7 Feb 2013 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA AND JAPAN
7 February 2013
RECOMMENDED MERGER OF THE INTERESTS OF ISIS PROPERTY TRUST LIMITED AND IRP PROPERTY INVESTMENTS LIMITED AND REVISED DIVIDEND POLICY
KEY HIGHLIGHTS
The Boards of each of ISIS Property Trust Limited and IRP Property Investments Limited are pleased to announce that they have reached agreement on the terms of a recommended merger of the entire assets of ISIS Property Trust Limited ("IPT") and IRP Property Investments Limited ("IRP").
Highlights of the merger
·; The recommended merger will be effected by means of a scheme of reconstruction.
·; Under the Scheme, IPT Shareholders will receive New Shares issued by IRP on a NAV for NAV basis.
·; The combination of these complementary property businesses will result in the enlarged IRP (to be renamed F&C UK Real Estate Investments Limited ("F&C Real Estate") having a market capitalisation which is expected to be in excess of £130 million which should enhance liquidity in the shares and increase the attractiveness of the enlarged IRP.
·; This proposal will result in a combined property portfolio with further diversification and more flexibility in its future investment strategy. The current property portfolios are complementary in their geographic and sector exposure and the combined portfolio will maintain an overweight position in London and the South East.
·; The proposal will also result in a material reduction in the Total Expense Ratio of F&C Real Estate.
Revised dividend policy
Each of the IPT Board and IRP Board have been reviewing their current dividend policies as each company has, since launch, followed a policy of paying out dividends which are not fully covered by net rental income. Following consultation with larger shareholders, it is proposed that F&C Real Estate's dividend will be set at a sustainable level which is expected to be fully covered by net rental income when the company is fully invested. In order to achieve this policy it is expected that the dividend of F&C Real Estate will be reduced and that the proposed level of dividends would equate to a reduction in the current dividends paid of approximately 30 per cent. in respect of IRP and 20 per cent. in respect of IPT.
The Chairmen of IRP and IPT commented on the proposals as follows:
"The Board of IRP is conscious that the UK wealth management sector is undergoing significant change, which is resulting in the creation of wealth management firms with significantly greater scale. This has consequent implications for the liquidity requirements for investments made on behalf of clients. The merger of IPT and IRP creates a larger and more liquid investment company which is a natural response to this trend, and one which my colleagues and I believe will bring a number of important benefits to shareholders." Quentin Spicer, Chairman of IRP
"The Board of IPT believes that the proposed merger is a very positive development for both IRP and IPT shareholders. It results in a larger and more diversified company that will provide greater flexibility in managing and growing the portfolio in the future to continue delivering attractive returns to shareholders." Peter Crook, Chairman of IPT
Further details on the proposed transaction are set out below.
1. Introduction and background
The IPT Board and the IRP Board announce that they have reached agreement on the terms of a recommended acquisition of the entire assets of IPT by IRP. The acquisition will be effected through a voluntary solvent liquidation of IPT and the issue of new ordinary shares by IRP (the "Scheme"). Under the Scheme, IPT Shareholders will receive New Shares on a NAV for NAV basis.
IPT and IRP are both Guernsey incorporated property investment companies which are listed on the Premium Segment of the UK Listing Authority's Official List and the Channel Islands Stock Exchange. IPT and IRP have identical investment objectives and policies and are both managed by F&C. The Boards of both IPT and IRP have been considering the options available to them to increase in scale in a cost effective manner. After careful consideration of the terms upon which they can merge their respective assets, the Boards have unanimously resolved to propose the Scheme to their Shareholders. It is proposed that the enlarged IRP will be renamed "F&C UK Real Estate Investments Limited".
Since their launch it has been the policy of both IPT and IRP to pay uncovered dividends as more fully set out under paragraph 5 below. Following consultation with larger Shareholders, it is expected that the dividend will be reduced to a sustainable level which is expected to be fully covered by its rental income (net of revenue expenses when the company is fully invested). Accordingly, it is expected that IRP's existing dividend of 1.80p per share per quarter will reduce to 1.25p per quarter with effect from 1 April 2013 (this is not a dividend forecast).
This announcement sets out the details of the proposed Scheme. Further documentation to convene general meetings to approve the Scheme and the issue of the New Shares is expected to be posted in early March 2013.
