Ediston Property Inv Comp PLC Publication of Prospectus and Circular (0176X)

TIDMEPIC

RNS Number : 0176X

Ediston Property Inv Comp PLC

20 November 2017

 
           NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION 
            IN WHOLE OR IN PART, IN OR INTO OR FROM ANY 
            JURISDICTION WHERE TO DO SO WOULD CONSTITUTE 
       A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 
        IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA, 
               THE REPUBLIC OF SOUTH AFRICA AND JAPAN 
 This announcement is an advertisement and not 
  a prospectus. This announcement does not constitute 
  or form part of, and should not be construed 
  as, any offer for sale or subscription of, or 
  solicitation of any offer to buy or subscribe 
  for, any securities in Ediston Property Investment 
  Company PLC (the "Company") or securities in 
  any other entity, in any jurisdiction, including 
  the United States, nor shall it, or any part 
  of it, or the fact of its distribution, form 
  the basis of, or be relied on in connection 
  with, any contract or investment decision whatsoever, 
  in any jurisdiction. This announcement does 
  not constitute a recommendation regarding any 
  securities. Any investment decision must be 
  made exclusively on the basis of the final prospectus 
  published by the Company and any supplement 
  thereto. 
 20 November 2017 
              PUBLICATION OF PROSPECTUS AND CIRCULAR 
 The Proposals 
 Further to the announcements made by the Company 
  on 6 October 2017 and 15 November 2017, the 
  Board of Directors of the Company is pleased 
  to announce that the Prospectus and Circular 
  have been published in respect of the Open Offer, 
  Initial Placing, Offer for Subscription and 
  Intermediaries Offer (the "Share Issue") and 
  the Acquisition. 
  Proceeds of the Share Issue will be used, in 
  conjunction with cash from the Company's existing 
  cash resources, new debt facilities and the 
  issue of New Shares to the Stadium Group, to 
  fund the acquisition of the New Portfolio of 
  four high quality, well located UK retail warehouse 
  parks, with an aggregated value of approximately 
  GBP144 million (the "Acquisition"). 
  The Acquisition is conditional, inter alia, 
  upon minimum proceeds of approximately GBP37 
  million being raised under the Share Issue, 
  Shareholders voting in favour of the Acquisition 
  and the issue of New Shares on a non pre-emptive 
  basis. The Proposals are expected to complete 
  on 8 December 2017. 
 The Board is proposing to issue up to 150 million 
  New Shares, pursuant to the Share Issue and 
  the Vendor Issue, at a Share Issue Price of 
  111.75 pence per New Share. The adjusted NAV 
  per Share as at 31 October 2017, used for pricing 
  the Share Issue, was 110.21 pence once the accrued 
  dividend for the month ending 31 October 2017 
  which is payable in November and the costs that 
  would be incurred if the Proposals did not complete 
  have been deducted. 
  Priority will be given to Existing Shareholders 
  who wish to participate through the Open Offer. 
  The entitlements of Existing Shareholders to 
  participate in the Open Offer will be calculated 
  on the basis of one New Share for every two 
  Ordinary Shares held on the Record Date. 
  The Stadium Group has agreed to subscribe for 
  a maximum of, in aggregate, GBP36.5 million 
  of New Shares pursuant to the Vendor Issue. 
  The Vendor Shares will be issued at the Share 
  Issue Price. As a result of the Vendor Issue, 
  the Vendors are expected to hold, in aggregate, 
  a significant shareholding in the Company and 
  have undertaken to retain their shareholding 
  for a period of not less than 12 months and 
  to have orderly marketing arrangements in place 
  for 12 months thereafter. 
  The Board is also putting in place a Placing 
  Programme for up to 60 million New Shares which, 
  if separately approved, will commence following 
  the completion of the Acquisition and Share 
  Issue and will be used to help finance further 
  property acquisition opportunities over the 
  next twelve months. 
 The Prospectus and Circular provide further 
  details of the Acquisition, the Vendor Issue, 
  the Share Issue and the subsequent 12 month 
  Placing Programme. The Circular will also provide 
  Shareholders with notice of the General Meeting 
  of the Company at which Shareholders will be 
  asked to consider and, if thought fit, pass 
  the Resolutions to approve the Acquisition and 
  issue of New Shares on a non pre-emptive basis 
  pursuant to the Proposals. 
 The Board and its advisers have consulted with 
  a significant proportion of Existing Shareholders 
  and a number of potential new investors on the 
  Proposals. The outcome of these discussions 
  continues to be positive, both in terms of support 
  for the Acquisition and the fundraising by the 
  Company. The Board considers the Proposals to 
  be an important next step in the development 
  of the Company and is encouraging support for 
  them. 
 Benefits of the Proposals 
 The Board believes that the Proposals offer 
  the following significant benefits for all Shareholders. 
 
