24 Jun 2009 07:00
FOR RELEASE AT 7.00AM 24 JUNE 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE FIRM PLACING AND PLACING AND OPEN OFFER. ANY DECISION TO PURCHASE, OTHERWISE ACQUIRE, SUBSCRIBE FOR, SELL OR OTHERWISE DISPOSE OF ANY NEW SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS. COPIES OF THE PROSPECTUS WILL BE AVAILABLE ON PUBLICATION FROM DEVELOPMENT SECURITIES' REGISTERED OFFICE AND WEBSITE: WWW.DEVELOPMENTSECURITIES.CO.UK
ALL TERMS ARE DEFINED AT THE BACK OF THIS ANNOUNCEMENT, UNLESS OTHERWISE DEFINED HEREIN
DEVELOPMENT SECURITIES PLC
24 June 2009
FIRM PLACING AND PLACING AND OPEN OFFER TO RAISE APPROXIMATELY £100 MILLION AND NOTICE OF EXTRAORDINARY GENERAL MEETING
Development Securities today announces a fully underwritten share issue to raise proceeds of approximately £100.0 million by way of a Firm Placing and Placing and Open Offer.
Highlights
| Firm Placing of 16,666,667 New Shares and Placing and Open Offer of 24,986,593 New Shares at a price of 240 pence per share |
| Net Proceeds of approximately £94.0 million |
| The Net Proceeds will be used to capitalise on opportunities early in the property development cycle and enhance the Group's investment portfolio |
| Strong support indicated by existing and new investors |
| All the Directors who are Shareholders at the Record Date will participate in the Open Offer, and in aggregate intend to subscribe for a total of 190,074 Open Offer Shares |
Introduction
The Board of Development Securities today announces a share issue to raise proceeds of approximately £100.0 million (approximately £94.0 million, net of expenses), by way of a fully underwritten Firm Placing and Placing and Open Offer.
16,666,667 New Shares will be issued through the Firm Placing and 24,986,593 New Shares will be issued through the Placing and Open Offer at the Issue Price of 240 pence per New Share.
The Issue Price represents a 9.1 per cent. discount to the closing middle-market price of 264 pence per Ordinary Share on 23 June 2009, being the last Business Day before the announcement of the Firm Placing and Placing and Open Offer.
The New Shares are being offered subject to Shareholder approval at an Extraordinary General Meeting of Shareholders to be held on 10 July 2009.
Rationale for the Placing
Development Securities' business focuses on UK commercial property development and also UK property investment. Its principal objective is to carry out substantial and complex development in a risk-averse manner with a view to generating returns for its shareholders. In recent years, Development Securities' commercial development projects have provided a greater contribution to shareholder returns than property investment.
The principal focus for development activity, through Development Securities' Trading and Development division, has been the provision of large-scale, multi-phase, urban developments in the office, retail and leisure sectors, with sites in central and suburban London and main provincial UK cities. The Directors believe that this is where the reputation and profile of the Company is held in high regard within the UK property market. In addition the Company develops more modest schemes, either solely or in joint venture, with a focus on shorter term generation of profits and recycling of working capital. The property investment business, through the Investment division, acquires and holds a limited number of investment properties in the UK to provide the Company with a stable base of income to contribute to overheads and interest costs. The Company also undertakes a serviced office business through its Operating division.
The Company has maintained its principal strategy of developing property assets for third parties, using a mixture of forward-funding, pre-sale, debt finance and joint venture arrangements. The Directors believe that the Company should continue with this focus, given the experience of the senior development management team and the working relationships that have been developed by Development Securities with the relevant local authorities, commercial property agents, funding partners and banks.
The UK's property markets have a record of responding to major shifts in both supply and demand. In recent times, the rental cycle peaked in 1988, then again in 2000 and most recently in 2007. Since the peak in 2007, capital values in these markets have declined markedly reflecting primarily softening yields and falling rental values. To the end of May 2009, this fall in values from the peak in 2007 has been 43.6 per cent. as measured by IPD. The Directors believe that this decline in values will continue further and is reflected in the current discounts at which UK property companies' shares are trading to their historical net asset values. However, given the rapid rate of this decline in values, the Directors believe that properties potentially suitable for development or refurbishment, or to enhance the Company's investment portfolio, may be available to be purchased at attractive levels.
