TIDMLII
RNS Number : 5113Z
Liberty International PLC
23 September 2009
23 September 2009
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
LIBERTY INTERNATIONAL PLC
PLACING OF UP TO 56.1 MILLION NEW ORDINARY SHARES
Liberty International PLC ("Liberty International" or the "Group") today
announces it is placing up to 56.1 million new ordinary shares (the "Placing")
representing up to 9.9 per cent of the Group's issued ordinary share capital
immediately prior to the Placing.
Purpose of the Placing
The proceeds of the Placing will enable the Group to resume investment in, and
so enhance returns from, its prime UK regional shopping centres and Central
London assets. Except for pre-existing commitments, the Group's investment plans
were placed on hold approximately twelve months ago as a result of the
exceptional turmoil in financial and property markets at that time.
The Placing addresses the Group's investment requirements beyond the net GBP592
million capital raised in April 2009, the purpose of which was to provide funds
for already committed capital expenditure, debt repayment and covenant cures on
non-recourse debt facilities for the period to December 2010. These further
investments can, in most cases, be undertaken by the Group at its discretion and
are not contingent on third party decisions.
Approximately half of the proceeds of this Placing are expected to fund
identified active management initiatives across the Group's fourteen UK regional
shopping centres which were valued at GBP4.4 billion at 30 June 2009. These
initiatives, which are not individually of significant size, but cover most of
the Group's centres, are expected to deliver rental and capital value
enhancement over the coming years. In addition, the Group has plans to implement
a number of larger strategic projects at selected centres, subject to gaining
the appropriate planning approvals.
The Group intends to use the other half of the proceeds of the Placing to fund
capital expenditure, including tactical acquisitions, to further the Group's
objectives for its prime Central London assets in Covent Garden and to fund
Earls Court & Olympia through to securing planning consent.
Expected benefits of the Placing
The expected benefits of the Placing are to:
* Restore positive momentum to the overall business, the focus of which has
recently been primarily on balance sheet and liability management;
* Provide funds for the Group to improve the competitive position of its prime UK
regional shopping centres through active asset management initiatives in the
short-term and more substantial enhancement and expansion projects in the
medium-term;
* Position the Group to further consolidate and develop its holdings in the prime
Covent Garden estate in Central London; and
* Enable the Group to actively pursue the development potential of Earls Court &
Olympia.
The programme of disposals of non-core UK assets embarked upon when Liberty
International became a REIT in January 2007 is largely complete. The Group
considers that it is not in the interests of shareholders to embark on a further
programme of substantial disposals at the current time, although this position
is kept under regular review.
Financial position as at 30 June 2009
Following the capital raising in April this year, the Group had a total cash
balance of GBP568 million and net external debt of GBP3,390 million at 30 June
2009, representing a debt to assets ratio of 56 per cent. Net assets per share
(diluted, adjusted) were 448 pence at 30 June 2009.
As explained at the time of the earlier capital raising, this cash balance is
earmarked to fund:
* Committed capital expenditure, which amounted to GBP172 million at 30 June 2009,
in particular in relation to the St. David's, Cardiff development which is
opening in October this year;
* Debt repayment and amortisation in 2009 and 2010 of GBP174 million, including
the repayment of the remaining GBP79 million of 3.95 per cent convertible bond
due September 2010; there is a further GBP113 million of amortisation due in
2011 and 2012;
* The remaining REIT entry charge of GBP19 million by December 2010 and GBP103
million in total; and
* Covenant cures in non-recourse debt facilities should there be further falls in
property values. As anticipated in the Interim Report, since 30 June 2009 the
Group has contributed or will be contributing, in aggregate, GBP36 million
(including associated costs). As illustrated in the Interim Report, a further 10
per cent reduction in values would require a further cash cure of approximately
GBP90 million.
The Group is also considering the refinancing prior to maturity in 2011 of the
net GBP591 million of borrowings secured by way of CMBS on the Group's flagship
asset Lakeside, Thurrock, which may require some equity contribution to reflect
a lower amount of debt on refinancing.
The St. David's Limited Partnership, in which the Group has a 50 per cent
interest, recently concluded a GBP290 million debt facility secured against the
St. David's, Cardiff shopping centre of which the Group's share is GBP145
million, with GBP37 million currently drawn. This will partially address the
Group's funding requirements.
In addition to its non-recourse debt, the Group has a corporate revolving credit
facility of GBP360 million to provide financial flexibility and meet short-term
borrowing requirements. This facility, which is committed to June 2011, is
currently undrawn.
Property and debt market background
The cumulative decline from the peak valuation of Liberty International's
investment properties amounted to 36.2 per cent at 30 June 2009, outperforming
the IPD UK All-Property Monthly Index decline over the comparable period of 44.1
per cent. Since 30 June 2009, the UK property market has shown signs of
improvement, particularly for prime assets of smaller lot sizes, with the IPD
index in August 2009 showing its first positive monthly return since summer
2007.
Recent months have shown some recovery and improved liquidity in credit markets,
with reducing spreads evident on listed UK property-related debt securities.
However, the availability of finance for real estate remains significantly
constrained, with only a small number of banks willing to advance new facilities
and generally only against the most prime assets.
Capital Shopping Centres ("CSC")
Since the Interim Report, occupancy levels at CSC's UK regional shopping centres
have increased, with headline occupancy at 31 August 2009 of 98.8 per cent (30
June 2009 - 98.3 per cent). As a result of continued positive re-letting
activity, occupancy levels (adjusted for units affected by administrations and
still to be re-let) have increased to 97.3 per cent (30 June 2009 - 96.3 per
cent).
The rate of tenant failures has slowed further in the third quarter, with only 7
retailers, affecting 14 units, failing since the half year, compared with an
aggregate 184 units out of CSC's 2,028 units in the three quarters to 30 June
2009.
Estimated footfall at CSC's centres continues to be encouraging with our 12
completed centres continuing to record an increase of over 3 per cent on the
previous year.
Whilst the retail letting market remains challenging, we are encountering more
activity and interest from retailers in securing well configured space in our
leading locations.
The 967,500 sq.ft. extension to St. David's, Cardiff is expected to open on 22
October 2009, with the new 260,000 sq.ft. John Lewis store opening on 24
September 2009. 66 per cent of the area and 61 per cent of the anticipated
rental income is currently either exchanged or in solicitors' hands (30 June
2009 - 64 per cent and 53 per cent respectively).
St. Andrew's Way mall at Eldon Square, due to complete in February 2010, now has
88 per cent by area and 92 per cent by anticipated rental income either
exchanged or in solicitors' hands (30 June 2009 - 85 per cent and 83 per cent
respectively).
At MetroCentre, our remodelling project in Yellow and Blue Quadrants continues
on programme. 82 per cent of the area and 73 per cent of anticipated rental
income is currently either exchanged or in solicitors' hands (30 June 2009 - 81
per cent and 70 per cent respectively) with a further 5 per cent by income in
active negotiation. Six of the eight restaurants on the upper level are open for
trade. Both Namco and Odeon are anticipated to be open for trade shortly, in
November and December 2009 respectively.
Capital & Counties
Covent Garden
The Group's holding in Covent Garden comprises around 750,000 sq.ft. over 44
buildings with 305 lettable units. The estate was valued at GBP529 million at 30
June 2009. Portfolio occupancy continues to be strong at 99 per cent taking into
account units under offer and under refurbishment, with net rental income in
line with expectations. Work on the refurbishment of the prominent Bedford
Chambers building is expected to complete on schedule with a world class tenant
opening for business in Spring 2010.
