REG - Palace Capital PLC - Proposed Tender Offer & Notice of General Meeting

Palace CapitalAnnouncement

31/07/2025 07:01

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RNS Number : 2805T  Palace Capital PLC  31 July 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF THE MARKET ABUSE REGULATION (EU 596/ 2014) AS IT FORMS PART
OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED

 

31 July 2025

Palace Capital plc

("Palace" or the "Company" or the "Group")

 

Proposed Return of Capital to Shareholders by way of a Tender Offer

 

Notice of General Meeting

 

The Company is pleased to announce an intended return of capital to
Shareholders by way of a Tender Offer pursuant to which Qualifying
Shareholders are invited to tender some or all of their Ordinary Shares. It is
proposed that up to 8,667,761 Ordinary Shares may be purchased under the
Tender Offer for a maximum aggregate cash consideration of up to approximately
£20.8 million. Qualifying Shareholders who participate in the Tender Offer
will have a Guaranteed Entitlement to tender 3 Ordinary Shares for every 10
Ordinary Shares held, representing up to 30 per cent. of the Ordinary Shares
held by them, at the Record Date, rounded down to the nearest whole number, at
a price of 240 pence per Ordinary Share.

 

A Circular is expected to be published shortly (and will be made available on
the Company's website at  www.palacecapitalplc.com) which includes the
background to, and reasons for, the Tender Offer and why the Board considers
that the Tender Offer is in the best interests of Shareholders as a whole and
why the Board  unanimously recommends that Shareholders vote in favour of the
Tender Offer Resolution which will be proposed at a General Meeting. The
Tender Offer is conditional on the passing of the Tender Offer Resolution.

 

Key terms of the Tender Offer:

·      The Tender Offer will be conducted at a price of 240 pence per
Ordinary Share.

·      The Tender Price represents a 9.6% premium to the Company's share
price as at 29 July 2025 (the "Latest Practicable Date") and a discount to 31
March 2025 EPRA NAV of 4.4%.

·     The Tender Offer will be open to all Qualifying Shareholders,
being Shareholders on the Register on the Record Date (being 6pm on 26 August
2025).

·     Each Qualifying Shareholder will be able to tender up to 30% of
their Ordinary Shares held on the Record Date, which equates to 3 Ordinary
Shares for every 10 Ordinary Shares held.

·      Qualifying Shareholders are able to submit tenders in excess of
their Guaranteed Entitlement ("Excess Tenders"). Excess Tenders will only be
accepted to the extent that other Qualifying Shareholders tender less than
their Guaranteed Entitlement or do not tender any Ordinary Shares.

·     The Tender Offer will open on 31 July 2025 and will close at 1:00
p.m. on 26 August 2025 or such other date as may be determined in accordance
with the Circular.

·     Implementation of the Tender Offer is conditional upon, amongst
other things, the approval of Shareholders of the Tender Offer Resolution.

·     It is intended that Ordinary Shares successfully tendered will be
cancelled by the Company.

·     Assuming that the maximum number of Ordinary Shares are purchased
under the Tender Offer and cancelled, the Company's issued share capital will
be reduced by 8,667,761 Ordinary Shares to 20,224,774 Ordinary Shares
following completion of the Tender Offer.

 

Steven Owen, Executive Chairman, commented:

"The Tender Offer announced today represents a further milestone in the
Board's strategy of returning cash to shareholders with over £43 million
returned since July 2022.

 

The format of the Tender Offer provides good flexibility, enabling those
Qualifying Shareholders who wish to reduce their holdings an opportunity to do
so at a market-driven price with a premium, whilst permitting those who wish
to retain their current investment in the Company to do so."

 

Expected timetable of principal events

Announcement of this Tender Offer, publication of the Circular and the Notice
of General Meeting

31 July 2025

 

Tender Offer opens 31 July 2025

 

Latest time and date for receipt of Voting Instructions 12.00 p.m. on 21
August 2025

 

General Meeting 12.00 p.m. on 26 August 2025

 

Announcement of results of the General Meeting 26 August 2025

 

Latest time and date for receipt of Tender Forms and share certificates in
relation to the Tender Offer (i.e. close of Tender Offer) 1.00 p.m. on 26
August 2025

 

Latest time and date for receipt of TTE Instructions in relation to the Tender
Offer (i.e. close of Tender Offer) 1.00 p.m. on 26 August 2025

 

Tender Offer Record Date 6.00 p.m. on 26 August 2025

 