        *    The rental income generated from the New Portfolio is 
             accretive to the overall income per Share and should 
             therefore enhance the dividend cover over the medium 
             term from its already fully covered position. 
 
        *    Over the past 18 months the Manager has looked at a 
             number of different opportunities all of which would 
             have been dependent on raising equity in advance with 
             the risk of income dilution before the capital was 
             invested. The proposed Acquisition significantly 
             reduces that risk. 
 
        *    The Acquisition will increase the Group's exposure to 
             the retail warehouse sector which the Board and the 
             Manager consider offers attractive value relative to 
             other sectors within the property market. 
 
        *    The Acquisition will further diversify the tenant 
             base and geographical exposure of the Property 
             Portfolio, with the new leases expected to reduce the 
             impact of the Group's exposure to its top ten tenants 
             from 62 per cent. to 46 per cent. of total rental 
             income. 
 
        *    The Acquisition is expected to improve the quality of 
             income by increasing the weighted average unexpired 
             lease term in the Property Portfolio from 6.19 years 
             to 6.78 years. 
 
        *    Existing Shareholders will benefit from lower 
             transaction costs through, inter alia, the 
             structuring of the costs attributable to the Share 
             Issue and the acquisition of the SPVs which currently 
             hold the New Portfolio compared to the typical costs 
             of transactions of a similar nature and, in 
             particular, the typical costs of acquiring UK 
             commercial real estate. 
 
        *    The Acquisition will introduce a number of asset 
             management opportunities which should enhance returns 
             to Shareholders, being consistent with the Company's 
             and the Manager's investment style and income 
             strategy. The Manager believes that there is credible 
             growth potential within the New Portfolio and scope 
             to improve the income stream of each retail warehouse 
             park. 
 
        *    In the event that the Company raises proceeds in 
             excess of the minimum required to complete the 
             Acquisition or issues New Shares under the Placing 
             Programme, the Company will have increased cash 
             resources that can be deployed in other property 
             acquisitions or other asset management opportunities 
             in line with the Manager's active style of investment 
             management. 
 
        *    The Share Issue and the subsequent Placing Programme 
             provide the opportunity to increase the market 
             capitalisation of the Company which should increase 
             liquidity in the Ordinary Shares and the 
             attractiveness of the Company to new investors. 
 
        *    Increasing the Company's issued share capital through 
             the Share Issue, the Vendor Issue and the subsequent 
             Placing Programme, will also result in the fixed 
             costs of the Group being spread over a larger asset 
             base. The ongoing charges ratio of the Group will, 
             therefore, be reduced. 
 For the reasons set out above, the Board is 
  recommending that Shareholders vote in favour 
  of the Proposals at the General Meeting of the 
  Company to be held at 9.30 a.m. on 7 December 
  2017 at 39 George Street, Edinburgh EH2 2HN. 
 Reduced management fees 
 As part of the Proposals, the Manager has agreed 
  to reduce future management fees payable on 
  any cash available for investment (being all 
  cash held by the Company except cash required 
  for working capital and capital expenditure) 
  by 50 per cent. while such cash remains uninvested. 
  The AIFM Agreement has been revised accordingly. 
 Increase in dividend 
 As announced on 15 November 2017, the Board 
  intends to increase the annualised dividend 
  level by 4.5 per cent., from 5.5p per Share 
  to 5.75 pence per Share, in the absence of unforeseen 
  circumstances. This new dividend level commences 
  with the dividend in respect of the month ending 
  31 January 2018 which will be paid in February 
  2018. 
 Further details of the Share Issue 
 The Company is proposing to issue up to 150 
  million New Shares under the Open Offer, Initial 
  Placing, Offer for Subscription and Intermediaries 
  Offer (representing approximately 89.57 per 
  cent. of the Company's current issued share 
  capital) to raise approximately GBP131.1 million. 
  The Share Issue has been structured to give 
  priority to Existing Shareholders who want to 
  participate in the fundraising, but also to 