Historical analysis of the property cycles indicates that it has taken two to four years from a low point for the market to recover to a point where risks and returns on development projects start to become commercially attractive to institutional property investors. If such a cycle is to be repeated, in order for the Company to participate in the early years of the cycle and benefit from any upturn, the Directors believe that they need to position the Company so as to be able to secure development roles in the near term. At this relatively early stage in the property cycle, property development frequently requires developers such as Development Securities to provide a higher level of financing or equity commitment to developments than is normally the case. Therefore, in order to take full advantage of the eventual expected upturn both in central London and in wider London and provincial property markets, the Group will require additional financial resources to enable it to make the equity commitments required to co-invest and to secure a participation in potential development projects.
Current market conditions, and the constraint on bank lending to development projects, are resulting in a number of smaller, shorter term opportunities for the Company's Trading and Development activity. In addition the Directors believe that these conditions offer opportunities to strengthen the Group's investment property portfolio including some opportunities to acquire assets which may in the longer term represent redevelopment projects.
As at 31 December 2008, the Company reported an investment portfolio valued at £134.1 million and cash of £60.7 million. The Company has a development portfolio of nine projects at varying stages of completion, which management estimates has a market value in aggregate upon completion in excess of £600 million. Development Securities has largely avoided acquisitions of over-priced property opportunities in the lead up to the market highs seen in 2007, and has also maintained its prudent approach to leverage. As a consequence, the proposed Firm Placing and Placing and Open Offer is focused on enabling Development Securities to invest in new assets that have declined in value since market highs, as opposed to applying funds to the repayment of debt. The Company intends to use the Net Proceeds from the Firm Placing and Placing and Open Offer primarily to take advantage of the current property market dislocation.
Principal terms of the Firm Placing and Placing and Open Offer
Qualifying Shareholders, on and subject to the terms and conditions of the Open Offer, are being given the opportunity to apply for the Open Offer Shares at the Issue Price pro rata to their holdings of Existing Shares on the Record Date on the basis of:
| 8 Open Offer Shares for every 13 Existing Shares |
The Placing and Open Offer has been fully underwritten by Collins Stewart and is conditional upon, amongst other things, the Placing Agreement becoming unconditional in all respects and not being terminated. Collins Stewart has agreed under the Placing Agreement to procure subscribers for New Shares not taken up under the Placing and Open Offer or, failing that, to subscribe itself for such New Shares.
The Open Offer is conditional upon, amongst other things, the passing of the Resolutions at the Extraordinary General Meeting and Admission of the Open Offer Shares becoming effective by not later than 8.00 a.m. on 15 July 2009 (or such later time and/or date as the Company and Collins Stewart may agree).
Development Securities is proposing to issue 16,666,667 Firm Placed Shares pursuant to Placee Commitment Letters.
The Firm Placing has been fully underwritten by Collins Stewart pursuant to the Placing Agreement and is conditional, amongst other things, on the passing of the Resolutions at the Extraordinary General Meeting and Admission.
The New Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Shares, including the right to receive all dividends or other distributions (if any) made, paid or declared after the date of the Prospectus, save for the final dividend declared for the 2008 financial year, and for any interim dividend that may or may not be declared when the interim results for the first six months of the 2009 financial year are announced.
Further details of the Firm Placing and Placing and Open Offer are contained in the Prospectus, which Shareholders should read in full before deciding whether to participate in the Open Offer. The Prospectus will not be posted to Shareholders but will be available at the Company's registered office and published on the Company's website at www.developmentsecurities.co.uk. The Prospectus will not be available (whether through the website or otherwise) to US and Excluded Territory Shareholders.
Use of proceeds
The Firm Placing and Placing and Open Offer is expected to raise approximately £94.0 million net of expenses. The Net Proceeds from the Firm Placing and Placing and Open Offer will be used by Development Securities to seek to capitalise on new opportunities early in the property development cycle as well as to enhance the Group's investment portfolio as and when attractive opportunities are identified. The Net Proceeds have not been allocated to specific projects as no commitments have been made; however, the Directors are appraising a number of opportunities both in central London and in wider London and provincial markets. Such opportunities are distinct from those currently under offer, as described below, which are intended to be funded through existing resources and appropriate levels of debt finance.
