| Wed 22 Nov 2006, 7:27 | | Liberty International Plc - Placing of ordinary sh |
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LBT
LILII
Liberty International Plc - Placing of ordinary shares and proposed conversion
to a Real Estate Investment Trust
LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILII
22 November 2006
PLACING OF UP TO 25 MILLION NEW ORDINARY SHARES AND PROPOSED CONVERSION TO A
REAL ESTATE INVESTMENT TRUST ("REIT")
Attached is a copy of an announcement released by Liberty International PLC via
the London Regulatory News Service after the London market closed on Tuesday 21
November 2006.
21 November 2006
LIBERTY INTERNATIONAL PLC
PLACING OF UP TO 25 MILLION NEW ORDINARY SHARES AND PROPOSED CONVERSION TO A
REAL ESTATE INVESTMENT TRUST ("REIT")
Attached is the full text of an announcement issued by Liberty International PLC
today.
Enquiries:
Liberty International PLC:
Sir Robert Finch Chairman +44 (0)20 7960 1273
David Fischel Chief Executive +44 (0)20 7960 1207
Aidan Smith Finance Director +44 (0)20 7960 1210
Merrill Lynch International
Rupert Hume Kendall +44 (0)20 7996 2441
Simon Fraser +44 (0)20 7996 2606
Mark Gwynne +44 (0)20 7995 3700
UBS Investment Bank
Oliver Pawle +44 (0)20 7568 2164
John Woolland +44 (0)20 7568 2336
Tim Guest +44 (0)20 7568 2549
Adrian Lewis +44 (0)20 7568 2240
Public relations:
UK: Michael Sandler, Hudson +44 (0)20 7796 4133
Sandler
SA: Matthew Gregorowski,
College Hill Associates +44 (0)20 7457 2020
Nicholas Williams,
College Hill Associates +27 (0)11 447 3030
Not for release, publication or distribution in, or into, the United States,
Australia, Canada or Japan
21 November 2006
LIBERTY INTERNATIONAL PLC
PLACING OF UP TO 25 MILLION NEW ORDINARY SHARES AND PROPOSED CONVERSION TO A
REAL ESTATE INVESTMENT TRUST ("REIT")
Liberty International PLC ("Liberty International" or the "Company") today
announces it is placing up to 25 million new ordinary shares (the "Placing")
representing up to 7.4 per cent of Liberty International"s issued ordinary share
capital immediately prior to the Placing and that it will be sending tomorrow a
circular to shareholders in relation to the proposed conversion of the Liberty
International group (the "Group") into a REIT.
Expected benefits of the Placing
The Placing will enable the Group to reduce borrowings incurred in connection
with the GBP421 million acquisition of the Covent Garden Estate in August 2006,
thereby providing Liberty International with increased financial flexibility to
pursue its GBP1.2 billion development pipeline and other potential investment
opportunities (after taking into account the REIT conversion charge of
approximately GBP146 million referred to below).
In addition, the Placing will benefit shareholders of Liberty International by
enabling the Group to:
- maintain and improve its leading position in the UK regional shopping
centre industry through its wholly-owned subsidiary, Capital Shopping
Centres ("CSC"), whose ownership interests include, inter alia, nine of the
UK"s top twenty-five regional shopping centres;
- consolidate and enhance the strong presence which the Group has established
in the Central London retail and leisure market, through the combination of
the Covent Garden Estate with the Group"s existing ownership in London"s
West End including holdings in Covent Garden, Piccadilly, Regent Street,
The Strand and High Street, Kensington;
- maintain sound financial ratios, in particular its interest cover and debt
to asset ratios; and
- continue to deliver superior returns to shareholders, adding value through
development and active management.
Details of the Placing
Liberty International intends to place up to 25 million new ordinary shares,
representing up to 7.4 per cent of Liberty International"s issued ordinary share
capital immediately prior to the Placing, with institutional and other investors
(the "Placing Shares"). The Placing is being conducted, subject to the
satisfaction of certain conditions, through an accelerated book-building process
to be carried out by Merrill Lynch International ("Merrill Lynch") and UBS
Limited ("UBS" or "UBS Investment Bank"). The books will open with immediate
effect. The timing of the closing of the books, pricing and allocations is at
the discretion of Liberty International, Merrill Lynch and UBS although the book
building is expected to close not later than 4.30 pm (London time) tomorrow.
However, Merrill Lynch and UBS may accept further bids after initial allocations
have been made on the basis explained in Appendix One. The number of Placing
Shares and the price at which the Placing Shares are to be placed (the "Placing
Price") will be agreed by Liberty International with Merrill Lynch and UBS at
the close of the book-building process. Details of the Placing Price will be
announced as soon as practicable after the close of the book-building process.
As part of the Placing, the family interests of Sir Donald Gordon, the President
for Life of Liberty International, and a connected person of Mr Graeme Gordon (a
Director of Liberty International) and as such a related party for the purposes
of the Listing Rules, have agreed to acquire and be allotted 1.4 million Placing
Shares at the Placing Price. The acquisition by the Gordon family interests
represents 0.4 per cent of Liberty International"s current issued share capital.
The existing shareholdings of the Gordon family interests amounted to 71.3
million Ordinary Shares (21.1 per cent of Liberty International"s issued
ordinary share capital) at the close of business on 21 November 2006 and would
amount to 20.1 per cent on the basis of the above subscription and a Placing of
25 million shares.
The Placing Shares will be issued credited as fully paid and will rank pari
passu with the Company"s existing ordinary shares, including the right to
receive all dividends and other distributions declared, made or paid on or in
respect of such shares after the date of issue of the Placing Shares. The
Company will apply for admission of the Placing Shares to the Official List of
the Financial Services Authority and to listing on the London Stock Exchange"s
market for listed securities ("Admission"). It is expected that Admission will
take place and that trading will commence on 29 November 2006. Application will
also be made to JSE Ltd in South Africa for the Placing Shares to be admitted to
the Johannesburg Stock Exchange.
Settlement of the Placing Shares will be on a T + 5 basis and is expected to
occur on 29 November 2006.
Appendix One to this announcement (which forms part of this announcement) sets
out the terms and conditions of the Placing.
The Covent Garden Estate
In August 2006, Liberty International acquired, for a cash consideration of
GBP421 million, a substantial 7 acre Central London investment in the prime
retail and leisure location of Covent Garden. This purchase added over 450,000
sq.ft. of substantially freehold, retail, restaurant, office, leisure and
residential space to the Group"s existing GBP54 million interests on Long Acre
and Floral Street.
The investment, of a size and quality seldom available on the open market in
London"s West End, included the iconic Covent Garden Market and surrounding
Piazza as well as properties around the Market in King Street, Henrietta Street,
Floral Street, James Street, Long Acre, Tavistock Street, Wellington Street and
Maiden Lane.
Net rental income on the properties acquired was approximately GBP17.2 million
per annum increasing, once lettings of currently vacant space have been
concluded, to provide a running yield on cost of around 4.5 per cent.
The Covent Garden acquisition provided the Group with a unique Central London
investment fitting in with the strengths of the Group which focuses on quality
retail assets of scarcity value, requiring active management and creativity.
The Covent Garden Estate represents a core holding of the Group. The Group is
energetically engaged in unlocking the full value of the investment through
creative management and community involvement, whilst steadily increasing its
presence in the area, through further acquisitions and joint ventures as
appropriate.
The Group aims to elevate and substantially improve Covent Garden"s status as a
world class urban destination where entertainment, heritage, architecture, food
and fun combine to create a vibrant retailing and leisure environment in a space
of character and history. The Group believes Covent Garden to be an
internationally recognised destination of choice both for residents of the
capital and for visitors with the potential to become the heart of London"s West
End.
Details of the Group"s Covent Garden holdings are set out in Appendix Two.
