitute a
building survey. Our Valuation is on the basis that a building survey would
not reveal material defects or cause us to alter our Valuation materially.
That in the construction or alteration of the building no use was made of any
deleterious or hazardous materials or techniques, such as high alumina cement,
calcium chloride additives, woodwool slabs used as permanent shuttering and
the like (other than those points referred to above). We will not carry out
any investigations into these matters.
That the properties are not adversely affected, nor is likely to become
adversely affected, by any highway, town planning or other schemes or
proposals, and that there are no matters adversely affecting value that might
be revealed by a local search, replies to usual enquiries, or by any statutory
notice.
That the buildings have been constructed and is used in accordance with all
statutory and bye-law requirements, and that there are no breaches of planning
control. Likewise, that any future construction or use will be lawful.
That the properties are connected or capable of being connected without undue
expense, to the public services of gas, electricity, water, telephones and
sewerage. Sewers, mains services and roads giving access to the Properties
have been adopted, and any lease provides rights of access and egress over all
communal estate roadways, pathways, corridors, stairways and the use of
communal grounds, parking areas and other facilities.
Environmental Risks
That the properties have not suffered any land contamination in the past, nor
is it likely to become so contaminated in the foreseeable future. We have
not carried out any soil tests or made any other investigations in this
respect, and we cannot assess the likelihood of any such contamination.
That there are no adverse site or soil conditions, that the properties are not
adversely affected by the Town and Country Planning (Assessment of
Environmental Effects) Regulations 1988, that the ground does not contain any
archaeological remains, nor that there is any other matter that would cause us
to make any allowance for exceptional delay or site or construction costs in
our valuation.
That the properties are free from environmental hazards, including infestation
from invasive plants such as Japanese Knotweed. This assumption is made in
recognition of the fact that identifying Japanese knotweed is problematic and
cannot be guaranteed. This is partly because during the early stages of its
annual life cycle some of the classic visual characteristics are not
distinctive and during the winter months the plant sheds its leaves and
suffers die back. It is also possible that Japanese knotweed has received a
herbicide-based treatment which has removed all visible above ground signs but
may not have killed the below ground rhizome (root) which, in turn, may lead
to new growth and the spread of the plant in time.
Floor Areas
That any floor areas provided by a third party and assigned to Savills (UK)
Limited, have been measured in accordance with the current RICS Property
Measurement. This is the basis on which we will carry out measured surveys
as instructed.
Development Opportunity
In situations where a property is in the course of development, we reflect its
physical condition and the costs remaining to be spent at the valuation
date. We have considered the cost estimates provided by the professional
advisors involved in the project.
In the case of properties where we have been asked to value the site under the
special assumption that the properties will be developed, there are no adverse
site or soil conditions, that the properties are not adversely affected by the
Town and Country Planning (Environmental Impact Assessment) Regulations 2017
that the ground does not contain any archaeological remains, nor that there is
any other matter that would cause us to make any allowance for exceptional
delay or site or construction costs in our Valuation.
General Conditions
Our reports and valuations are carried out on the basis of the following
General Conditions:
1. We have not made any allowance for any Capital Gains Tax or other
taxation liability that might arise upon a sale of the properties. No
allowance has been made for any expenses of realisation.
2. Our valuations are exclusive of VAT (if applicable).
3. Excluded from our valuations is any additional value attributable to
goodwill, or to fixtures and fittings which are only of value in situ to the
present occupier.
4. Our valuations are prepared in accordance with the latest edition of
the RICS Valuation - Global Standards ("the Red Book") on the basis of Market
Value, unless instructed otherwise. Any such deviation is expressly stated
in our terms of engagement.
5. Each property has been valued individually and no allowance has been
made, either positive or negative, should it form part of a larger disposal.
The total stated is the aggregate of the individual Market Values.
6. No allowance has been made for rights, obligations or liabilities
arising under the Defective Premises Act 1972, and it has been assumed that
all fixed plant and machinery and the installation thereof complies with the
relevant UK and EEU legislation, insofar that the latter is applicable.
7. That we have been supplied with all information likely to have an
effect on the value of the properties and that the information supplied to us
and summarised in this report is both complete and correct.
8. Our valuations are based on market evidence which has come into our
possession from numerous sources. That from other agents and valuers is
given in good faith but without liability. It is often provided in verbal
form. Some comes from databases such as the Land Registry or computer
databases to which Savills subscribes. In all cases, other than where we
have had a direct involvement with the transactions, we are unable to warrant
that the information on which we have relied is correct although we believe it
to be so.
9. The files which we hold relating to all of our property valuations may
be subject to monitor and audit by the RICS under its conduct and disciplinary
regulations.
Claire Magowan MRICS Ollie King MRICS
Director Director
+44 (0) 2074 098 091 +44 (0) 2074 098 098
cmagowan@savills.com oking@savills.com
Valuation Report.
LXi REIT plc
Valuation date: 31 December 2023
Important Notice to all readers of this report
Unless you are the Client named within this report, or have been explicitly
identified by us as a party to whom we owe a duty of care and who is entitled
to rely on this report, Knight Frank LLP does not owe or assume any duty of
care to you in respect of the contents of this report and you are not entitled
to rely upon it.
LXi REIT plc
LXi REIT plc
8th Floor, 100 Bishopsgate
London
EC2N 4AG
(the "Client", "you", "your")
Lazard & Co., Limited (acting as lead financial adviser to the Client)
50 Stratton Street
London
W1J 8LL
Jefferies International Limited (acting as financial adviser and corporate
broker to the Client)
100 Bishopsgate
London
EC2N 4JL
LondonMetric Property plc
1 Curzon Street
London
W1J 5HB
(hereinafter referred to as the "Offeror")
Barclays Bank plc, acting through its Investment Bank (acting as lead
financial adviser and joint corporate broker to the Offeror)
1 Churchill Place
Our Ref: I:1139946
London
E14 5HP
Peel Hunt LLP (acting as financial adviser and joint corporate broker to the
Offeror)
7th Floor, 100 Liverpool Street
London
EC2M 2AT
J.P. Morgan Securities plc (acting as financial adviser and joint corporate
broker to the Offeror)
25 Bank Street
Canary Wharf
London
E14 5JP
(each an "Addressee" and together the "Addressees")
LXi REIT plc
8th Floor, 100 Bishopsgate
London
EC2N 4AG
(the "Client", "you", "your")
Lazard & Co., Limited (acting as lead financial adviser to the Client)
50 Stratton Street
London
W1J 8LL
Jefferies International Limited (acting as financial adviser and corporate
broker to the Client)
100 Bishopsgate
London
EC2N 4JL
LondonMetric Property plc
1 Curzon Street
London
W1J 5HB
(hereinafter referred to as the "Offeror")
Barclays Bank plc, acting through its Investment Bank (acting as lead
financial adviser and joint corporate broker to the Offeror)
1 Churchill Place
London
E14 5HP
Peel Hunt LLP (acting as financial adviser and joint corporate broker to the
Offeror)
7th Floor, 100 Liverpool Street
London
EC2M 2AT
J.P. Morgan Securities plc (acting as financial adviser and joint corporate
broker to the Offeror)
25 Bank Street
Canary Wharf
London
E14 5JP
(each an "Addressee" and together the "Addressees")
Our Ref: I:1139946
Date of issue: 11 January 2024
Dear Sir/Madam
Valuation Report in respect of the properties of LXi REIT plc as at 31
December 2023 for inclusion in a Rule 2.7 Announcement, Scheme Document and
Combined Prospectus and Circular ("Valuation Report")
Further to your instructions, we are pleased to provide our Valuation Report
in respect of the freehold, heritable or leasehold interests in the properties
("Properties") set out in Appendix 1 (List of Properties) below in connection
with inclusion in a 2.7 Announcement, Scheme Document to be published by the
Client and a Combined Prospectus and Circular to be published by the Offeror,
in connection with a possible all-share merger of the Client and the Offeror
(the "Transaction"). If you have any queries regarding this Valuation
Report, please let us know as soon as possible.
Signed for and on behalf of Knight Frank LLP
Signature.
Signature. Signature.
Chris Galloway MRICS Michael Crowe MRICS
RICS Registered Valuer RICS Registered Valuer
Partner, Valuation & Advisory Partner, Valuation & Advisory
chris.galloway@knightfrank.com michael.crowe@knightfrank.com
T +44 20 7861 1297 T +44 20 7861 5258
M +44 7788 716 946 M +44 7776 382 124
Chris Galloway MRICS Nicholas Peart-Moisey MRICS
RICS Registered Valuer RICS Registered Valuer
Partner, Valuation & Advisory Partner, Valuation & Advisory
chris.galloway@knightfrank.com Nick.moisey@knightfrank.com
T +44 20 7861 1297 T +44 20 3909 6844
M +44 7788 716 946 M +44 7855 169 761
Signature.
Chris Galloway MRICS
RICS Registered Valuer
Partner, Valuation & Advisory
chris.galloway@knightfrank.com
T +44 20 7861 1297
M +44 7788 716 946
Nicholas Peart-Moisey MRICS
RICS Registered Valuer
Partner, Valuation & Advisory
Nick.moisey@knightfrank.com
T +44 20 3909 6844
M +44 7855 169 761
1. About this report
Engagement of Knight Frank LLP
1.1 This Valuation Report sets out our valuation, as at 31
December 2023 ("valuation date"), of the Properties ("Valuation"). This
Valuation Report has been prepared in accordance with our Terms of Engagement
letter dated 9 January 2024 addressed to the Addressees, and our General Terms
of Business for Valuation Services (together the "Agreement").
