London & Associated Properties Regulatory News (LAS)

2 Jun 2005 06:00

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN,SOUTH AFRICA OR THE REPUBLIC OF IRELAND London & Associated Properties PLC PROPOSED TENDER OFFER TO RETURN UP TO ‚£10 MILLION TO SHAREHOLDERS The Board of London & Associated Properties PLC ("London & AssociatedProperties" or "the Company") today announces that the Company intends toeffect a purchase of its own Ordinary Shares by way of an on-market tenderoffer.Panmure Gordon & Co will offer to purchase up to 10,309,278 Ordinary Shares atbetween 97 pence and 104 pence, in order to return up to ‚£10 million incapital.A Tender Offer Document is being posted to Shareholders today together with anotice convening an extraordinary general meeting at 10.00 a.m. on 27 June 2005to approve the Tender Offer.Instructions on how to tender Ordinary Shares are included in the Tender OfferDocument and the accompanying Tender Form that are being posted to Shareholderstoday.EXPECTED TIMETABLE Tender Offer commences 8.00 a.m. on 2 June 2005 Record Date for Tender Offer 5.00 p.m. on 24 June 2005 Latest time and date for receipt of Tender Forms 5.00 p.m. on 24 June 2005 Tender Offer closes 5.00 p.m. on 24 June 2005 Latest time and date for receipt of forms of proxy 10.00 a.m. on 25 June 2005 for the Extraordinary General Meeting Extraordinary General Meeting 10.00 a.m. on 27 June 2005 Results of Tender Offer announced by 7.00 a.m. on 28 June 2005 Purchase of Ordinary Shares under the Tender Offer 28 June 2005 Payment despatched for Ordinary Shares pursuant to 5 July 2005 the Tender Offer CREST accounts credited with Tender Offer proceeds 5 July 2005 and any uncertificated unsold Ordinary Shares Balance certificates in respect of any unsold 5 July 2005 certificated Ordinary Shares despatched by The above times are all UK times. If any of the above times and/or dateschange, the revised time(s) and/or date(s) will be notified to Shareholders byannouncement through a Regulatory Information Service.For further information, please contact:London & Associated Properties 020 7415 5000 John Heller, Chief Executive Robert Corry, Finance Director Panmure Gordon & Co 020 7459 3600 Andrew Godber Andrew Potts Baron Phillips Associates 020 7920 3161 Baron Phillips Panmure Gordon & Co, which is regulated in United Kingdom by the FinancialServices Authority, is acting for London & Associated Properties and for no-oneelse in connection with the Tender Offer and will not be responsible to anyoneother than London & Associated Properties for providing the protectionsafforded to customers of Panmure Gordon & Co or for providing advice inconnection with the matters set out in this announcement or any transaction orarrangement referred to herein. London & Associated Properties PLC Proposed Tender Offer IntroductionThe Board of London & Associated Properties announces that the Company intendsto effect a purchase of its own Ordinary Shares by way of an on-market tenderoffer pursuant to which Panmure Gordon & Co will offer to purchase, free ofdealing and commission charges, from Eligible Shareholders up to 10,309,278Ordinary Shares at between 97 pence and 104 pence, in order to return up to ‚£10million of capital. The Company will then purchase from Panmure Gordon & Coon-market all those Ordinary Shares purchased under the terms of the TenderOffer at an aggregate price equal to the aggregate amount paid by PanmureGordon & Co for the Ordinary Shares plus its fees, commission, costs andexpenses. Such Shares will then either be cancelled or held in treasury.Further details of the Tender Offer are set out in a circular which is beingposted to Shareholders today together with a notice convening an extraordinarygeneral meeting to approve the Tender Offer for 10.00 a.m. on 27 June 2005 at8-10 New Fetter Lane, London EC4A 1AF.Background to and reasons for the Tender OfferAs set out in the Chairman's Statement accompanying the 2004 annual report andaccounts, the Directors continue to look for ways to create shareholder valuein the absence of suitable property investment opportunities including theacquisition by the Company of its Shares for cancellation or to be held intreasury. The Directors continue to review potential property investmentopportunities but to date have been unable to identify further investmentopportunities that are priced at a level which they believe is capable ofcreating shareholder value as has been achieved by the acquisition of: * King Edward Court, Windsor (December 2002); and * Church Square Shopping Centre, St. Helens (July 2003) In line with their ongoing policy, the Directors have continued to dispose ofproperties