Proposed conversion of Liberty International to a Real Estate Investment Trust
("REIT")
Liberty International will also be sending tomorrow a circular to shareholders
containing a proposal to amend its Articles of Association as part of its
proposed conversion to a REIT. The Board expects to convert the Group to a REIT
with effect from 1 January 2007. A REIT is a company or group that invests in
property and enjoys a measure of protection from corporation tax in return for
an obligation to distribute a significant amount of the REIT"s cash flows to
shareholders.
The Group"s UK tax exempt business under the new UK REIT regime is currently
expected to amount to around 90 per cent of its aggregate business. The
principle underlying the REIT regime is that, in return for profits of this
business not being taxed, a dividend from this business will generally be taxed
in the hands of shareholders as if it was rental income. However, in the case
of South African resident shareholders, such dividend will constitute a foreign
dividend which is exempt from South African income tax. The Group will remain
liable for tax on its profits from other activities.
Overall the amount of tax paid, whether by the Company or the shareholders,
should reduce as a result of the conversion to a REIT. This saving in tax will
be partly offset by the interest expense resulting from payment of the entry
charge on conversion to a REIT which has been set at 2 per cent of the aggregate
market value of qualifying properties at the time of conversion. Based on the
valuations at 30 June 2006 and the Covent Garden acquisition, the entry charge
for Liberty International would amount to around GBP146 million resulting in a
one-time reduction in adjusted net assets per share of 41p and, at current
interest rates, an annual interest charge of approximately GBP8.0 million (2.4p
per share). The amount of the entry charge will however depend on any
acquisitions or disposals of properties prior to conversion and the valuations
at the date of conversion.
In terms of Liberty International"s balance sheet, conversion to a REIT will
mean that the provision for deferred tax on UK property revaluation surpluses
and capital allowances (amounting to GBP930 million at 30 June 2006) will no
longer be required. This will remove substantially all of the difference between
the basic net assets per share of 966p at 30 June 2006, calculated from the
balance sheet prepared under International Financial Reporting Standards, and
the net assets per share (diluted, adjusted*), the standard property industry
measure, of 1268p at 30 June 2006.
One requirement of the REIT regime is that a REIT must distribute to
shareholders by way of a dividend at least 90 per cent. of the profits from its
UK tax exempt business in the form of a Property Income Distribution ("PID").
Any further distribution will either be designated as a PID or ordinary dividend
("Non-PID Dividend") at the company"s option. A PID will generally be subject to
withholding tax at the basic rate of UK income tax, currently 22 per cent. Non-
PID Dividends will be taxed in the same way as dividends paid prior to entry
into the REIT regime.
Under the REIT regime, the minimum distribution requirement is determined after
taking account of tax deductions such as capital allowances arising from a
Group"s capital expenditure. The level of Liberty International"s recent
dividend distributions has been around one and a half times the amount which
would have been required to meet the minimum distribution requirement. The
Directors expect a proportion of the annual dividend to be payable as a Non-PID
Dividend which will not be subject to withholding tax.
To date, the Board has pursued a progressive dividend policy distributing
substantially all of the Group"s recurring income. The Directors intend to
continue a relatively full and progressive dividend policy and expect the
dividend for 2007 to include an extra increase out of the net savings from
conversion to a REIT. As a result, dividends are expected to be higher than they
would be if the Group did not convert to a REIT.
The principal benefits for Liberty International of converting to a REIT are:
- greater flexibility in asset management decisions, without tax being a
constraining factor;
- tax transparency for shareholders and the removal of the tax inefficiencies
of the current structure. These inefficiencies particularly disadvantage UK
tax exempt institutions;
- a globally recognised structure as a REIT which should broaden the
potential investor base; and
- elimination of the current contingent taxation on unrealised UK capital
gains in exchange for the payment of the entry charge.
Under the REIT regime, a tax charge may be levied if Liberty International makes
a distribution to a company which is beneficially entitled (directly or
indirectly) to 10 per cent. or more of the shares or dividends of Liberty
International or controls (directly or indirectly) 10 per cent. or more of the
voting rights of Liberty International unless Liberty International has taken
reasonable steps to avoid such a distribution being paid. The amendments
proposed to be made to the Articles are intended to give the Board the powers it
needs in order to be able to demonstrate to HM Revenue & Customs that such
"reasonable steps" have been taken. At the current time, Liberty International
does not have any single shareholder with a holding of 10 per cent. or more for
the purposes of this rule.
The Board considers the proposal to amend the Articles of Association to enable
the Group to convert to a REIT to be in the best interests of Liberty
International and its shareholders as a whole and is recommending that
shareholders vote in favour of the proposal at the Extraordinary General Meeting
on 18 December 2006.
Further information concerning the detailed conditions which a company must
satisfy to be a REIT, the operation of the REIT regime and the details of the
proposed changes to the Articles of Association can be found in the circular to
be sent to shareholders, a copy of which will be published on the Company"s
website.
The conversion is being proposed on the basis of the Board"s current expectation
as to how the legislation and guidance on the REIT regime will be finalised. The
detailed guidance on the REIT regime has not yet been finalised by HM Revenue &
Customs. The Board will review the guidance when it is finalised, which is
expected before the end of the year. The Board will not proceed with conversion
to a REIT if, contrary to expectations, there are, or are expected to be,
material implications that it considers would be adverse for the Company or
would have materially different consequences from those described in the
Circular.
* Adjusted for deferred tax in respect of revaluation surpluses and capital
allowances, fair value movements on interest rate hedges, net of tax, and
valuation surpluses on trading properties, in accordance with UK property
industry practice.
Development programme
Liberty International has maintained an active development programme with the
major events of the last few years being the opening by CSC of the Red Mall at
MetroCentre, Gateshead (371,000 sq.ft. of new retail space, 2004); Chapelfield,
Norwich (530,000 sq.ft., 2005); Manchester Arndale Northern Extension (95 per
cent joint ownership, 550,000 sq.ft., 2005 and 2006) and Xscape, Braehead (50
per cent joint venture, 460,000 sq.ft. retail and leisure, 2006).
At 30 June 2006, the Group had a GBP1.2 billion development programme.
The largest three components are all regional shopping centres in prime
locations extending established high quality retail destinations; St David"s,
Cardiff; Westgate, Oxford and Eldon Square, Newcastle.
In addition, CSC has incremental projects at a number of existing centres, such
as the Boardwalk development at Lakeside, Thurrock, while Capital & Counties has
a GBP150 million retail and commercial redevelopment and regeneration programme.
Details of the major components of the development pipeline are set out in
Appendix Three.
Financial position
At 30 June 2006, the Group"s total properties amounted to GBP7.3 billion by
market value. Net assets (diluted, adjusted*) amounted to GBP4.5 billion and
net borrowings amounted to GBP2.9 billion.
Regional shopping centres represented 87 per cent of total investment properties
and retail in aggregate amounted to 94 per cent.
In addition to the Covent Garden acquisition, the Group has since 30 June 2006
continued to incur expenditure on its development programme, estimated to amount
to around GBP200 million by 31 December 2006, including a GBP115 million payment
to equalise its interests with its joint venture partner in the Cardiff site,
including the existing St David"s Centre, prior to commencing the St David"s 2
development.
The Board of Liberty International has always placed a high priority on
maintaining sound financial ratios. The two key internal corporate guidelines
are (i) interest cover, measured before valuation and exceptional items, to be
maintained at a level in excess of 1.6 times and (ii) the debt to assets ratio,
to be maintained at less than 50 per cent. Interest cover for the period ended
30 June 2006 was around 1.7 times and the ratio of net debt to assets at 30 June
2006 amounted to 39 per cent.
Net assets per share
Net assets per share (diluted, adjusted*) amounted to 1268p at 30 June 2006.