The strategy is to drive income through the introduction of an enhanced retail
and hospitality mix with particular focus on locations with currently low rental
levels. Opportunities to enhance our substantial presence in the district are
now presenting themselves, either by way of improvement works to the existing
portfolio or direct acquisitions. Part of the proceeds of the Placing will fund
expansionary capital expenditure in these prime locations.
Earls Court & Olympia (50 per cent controlling interest)
The Group reported at 30 June 2009 a satisfactory performance from the
underlying exhibition business which has continued in the second half of the
year. The estate including the adjacent Empress State building was valued at
GBP524 million at 30 June 2009.
The Group intends to use part of the proceeds of the Placing to continue to
pursue a planning consent for comprehensive redevelopment. Significant progress
has been made in making all stakeholders cognisant of the scale of the
opportunity, with both relevant London boroughs publishing strategy consultation
drafts recognising that Earls Court should be redeveloped. The project also has
the support of the Greater London Authority (GLA), which has described the site
as one of the most important development sites in London, capable of
implementation in the next 5 years. A Collaboration Agreement is well advanced
with adjacent land owners, who are working together to establish a Conditional
Joint Venture Agreement.
Dividends
As noted in the Interim Report, the Board intends, subject to available
resources, to pay a dividend in respect of 2009 on the enlarged share capital
amounting to 16.5 pence per share in aggregate, which is the same level as in
2008. Shares issued as a result of the Placing will not be entitled to the
interim dividend of 5.0 pence per share in respect of 2009. Such shares will be
entitled to receive the anticipated final dividend payment of 11.5 pence per
share in respect of 2009 payable in 2010.
Prospects
Liberty International has a high quality and defensive business, with 14 UK
regional shopping centres (including 9 of the UK's top 30) and prime central
London assets including the Covent Garden Estate and Earls Court & Olympia. The
Board believes the Group is well positioned for recovery as the property market
improves, with prime assets and large scale destinations expected to outperform
secondary assets and inferior locations. Due to recent adverse market
conditions, the supply of new retail space in the UK has been sharply curbed
which should be beneficial to the Group.
As stated in the Interim Report, tenant failures in the three quarters to 30
June 2009 amounting to over GBP30 million of CSC's passing rent will adversely
impact underlying earnings, despite the positive progress on re-lettings noted
above. As was also stated, earnings per share will be negatively impacted in the
short-term due to the impact of cash balances earning a low return pending the
most effective deployment, and also due to the Group being overhedged with
regard to interest rate risk.
Nevertheless, with the benefit of further capital and stability returning to the
UK market, the Group will have the opportunity to implement a number of active
asset management initiatives within its existing business to enhance returns to
shareholders.
Details of the Placing
Liberty International intends to place up to 56.1 million new ordinary shares,
representing up to 9.9 per cent of Liberty International's issued ordinary share
capital immediately prior to the Placing, with institutional and other investors
(the "Placing Shares"). The Placing is being conducted, subject to the
satisfaction of certain conditions, through an accelerated book-building process
to be carried out by Merrill Lynch International ("Merrill Lynch"). The book
will open with immediate effect. The timing of the closing of the book, pricing
and allocations is at the discretion of Liberty International and Merrill Lynch
although the book-building is expected to close not later than 4.30 pm (London
time) today. However, Merrill Lynch may accept further bids after initial
allocations have been made on the basis explained in the Appendix. The number of
Placing Shares and the price at which the Placing Shares are to be placed (the
"Placing Price") will be agreed by Liberty International with Merrill Lynch at
the close of the book-building process. Details of the Placing Price will be
announced as soon as practicable after the close of the book-building process.
The Placing Shares will be issued credited as fully paid and will rank pari
passu with the Company's existing ordinary shares, including the right to
receive all dividends and other distributions declared in respect of such shares
after the date of issue of the Placing Shares. The Placing Shares will not be
entitled to the interim dividend of 5.0 pence per share in respect of 2009. The
Placing Shares will be entitled to receive the anticipated final dividend
payment of 11.5 pence per share in respect of 2009 payable in 2010.
The Company will apply for admission of the Placing Shares to the Official List
of the Financial Services Authority and to listing on the London Stock
Exchange's main market for listed securities ("Admission"). It is expected that
Admission will take place and that trading will commence on 5 October 2009.
Application will also be made to JSE Ltd in South Africa for the Placing Shares
to be admitted to the Johannesburg Stock Exchange.
Settlement of the Placing Shares will be on a T + 8 basis (according to business
days in the UK) and is expected to occur on 5 October 2009.
The Appendix to this Announcement (which forms part of this Announcement) sets
out the terms and conditions of the Placing.
Enquiries:
Liberty International PLC
David FischelChief Executive +44 (0)20 7960 1207
Ian Durant Finance Director +44 (0)20 7960 1210
Kate BowyerInvestor Relations +44 (0)20 7960 1250
BofA Merrill Lynch +44 (0)20 7628 1000
Simon Mackenzie-Smith
Simon Fraser
Rupert Hume-Kendall
Public relations
UK: Michael Sandler +44 (0)20 7796 4133
Hudson Sandler
SA: Nicholas Williams
College Hill Associates +27 (0)11 447 3030
Certain statements made in this Announcement constitute forward-looking
statements. Forward looking statements are typically identified by the use of
forward looking terminology such as 'believes', 'expects', 'may', 'will',
'could', 'should', 'intends', 'estimates', 'plans', 'assumes' or 'anticipates'
or the negative thereof or other variations thereon or comparable terminology,
or by discussions of, e.g. future plans, present or future events, or strategy
that involve risks and uncertainties. Such forward-looking statements are
subject to a number of risks and uncertainties, many of which are beyond the
Company's control and all of which are based on the Company's current beliefs
and expectations about future events. Such statements are based on current
expectations and, by their nature, are subject to a number of risks and
uncertainties that could cause actual results and performance to differ
materially from any expected future results or performance, expressed or
implied, by the forward-looking statement. No assurance can be given that such
future results will be achieved; actual events or results may differ materially
as a result of risks and uncertainties facing the Company and its subsidiaries.
Factors that might cause forward-looking statements to differ materially from
actual results include, among other things, the following: global economic
conditions; economic conditions in the UK and other jurisdictions in which
Liberty International operates or invests; volatile property prices; any
inability of the Company to hedge certain risks economically; and exposure to
various types of market risk (e.g. interest rate risk and foreign exchange rate
risk). The forward-looking statements contained in this Announcement speak only
as of the date of this Announcement and the Company undertakes no duty to, and
will not necessarily, update any of them in light of new information or future
events, except to the extent required by applicable law, the Prospectus Rules,
the Listing Rules and the Disclosure and Transparency Rules.
This Announcement is for information purposes only and shall not constitute an
offer to buy, sell, issue, or acquire, or the solicitation of an offer to buy,
sell, issue, or acquire any securities in any jurisdiction, nor shall there be
any sale of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. 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, Australia, Canada or Japan. This Announcement has been issued by and is
the sole responsibility of the Company and should not be relied upon in
connection with any decision to subscribe for or acquire any of the Placing
Shares. No representation or warranty, express or implied, is or will be made as
to, or in relation to, and no responsibility or liability is or will be accepted
by Merrill Lynch International ("Merrill Lynch") or by any of its Affiliates or
agents as to, or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made available to or
publicly available to any interested party or its advisers, and any liability
therefore is expressly disclaimed.