2. Benefits of the Scheme
The IPT and IRP Boards each believe that the Scheme offers significant benefits for all IPT and IRP Shareholders as noted below.
§ F&C Real Estate is expected to have a market capitalisation (based on the average share price discounts for the previous 12 months) in excess of £130 million, which should enhance the liquidity in the shares and increase the attractiveness of F&C Real Estate to new investors. F&C Real Estate is therefore expected to be well placed to take advantage of the current changes in the retail distribution market.
§ The Scheme will result in a substantial increase in the size of F&C Real Estate's property portfolio to approximately £280 million, which will:
§ diversify further the property and tenant exposure, which also provides greater flexibility in respect of certain bank facility covenants;
§ enable F&C Real Estate, over time, to obtain exposure to assets with a larger lot size; and
§ provide complementary geographic and sector exposures whilst maintaining an overweight position in London and the South East.
§ There will be a material reduction in the Total Expense Ratio of both IPT and IRP, as a result of fixed costs being spread over a larger asset base and a reduction in the management fees payable to F&C.
Further details on IPT and IRP and the Combined Portfolio are set out in paragraph 12 below.
3. The Scheme
The acquisition of IPT's assets by IRP will be achieved through a voluntary solvent liquidation of IPT. Upon the liquidation of IPT, the Liquidator will implement the Scheme by distributing IPT's assets to a newly incorporated Guernsey company, which is wholly owned by IRP, F&C UK Real Estate Finance Limited ("F&C Real Estate Finance"), in return for an issue of New Shares to IPT Shareholders. The Scheme will result in the subsidiary of IPT being transferred to F&C Real Estate Finance and IPT then being wound up.
Under the Scheme, IPT Shareholders will receive New Shares with an aggregate NAV equal to the aggregate NAV of such IPT Shares.
The New Shares will rank pari passu with the issued IRP Shares in respect of any dividends declared, made or paid with a record date on or after the date of issue of the New Shares.
It is expected that, following the implementation of the Scheme, the board of F&C Real Estate will comprise three directors from each of IRP and IPT and that Quentin Spicer will remain as Chairman.
4. NAVs and property valuation
The New Shares will be issued on a NAV for NAV basis. It is intended that the NAV per IPT Share and IRP Share will be calculated as at 31 March 2013 on the basis of a valuation of the respective property portfolios as at that date.
The NAV of each share will be calculated using each company's accounting policies (which are identical) and the property valuations will be determined by the independent valuer, who is the same for both portfolios. The NAVs of each company will be subject to adjustments for any dividends declared with a record date in the period from the date of the calculation of the respective NAVs to completion of the Scheme.
As noted below, the costs of the transaction will be borne by all IPT and IRP Shareholders pro rata to their shareholdings in IPT and IRP respectively. The calculation of the NAVs will be adjusted for any transaction costs already incurred by the respective companies prior to the calculation of the NAVs.
Illustrative financial effects
Based on the unaudited NAVs as at 31 December 2012 of 92.8p for IPT and 72.0p for IRP, adjusted for dividends expected to be paid in respect of the quarter to 31 December 2012 but not yet paid as at that date, an IPT Shareholder would receive 1.29 New Shares in respect of each IPT Share held.
5. Revised dividend policy and interim dividends
Since launch each of IPT and IRP has followed a policy of paying out dividends which are not fully covered by net rental income. Each of the IPT Board and IRP Board have been considering their respective dividend policies and, following consultation with larger Shareholders, it is proposed that F&C Real Estate's dividend will be set at a sustainable level, which is expected to be fully covered by its rental income (net of revenue expenses when the company is fully invested).
In the absence of unforeseen circumstances and on the assumption that the Scheme becomes effective, it is expected that IRP's existing dividend of 1.80p per share per quarter will reduce to 1.25p per quarter with effect from 1 April 2013 (this is not a dividend forecast). This proposed level of dividend would equate to a reduction in the current dividends paid of 30.6 per cent. in respect of an IRP Share and 19.4 per cent. in respect of an IPT Share (based on the illustrative share exchange ratio referred to in paragraph 4 above). Thus, the effective reduction in dividend per IPT Share will be from 2.00p per quarter to 1.61p per quarter. IPT and IRP Shareholders should note that if the Scheme does not become effective, dividends would not be fully covered at these levels by each company's respective net rental income and each of the Boards would separately consider the appropriate level of dividends paid by them in the light of the circumstances at that time.