To participate in new development opportunities early in the property cycle invariably requires an element of equity investment or financing commitment from the developer. The Net Proceeds of the Firm Placing and Placing and Open Offer will strengthen Development Securities' negotiating position with potential vendors, forward-funding partners and occupiers. Property acquisitions at this early stage in the property cycle may well include buildings or sites that each have more than one prospective option in the way that latent value may be crystallised in either the short or medium term, e.g. tenanted properties that offer Development Securities rental income with the option of later redevelopment.
Although the Directors believe that lending covenants in a large number of loans financing development and investment properties in the UK are close to being breached, there is little evidence of lenders requiring the sale of such properties. In order to maximise the Group's opportunities, the Group may seek alternative access to properties in the UK by participating in the acquisition from lenders of existing loans secured on such properties. The Company's focus will be on commercial property rather than residential property. Such acquisitions would only relate to specific properties that have been extensively researched by the Group and should offer the prospect of attractive returns. Where the security is eventually enforced in the event of either a possible borrower default of some kind and/or an acceleration of the loan or other obligation, repayment of which is secured on the relevant property, the potential exists for the Group to participate (subject to certain legal limitations, e.g. on enforcing the security or the rights of other creditors) in the underlying property by way of development or further added value initiatives.
It is intended that such acquisitions should provide the Group with flexible access to UK property assets at a time when there is a limited conventional supply of suitable opportunities in the marketplace. Any such investments are likely to be made in conjunction with a funding partner, although more modest targets could be acquired by the Company on its own. In any event, the Directors anticipate that any such purchases would represent a relatively small proportion of the Company's business, and it is unlikely that the Company's participation in any one loan would exceed £5 million.
Pending use of the Net Proceeds of the Firm Placing and Placing and Open Offer as described above, Development Securities will hold the money in bank accounts or, where appropriate, through investment in UK government securities with a maturity of not more than 12 months or similar securities.
Commenting on the Firm Placing and Placing and Open Offer, David Jenkins, Development Securities' Chairman, said:
"We currently see significant opportunities to take advantage of the recent falls in UK property values. Through our robust balance sheet and modest levels of gearing, we are well placed to deploy the proceeds of the fundraising into new development opportunities in a timely and effective manner to maximise shareholder returns. Our proven forward-funding model will continue to allow us to minimise risk and maintain limited exposure to bank debt while participating in the upside.
We are delighted to have received such strong support from our existing and new investors to maintain our established track record through the next property cycle."
Collins Stewart is acting as financial adviser, broker, sponsor and underwriter.
For further information, please contact:
| Development Securities PLC | +44 (0)20 7828 4777 |
| Michael Marx (Chief Executive) | |
| Graham Prothero (Finance Director) | |
| Collins Stewart Europe Limited | +44 (0)20 7523 8350 |
| Mark Dickenson | |
| Bruce Garrow | |
| The Communication Group plc | +44 (0)20 7630 1411 |
| Richard Evans | +44 (0)7751 087 291 |
| Kit Bingham | +44 (0)7880 748 672 |
Disclaimer
This announcement is not a prospectus but an advertisement and investors should not subscribe for or purchase any New Shares referred to in this announcement except on the basis of the information contained in the Prospectus.
Collins Stewart is authorised and regulated by the Financial Services Authority in the UK and is acting for Development Securities and no one else in connection with the Firm Placing and Placing and Open Offer and will not be responsible to anyone other than Development Securities for providing the protections afforded to clients of Collins Stewart or for providing advice in relation to the Firm Placing and Placing and Open Offer or any other matters referred to in this announcement.
Apart from the responsibilities and liabilities, if any, which may be imposed on Collins Stewart by the FSMA, Collins Stewart accepts no responsibility whatsoever and makes no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, fairness, sufficiency, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with Development Securities or the New Shares or the Firm Placing and Placing and Open Offer and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Collins Stewart accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement. Collins Stewart and/or its affiliates provide various investment banking, commercial banking and financial advisory services from time to time to Development Securities.