Announcement of results of the Tender Offer 29 August 2025

 

CREST accounts credited with unsuccessfully tendered uncertificated holdings
of Ordinary Shares not later than 1 September 2025

 

Purchase of Ordinary Shares under the Tender Offer 2 September 2025

 

CREST accounts credited in respect of Tender Offer proceeds for uncertificated
Ordinary Shares by 4 September 2025

 

Cheques despatched in respect of Tender Offer proceeds for certificated
Ordinary Shares by 15 September 2025

 

Return of share certificates in respect of unsuccessful tenders of
certificated Ordinary Shares by 15 September 2025

 

Despatch of balancing share certificates (in respect of certificated Ordinary
Shares) for revised, certificated holdings in the case of partially successful
tenders by 15 September 2025

 

All times are references to London (UK) times. Other than the date of the
announcement of the Tender Offer, each of the above times and dates are
indicative only and based on the Company's expectations as at the date of this
announcement. If any of the above times and/or dates change, the revised times
and/or dates will be notified to Shareholders by an announcement through a
Regulatory Information Service.

 

 

Enquiries:

 Palace Capital
 Steven Owen, Executive Chairman  info@palacecapitalplc.com

 FTI Consulting                   Tel: 0203 727 1000

 Financial PR

 Dido Laurimore, Andrew Davis

 Deutsche Numis                   Tel: 0207 260 1000

 Broker

 Oliver Hardy

 Heraclis Economides

 

 

Posting of Circular and Notice of General Meeting:

Full details of the Tender Offer will be included in a Circular which is
expected to be published and available on the Group's website later today
(www.palacecapital.com).

 

There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on, among other things, the approval of the Tender Offer
Resolution by Shareholders and will not proceed if any of the Tender
Conditions are not satisfied or waived by Deutsche Numis or the Company (as
the case may be) or if it is withdrawn by Deutsche Numis or the Company at any
point prior to the announcement of the results of the Tender Offer.

 

Notice in relation to overseas persons:

The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
person who is subject to the laws of any jurisdiction other than the UK should
inform themselves about and observe any of those restrictions. Any failure to
comply with any of those restrictions might constitute a violation of the
relevant laws or regulations of such jurisdiction.

 

 Forward-looking statements:

This announcement includes "forward-looking statements" which include all
statements other than statements of historical fact, including, without
limitation, those regarding the Group's financial position, business strategy,
plans and objectives of management for future operations, or any statements
preceded by, followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "would, "could" or
similar expressions or negatives thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors
beyond the Group's control that could cause the actual results, performance or
achievements of the Group to be materially different from the future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and the
environment in which the Group will operate in the future. These
forward-looking statements speak only as at the date of this announcement.
Whilst the Directors consider these statements to be reasonable based upon
information currently available, they may prove to be incorrect. However, the
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law.

 

No profit forecast or estimates:

Unless otherwise stated, no statement in this announcement is intended as a
profit forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings, earnings per share
or income, cash flow from operations or free cash flow for the Group, for the
current or future financial years would necessarily match or exceed the
historical published earnings, earnings per share or income, cash flow from
operations or free cash flow from the Group.

 

Numis Securities Limited (trading as Deutsche Numis) ("Deutsche Numis"), which
is authorised and regulated in the United Kingdom by the FCA, is acting
exclusively for Palace and no one else in connection with the proposed Tender
Offer and will not be responsible to anyone other than Palace for providing
the protections afforded to clients of Deutsche Numis nor for providing advice
in relation to the proposed Tender Offer or any other matter referred to
herein. Neither Deutsche Numis nor any of its group undertakings or 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 Deutsche Numis in connection with the
proposed Tender Offer or any matter referred to herein.

 

 

 

Proposed Return of Capital to Shareholders by way of a Tender Offer for 3
Ordinary Shares for every 10 Ordinary Shares held at 240 pence per Ordinary
Share and Notice of General Meeting

 

Introduction

On 5 June 2025, the Company announced that it intended to return capital to
Shareholders by way of a Tender Offer pursuant to which Qualifying
Shareholders are invited to tender some or all of their Ordinary Shares.

 

It is proposed that up to 8,667,761 Ordinary Shares may be purchased under the
Tender Offer for a maximum aggregate cash consideration of up to approximately
£20.8 million and Qualifying Shareholders who participate in the Tender Offer
will have a Guaranteed Entitlement to tender 3 Ordinary Shares for every 10
Ordinary Shares held, representing up to 30 per cent. of the Ordinary Shares
held by them, at the Record Date, rounded down to the nearest whole number, at
a price of 240 pence per Ordinary Share.