Merrill Lynch, which is authorised and regulated in the United Kingdom by the
FSA, is acting for the Company and for no-one else in connection with the
Placing, and will not regard any other person (whether or not a recipient of
this Announcement) as a client in relation to the Placing and will not be
responsible to anyone other than the Company for providing the protections
afforded to clients of Merrill Lynch or for providing advice to any other person
in relation to the Placing or any other matter referred to herein.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. Accordingly,
they should obtain through an authorised dealer any necessary approval or
establish that an existing exchange control approval or exemption applies to
such investment. Within South Africa subscriptions can only be made for a
minimum subscription amount of Rand 100,000 per single addressee acting as
principal.
The price of shares and the income from them may go down as well as up and
investors may not get back the full amount invested on disposal of the shares.
APPENDIX
TERMS AND CONDITIONS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT
PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING
AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR
BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS
AND ARE (1) QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 AS AMENDED ("FSMA"), BEING PERSONS FALLING WITHIN
THE MEANING OF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE
"PROSPECTUS DIRECTIVE") AND (2) IN THE UNITED KINGDOM FALL WITHIN ARTICLE 19(5)
OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005,
AS AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d)
("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED
ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING
THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN LIBERTY
INTERNATIONAL.
THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE LAWS OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR DELIVERED DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES
EXCEPT PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NO
MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED
STATES IS BEING SOLICITED BY THIS ANNOUNCEMENT AND THIS APPENDIX AND IF SENT IN
RESPONSE TO INFORMATION CONTAINED IN THIS ANNOUNCEMENT OR THIS APPENDIX, WILL
NOT BE ACCEPTED.THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS ONLY
ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC
AREA ("EEA") WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E)
OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC) ("QUALIFIED INVESTORS").
By participating in the bookbuilding procedure (the "Bookbuilding") and the
Placing, Placees will be deemed to have read and understood this Appendix and
the remainder of this Announcement in its entirety (together referred to as the
"Announcement"), and to be participating, making an offer and acquiring Placing
Shares on the terms and conditions contained herein and to be providing the
representations, warranties, indemnities, acknowledgements and undertakings
contained herein.
In particular each such Placee represents, warrants and acknowledges that it:
1. is a Relevant Person and undertakes that it will acquire, hold, manage or
dispose of any Placing Shares that are allocated to it for the purposes of its
business;
2. in the case of a Relevant Person in a member state of the EEA which has
implemented the Prospectus Directive (each a "Relevant Member State") who
acquires any Placing Shares pursuant to the Placing:
(i) it is a Qualified Investor; and
(ii) in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 3(2) of the Prospectus Directive,
that (a) the Placing Shares subscribed for and/or acquired by it in the Placing
have not been subscribed for and/or acquired on behalf of, nor have they been or
will be acquired with a view to their offer or resale to, persons in any
Relevant Member State other than Qualified Investors or in circumstances in
which the prior consent of Merrill Lynch has been given to the offer or resale;
or (b) where Placing Shares have been acquired by it on behalf of persons in any
member state of the EEA other than Qualified Investors, the offer of those
Placing Shares to it is not treated under the Prospectus Directive as having
been made to such persons; and
3. is acquiring the Placing Shares for its own account or is acquiring the
Placing Shares for an account with respect to which it exercises sole investment
discretion and has the authority to make, and does make, the acknowledgements,
representations and agreements contain in this Appendix and that it (and any
such account) is outside the United States or it is a dealer or other
professional fiduciary in the United States acting on a discretionary basis for
non-US beneficial owners (other than an estate or trust), and is acquiring the
Placing Shares in an offshore transaction in reliance upon Regulation S under
the US Securities Act of 1933, as amended (the "Securities Act") and it is not
purchasing the Placing Shares for the account of another person who is resident
or located in the United States unless (a) the instruction to purchase was
received from a person outside the United States and (b) the person giving such
instruction has confirmed that it (i) has the authority to give such instruction
and (ii) either (x) has investment discretion over such account or (y) is an
investment manager or investment company and that, in the case of each of (x)
and (y), is purchasing the Placing Shares in an "offshore transaction" within
the meaning of Regulation S under the Securities Act; or if it is not outside
the United States, it is a qualified institutional buyer ("QIB") as defined in
Rule 144A under the Securities Act, or purchasing Placing Shares on behalf of a
QIB, who will sign a letter in the form agreed between the Company and Merrill
Lynch ("US Investor Letter") and understands (or, if it is acting for the
account of another person, such person has confirmed that such person
understands) the resale and transfer restrictions set out in "Representations
and further terms" contained herein.
This Announcement does not constitute or form part of an offer to sell or issue
or the solicitation of an offer to buy or subscribe for Placing Shares in any
jurisdiction including, without limitation, the United Kingdom, South Africa,
the United States, Canada, Australia or Japan. This Announcement and the
information contained herein is not for publication or distribution, directly or
indirectly, to persons in the United States, Canada, Australia, Japan or in any
jurisdiction in which such publication or distribution is unlawful. No public
offering of securities will be made in connection with the Placing in the United
Kingdom, the United States or elsewhere.
The Placing Shares referred to in this Announcement have not been and will not
be registered under the Securities Act or under the securities laws of any State
or other jurisdiction of the United States, and may not be offered or sold
directly or indirectly in or into the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in compliance with the securities laws of
any State of the United States. Any offering to be made in the United States
will be made to a limited number of qualified institutional investors ("QIBs")
pursuant to an exemption from registration under the Securities Act in a
transaction not involving any public offering. The Placing Shares are being
offered and sold outside the United States in accordance with Regulation S under
the Securities Act.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange commission (the "SEC"), any State securities commission or any
other regulatory authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Placing or the accuracy or
adequacy of this Announcement. Any representation to the contrary is a criminal
offence in the United States. Persons (including without limitation, nominees
and trustees) who have a contractual or other legal obligation to forward a copy
of this Appendix or this Announcement should seek appropriate advice before
taking any action.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. Accordingly,
they should obtain through an authorised dealer any necessary approval or
establish that an existing exchange control approval or exemption applies to
such investment. Within South Africa subscriptions can only be made for a
minimum subscription amount of Rand 100,000 per single addressee acting as
principal.
The distribution of this Announcement and the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action has
been taken by the Company, Merrill Lynch, or any of their respective Affiliates,
that would permit an offer of the Placing Shares or possession or distribution
of this Announcement or any other offering or publicity material relating to
such Placing Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement comes are required by
the Company and Merrill Lynch to inform themselves about and to observe any such
restrictions.
In this Appendix, unless the context otherwise requires, the "Company" means
Liberty International PLC and "Placee" includes a person (including individuals,
funds or others) on whose behalf a commitment to acquire Placing Shares has been
given.
