Co-op.gp. 25 Regulatory News (42TF)

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014.

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (the United States) OR TO ANY U.S. PERSON (AS DEFINED BELOW) OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

7 May 2019

CO-OPERATIVE GROUP LIMITED ANNOUNCES TENDER OFFER TO PURCHASE NOTES FOR CASH

Co-operative Group Limited (the Offeror) has today launched an invitation to holders of its outstanding £450,000,000 5.625 per cent. Notes (currently paying interest at the step-up amount of 6.875 per cent.) due 2020 (ISIN: XS0629969352) (the Notes), which are guaranteed by Funeral Services Limited, Co-operative Group Holdings (2011) Limited, Co-operative Group Food Limited, Co-operative Foodstores Limited and Rochpion Properties (4) LLP (each a Guarantor and together, the Guarantors) to tender their Notes for purchase by the Offeror for cash (the Offer) in an aggregate principal amount of up to the Maximum Acceptance Amount. The Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 7 May 2019 (the Tender Offer Memorandum) and is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum are (subject to the offer and distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used and not otherwise defined in this announcement have the meanings given in the Tender Offer Memorandum.

Summary of the Offer

The Offer will end at 5:00 p.m. (London time) on 14 May 2019 (the Expiration Deadline) unless extended, amended or terminated early by the Offeror.

The Offeror is not under any obligation to accept for purchase any Notes tendered pursuant to the Offer. The acceptance for purchase by the Offeror of Notes tendered pursuant to the Offer is at the sole discretion of the Offeror and tenders may be rejected by the Offeror for any reason. 

Rationale for the Offer

The purpose of the Offer is to provide liquidity to Noteholders and proactively manage the Co-op Group's balance sheet.

Purchase Price and Accrued Interest

The Offeror will pay a cash purchase price (the Purchase Price) on the Tender Offer Settlement Date for Notes validly tendered and accepted by it for purchase pursuant to the Offer. The Purchase Price will be 106.00 per cent. of the principal amount of the Notes. The Offeror will also pay, on the Tender Offer Settlement Date, an Accrued Interest Payment in respect of Notes validly tendered and accepted for purchase pursuant to the Offer.

New Issue Condition

The Offeror announced today its intention to issue new sterling-denominated fixed rate notes (the New Notes). Whether the Offeror will purchase any Notes validly tendered in the Offer is subject, without limitation, to (i) the pricing of the issue of the New Notes and (ii) the signing by the Offeror and the respective Joint Lead Managers (listed below) of a subscription agreement for the purchase of, and subscription for, the New Notes (the New Issue Condition). The New Issue Condition may be waived by the Offeror.

The Offeror has appointed each of Barclays Bank PLC, ING Bank N.V., London Branch and Lloyds Bank Corporate Markets plc as Joint Lead Managers in connection with the New Notes.

Expected Timetable of Events

This is an indicative timetable and is subject to change. All times are London time.

The above dates and times are subject, where applicable, to the right of the Offeror, in its sole and absolute discretion, to extend, re‑open, amend, and/or terminate the Offer. Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes whether such intermediary would require receipt of instructions to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer before the deadlines specified in the Tender Offer Memorandum. The deadlines set by any such intermediary and each Clearing System for the submission of Tender Instructions will be earlier than the relevant deadlines above. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum.

Scaling of Tenders of Notes

The Offeror proposes to accept Notes for purchase pursuant to the Offer up to the Maximum Acceptance Amount (subject to the right of the Offeror, in its sole discretion, to accept less than or more than such amount for purchase pursuant to the Offer).

If:

(i) the amount payable (excluding Accrued Interest) for the aggregate principal amount of the Tendered Notes is equal to or less than the Maximum Consideration Amount, the Offeror intends to accept for purchase all of Tendered Notes; and

(ii) the amount payable (excluding Accrued Interest) for the aggregate principal amount of the Tendered Notes is greater than the Maximum Consideration Amount, the Offeror intends to accept such Tendered Notes for purchase on a pro rata basis,

subject in each case to the acceptance of the Offer by the Offeror and the satisfaction (or waiver) of the other conditions of the Offer.

In the circumstances described in (ii) above in which valid tenders of Notes are to be accepted on a pro rata basis, each such tender of Tendered Notes will be scaled by a scaling factor equal to (A) the Maximum Consideration Amount, divided by (B) the amount payable (excluding Accrued Interest) for the aggregate principal amount of the Tendered Notes, in each case rounded to 6 decimal places, and subject to adjustment to allow for the amount payable (excluding Accrued Interest) for the aggregate principal amount of Notes accepted for purchase, following the rounding of tenders for purchase as described below, to exactly equal the Maximum Consideration Amount.