Client
1.2 We have been instructed to prepare this Valuation Report
by LXi REIT plc. However as set out above, this Valuation Report has also
been addressed to other Addressees.
Valuation standards
1.3 The Valuation has been undertaken in accordance with and
complies with: (a) the current editions of RICS Valuation - Global Standards,
which incorporate the International Valuation Standards, and the RICS UK
National Supplement. References to the "Red Book" refer to either or both of
these documents, as applicable; (b) Rule 29 of the City Code on Takeovers and
Mergers (the "Code") as issued by the UK Panel on Takeovers and Mergers; (c)
paragraphs 128-130 of the Financial Conduct Authority ("FCA") Primary Market
Technical Note 619.1 (the "FCA Technical Note"); and (d) Rules 5.4.5 and 5.4.6
of the UK Prospectus Regulation Rules published by the FCA and item 2.7 of
Annex 4 to the UK Prospectus Regulation Rules.
1.4 The Properties have been valued by a valuer who is
qualified for the purposes of the Valuation in accordance with Rule 29 of the
Code. For the purposes of this Valuation Report, "UK Prospectus Regulation
Rules" shall mean the prospectus regulation rules made by the FCA for the
purposes of part 6 of the Financial Services and Markets Act 2000.
Status and experience of valuer
Valuer and expertise
1.5 The valuers, on behalf of Knight Frank LLP, with the
responsibility for this Valuation Report are Chris Galloway MRICS, RICS
Registered Valuer and Nicholas Peart-Moisey MRICS, RICS Registered Valuer
("Lead Valuers"). Parts of the Valuation have been undertaken by additional
valuers as listed on our file.
1.6 We confirm that the Lead Valuers and any additional
valuers who value the Properties meet the requirements of the Red Book and
Rule 29.3(a)(iii) of the Code in having sufficient current knowledge of the
particular market and the skills and understanding to undertake the Valuation
and prepare this Valuation Report competently and, are appropriately qualified
for the purposes of the Valuation as required by Rule 29.3(a)(ii) of the Code,
and are independent of the parties to the offer as required by Rule 29.3(a)(i)
of the Code.
1.7 We confirm that we are not aware of any reason why we
would not satisfy the requirements of Rule 29.3(a)(i) of the Code.
Conflicts of Interest: Declaration and Disclosures
1.8 For the purposes of Directive 2011/61/EU and/or any
implementing legislation, laws or regulations thereof (including, but not
limited to, the Alternative Investment Fund Manager's Regulations 2013)
("AIFMD") we act as the Client's valuation advisers but are not acting as
"External Valuer" (as defined therein). Our role is limited to providing
property valuation services in accordance with the Red Book under the terms of
the Agreement; we shall not perform the valuation function referred to in
Article 19 of AIFMD for the Client, and, we are not responsible for making the
final determination of the value of the Properties nor for the calculation of
the Net Asset Value of the Client.
1.9 We confirm that the Lead Valuers and additional valuers
meet the requirements of the Red Book, having sufficient current knowledge of
the particular market and the skills and understanding to undertake the
Valuation competently.
1.10 We confirm that we have no material interest in the Client
and we have acted as an External Valuer for the purpose of valuing the
Properties pursuant to the terms of our letter of engagement dated September
2017.
1.11 This Valuation Report has been vetted as part of Knight
Frank LLP's quality assurance procedures.
1.12 We recognise and support the RICS Rules of Conduct and have
procedures for identifying conflicts of interest.
Independence
1.13 As set out in paragraph 1.8, Knight Frank LLP currently
values the Properties, for financial reporting purposes, on behalf of the
Client. The total fees for this assignment, earned by Knight Frank LLP (or
other companies forming part of the same group of companies within the UK)
from the Client (or other companies within the UK) is less than 5.0% of the
total UK revenues. It is not anticipated that there will be a material
increase in the proportion of the fees payable, or likely to be payable, by
the Client.
1.14 Other these valuation services, Knight Frank LLP have no
material involvement with the assets being valued and we confirm that we can
report without any material conflict.
Use of this Valuation
Purpose of valuation
1.15 The Valuation and this Valuation Report are each provided
solely for the purpose of:
i. inclusion in an announcement proposed to be made by the
Client and the Offeror pursuant to Rule 2.7 of the Code in connection
Transaction (the "Rule 2.7 Announcement");
ii. inclusion in a scheme circular to be published by the Client
in connection with the Transaction (the "Scheme Document");
iii. inclusion in a combined prospectus and circular to be published
by the Offeror in connection with the Transaction and the issue and allotment
of new shares in the capital of the Offeror pursuant to the terms of the
Transaction (the "Combined Prospectus and Circular");
iv. inclusion and/or reference to it in any other announcements,
documents and/or supplementary documents required to be released by the Client
and/or the Offeror pursuant to the Code and which directly relate to the
Transaction (each a "Code Document"); and
v. publication on the Client's website and the Offeror's website
in accordance with the requirements of Rule 26.3 of the Code and the UK
Prospectus Regulation Rules,
(together, the "Purpose").
Reliance
1.16 This Valuation Report has been prepared for the Addressees
only and is for the use of and may be relied upon by the Addressees for the
Purpose. Notwithstanding the General Terms, we acknowledge that this Valuation
Report will also be for the use of the shareholders of the Client and the
Offeror for the Purpose set out above.
1.17 Save for: (a) the Addressees; and (b) any responsibility
arising under the Code and/or the UK Prospectus Regulation Rules to any person
as and to the extent there provided, in accordance with Clauses 3 & 4 of
the General Terms and to the fullest extent permitted by law, we do not assume
any responsibility and will not accept any liability to any other person for
any loss suffered by any such other person as a result of, arising out of, or
in accordance with this Valuation Report or our statement, required by and
given solely for the purposes of complying with the UK Prospectus Regulation
Rules and Rule 29 of the Code.
Disclosure & publication
1.18 The Valuation has been prepared for the Client and in
accordance with the Agreement which governs its purpose and use. As stated in
the Agreement, this Valuation Report is confidential to the Addressees and
must not be disclosed to any person other than for the Purpose without our
express written consent. Other than for the Purpose, neither the whole, nor
any part of this Valuation Report nor any reference thereto may be included in
any prospectus, listing particulars, published document, circular or statement
nor published in any way without our prior written approval of the form or
context in which it may appear.
1.19 Notwithstanding paragraph 1.18 above, this Valuation
Report may be disclosed as set out below:
Subject to the terms and conditions (but disregarding for these purposes
clauses 4.3 to 4.6 (inclusive) of the General Terms) of the Agreement and our
approval of the form and context thereof, we hereby confirm that we will
authorise and consent to the disclosure of this Valuation Report:
· as may be required by any applicable court of
competent jurisdiction or other competent judicial or governmental body or any
applicable law or regulation or pursuant to government action, regulatory
requirement or request;
· to each Addressee's affiliates and each
Addressee's affiliates' respective directors, officers, employees, agents,
professional advisers, insurers, auditors and bankers that need to see the
Valuation in connection with the Purpose;
· in seeking to establish a defence or otherwise in
connection with any actual or threatened legal or regulatory proceedings or
investigation relating to the matters set out in this Letter or claims that
may be brought against them arising from their roles as sponsor and/or
financial advisers to the Client;
· in investor presentations and other investor
education materials prepared in connection with the Transaction, and in any
private discussions with Investors or other third parties in connection with
the Transaction; and
· for the Purpose.
1.20 It is a condition of such disclosure that each party in
receipt of this Valuation Report that is not an Addressee agrees and
acknowledges that this Valuation Report cannot be relied upon by them, and we
do not accept any responsibility, duty of care or liability to them, whether
in contract, tort (including negligence), misrepresentation or otherwise in
respect of the Valuation and the information it contains. For the avoidance
of doubt, nothing in the preceding sentence shall affect our responsibility,
for the purposes of Rule 5.3.2R(2)(f) of the UK Prospectus Regulation Rules,
or under paragraphs 1.16 and 1.17 of this Valuation Report for the
information contained in this Valuation Report.
1.21 This Valuation Report complies with Rule 29 of the Code and
we understand that the publication or reproduction by the Client of this
Valuation Report and/or the information contained herein as required by Rules
26 and 29 of the Code is necessary, including in the Rule 2.7 Announcement,
the Scheme Document and any Code Document.
1.22 We confirm that this Valuation Report complies with Rules
5.4.5G and 5.4.6G of the UK Prospectus Regulation Rules and paragraphs 128 to
130 of the FCA Technical Note.
1.23 We confirm that the information contained in the Combined
Prospectus and Circular or any supplementary prospectus and/or circular (as
the case may be) which is extracted from this Valuation Report is accurate,
balanced and complete and is not misleading or inconsistent with this
Valuation Report as prepared by us and has been properly extracted, derived or
computed from this Valuation Report.
1.24 The Addressees agree and acknowledge that we shall have no
liability for any error, omission or inaccuracy in this Valuation Report to
the extent resulting from our reliance on information provided by or on behalf
of the Addressees unless otherwise stated. Notwithstanding the above, we
highlight the restricted nature of this instruction, in accordance with the
Red Book; as a result the reliance that can be placed on the Valuation is
limited.
Verification
1.25 We recommend that before any financial transaction is
entered into based upon the Valuation, you obtain verification of any
third-party information contained within this Valuation Report.