 

To the extent that Qualifying Shareholders tender for less than the total
overall amount that may be returned to Shareholders pursuant to the Tender
Offer, or where the Board decides not to proceed with the Tender Offer in
accordance with terms of the Tender Offer, the Board will consider alternative
options regarding how best to deploy any cash or capital surplus or to return
value to Shareholders, including by way of a further tender offer, a share
buy-back programme or by way of dividend, taking into consideration the then
prevailing market and economic conditions and other relevant factors at the
relevant time.

 

 

Tender Offer

Background and reasons for the Tender Offer

Subject to certain conditions including the passing of the Tender Offer
Resolution by Shareholders at the General Meeting as a special resolution, the
Tender Offer will be implemented by Deutsche Numis (acting as principal and
not as agent, nominee or trustee) at the Tender Price giving Qualifying
Shareholders the opportunity to tender Ordinary Shares through the Tender
Offer for cash. The Tender Offer Resolution will give the Directors authority
to buy back up to 8,667,761 Ordinary Shares, at the Tender Price of 240 pence
per Ordinary Share, for a maximum aggregate cash consideration of up to
approximately £20.8 million.

 

Update on delivery of strategic objectives

As announced with the Company's full year results for the financial year ended
31 March 2025 (FY25), we continued to progress our strategy to return capital
to Shareholders through the disposal of investment and residential properties.
This was achieved through the sale of £35.0 million of assets at 6.0% above
the 31 March 2024 valuation and returning cash of £21.7 million to
Shareholders by way of a successful, oversubscribed tender offer in July 2024,
which contributed an additional 2.0 pence to EPRA NTA per share. Since the
updated strategy of the Company was announced in July 2022, we have returned
over £43 million of cash to Shareholders. In addition, dividends paid to
Shareholders since July 2022 total approximately £17.9 million.

 

Since 1 April 2025, the Company completed the sale of HQ Office, York, a
freehold, multi-let building, for a gross consideration of £10.0 million,
which, after adjusting for rent top ups, was in line with the 31 March 2024
valuation. There were ten apartments remaining at Hudson Quarter, York, valued
at £4.3 million as at 31 March 2025, at the time of the announcement of the
full year 2025 results in June 2025 but since then one apartment has gone
under offer.

 

The Company has been in a net cash position since April 2024 and in line with
the terms of the loan agreement with Scottish Widows, the Company repaid the
outstanding £8.0 million loan (£7.9 million net of the loan break gain) in
March 2025, in advance of the completion of the sale of the NHS units at
Halifax as reported on 11 April 2025. The Company is now debt free, the
portfolio is entirely unencumbered and as at 29 July 2025 the Company had cash
of approximately £29.3 million, compared with £22.2 million as at 31 March
2025.

 

Total investment properties sold since the change of strategy in July 2022
amount to £145.6 million (£160.3 million including residential apartments).

 

The Company currently has five investment properties remaining, which were
valued at £39.0 million as at 31 March 2025. Halifax is expected to be
marketed for sale in September or the fourth quarter of 2025, subject to
market conditions, following its part disposal in March 2025. The Leamington
sale, which was under offer as at 6 June 2025, did not progress but the
Company will continue to seek to dispose of this asset. The three other
properties require the completion of ongoing asset management activities in
order to be ready for sale.

 

Further to the Company's announcement of its full year 2025 results, current
trading and the Company's asset management activities remain in-line with
plan.

 

As previously reported, the Board remains of the view that conditions in the
investment market for certain types of assets, particularly leisure assets,
were such that, in the Board's view, the sale of these assets should be
deferred until market demand and pricing improve, particularly given the high
income yield and long unexpired lease terms. We remain of this view although
we expect market conditions to improve later this year assuming that financial
markets are less volatile than at present. The increase in bank lending to UK
real estate businesses seen over the last twelve months is encouraging and the
Board believes this should bring more liquidity to property investment markets
as should further interest rate reductions which are expected during 2025.

 

Palace Capital continues to reduce its level of administrative expenses in
line with its strategy with a reduction of £1.1 million in total
administrative expenses in FY25 and since 1 July 2025 there has been a
significant reduction in headcount from six to three executives. This together
with other cost reduction measures when fully implemented are expected to
result in annualised administrative expenses of approximately £1.3 million
from 1 July 2025.