The average true equivalent yield used by the valuers of the Group"s prime UK
regional shopping centres reduced in the six month period from 31 December 2005
to 30 June 2006 by eight basis points overall from 5.30 per cent to 5.22 per
cent (approximately 5.06 per cent on a nominal equivalent yield basis assuming
rent is received annually in arrears). This represents a relatively
conservative yield compared with other retail asset classes at that date with
prime high street shops valued on nominal equivalent yields around 4 per cent
and prime retail parks valued below the 4 per cent mark.
Furthermore, iOWhOnvestment properties are valued after deducting notional
acquisition costs including stamp duty, which in the case of Liberty
International amounted in aggregate to GBP330 million at 30 June 2006,
equivalent to 93p per share. These notional costs assume each asset is sold
individually on the open market at that date, whereas in the case of a listed
property company such as Liberty International, the purchase and sale of shares
is the predominant mode of exchange of ownership and value for shareholders, not
the sale of each underlying individual property. Net assets per share would
have amounted to 1361p at 30 June 2006 if adjustment had been made for this
factor.
Current trading and prospects
Since 30 June 2006, CSC has continued to maintain a high level of occupancy
within the Group"s established regional shopping centres at over 98.5 per cent,
excluding the recently opened developments.
CSC"s immediate priority is to complete lettings at the recently opened
Manchester Arndale Northern Extension where 80 per cent of total anticipated
income from the extension is now committed. Beyond that point, CSC has no
material development letting exposure until the opening of St David"s 2, Cardiff
expected in 2009 and of the last and largest phase of the Eldon Square,
Newcastle extension, also scheduled for 2009.
Retailers are generally maintaining selective expansion plans and the early
indications of retailer enthusiasm for CSC"s attractive major developments are
encouraging.
CSC continues to make good progress with the rent review programme, primarily
involving 2005 reviews at Lakeside Thurrock, and 2006 reviews at MetroCentre and
The Chimes, Uxbridge, with settlements in line with expectations.
The steady recovery, as measured by national statistics, in UK non-food retail
sales which began in the second quarter of 2006 has continued into the second
half year. Trade appears to have improved overall at CSC"s centres this year,
although as ever with winners and losers among the Group"s retail customers as
the process of dynamic change in UK retailing unfolds.
The Covent Garden acquisition has substantially re-energised the Group"s Central
London business. Central London retail sales have shown strong increases this
year. The Group looks forward to capitalising on the estimated 50 million
customer visits per annum to Covent Garden, as it applies its active management
skills to this landmark international urban destination.
Since 30 June 2006, the UK investment property market has continued to be strong
and this has continued to drive market yields to lower levels. Barring any
unforeseen changes in market conditions, the valuation of Liberty
International"s major regional shopping centres and other UK assets at 31
December 2006 would be expected to reflect some downward yield shift, implying
further capital appreciation and therefore an increase in Liberty
International"s net asset value per share from the 1268p (diluted, adjusted*)
reported at 30 June 2006.
General
Merrill Lynch and UBS are acting for the Company and no-one else in relation to
the Placing and will not be responsible to any person other than the Company for
providing the protections afforded to clients of Merrill Lynch and UBS or for
providing advice in relation to the Placing or in relation to the contents of
this announcement or any other transaction, arrangement or matter referred to
herein.
This announcement is for information purposes only and does not constitute an
offer to issue or sell, or the solicitation of an offer to acquire or buy, any
securities to any person in any jurisdiction. In particular, this announcement
does not constitute an offer to issue or sell, or the solicitation of an offer
to acquire or buy, any securities in the United States, Canada, Australia or
Japan.
The Placing Shares have not been, nor will they be, registered under the
Securities Act or with any securities regulatory authority of any State or other
jurisdiction of the United States, and accordingly may not be offered or sold
within the United States except pursuant to an exemption from, or in a
transaction not subject to, registration under the Securities Act. No public
offering of the Placing shares will be made in the United States. Any offering
to be made in the United States will be made to a limited number of QIBs
pursuant to an exemption from registration under the Securities Act in a
transaction not involving any public offering. The Placing Shares are being
offered and sold outside the United States in accordance with Regulation S under
the Securities Act.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. Accordingly,
they should obtain through an authorised dealer any necessary approval or
establish that an existing exchange control approval or exemption applies to
such investment. Within South Africa subscriptions can only be made for a
minimum subscription amount of Rand 100,000 per single addressee acting as
principal.
Certain statements made in this announcement are forward looking statements.
Such forward looking statements are based on current expectations and numerous
assumptions regarding the Company"s present and future business strategies and
the environments in which the Company will operate in the future. Such
assumptions may or may not prove to be correct and actual results and
performance could differ materially from any expected further results or
performances, express or implied, by the forward looking statements. Factors
that might cause forward looking statements to differ materially from actual
results include, among other things, changes in global, political, economic,
business, competitive, market and regulatory forces, future exchange and
interest rates and future business combinations or disposals. The Company
expressly disclaims and assumes no responsibility to update or revise any of the
forward looking statements contained in this announcement to reflect any change
in the Company"s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Any indication in this announcement of the price at which Ordinary Shares have
been bought or sold in the past cannot be relied upon as a guide to future
performance. No statement in this announcement is intended to be a profit
forecast and no statement in this announcement should be interpreted to mean
that earnings per share of the Company for the current or future financial years
would necessarily match or exceed the historical published earnings per share of
the Company.
APPENDIX ONE
TERMS AND CONDITIONS
Important information on the Placing
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT
PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING
AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR
BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS
AND ARE (1) QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANING
OF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS
DIRECTIVE") AND (2) IN THE UNITED KINGDOM FALL WITHIN ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d)
("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX
AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY
PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO
WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN LIBERTY INTERNATIONAL.
This announcement and any offer if made subsequently is only addressed to and
directed at persons in member states of the European Economic Area ("EEA") who
are "qualified investors" within the meaning of Article 2(1)(e) of the
Prospectus Directive (Directive 2003/71/EC) ("Qualified Investors").
By participating in the bookbuilding procedure (the "Bookbuilding") and the
Placing, Placees will be deemed to have read and understood this Appendix One in
its entirety, to be participating, making an offer and acquiring Placing Shares
on the terms and conditions contained herein and to be providing the
representations, warranties, acknowledgements and undertakings contained herein.
In particular each such Placee represents, warrants and acknowledges that it:
1. is a Relevant Person and undertakes that it will acquire, hold, manage or
dispose of any Placing Shares that are allocated to it for the purposes of
its business;
2. in the case of a Relevant Person in a member state of the EEA which has
implemented the Prospectus Directive (each a "Relevant Member State") who
acquires any Placing Shares pursuant to the Placing:
(i) it is a Qualified Investor; and
(ii) in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the Prospectus
Directive, (i) the Placing Shares acquired by it in the Placing have
not been acquired on behalf of, nor have they been acquired with a
view to their offer or resale to, persons in any Relevant Member State
other than Qualified Investors or in circumstances in which the prior
consent of Merrill Lynch International and UBS (together, the
"Managers") has been given to the offer or resale; or (ii) where
Placing Shares have been acquired by it on behalf of persons in any
member state of the EEA other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the Prospectus
Directive as having been made to such persons; and
3. is acquiring the Placing Shares for its own account or is acquiring the
Placing Shares for an account with respect to which it exercises sole
investment discretion and that it (and any such account) is outside the
United States or it is a dealer or other professional fiduciary in the
United States acting on a discretionary basis for non-US beneficial owners
(other than an estate or trust), in reliance upon Regulation S under the US
Securities Act of 1933 (the "Securities Act"); or if it is not outside the
United States is a qualified institutional buyer ("QIB") as defined in Rule
144A under the Securities Act.