It is intended that each of IRP and IPT will pay an interim dividend in respect of the period up to 31 March 2013 at the current dividend level to ensure that all IPT and IRP Shareholders are treated equally. IPT's final interim dividend will be paid immediately prior to the Effective Date of the Scheme. IRP's interim dividend will be paid in June 2013 to IRP Shareholders on its register as at a record date prior to the Effective Date. Accordingly, the first interim dividend paid by F&C Real Estate to all Shareholders will be paid in September 2013 in respect of the period from 1 April 2013 to 30 June 2013 at the rate of 1.25p per share.
6. Reduction in management fees
F&C Investment Business Limited will continue as the investment manager of F&C Real Estate and F&C REIT Property Asset Management plc as the property manager. In connection with the Scheme, F&C has agreed to reduce its basic management fee from 0.70 per cent. per annum of F&C Real Estate's total assets (less current liabilities) to a basic management fee of 0.60 per cent. per annum on the total assets (less current liabilities) of F&C Real Estate (which is the level of the basic management fee currently paid by IPT).
In addition, F&C will be entitled to a performance fee of 15 per cent. of the amount by which the total return of F&C Real Estate's directly held properties exceeds 115 per cent. of the total return on the IPD Quarterly and Monthly Funds Index (the existing IPT performance fee is currently calculated on the basis of 20 per cent. of total return above a hurdle rate of 120 per cent.).
The performance fee will be measured over a rolling three year period, commencing from the Effective Date, and the total fees payable in any financial year will be capped at 0.75 per cent. of total assets (less current liabilities). The first payment of the performance fee, if earned, will be due in respect of the period from the Effective Date to 30 June 2014, subject to claw back to the extent that its property portfolio underperforms over the following two financial years.
F&C also currently receives an administration fee from each of IPT and IRP of £63,000 and £70,000 respectively (both of which increase annually in line with inflation). If the Scheme becomes effective, F&C will receive an administration fee from F&C Real Estate of £100,000 per annum (which will increase annually in line with inflation).
7. Replacement debt facility
The implementation of the Scheme requires the consent of Lloyds TSB Bank in respect of both the IPT Facility and the IRP Facility. Lloyds TSB Bank has agreed to consent to the implementation of the Scheme and it has agreed to replace the existing IPT Facility and IRP Facility with a new term and revolving credit loan facility. The borrower under the New Facility will be F&C Real Estate Finance.
Under the current IPT Facility and IRP Facility a maximum amount of £125 million can be drawn down in aggregate (currently £110 million is drawn down in aggregate) and the New Facility will permit a maximum amount of £115 million to be drawn down. The existing interest rate swaps, which fix the interest payable in respect of £100 million in aggregate of the existing borrowings, will be novated to F&C Real Estate Finance without any amendments or additional cost. As a condition of obtaining the consent of Lloyds TSB Bank to the Scheme, the aggregate margin under the New Facility with £110 million drawn down will increase by 0.18 per cent. per annum (based on the current loan to value and drawn down amounts) giving a fixed interest rate payable on £100 million of the New Facility of 5.75 per cent. per annum (including the margin increase referred to above) and a floating rate which is currently around 1 per cent. per annum on the balance. The New Facility will be repayable in January 2017, the same repayment date as applies under the existing IPT Facility and IRP Facility. The other terms of the New Facility and related security and finance documents will be substantially similar to the terms of the existing IPT Facility and IRP Facility.
The New Facility is conditional on certain conditions precedent including, inter alia, the Scheme becoming effective and the property holding subsidiaries of both IPT and IRP becoming wholly owned subsidiaries of F&C Real Estate Finance.
F&C Real Estate will not be a party to, or guarantor of, the New Facility.
8. Costs of the Scheme and reduction in total expense ratio
It is estimated that the costs of the Scheme incurred by IPT and IRP will in aggregate be approximately £800,000, which is approximately 0.5 per cent. of the estimated net assets of F&C Real Estate.
In the event that the Scheme does not become effective, it is estimated that the costs incurred by IPT and IRP will be in aggregate up to £750,000. IPT and IRP have agreed to bear these costs in proportion to their respective unaudited net assets as at 31 December 2012, being 46.9 per cent. and 53.1 per cent. respectively.