 

Following consultation with certain Shareholders, the Directors believe that
it is now appropriate to return further capital to Shareholders. This reflects
the Directors' belief that share buy backs (including by way of tender offer)
are an appropriate means of returning capital to Shareholders.

 

The Board regularly reviews capital allocation to optimise long-term returns
for Shareholders and has

explored various options for returning capital to Shareholders. The Board has
determined that the proposed Tender Offer, to be made at an appropriate
premium to the price per Ordinary Share on the Latest Practicable Date, is the
most suitable way of returning capital to Shareholders in a quick and
efficient manner, taking account of the relative costs, complexity and
timeframes of the possible methods available, as well as the likely tax
treatment for and equality of treatment of Shareholders.

 

The Board of Directors of the Company considers the Tender Offer to be in the
best interests of Shareholders as a whole, among other reasons, because:

 

·     the Tender Offer is available to all Qualifying Shareholders
regardless of the size of their holding;

·     the Tender Price represents a premium of 9.6% to the Company's
Ordinary Shares closing price of 219 pence on 29 July 2025 and a discount to
31 March 2025 EPRA NAV of 4.4%;

·      the Tender Offer provides Qualifying Shareholders who wish to
reduce their holdings of Ordinary Shares with an opportunity to do so at a
market-driven price with a premium;

·     the Tender Offer enables Ordinary Shares to be sold free of
commissions or charges that would otherwise be payable if Qualifying
Shareholders were to sell their Ordinary Shares through their broker; and

·     the Tender Offer permits Shareholders who wish to retain their
current investment in the Company and their Ordinary Shares to do so, as no
Shareholder is required to participate in the Tender Offer, providing
Shareholders with flexibility.

 

The Board considers that up to approximately £20.8m is the right amount at
this time to return to Shareholders taking into account possible future
working capital and business requirements including asset management plans
relating to the remaining assets.

 

The Tender Offer is separate, and in addition, to the share buy-back programme
approved by Shareholders on 9 July 2025 at its annual general meeting (the
"2025 AGM") (the "Buy-Back Programme"). Pursuant to the Buy-Back Programme,
the Company is entitled to repurchase up to a maximum of 4,330,880 shares
representing approximately 15% of the then issued share capital. Since the
2025 AGM no Ordinary Shares have been purchased under the Buy-Back Programme.
 

 

Therefore, the Tender Offer is being proposed in addition to the Buy-Back
Programme approved by Shareholders at the 2025 AGM.

 

Principal Terms of the Tender Offer

Subject to certain conditions (including the Tender Offer Resolution being
passed at the General

Meeting), Deutsche Numis will implement the Tender Offer by acquiring, as
principal (and not as

agent, nominee or trustee), the successfully tendered Ordinary Shares at the
Tender Price. Ordinary Shares purchased by Deutsche Numis pursuant to the
Tender Offer will be purchased by Deutsche Numis as principal (and not as
agent, nominee or trustee) and such purchases will be on-market purchases in
accordance with the provisions of the Act and the rules of the London Stock
Exchange and the FCA.

 

Conditional upon the Tender Offer becoming unconditional and subject to the
terms thereof, Deutsche

Numis has the right to require the Company to purchase from it (and the
Company has the right to

require Deutsche Numis to sell to it) any Ordinary Shares acquired by Deutsche
Numis under the

Tender Offer pursuant to the Repurchase Agreement at the Tender Price.  If
either the put option or call option under the Repurchase Agreement is
exercised, Deutsche Numis shall sell such Ordinary Shares to the Company, at a
price per Ordinary Share equal to the Tender Price, pursuant to the Repurchase
Agreement. Purchases of Ordinary Shares by the Company pursuant to the
Repurchase Agreement will also be on-market purchases in accordance with the
provisions of the Act and the rules of the London Stock Exchange and the FCA.
The Company intends that all of the Ordinary Shares purchased by the Company
pursuant to the Repurchase Agreement in connection with the Tender Offer will
be cancelled.

 

Qualifying Shareholders must consider carefully all of the information
contained in the Circular as

well as their personal circumstances when deciding whether to participate in
the Tender Offer.

 

The maximum number of Ordinary Shares that may be purchased under the Tender
Offer, being up to

8,667,761 Ordinary Shares, will equate to approximately 30 per cent. of the
Issued Ordinary Share Capital at the Tender Offer Record Date, for a maximum
aggregate cash consideration of up to approximately £20.8 million ("Maximum
Tendered Shares"). As at 29 July 2025, there were 28,892,535 Ordinary Shares
in issue. No shares were held in treasury.