This announcement (including this Appendix One) does not constitute an offer to
sell or issue or the solicitation of an offer to buy or subscribe for Placing
Shares in any jurisdiction including, without limitation, the United Kingdom,
South Africa, the United States, Canada, Australia or Japan. This announcement
and the information contained herein is not for publication or distribution,
directly or indirectly, to persons in the United States, Canada, Australia,
Japan or in any jurisdiction in which such publication or distribution is
unlawful.
The Placing Shares referred to in this announcement have not been and will not
be registered under the Securities Act or with any securities regulatory
authority of any State or other jurisdiction of the United States, and may not
be offered, sold or transferred within the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. Any offering to be made in the United
States will be made to a limited number of QIBs pursuant to an exemption from
registration under the Securities Act in a transaction not involving any public
offering. The Placing Shares are being offered and sold outside the United
States in accordance with Regulation S under the Securities Act.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. Accordingly,
they should obtain through an authorised dealer any necessary approval or
establish that an existing exchange control approval or exemption applies to
such investment. Within South Africa subscriptions can only be made for a
minimum subscription amount of Rand 100,000 per single addressee acting as
principal.
The distribution of this announcement and the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action has
been taken by the Company, the Managers, or any of their respective Affiliates,
that would permit an offer of the Placing Shares or possession or distribution
of this announcement or any other offering or publicity material relating to
such Placing Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this announcement comes are required by
the Company and the Managers to inform themselves about and to observe any such
restrictions.
In this Appendix, unless the context otherwise requires, the "Company" means
Liberty International PLC and "Placee" includes a person (including individuals,
funds or others) on whose behalf a commitment to acquire Placing Shares has been
given.
No prospectus
No prospectus or other offering document has been or will be submitted to be
approved by the FSA in relation to the Placing and the Placees" commitments will
be made solely on the basis of the information contained in this announcement,
the Pricing Announcement and any information publicly announced to a Regulatory
Information Service by or on behalf of the Company prior to the date of this
announcement (the "Publicly Available Information"). Each Placee, by
participating in the Placing, agrees that it has neither received nor relied on
any other information, representation, warranty or statement made by or on
behalf of either the Managers or the Company and neither the Managers, the
Company nor any person acting on such person"s behalf nor any of their
Affiliates has or shall have any liability for any Placee"s decision to accept
this invitation to participate in the Placing based on any other information,
representation, warranty or statement. Each Placee acknowledges and agrees that
it has relied on its own investigation of the business, financial or other
position of the Company in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Details of the Placing Agreement and the Placing Shares
The Managers have entered into a placing agreement (the "Placing Agreement")
with the Company under which the Managers have undertaken, on the terms and
subject to the conditions set out in the Placing Agreement, acting severally,
and not jointly or jointly and severally, to use their reasonable endeavours as
agents of the Company to seek to procure Placees for the Placing Shares, or
failing which to acquire the Placing Shares themselves.
The Placing Shares will, when issued, be credited as fully paid and will rank
pari passu in all respects with the existing issued ordinary shares of 50 pence
per share in the capital of the Company, including the right to receive all
dividends and other distributions declared, made or paid in respect of such
ordinary shares after the date of issue of the Placing Shares.
Application for admission to listing and trading
Application will be made to the Financial Services Authority (the "FSA") for
admission of the Placing Shares to the official list maintained by the FSA (the
"Official List") and to the London Stock Exchange for admission to trading of
the Placing Shares on the London Stock Exchange"s market for listed securities
(together "Admission"). Application will also be made to the JSE for the Placing
Shares to be admitted to the JSE at the same time as Admission occurs. It is
expected that Admission will take place at 8.00 a.m. on 29 November 2006 and
that dealings in the Placing Shares on the London Stock Exchange"s main market
for listed securities will commence at that time.
Bookbuilding
The Managers will today commence the Bookbuilding to determine demand for
participation in the Placing by Placees. This Appendix gives details of the
terms and conditions of, and the mechanics of participation in, the Placing. No
commissions will be paid to Placees or by Placees in respect of any Placing
Shares.
The Managers and the Company shall be entitled to effect the Placing by such
alternative method to the Bookbuilding as they may, in their sole discretion,
determine.
Principal terms of the Bookbuilding and Placing
1. Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by the Managers. Each of the
Managers is entitled to enter bids in the Bookbuilding.
2. The Bookbuilding will establish a single price (the "Placing Price")
payable to the Managers by all Placees whose bids are successful. The
Placing Price will be agreed between the Managers and the Company following
completion of the Bookbuilding and any discount to the market price of the
ordinary shares of the Company will be determined in accordance with the
Listing Rules and IPC guidelines. The Placing Price will be announced (the
"Pricing Announcement") on a Regulatory Information Service following the
completion of the Bookbuilding.
3. To bid in the Bookbuilding, Placees should communicate their bid by
telephone to their usual sales contact at Merrill Lynch or UBS. Each bid
should state the number of shares in the Company which a prospective Placee
wishes to acquire at either the Placing Price which is ultimately
established by the Company and the Managers or at prices up to a price
limit specified in its bid. Bids may be scaled down by the Managers on the
basis referred to in paragraph 7 below. Each of Merrill Lynch
International and UBS is arranging the Placing severally, and not jointly
and severally as agent of the Company.
4. The Bookbuilding is expected to close no later than 4.30 p.m. on 22
November 2006 but may be closed earlier at the sole discretion of the
Managers. The Managers may, in agreement with the Company, accept bids that
are received after the Bookbuilding has closed.
5. Allocations will be confirmed orally by the relevant Manager as soon as
practicable following the close of the Bookbuilding. The relevant Manager"s
oral confirmation of an allocation will give rise to a legally binding
commitment by the Placee concerned, in favour of the relevant Manager and
the Company, under which it agrees to acquire the number of Placing Shares
allocated to it on the terms and subject to the conditions set out in this
Appendix One and the Company"s Memorandum and Articles of Association.
6. The Company will make a further announcement following the close of the
Bookbuilding detailing the number of such shares to be issued and the price
at which such shares have been placed.
7. Subject to paragraphs 4 and 6 above, the Managers may choose to accept
bids, either in whole or in part, on the basis of allocations determined at
its discretion (in agreement with the Company) and may scale down any bids
for this purpose on such basis as they may determine. They may also,
notwithstanding paragraphs 4 to 6 above, subject to the prior consent of
the Company (a) allocate Placing Shares after the time of any initial
allocation to any person submitting a bid after that time and (b) allocate
Placing Shares after the Bookbuilding has closed to any person submitting a
bid after that time. Placees should note that the Trust, or its nominee,
has agreed to acquire 1.4 million Placing Shares at the Placing Price and
the Managers will allocate that number of shares to it.
8. A bid in the Bookbuilding will be made on the terms and subject to the
conditions in this Appendix One and will be legally binding on the Placee
on behalf of which it is made and except with the relevant Manager"s
consent will not be capable of variation or revocation after the time at
which it submitted. Each Placee will have an immediate, separate,
irrevocable and binding obligation, owed to the relevant Manager, to pay to
it (or as it may direct) in cleared funds an amount equal to the product of
the Placing Price and the amount of Placing Shares such Placee has agreed
to acquire. Each Placee"s obligations will be owed to the Company and to
the relevant Manager.
9. Except as required by law or regulation, no press release or other
announcement will be made by the Managers or the Company using the name of
any Placee (or its agent), in its capacity as Placee (or agent), other than
with such Placee"s prior written consent.
10. Irrespective of the time at which a Placee"s allocation(s) pursuant to the
Placing is/are confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the same time, on
the basis explained below under "Registration and Settlement".
11. All obligations under the Bookbuilding and Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of the
Placing" and to the Placing not being terminated on the basis referred to
below under "Termination of the Placing".
12. By participating in the Bookbuilding each Placee will agree that its rights
and obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission or
termination by the Placee.