No person has been authorised to give any information or to make any representations other than those contained in this announcement and the Prospectus and, if given or made, such information or representations must not be relied on as having been authorised by Development Securities or Collins Stewart. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of Development Securities since the date of this announcement or that the information in it is correct as at any subsequent date.
The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part in, into or from the United States, Canada, Australia, Japan, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The New Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws.
No action has been taken by Development Securities that would permit an offer of the New Shares or possession or distribution of this announcement, the Prospectus or any other offering or publicity material or the Application Forms in any jurisdiction where action for that purpose is required, other than in the United Kingdom.
The distribution of this announcement, the Prospectus and/or the transfer or offering of New Shares into jurisdictions other than the United Kingdom is or may be restricted by law. Persons into whose possession this announcement or any such document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the New Shares. In particular, this announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Canada, Australia, Japan or South Africa.
This announcement and the information contained herein does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. This announcement and the information contained herein is not for distribution in or into the United States. The New Shares have not been, and will not be, registered under the US Securities Act of 1933 (the "US Securities Act") or with any securities regulatory authority of any State or other jurisdiction. The New Shares may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offer of the New Shares in the United States.
The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any matter whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the US Securities Act or the applicable laws of other jurisdictions.
No statement in this announcement is intended as a profit forecast or a profit estimate and no statement in this announcement should be interpreted to mean that earnings per share of Development Securities for the current or future financial years would necessarily match or exceed the historical published earnings per share of Development Securities.
Prices and values of, and income from, securities may go down as well as up and an investor may not get back the amount invested. It should be noted that past performance is no guide to future performance. Persons needing advice should consult an independent financial adviser.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
Cautionary note regarding forward-looking statements
This announcement contains "forward-looking statements" regarding the belief or current expectations of the Company, the Directors and other members of senior management about the Company's businesses and the transactions described in this announcement, including statements relating to possible future write-downs or movements in property prices and the Company's capital and financial planning projections. Generally, words such as "may", "could", "will", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or similar expressions identify forward-looking statements.
These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements.
These forward-looking statements speak only as at the date of this announcement. Except as required by the FSA, the London Stock Exchange, the Part VI Rules or applicable law, neither the Company nor Collins Stewart have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the FSA, the London Stock Exchange, the Prospectus Directive, the Listing Rules, the Disclosure and Transparency Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein 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.
You are advised to read this announcement and the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect Development Securities' future performance and the industries in which the Group operates. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.
About Development Securities
Development Securities is a UK property development and investment company. Its principal objective is to carry out substantial and complex development in a risk-averse manner with a view to generating returns for its shareholders.
The property development business, through the Trading and Development division, focuses on large-scale, multi-phase, urban developments in the office, retail and leisure sectors, with sites in central and suburban London and main provincial UK cities. The property investment business, through the Investment division, invests in properties in the UK and provides a stable base of income to contribute to overheads and interest costs. The Company also undertakes a serviced office business through its Operating division.
In recent years, development projects have provided a greater contribution to shareholder returns than property investment. For the year ended 31 December 2008, the segmental gross profit for each of the Trading and Development, Investment and Operating business divisions were £13.20 million, £2.98 million and a loss of £1.03 million respectively.
Current trading and prospects
The market challenges that were evident in 2008 have continued in 2009, reflecting softening yields and falling rental values (the IPD Index has shown falls of 3.0 per cent., 3.1 per cent., 3.1 per cent., 2.3 per cent. and 1.6 per cent. respectively for January, February, March, April and May 2009). In addition, the prospects for the UK economy in 2009 and 2010 remain uncertain with HM Treasury's comparison of independent forecasts for the UK economy, published in May 2009, suggesting on average negative GDP growth of 3.8 per cent. in 2009, improving in 2010. In addition, bank lending to the property sector remains very highly constrained. In the opinion of the Directors, these current market conditions are likely to continue in the near term. Accordingly, further reductions in the Company's net asset value are anticipated, in line with the underlying property market trends. The level of development earnings which Development Securities was able to generate in recent years is unlikely to be repeated in the next few years as no significantly profitable development projects will be concluded until the market enters a more positive phase. The Directors have responded to these market challenges by implementing a voluntary 10 per cent. reduction in remuneration for the Executive Directors and a voluntary 7.5 per cent. reduction for senior members of the management team with effect from January 2009.