It is estimated that the total expense ratio of F&C Real Estate (excluding property expenses) will be 0.86 per cent. per annum of total assets less current liabilities (excluding the impact of any performance fee). IPT and IRP currently have total expense ratios of 1.00 per cent. and 1.08 per cent. respectively. Based on the reduced total expense ratio and taking into account the increased margin under the New Facility it is estimated that the costs of the Scheme will be recovered within a period of two and a half years.
9. Shareholder support
IPT and IRP have each consulted with their largest Shareholders. These Shareholders have indicated that they are supportive of the proposals set out in this announcement.
10. Conditions to the Scheme becoming effective
To become effective, the Scheme requires, amongst other things, the following events to occur:
§ special resolutions of IPT (requiring approval by 75 per cent. of IPT Shareholders in attendance) approving amendments to the articles to facilitate the proposals, to wind up IPT and to appoint a Liquidator;
§ an ordinary resolution of IRP (requiring approval by a simple majority of IRP Shareholders in attendance) approving the acquisition of the assets of IPT pursuant to the Scheme;
§ IPT, IRP and the Liquidator entering into a transfer agreement setting out the terms upon which IPT (acting through the Liquidator) transfers its assets to IRP in return for the issue of New Shares;
§ the UKLA, the London Stock Exchange and the Channel Islands Stock Exchange agreeing to the admission of the New Shares to the Official List and to trading on the main market for listed securities of the London Stock Exchange respectively and the Channel Islands Stock Exchange, subject only to allotment; and
§ the IRP Board and the IPT Board not resolving to abandon the Scheme.
11. Risk factors
The Boards of IPT and IRP believe that the following are the key risk factors that relate to the Scheme.
§ The implementation of the Scheme is subject to a number of conditions and there is no certainty that the Scheme will become effective. In the event that these conditions are not satisfied, Shareholders will bear costs which are estimated as being equivalent to 0.5 per cent. of the NAV of an IPT Share and an IRP Share.
§ New Shares will be issued to IPT Shareholders on the basis of a NAV for NAV ratio expected to be calculated as at 31 March 2013. The NAV of an IPT Share or an IRP Share will vary between the calculation date and the Effective Date and the NAVs used for the purposes of the Scheme may be lower or higher than the illustrative figures in this announcement.
§ The NAVs are primarily based on the valuation of the underlying properties in each of IRP and IPT. The valuation of property is inherently subjective due to the individual nature of each property and as a result valuations are subject to uncertainty.
§ The performance of IPT and IRP, and their respective NAVs and level of, and ability to pay, dividends, would be adversely affected by a downturn in the property market in the UK in terms of market value or a weakening of rental yields. There remains considerable economic and fiscal uncertainty in the UK economy.
§ The market value of, and income derived from, the IPT Shares and the IRP Shares can fluctuate. The market value of such shares may vary considerably from their underlying NAV. The market values of these shares, as well as being affected by their NAV, also take into account their dividend yield and prevailing interest rates.
§ There can be no guarantee that the expected benefits of the Scheme, as described in paragraph 2 above, will arise, either at all or to the extent stated.
12. Information on IPT, IRP and the Combined Portfolio
IPT
The IPT Property Portfolio comprises 23 properties with an aggregate market value as determined by the Valuer at 31 December 2012 of £120.1 million. The IPT Property Portfolio generates a current net annual rent of £8.40 million (being a net initial yield of 6.6 per cent.).
IRP
The IRP Property Portfolio comprises 33 properties with an aggregate market value as determined by the Valuer at 31 December 2012 of £158.7 million. The IRP Property Portfolio generates a current net annual rent of £11.29 million (being a net initial yield of 6.7 per cent.).
Combined Portfolio
The Combined Portfolio would comprise 56 properties with an aggregate market value as determined by the Valuer at 31 December 2012 of £278.8 million. The Combined Portfolio would generate a current net annual rent of £19.69 million (being a net initial yield of 6.7 per cent.).
A comparison of the IPT Property Portfolio, IRP Property Portfolio and the Combined Portfolio is set out below.