13. To the fullest extent permissible by law, none of the Managers nor any of
their Affiliates shall have any liability to Placees (or to any other
person whether acting on behalf of a Placee or otherwise). In particular,
none of the Managers nor any of their Affiliates shall have any liability
(including, to the extent permissible by law, any fiduciary duties) in
respect of the Managers" conduct of the Bookbuilding or of such alternative
method of effecting the Placing as the Managers and the Company may agree.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a
contract note or electronic confirmation which will confirm the number of
Placing Shares allocated to them, the Placing Price and the aggregate amount
owed by them to the relevant Manager. Each Placee will be deemed to agree that
it will do all things necessary to ensure that delivery and payment is completed
in accordance with either the standing CREST or certificated settlement
instructions which they have in place with the relevant Manager.
Settlement of transactions in the Placing Shares following Admission will take
place within the CREST system. Settlement through CREST will be on a T + 5
basis unless otherwise notified by the Managers and is expected to occur on 29
November 2006. Settlement will be on a delivery versus payment basis. However,
in the event of any difficulties or delays in the admission of the Placing
Shares to CREST or the use of CREST in relation to the Placing, the Company and
the Managers may agree that the Placing Shares should be issued in certificated
form. The Managers reserve the right to require settlement for the Placing
Shares, and to deliver the Placing Shares to Placees, by such other means as
they deem necessary if delivery or settlement to Placees is not practicable
within the CREST system or would not be consistent with regulatory requirements
in a Placee"s jurisdiction.
Interest is chargeable daily on payments not received on the due date in
accordance with the arrangements set out above, in respect of either CREST or
certificated deliveries, at the rate of 2 percentage points above prevailing
LIBOR.
If Placees do not comply with their obligations the relevant Manager may sell
their Placing Shares on their behalf and retain from the proceeds, for its own
account and benefit, an amount equal to the Placing Price of each share sold
plus any interest due. Placees will, however, remain liable for any shortfall
below the Placing Price and for any stamp duty or stamp duty reserve tax
(together with any interest or penalties) which may arise upon the sale of their
Placing Shares on their behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees must ensure that, upon receipt, the conditional contract note is copied
and delivered immediately to the relevant person within that organisation.
Conditions of the Placing
The Placing is conditional upon the Placement Agreement becoming unconditional
and not having been terminated in accordance with its terms.
The obligations of the Managers under the Placing Agreement are, and the Placing
is, conditional on, inter alia:
(a) Admission occurring by not later than 8 am (London time) on 1 December 2006
(or such later time and/or date as the Managers may agree);
(b) the warranties given by the Company in the Placing Agreement being true and
accurate and not misleading in any respect on and as of the date of the
Placing Agreement and at any time prior to Admission; and
(c) the fulfilment by the Company of its obligations under the Placing
Agreement which are required to be performed or satisfied on or prior to
Admission, save to the extent that any non-compliance is not material in
the context of the Placing.
If the conditions in the Placing Agreement are not satisfied or waived in
accordance with the Placing Agreement within the stated time periods (or such
later time and/or date as the Company and the Managers may agree), or the
Placing Agreement is terminated in accordance with its terms, the Placing will
lapse and the Placee"s rights and obligations shall cease and terminate at such
time and each Placee agrees that no claim can be made by or on behalf of the
Placee (or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Bookbuilding Process, each Placee agrees that its rights
and obligations cease and terminate only in the circumstances described above
and under "Termination of the Placing" below and will not be capable of
rescission or termination by it.
The Managers may, at their joint agreement and discretion and upon such terms as
they jointly think fit, waive compliance by the Company, or extend the time
and/or date for fulfilment by the Company, with the whole or any part of any of
the Company"s obligations in relation to the conditions in the Placing
Agreement, save that certain conditions including the condition relating to
Admission referred to in paragraph (a) above may not be waived. Any such
extension or waiver will not affect Placees" commitments as set out in this
Appendix One.
None of the Managers nor any of their Affiliates nor the Company shall have any
liability to any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision any of them may make as to
whether or not to waive or to extend the time and/or date for the satisfaction
of any condition to the Placing nor for any decision any of them may make as to
the satisfaction of any condition or in respect of the Placing generally.
Termination of the Placing
The Managers may, at their absolute discretion, by notice in writing to the
Company, terminate the Placing Agreement at any time prior to Admission if,
inter alia:
(a) they become aware that the Company is in breach of any of its obligations
under the Placing Agreement save to the extent that any breach is not, in
the opinion of the Managers, material in the context of the Placing; or
(b) they become aware that any of the warranties given by the Company in the
Placing Agreement is, or if repeated at any time up to and including
Admission (by reference to the facts and circumstances then existing) would
be, untrue, inaccurate, incorrect or misleading; or
(c) there has been a material adverse change in the condition (financial or
otherwise) or prospects of the Company or the Group since the date of the
Placing Agreement; or
(d) there has been, in the opinion of the Managers, since the date of the
Placing Agreement any change in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls such as would in the Managers" view be likely to prejudice
materially the success of the offering and distribution of the Placing
Shares or dealings in the Ordinary Shares in the Secondary Market; or
(e) they become aware of any matter which in good faith they consider likely to
have the effect that payment by the Trust will not be made to them in
accordance with this Appendix One in connection with the acquisition of
Placing Shares by the Trust
If the Placing Agreement is terminated in accordance with its terms, the rights
and obligations of each Placee in respect of the Placing as described in this
announcement (including this Appendix) shall cease and terminate at such time
and no claim can be made by any Placee in respect thereof.
By participating in the Placing, each Placee agrees with the Company and the
Managers that the exercise by the Company or the Managers of any right of
termination or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of the Company or the Managers (as the
case may be) and that neither the Company nor the Managers need make any
reference to such Placee and that neither the Company, the Managers nor any of
their respective Affiliates shall have any liability to such Placee (or to any
other person whether acting on behalf of a Placee or otherwise) whatsoever in
connection with any such exercise.
By participating in the Placing, each Placee agrees that its rights and
obligations terminate only in the circumstances described above and will not be
capable of rescission or termination by it after oral confirmation by the
Managers following the close of the Bookbuilding.