1.26 We would advise you that whilst we have valued the
Properties reflecting current market conditions, there are certain risks which
may be, or may become, uninsurable. Before undertaking any financial
transaction based upon this Valuation, you should satisfy yourselves as to the
current insurance cover and the risks that may be involved should an uninsured
loss occur.
Limitations on liability
1.27 Knight Frank LLP's total liability for any direct loss or
damage (whether caused by negligence or breach of contract or otherwise)
arising out of or in connection with this Valuation is limited in accordance
with the terms of the Agreement. Knight Frank LLP accepts no liability for
any indirect or consequential loss or for loss of profits.
1.28 We confirm that we hold adequate and appropriate PII cover
for this instruction.
1.29 No claim arising out of or in connection with this
Valuation may be brought against any member, employee, partner or consultant
of Knight Frank LLP. Those individuals will not have a personal duty of care
to any party and any claim for losses must be brought against Knight Frank
LLP.
1.30 Nothing in this Valuation shall exclude or limit our
liability in respect of fraud or for death or personal injury caused by our
negligence or for any other liability to the extent that such liability may
not be excluded or limited as a matter of law.
Scope of work
Information to be relied upon
1.31 We have relied upon the information previously provided to
us by you, or by third parties in respect of the 31 December 2023 Valuation
and will assume it to be correct for the purposes of the Valuation unless you
inform us otherwise, subject only to any valuation that we have agreed to
undertake.
1.32 Where we express an opinion in respect of (or which depends
upon) legal issues, any such opinion must be verified by your legal advisors
before any Valuation can be relied upon.
1.33 We are instructed to rely on floor areas and tenancy
information provided by the Client. We have not read lease agreements nor
verify accordance between tenancy schedule and lease terms.
1.34 Knight Frank LLP cannot be held liable as regards the legal
description of the Properties, its use, non-compliance with statutory
requirements, technological and natural risks, the areas taken into account,
the existence of concealed defects, presence of asbestos, adverse ground
condition, presence of soil contamination, presence of insects, noxious
animals or plants, rot, or deleterious materials, etc. This Valuation Report
comments on the above on the basis of Technical or Environmental reports, if
provided.
Inspections
1.35 In our ongoing role as External Valuers, we have previously
been instructed to carry out an inspection of the Properties, with all
Properties being inspected externally and some being inspected internally. The
Valuation has been prepared in accordance with our previous inspections of the
Properties. Our inspections of all the Properties have been undertaken within
the last twelve months.
Information Provided
1.36 In this Valuation Report we have been provided with
information by the Client, its advisors and other third parties. We have
relied upon this information as being materially correct in all aspects.
1.37 In the absence of any documents or information provided, we
have had to rely solely upon our own enquiries as outlined in this Valuation
Report.
1.38 We have assumed there to be good and marketable titles to
the Properties. We have made oral enquiries with the Client where appropriate
and have taken account, insofar as we are aware, of unusual outgoings,
planning proposals and onerous restrictions or local authority intentions
which affect the Properties. However, this information has been provided to us
on the basis that it should not be relied upon.
1.39 We have been supplied with details of tenure and tenancies
and have valued on the basis that there are no undisclosed matters which would
affect our valuation.
1.40 We have not undertaken any building surveys or
environmental audits and are therefore unable to report that the Properties
are free of any structural fault, rot, infestation or defects of any other
nature, including inherent weaknesses due to the use in construction of
materials now suspect. No tests were carried out on any of the technical
services. However, we have reflected any apparent wants of repair in our
opinion of value as appropriate.
1.41 The Properties have been valued individually, not as part
of a portfolio.
Assumptions
1.42 We have assumed, except where we have been informed to the
contrary, that there are no adverse ground or soil conditions or environmental
contaminations which would affect the present or future use of the Properties
and that the load bearing qualities of the site of each property are
sufficient to support the buildings constructed or to be constructed thereon.
Special Assumptions
1.43 The Valuation has been undertaken on the special assumption
that the Properties are fully constructed and income producing as at the
Valuation Date. This assumption only relates to the following properties:
Under Construction:
1. Retail Pod at Morrisons Store, Lysander Road, Yeovil
2. Ferry Road, 102 Pilton Drive, Edinburgh, EH5 2XS
3. 2, Greenmarket, Dundee, DD1 4EH
4. Tesco & Home Bargains, Houghton Le Spring
5. Co-op, Horncastle
6. M&S, Largs
7.
Final Payments to be made:
8. Loaning Meadows Retail Park, Berwick Upon Tweed
9. Sainsbury's, 2 Dog Lane, Bewdley, Worcestershire, DY12 2BU
10. Lidl, The Brickyard, High Street, East Ham
1.44 Should the Properties above be treated as developments and
valued using the residual method, the value reported would be significantly
different incorporating outstanding construction costs, finance, developers
profit, fees and tenant incentive packages.
2. Valuation
Methodology
2.1 The Valuation has been undertaken using appropriate
valuation methodology and our professional judgement.
Comparative method
2.2 In undertaking the Valuation, we have made our
assessment on the basis of a collation and analysis of appropriate comparable
transactions, together with evidence of demand within the vicinity of the
subject properties. With the benefit of such transactions we have then
applied these to the Properties, taking into account size, location, aspect
and other material factors.
Investment method
2.3 The Valuation has been carried out using the comparative
and investment methods. In undertaking the Valuation, we have made our
assessment on the basis of a collation and analysis of appropriate comparable
investment and rental transactions, together with evidence of demand within
the vicinity of the subject Properties. With the benefit of such transactions
we have then applied these to the Properties, taking into account size,
location, terms, covenant and other material factors.
Valuation bases
2.4 The basis of value for the Valuation as required by the
Code is Market Value and therefore these valuations have been prepared on a
Market Value basis.
Market Value
2.5 Market Value is defined within RICS Valuation - Global
Standards as:
"The estimated amount for which an asset or liability should exchange on the
valuation date between a willing buyer and a willing seller in an arm's length
transaction after proper marketing and where the parties had each acted
knowledgeably, prudently and without compulsion."
Portfolios
2.6 In a valuation of a property portfolio, we have valued
the individual properties separately and we have assumed that the individual
properties have been marketed in an orderly way.
Market Value
Market Value
2.7 We are of the opinion that the aggregate Market Value of
the freehold, heritable and long leasehold interests in the Properties,
subject to the existing tenancies on the special assumptions highlighted
above, as at the valuation date is:
£3,022,990,000 (Three Billion, Twenty Two Million and Nine Hundred and Ninety
Thousand Pounds).
€161,675,000 (One Hundred and Sixty One Million, Six Hundred and Seventy
Five Thousand Euros).
2.8 The tenure of the Properties held by the Company as at
31 December 2023 comprises the following:
No. of properties Market Value
Freehold 235 £2,411,830,000
Heritable 28 £185,345,000
Long leasehold 83 £425,815,000
Total 346 £3,022,990,000
No. of properties Market Value
Freehold 2 €161,675,000
Long leasehold 0 €0
Total 2 €161,675,000
2.9 There are no negative values to report.
2.10 For the purposes of Rule 29.5 of the Code, we confirm that
in our opinion the current valuation of the Properties as at the date of this
Valuation Report would not be materially different from the valuation of the
Properties as at the valuation date.
2.11 We are not aware, as a result of our role as an External
Valuer of the Properties of any matter which would materially affect the
Market Value of the Properties which is not disclosed in this Valuation Report
(subject to the assumptions set out in this Valuation Report) and we are not
aware of any matter in relation to this Valuation Report that we believe
should be and has not yet been brought to the attention of the Addressees.
2.12 For the purposes of paragraph 130(vi) of the FCA Technical
Note, we consider the differences between the valuation figure in this
Valuation Report and the equivalent figure reported in the Client's latest
published annual or consolidated accounts to be as a result of market
movements.
Responsibility
2.13 For the purposes of the Code, we are responsible for this
Valuation Report and accept responsibility for the information contained in
this Valuation Report and confirm that to the best of our knowledge (having
taken all reasonable care to ensure this is the case), the information
contained in this Valuation Report is in accordance with the facts and
contains no omissions likely to affect its import. This Valuation Report
complies with and is prepared in accordance with, and on the basis of, the
Code. We authorise its contents for the purposes of Rule 29 of the Code.
Knight Frank has given and has not withdrawn its consent to the inclusion of
this Valuation Report in the Rule 2.7 Announcement, the Scheme Document and in
the Combined Prospectus and Circular.
2.14 We accept responsibility (including for the purpose of Rule
5.3.2R(2)(f) of the UK Prospectus Regulation Rules) for the information
contained in this Valuation Report and to the best of our knowledge, the
information contained in this Valuation Report is in accordance with the facts
and the Valuation Report makes no omission likely to affect its import.
Consent
2.15 Knight Frank LLP has given and has not withdrawn its
consent to the inclusion of this Valuation Report in the Rule 2.7
Announcement, the Scheme Document and in the Combined Prospectus and Circular
published by the Client and/or the Offeror in the form and context in which it
is included.
2.16 We consent to the inclusion of the Valuation and this
Valuation Report and any extracts or references thereto in the Combined
Prospectus and Circular or any supplementary prospectus and/or circular (as
the case may be) and the reference to our name in the form and context in
which they are included in the Combined Prospectus and Circular or any
supplementary prospectus and/or circular (as the case may be) (subject to us
first approving the form and context in which our Valuation Report will
appear).