No prospectus
No prospectus or other offering document has been or will be submitted to be
approved by the FSA in relation to the Placing and the Placees' commitments will
be made solely on the basis of the information contained in this Announcement,
the Pricing Announcement and any information publicly announced to a Regulatory
Information Service by or on behalf of the Company prior to the date of this
Announcement (the "Publicly Available Information"). Each Placee, by
participating in the Placing, agrees that it has neither received nor relied on
any other information, representation, warranty or statement made by or on
behalf of either Merrill Lynch or the Company and neither Merrill Lynch, the
Company nor any person acting on such person's behalf nor any of their
Affiliates has or shall have any liability for any Placee's decision to accept
this invitation to participate in the Placing based on any other information,
representation, warranty or statement. Each Placee acknowledges and agrees that
it has relied on its own investigation of the business, financial or other
position of the Company in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
No representation or warranty, express or implied, is or will be made as to, or
in relation to, and no responsibility or liability will be accepted by Merrill
Lynch or any of its employees, Affiliates, advisers or agents or any other
person as to or in relation to, the accuracy or completeness of any of the
Publicly Available Information or this Announcement or any other written or oral
information made available to any Placee, any person acting on such Placee's
behalf or any of their respective advisers, and any liability therefore is
expressly disclaimed.
Details of the Placing Agreement and the Placing Shares
Merrill Lynch has entered into a placing agreement (the "Placing Agreement")
with the Company under which Merrill Lynch has undertaken, on the terms and
subject to the conditions set out in the Placing Agreement, to use its
reasonable endeavours as agent of the Company to seek to procure Placees for the
Placing Shares. In accordance with the terms of the Placing Agreement, Merrill
Lynch has agreed to underwrite the settlement risk in the event that any Placees
fail to take up their allocation of Placing Shares.
The Placing Shares will, when issued, be subject to the memorandum and articles
of association of the Company and be credited as fully paid and will rank pari
passu in all respects with the existing issued ordinary shares of 50 pence per
share in the capital of the Company, including the right to receive all
dividends and other distributions declared in respect of such ordinary shares
after the date of issue of the Placing Shares. The Placing Shares will not be
entitled to the interim dividend of 5.0 pence per share in respect of 2009. The
Placing Shares will be entitled to receive the anticipated final dividend
payment of 11.5 pence per share in respect of 2009 payable in 2010.
Application for admission to listing and trading
Application will be made to the FSA for admission of the Placing Shares to the
official list maintained by the FSA (the "Official List") and to the London
Stock Exchange for admission to trading of the Placing Shares on the London
Stock Exchange's market for listed securities (together "Admission").
Application will also be made to the JSE for the Placing Shares to be admitted
to the JSE at the same time as Admission occurs. It is expected that Admission
will take place at 8.00 a.m. on 5 October 2009 and that dealings in the Placing
Shares on the London Stock Exchange's main market for listed securities will
commence at that time.
Bookbuilding
Merrill Lynch will today commence the Bookbuilding to determine demand for
participation in the Placing by Placees. This Appendix gives details of the
terms and conditions of, and the mechanics of participation in, the Placing. No
commissions will be paid to Placees or by Placees in respect of any Placing
Shares.
Merrill Lynch and the Company shall be entitled to effect the Placing by such
alternative method to the Bookbuilding as they may, in their sole discretion,
determine.
Principal terms of the Bookbuilding and Placing
1. Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by Merrill Lynch. Merrill Lynch is
entitled to enter bids in the Bookbuilding.
2. The Bookbuilding will establish a single price (the "Placing Price")
payable to Merrill Lynch by all Placees whose bids are successful. The Placing
Price will be agreed between Merrill Lynch and the Company following completion
of the Bookbuilding and any discount to the market price of the ordinary shares
of the Company will be determined in accordance with the Listing Rules. The
Placing Price will be announced (the "Pricing Announcement") on a Regulatory
Information Service following the completion of the Bookbuilding.
3. To bid in the Bookbuilding, Placees should communicate their bid by
telephone to their usual sales contact at Merrill Lynch. Each bid should state
the number of shares in the Company which a prospective Placee wishes to acquire
at either the Placing Price which is ultimately established by the Company and
Merrill Lynch or at prices up to a price limit specified in its bid. Bids may be
scaled down by Merrill Lynch on the basis referred to in paragraph 6 below.
4. The Bookbuilding is expected to close no later than 4.30 p.m. on 23
September 2009 but may be closed earlier or later at the sole discretion of
Merrill Lynch. Merrill Lynch may, in agreement with the Company, accept bids
that are received after the Bookbuilding has closed.
5. Allocations will be confirmed orally by Merrill Lynch as soon as
practicable following the close of the Bookbuilding. Merrill Lynch's oral
confirmation of an allocation will give rise to a legally binding commitment by
the Placee concerned, in favour of Merrill Lynch and the Company, under which it
agrees to acquire the number of Placing Shares allocated to it on the terms and
subject to the conditions set out in this Appendix and the Company's Memorandum
and Articles of Association.
6. Subject to paragraphs 1 and 4 above, Merrill Lynch may choose to accept
bids, either in whole or in part, on the basis of allocations determined at its
discretion (in agreement with the Company) and may scale down any bids for this
purpose on such basis as it may determine. It may also, notwithstanding
paragraphs 1 and 4, subject to the prior consent of the Company (a) allocate
Placing Shares after the time of any initial allocation to any person submitting
a bid after that time and (b) allocate Placing Shares after the Bookbuilding has
closed to any person submitting a bid after that time.
7. A bid in the Bookbuilding will be made on the terms and subject to the
conditions in this Appendix and will be legally binding on the Placee on behalf
of which it is made and except with Merrill Lynch's consent will not be capable
of variation or revocation after the time at which it is submitted. Each Placee
will have an immediate, separate, irrevocable and binding obligation, owed to
Merrill Lynch, to pay to it (or as it may direct) in cleared funds an amount
equal to the product of the Placing Price and the amount of Placing Shares such
Placee has agreed to acquire. Each Placee's obligations will be owed to the
Company and to Merrill Lynch. Merrill Lynch is arranging the Placing as agent of
the Company.
8. Except as required by law or regulation, no press release or other
announcement will be made by Merrill Lynch or the Company using the name of any
Placee (or its agent), in its capacity as Placee (or agent), other than with
such Placee's prior written consent.
9. Irrespective of the time at which a Placee's allocation(s) pursuant to the
Placing is/are confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the same time, on the
basis explained below under "Registration and Settlement".
10. All obligations under the Bookbuilding and Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of the Placing"
and to the Placing not being terminated on the basis referred to below under
"Termination of the Placing".
11. By participating in the Bookbuilding each Placee will agree that its
rights and obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission or
termination by the Placee.
12. To the fullest extent permissible by law, neither Merrill Lynch nor any
of its Affiliates shall have any liability to Placees (or to any other person
whether acting on behalf of a Placee or otherwise). In particular, neither
Merrill Lynch nor any of its Affiliates shall have any liability (including, to
the extent permissible by law, any fiduciary duties) in respect of Merrill
Lynch's conduct of the Bookbuilding or of such alternative method of effecting
the Placing as Merrill Lynch and the Company may agree.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a
contract note or electronic confirmation which will confirm the number of
Placing Shares allocated to them, the Placing Price and the aggregate amount
owed by them to Merrill Lynch. Each Placee will be deemed to agree that it will
do all things necessary to ensure that delivery and payment is completed in
accordance with either the standing CREST or certificated settlement
instructions which they have in place with Merrill Lynch. Payment in full for
any Placing Shares so allocated at the Placing Price must be made by no later
than midday (or such other time as shall be notified to each Placee by Merrill
Lynch on 5 October 2009 (or such other time and/or date as the Company and
Merrill Lynch may agree)).