Representations and further terms
By submitting a bid in the Bookbuilding, each prospective Placee (and any person
acting on such Placee"s behalf) represents, warrants, acknowledges and agrees
that:
1. it has read this announcement (including this Appendix) in its entirety and
that its purchase of the Placing Shares is subject to and based upon all
the terms, conditions, representations, warranties, acknowledgements,
agreements and undertakings and other information contained herein;
2. it has not received a prospectus or other offering document in connection
with the Placing and acknowledges that no prospectus or other offering
document has been prepared in connection with the Placing;
3. if the Placing Shares were offered to it in the United States, it
represents and warrants that in making its investment decision, (i) it has
consulted its own independent advisers or otherwise has satisfied itself
concerning, without limitation, the effects of United States federal, state
and local income tax laws and foreign tax laws generally and the US
Employee Retirement Income Security Act of 1974, the US Investment Company
Act of 1940 and the Securities Act, (ii) it has received all information
that it believes is necessary or appropriate in order to make an investment
decision in respect of the Company and the Placing Shares and (iii) it is
aware and understands that an investment in the Placing Shares involves a
considerable degree of risk and no US federal or state or non-US agency has
made any finding or determination as to the fairness for investment or any
recommendation or endorsement of the Placing Shares;
4. (i) it has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on Publicly Available Information, (ii)
neither of the Managers, their respective Affiliates or the Company has
made any representation to it, express or implied, with respect to the
Company, the Placing or the Placing Shares or the accuracy, completeness or
adequacy of the Publicly Available Information and (iii) it has made its
own investigation of the business, financial and other position of the
Company and the terms of the Placing, satisfied itself that the information
is still current and relied on that investigation for the purposes of its
decision to participate in the Placing;
5. the content of this announcement is exclusively the responsibility of the
Company and that neither of the Managers nor any person acting on their
behalf is responsible for or has or shall have any liability for any
information or representation relating to the Company contained in this
announcement or the Publicly Available Information nor will be liable for
any Placee"s decision to participate in the Placing based on any
information, representation, warranty or statement contained in this
announcement, the Publicly Available Information or otherwise. Nothing in
this Appendix One shall exclude any liability of any person for fraudulent
misrepresentation;
6. it is not, and at the time the Placing Shares are acquired will not be a
resident of Australia, Canada or Japan, and each of it and the beneficial
owner of the Placing Shares is, and at the time the Placing Shares are
acquired will be, (i) not in the United States or (ii) a QIB, or (iii)
acquiring the Placing Shares in an "offshore transaction" in accordance
with Rule 903 or Rule 904 of Regulation S under the Securities Act, and has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the Placing
Shares, is able to bear the economic risk of an investment in the Placing
Shares, is able to sustain a complete loss of the investment in the Placing
Shares and has no need for liquidity with respect to its investment in the
Placing Shares and represents and, in the case of (ii) above, warrants that
it is acquiring the Placing Shares for its own account or for one or more
accounts as to each of which it exercises sole investment discretion and
each of which is a QIB, for investment purposes and not with a view to any
distribution or for resale in connection with, the distribution thereof in
whole or in part, in the United States;
7. the Placing Shares have not been registered or otherwise qualified for
offer and sale nor will a prospectus be cleared in respect of any of the
Placing Shares under the securities laws of the United States, Australia,
Canada or Japan and, subject to certain exceptions, may not be offered,
sold, taken up, renounced or delivered or transferred, directly or
indirectly, within the United States, Australia, Canada or Japan;
8. it and/or each person on whose behalf it is participating:
(i) is entitled to acquire Placing Shares pursuant to the Placing under
the laws of all relevant jurisdictions;
(ii) has fully observed such laws;
(iii)has capacity and authority and is entitled to enter into and perform
its obligations as an acquirer of Placing Shares and will honour such
obligations; and
(iv) has obtained all necessary consents and authorities (including,
without limitation, in the case of a person acting on behalf of a
Placee, all necessary consents and authorities to agree to the terms
set out or referred to in this Appendix) under those laws or otherwise
and complied with all necessary formalities;
9. the Placing Shares have not and will not be registered under the Securities
Act, or under the securities laws of any state of the United States, and
are being offered and sold on behalf of the Company in offshore
transactions (as defined in Regulation S under the Securities Act) and to
QIBs in reliance upon Rule 144A or another exemption from the registration
requirements under the Securities Act;
10. the Placing Shares offered and sold in the United States are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act;
11. so long as the Placing Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, it will not deposit the
Placing Shares into any depositary receipt facility maintained by any
depositary bank in respect of the Company"s Ordinary Shares;
12. a purchase of Placing Shares by an employee benefit plan subject to the US
Employee Retirement Income Security Act of 1974 ("ERISA") or a plan subject
to Section 4975 of the US Internal Revenue Code of 1986, as amended (the
"Code"), or by any entity whose assets are treated as assets of any such
plan, could result in severe penalties or other liabilities for the
Company; and it represents, warrants and agrees that it is not (i) an
employee benefit plan as described in Section 3(3) of ERISA and subject to
ERISA, (ii) a plan subject to Section 4975 of the Code, (iii) a
governmental plan or church plan which is subject to any federal, state or
local law that is substantially similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code or (iv) an entity whose assets are
treated as assets of any such plan (the entities referred to in (i)-(iv),
being referred to as ERISA- Entities);
13. it will not reoffer, sell, pledge or otherwise transfer the Placing Shares
except (i) in an offshore transaction in accordance with Regulation S under
the Securities Act (and, if in a privately negotiated transaction, to a
person that is not an ERISA Entity); (ii) in the United States to QIBs that
are not ERISA Entities pursuant to Rule 144A under the Securities Act;
(iii) pursuant to Rule 144 under the Securities Act (if available) or (iv)
pursuant to an effective registration statement under the Securities Act
and that, in each such case, such offer, sale, pledge, or transfer will be
made in accordance with any applicable securities laws of any state of the
United States;
14. if it is acquiring Placing Shares for the account of one or more QIBs, it
has full power to make the acknowledgements, representations and agreements
herein on behalf of each such account;
15. if it will be a "US Holder" as defined below under the heading "Passive
Foreign Investment Company", it acknowledges that it has read and
understood the disclosure thereunder;
16. it acknowledges that where it is acquiring the Placing Shares for one or
more managed accounts, it represents and warrants that it is authorised in
writing by each managed account to acquire the Placing Shares for each
managed account;
17. if it is a pension fund or investment company, its acquisition of Placing
Shares is in full compliance with applicable laws and regulations;
18. no representation has been made as to the availability of any other
exemption under the Securities Act for the reoffer, resale, pledge or
transfer of the Placing Shares;
19. participation in the Placing is on the basis that it is not and will not be
a client of either of the Managers and that the Managers have no duties or
responsibilities to a Placee for providing protections afforded to their
respective clients or for providing advice in relation to the Placing nor
in respect of any representations, warranties, undertakings or indemnities
contained in the Placing Agreement;
20. it will make payment to the Managers in accordance with the terms and
conditions of this announcement on the due times and dates set out in this
announcement, failing which the relevant Placing Shares may be placed with
others on such terms as the Managers determine;
21. the person who it specifies for registration as holder of the Placing
Shares will be (i) the Placee or (ii) a nominee of the Placee, as the case
may be. The Managers and the Company will not be responsible for any
liability to stamp duty or stamp duty reserve tax resulting from a failure
to observe this requirement. It agrees to acquire Placing Shares pursuant
to the Placing on the basis that the Placing Shares will be allotted to a
CREST stock account of one of the Managers who will hold them as nominee on
behalf of the Placee until settlement in accordance with its standing
settlement instructions with it;
22. the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not give
rise to a stamp duty or stamp duty reserve tax liability under (or at a
rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act
1986 (depository receipts and clearance services) and that it is not
participating in the Placing as nominee or agent for any person or persons
to whom the allocation, allotment, issue or delivery of Placing Shares
would give rise to such a liability;
23. it and any person acting on its behalf falls within Article 19(5) and/or
49(2) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005, as amended, and undertakes that it will acquire, hold, manage
and (if applicable) dispose of any Placing Shares that are allocated to it
for the purposes of its business only;
24. it has not offered or sold and will not offer or sell any Placing Shares to
persons in the United Kingdom prior to Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which have not resulted and which
will not result in an offer to the public in the United Kingdom within the
meaning of section 85(1) of the Financial Services and Markets Act 2000
(the "FSMA");
25. it is a qualified investor as defined in section 86(7) of FSMA, being a
person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus
Directive;
26. it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of section 21 of the
FSMA) relating to Placing Shares in circumstances in which section 21(1) of
the FSMA does not require approval of the communication by an authorised
person;
27. it has complied and it will comply with all applicable provisions of the
FSMA with respect to anything done by it or on its behalf in relation to
the Placing Shares in, from or otherwise involving the United Kingdom;
28. it has not offered or sold and will not offer or sell any Placing Shares to
persons in the European Economic Area prior to Admission except to persons
whose ordinary activities involve them acquiring, holding, managing or
disposing of investments (as principal or agent) for the purpose of their
business or otherwise in circumstances which have not resulted and which
will not result in an offer to the public in any member state of the
European Economic Area within the meaning of the Prospectus Directive
(which means Directive 2003/71/EC and includes any relevant implementing
measure in any member state);
29. it has complied with its obligations in connection with money laundering
and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism
Act 2000, and the Money Laundering Regulations (2003) (the "Regulations")
and, if making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the identity of the
third party as required by the Regulations;
30. if it is resident in South Africa, it is acting as a principal in respect
of the Placing for an aggregate subscription price of more than Rand
100,000;
31. if it is resident in South Africa, it has obtained the necessary approvals
from the South African Reserve Bank in order to participate in the Placing
or is entitled to make use of an exemption to the South African Exchange
Control Regulations and accordingly is permitted to participate in the
Placing;
32. the Company, the Managers and others will rely upon the truth and accuracy
of the foregoing representations, warranties, acknowledgements and
agreements;
33. the Placing Shares will be issued subject to the terms and conditions of
this Appendix; and
34. this Appendix and all documents into which this Appendix is incorporated by
reference or otherwise validly forms a part will be governed by and
construed in accordance with English law. All agreements to acquire shares
pursuant to the Bookbuilding and/or the Placing will be governed by English
law and the English courts shall have exclusive jurisdiction in relation
thereto except that proceedings may be taken by the Company or the Managers
in any jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange.