Appendix 1 List of Properties
Tenure Property Address Property reference Date of Inspection
FH Biffa Waste Services 181 14/10/2023
Greenbank Road, East Tullos Industrial Estate
Aberdeen
LH Bombardier Maintenance 91 19/10/2023
Biggin Hill Airport
LH Orbital 7, Orbital Park 127 10/07/2023
Cannock
FH Cazoo Cardiff 225 06/12/2023
232 Penarth Road
Cardiff
LH Customer Centre Carlise 222 07/072023
57a Kingstown Industrial Estate
Carlisle
FH Geddington Road 177 12/12/2023
Land at North East and South West Side of Geddington Rd
Corby
FH GE Cramlington 5 05/08/2023
North Nelson Industrial Estate
Cramlington
FH Unit 11 Merchant Way Wheatley Hall Road 176 20/09/2023
Doncaster
LH Gestamp 134 04/08/2023
Aycliffe Industrial Estate
Durham
FH 22-26 Bankhead Drive 221 12/12/2023
Sighthill
Edinburgh
FH 31 Turnpike Road 30 23/05/2023
Newbury
FH Veolia Poole 130 23/05/2023
Plot 3 Holton Heath Trading Park
Poole
FH Stobart Rotherham 23 06/12/2023
Greaseborough Depot North Drive
Rotherham
FH Cornwall Road 92 10/07/2023
Smethwick
FH Turbine Business Park 27 08/08/2023
Nissan Way
Sunderland
FH Belasis Business Park 28 04/08/2023
10-11 Belasis Business Park Billingham
Teeside
FH Oak Lane 36 10/07/2023
West Bromwich
FH Stobart Widnes 24 02/09/2023
Viking Park
Widnes
FH Andover Business Park 54 19/12/2023
Andover
LH Columbus Quarter 39 19/12/2023
Andover
FH Motorpoint Burnley 14 07/04/2023
Rosegrove Lane
Burnley
FH Travelodge Camborne, Cornwall 15 12/09/2023
Tolvaddon Road
Camborne
FH BT Dundee 226 06/12/2023
2 Greenmarket
Dundee
FH Mears Student Dundee 22 06/12/2023
21 Brown Street
Dundee
FH STV, Pacific Quay 182 12/12/2023
Glasgow
LH Hamilton Health & Racquet Club 218 16/12/2023
Mote Hill
Hamilton
LH PGL Travel 131 23/01/2023
Winmarleigh Hall, Church Lane
Lancaster
FH Kents Hill Training Centre 229 16/08/2023
Milton Keynes
FH Copenhagen Way 55 18/12/2023
Norwich
FH Yarnfield Park Training & Conference Cen 227 06/12/2023
Stone
FH Q Parks, Surrey Street 93 23/05/2023
Croydon
FH Q-Park, Quartermile Car Park 121 02/11/2023
Simpson Loan
Edinburgh
FH Q-Park, Candleriggs Car Park 122 02/11/2023
37 Albion Street
Glasgow
FH Q-Park Tower Bridge Car Park 120 05/12/2023
Gainsford Street
London
LH Q-Park, Piazza Car Park 123 03/05/2023
St James Street
Manchester
FH Q-Park, Waterside Car Park 124 25/02/2023
5 Broad Road
Manchester
FH Q-Park Sheffield 10 07/04/2023
Rockingham Street
Sheffield
LH Q-Park, Riverside Car Park 125 07/04/2023
5 Millsands
Sheffield
LH Kent Street Car Park 219 07/04/2023
Kent Street
York
LH Q-Park, Shambles Car Park 126 07/04/2023
Garden Place
York
FH 9 Bridge Street 33 30/09/2023
Aberdeen
LH Travelodge P039 23/04/2023
A96 Inverurie Road, Bucksburn
Aberdeen
FH Travelodge P109 26/07/2023
Old Swanwick, Colliery Road
Alfreton
FH Travelodge P110 13/04/2023
A27/A29 Fontwell
Arundel Fontwell
LH Travelodge P040 06/06/2023
A303 Westbound
Barton Stacey
LH Travelodge P041 27/11/2023
Festival Leisure Park, Festival Way
Basildon
LH Travelodge P096 30/10/2023
Runwell Road, Wickford
Basildon
FH Travelodge P042 22/04/2023
Stag & Hounds, Winchester Rd
Basingstoke
LH Travelodge P111 07/07/2023
1 York Buildings, George Street
Bath Central
FH Travelodge P043 13/07/2023
A421 Beancroft Rd, Marston Moretaine
Bedford
FH Travelodge P112 11/07/2023
A1 North, Nr. Chawston, Black Cat Roundabout, Wyboston
Bedford
LH Travelodge P098 17/06/2023
Chester Road, Castle Bromwich
Birmingham
FH Travelodge P114 10/08/2023
Moto Service Area, Frankley, M5 Motorway, Illey Lane, Frankl
Birmingham
FH Travelodge P116 10/08/2023
A4123 Wolverhampton Road, Oldbury
Birmingham
FH Travelodge P117 11/07/2023
B4142 Boldmere Rd, Sutton Coldfield
Birmingham
FH Travelodge P113 11/07/2023
230 Broad Street
Birmingham Central
LH Travelodge P094 05/04/2023
Cooper Dean Roundabout
Bournemouth
FH Travelodge P118 06/06/2023
London Road, Binfield
Bracknell
LH Travelodge P044 23/10/2023
Mid Point
Bradford
FH Travelodge P119 27/11/2023
A127 East Horndon, East Horndon
Brentwood
LH Travelodge P045 23/08/2023
First Motorway Services, M5 Service Area, Huntworth Business
Bridgwater
FH 165-167 Preston Road 34 23/05/2023
Brighton
FH Travelodge P046 16/11/2023
Cribbs Causeway
Bristol
LH Travelodge P047 03/07/2023
Moto Service Area, M48 Motorway
Bristol
FH Travelodge P048 23/10/2023
A671/A679, Cavalry Barracks, Barracks Road
Burnley
FH Travelodge P049 13/10/2023
A38 Northbound, Barton-under-Needwood
Burton
FH Travelodge P050 09/08/2023
A38 Southbound, Barton-under-Needwood
Burton
FH Cambridge Belfry Hotel 2 30/10/2023
Back Lane
Cambourne, Cambridge
FH Travelodge P120 30/10/2023
A11 Fourwentways, Abington, Fourwentways
Cambridge
FH Travelodge P121 30/10/2023
Huntingdon Road (A14),Swavesey
Cambridge
FH Travelodge P122 12/06/2023
A299 Thanet Way, Faversham
Canterbury
LH Travelodge P123 28/06/2023
Circle Way East off A48, Llanedeyrn
Cardiff
LH Travelodge P051 15/08/2023
Moto Service Area Southwaite, M6 Motorway, Broadfield Road
Carlisle
LH Travelodge P124 15/08/2023
M6 Southbound, Todhills
Carlisle
LH Travelodge P103 10/07/2023
Warrington Road, Mickle Trafford
Chester
FH Travelodge P052 07/07/2023
A55 Eastbound Expressway, Northop Hall, Mold
Chester Northop Hall
FH Premier Inn Chesterfield 12 26/08/2023
Elder Way
Chesterfield
LH Travelodge P125 01/09/2023
M4 Motorway, Moto Service Area, Leigh Delamere M4 Eastbound
Chippenham
FH Travelodge P126 23/08/2023
Moto Service Area, Leigh Delamere, M4 Motorway M4 Westbound
Chippenham
LH Travelodge P127 01/12/2023
Hare Bushes, A429 Burford Rd
Cirencester
LH Travelodge P097 13/10/2023
Brinklow Road, Binley
Coventry
LH Travelodge P128 12/06/2023
Charles Street, Off Crossways Boulevard
Dartford
LH Travelodge P100 26/07/2023
Nottingham Road, Chaddesden
Derby
FH Travelodge P053 23/10/2023
A1 Great North Road, Carcroft
Doncaster
FH Travelodge P054 18/08/2023
A25 Reigate Road
Dorking
FH Travelodge P055 14/06/2023
A38 Rashwood Hill
Droitwich
LH Travelodge P056 27/04/2023
A82 Stirling Road, Milton
Dumbarton
LH Travelodge P057 07/07/2023
A75, Annan Road, Collin
Dumfries
FH Travelodge South Gyle Broadway 60 02/11/2023
Edinburgh Park
Edinburgh
LH Travelodge P058 02/11/2023
33 St. Mary's Street
Edinburgh Central
FH Travelodge P059 30/10/2023
A10/A142 Roundabout, Witchford Road
Ely
FH Premier Inn Exeter 220 17/11/2023
398 Topsham Road
Exeter
LH Travelodge P060 11/07/2023
Moto Service Area, M5 Motorway, Sandygate
Exeter
LH Travelodge P095 06/06/2023
114 Portsmouth Road
Frimley
LH Travelodge P062 02/11/2023
251 Paisley Road
Glasgow
FH Travelodge P061 02/11/2023
5-11 Hill Street
Glasgow Central
FH High Street 56 03/08/2023
Gosport
LH Travelodge P129 26/07/2023
Great North Road, South Witham
Grantham
FH Travelodge P130 18/12/2023
A47 Roundabout, Acle Bypass
Great Yarmouth
FH Travelodge P063 03/08/2023
A580 Piele Road, Haydock
Haydock
FH Travelodge P131 30/10/2023
M4 Moto service area, J2/J3 Eastbound, North Hyde Lane, Houn
Heathrow
LH Travelodge P132 30/10/2023
Moto Service Area, M4 Motorway, Phoenix Way, Heston, Hounslo Westbound
Heathrow
FH Travelodge P064 05/06/2023
A22 Boship Farm Roundabout
Hellingly Eastbourne
LH Travelodge P065 26/04/2023
A63 Eastbound, Beacon Service Area
Hull
LH Travelodge P066 03/08/2023
A14 Eastbound
Huntingdon Fenstanton
FH Travelodge P133 11/07/2023
A303, Southfield Roundabout, Horton Cross
Ilminster
LH Travelodge P134 22/04/2023
Stonyfield, A96 Inverness Road
Inverness
FH Travelodge P067 07/07/2023