IPT Property Portfolio | IRP Property Portfolio | Combined Portfolio |
Top ten properties (percentage of market value as at 31 December 2012) | ||
14 Berkeley Street, London W1 (14.8%) | 3663 Unit, Echo Park, Banbury (10.6%) | 14 Berkeley Street, London W1 (6.4%) |
County House, County Square, Chelmsford (7.1%) | Units 1-8 Lakeside Road, Colnbrook (7.5%) | 3663 Unit, Echo Park, Banbury (6.0%) |
Enterprise Way, Luton (6.5%) | Southampton International Park, Eastleigh (6.7%) | Units 1-8 Lakeside Road, Colnbrook (4.3%) |
Keens House, Anton Mill Road, Andover (6.3%) | 30-40 Parade, Leamington Spa (6.5%) | Southampton International Park, Eastleigh (3.8%) |
Halls Mill Retail Park, Foundry Street, Bury (6.3%) | Clifton Moor Gate, York (5.5%) | 30-40 Parade, Leamington Spa (3.7%) |
7 Beverley Way, New Malden (6.1%) | Mercury House, Strathclyde Business Park, Bellshill (4.9%) | Clifton Moor Gate, York (3.1%) |
1/2 Network Bracknell, Eastern Rd, Bracknell (5.5%) | Hemel Gateway, Hemel Hempstead (4.7%) | County House, County Square, Chelmsford (3.1%) |
King William House, Market Place, Hull (5.0%) | 1-2 Lochside Way, Edinburgh Park, Edinburgh (4.3%) | Mercury House, Strathclyde Business Park, Bellshill (2.8%) |
16, 18 & 20 Upper Marlborough Road, St. Albans (4.9%) | Willowbeck Road, Northallerton (4.2%) | Enterprise Way, Luton (2.8%) |
Wide Lane, Eastleigh (4.1%) | 7-8 High Street & 50 Colebrook Street, Winchester (4.2%) | Keens House, Anton Mill Road, Andover (2.7%) |
IPT Property Portfolio | IRP Property Portfolio | Combined Portfolio |
Top ten tenants (percentage of current gross annual rent) | ||
Public Sector (11.1%) | Cable & Wireless Group (11.9%) | Cable & Wireless Group (6.8%) |
Homebase Limited (6.8%) | BFS Group Limited (11.0%) | BFS Group Limited (6.3%) |
Bunzl UK Limited (6.4%) | HSBC Bank plc (8.9%) | HSBC Bank plc (5.8%) |
AECOM Limited (5.5%) | B&Q plc (5.0%) | Public Sector (4.7%) |
Applied Materials UK Limited (5.0%) | Inchcape Estates Limited (4.9%) | Homebase Limited (4.5%) |
Halfords Limited (4.6%) | Premier Foods Group Limited (4.6%) | B&Q plc (2.8%) |
Lloyds TSB General Insurance Holdings Limited (4.5%) | PEI Genesis (UK) Limited (3.8%) | Inchcape Estates Limited (2.8%) |
City Motor Holdings Limited (3.7%) | Retail Decisions Europe Ltd (3.7%) | Bunzl UK Limited (2.7%) |
Robert Home Group Limited (3.7%) | HTEC Limited (3.6%) | Premier Foods Group Limited (2.7%) |
DSG Retail Limited (3.4%) | Homebase Limited (2.9%) | Halfords Limited (2.5%) |
IPT Property Portfolio | IRP Property Portfolio | Combined Portfolio |
Average unexpired lease length (weighted by current gross annual rent) | ||
8.97 years | 7.45 years | 8.10 years |
Void rate (percentage of estimated net annual rent) | ||
2.5% | 4.4% | 3.6% |
IPT Property Portfolio | IRP Property Portfolio | Combined Portfolio | ||
Regional weightings (percentage of market value as at 31 December 2012) | ||||
West End | 14.8% | 2.6% | 7.9% | |
Rest London | 10.1% | 1.8% | 5.4% | |
South East | 36.6% | 48.8% | 43.6% | |
South West | 3.8% | 0.7% | 2.1% | |
Eastern | 15.5% | 2.5% | 8.1% | |
East Midlands | 3.0% | 5.0% | 4.1% | |
West Midlands | 3.1% | 12.7% | 8.5% | |
York and Humber | 6.0% | 9.7% | 8.1% | |
North West and Merseyside | 6.3% | 3.6% | 4.8% | |
North East | 0.8% | 1.6% | 1.3% | |
Scotland | 0.0% | 11.0% | 6.3% | |
IPT Property Portfolio | IRP Property Portfolio | Combined Portfolio | ||
Sub-sector weighting (percentage of market value as at 31 December 2012) | ||||
Industrial | 20.5% | 36.0% | 29.3% | |
Office | 40.3% | 15.9% | 26.4% | |
Retail Warehouse | 22.3% | 14.5% | 17.9% | |
Standard Retail | 16.8% | 33.6% | 26.4% | |
13. Overseas Shareholders
The availability of the Scheme to Shareholders who are not resident in the United Kingdom, the Channel Islands and the Isle of Man may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. The Liquidator shall sell, as soon as reasonably practicable, the New Shares issued in respect of IPT Shares that are held by Overseas Shareholders and shall ensure that the monies received from such sale, net of associated costs, are paid to the relevant Overseas Shareholders. Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.