Settlement of transactions in the Placing Shares following Admission will take
place within the CREST system. Settlement through CREST will be on a T + 8 basis
(according to business days in the UK) unless otherwise notified by Merrill
Lynch and is expected to occur on 5 October 2009. Settlement will be on a
delivery versus payment basis. However, in the event of any difficulties or
delays in the admission of the Placing Shares to CREST or the use of CREST in
relation to the Placing, the Company and Merrill Lynch may agree that the
Placing Shares should be issued in certificated form. Merrill Lynch reserves the
right to require settlement for the Placing Shares, and to deliver the Placing
Shares to Placees, by such other means as they deem necessary if delivery or
settlement to Placees is not practicable within the CREST system or would not be
consistent with regulatory requirements in a Placee's jurisdiction.
Interest is chargeable daily on payments not received on the due date in
accordance with the arrangements set out above, in respect of either CREST or
certificated deliveries, at the rate of two percentage points above prevailing
LIBOR.
If Placees do not comply with their obligations Merrill Lynch may sell their
Placing Shares on their behalf and retain from the proceeds, for its own account
and benefit, an amount equal to the Placing Price of each share sold plus any
interest due. Placees will, however, remain liable for any shortfall below the
Placing Price and for any stamp duty or stamp duty reserve tax (together with
any interest or penalties) which may arise upon the sale of their Placing Shares
on their behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees must ensure that, upon receipt, the conditional contract note is copied
and delivered immediately to the relevant person within that organisation.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and
not having been terminated in accordance with its terms.
The obligations of Merrill Lynch under the Placing Agreement are, and the
Placing is, conditional on, inter alia:
(a) Admission occurring by not later than 8.00 a.m. (London time) on 6 October
2009 (or such later time and/or date as the Company with Merrill Lynch may
agree);
(b) the warranties, representations and undertakings given by the Company in the
Placing Agreement being true and accurate and not misleading in any respect on
and as of the date of the Placing Agreement and at any time prior to Admission;
and
(c) the fulfilment by the Company of its obligations under the Placing Agreement
which are required to be performed or satisfied on or prior to Admission, save
to the extent that any non-compliance is not material in the context of the
Placing,
(all such conditions included in the Placing Agreement being each a "condition"
and together the "conditions").
If any condition in the Placing Agreement is not satisfied or waived in
accordance with the Placing Agreement within the stated time periods (or such
later time and/or date as the Company and Merrill Lynch may agree), or has
become incapable of being satisfied or the Placing Agreement is terminated in
accordance with its terms, the Placing will lapse and the Placee's rights and
obligations under these terms and conditions shall cease and terminate at such
time and each Placee agrees that no claim can be made by or on behalf of the
Placee (or any person on whose behalf the Placee is acting) in respect thereof.
Merrill Lynch may at its sole discretion and upon such terms as it thinks fit,
waive compliance by the Company, or extend the time and/or date for fulfilment
by the Company, with the whole or any part of any of the Company's obligations
in relation to the conditions in the Placing Agreement, save that certain
conditions including the condition relating to Admission referred to in
paragraph (a) above may not be waived. Any such extension or waiver will not
affect Placees' commitments as set out in this Appendix.
Neither Merrill Lynch nor any of its Affiliates nor the Company shall have any
liability to any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision any of them may make as to
whether or not to waive or to extend the time and/or date for the satisfaction
of any condition to the Placing nor for any decision any of them may make as to
the satisfaction of any condition or in respect of the Placing generally.
Termination of the Placing
Merrill Lynch may, at its absolute discretion, by notice in writing to the
Company, terminate the Placing Agreement at any time prior to Admission if,
inter alia:
(a) they become aware that the Company is in breach of any of its obligations
under the Placing Agreement save to the extent that any breach is not, in the
opinion of Merrill Lynch, material in the context of the Placing; or
(b) any of the warranties, undertakings or covenants given by the Company in the
Placing Agreement is, or if repeated at any time up to and including Admission
(by reference to the facts and circumstances then existing) would be, untrue,
inaccurate or misleading or Merrill Lynch become aware that any statement in
this Announcement is or becomes untrue, inaccurate or misleading save to the
extent that any breach is not, in the opinion of Merrill Lynch, material in the
context of the Placing; or
(c) there has been a material adverse change in the condition (financial or
otherwise) or prospects of the Company or the Group since the date of the
Placing Agreement; or
(d) there has occurred any material adverse change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls that has, in the opinion of Merrill Lynch, resulted in the
marketing of the Placing Shares or dealings in the Placing Shares becoming
impracticable or inadvisable.
If the Placing Agreement is terminated in accordance with its terms, the rights
and obligations of each Placee in respect of the Placing as described in this
Announcement (including this Appendix) shall cease and terminate at such time
and no claim can be made by any Placee in respect thereof.
By participating in the Placing, each Placee agrees with the Company and Merrill
Lynch that the exercise by the Company or Merrill Lynch of any right of
termination or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of the Company or Merrill Lynch (as the
case may be) and that neither the Company nor Merrill Lynch need make any
reference to such Placee and that neither the Company, Merrill Lynch nor any of
their respective Affiliates shall have any liability to such Placee (or to any
other person whether acting on behalf of a Placee or otherwise) whatsoever in
connection with any such exercise.
By participating in the Placing, each Placee agrees that its rights and
obligations terminate only in the circumstances described above and will not be
capable of rescission or termination by it after oral confirmation by Merrill
Lynch following the close of the Bookbuilding.