Junction 13, A14 Eastbound, Thrapston
Kettering
FH Travelodge P068 03/07/2023
M90 Junction 6
Kinross
FH Travelodge P069 16/06/2023
Moto Service Area, M6 Motorway, Northbound J32/33, White Car
Lancaster
LH Travelodge P106 09/08/2023
Bruntcliffe Road, Morley
Leeds
LH Travelodge P135 09/08/2023
Blayd's Court, Blayds Yard
Leeds Central
LH Travelodge P099 13/07/2023
Hinckley Road
Leicester
FH Travelodge P136 14/11/2023
A46, Newark / Lincoln Road, Thorpe on the Hill
Lincoln
LH 25 Old Haymarket 35 23/12/2023
Liverpool
LH Travelodge P104 10/07/2023
Aigburth Road, Aigburth
Liverpool
FH Travelodge P137 10/07/2023
Brunswick Dock, Sefton Street
Liverpool Docks
FH A48, Cross Hands 31 07/08/2023
Llanelli
LH Travelodge P138 27/11/2023
A40 Western Avenue, Acton
London Park Royal
FH Travelodge P139 27/11/2023
Epsom Road, Morden
London Wimbledon
FH Travelodge P070 14/04/2023
Station Road, Woofferton
Ludlow
FH Travelodge P140 07/08/2023
London Road, South Adlington, Macclesfield
Macclesfield
FH Travelodge P071 09/08/2023
11 Blackfriars Street, Salford
Manchester Central
FH Travelodge P141 12/06/2023
M2 Motorway, Moto Service Area, Rainham, Gillingham
Medway
FH Travelodge Melksham 8 23/05/2023
Commerce Way
Melksham
FH Premier Inn Middlesbrough 1 04/08/2023
Wilson Street
Middlesborough
FH Travelodge P142 07/08/2023
Holmes Chapel Rd
Middlewich
FH Travelodge P143 12/07/2023
A5 Old Stratford Roundabout, Old Stratford
Milton Keynes
FH Travelodge P072 12/07/2023
199 Grafton Gate
Milton Keynes Central
FH Travelodge P073 06/06/2023
Tot Hill Services, A34 Newbury Bypass
Newbury
FH Travelodge P074 13/07/2023
A45, Upton Way
Northampton
LH Travelodge P075 26/07/2023
Moto Service Area, M1 J.23a, EM Airport Donington Park M1
Nottingham
FH Travelodge P076 09/08/2023
Riverside Retail Park, Tottle Road
Nottingham
LH Travelodge P101 09/08/2023
Derby Road, Wollaton Vale
Nottingham
FH A444 Southbound, Bedworth 32 04/08/2023
Nuneaton
FH Travelodge P077 12/07/2023
St Nicolas Park Dr
Nuneaton
FH Travelodge P144 29/05/2023
A5/A483, Mile End Service Area
Oswestry
FH Travelodge P078 14/06/2023
Moto Service Area, Peartree Roundabout, Woodstock Road
Oxford
FH Travelodge P079 14/06/2023
London Road, Wheatley
Oxford
LH Travelodge P108 03/07/2023
Crieff Road
Perth
LH Travelodge P080 07/07/2023
Crowlands Road, Eye Green
Peterborough
FH Travelodge P145 07/07/2023
A1 Southbound, Alwalton
Peterborough
FH Jurys Inn 61 23/05/2023
50 Exeter Street
Plymouth
LH Travelodge P092 11/07/2023
Derriford Road, Derriford
Plymouth
LH Travelodge P093 11/07/2023
Tavistock Road, Roborough
Plymouth
FH Travelodge P146 23/10/2023
Moto Service Area, Ferrybridge, A1/M62 Junction
Pontefract
FH Premier Inn 141-2 14/06/2023
Porthmadog
LH Travelodge P147 01/12/2023
472 Preston Rd, Clayton-le-Woods, Chorley
Preston
LH Travelodge P081 06/06/2023
387 Basingstoke Rd, Whitley
Reading
LH Travelodge P149 06/06/2023
Moto Service Area, M4 Motorway, Burghfield M4 Eastbound
Reading
FH Travelodge P150 06/06/2023
Moto Service Area, M4 Motorway, Burghfield M4 Westbound
Reading
FH Travelodge P148 11/09/2023
60 Oxford Road
Reading Central
FH Travelodge P082 04/08/2023
A1 Northbound, Markham Moor
Retford
LH Premier Inn Romford 137 19/10/2023
25-29 Market Place
Romford
FH Travelodge P083 12/07/2023
Western Springs Rd
Rugeley
FH Travelodge P084 11/07/2023
Callington Rd
Saltash
FH Travelodge, Discovery Park 135 29/05/2023
Sandwich
LH Travelodge P085 29/05/2023
A5 / A49 Roundabout, Bayston Hill Services
Shrewsbury
FH Travelodge P086 06/06/2023
144 Lodge Road
Southampton
FH Travelodge P151 06/06/2023
Ham Farm, Twyford Road, Eastleigh
Southampton
LH Travelodge P152 03/08/2023
Moto Service Area, M6 Motorway Northbound, Eccleshall Road,
Stafford
LH Travelodge P153 07/06/2023
Moto Service Area, Pirnhall
Stirling
LH Travelodge P102 03/08/2023
Longton Road
Stoke on Trent
FH Travelodge P154 30/10/2023
Newcastle Road, Talke
Stoke-on-Trent
LH Travelodge P155 01/12/2023
Eastington, Nr. Stroud
Stonehouse
LH Travelodge P156 03/08/2023
Oversley Mill, Alcester
Stratford
LH Travelodge P157 30/06/2023
Moto Service Area, M4 Motorway, Penllergaer
Swansea
FH Travelodge Swindon 9 23/05/2023
Barnfield Close
Swindon
FH Travelodge P158 17/06/2023
Whitchurch Dr
Telford
FH Travelodge P087 08/07/2023
Sampford Peverell Service Area, M5 Motorway, Sampford Pevere
Tiverton
FH Travelodge P159 12/07/2023
A43 Towcester Bypass
Towcester
FH Travelodge P088 07/07/2023
A36/A350 Bypass, Service Area, Bath Rd
Warminster
FH Travelodge P089 03/08/2023
Kendrick St
Warrington
LH Travelodge P105 09/08/2023
Newton Road, Lowton
Warrington
LH Premier Inn Whitley Bay 13 21/11/2023
Spanish City Promenade
Whitley Bay
FH Travelodge P160 07/07/2023
Fiddlers Ferry Rd
Widnes
FH Travelodge P115 07/07/2023
Moto Service Area, M6 Motorway, Essington
Wolverhampton
FH Travelodge Workington 119 19/10/2023
William Street
Workington
FH Premier Inn 139 26/08/2023
Worksop
FH Travelodge P090 26/07/2023
St Annes Dr
Worksop
FH Travelodge P091 07/07/2023
A303 Roundabout, Podimore Services
Yeovil
LH Travelodge P107 10/06/2023
Hull Road
York
FH Travelodge P161 21/11/2023
A64 Eastbound, Bilbrough, Steeton
York
LH Apple Mews 1 16 24/11/2023
95 Cathedral Road
Armagh
LH Apple Mews 2 25 24/11/2023
95 Cathedral Road
Armagh
FH Ramsay Yorkshire Clinic P030 02/08/2023
Bradford Road
Bingley
FH 12 Oakfield Road AL46 20/12/2023
Birmingham
FH Sutton House AL2 08/12/2023
Dick Lane
Bradford
FH 31 Druid Stoke Avenue 57 21/12/2023
Bristol
FH Ramsay Springfield Hospital P027 07/09/2023
Lawn Lane
Chelmsford
FH 213 Harwich Road AL48 02/01/2023
Colchester
FH Ramsay Oaks Hospital P024 07/09/2023
Oaks Place, 120 Mile End Road
Colchester
FH Jacame AL4 21/12/2023
Bath Road
Eastington
FH 26 Ambleside Crescent AL51 06/01/2023
Enfield
FH Ramsay West Midlands Hospital P028 10/07/2023
Colman Hill
Halesowen
FH Ramsay Pinehill Hospitals P025 28/04/2023
Benslow Lane
Hitchin
FH 20 Mount Vernon AL36 07/12/2023
Hull
FH Ramsay Woodland Hospital P029 05/09/2023
Rothwell Road
Kettering
FH 18C Rosebery Avenue AL13 13/12/2023
Kings Lynn
FH 20 Checker Street AL14 13/12/2023
Kings Lynn
LH 25 Wootton Road AL10 13/12/2023
Kings Lynn
FH 63 Kensington Road AL12 12/12/2023
Kings Lynn
FH 78 Wootton Road AL11 13/12/2023
Kings Lynn
FH Atkinson Court Care Home 7 08/12/2023
Ings Road Cross Green
Leeds
FH Florence Nightingale Hospital P031 25/07/2023
11-19 Lisson Grove
London
FH Edenmore Care Home 17 24/11/2023
646 Shore Road
Newtownabbey
FH 37 Manor Road AL30 21/12/2023
Pawlett
FH Ramsay Fitzwilliam Hospital P021 03/08/2023
Milton Way, South Bretton
Peterborough
FH Ramsay Fulwood Hospital P022 17/08/2023
Midgery Lane, Fulwood
Preston
FH 85 Holmesdale Road AL32 12/12/2023
Reigate
FH Ramsay Oaklands Hospital P023 17/08/2023
19 Lancaster Road
Salford
FH Ramsay Rivers Hospital (includes Gardens P026 24/06/2023
High Wych Road
Sawbridgeworth
FH Prime Life Phoenix 21 07/11/2023
Phoenix Park Care Village, Phoenix Avenue
Scunthorpe
FH The Priory Care Home 128 20/12/2023
1 Shelley Crescent, Monkspath, Shirley
Solihull
FH 3 Farm Way AL38 12/12/2023
Southwick
FH Ramsay Duchy Hospital P020 16/06/2023
Pentenvinnie Lane
Truro
FH 43 Grosvenor Road AL60 06/01/2023
Watford
FH 77 Queens Road AL56 06/01/2023
Watford
FH 77A Queens Road AL57 06/01/2023
Watford
FH 79 Queens Road AL59 06/01/2023
Watford
FH 79A Queens Road AL58 06/01/2023
Watford
FH 13 Grove Park Road AL40 21/12/2023
Weston-super-Mare
FH 17 Ashfield Road 185 08/12/2023