 

If the Maximum Tendered Shares are acquired by Deutsche Numis pursuant to the
Tender Offer and subsequently repurchased by the Company for cancellation
pursuant to the Repurchase Agreement, the total number of Ordinary Shares of
the Company in issue following such cancellation will be 20,224,774 Ordinary
Shares. It is intended that successfully tendered Ordinary Shares which are
subsequently purchased by the Company pursuant to the Repurchase Agreement
will be cancelled and will not rank for any future dividends.

 

 

How to Participate in the Tender Offer

Qualifying Shareholders are not obliged to tender any Ordinary Shares if they
do not wish to do so. If

no action is taken by Qualifying Shareholders, there will be no change to the
number of Ordinary

Shares that they hold and they will receive no cash as a result of the Tender
Offer.

 

Each Qualifying Shareholder who wishes to participate in the Tender Offer is
entitled to submit a

tender to sell some or all of their Ordinary Shares.

 

The total number of Ordinary Shares tendered by any Qualifying Shareholder
should not exceed the

total number of Ordinary Shares registered in the name of that Qualifying
Shareholder at the Record

Date. For example, a Qualifying Shareholder may decide to tender fifty per
cent. (50%) of their

Ordinary Shares, but if a Qualifying Shareholder returned a tender purporting
to offer for sale more

than one hundred per cent. (100%) of their Ordinary Shares, they would be
deemed to have tendered

only the number of Ordinary Shares actually owned by that Shareholder on the
Record Date, with the

tender in respect of any additional shares being deemed invalid.

 

The Tender Offer will open on 31 July 2025 (unless such date is altered by
Deutsche Numis in consultation with the Company in accordance with the terms
and conditions of the Tender Offer). The Tender Offer will close at 1.00 p.m.
on 26 August 2025 and tenders received after that time will not be accepted
(unless the Closing Date is extended by Deutsche Numis (in consultation with
the Company) in accordance with the terms and conditions of the Tender Offer).

 

Tender Forms which have been, or are deemed to be, validly and properly
completed (for Ordinary

Shares held in certificated form) and submitted to Equiniti acting as
Receiving Agent and TTE

Instructions which have settled (for Ordinary Shares held in uncertificated
form) will become

irrevocable and cannot be withdrawn except with the consent of Deutsche Numis
(having consulted the Company) in its absolute discretion.

 

 

Purchase of Ordinary Shares

Successfully tendered Ordinary Shares will be purchased from Qualifying
Shareholders by Deutsche Numis (acting as principal and not as agent nominee
or trustee), free of commission and dealing charges. Conditional upon the
Tender Offer becoming unconditional and subject to the terms thereof, Deutsche
Numis has the right to require the Company to purchase from it (and the
Company has the right to require Deutsche Numis to sell to it) any Ordinary
Shares acquired by Deutsche Numis under the Tender Offer pursuant to the
Repurchase Agreement at the Tender Price. If either the put option or call
option under the Repurchase Agreement is exercised, such Ordinary Shares will
be repurchased by the Company from Deutsche Numis pursuant to the terms of the
Repurchase Agreement and subsequently will be cancelled by the Company. Any
rights of Qualifying Shareholders who do not participate in the Tender Offer
will be unaffected by the Tender Offer.

 

All Shareholders who tender Ordinary Shares will receive the Tender Price,
subject, where applicable,

to the scaling-down arrangements as set out in the Circular to be published
later today.

 

If more than the overall limit of Ordinary Shares that may be repurchased
pursuant to the Tender

Offer are validly tendered by Qualifying Shareholders and the Tender Offer is
therefore oversubscribed, acceptances of validly tendered Ordinary Shares will
be scaled-down to determine the extent to which individual tenders are
accepted. Accordingly, where scaling-down applies, beyond a Qualifying
Shareholder's Guaranteed Entitlement, there is no guarantee that all of the
Ordinary Shares which are tendered by Qualifying Shareholders will be accepted
for purchase.