Representations and further terms
By submitting a bid in the Bookbuilding, each prospective Placee (and any person
acting on such Placee's behalf) represents, warrants, acknowledges and agrees
that:
1. it has read and understood this Announcement (including this Appendix) in
its entirety and that its purchase of the Placing Shares is subject to and based
upon all the terms, conditions, representations, warranties, acknowledgements,
agreements and undertakings and other information contained herein and that it
has not relied on any information given or any representations or statements
made at any time by any person in connection with Admission, the Placing, the
Company, the Placing Shares, or otherwise, other than the information contained
in this Announcement and that in accepting the offer of its placing
participation it will be relying solely on the information contained in the
Announcement;
2. it has not received a prospectus or other offering document in connection
with the Placing and acknowledges that no prospectus or other offering document
has been prepared in connection with the Placing;
3. if the Placing Shares were offered to it in the United States, it
represents and warrants that in making its investment decision, (i) it has
consulted its own independent advisers or otherwise has satisfied itself
concerning, without limitation, the effects of United States federal, state and
local income tax laws and foreign tax laws generally and the US Employee
Retirement Income Security Act of 1974 ("ERISA"), the US Investment Company Act
of 1940 and the Securities Act, (ii) it has received all information that it
believes is necessary or appropriate in order to make an investment decision in
respect of the Company and the Placing Shares and (iii) it is aware and
understands that an investment in the Placing Shares involves a considerable
degree of risk and no US federal or state or non-US agency has made any finding
or determination as to the fairness for investment or any recommendation or
endorsement of the Placing Shares;
4. (i) it has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on Publicly Available Information, (ii) neither
Merrill Lynch, nor the Company nor their respective Affiliates has made any
representation to it, express or implied, with respect to the Company, the
Placing or the Placing Shares or the accuracy, completeness or adequacy of the
Publicly Available Information and (iii) it has made its own investigation of
the business, financial and other position of the Company and the terms of the
Placing, satisfied itself that the information is still current and relied on
that investigation for the purposes of its decision to participate in the
Placing;
5. the content of this Announcement is exclusively the responsibility of the
Company and neither Merrill Lynch nor any person acting on its behalf is
responsible for or has or shall have any liability for any information or
representation relating to the Company contained in this Announcement or the
Publicly Available Information nor will be liable for any Placee's decision to
participate in the Placing based on any information, representation, warranty or
statement contained in this Announcement, the Publicly Available Information or
otherwise. Nothing in this Appendix One shall exclude any liability of any
person for fraudulent misrepresentation;
6. it is not and it will not be subscribing on behalf of a resident of
Australia, Canada or Japan at the time the Placing Shares are acquired, and each
of it and the beneficial owner of the Placing Shares is, and at the time the
Placing Shares are acquired will be, (i) outside the United States or (ii) a
QIB, or (iii) acquiring the Placing Shares in an 'offshore transaction' in
accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act,
and it is not purchasing the Placing Shares for the account of another person
who is resident or located in the United States unless (a) the instruction to
purchase was received from a person outside the United States and (b) the person
giving such instruction has confirmed that it (i) has the authority to give such
instruction and (ii) either (x) has investment discretion over such account or
(y) is an investment manager or investment company and that, in the case of each
of (x) and (y), is purchasing the Shares in an "offshore transaction" within the
meaning of Regulation S under the Securities Act and has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Placing Shares, is able to bear the
economic risk of an investment in the Placing Shares, has adequate means of
providing for its current and contingent needs, is able to sustain a complete
loss of the investment in the Placing Shares and has no need for liquidity with
respect to its investment in the Placing Shares and represents and, in the case
of (ii) above, warrants that it is acquiring the Placing Shares for its own
account or for one or more accounts as to each of which it exercises sole
investment discretion and each of which is a QIB, and will sign the US Investor
Letter, for investment purposes and not with a view to any distribution or for
resale in connection with, the distribution (within the meaning of US Securities
Laws) thereof in whole or in part, in the United States;
7. the Placing Shares have not been and will not be registered or otherwise
qualified for offer and sale nor will a prospectus be cleared or approved in
respect of any of the Placing Shares under the securities laws of the United
States, Australia, Canada or Japan and, subject to certain exceptions, may not
be offered or sold directly or indirectly, in or into Australia, Canada or
Japan;
8. it and/or each person on whose behalf it is participating:
(i) is entitled to acquire Placing Shares pursuant to the Placing under the laws
of all relevant jurisdictions;
(ii) has fully observed such laws;
(iii) has capacity and authority and is entitled to enter into and perform its
obligations as an acquirer of Placing Shares and will honour such obligations;
and
(iv) has obtained all necessary consents and authorities (including, without
limitation, in the case of a person acting on behalf of a Placee, all necessary
consents and authorities to agree to the terms set out or referred to in this
Appendix) under those laws or otherwise and complied with all necessary
formalities;
9. the Placing Shares have not and will not be registered under the
Securities Act, or under the securities laws of any state of the United States,
and are being offered and sold on behalf of the Company in offshore transactions
(as defined in Regulation S under the Securities Act) or in the case of QIBs
only, in reliance upon an exemption from the registration requirements under the
Securities Act or in a transaction not including a "public offering";
10. the Placing Shares offered and sold in the United States are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act;
11. so long as the Placing Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, it will segregate such
Placing Shares from any other shares in the Company that it holds that are not
restricted securities and will not deposit the Placing Shares into any
depositary receipt facility maintained by any depositary bank in respect of the
Company's Ordinary Shares;
12. whether or not it currently holds the Company's American Depositary
Receipts ("ADRs"), it will receive the Placing Shares in the form of ordinary
shares and not in the form of ADRs and until one year after the latest date on
which the Placing Shares are delivered in the Placing (which is currently
expected to be 5 October 2009), no depositary will accept deposits of the
Placing Shares in the Company's ADR facility or permit pre-releases of the
Company's American Depositary Shares from its ADR facility unless it (or a
broker on its behalf) certifies, among other things, that the shares to be
deposited were not subscribed or purchased pursuant to the Placing, and that it
has not borrowed shares to be deposited with the intention of replacing them
with Placing Shares subscribed or purchased pursuant to the Placing;
13. a purchase of Placing Shares by an employee benefit plan subject to ERISA
or a plan subject to Section 4975 of the US Internal Revenue Code of 1986, as
amended (the "Code"), or by any entity whose assets are treated as assets of any
such plan, could result in severe penalties or other liabilities for the
Company; and it represents, warrants and agrees that it is not (a) (i) an
employee benefit plan as described in Section 3(3) of ERISA and subject to
ERISA, (ii) a plan subject to Section 4975 of the Code, (iii) any entities whose
assets are treated as assets of any such plan by reason of such employee benefit
plan's or plan's investment in the entity, or (iv) a "benefit plan investor" as
such term is otherwise defined in the regulations promulgated by the US
Department of Labor, and (b) if we are a governmental plan, church or other plan
which is subject to any federal, state or local law that is substantially
similar to the provisions of Title I of ERISA or Section 4975 of the Code, our
purchase, holding or disposition of Placing Shares will not constitute or result
in a non-exempt violation under any such substantially similar law (the entities
referred to in (a)-(b), being referred to as "ERISA Entities");
14. it will not reoffer, sell, pledge or otherwise transfer the Placing
Shares except (i) in an offshore transaction in accordance with Rule 903 or 904
of Regulation S under the Securities Act (and, if in a privately negotiated
transaction, to a person that is not an ERISA Entity); (ii) in the United States
to QIBs that are not ERISA Entities pursuant to Rule 144A under the Securities
Act; (iii) pursuant to Rule 144 under the Securities Act (if available); or (iv)
pursuant to an effective registration statement under the Securities Act and
that, in each such case, such offer, sale, pledge, or transfer will be made in
accordance with any applicable securities laws of any State of the United
States;
15. it is not acquiring any of the Placing Shares as a result of any form of
general solicitation or general advertising (within the meaning of Rule 502(c)
of Regulation D under the Securities Act) or directed selling efforts (as
defined in Regulation S under the Securities Act);
16. if it will be a "US Holder" as defined below under the heading "Passive
Foreign Investment Company", it acknowledges that there is a significant risk
that the Company is treated as a Passive Foreign Investment Company for US
federal income tax purposes, which status will subject US holders to adverse US