where they no longer see opportunities to grow rental income andcapital values. Whilst there are currently no further properties under offer,the Directors continue to look at the property portfolio and will look todispose of any properties whose potential the Directors feel has beenmaximised. This has been illustrated by the property disposals since January2002 which have resulted in net proceeds of ‚£31.1 million.The Directors have considered carefully the forward cash generation of theGroup, its need for cash to support its growth and future capital expenditure,and its responsibility for pensions and other requirements. As at 31 December2004, the Group had cash balances (net of overdrafts) of ‚£11.35 million,long-dated bank debt and debentures of ‚£50.13 million and undrawn bankfacilities of ‚£18.82 million. As at 31 December 2004, the Group's gearing (netof cash held as agent) was at 41.5% (2003: 42.4%). Furthermore, the Companyannounced on 16 February 2005 the sale of the Moor Centre, Brierley Hill, WestMidlands for a consideration of ‚£4.85 million cash, and the proceeds of salewere added to the Company's cash resources. The Board is proposing the TenderOffer in order to return up to ‚£10 million of capital to Shareholders.Following the return of capital, the Directors believe London & AssociatedProperties will retain a strong balance sheet with sufficient cash resources tocontinue its existing dividend policy and support its future growth.The Tender OfferSubject to the necessary Shareholder approval being obtained at the EGM, theBoard is proposing to return up to ‚£10 million of capital through the purchaseby the Company of existing Ordinary Shares for cancellation or to be held intreasury. This return of capital is to be effected by Panmure Gordon & Copurchasing existing Ordinary Shares from Shareholders as principal for a totalpurchase price of up to ‚£10 million and then selling such Ordinary Shares onthe London Stock Exchange to the Company for cancellation or to be held intreasury pursuant to the Repurchase Agreement.The principal terms of the Tender Offer (which are set out in more detail inthe Tender Offer document) are as follows:(a) The Tender Offer will require approval by Shareholders at the ExtraordinaryGeneral Meeting;(b) Panmure Gordon & Co is inviting Eligible Shareholders to tender OrdinaryShares (subject to the overall maximum number indicated below) at any price(expressed in whole pence per Ordinary Share) within the Price Range of 97pence to 104 pence per Ordinary Share;(c) Panmure Gordon & Co will not charge Eligible Shareholders commission anddealing charges on any Ordinary Shares purchased pursuant to the Tender Offer;(d) Panmure Gordon & Co will purchase, as principal, existing Ordinary Sharesfor a total purchase price of up to ‚£10 million and then sell such OrdinaryShares, on the London Stock Exchange, to the Company for cancellation or to beheld in treasury;(e) The maximum number of Ordinary Shares to be purchased by Panmure Gordon &Co under the Tender Offer is 10,309,278, representing 12.64 per cent. of theCompany's issued share capital as at 1 June 2005;(f) All Shareholders (other than certain Overseas Shareholders - see thesection entitled "Overseas Shareholders" in the Tender Offer Document) on theRegister on the Record Date are being given the opportunity to participate inthe Tender Offer;(g) All Ordinary Shares which are successfully tendered will be purchased atthe same price (the "Strike Price"), which will be determined at the conclusionof the Tender Offer on the basis of the prices at which Ordinary Shares havebeen tendered. The Strike Price will be the lowest price per Ordinary Share(within the Price Range) which will allow Panmure Gordon & Co to purchaseOrdinary Shares with an aggregate purchase value not exceeding ‚£10 million (orsuch lesser amount as the Board, in consultation with Panmure Gordon & Co, mayin its absolute discretion decide), in accordance with the order of prioritydetailed below;(h) Eligible Shareholders are entitled to tender Ordinary Shares for sale atdifferent prices within the Price Range, but all Ordinary Shares purchased byPanmure Gordon & Co will be purchased at the Strike Price;(i) Tender Forms will become irrevocable at the time of receipt by theReceiving Agent;(j) The Tender Offer opens on 2 June 2005 and closes at 5.00 p.m. on theClosing Date being 24 June 2005 (unless extended in accordance with the termsset out in the Tender Offer Document);(k) Any Ordinary Shares tendered at a price or prices above the Strike Pricewill not be purchased under the Tender Offer;(l) All or part of a registered holding of Ordinary Shares may be