 

Depending on the level of participation in the Tender Offer, it is possible
that Deutsche Numis will purchase, as principal, Ordinary Shares pursuant to
the Tender Offer such that Deutsche Numis' interest in Ordinary Shares would
carry 30 per cent. or more of the Company's voting rights. Such an acquisition
would ordinarily trigger an obligation to make a mandatory offer pursuant to
Rule 9 of the Takeover Code. The Takeover Panel have, following consultation,
granted a waiver from this obligation as a result of Deutsche Numis'
acquisition of Ordinary Shares from Qualifying Shareholders pursuant to the
Tender Offer. Further details are set out in the Circular to be published
later today.

 

Guaranteed Entitlement

The Guaranteed Entitlement is only relevant if the Tender Offer is
oversubscribed.  Tenders in respect of up to 30 per cent. of each holding of
Ordinary Shares of every Qualifying Shareholder on the Record Date will be
accepted in full at the Tender Price and will not be scaled down.  This
percentage is known as the "Guaranteed Entitlement".  Qualifying Shareholders
may tender Ordinary Shares in excess of their Guaranteed Entitlement.
However, if the Tender Offer is oversubscribed, the tender of such excess
Ordinary Shares will only be successful to the extent that other Qualifying
Shareholders have tendered less than their Guaranteed Entitlement.

 

Circumstances in which the Tender Offer may not proceed

There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on the

passing of the Tender Offer Resolution as set out in the Notice of General
Meeting and on the

satisfaction of the other Tender Conditions specified in the Circular. In
particular, the Tender Offer is conditional on the receipt by 1.00 p.m. on the
Closing Date of valid tenders in respect of at least 288,925 Ordinary Shares
(representing approximately 1% of the Company's issued share capital as at the
Latest Practicable Date).

 

Deutsche Numis has reserved the right at any time prior to the announcement of
the results of the

Tender Offer, in consultation with the Company, to extend the period during
which the Tender Offer is open and/or vary the aggregate value of the Tender
Offer, based on economic or market conditions and/or other factors, subject to
compliance with applicable legal and regulatory requirements. Deutsche Numis
has also reserved the right, in certain circumstances, to not proceed with the
Tender Offer. Any such decision will be announced by the Company through a
Regulatory Information Service as soon as practicable thereafter.

 

To the extent that Qualifying Shareholders tender for significantly less than
the total amount that may

be returned to Shareholders pursuant to the Tender Offer, or where Deutsche
Numis decides not to

proceed with the Tender Offer, the Company will consider alternative options
regarding how best to

deploy any such cash or capital surplus or to return cash to Shareholders,
including by way of a

share buy-back programme or by way of dividend, taking into consideration the
then

prevailing market conditions and other relevant factors at the relevant time.

 

Full terms and conditions of the Tender Offer

Full details of the Tender Offer, including the terms and conditions on which
it is made, are set out in

the Circular expected to be published later today.

 

General Meeting to approve the Tender Offer Resolution

The Tender Offer requires the approval by Shareholders of the Tender Offer
Resolution at a General Meeting of the Company. For this purpose, the Company
is convening the General Meeting for 12.00 p.m. on 26 August 2025 to consider
and, if thought fit, pass the Tender Offer Resolution to authorise and to
approve the terms under which the Tender Offer will be effected.

 

The Tender Offer Resolution must be passed on a poll by at least seventy-five
per cent. (75%) of the votes validly cast by those Shareholders present in
person or by proxy and entitled to vote at the General Meeting. Deutsche Numis
will not purchase Ordinary Shares pursuant to the Tender Offer unless the
Tender Offer Resolution is duly passed.

 

A summary of action to be taken by Shareholders is set out in the Circular.

 

Recommendation by the Board

The Directors consider that the Tender Offer is in the best interests of the
Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour
of the Tender Offer Resolution. The Board makes no recommendation to
Qualifying Shareholders in relation to participation in the Tender Offer
itself. Whether or not Qualifying Shareholders decide to tender all, or any,
of their Ordinary Shares will depend on, among other things, their view of the
Company's prospects and their own individual circumstances, including their
own financial and tax position. Shareholders are required to take their own
decision and are recommended to consult with their duly authorised independent
financial or professional adviser.