By participating in the Placing, each Placee (and any person acting on such
Placee"s behalf) agrees to indemnify and hold the Company and the Managers
harmless from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and undertakings in
this Appendix and further agrees that the provisions of this Appendix shall
survive after completion of the Placing.
Please also note that the agreement to allot and issue Placing Shares to Placees
(or the persons for whom Placees are contracting as agent) free of stamp duty
and stamp duty reserve tax in the UK relates only to their allotment and issue
to Placees, or such persons as they nominate as their agents, direct from the
Company for the Placing Shares in question. Such agreement assumes that the
Placing Shares are not being acquired in connection with arrangements to issue
depositary receipts or to transfer the Placing Shares into a clearance service.
If there were any such arrangements, or the settlement related to other dealing
in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for
which neither the Company nor the Managers would be responsible. If this is the
case, it would be sensible for Placees to take their own advice and they should
notify the relevant Manager accordingly. In addition, Placees should note that
they will be liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the UK by them or any other person on the acquisition by them of any Placing
Shares or the agreement by them to acquire any Placing Shares.
The representations, warranties, acknowledgements and undertakings contained in
this Appendix are given to the Managers for itself and on behalf of the Company
and are irrevocable.
The Managers are acting exclusively for the Company and no one else in
connection with the Bookbuilding and the Placing and the Managers will not be
responsible to anyone (including Placees) other than the Company for providing
the protections afforded to their respective clients or for providing advice in
relation to the Bookbuilding or the Placing or any other matters referred to in
this press announcement.
Each Placee and any person acting on behalf of the Placee acknowledges that
neither of the Managers owes fiduciary or other duties to any Placee in respect
of any representations, warranties, undertakings or indemnities in the Placing
Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that the each of the Managers may (at its absolute discretion) satisfy
its obligations to procure Placees by itself agreeing to become a Placee in
respect of some or all of the Placing Shares or by nominating any connected or
associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with
either of the Managers, any money held in an account with either Manager on
behalf of the Placee and/or any person acting on behalf of the Placee will not
be treated as client money within the meaning of the relevant rules and
regulations of the Financial Services Authority which therefore will not require
the Managers to segregate such money, as that money will be held by it under a
banking relationship and not as trustee.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser.
All times and dates in this announcement may be subject to amendment. The
relevant Manager will notify Placees and any persons acting on behalf of the
Placees of any changes.
Passive Foreign Investment Company
The following discussion applies only to US Holders of the Company"s Ordinary
Shares. For this purpose, a US Holder is a beneficial owner of Ordinary Shares
that is (i) a citizen or resident of the United States for US federal income tax
purposes; (ii) a corporation, or other entity treated as a corporation, created
or organised under the laws of the United States or any state thereof; (iii) an
estate the income of which is subject to US federal income tax without regard to
its source; or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more US persons have the authority to control all substantial decisions of the
trust.
There is a risk that the Company may be considered to be a Passive Foreign
Investment Company (a "PFIC") for US federal income tax purposes because it
holds rental properties in subsidiaries that are separate from the subsidiaries
through which it conducts its property management activities. If the Company is
a PFIC in any year during which a US Holder owns Ordinary Shares, and the US
Holder has not made a mark to market or qualified electing fund ("QEF")
election, the US Holder will generally be subject to special rules (regardless
of whether the Company continues to be a PFIC) with respect to (i) distributions
exceeding 125 per cent of the average annual distributions received from the
Company in the previous three taxable years or, if shorter, the US Holder"s
holding period for the Ordinary Shares; and (ii) any gain realised on the sale
or other disposition of Ordinary Shares.
Under these rules (i) the distribution or gain will be allocated rateably over
the US Holder"s holding period; (ii) the amount allocated to the current taxable
year and any taxable year prior to the first taxable year in which the Company
was a PFIC will be taxed as ordinary income; and (iii) the amount allocated to
each of the other taxable years will be subject to tax at the highest rate of
tax applicable to the US Holder for that year and an interest charge for the
deemed deferral benefit will be imposed on the resulting tax attributable to
each of those other taxable years. If the Company is a PFIC, a US Holder will
generally be subject to similar rules with respect to distributions to the
Company by, and dispositions by the Company of the shares of, any of the
Company"s direct or indirect subsidiaries that are also PFICs.
US Holders can avoid the interest charge by making a mark to market election
with respect to the Ordinary Shares, provided that the shares are "marketable".
Shares will be marketable if they are regularly traded on certain US stock
exchanges, or on a foreign stock exchange that satisfies certain regulatory
requirements. It is expected that the London Stock Exchange will satisfy these
requirements. For purposes of this election, the Ordinary Shares will be
considered regularly traded during any calendar year during which they are
traded, other than in de minimis quantities, on at least 15 days during each
calendar quarter. Any trades that have as their principal purpose meeting this
requirement will be disregarded. US Holders should consult their tax advisers
concerning the availability and consequences of making a mark to market election
with respect to the Ordinary Shares.
In some cases a shareholder can avoid the interest charge and the other adverse
PFIC consequences described above by making a QEF election to be taxed currently
on its share of the PFIC"s undistributed income. The Company does not, however,
expect to provide US Holders with the information regarding this income that
would be necessary for a US Holder to make a QEF election with respect to its
Ordinary Shares.
If the Company is a PFIC, each US Holder will be required to make an annual
return on IRS Form 8621, reporting distributions received and gains realised
with respect to each PFIC in which it holds a direct or indirect interest.
US Holders should consult their tax advisers regarding the potential application
of the PFIC regime.
DEFINITIONS
In this announcement:
"Admission" means the admission of the Placing Shares to the Official List in
accordance with the Listing Rules and to trading on the London Stock Exchange"s
main market for listed securities;
"Affiliate" means any holding company, subsidiary, branch or associated
undertaking (including, without limitation, joint venture partners) of a Manager
from time to time or any subsidiary, branch or associated undertaking
(including, without limitation, joint venture partners) of any such holding
company from time to time;
"Bookbuilding" means the Bookbuilding procedure to be carried out by the
Managers in connection with the Placing;
"Board" means the Board of Directors of the Company or a duly authorised
committee thereof;
"Directors" means all the directors of the Company;
"FSA" means the Financial Services Authority;
"FSMA" means the Financial Services and Markets Act 2000, as amended;
"Group" means the Company and its subsidiary undertakings;
"JSE" means JSE Limited, a public company incorporated and registered in South
Africa (Registration number 2005/022939/06), licensed as a securities exchange
in terms of the Securities Service Act, No 36 of 2004, as amended;
"London Stock Exchange" means London Stock Exchange plc;
"Liberty International" or the "Company" means Liberty International PLC;
"Listing Rules" means the listing rules produced by the FSA under Part VI of the
FSMA and forming part of the FSA"s Handbook of rules and guidance, as from time
to time amending;
"Managers" means Merrill Lynch International and UBS;
"Official List" means the list maintained by the FSA in accordance with section
74(1) of the FSMA for the purposes of Part VI of the FSMA;
"Ordinary Shares" means ordinary shares of 50p each in the capital of the
Company;
"Placees" means persons (including individuals, funds or others) on whose behalf
a commitment to acquire Placing Shares has been given and Placee means any one
of them;
"Placing" means the placing of the Placing Shares by the Managers with
institutional and other investors on behalf of the Company;
"Placing Agreement" means the agreement dated 21 November 2006 between the
Company, Merrill Lynch International and UBS in connection with the Placing;
"Placing Price" means the price per Ordinary Share at which the Placing Shares
are to be placed with Placees;
"Placing Shares" means the new Ordinary Shares which are to be issued in
connection with the Placing;
"Regulatory Information Service" means any of the regulatory information
services included within the list maintained on the London Stock Exchange"s
website;
"Securities Act" means the United States Securities Act of 1933, as amended;
"Shareholders" means holders of Ordinary Shares;
"Trust" means STC International Limited as trustee of trusts related to the
Gordon family;
"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern
Ireland; and
"United States" means the United States of America, its territories and
possessions, any State of the United States and the District of Columbia.
