Investment Update

 

TIDMTCF TIDMRUGB TIDMIRET 
 
RNS Number : 2271K 
Terra Catalyst Fund 
15 April 2010 
 

15 April 2010 
 
                              TERRA CATALYST FUND 
 
                                Investment Update 
 
  Terra Catalyst Fund undertakes to support the ING UK Real Estate Income Trust 
              takeover bid for Rugby Estates Investment Trust plc 
 
Terra Catalyst Fund ("TCF") and other funds managed by Laxey Partners (the 
"Laxey Funds") acquired, over time, 21,025,254 ordinary shares in Rugby Estates 
Investment Trust plc ("Rugby REIT") representing approximately 36 per cent of 
the issued share capital of Rugby REIT. 
 
Following extensive dialogue with the Board of Rugby REIT, TCF and the Laxey 
Funds have sought to maximise shareholder value by helping to facilitate a 
transaction which would benefit all shareholders in Rugby REIT.  This has 
resulted in the announcement today of a recommended offer by ING UK Real Estate 
Income Trust plc ("ING UK REIT") for the entire issued share capital of Rugby 
REIT (the "Offer"). 
 
Under the terms of the Offer shareholders in Rugby REIT may elect to receive as 
consideration: cash, ordinary shares in ING UK REIT and/or zero dividend 
preference shares in IRET Securities Limited, a wholly owned subsidiary of ING 
UK REIT ("ZDP's").  TCF and the Laxey Funds have undertaken to accept the Offer 
and to receive ZDP's as consideration.  The ZDP's are valued at 65p each on 
issue (generating a total consideration of GBP13.7 million to TCF and the Laxey 
Funds) which represents a premium of 71 per cent. to the average cost of 
investment of 38p by TCF and the Laxey Funds.  It also represents a premium of 
41 per cent. to the price paid (41p) by TCF and the Laxey Funds for the shares 
in Rugby REIT it acquired in October 2009. 
 
In addition to participating in an innovative and tax efficient offer structure 
which involves the issue of ZDP's as consideration under the Offer, TCF and the 
Laxey Funds have agreed to sub-underwrite a placing of further ZDP's at 65p per 
ZDP by ING UK REIT which will be used to fund the cash alternative available 
under the Offer.  Provided the Offer is declared unconditional, TCF and the 
Laxey Funds will receive sub-underwriting commission of GBP493,000.  The maximum 
number of ZDP's that TCF and the Laxey Funds may be required to subscribe for is 
37.9 million and in the case of TCF the maximum number of ZDP's it may be 
required to subscribe for is 7.6 million. 
 
The ZDP's are being issued at 65p per share and are due to be redeemed at 
approximately 77p on 31 October 2012 which represents a gross redemption yield 
of 6.875%.  On issue the final amount payable on the redemption of the ZDP's 
will be covered approximately five times by the net assets of the ING UK REIT 
group.  ING UK REIT has undertaken to use all reasonable endeavours to seek 
admission of the ZDP's to the Official List of the UKLA and to trading on the 
main market of the London Stock Exchange. 
 
 
Laxey Partners commented: 
"We are pleased that ING UK REIT has decided to make a takeover bid for Rugby 
REIT. This once again demonstrates our ability to help facilitate transactions 
and release value from our investments." 
                                     -ends- 
Enquiries to: 
 
Terra Catalyst Fund 
Mike Haxby       [phone] 
Michael Allison 
 
www.terracatalystfund.com Tel: [phone] 
 
Fairfax I.S. PLC 
James King / Gillian McCarthy Tel: [phone] 
 
 
NOTE TO EDITORS 
Terra Catalyst Fund 
Terra Catalyst Fund is a closed-ended Cayman Islands registered, exempted 
company established to invest in listed property companies and funds in Europe, 
with the objective of seeking to identify undervalued securities and actively 
seeking to close the valuation gap between the value at which the security is 
trading and its intrinsic value. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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