 

The following definitions apply throughout this announcement and the Circular:

Act the Companies Act of England and Wales 2006, as amended from time to time

Articles or Articles of association the articles of association of the
Company, as amended from time to time

Board or Board of Directors or Directors the directors of the Company as at
the date of the Circular, whose names are set out in the Circular

Business Day any day other than a Saturday, Sunday or public holiday on which
banks are open in the City of London for the transaction of general commercial
business

certificated form or certificated in relation to a share, a share, title to
which is recorded in the relevant register of the share concerned as being
held in certificated form (that is, not in CREST)

Circular the document to be published by the Company and sent to Shareholders
relating to the proposed Tender Offer and Notice of General Meeting

Closing Date 26 August 2025 or such other date as may be determined in
accordance with the Circular in relation to the Tender Offer

Company or Palace Capital Palace Capital plc, a public limited company
incorporated in England and Wales with registered number 05332938 and
registered office at Thomas House, 84 Eccleston Square, London England SW1V
1PX United Kingdom

CREST the paperless settlement procedure operated by Euroclear enabling system
securities to be evidenced otherwise than by certificates and transferred
otherwise than by written instrument

CREST Manual the rules governing the operation of CREST as published by
Euroclear

CREST Member a person who has been admitted by Euroclear as a system member
(as defined in the CREST Regulations)

CREST Participant a person who is, in relation to CREST, a system participant
(as defined in the CREST Regulations)

CREST Proxy Instruction a proxy appointment or instruction made via CREST
authenticated in accordance with Euroclear's specifications and containing the
information set out in the CREST Manual CREST Regulations the Uncertificated
Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time

CREST Sponsor a CREST Participant admitted to CREST as a CREST sponsor, being
a sponsoring system participant (as defined in the CREST Regulations)

CREST Sponsored Member a CREST Member admitted to CREST as a sponsored member

CTA 2010 the UK Corporation Tax Act 2010 (as amended from time to time)

Deferred Bonus Scheme the deferred bonus share scheme under the Remuneration
Policy approved by shareholders at the 2023 Annual General Meeting

Deutsche Numis Numis Securities Limited

Disclosure and Transparency Rules the Disclosure Guidance and Transparency
Rules of the FCA made under Part VI of FSMA, as amended from time to time

Distribution any dividend or other distribution on or in respect of the shares
of the Company and references to a Distribution being paid include a
distribution not involving a cash payment being made

Electronic Tender the inputting and settlement of a TTE Instruction in
accordance with the procedures set out in the Circular which constitutes or is
deemed to constitute a tender of Ordinary Shares pursuant to and on the terms
of the Tender Offer as set out in the Circular

EPRA NTA is the Net Asset Value adjusted to reflect the fair value of trading
properties and to exclude deferred taxation and derivatives

Equiniti Equiniti Limited, Corporate Actions, Aspect House, Spencer Road,
Lancing, West Sussex,

BN99 6DA

Euroclear Euroclear UK & International Limited, the operator of CREST

FCA the Financial Conduct Authority of the United Kingdom

Form of Proxy the paper proxy form available from the Registrar upon request;
or the electronic proxy form to appoint a proxy electronically using the
Equiniti Shareview website or (for institutional investors only) by using the
Proxymity platform on www.proxymity.io (http://www.proxymity.io) , as the case
may be, in each case, to be used in connection with the General Meeting and to
be completed and submitted in accordance with the instructions thereof and the
terms and conditions of the Circular (including the notes to the Notice of the
General Meeting set out in the Circular)

FSMA Financial Services and Markets Act 2000, as amended from time to time

General Meeting the general meeting of the Company to be held at the offices
of CMS Cameron McKenna Nabarro Olswang LLP at Cannon Place 78 Cannon Street,
London EC4N 6AF at 12.00 p.m. on 26 August 2025, or any adjournment thereof,
notice of which is set out in the Circular

Group the Company and its subsidiaries and subsidiary undertakings

Guaranteed Entitlement has the meaning given to that term in the Circular (as
calculated in accordance with the terms of the Circular)

HMRC H.M. Revenue & Customs

Issued Ordinary Share Capital the issued Ordinary Shares in the capital of the
Company at the Tender Offer Record Date

Latest Practicable Date 29 July 2025, being the latest practicable date prior
to the publication of the Circular

London Stock Exchange London Stock Exchange PLC

Long Term Incentive Plan the long term incentive plan in line with the
Remuneration Policy approved by shareholders at the 2023 Annual General
Meeting

MAR the Market Abuse Regulation (EU) 5964/2014, which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018)

member account ID the identification code or number attached to any member
account in CREST

Notice of General Meeting the notice of the General Meeting which appears in
the Circular

Official List the list maintained by the FCA in accordance with section 74(1)
of FSMA for the purposes of Part VI of FSMA