tendered, butonly one tender may be made in respect of any single Ordinary Share;(m) Eligible Shareholders may tender any number of Ordinary Shares that areregistered in their names on the Record Date in two ways:(i) tenders may be made at fixed prices, in which case they will only beaccepted if the price at which such tender is made is at or below the StrikePrice; or(ii) tenders may be expressed to be made at the Strike Price, rather than at afixed price in pence, in which case the relevant Shareholder will be treated ashaving tendered at the price at which the Strike Price is ultimately set;(n) Subject to the overall limit referred to below and to the Tender Offerbecoming unconditional and not lapsing, tenders from Eligible Shareholders willbe accepted in the following order of priority:(i) Firstly, tenders of up to 3,000 Ordinary Shares by Eligible Shareholders ator below the Strike Price will be accepted;(ii) Secondly, tenders by Eligible Shareholders in excess of 3,000 OrdinaryShares below the Strike Price will be accepted; and(iii) Thirdly, tenders by Eligible Shareholders in excess of 3,000 OrdinaryShares at the Strike Price will be accepted.In the case of (i), (ii) and (iii) above, tenders may be scaled back pro ratato ensure that the aggregate consideration paid to Eligible Shareholders underthe Tender Offer does not exceed ‚£10 million (or such lesser amount as theBoard, in consultation with Panmure Gordon & Co may in its absolute discretiondecide).If the Strike Price were to be 97 pence, being the bottom end of the PriceRange, the Company could repurchase up to 10,309,278 Ordinary Shares,representing approximately 12.64 per cent. of its current issued share capital.If the Strike Price were to be 104 pence, being the top end of the Price Range,the Company could repurchase up to 9,615,384 Ordinary Shares, representingapproximately 11.79 per cent. of its current issued share capital.In exercising their discretion to set an amount for the return of capital underthe Tender Offer, the matters to which the Board, in consultation with PanmureGordon & Co, will have regard will include the value being delivered to theremaining Shareholders through enhanced net asset value per share, whilst atthe same time ensuring a sufficient balance between debt and equity capitalstructure for the Group.Shareholders should note that the Tender Offer will lapse if less than one percent. in aggregate of the existing issued Ordinary Share capital of London &Associated Properties less the Treasury Shares (as at the date immediatelyprior to publication of the Tender Offer Document) is tendered. Shareholdersshould also note that Panmure Gordon & Co is entitled not to, and will not,proceed with the Tender Offer in the circumstances as set out in paragraph 9 ofPart II of the Tender Offer Document. This right may only be exercised prior tothe Closing Date.Shareholders do not have to tender any Ordinary Shares but, once submitted, aTender Form is irrevocable and cannot be withdrawn. Shareholders should notethat, once tendered, Ordinary Shares may not be sold, transferred, charged orotherwise disposed of.Repurchase AgreementUnder the terms of the Repurchase Agreement the Company will acquire, throughan on-market purchase, all of the Ordinary Shares acquired by Panmure Gordon &Co pursuant to the Tender Offer, at an aggregate price equal to the aggregateamount paid by Panmure Gordon & Co for the Ordinary Shares purchased by it plusits fees, commissions, costs and expenses.The City Code on Takeovers and MergersMichael Heller and John Heller (two directors of London & AssociatedProperties) and their families and related companies and trusts, which aredeemed by the Takeover Panel to be acting in concert for the purposes of theTakeover Code, together own 45,299,187 Ordinary Shares representingapproximately 55.54 per cent. of the issued ordinary share capital of theCompany at the date of the Tender Offer Document and have options (held by JohnHeller) over 100,000 Ordinary Shares, representing 0.12 per cent. of the issuedordinary share capital of the Company at the date of this Tender OfferDocument. If the options held over the 100,000 Ordinary Shares by John Hellerwere exercised, the Concert Party's shareholding would increase to 45,399,187,and would represent 55.59 per cent. of the issued ordinary share capital of theCompany.Shareholders should be aware that, if the Concert Party's aggregate holding inthe Company remains above 50 per cent. of the issued ordinary share capital ofthe Company, the members of the Concert Party (for so long as they continue tobe treated as acting in concert) would be free to increase their aggregateshareholding without