Shipley
Bradford
FH Woodlands Park Drive 184 08/12/2023
Apperley Bridge
Bradford
FH 73-75 Birchwood Road 186 20/12/2023
Brislington
Bristol
FH 116 Fairfield Road 187 26/09/2023
Widnes
Cheshire
FH Smith House 188 26/09/2023
Stanney Lane Chester
Cheshire
FH 124 Hadfield Road 189 26/09/2023
Derbyshire
FH 65 Bawtry Road 190 07/12/2023
Bessacarr
Doncaster
FH 70 High Street 191 07/12/2023
Hatfield
Doncaster
FH Abbotsford House 192 28/12/2023
15 Kent Road
Harrogate
FH 116 Sharoe Green Lane 195 29/09/2023
Fulwood Preston
Lancashire
FH 119 Heapey Road 194 26/09/2023
Chorley
Lancashire
FH Longsands Lane 193 29/09/2023
Preston
Lancashire
FH 437 Street Lane 199 28/12/2023
Leeds
FH 469 Otley Road 197 28/12/2023
Adel
Leeds
FH 48 Nursery Lane 198 28/12/2023
Alwoodley
Leeds
FH 60 North Park Avenue 196 28/12/2023
Leeds
FH 68 Leigh Road 200 19/12/2023
Atherton
Manchester
FH 1 Hartwith Way 201 28/09/2023
Harrogate
North Yorkshire
FH 83 Broad Road 202 19/12/2023
Sale
FH 63a Scarisbrick New Road 203 19/12/2023
Southport
FH 3 Simplemarsh Road 234 15/12/2023
Addlestone
Surrey
FH Cross Road, Idle 204 18/09/2023
Bradford
West Yorkshire
FH 20 Kingsmead Road 205 19/12/2023
North Prenton
Wirral
FH 97 Eleanor Road 206 19/12/2023
Bidston
Wirral
FH Alton Towers Hotel P032 01/09/2023
Wootton Lane
Alton
FH Alton Towers Park P033 01/09/2023
Wootton Lane
Alton
FH Thorpe Park P035 14/07/2023
Egham
FH Thorpe Park Hotel Site P036 14/07/2023
Egham
FH Warwick Castle P034 28/12/2023
Warwick
LH Manchester Arena P019 03/05/2023
Manchester
LH Barry Penny Lane 40 15/12/2023
Barry
LH Squires Gate 52 12/12/2023
Blackpool
LH Norman Road 210 29/09/2023
Bradford
LH Buntsford Park Road 211 10/07/2023
Bromsgrove
LH Canvey Island 42 19/10/2023
Northwich Road
Canvey Island
LH Sports Village 47 15/12/2023
Cardiff
LH Parc Pensam 43 15/12/2023
Carmathan
LH 1 Afton Way 138 06/12/2023
Dundee
LH Ferry Road 243 06/12/2023
102 Pilton Drive,
Edinburgh
LH Queen Katherines Avenue 233 12/12/2023
Kendal
LH Goose Street 46 06/12/2023
Newcastle Under Lyme
LH Kettering Road 48 19/05/2023
Northampton
LH Victoria Parkway 99 06/12/2023
Nottingham
LH Smithfield Park 212 10/12/2023
Oswestry
LH Lincoln Road 49 14/11/2023
Peterborough
LH Riversway 50 14/05/2023
Preston
LH Warwick Highway 45 20/12/2023
Redditch
LH Lakeside Parkway 213 04/09/2023
Scunthorpe
LH Teeside Retail Park 214 15/10/2023
Newmarket Avenue Thornby
Stockton-on-Tees
LH Ridgway Drive 51 06/12/2023
Stoke
LH Wallows Lane 215 10/07/2023
Walsall
LH Lysander Road 216 13/12/2023
Yeovil
FH Co-op Service Station Aston 207 14/06/2023
Worksop Road
Aston
FH Aldi Berwick Upon Tweed 142 11/12/2023
Berwick Upon Tweed
FH Co-op Bicester 171 28/12/2023
Bure Park
Bicester
FH Co-op Blackpool 156 12/12/2023
Thornton Centre
Blackpool
FH Aldi, Scott Works 11 09/09/2023
Clayton Road
Bradford
FH Bradford Victoria Shopping Centre 160 09/09/2023
Bradford
FH Currock Road 63 30/12/2023
Carlisle
LH Asda - Clydebank 170 12/12/2023
31 Britannia Way
Clydebank
FH Co-op Coalville 173 10/07/2023
99a Midland Road, Ellistown
Coalville
FH North End Retail Park 29 06/12/2023
High Street
Cowdenbeath
FH Lidl East Ham 175 19/10/2023
The Brickyard, High Street / Barking Road
East Ham
FH St Hilary Retail Park 231 19/10/2023
Basildon
Essex
FH Sinclair Retail Park 38 20/12/2023
Evesham
FH Co-op Glasgow 143 12/12/2023
63 Cumbernauld Road
Glasgow
FH Junction 24 Retail Park 1511 12/12/2023
Helen Street
Glasgow
FH Asda Halesown 230 10/07/2023
Halesown
FH Newbottle Street Retail Park 241 18/03/2023
Newbottle Street
Houghton Le Spring
FH M&S 244 12/12/2023
Largs
FH Co-op Hornscastle 242 06/12/2023
Lincolnshire
FH New Berwyn Works 178 15/12/2023
Berwyn Road
Llangollen
FH Tesco Welling 174 27/07/2023
Welling High St
London
LH Aldi 140 13/12/2023
Clifton Drive North
Lytham St Annes
FH Sainsburys 180 12/12/2023
Gateway Retail Park, Cargo Fleet Road Middlehaven
Middlesborough
FH Co-op Service Station New Cottsey 208 18/12/2023
Wayside Service Station Dereham Road
Norwich
FH Co-op Pontypridd 144 04/05/2023
Penrhiwfer Rd
Pontypridd
FH Lidl Portsmouth 150 03/05/2023
73 London Rd Cosham
Portsmouth
FH Co-op Sandbach 145 08/07/2023
Lawton Way Elworth
Sandbach
FH Co-op Southport 149 25/02/2023
Station Rd Ainsdale
Southport
FH Waitrose Poynton 151 08/07/2023
89 Park Lane Poynton
Stockport
FH Co-op Swindon 172 13/12/2023
Taw Hill Village Centre
Swindon
FH Co-op Wallasey 146 08/07/2023
83-85 Wallasey Village
Wallasey
FH Co-op Service Station Washington 209 18/12/2023
Washington
FH Lidl West Bridgford 152 06/12/2023
West Bridgford
FH Sainsbury's Dog Lane 217 10/07/2023
Bewdley
Worcestershire
FH Co-op Wrexham 147 15/12/2023
Borras Park Rd
Wrexham
FH Dobbies Garden Centre 179 13/12/2023
Haresfield
Gloucester
FH Dobbies Garden Centre Pennine 114 22/12/2023
Shelley
Huddersfield
FH Dobbies Garden Centre Morpeth 64 05/08/2023
Heighley Gate
Morpeth
FH Dobbies Reading 240 13/12/2023
Hyde End Road, Shinfield,
Reading
FH York Biotech Campus 183 06/12/2023
York
FH Yates's P010 26/12/2023
36 Bradshawgate
Bolton
FH The Calder P013 23/04/2023
Huddersfield Road
Brighouse
FH Griffin Inn 104 23/11/2023
184 Warrington Road
Cheshire
FH Shrewsbury Arms 105 23/11/2023
38 Claughton Firs Prenton
Cheshire
FH Unicorn 106 07/08/2023
Adlington Road
Cheshire
FH Brinkburn 108 27/12/2023
Lady Kathryn Grove
County Durham
FH The Blagdon Arms P016 04/08/2023
Village Square
Cramlington
FH The Grey Horse P015 04/08/2023
Front Street
East Boldon
FH Slug and Lettuce P003 25/04/2023
9-11 East Street
Farnham
FH The Abbey P005 13/12/2023
53 Northgate Street
Gloucester
FH Spread Eagle Hotel 116 26/12/2023
Hatherlow
FH Slug and Lettuce P012 23/04/2023
40-44 King Street
Huddersfield
FH The Exchequer P017 26/12/2023
60-64 High Street
Kirkcaldy
FH Old Leyland Gates 102 26/12/2023
Golden Hill Lane
Leyland
FH The William Foster P008 06/12/2023
Guildhall Street
Lincoln
FH The William Gladstone P009 27/04/2023
18-20 North John Street
Liverpool
FH The Brewery P018 27/04/2023
52 Chiswell St
London
FH The Occassional Half P004 25/04/2023
66 - 77 Green Lanes
London
FH The Blue Bell Hotel P014 18/12/2023
Acklam Road
Middlesborough
FH Norman Conquest 109 27/12/2023
Flatts Lane
Middlesbrough
FH Britannia 112 06/12/2023
Bradwell Lane
Newcastle Under Lyne
FH County Hotel 110 27/12/2023
High Street
Newcastle Upon Tyne
FH Duke of Wellington 111 27/12/2023
Kenton Lane
Newcastle Upon Tyne
FH Faradays P007 06/12/2023
44 Pelham Street
Nottingham
FH Yates's P011 26/12/2023
144-146 Church Street
Preston
FH The Bedford Arms P002 25/04/2023
23 Bedford Place
Southampton
FH The Scarlet Tap P001 25/04/2023
80-82 Palmerston Road
Southsea
FH Bulls Head 103 26/12/2023
341 London Road
Stockport
FH The Bridgewater 107 26/12/2023
23 Barton Road
Wardley
FH Church View Inn 117 23/11/2023
38 Lunts Heath Road
Widnes
FH Hog's Head P006 10/07/2023
186 Stafford Street
Wolverhampton
FH Pear and Partridge 113 10/07/2023
The Parkway
Wolverhampton
FH Heide Park P038 26/06/2023
Soltau
Germany
FH Heide Park Hotel P037 26/06/2023
Soltau
Germany
Appendix 5
dEFINITIONS
The following definitions apply throughout this Announcement unless the
context requires otherwise:
"Admission" admission of the New LondonMetric Shares to be issued pursuant to the Merger
to the premium listing segment of the Official List and to trading on the Main
Market;
"AIFMD" the European Union's Alternative Investment Fund Managers directive (No.