14. Indicative timetable
The Scheme will be implemented on the terms and subject to the conditions set out in this announcement and to be set out in the Scheme Circular, including obtaining relevant regulatory approvals and approval by the IPT and IRP Shareholders. The Scheme Circular will provide full details of the Scheme, together with notice of the IPT EGM and the expected timetable. It is expected that the Scheme Circular, the IRP Circular and the Prospectus will be published in early March 2013.
An indicative timetable of principal events is as follows:
Event | Indicative Timing |
Posting of Scheme Circular and Prospectus to IPT Shareholders Posting of IRP Circular and Prospectus to IRP Shareholders | Early March Early March |
Calculation Date | 31 March |
Announcement of final interim dividend of IPT and third interim dividend of IRP | Early April |
IPT EGM and IRP EGM and announcement of results | Mid April |
Effective Date | Mid April |
IPT in liquidation | Mid April |
New Shares issued | Mid April |
A more detailed timetable will be included in the Scheme Circular.
15. General
In deciding whether or not to vote in favour of the resolutions to implement the Scheme, IPT Shareholders and IRP Shareholders should rely only on the information contained in, and should follow the procedures described in, the Scheme Circular and the IRP Circular respectively and the Prospectus.
Information on the tax consequences of the Scheme for the IPT Shareholders will be contained in the Scheme Circular.
Enquiries:
Simon Cordery | F&C Asset Management plc | Tel: +44(0) 20 7628 8000 |
Gordon Neilly | Cantor Fitzgerald, Financial Adviser to IPT | Tel: +44(0) 207 894 8096 |
Charlie Ricketts | Cenkos Securities plc | Tel: +44(0) 207 397 1910 |
Douglas Armstrong | Dickson Minto W.S., Financial Adviser to IRP | Tel: +44(0) 207 628 4455 |
Cantor Fitzgerald, which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for IPT and no one else in relation to the Scheme and will not be responsible to anyone other than IPT for providing the protections afforded to clients of Cantor Fitzgerald nor for providing advice in relation to the proposed transaction.
Dickson Minto W.S., which is authorised and regulated by the Financial Services Authority in the United Kingdom, is acting for IRP and no one else in relation to the Scheme and will not be responsible to anyone other than IRP for providing the protections afforded to clients of Dickson Minto W.S. nor for providing advice in relation to the proposed transaction.
This announcement is not intended to and does not constitute, or form any part of, an offer to sell or an invitation to subscribe for or purchase any securities or the solicitation of any vote or approval in any jurisdiction, pursuant to the Scheme or otherwise. The Scheme will be made solely through the Scheme Circular, which will contain the full terms and conditions of the Scheme (including details of how to vote in respect of the Scheme). Any response in relation to the Scheme will be made only on the basis of the information contained in the Scheme Circular and the Prospectus or any other document by which the Scheme is made. IPT and IRP Shareholders are advised to read carefully the formal documentation in relation to the Scheme once it has been dispatched. This announcement does not constitute a prospectus or prospectus equivalent document.
Forward Looking Statements
This announcement contains statements about IPT and IRP that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans" "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects", "continue", "should" or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditure, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of IPT's or IRP's operations and potential synergies resulting from the Scheme; and (iii) the effects of government regulation on IPT's or IRP's business.
Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. IPT and IRP disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.
APPENDIX - DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise.