APPENDIX TWO
COVENT GARDEN ACQUISITION IN AUGUST 2006 - FACT SHEET
Summary
Retail: 130,300 sq.ft.
Restaurant/Bars: 98,250 sq.ft.
Leisure: 109.700 sq.ft.
Office: 113,300 sq.ft.
122 tenants
146 leases
Average unexpired term to lease expiry 11.9 years.
Estimated one million visitors per week to the area
Unique Central London location
Diversity of uses and occupiers
Reversionary
Added value opportunities
Details of property acquired
The properties are in five principal blocks:
The Market - Located at the centre of the Estate, surrounded by the cobbled
Piazza, the Market totals approximately 71,300 sq ft. There are four parallel
arcades, with accommodation arranged over basement, ground and first floor
levels. The Market includes small shop units, the Apple Market (market stalls),
bars, restaurants and space for open air events.
South East Piazza - This is made up of the museum block and Jubilee Hall and
totals approximately 154,500 sq ft of commercial space. The museum block
includes the London Transport Museum and Theatre Museum, together with
restaurants, retail, office and residential accommodation. Jubilee Hall includes
market stalls, restaurants and leisure accommodation.
North West Piazza - This block includes: Bedford Chambers, which comprises
offices, retail and restaurant space; 40-43 King Street in retail and
residential use; and properties on Floral Street in retail, leisure, office and
residential use. Tenants include, HMV, LK Bennett, French Connection, Ted Baker
and The Sanctuary. The commercial space totals approximately 103,000 sq ft.
South West Piazza - This comprises thirteen properties fronting Henrietta Street
and Maiden Lane, which are in mixed use, principally retail, restaurants/bars
and offices. The commercial space totals approximately 70,000 sq ft.
Gateway Properties - Three separate properties, namely Regal House; nos. 1/3
Long Acre and Burleigh House, Burleigh Street which total 52,800 sq ft. Regal
House is a trophy building with a prime retail frontage to James Street and with
offices above. 1/3 Long Acre comprises a bar and modern offices on the upper
floors at the gateway to Covent Garden. Burleigh House comprises retail and
office accommodation.
Details of other holdings of the Group in the Covent Garden area
Floral Place - a mixed use development of 52,600 sq.ft. formed around the Grade
2 listed Carriage Hall with frontages onto Floral Street and Long Acre. Held on
2 long leases from the Church Commissioners, the Long Acre block provides high
quality new build office and retail accommodation whilst the Floral Street block
is a mix of new build and refurbished retail, offices, residential and
carparking.
32-33 Long Acre - an attractive freehold period building providing 2,950 sq.ft.
of retail and 2,600 sq.ft. of "media style" office accommodation.
APPENDIX THREE
DEVELOPMENT PIPELINE OF LIBERTY INTERNATIONAL
St David"s, Cardiff
The St David"s 2, Cardiff, project entails adding some 967,500 sq.ft. of retail
space, anchored by a John Lewis Partnership department store, to the existing St
David"s Centre, creating an overall centre of around 1.4 million sq.ft. of
space, ranking amongst the UK"s largest city centre regional shopping centres.
We anticipate pooling of our existing interest with that of our partner, Land
Securities Group PLC, prior to the year end and commencing the main works on the
St David"s 2 project in January 2007, for an opening in 2009.
Westgate Centre, Oxford
The Westgate Partnership, a joint venture with LaSalle Investment Management,
continues to progress this major city-centre regeneration project.
The proposals include the refurbishment and extension of the existing centre to
around 750,000 sq.ft., including a John Lewis Partnership department store and
around 90 shops. Significant improvements to the surrounding environment will
also add to the increased vitality of this part of Oxford.
Oxford City Council has resolved to grant planning permission for the Westgate
Partnership"s proposals which will now be referred to the Government Office for
the South East for final determination. Assuming a favourable outcome,
construction is scheduled to start at the end of 2007 or early 2008.
Eldon Square, Newcastle
At Eldon Square, Newcastle, two of the three schemes to improve and extend the
centre from 961,000 sq.ft. to a total of around 1.3 million sq.ft. have
commenced on site.
Eldon Square West provides 22,000 sq.ft. of retail and restaurant space
overlooking Old Eldon Square and 74 per cent of the rental income is currently
committed, for opening prior to the end of 2006.
Eldon Square North, the project to relocate the current bus station and provide
48,000 sq.ft. of additional retail space, started on site in April this year and
is due to complete, in phases, between 2007 and 2008.
Progress has also been achieved on the third and largest of the schemes, Eldon
Square South, which will provide 410,000 sq.ft. of retail space. Construction
is scheduled to start in 2007 for an opening in Autumn 2009. An agreement for
lease has been completed with Debenhams for the 175,000 sq.ft. department store.
This store, together with units currently under active negotiation, amount to 57
per cent of Eldon Square South"s anticipated rental income.
Manchester Arndale Northern Extension
The final phase of the Manchester Arndale Northern Extension opened in September
2006, creating the loop linking the new Northern Extension with the existing
Southern malls, with the centre now providing 1.4 million sq.ft. of retail
space, the largest city centre shopping centre in the UK. The 550,000 sq.ft.
extension provides the large floor plates and well configured space required by
modern retailers and has attracted a range of top quality names, including the
only 150,000 sq.ft. Next store in the country and the largest Top Shop in the UK
outside London. 80 per cent of total anticipated income from the extension is
now committed.
Other major regional shopping centre projects:
Thurrock Lakeside
Boardwalk project involving remodelling of the Lakeside pavilion providing 10
new restaurants and further retail and leisure space, opening in 2007
MetroCentre, Gateshead
Ongoing mall refurbishment and centre reconfiguration at Europe"s largest
covered shopping centre (1.81 million sq.ft.)
The Glades, Bromley
38,000 sq.ft. High Street redevelopment linking with the main centre (421,000
sq.ft.) now under construction for 2008 opening
Medium term development and extension plans at a number of centres including The
Potteries, Stoke-on-Trent; The Harlequin, Watford and The Victoria Centre,
Nottingham
Capital & Counties" GBP150 million retail and commercial redevelopment and
regeneration programme
Projects include Wapping Riverside (110,000 sq.ft. offices), Metro building,
Hammersmith (110,000 sq.ft. offices), 190 Strand WC2 (260,000 sq.ft. offices and
residential, joint venture with Prudential), Broad Gate, Leeds (120,000 sq.ft.
retail, 160,000 sq.ft. offices and 23 residential apartments), Hagley Road,
Birmingham (140,000 sq.ft. offices).
Date: 22/11/2006 07:28:03 AM Produced by the JSE SENS Department