2071/61/EU) and all legislation made pursuant thereto, including, where
applicable, the applicable implementing legislation and regulations in each
member state of the European Union;
"AlTi" AlTi Global Inc.;
"AlTi RE" AlTi RE Public Markets Limited;
"Amended LXi Articles" the articles of association of LXi, as amended to include a new article under
which (i) any LXi Shares issued or transferred after the Scheme Voting Record
Time (other than to LondonMetric and/or its nominees) shall be automatically
transferred to LondonMetric (and, where applicable, for consideration to be
paid to the transferee or to the original recipient of the LXi Shares so
transferred or issued) on the same terms as the Merger (other than terms as to
timings and formalities) and (ii) immediately prior to the Scheme becoming
Effective, LXi will cease to be able to raise capital from a number of
investors and will only be able to raise capital from its sole shareholder (or
its nominee), such proposed amendment to be set out in full in the notice of
the LXi General Meeting;
"Announcement" this Announcement made pursuant to Rule 2.7 of the Takeover Code;
"Authorisations" authorisations, orders, grants, recognitions, determinations, certificates,
confirmations, consents, licences, clearances, permissions and approvals;
"Business Day" a day (other than Saturdays, Sundays and public holidays in the UK) on which
banks are generally open for normal business in the City of London;
"CBRE" CBRE Limited (a private limited company incorporated in England and Wales with
registered number 03536032) whose registered office is at Henrietta House,
Henrietta Place, London, England, W1G 0NB;
"Closing Price" the closing middle market quotation of a share derived from the Daily Official
List on any particular date;
"Combined Circular and Prospectus" the combined circular and prospectus to be published by LondonMetric and to be
sent to LondonMetric Shareholders outlining, amongst other things, the Merger
and containing the notice convening the LondonMetric General Meeting and
information on LondonMetric, the Combined Group and the New LondonMetric
Shares;
"Combined Group" the LondonMetric Group as enlarged by the LXi Group following completion of
the Merger;
"Companies Act" the Companies Act 2006 (as amended from time to time);
"Conditions" the conditions of the Merger set out in Appendix 1 to this Announcement and to
be set out in full in the Scheme Document;
"Confidentiality Agreement" the confidentiality agreement dated 22 November 2023 between (1) LondonMetric
and (2) LXi;
"Court" the High Court of Justice in England and Wales;
"Court Hearing" the Court hearing at which LXi will seek an order sanctioning the Scheme;
"Court Meeting" the meeting or meetings of the Scheme Shareholders to be convened pursuant to
section 896 of the Companies Act for the purpose of considering and, if
thought fit, approving the Scheme (with or without amendment approved or
imposed by the Court and agreed to by LondonMetric and LXi), including any
adjournment or postponement of any such meeting, notice of which shall be
contained in the Scheme Document;
"Court Order" the order of the Court sanctioning the Scheme under section 899 of the
Companies Act;
"CREST" the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear;
"Daily Official List" the Daily Official List published by the London Stock Exchange;
"Dealing Disclosure" an announcement pursuant to Rule 8 of the Takeover Code containing details of
dealings in interests in relevant securities of a party to an offer;
"Disclosed" in respect of LondonMetric: the information disclosed (A) fairly in writing to
LXi (or its respective officers, employees, agents or advisers in their
capacity as such) prior to the date of this Announcement by, or on behalf of,
LondonMetric, including in the virtual data room, prior to 6.00 p.m. on the
Latest Practicable Date, operated on behalf of LondonMetric and which LXi and
its advisers are able to access in respect of the Merger; (B) to LXi or LXi's
advisers by, or on behalf of, the LondonMetric Group via management meetings
held in connection with the Merger; (C) in the annual report and accounts of
the LondonMetric Group for the financial year ended 31 March 2023; (D) in the
interim report and results of the LondonMetric Group for the six-month period
ended on 30 September 2023; (E) in this Announcement; and/or (F) in any other
announcement made by, or on behalf of, LondonMetric via a Regulatory
Information Service before the publication of this Announcement;
in respect of LXi: the information disclosed (A) fairly in writing to
LondonMetric (or their respective officers, employees, agents or advisers in
their capacity as such) prior to the date of this Announcement by, or on
behalf of, LXi, including in the virtual data room, prior to 6.00 p.m. on the
Latest Practicable Date, operated on behalf of LXi and which LondonMetric and
its advisers are able to access in respect of the Merger, (B) to LondonMetric
or LondonMetric's advisers by, or on behalf of, the LXi Group via management
meetings held in connection with the Merger; (C) in the annual report and
accounts of the LXi Group for the financial year ended 31 March 2023; (D) in
the interim report and results of the LXi Group for the six-month period ended
on 30 September 2023; (E) in this Announcement; and/or (F) in any other
announcement made by, or on behalf of, LXi via a Regulatory Information
Service before the publication of this Announcement;
"Disclosure Guidance and Transparency Rules" the disclosure guidance and transparency rules made by the FCA under Part VI
of FSMA;
"EBITDA" earnings before interest, tax, depreciation, and amortisation;
"Effective" either:
1. if the Merger is implemented by way of the Scheme, the
Scheme having become effective in accordance with its terms; or
2. if LondonMetric elects to implement the Merger by way of a
Takeover Offer (with Panel consent), such Takeover Offer having been declared
or having become unconditional in accordance with the requirements of the
Takeover Code;
"Effective Date" the date on which the Merger becomes Effective;
"EPRA" European Public Real Estate Association;
"EPRA NTA" or "NTA" a measure of net asset value designed by EPRA to present the fair value of a
company on a long term basis, as defined in the EPRA Guidance;
"Euroclear" Euroclear UK & International Limited;
"European Union" the economic and political confederation of European nations which share a
common foreign and security policy and co-operate on justice and home affairs
known as the European Union;
"Excluded Shares" any LXi Shares which are: (i) registered in the name of, or beneficially owned
by, LondonMetric or any other member of the LondonMetric Group or any of their
respective nominees; or (ii) held as treasury shares (unless such LXi Shares
cease to be so held), in each case at any relevant time;
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority acting in its capacity as the competent
authority for the purposes of Part VI of FSMA, or any successor regulatory
body;
"Forms of Proxy" the forms of proxy in connection with each of the Court Meeting and the LXi
General Meeting which will accompany the Scheme Document;
"FRI" fully repairing and insuring;
"FSMA" the Financial Services and Markets Act 2000, as amended from time to time;
"Heads of Terms" the heads of terms dated 9 January 2024 between (1) LondonMetric, (2) AlTi RE
and (3) AlTi;
"ICR" interest coverage ratio;
"IFRS" International Financial Reporting Standards;
"ISIN" International Securities Identification Number;
"Knight Frank" Knight Frank LLP, which is registered in England and Wales (registered number
OC305934);
"Latest Practicable Date" 10 January 2024;
"Listing Rules" the rules and regulations made by the FCA under FSMA and contained in the
publication of the same name, as amended from time to time;
"Lock-in Commitment" the lock-in arrangements provided by Nick Leslau pursuant to which he has
agreed that, subject to certain customary exceptions, during the period of 12
months following the Effective Date, he and certain associated entities will
not offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, 39,591,092 New LondonMetric Shares (or any interest therein or in
respect thereof) issued on completion of the Merger or enter into any
transaction with the same economic effect as any of the foregoing;
"London Stock Exchange" London Stock Exchange plc;
"LondonMetric" LondonMetric Property plc, a public company limited by shares incorporated in
England and Wales with registered number 07124797 and which has its registered
office at 1 Curzon Street, London, England, W1J 5HB;
"LondonMetric Directors" the directors of LondonMetric at the date of this Announcement or, where the
context so requires, the directors of LondonMetric from time to time;
"LondonMetric General Meeting" the general meeting of LondonMetric to be convened by the LondonMetric Board
and currently expected to be held in February 2024;
"LondonMetric Group" LondonMetric and its subsidiaries and subsidiary undertakings from time to
time and, where the context permits, each of them;
"LondonMetric Permitted Dividend" any dividend satisfying the criteria of a "LondonMetric Permitted Dividend" in
paragraph 9 of this Announcement;
"LondonMetric Resolution" the shareholder resolution to be proposed at the LondonMetric General Meeting
to approve the Merger and the authority to allot the New LondonMetric
Shares;