incurring an obligation under Rule 9 of the Takeover Code.However, individual members of the Concert Party will not be able to increasetheir percentage shareholding through a Rule 9 threshold without Takeover Panelconsent.The Concert Party members have irrevocably undertaken not to tender more than2,450,000 Ordinary Shares under the Tender Offer, which includes the exerciseand tender of the 100,000 options as described above.On the assumption of the following: * that the Concert Party tenders 2,450,000 Ordinary Shares at the Strike Price (being the maximum number of shares which the Concert Party could tender under its irrevocable undertaking); and * no other Eligible Shareholder tenders any Ordinary Shares in the Tender Offer then: * if the Strike Price were to be 97 pence, being the bottom end of the Price Range, the Concert Party shareholding after the completion of the Tender Offer would be 42,949,187 Ordinary Shares, representing approximately 54.22 per cent. of the Company's issued share capital; or * if the Strike Price were to be 104 pence, being the top end of the Price Range, the Concert Party shareholding after the completion of the Tender Offer would be 42,949,187 Ordinary Shares, representing approximately 54.22 per cent. of the Company's issued share capital. On the assumption: * that the maximum amount of ‚£10 million is returned to Eligible Shareholders by way of the Tender Offer; * that the Concert Party tenders 2,450,000 Ordinary Shares at 97 pence, the bottom end of the Price Range (being the maximum number of shares which the Concert Party has irrevocably committed to tender) and are not scaled-back; and * that Eligible Shareholders tender 7,859,278 Ordinary Shares (being the maximum number of Ordinary Shares which Eligible Shareholders other than the Concert Party could tender without being scaled back at 97 pence, the bottom end of the Price Range) then the Concert Party's shareholding after completion of the Tender Offerwould be approximately 60.19 per cent.In any event, given that the members of the Concert Party have irrevocablyundertaken not to tender more than 2,450,000 Ordinary Shares, then even in theabsence of any tenders by any other Eligible Shareholders, the Concert Party'sshareholding in London & Associated Properties after the completion of theTender Offer would not fall below 50 per cent.Current Trading and ProspectsThe year continues to progress well and as stated in the Company's finalresults, the Directors look forward with confidence to the future.Overseas ShareholdersThe attention of all Overseas Shareholders is drawn to the section entitled"Overseas Shareholders" in Part II of the Tender Offer Document and to therelevant provisions of the Tender Form. It is the responsibility of allOverseas Shareholders to satisfy themselves as to the observance of any legalrequirements in their jurisdiction, including, without limitation, any relevantrequirements in relation to the ability of such Shareholders to complete andreturn a Tender Form.The Tender Offer is not being made, directly or indirectly, in or into theUnited States, Canada, Australia, Japan, South Africa or the Republic ofIreland and the Tender Offer cannot be accepted from within the United States,Canada, Australia, Japan, South Africa or the Republic of Ireland.Accordingly, copies of the Tender Offer Document, the Tender Forms and anyrelated documents are not being and must not be mailed or otherwise distributedor sent in, into or from the United States, Canada, Australia, Japan, SouthAfrica or the Republic of Ireland including to Shareholders with registeredaddresses in the United States, Canada, Australia, Japan, South Africa or theRepublic of Ireland or to persons who are custodians, nominees or trusteesholding shares for persons in the United States, Canada, Australia, Japan,South Africa or the Republic of Ireland. Persons receiving such documents(including, without limitation, custodians, nominees and trustees) must notdistribute, send or mail them in, into or from the United States, Canada,Australia or Japan, South Africa or the Republic of Ireland and so doing willrender invalid any related purported acceptance of the Tender Offer. Envelopescontaining Tender Forms must not be postmarked in the United States, Canada,Australia, Japan, South Africa or the Republic of Ireland or otherwisedespatched from the United States, Canada, Australia, Japan, South Africa orthe Republic of Ireland and all accepting Shareholders must provide addressesoutside the United States, Canada, Australia, Japan, South Africa or theRepublic of Ireland for the remittance of cash or return of Tender Forms andany other documents. Failure