federal income tax consequences, and it has read and understood the disclosure
thereunder;
17. it acknowledges that where it is acquiring the Placing Shares for one or
more managed accounts, it represents and warrants that it is authorised in
writing by each managed account to acquire the Placing Shares for each managed
account;
18. if it is a pension fund or investment company, its acquisition of Placing
Shares is in full compliance with applicable laws and regulations;
19. no representation has been made as to the availability of the exemption
provided by Rule 144, Rule 144A or any other exemption under the Securities Act
for the reoffer, resale, pledge or transfer of the Placing Shares;
20. participation in the Placing is on the basis that it is not and will not
be a client of Merrill Lynch and Merrill Lynch will have no duties or
responsibilities to a Placee for providing protections afforded to its clients
under the rules of the FSA or for providing advice in relation to the Placing
nor in respect of any representations, warranties, undertakings or indemnities
contained in the Placing Agreement;
21. it will make payment to Merrill Lynch in accordance with the terms and
conditions of this Announcement on the due times and dates set out in this
Announcement, failing which the relevant Placing Shares may be placed with
others on such terms as Merrill Lynch determine;
22. the person who it specifies for registration as holder of the Placing
Shares will be (i) the Placee or (ii) a nominee of the Placee, as the case may
be. Merrill Lynch and the Company will not be responsible for any liability to
stamp duty or stamp duty reserve tax resulting from a failure to observe this
requirement. It agrees to acquire Placing Shares pursuant to the Placing on the
basis that the Placing Shares will be allotted to a CREST stock account of
Merrill Lynch who will hold them as nominee on behalf of the Placee until
settlement in accordance with its standing settlement instructions with it;
23. the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not give rise
to a stamp duty or stamp duty reserve tax liability under (or at a rate
determined under) any of sections 67, 70, 93 and 96 of the Finance Act 1986
(depository receipts and clearance services) and that it is not participating in
the Placing as nominee or agent for any person or persons to whom the
allocation, allotment, issue or delivery of Placing Shares would give rise to
such a liability;
24. it and any person acting on its behalf falls within Article 19(5) and/or
49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended, and undertakes that it will acquire, hold, manage and (if
applicable) dispose of any Placing Shares that are allocated to it for the
purposes of its business only and represents and warrants that it is entitled to
subscribe for Placing Shares comprised in its allocation under the laws of all
relevant jurisdictions which apply to it and that it has fully observed such
laws and obtained all governmental and other consents which may be required
thereunder and complied with all necessary formalities;
25. it has not offered or sold and will not offer or sell any Placing Shares
to persons in the United Kingdom prior to Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and which will not result in
an offer to the public in the United Kingdom within the meaning of section 85(1)
of the Financial Services and Markets Act 2000 (the "FSMA");
26. if it is within the EEA, it is a qualified investor as defined in section
86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of
the Prospectus Directive;
27. it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of section 21 of the FSMA) relating
to Placing Shares in circumstances in which section 21(1) of the FSMA does not
require approval of the communication by an authorised person;
28. it has complied and it will comply with all applicable provisions of the
FSMA with respect to anything done by it or on its behalf in relation to the
Placing Shares in, from or otherwise involving the United Kingdom;
29. if it has received any confidential price sensitive information about the
Company in advance of the Placings, it has not (i) dealt in the securities of
the Company; (ii) encouraged or required another person to deal in the
securities of the Company; or (iii) disclosed such information to any person,
prior to the information being made generally available;
30. acknowledges and accepts that Merrill Lynch may, in accordance with
applicable legal and regulatory provisions, engage in transactions in relation
to the Placing Shares and/or related instruments for their own account for the
purpose of hedging their underwriting exposure or otherwise and, except as
required by applicable law or regulation, Merrill Lynch will not make any public
disclosure in relation to such transactions;
31. it has not offered or sold and will not offer or sell any Placing Shares
to persons in the European Economic Area prior to Admission except to persons
whose ordinary activities involve them acquiring, holding, managing or disposing
of investments (as principal or agent) for the purpose of their business or
otherwise in circumstances which have not resulted and which will not result in
an offer to the public in any member state of the European Economic Area within
the meaning of the Prospectus Directive (which means Directive 2003/71/EC and
includes any relevant implementing measure in any member state);
32. it has complied with its obligations in connection with money laundering
and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act
2000, and the Money Laundering Regulations (2003) (the "Regulations") and, if
making payment on behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third party as
required by the Regulations;
33. if it is resident in South Africa, it is acting as a principal in respect
of the Placing for an aggregate subscription price of more than Rand 100,000;
34. if it is resident in South Africa, it has obtained the necessary
approvals from the South African Reserve Bank in order to participate in the
Placing or is entitled to make use of an exemption to the South African Exchange
Control Regulations and accordingly is permitted to participate in the Placing;
35. the Company, Merrill Lynch and others will rely upon the truth and
accuracy of the foregoing representations, warranties, acknowledgements and
agreements;
36. the Placing Shares will be issued subject to the terms and conditions of
this Appendix;
37. this Appendix, all documents into which this Appendix is incorporated by
reference or otherwise validly forms a part will be governed by and construed in
accordance with English law. All agreements to acquire shares pursuant to the
Bookbuilding and/or the Placing will be governed by English law and the English
courts shall have exclusive jurisdiction in relation thereto except that
proceedings may be taken by the Company or Merrill Lynch in any jurisdiction in
which the relevant Placee is incorporated or in which any of its securities have
a quotation on a recognised stock exchange; and
38. it (and any person acting on its behalf) agrees to indemnify and hold the
Company, Merrill Lynch and their respective Affiliates harmless from any and all
costs, claims, liabilities and expenses (including legal fees and expenses) (i)
arising out of or in connection with any breach of the representations,
warranties, acknowledgements, agreements and undertakings in this Appendix; or
(ii) incurred by Merrill Lynch and/or the Company arising from the performance
of the Placee's obligations as set out in this Announcement, and further agrees
that the provisions of this Appendix shall survive after completion of the
Placing.
Please also note that the agreement to allot and issue Placing Shares to Placees
(or the persons for whom Placees are contracting as agent) free of stamp duty
and stamp duty reserve tax in the UK relates only to their allotment and issue
to Placees, or such persons as they nominate as their agents, direct from the
Company for the Placing Shares in question. Such agreement assumes that the
Placing Shares are not being acquired in connection with arrangements to issue
depositary receipts or to transfer the Placing Shares into a clearance service.
If there were any such arrangements, or the settlement related to other dealing
in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for
which neither the Company nor Merrill Lynch would be responsible. If this is the
case, it would be sensible for Placees to take their own advice and they should
notify Merrill Lynch accordingly. In addition, Placees should note that they
will be liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the UK by them or any other person on the acquisition by them of any Placing
Shares or the agreement by them to acquire any Placing Shares.
The representations, warranties, acknowledgements and undertakings contained in
this Appendix are given to Merrill Lynch for itself and on behalf of the Company
and are irrevocable.
Merrill Lynch is acting exclusively for the Company and no one else in
connection with the Bookbuilding and the Placing and Merrill Lynch will not be
responsible to anyone (including Placees) other than the Company for providing
the protections afforded to their respective clients or for providing advice in
relation to the Bookbuilding or the Placing or any other matters referred to in
this Announcement.
Each Placee and any person acting on behalf of the Placee acknowledges that
Merrill Lynch does not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings or indemnities in the
Placing Agreement or otherwise.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that Merrill Lynch may (at its absolute discretion) satisfy its
obligations to procure Placees by itself agreeing to become a Placee in respect
of some or all of the Placing Shares or by nominating any connected or
associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with
Merrill Lynch, any money held in an account with Merrill Lynch on behalf of the
Placee and/or any person acting on behalf of the Placee will not be treated as
client money within the meaning of the relevant rules and regulations of the
Financial Services Authority which therefore will not require Merrill Lynch to
segregate such money, as that money will be held by it under a banking
relationship and not as trustee.
Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser.
All times and dates in this Announcement may be subject to amendment. Merrill
Lynch will notify Placees and any persons acting on behalf of the Placees of any
changes.