In the near term, Development Securities will be focusing on securing participation in development sites that the Directors believe will provide potentially attractive returns in the future, as well as enhancing its investment portfolio where attractive opportunities exist. The Group continues to search for appropriate opportunities to invest surplus cash resources into investment properties to take advantage of relatively high yields available. The Directors intend to target investments at yields of between 8 per cent. and 15 per cent. Since 1 January 2009, the Company has made offers on several investment properties with a typical size of 100,000 square feet and commitments ranging from £2 million to £15 million. In appraising such opportunities the Company will consider the availability of appropriate debt finance, which, if required, would be secured before any commitment was undertaken. Such commitments would not be funded through the Net Proceeds. This reflects a strategic decision by the Directors to reduce the Group's cash weighting in favour of investment property and is not a prerequisite for the successful execution of the Group's longer term strategy. As at the date of this announcement, no commitments have been made but the Directors believe that some of these offers may proceed to contract in the near term, subject to financing.
Similarly, the Group continues to evaluate prospective development projects, but since 31 December 2008, it has undertaken no new commitments. Since 31 December 2008, the Group has been in negotiations to make further investments in joint ventures of approximately £5 million over the next two to four years, which will be financed from existing cash resources.
In addition, the Company is continuing to develop its projects at Two Kingdom Street, PaddingtonCentral, St Bride Street, London EC4, CityPark, Manchester and Weeke Local Centre, Winchester, all of which are proceeding substantially on time and budget.
As at 31 December 2008, the vacancy rate of the Group's investment properties was 10.3 per cent. (9.1 per cent. excluding development properties).
The Directors believe that the Group's cash balances remain strong. Since 31 December 2008, the Company has renegotiated minimum net worth covenants in respect of three financial facilities in order to accommodate actual and prospective falls in net asset value.
Effect of the Firm Placing and Placing and Open Offer
Upon completion of the Firm Placing and the Placing and Open Offer, the New Shares will represent approximately 50.6 per cent. of the Company's Enlarged Issued Share Capital and the Existing Shares will represent approximately 49.4 per cent. of the Company's Enlarged Issued Share Capital. New Shares issued through the Placing and Open Offer and New Shares issued through the Firm Placing will account for approximately 60.0 and 40.0 per cent. respectively of the total New Shares issued through the Firm Placing and Placing and Open Offer.
Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market on behalf of or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but will be subscribed for under the Placing for the benefit of the Company. If any Shareholder does not take up its Open Offer Entitlements then, following the issue of the Open Offer Shares pursuant to the Open Offer, its interest in the Company will be diluted by approximately 50.6 per cent.
Over the longer term, the Firm Placing and Placing and Open Offer are expected to be accretive to the Group's earnings.
Extraordinary General Meeting
The Circular sent to Shareholders today includes a notice convening the Extraordinary General Meeting to be held on the 11th Floor, Portland House, Bressenden Place, London SW1E 5DS at 2.30 p.m. on 10 July 2009. The purpose of the Extraordinary General Meeting is to consider, and if thought fit, to pass certain Resolutions necessary to authorise and carry out the Firm Placing and Placing and Open Offer.
A summary and explanation of the Resolutions is set out in the Circular. However, Shareholders should also read the full text of the Resolutions contained in the Notice which forms part of the Circular.
A Form of Proxy is enclosed with the Notice. To be effective, Forms of Proxy must be completed and received by the Registrars at Capita Registrars Limited (Proxies), PO Box 25, Beckenham, Kent BR3 4BR by 2.30 p.m. on 8 July 2009.
Directors' intentions
The Directors are fully supportive of the Firm Placing and Placing and Open Offer. All the Directors who are Shareholders at the Record Date will participate in the Open Offer, and in aggregate intend to subscribe for a total of 190,074 Open Offer Shares. Following the Firm Placing and Placing and Open Offer, the Directors will beneficially own, in aggregate, approximately 0.9 per cent. of the Enlarged Issued Share Capital.