Ordinary Shares the ordinary shares of £0.10 each in the capital of the
Company

Overseas Shareholders a Shareholder who is a resident in, or a national or
citizen of, a jurisdiction outside the United Kingdom

Participant ID the identification code or membership number used in CREST to
identify a particular CREST Member or other CREST Participant

Qualifying Property Rental Business the property-rental business of a REIT as
defined in section 519 of the CTA 2010

Qualifying Shareholder Shareholders who are entitled to participate in the
Tender Offer, being those who are on the Register on the Tender Offer Record
Date and excluding those with a registered address in a Restricted
Jurisdiction

REIT UK Real Estate Investment Trust

Repurchase Agreement the Repurchase Agreement, dated 31 July 2025, between
Deutsche Numis and the Company, the terms of which are summarised in the
Circular

Register the Company's register of members

Registrar and Receiving Agent Equiniti Limited, Highdown House, Yeoman Way,
Worthing, West Sussex, United Kingdom, BN99 3HH as Registrar and Receiving
Agent

Regulatory Information Service a service approved by the FCA for the
distribution to the public of regulatory announcements and included within the
list maintained on the FCA's website

Restricted Jurisdiction means: (i) the United States, Brazil and the Republic
of South Africa and any other jurisdiction where the mailing of the Circular
or the accompanying documents, or the extension of the Tender Offer, in the
manner contemplated by the Circular into or inside such jurisdiction would
constitute a violation of the laws of such jurisdiction; or (ii) any country,
region or territory which is the subject of Sanctions (including, without
limitation, Cuba, Iran, North Korea, Syria, Russia, the Crimea Region of
Ukraine, the so-called Donetsk People's Republic and the so-called Luhansk
People's Republic)

Sanctions means any sanctions administered or enforced by the US Government
(including, without limitation, the Office of Foreign Assets Control of the
U.S. Department of Treasury of the U.S. Department of State, and including,
without limitation, the designation of a "specially designated national" or
"blocked person"), the United Nations Security Council, the European Union,
His Majesty's Treasury, or other relevant competent governmental or regulatory
authority, institution or agency which administers economic, financial and/or
trade sanctions

Shareholder Helpline the helpline operated by Equiniti available to
Shareholders in connection with the Tender Offer

Shareholders holders of Ordinary Shares from time to time

Subsidiary a subsidiary as that term is defined in section 1159 of the Act

Substantial Shareholder any person whose interest in the Company, whether
legal or beneficial, direct or indirect, may cause any member of the Group to
be liable to pay tax under Regulation 10 of the Real Estate Investment Trusts
(Breach of Conditions) Regulations 2006 (as such regulations may be modified,
supplemented or replaced from time to time) on or in connection with the
making of a Distribution to or in respect of such person, and the term
"Substantial Shareholding" shall be construed accordingly

Takeover Code the City Code on Takeovers and Mergers

Takeover Panel the Panel on Takeovers and Mergers

Tender Conditions shall have the meaning given in the Circular

Tender Form the form enclosed with the Circular for use by Shareholders who
hold Ordinary Shares in certificated form in connection with the Tender Offer

Tender Offer the invitation to Shareholders to tender Ordinary Shares on the
terms and conditions set out in the Circular and also, in the case of
certificated Ordinary Shares only, the Tender Form (and, where the context so
requires, the associated repurchase of such Ordinary Shares by the Company
from Deutsche Numis pursuant to the Repurchase Agreement)

Tender Offer Record Date or Record Date close of business (6.00 p.m., UK time)
on 26 August  2025 or such other time and date as may be determined by the
Company in its sole discretion in the event that the Closing Date is altered
in accordance with the Circular

Tender Offer Resolution the special resolution to be proposed at the General
Meeting, as set out in the Notice of General Meeting

Tender Price 240 pence being the price per Ordinary Share at which Ordinary
Shares will be purchased pursuant to the Tender Offer

TFE Instruction a transfer from escrow instruction (as defined by the CREST
Manual)

TTE Instruction a transfer to escrow instruction (as defined by the CREST
Manual)

UK Listing Rules the listing rules made by the FCA under Part VI of FSMA, as
amended from time to time and contained in the FCA's publication of the same
name

uncertificated form recorded on the register as being held in uncertificated
form in CREST and title to which, by virtue of the Uncertified Securities
Regulations, may be transferred by means of CREST

United Kingdom or UK United Kingdom of Great Britain and Northern Ireland

United States the United States of America, its territories and possessions,
any state of the

United States, and the District of Columbia

 

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