Passive Foreign Investment Company
The following discussion applies only to US Holders of the Company's Ordinary
Shares. For this purpose, a US Holder is a beneficial owner of Ordinary Shares
that is (i) a citizen or resident of the United States for US federal income tax
purposes; (ii) a corporation, or other entity treated as a corporation, created
or organised under the laws of the United States or any state thereof; (iii) an
estate the income of which is subject to US federal income tax without regard to
its source; or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more US persons have the authority to control all substantial decisions of the
trust.
There is a significant risk that the Company may be considered to be a Passive
Foreign Investment Company (a "PFIC") for US federal income tax purposes.
If the Company is a PFIC in any year during which a US Holder owns Ordinary
Shares, and the US Holder has not made a mark to market or qualified electing
fund ("QEF") election, the US Holder will generally be subject to special rules
(regardless of whether the Company continues to be a PFIC) with respect to (i)
"distributions" exceeding 125 per cent of the average annual distributions
received from the Company in the previous three taxable years or, if shorter,
the US Holder's holding period for the Ordinary Shares; and (ii) any gain
realised on the sale or other disposition of Ordinary Shares.
Under these rules (i) the distribution or gain will be allocated rateably over
the US Holder's holding period; (ii) the amount allocated to the current taxable
year and any taxable year prior to the first taxable year in which the Company
was a PFIC will be taxed as ordinary income; and (iii) the amount allocated to
each of the other taxable years will be subject to tax at the highest rate of
tax applicable to the US Holder for that year and an interest charge for the
deemed deferral benefit will be imposed on the resulting tax attributable to
each of those other taxable years. If the Company is a PFIC, a US Holder will
generally be subject to similar rules with respect to distributions to the
Company by, and dispositions by the Company of the shares of, any of the
Company's direct or indirect subsidiaries that are also PFICs.
US Holders can avoid the interest charge by making a mark to market election
with respect to the Ordinary Shares, provided that the shares are "marketable".
Shares will be marketable if they are regularly traded on certain US stock
exchanges, or on a foreign stock exchange that satisfies certain regulatory
requirements. It is expected that the London Stock Exchange will satisfy these
requirements. For purposes of this election, the Ordinary Shares will be
considered regularly traded during any calendar year during which they are
traded, other than in de minimis quantities, on at least 15 days during each
calendar quarter. Any trades that have as their principal purpose meeting this
requirement will be disregarded. US Holders should consult their tax advisers
concerning the availability and consequences of making a mark to market election
with respect to the Ordinary Shares.
In some cases a shareholder can avoid the interest charge and the other adverse
PFIC consequences described above by making a QEF election to be taxed currently
on its share of the PFIC's undistributed income. The Company does not, however,
expect to provide US Holders with the information regarding this income that
would be necessary for a US Holder to make a QEF election with respect to its
Ordinary Shares.
If the Company is a PFIC, each US Holder will be required to make an annual
return on IRS Form 8621, reporting distributions received and gains realised
with respect to each PFIC in which it holds a direct or indirect interest.
US Holders should consult their tax advisers regarding the potential application
of the PFIC regime.
DEFINITIONS
In this Announcement:
"Admission" means the admission of the Placing Shares to the Official List in
accordance with the Listing Rules and to trading on the London Stock Exchange's
main market for listed securities;
"Affiliate" means any holding company, subsidiary, branch or associated
undertaking (including, without limitation, joint venture partners) of Merrill
Lynch from time to time or any subsidiary, branch or associated undertaking
(including, without limitation, joint venture partners) of any such holding
company from time to time;
"Bookbuilding" means the bookbuilding procedure to be carried out by Merrill
Lynch in connection with the Placing;
"Board" means the Board of Directors of the Company or a duly authorised
committee thereof;
"Directors" means all the directors of the Company;
"FSA" means the Financial Services Authority;
"FSMA" means the Financial Services and Markets Act 2000, as amended;
"Group" means the Company and its subsidiary undertakings;
"JSE" means JSE Limited, a public company incorporated and registered in South
Africa (Registration number 2005/022939/06), licensed as a securities exchange
in terms of the Securities Service Act, No 36 of 2004, as amended;
"London Stock Exchange" means London Stock Exchange plc;
"Liberty International" or the "Company" means Liberty International PLC;
"Listing Rules" means the listing rules produced by the FSA under Part VI of the
FSMA and forming part of the FSA's Handbook of rules and guidance, as from time
to time amending;
"Official List" means the list maintained by the FSA in accordance with section
74(1) of the FSMA for the purposes of Part VI of the FSMA;
"Ordinary Shares" means ordinary shares of 50p each in the capital of the
Company;
"Placees" means persons (including individuals, funds or others) on whose behalf
a commitment to acquire Placing Shares has been given and Placee means any one
of them;
"Placing" means the placing of the Placing Shares by Merrill Lynch with
institutional and other investors on behalf of the Company;
"Placing Agreement" means the agreement dated 23 September 2009 between the
Company and Merrill Lynch in connection with the Placing;
"Placing Price" means the price per Ordinary Share at which the Placing Shares
are to be placed with Placees;
"Placing Shares" means the new Ordinary Shares which are to be issued in
connection with the Placing;
"Regulatory Information Service" means any of the regulatory information
services included within the list maintained on the London Stock Exchange's
website;
"Securities Act" means the United States Securities Act of 1933, as amended;
"Shareholders" means holders of Ordinary Shares;
"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern
Ireland; and
"United States" or "US" means the United States of America, its territories and
possessions, any State of the United States and the District of Columbia.
NOTE FOR EDITORS: BACKGROUND ON LIBERTY INTERNATIONAL
LIBERTY INTERNATIONAL PLC is one of the UK's largest listed property companies
and a constituent of the FTSE-100 Index of the UK's leading listed companies.
Liberty International converted into a UK Real Estate Investment Trust (REIT) on
1 January 2007.
Liberty International owns 100 per cent of Capital Shopping Centres ("CSC"), the
premier UK regional shopping centre business, and of Capital & Counties, a
retail and commercial property investment and development company.
At 30 June 2009, Liberty International owned GBP6.1 billion of properties of
which UK regional shopping centres comprised 73 per cent and retail property in
aggregate 86 per cent. Adjusted, diluted shareholders' funds amounted to GBP2.6
billion.
CAPITAL SHOPPING CENTRES has interests in 14 UK regional shopping centres
amounting to some 13 million sq.ft. in aggregate including 9 of the UK's top 30
regional shopping centres with a market value of GBP4.4 billion at 30 June 2009.
CSC's largest centres are Lakeside, Thurrock; MetroCentre, Gateshead; Braehead,
Glasgow; The Harlequin, Watford; and Arndale, Manchester. CSC has a 50 per cent
share in the extension of St David's, Cardiff, which is due to open in October
2009.
CAPITAL & COUNTIES held assets of GBP1.7 billion at 30 June 2009, amounting to
7.4 million sq.ft. in aggregate, of which GBP1,277 million was invested in
Central London. Capital & Counties had GBP529 million invested in the Covent
Garden area including the historic Covent Garden Market, and a further GBP224
million in London's West End, primarily through the Great Capital Partnership, a
joint venture with Great Portland Estates plc. Capital & Counties owns 50 per
cent of the Earls Court and Olympia Group and of the Empress State building in
Earls Court amounting to aggregate assets of GBP524 million. In addition,
Capital & Counties has interests in the USA amounting to GBP368 million (2.6
million sq.ft.), predominantly comprising retail assets in California, including
the 856,000 sq.ft. Serramonte Shopping Centre, Daly City, San Francisco.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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