"LondonMetric Shares" the ordinary shares of 10 pence each in the share capital of LondonMetric and
each being a "LondonMetric Share";
"LondonMetric Shareholders" the holders of LondonMetric Shares from time to time;
"Long-stop Date" 11 July 2024 or such later date (if any) as LondonMetric and LXi may (with the
consent of the Panel) agree and (if required) the Court may allow;
"LRA" LXi REIT Advisors Limited;
"LTV" loan to value;
"LXi" LXi REIT plc, a public company limited by shares incorporated in England and
Wales with registered number 10535081 and which has its registered office at
8th Floor 100 Bishopsgate, London, United Kingdom, EC2N 4AG;
"LXi Directors" the directors of LXi at the date of this Announcement or, where the context so
requires, the directors of LXi from time to time;
"LXi General Meeting" the general meeting of LXi Shareholders (including any adjournment or
postponement, thereof) to be convened for the purposes of seeking approval of
the LXi Resolutions (with or without amendment);
"LXi Group" LXi and its subsidiaries and subsidiary undertakings from time to time and,
where the context permits, each of them;
"LXi Meetings" the LXi General Meeting and the Court Meeting;
"LXi Permitted Dividend" any dividend satisfying the criteria of a "LXi Permitted Dividend" in
paragraph 9 of this Announcement;
"LXi Resolution" the resolution to be proposed at the LXi General Meeting necessary to approve
and implement the Scheme, including a resolution authorising the LXi Directors
to take all actions as they may consider necessary or appropriate to give
effect to the Scheme, a resolution to approve the Amended LXi Articles and a
resolution re-registering LXi as a private limited company;
"LXi Shareholders" the holders of LXi Shares from time to time;
"LXi Shares" ordinary shares of one penny each in the capital of LXi and each being a "LXi
Share".
"Main Market" the London Stock Exchange's main market for listed securities;
"Market Abuse Regulation" or "MAR" the UK version of EU Regulation No. 596/2014, which has effect in English law
by virtue of the European Union (Withdrawal) Act 2018, as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019;
"Merger" the proposed acquisition by LondonMetric of the entire issued and to be issued
ordinary share capital of LXi (other than the Excluded Shares), to be
implemented by means of the Scheme (or, should LondonMetric so elect, with the
consent of the Panel, by way of a Takeover Offer) and, where the context
requires, any subsequent revision, variation, extension or renewal thereof;
"New LondonMetric Shares" the LondonMetric Shares proposed to be allotted and issued to Scheme
Shareholders in connection with the Scheme;
"Offer Period" the offer period (as defined by the Takeover Code) relating to LXi, which
commenced on 18 December 2023 and ending on the earlier of the Effective Date
and/or the date on which it is announced that the Scheme has lapsed or been
withdrawn (or such other date as the Code may provide or the Takeover Panel
may decide);
"Official List" the Official List of the FCA;
"Opening Position Disclosure" has the same meaning as in Rule 8 of the Takeover Code;
"Overseas Shareholders" LXi Shareholders (or nominees of, or custodians or trustees for, LXi
Shareholders) not resident in, or nationals or citizens of, the United
Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"PRIIPs" Regulation (EU) No 1286/2014 of the European Parliament and of the Council of
26 November 2014 on key information documents for packaged retail and
insurance-based investment products, together with its implementing and
delegated acts, as they form part of the domestic law of the United Kingdom by
virtue of the European Union (Withdrawal) Act 2018;
"Regulatory Information Service" any information service authorised from time to time by the FCA for the
purpose of disseminating regulatory announcements;
"Restricted Jurisdiction" any jurisdiction into which, or from which, making the Merger, or any
information relating to the Merger, available would violate the local laws or
regulations of that jurisdiction resulting in a significant risk of civil,
regulatory or criminal exposure;
"Rolled-Forward Unaudited EPRA NTA" the rolled-forward unaudited EPRA NTA of LondonMetric and/or LXi (as
applicable) as at 31 December 2023 as more specifically shown in paragraphs 10
and 11 respectively of Appendix 2 to this Announcement;
"Savills" Savills Advisory Services Limited (a private limited company incorporated in
England and Wales with registered number 06215875) whose registered office is
at 33 Margaret Street, London, W1G 0JD;
"Scheme" the proposed scheme of arrangement under Part 26 of the Companies Act between
LXi and Scheme Shareholders to implement the Merger, with or subject to any
modification, addition or condition approved or imposed by the Court and
agreed by LXi and LondonMetric;
"Scheme Document" the document to be sent to LXi Shareholders containing, amongst other things,
the notices convening the Court Meeting and the LXi General Meeting and the
particulars required by section 897 of the Companies Act;
"Scheme Record Time" the time and date specified as such in the Scheme Document by reference to
which the entitlements of Scheme Shareholders under the Scheme will be
determined, expected to be 6.00 p.m. on the Business Day immediately after the
date of the Court Hearing, or such later time as LXi and LondonMetric may
agree;
"Scheme Shareholder" a holder of Scheme Shares from time to time;
"Scheme Shares" all LXi Shares:
(i) in issue at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document and
before the Scheme Voting Record Time; and
(iii) (if any) issued at or after the Scheme Voting Record Time
but on or before the Scheme Record Time either on terms that the original or
any subsequent holders thereof are bound by the Scheme or in respect of which
such holders are, or shall have agreed in writing to be, so bound by the
Scheme,
in each case which remain in issue at the Scheme Record Time and excluding any
Excluded Shares;
"Scheme Voting Record Time" the date and time specified as such in the Scheme Document by reference to
which entitlement to vote at the Court Meeting will be determined;
"SEC" the United States Securities and Exchange Commission;
"Significant Interest" a direct or indirect interest in 20 per cent. or more of the total voting
equity share capital of an undertaking (or the equivalent);
"Takeover Code" the City Code on Takeovers and Mergers, as issued from time to time by or on
behalf of the Panel;
"Takeover Offer" if (with the consent of the Panel, as applicable) LondonMetric elects to
implement the Merger by way of a takeover offer as defined in Chapter 3 of
Part 28 of the Companies Act, the offer to be made by or on behalf of
LondonMetric to acquire the entire issued and to be issued ordinary share
capital of LXi including, where the context admits, any subsequent revision,
variation, extension or renewal of such offer;
"Third Party" each of a central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative or
investigative body, court, trade agency, association, institution, any entity
owned or controlled by any relevant government or state, or any other body or
person whatsoever in any jurisdiction;
"TUPE" the Transfer of Undertakings (Protection of Employment) Regulations 2006;
"UK REIT" a UK real estate investment trust under Part 12 of the Corporation Tax Act
2010;
"Undisturbed Closing Price" the Closing Price of the relevant shares on 15 December 2023;
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland;
"United Nations" the international organisation founded in 1945 with 193 member states;
"United States" or "US" the United States of America, its territories and possessions, any State of
the United States of America, and the District of Columbia;
"US Exchange Act" the United States Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder;
"US Securities Act" the United States Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder;
"WAULT" weighted average unexpired lease term;
"Wider LXi Group" LXi, its subsidiary undertakings and associated undertakings (including any
joint venture, partnership, firm or company) in which LXi and/or such
undertakings (aggregating their interests) have a Significant Interest; and
"Wider LondonMetric Group" LondonMetric, its subsidiary undertakings and associated undertakings
(including any joint venture, partnership, firm or company) in which
LondonMetric and/or such undertakings (aggregating their interests) have a
Significant Interest.
In this Announcement, "subsidiary", "subsidiary undertaking", "undertaking"
and "associated undertaking" and "equity share capital" have the respective
meanings given thereto by the Companies Act.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.
A reference to "includes" shall mean "includes without limitation", and
references to "including" and any other similar term shall be construed
accordingly.
All references to a statutory provision or law or to any order or regulation
shall be construed as a reference to that provision, law, order or regulation
as extended, modified, replaced or re-enacted from time to time and all
statutory instruments, regulations and orders from time to time made
thereunder or deriving validity therefrom.
All the times referred to in this Announcement are London (UK) times unless
otherwise stated.
References to the singular include the plural and vice versa.
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