  provide the opportunity for new investors to 
  subscribe, including retail investors through 
  the Offer for Subscription and the Intermediaries 
  Offer. 
  The Share Issue Price is 111.75 pence per New 
  Share representing a premium of 1.4 per cent. 
  to the Adjusted NAV per Share as at 31 October 
  2017. 
 The Directors intend to allocate 15 million 
  New Shares to the Intermediaries Offer, which 
  will not be subject to scaling back. 
  Under the Open Offer, up to approximately 65.45 
  million New Shares will be made available to 
  the Company's existing shareholders at the Share 
  Issue Price, pro rata to their holdings of Ordinary 
  Shares in the Company as at close of business 
  on 17 November 2017, being the Record Date. 
  The entitlements of the Company's Existing Shareholders 
  will be calculated on the basis of one New Share 
  for every two Ordinary Shares held as at the 
  Record Date. An excess application facility 
  is available under the Open Offer, where existing 
  Shareholders can apply for more than their basic 
  entitlement, satisfaction of which will depend 
  on other Shareholders applying for less than 
  their full entitlement. 
  The Open Offer is being made on a pre-emptive 
  basis to Qualifying Shareholders and is not 
  subject to scaling back in favour of any of 
  the Initial Placing, Offer for Subscription 
  or the Intermediaries Offer. 
  Any New Shares that are available under the 
  Open Offer and are not taken up by Qualifying 
  Shareholders pursuant to their Open Offer Entitlements 
  and under the Excess Application Facility may 
  be reallocated to the Initial Placing, Offer 
  for Subscription and/or the Intermediaries Offer. 
 Costs of the Proposals 
 The costs and expenses of the Share Issue, the 
  Vendor Issue and the Acquisition are partly 
  dependent on the level of subscriptions. Assuming 
  only the Minimum Issue Proceeds of approximately 
  GBP37 million are raised and that the maximum 
  number of Vendor Shares are issued (being approximately 
  32.6 million) the costs of the Share Issue, 
  the Vendor Issue and the Acquisition would be 
  approximately GBP2.4 million (of such costs 
  approximately GBP1 million relate to the Share 
  Issue). In the event the Proposals do not proceed, 
  the abortive costs would be approximately GBP0.85 
  million. These costs are lower than the typical 
  costs incurred in relation to transactions of 
  a similar nature and, in particular, the typical 
  costs of acquiring UK commercial real estate. 
 Indicative timetable 
 An indicative timetable of principal events 
  is as follows: 
 
 
 Event                                    Indicative Timing 
 Record Date for entitlement              close of business 
  under the Open Offer                     on 17 November 2017 
 Publication of Circular and              20 November 2017 
  Prospectus 
 Open Offer Initial Placing,              22 November 2017 
  Offer for Subscription and 
  Intermediaries Offer opens 
  Latest time and date for receipt        9.30 a.m. on 5 December 
   of forms of proxy                       2017 
 Latest date for receipt of               11.00 a.m. on 6 December 
  Application Forms under the              2017 
  Open Offer and Offer for Subscription 
 Latest time and date for receipt         11.00 a.m. on 6 December 
  of application forms under               2017 
  the Intermediaries Offer 
 Latest date for receipt of               12.00 p.m. on 6 December 
  commitments under the Initial            2017 
  Placing 
 Results of the Share Issue               By close of business 
  announced                                on 6 December 2017 
 General Meeting                          9.30 a.m. on 7 December 
                                           2017 
 Results of the General Meeting           7 December 2017 
  announced 
 Admission and dealings in New            8 a.m. on 8 December 
  Shares commence and completion           2017 
  of the Acquisition 
 
 
 
