| Mon 24 May 2010, 9:11 | | CSO - Capital Shopping Centres Group Plc - US transaction with equity one |
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CSO
CSO
CSO - Capital Shopping Centres Group Plc - US transaction with equity one
CAPITAL SHOPPING CENTRES GROUP PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: CSO
Issuer Code: CSCSCG
24 MAY 2010
CAPITAL SHOPPING CENTRES GROUP PLC
US TRANSACTION WITH EQUITY ONE
Capital Shopping Centres Group PLC ("Capital Shopping Centres") yesterday
made the joint announcement set out below with Equity One, Inc. ("Equity
One")that they have entered into an agreement pursuant to which Equity One
will acquire Capital Shopping Centres` U.S. subsidiary, Capital and Counties
USA., Inc. ("C&C USA"), through a joint venture with Capital Shopping Centres.
In connection with the transaction, Capital Shopping Centres will receive
4.1 million shares of Equity One common stock and 10.9 million joint venture
units. Capital Shopping Centres may redeem its units in the joint venture
for cash or, at Equity One`s option, Equity One common stock
(on a one-for-one basis). The closing price per Equity One share as at
21 May 2010 was $17.22.Capital Shopping Centres intends to retain its
interest in Equity One and the joint venture in order to participate in
its growth potential.
For the 12 month period ending 31 December 2009, Capital Shopping Centres
reported, in respect of C&C USA, net rental income of $38.1 million, GBP24.4
million, underlying profit after tax (before revaluation of investment
properties and related tax) of $9.8 million, GBP6.3 million, and loss before
tax of $135.1 million, GBP86.6 million (including a deficit on revaluation of
investment properties of $143.3 million, GBP91.9 million). The transaction is
not expected to have a significant impact on the level of Capital Shopping
Centres` underlying profit after tax.
As at 31 December 2009 Capital Shopping Centres reported in respect of C&C
USA, gross assets of $613.9 million, GBP380.1 million, of which investment
properties accounted for $545.9 million, GBP338.0 million.
David Fischel, Chief Executive of Capital Shopping Centres Group PLC, commented
"I am pleased to announce this significant transaction which has restructured
our US interests such that we can focus on our core business in the United
Kingdom while participating in the significant growth potential of the
combined enterprise."
ENQUIRIES:
Capital Shopping Centres +44 (0) 207 887 4220
Group PLC:
David Fischel Chief Executive
Kate Bowyer Investor Relations
Bank of America Merrill Lynch: +44 (0) 207 628 1000
Simon Mackenzie-Smith
Simon Fraser
George Close-Brooks
Press:
UK: Michael Sandler, Hudson +44 (0)20 7796 4133
Sandler
SA: Nicholas Williams, College +27 (0)11 447 3030
Hill
This announcement includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Capital Shopping Centres Group PLC to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Any information contained in this announcement
on the price at which shares or other securities in Capital Shopping Centres
Group PLC have been bought or sold in the past, or on the yield on such
shares or other securities, should not be relied upon as a guide to future
performance.
Merrill Lynch International ("Bank of America Merrill Lynch"), a subsidiary
of Bank of America Corporation, is acting exclusively for Capital Shopping
Centres Group PLC in connection with this transaction and for no one else and
will not be responsible to anyone other than Capital Shopping Centres Group
PLC for providing the protections afforded to its clients or for providing
advice in relation to this transaction.
Notes to editors:
Background on Capital Shopping Centres Group PLC
Liberty International PLC was renamed CAPITAL SHOPPING CENTRES GROUP PLC on
7 May 2010 upon the demerger of its central London business into a separate
listed company, Capital & Counties.
Capital Shopping Centres Group PLC is one of the UK`s largest listed
property companies, a real estate investment trust (REIT) and a constituent
of the FTSE-100 Index of the UK`s leading listed companies. It is the
leading UK shopping centre business with focus on prime assets including
Lakeside, Thurrock; MetroCentre, Gateshead; Braehead, Glasgow; The
Harlequin, Watford; and The Arndale, Manchester.
??13 UK shopping centres including 9 of the top 30;
??GBP4.5 billion UK asset value at 31 December 2009;
??13.8 million sq. ft. of UK retail space;
??Over 2000 retail units; and
??Half of the UK population live within a 45 minute drive of a CSC centre.