Dividends and dividend policy
The New Shares will, when issued and fully paid, rank pari passu in all aspects with the Existing Shares, including the right to receive all dividends and other distributions (if any) declared, paid or made by Development Securities after the date of the Prospectus, save for the final dividend declared for the 2008 financial year, and for any interim dividend that may or may not be declared when the interim results for the first six months of the 2009 financial year are announced. With respect to the 2009 financial year, it is the current intention of the Directors to maintain dividends at current levels, returning to a progressive dividend policy once the property market recovers and economic activity is sustained by positive GDP growth.
References to dividends and dividend policy should not be interpreted as a dividend forecast or profit forecast.
Expected timetable of principal events
Each of the times and dates in the table below is indicative only and may be subject to change.
| Event | Time and/or date | ||
| Record Date for entitlement under the Open Offer | close of business on 23 June 2009 | ||
| Announcement and publication of the Prospectus and Application Form | 24 June 2009 | ||
| Ex-entitlement date for the Open Offer | 8.00 a.m. on 24 June 2009 | ||
| Open Offer Entitlements credited to stock account of Qualifying CREST Shareholders in CREST | 8.00 a.m. on 25 June 2009 | ||
| Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST | 4.30 p.m. on 3 July 2009 | ||
| Latest time and date for depositing Open Offer Entitlements into CREST | 3.00 p.m. on 6 July 2009 | ||
| Latest time and date for splitting Application Forms (to satisfy bona fide market claims only) | 3.00 p.m. on 7 July 2009 | ||
| Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate) | 11.00 a.m. on 9 July 2009 | ||
| Extraordinary General Meeting | 2.30 p.m. on 10 July 2009 | ||
| Admission and commencement of dealings in the New Shares | 8.00 a.m. on 15 July 2009 | ||
| New Shares in uncertificated form expected to be credited to accounts in CREST | as soon as possible on 15 July 2009 | ||
| Despatch of definitive share certificates for the New Shares in certificated form | by 22 July 2009 |
Definitions
| Admission | the admission of the New Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the London Stock Exchange's market for listed securities becoming effective in accordance with the Admission and Disclosure Standards |
| Application Form | the personalised application form on which Qualifying Non-CREST Shareholders who are registered on the register of Development Securities at the Record Date may apply for Open Offer Shares under the Open Offer |
| Board | the board of directors of Development Securities |
| Business Day | a day (excluding Saturdays and Sundays or public holidays in England and Wales) on which banks generally are open in London for the transaction of normal business |
| certificated or in certificated form | where a share or other security is not in uncertificated form |
| Circular | the circular to Shareholders dated 24 June 2009 issued by the Company in connection with the Firm Placing and Placing and Open Offer and including the Notice |
| Collins Stewart | Collins Stewart Europe Limited of 88 Wood Street, London EC2V 7QR |
| Company or Development Securities | Development Securities PLC, a company incorporated under the laws of England and Wales (registered under no. 1528784), with its registered office at Portland House, Bressenden Place, London SW1E 5DS |
| Conditional Placed Shares | the aggregate 24,986,593 New Shares which the Company is proposing to issue in the Conditional Placing |
| Conditional Placees | such persons who have agreed or shall agree to subscribe for Conditional Placed Shares on the terms of the Placee Commitment Letters |
| Conditional Placing | the subscription by the Conditional Placees for the Conditional Placed Shares pursuant to Placee Commitment Letters |
| CREST | the relevant system, as defined in the CREST Regulations (in respect of which Euroclear UK is the operator as defined in the CREST Regulations) |
| CREST member | a person who has been admitted to CREST as a system member (as defined in the CREST Regulations) |
| CREST Regulations or Regulations | the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended |
| Directors | the Executive Directors and Non-executive Directors |
| Disclosure and Transparency Rules | the rules relating to the disclosure of information made in accordance with Section 73A(3) of the FSMA |
| Enlarged Issued Share Capital | the ordinary share capital of the Company following completion of the Firm Placing and the Placing and Open Offer |