Each tender of Notes that is scaled in this manner will be rounded down to the nearest £1,000 in principal amount of Notes.

In addition, in the event of any such scaling, the Offeror intends to apply pro rata scaling to each valid tender of Notes in such a manner as will result in both (a) the relevant Noteholder transferring Notes to the Offeror in an aggregate nominal amount of at least £100,000 (being the minimum denomination of the Notes) and (b) the relevant Noteholder's residual amount of Notes (being the nominal amount of the Notes the subject of the relevant Tender Instruction that are not accepted for purchase by virtue of such scaling) amounting to either (i) at least £100,000 or (ii) £0, and the Offeror therefore intends to adjust the scaling factor applicable to any relevant Tender Instruction accordingly.

Tender Instructions

In order to participate in the Offer, and be eligible to receive the relevant Purchase Price and the relevant Accrued Interest Payment pursuant to the Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by the Expiration Deadline. See "Procedures for Participating in the Offer" in the Tender Offer Memorandum for further information.

Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for participating in, the Offer.

Questions and requests for assistance in connection with the Offer may be directed to the Dealer Managers:

Barclays Bank PLC (Telephone: +44 (0) 20 3134 8515; Attention: Liability Management Group; Email: eu.lm@barclays.com)

ING Bank N.V., London Branch (Telephone: + 44 (0) 20 7767 6784; Attention: Liability Management Group; Email: liability.management@ing.com)

Lloyds Bank Corporate Markets plc (Telephone: +44 (0) 20 7158 1719 / 1726; Attention: Liability Management Group; liability.management@lloydsbanking.com)

Questions and requests for assistance in connection with the delivery of Tender Instructions may be directed to the Tender Agent:

Lucid Issuer Services Limited (Telephone: +44 (0) 20 7704 0880; Attention: Thomas Choquet; Email: co-op@lucid-is.com)

This announcement is released by Co-operative Group Limited and contains information that qualified or may have qualified as insider information for the purposes of Article 7 of Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Offer described above. For the purpose of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Ian Ellis, Chief Financial Officer of Co-operative Group Limited.

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer. If any Noteholder is in any doubt as to the contents of this announcement, the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Noteholders should consult with their own advisers as needed to assist them in making an investment decision and to advise them whether they are legally permitted to tender Notes pursuant to the Offer. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offer. Each Noteholder is solely responsible for making its own independent appraisal of all matters as such Noteholder deems appropriate and each Noteholder must make its own decision as to whether to tender any of its Notes for purchase pursuant to the Offer. The Dealer Managers will not be responsible to any Noteholders for providing the protections afforded to customers of the Dealer Manager or for advising any other person in connection with the Offer. None of the Offeror, the Guarantors, the Dealer Managers or the Tender Agent makes any recommendation whether Noteholders should tender Notes pursuant to the Offer. None of the Dealer Managers, the Tender Agent or any of their respective directors, employees or affiliates takes any responsibility for the contents of this announcement or the Tender Offer Memorandum, or for any failure by the Offeror to disclose events that may have occurred which may affect the significance or accuracy of the information set out in it since the date of this announcement or the Tender Offer Memorandum.

Offer and Distribution Restrictions

The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by the Offeror and the Dealer Managers to inform themselves about, and to observe, any such restrictions. Nothing in this announcement or the Tender Offer Memorandum or the electronic transmission thereof constitutes an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes in the Offer will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and any of the Dealer Managers or any of their respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction.

United States

The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States or to any U.S. Person (as defined in Regulation S of the United States Securities Act of 1933, as amended (each a U.S. Person)). This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of this announcement and the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any U.S. Person. Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States, a U.S. Person, or any person acting for or on the account or benefit of any U.S. Person, or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Neither this announcement nor the Tender Offer Memorandum is an offer of securities for sale in the United States or to U.S. persons. Securities may not be offered or sold in the United States absent registration under, or an exemption from the registration requirements of, the Securities Act. The New Notes have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. persons.

Each holder of Notes participating in the Offer will represent that it is not a U.S. Person located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States and who is not a U.S. Person. For the purposes of this and the above two paragraphs, United States means the United States of America, its territories and possessions, (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Financial Promotion Order)) or persons who are within Article 43(2) of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

France

The Offer is not being made, directly or indirectly, to the public in the Republic of France (France). Neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offer have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) other than individuals, in each case acting on their own account and all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code Monétaire et Financier, are eligible to participate in the Offer. Neither this announcement, the Tender Offer Memorandum nor any other document or material relating to the Offer has been or will be submitted for clearance to or approved by the Autorité des marchés financiers.

Italy

None of the Offer, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offer have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Accordingly, Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase pursuant to the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offer.