EQUITY ONE ENTERS INTO JOINT VENTURE WITH CAPITAL SHOPPING CENTRES GROUP PLC IN
A TRANSACTION VALUED AT APPROXIMATELY $600 MILLION
Portfolio of 15 California Properties Totaling 2.6 Million Square Feet Expands
Equity One`s Geographic Reach
NORTH MIAMI BEACH, FL; May 23, 2010 -- Equity One, Inc. (NYSE-EQY), an owner,
developer, and operator of shopping centers, announced today it has entered
into an agreement to acquire Capital and Counties USA Inc. (C&C USA) through a
joint venture with its parent company, Capital Shopping Centres Group PLC
(Capital Shopping Centres). In the transaction, which is valued at
approximately $600 million, Capital Shopping Centres will receive 4.1 million
shares of Equity One common stock and 10.9 million joint venture units.
Capital Shopping Centres may redeem its units in the joint venture for Equity
One common stock on a one-for-one basis or cash, at Equity One`s option.
Equity One will assume approximately $330 million of mortgage debt, including
its proportionate share of debt held by its joint ventures, with a weighted
average interest rate of 5.7%.
C&C USA owns a portfolio of 15 properties in California totaling 2.6 million
square feet, of which 70% of the transaction value consists of retail assets.
The retail portfolio is concentrated in the San Francisco Bay Area and includes
Serramonte Shopping Center in Daly City, Plaza Escuela in Walnut Creek, The
Willows Shopping Center in Concord, 222 Sutter Street in San Francisco, and
The Marketplace Shopping Center in Davis. The retail portfolio was 83% leased
as of April 30, 2010. When including several major leases recently executed
or currently under letter of intent, the retail portfolio occupancy rate
increases to 93%. The average population density within a 3-mile ring of
the retail properties is 180,848 people and the average household income is
$87,688.
The remaining 30% of the portfolio consists of medical office, office,
undeveloped land and multifamily properties located in the Bay Area and Los
Angeles. In keeping with its retail focus, Equity One intends to dispose
of a majority of the non-core assets.
This transaction is consistent with Equity One`s strategic plan, including
entering California, diversifying the Company`s geographic and tenant base
and expanding its redevelopment pipeline. Upon completion of the transaction,
Northern California will be Equity One`s second largest market after South
Florida, representing approximately 16% of its asset value.
"This is a unique opportunity for Equity One to expand its asset base into
one of the most densely populated, supply constrained markets in the country
in a transaction that is accretive to Equity One shareholders," said Jeff Olson,
CEO of Equity One. "Tenant sales are extraordinarily high within the retail
portfolio and many of the assets contain future leasing, redevelopment, and
expansion opportunities. In particular, the Serramonte Center, with only
849,061 square feet of developed rentable space on 81 acres just south of the
city of San Francisco, offers substantial potential for further development
and densification."
David Fischel, the CEO of Capital Shopping Centres, will join Equity One`s
Board of Directors following the closing of the transaction. Mr. Fischel
stated, "This transaction allows us to focus on our core business in the
United Kingdom while providing an expansion platform for Equity One. By
retaining a long-term investment in Equity One, we can participate in the
significant growth potential of the combined enterprise."
Turner Newton, who has been CEO of C&C USA since 1994, will continue to lead
this subsidiary for Equity One. Equity One intends to retain the majority of
the in-place infrastructure, including C&C USA`s operating, acquisition and
asset management teams.
The transaction is expected to close late in the third quarter of 2010. The
acquisition is subject to customary closing conditions.
The transaction is expected to be modestly accretive to funds from operations
in the first year prior to one-time transaction expenses and non-cash purchase
accounting adjustments. The proforma capitalization rate is 7.0%. Equity One
expects to incur one time transaction expenses of approximately $0.05/share
in 2010. Excluding these transaction expenses and given the timing of closing,
Equity One reaffirms its prior 2010 FFO per share guidance of $1.00 to $1.08
per share.