| Ex-entitlement Date | the date on which the Existing Shares commence trading ex-Open Offer Entitlements, being 24 June 2009 |
| Excluded Territories and each an Excluded Territory | Australia, Canada, Japan and South Africa |
| Executive Directors | the executive directors of Development Securities |
| Existing Shares | the Ordinary Shares in issue as at the date of the Prospectus |
| Extraordinary General Meeting | the extraordinary general meeting of Development Securities to be held at 11th Floor, Portland House, Bressenden Place, London SW1E 5DS on 10 July 2009, notice of which is set out at the end of the Circular |
| Financial Services Authority or FSA | the Financial Services Authority of the UK |
| Firm Placed Shares | the 16,666,667 million New Shares which the Firm Placees have agreed to subscribe for under the Firm Placing |
| Firm Placees | such persons who have agreed or shall agree to subscribe for Firm Placed Shares on the terms of the Placee Commitment Letters |
| Firm Placing | the aggregate 16,666,667 million New Shares which the Company is proposing to issue in the Firm Placing |
| FSMA | the Financial Services and Markets Act 2000, as amended |
| GDP | the gross domestic product for the UK |
| Group | the Company and each of its subsidiaries and subsidiary undertakings from time to time |
| IPD | Investment Property Databank |
| IPD Index | the IPD Monthly all Property Index |
| Issue Price | 240 pence per New Share |
| Listing Rules | the Listing Rules made by the FSA under Part VI of the FSMA |
| London Stock Exchange | London Stock Exchange plc |
| Net Proceeds | the proceeds of the Firm Placing and Placing and Open Offer receivable by the Company after expenses incurred in connection therewith |
| New Shares | Ordinary Shares to be allotted and issued pursuant to the Firm Placing and Placing and Open Offer |
| Non-executive Directors | the non-executive directors of Development Securities |
| Notice | the notice of the Extraordinary General Meeting set out in the Circular |
| Official List | the Official List of the FSA pursuant to Part VI of the FSMA |
| Open Offer | the offer to Qualifying Shareholders, constituting an invitation to apply for the Open Offer Shares on the terms and subject to the conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Application Form |
| Open Offer Entitlement | an entitlement to apply for Open Offer Shares allocated to a Qualifying Shareholder pursuant to the Open Offer |
| Open Offer Shares | the 24,986,593 million Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer |
| Ordinary Shares or Shares | the ordinary shares of £0.50 each in the share capital of the Company (including, if the context requires, the New Shares) |
| Part VI Rules | the rules contained in Part VI of the FSMA |
| Placee Commitment Letters | the letters entered into, or to be entered into, by each of the Conditional Placees and the Firm Placees establishing the terms of their participation in the Placing and Open Offer and the Firm Placing and "Placee Commitment Letter" means one of them |
| Placing | the placing of the Open Offer Shares in accordance with the Placing Agreement |
| Placing Agreement | the placing agreement dated 24 June 2009 between Development Securities and Collins Stewart |
| pounds sterling or £ | the lawful currency of the UK |
| Prospectus | means the prospectus dated on or about the date of this announcement to be issued by the Company in connection with the Firm Placing and Placing and Open Offer |
| Prospectus Rules | the Prospectus Rules published by the FSA under Section 73A of FSMA |
| Qualifying CREST Shareholders | Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST |
| Qualifying Shareholders | holders of Ordinary Shares on the register of members of the Company at the Record Date, other than, subject to certain exceptions, shareholders with a registered address or otherwise located in the United States or any Excluded Territory |
| Record Date | close of business on 23 June 2009 |
| Resolutions | the ordinary and special resolutions to be proposed at the Extraordinary General Meeting, notice of which is set out in the Circular |
| Shareholder or Development Securities Shareholder | holder of Ordinary Shares |
| stock account | an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited |
| UK or United Kingdom | the United Kingdom of Great Britain and Northern Ireland |
| uncertificated or in uncertificated form | recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST |
| US or United States | the United States of America, its territories and possessions, any state of the United States and the District of Columbia |
| US Securities Act | the US Securities Act of 1933, as amended |