to observe these requirements will render invalidany purported acceptance of the Tender Offer.Panmure Gordon & Co, which is regulated in United Kingdom by the FinancialServices Authority, is acting for London & Associated Properties and for no-oneelse in connection with the Tender Offer and will not be responsible to anyoneother than London & Associated Properties for providing the protectionsafforded to customers of Panmure Gordon & Co or for providing advice inconnection with the matters set out in this announcement or any transaction orarrangement referred to herein.DEFINITIONSThe following definitions apply throughout this announcement unless the contextotherwise requires:"Australia" the Commonwealth of Australia, its states, territories and possessions "Board" or the the board of directors of London & Associated Properties "Directors" as at the date of this announcement "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any political subdivision thereof "Closing Date" 5.00 p.m. (UK time) on 24 June 2005, the date on which the Tender Offer closes, unless extended in accordance with the terms set out in the Tender Offer Document "Concert Party" Michael Heller, John Heller and their families and related companies and trusts "CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo is the Operator (as defined in the CREST Regulations) "EGM" the extraordinary general meeting of Shareholders of the Company convened for 27 June 2005 "Eligible Shareholders, resident in, or citizens of, a jurisdiction Shareholders" outside the Restricted Territories, on the Register on the Record Date "Group" the Company and its subsidiary undertakings "Japan" Japan, its possessions and territories and all areas subject to its jurisdiction and any political subdivision thereof "London & Associated London & Associated Properties PLC Properties" or the "Company" "London Stock London Stock Exchange plc Exchange" "Ordinary Shares" or ordinary shares of 10p each in the capital of the Company "Shares" "Overseas a Shareholder who is resident in, or a citizen of, a Shareholder" jurisdiction outside the United Kingdom "Panmure Gordon & Panmure Gordon (UK) Limited, of Moorgate Hall, 155 Co" Moorgate, London, EC2M 6XB "Price Range" the range of prices within which Ordinary Shares may be purchased by Panmure Gordon & Co pursuant to the terms of the Tender Offer, being 97 pence to 104 pence per Ordinary Share "Record Date" 5.00 p.m. (UK time) on 24 June 2005 "Registrars" Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU "Repurchase the agreement dated 2 June 2005 between the Company and Agreement" Panmure Gordon & Co for the repurchase by the Company as an on market purchase (as defined in the Act), on the London Stock Exchange, of the Ordinary Shares purchased by Panmure Gordon & Co pursuant to the Tender Offer "Republic of the Republic of Ireland, its possessions and territories Ireland" and all areas subject to its jurisdiction and any political subdivision thereof "Restricted United States, Canada, Australia, Japan, South Africa and Territories" the Republic of Ireland "Shareholders" holders of Ordinary Shares "Share Option the 1986 Approved Scheme and the 1998 Unapproved Scheme Schemes" "South Africa" the Republic of South Africa, its possessions and territories and all areas subject to its jurisdiction and any political subdivision thereof "Strike Price" the price at which Panmure Gordon & Co will purchase Ordinary Shares pursuant to the Tender Offer, which will be determined in accordance with the provisions set out in the Tender Offer Document "Strike Price a tender of Ordinary Shares for sale at the Strike Price Tender" "Takeover Panel" The Panel on Takeovers and Mergers "Takeover Code" The City Code on Takeovers and Mergers "Tender Offer the tender offer document posted today by the Company Document" containing details of the Tender Offer "Tender Offer" the invitation by Panmure Gordon & Co to Eligible Shareholders to tender Ordinary Shares on the terms and subject to the conditions set out in this document and the Tender Form "Tender Offer the period commencing on 2 June 2005 and ending on the Period" Closing Date "uncertificated" or recorded on the Register as being held in uncertificated "in uncertificated form in CREST and title to which, by virtue of the CREST form" Regulations, may be transferred by means of CREST "United Kingdom" or The United Kingdom of Great Britain and Northern Ireland "UK" "United States" or The United States of America, its territories and "US" possessions, any state of the United States and other areas subject to its jurisdiction and the District of Columbia ENDLONDON AND ASSOCIATED PROPERTIES PLC