Goodwin Procter acted as legal counsel and Eastdil Secured acted as financial
advisor to Equity One. Skadden Arps acted as legal counsel and Bank of America
Merrill Lynch acted as financial advisor to Capital Shopping Centres.
PROPERTIES
Occupancy
Property Location GLA as of Major Tenants
4/30/10
Retail
Serramonte Daly City 849,061 80% Macy`s, Target, New
Shopping Center
York & Company
Plaza Escuela Walnut 152,183 81% Cheesecake Factory,
Creek
Container Store
The Willows Concord 255,969 90% Old Navy, Cost Plus,
Shopping Center
REI, UFC Gym
222 Sutter Street San 127,878 87% Loehmann`s
Francisco
The Marketplace Davis 112,974 91% Safeway, CVS, Petco
Shopping Center
Retail Subtotal 1,498,065 83%
Office
The Senator Office 171,593 96% California Housing
Building (1) Sacramento Finance
Agency, State of
California
595 Colorado Pasadena 87,379 87% Bank of the West
Boulevard
Pacific Financial Los 217,038 80% Charles Dunn, Bovis
Center (1) Angeles
Lend Lease, Verizon
Park Plaza 72,649 93% Global Crossing
Sacramento Telecom
625 Third Street San 42,429 100% Ubisoft
Francisco
Office Subtotal 591,088 89%
Medical Office
Parnassus Heights San 143,865 100% UC San Francisco
Medical Center (1) Francisco
Danville-San Ramon Danville 74,599 99%
Medical Center
Medical Office 218,464 99%
Subtotal
Other
Trio Apartments Pasadena 284,835 93% Roy`s Restaurant
(retail / apt.)
(1)
Antioch Land Antioch
Figueroa Land (1) Los
Angeles
Other Subtotal 284,835 93%
Total / Weighted 2,592,452 87%
Average
(1) Property is held in a joint
venture.
ABOUT EQUITY ONE, INC.
As of March 31, 2010, Equity One owned or had interests in 184 properties,
consisting of 170 shopping centers comprising approximately 19.2 million
square feet, three projects in development/redevelopment, six non-retail
properties, and five parcels of land. Additionally, Equity One had joint
venture interests in twelve shopping centers and one office building totaling
approximately 1.9 million square feet.
ABOUT CAPITAL SHOPPING CENTRES GROUP PLC
Capital Shopping Centres Group PLC is one of the UK`s largest listed
property companies, a real estate investment trust (REIT) and a constituent
of the FTSE-100 Index of the UK`s leading listed companies. On a pro-forma
basis, at 31 December 2009, adjusted, diluted shareholders` funds amounted to
GBP2.1 billion and Capital Shopping Centres Group PLC owned GBP5.0 billion of
properties. It is the leading UK shopping centre business with focus on
prime assets including Lakeside, Thurrock; MetroCentre, Gateshead; Braehead,
Glasgow; The Harlequin, Watford; and The Arndale, Manchester.
DISCLAIMER
Bank of America Merrill Lynch, a subsidiary of Bank of America Corporation,
is acting exclusively for Capital Shopping Centres Group PLC in connection
with this transaction and for no one else and will not be responsible to anyone
other than Capital Shopping Centres Group PLC for providing the protections
afforded to its clients or for providing advice in relation to this
transaction.
FORWARD LOOKING STATEMENTS
Certain matters discussed by Equity One in this press release
constitute forward-looking statements within the meaning of the federal
securities laws. Although Equity One believes that the expectations
reflected in such forward-looking statements is based upon reasonable
assumptions, it can give no assurance that these expectations will be
achieved. Factors that could cause actual results to differ materially
from current expectations include the closing of this transaction,
executing leases currently under letter of intent, the ability to sell
non-core assets, changes in macro-economic conditions and the demand for
retail space in the states in which Equity One owns properties; the
continuing financial success of Equity One`s current and prospective
tenants; continuing supply constraints in its geographic markets; the
availability of properties for acquisition; the success of its efforts
to lease up vacant space; the effects of natural and other disasters; the
ability of Equity One to successfully integrate the operations and systems
of acquired companies and properties; and other risks, which are described
in Equity One`s filings with the Securities and Exchange Commission.
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 24/05/2010 09:11:08 Produced by the JSE SENS Department.
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