 A more detailed timetable will be included in 
  the Prospectus. 
 General 
 In deciding whether or not to vote in favour 
  of the Resolutions at the General Meeting to 
  implement the Proposals, Shareholders should 
  rely only on the information contained in, and 
  should follow the procedures described in, the 
  Circular and the Prospectus. 
 Copies of the Prospectus and Circular will shortly 
  be available for inspection at the National 
  Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm.do. 
 Copies of the Prospectus and Circular are also 
  available in electronic form on the Company's 
  website at www.ediston-REIT.com and are available 
  for collection, free of charge, during normal 
  business hours on any working day (Saturday, 
  Sunday and public holidays excepted) until 19 
  November 2018 from the offices of Dickson Minto 
  W.S., Broadgate Tower, 20 Primrose Street, London 
  EC2A 2EW. 
  Save as otherwise defined in this announcement 
  or where the context otherwise requires, terms 
  defined in the Prospectus shall bear the same 
  meaning in this announcement. 
 For further information please contact: 
 Ediston Properties Limited 
  Danny O'Neill 
  Calum Bruce                                            0131 225 5599 
 Canaccord Genuity Limited 
  Will Barnett 
  Robbie Robertson                                       020 7523 8000 
 Scott Harris UK Ltd 
  Jamie Blewitt                                          020 7653 0030 
 Notes: 
 The information contained within this announcement 
  is deemed by the Company to constitute inside 
  information as stipulated under the Market Abuse 
  Regulation (EU) No. 596/2014. Upon the publication 
  of this announcement via a Regulatory Information 
  Service this information is now considered to 
  be in the public domain. 
 This announcement is for information purposes 
  only and does not purport to be full or complete 
  and any decision regarding the Proposals should 
  be made only on the basis of the Circular and 
  the Prospectus. 
 The issue and the distribution of this announcement, 
  the Circular and/or the Prospectus in certain 
  jurisdictions may be restricted by law and persons 
  into whose possession any document or other 
  information referred to this announcement, the 
  Circular and/or the Prospectus comes should 
  inform themselves about and observe any such 
  restriction. Any failure to comply with these 
  restrictions may constitute a violation of the 
  securities laws of any such jurisdiction. 
 Neither the contents of the Company's website 
  nor the contents of any website accessible from 
  hyperlinks on the Company's website (or any 
  other website) is incorporated into, or forms 
  part of, this announcement 
 This announcement may include statements that 
  are, or may be deemed to be, "forward-looking 
  statements". These forward-looking statements 
  can be identified by the use of forward-looking 
  terminology, including the terms "believes", 
  "estimates", "anticipates", "expects", "intends", 
  "may", "will" or "should" or, in each case, 
  their negative or other variations or comparable 
  terminology. All statements other than statements 
  of historical facts included in this announcement, 
  including, without limitation, those regarding 
  the Company's financial position, strategy, 
  plans, proposed acquisitions and objectives, 
  are forward-looking statements. 
 Forward-looking statements are subject to risks 
  and uncertainties and, accordingly, the Company's 
  actual future financial results and operational 
  performance may differ materially from the results 
  and performance expressed in, or implied by, 
  the statements. These forward-looking statements 
  speak only as at the date of this announcement 
  and cannot be relied upon as a guide to future 
  performance. The Company, Ediston Investment 
  Services Limited, Ediston Properties Limited, 
  Canaccord Genuity Limited and Dickson Minto 
  W.S. expressly disclaim any obligation or undertaking 
  to update or revise any forward-looking statements 
  contained herein to reflect actual results or 
  any change in the assumptions, conditions or 
  circumstances on which any such statements are 
  based unless required to do so by the Financial 
  Services and Markets Act 2000, the Prospectus 
  Rules of the Financial Conduct Authority or 
  other applicable laws, regulations or rules. 
 Canaccord Genuity Limited ("Canaccord") is authorised 
  and regulated in the United Kingdom by the Financial 
  Conduct Authority. Canaccord is acting exclusively 
  for the Company and for no-one else in relation 
  to the Share Issue and the Placing Programme 
  and will not regard any other person as its 
  client. Apart from the responsibilities and 
  liabilities, if any, which may be imposed on 
  Canaccord by the Financial Services and Markets 
  Act 2000 or the regulatory regime established 
  thereunder, Canaccord will not be responsible 
  to anyone other than the Company for providing 
  the protections afforded to its clients or for 
  advising any other person in relation to the 
  Share Issue, the Placing Programme, or any transaction 
  contemplated in or by the Prospectus to be published 
  by the Company. 
 Dickson Minto W.S. is authorised and regulated 
  in the United Kingdom by the Financial Conduct 
  Authority. Dickson Minto W.S. is acting exclusively 
  for the Company and for no-one else in relation 
  to the Share Issue and the Placing Programme 
  and will not regard any other person as its 
  client. Apart from the responsibilities and 
  liabilities, if any, which may be imposed on 
  Dickson Minto W.S. by the Financial Services 
  and Markets Act 2000 or the regulatory regime 
  established thereunder, Dickson Minto W.S. will 
  not be responsible to anyone other than the 
  Company for providing the protections afforded 
  to its clients or for advising any other person 
  in relation to the Share Issue, the Placing 
  Programme, or any transaction contemplated in 
  or by the Prospectus to be published by the 
  Company. 
 

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November 20, 2017 11:13 ET (16:13 GMT)