"Business Day" | a day (other than Saturdays, Sundays and public holidays in the UK and Guernsey) on which banks are open for business (other than solely for trading and settlement in Euros) in the City of London and Guernsey |
"Combined Portfolio" | the IPT Portfolio and the IRP Portfolio |
"Effective Date" | the date on which the Scheme becomes effective pursuant to its terms |
"EGMs" | the IPT EGM and the IRP EGM |
"F&C" or "Investment Manager" | F&C Investment Business Limited |
"F&C Real Estate" | IRP (as renamed) after the implementation and completion of the Scheme |
"F&C Real Estate Finance" | a newly incorporated wholly owned subsidiary of IRP |
"Index" | IPD Quarterly and Monthly Funds Index |
"IPT" | ISIS Property Trust Limited |
"IPT Board" | the board of directors of IPT as at the date of this announcement |
"IPT EGM" | the extraordinary general meeting of IPT (or any adjournment thereof) to be held in connection with the Scheme for the purposes of, inter alia, obtaining shareholder approval for the Scheme and the steps necessary to implement the Scheme |
"IPT Facility" | the existing term loan facility between IPT and Lloyds TSB Bank for £50 million which is repayable in January 2017 |
"IPT Property Portfolio" | the direct and indirect property assets of IPT as at the date of this document |
"IPT Shareholders" | the holders of IPT Shares |
"IPT Shares" | the existing fully paid ordinary shares of 1p each in the capital of IPT |
"IRP" | IRP Property Investments Limited |
"IRP Board" | the board of directors of IRP as at the date of this announcement |
"IRP Circular" | the circular to be sent to IRP Shareholders containing the terms and conditions of the Scheme, details of the proposals and the resolutions required to implement them |
"IRP EGM" | the extraordinary general meeting of IRP (or any adjournment thereof) to be held in connection with the Scheme for the purposes of, inter alia, obtaining shareholder approval for the steps necessary to implement the Scheme |
"IRP Facility" | the existing term loan facility between IRP and Lloyds TSB Bank for £75 million which is repayable in January 2017 |
"IRP Property Portfolio" | the direct and indirect property assets of IRP as at the date of this document |
"IRP Shareholders" | the holders of IRP Shares |
"IRP Shares" | the existing fully paid ordinary shares of 1p each in the capital of IRP |
"Liquidator" | the liquidator of IPT being, initially, the person(s) appointed upon the resolution to be proposed at the IPT EGM becoming effective |
"Lloyds TSB Bank" | Lloyds TSB Bank plc |
"London Stock Exchange" | London Stock Exchange plc |
"NAV" | in relation to an IPT Share, a IRP Share and/or a New Share as the case may be, means its net asset value on the relevant date as calculated on the basis of the relevant company's normal accounting policies |
"New Facility" | the new term loan and revolving credit facility between F&C Real Estate Finance and Lloyds TSB Bank for £115 million which is repayable in January 2017 |
"New Shares" | the ordinary shares issued by IRP to IPT Shareholders pursuant to the Scheme |
"Official List" | the Official List of the UKLA |
"Overseas Shareholders" | IPT's Shareholders who are resident in, or nationals or citizens of, or whose registered address is in, a jurisdiction outside the United Kingdom, the Channel Islands and the Isle of Man or who are nominees of, or custodians or trustees for, residents, citizens or nationals of other countries |
"Prospectus" | the prospectus to be published by IRP for the issue of New Shares and their admission to the Official List and to trading on the Main Market of the London Stock Exchange |
"Scheme" | a transfer by the Liquidator of the assets of IPT to IRP in consideration of the issue of New Shares to IPT Shareholders in respect of their interests in IPT |
"Scheme Circular" | the circular to be sent to IPT Shareholders containing the terms and conditions of the Scheme, details of the proposals and the resolutions required to implement them |
"Shareholders" | the IPT Shareholders and IRP Shareholders |
"Total Expense Ratio" | the total costs of managing and operating IPT or IRP per annum divided by IPT or IRP's total assets |
"UKLA" | the UK Listing Authority, being the Financial Services Authority Limited acting in its capacity as the competent authority for the purposes of Part IV of the Financial Services and Markets Act 2000 |
"United Kingdom" or "UK" | the United Kingdom of Great Britain and Northern Ireland |
"Valuer" | DTZ Debenham Tie Leung Limited |
References to the singular include the plural and vice versa.