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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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UK Balanced | LSE:UBR | London | Ordinary Share | GB0031306698 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 128.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:6640A UK Balanced Property Trust Ltd(The) 23 July 2007 NOT FOR RELEASE OR PUBLICATION IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION THE UK BALANCED PROPERTY TRUST LIMITED (Registered in Guernsey - Number 39171) Administrative Office: C/o BUTTERFIELD FUND SERVICES (GUERNSEY) LIMITED P.O. BOX 211, REGENCY COURT, GLATEGNY ESPLANADE, ST. PETER PORT, GUERNSEY, GY1 3NQ, CHANNEL ISLANDS. ___________________________ TELEPHONE: + 44 1481 720321 FACSIMILE: + 44 1481 716117 e-mail: Funds@bfmgl.gg For immediate release 23 July 2007 THE UK BALANCED PROPERTY TRUST LIMITED (the "Company") SALE OF THE PROPERTY PORTFOLIO AND RECONSTRUCTION PROPOSALS ________________________________________ Executive Summary * The Directors of the Company are pleased to confirm that, following a competitive marketing of the Company's property portfolio, they have signed a conditional contract for the sale of the Company's entire property portfolio by means of a sale of the Company's subsidiaries (the "Sale"). By undertaking a competitive sale of the Company's Property Portfolio, the Directors have significantly increased value for Shareholders. * The purchaser of the Company's Property Portfolio is GE Capital Corporation Inc, through its division, GE Real Estate. GE Real Estate is one of the world's premier commercial real estate companies with more than $62 billion in assets and a presence in 32 countries. GE Real Estate is backed by GE Capital Corporation's AAA rating. * The Sale is conditional on the approval of Shareholders. The aggregate consideration for the Sale is the payment in cash of #417.5 million, which, net of all costs of the Sale, represents a premium of #14.76 million (3.7 per cent.) over the valuation of the Property Portfolio as at 12 June 2007. * The Directors estimate that, after all of the costs of the Sale and a winding up of the Company, the NAV of a Share on the winding up would equate to approximately 169.5p, a premium of 5.7 per cent. to the NAV per Share as at 30 June 2007. * The Directors intend that the Company will continue to pay the quarterly dividend at the current rate of 1.875p per quarter up to the date of the winding up. * Accordingly, the Directors estimate that their proposals would equate to a total return per Share (including a final quarterly dividend) on a winding up of approximately 171.4p per Share. This is 6.5p (4 per cent.) higher than the indicative value of the SWUF proposals. * The SWUF proposals are subject to amendment based on a future valuation. The SWUF proposals do not involve any legally binding obligation on SWUF to put forward the SWUF proposals. There is no guarantee that the SWUF proposals would be offered to Shareholders. SWUF declined the opportunity to participate in the competitive marketing of the Company's property portfolio. * Subject to the Sale becoming unconditional, the Directors propose to put forward proposals to Shareholders for the winding up of the Company with the option for Shareholders to receive cash or to roll-over their investment into F&C Commercial Property Trust Limited ("FCCPT"), a London listed and Guernsey registered property investment company with a similar investment objective to the Company which is managed by F&C Asset Management. * FCCPT is the largest listed property investment company in the Company's sector with gross assets of #1.3 billion. FCCPT's portfolio comprises prime UK commercial properties. Since its launch in March 2005, FCCPT's property portfolio has significantly outperformed the IPD UK Monthly Index. * It is expected that the liquidators under the winding up will retain #1 million in the liquidation for unknown liabilities. This amount has not been deducted from the figures referred to above and will be returned to Shareholders if it is not used. It is expected that the winding up would become effective in mid-October 2007. * The Directors believe that their proposals offer a significant enhancement to Shareholder value. The Directors also believe that their proposals have a materially higher value than the alternative SWUF proposals, are more certain and are in the best interests of all Shareholders. * The Directors intend to send to Shareholders shortly a circular convening an extraordinary general meeting to approve the Sale. In the meantime, Shareholders are urged to reject the SWUF resolutions at the EGM convened for 31 July 2007. There is no guarantee that the Directors' proposals would be implemented by the SWUF Nominated Directors. The SWUF proposals offer significantly less value for Shareholders and their implementation would result in significant abortive costs being incurred by the Company. SHAREHOLDERS MUST VOTE AGAINST THE SWUF RESOLUTIONS AT THE EGM ON 31 JULY 2007 PLEASE READ THE FULL ANNOUNCEMENT. FULL DETAILS OF THE DIRECTORS' PROPOSALS ARE SET OUT BELOW. Background to the Sale and the Proposals On 18 May 2007, Scottish Widows Unit Funds Limited announced that it had requisitioned an extraordinary general meeting of the Company to remove the current Directors, appoint the SWUF Nominated Directors and to instruct those directors to put forward the SWUF proposals. The SWUF proposals involve winding up the Company and offering Shareholders a cash exit at the net asset value prevailing prior to the winding up. Following the service of the SWUF Requisition, the Board consulted with a number of the Shareholders, including SWUF as the largest Shareholder. The Directors reached the conclusion that sufficient of the Shareholders wished a cash exit and that therefore the Directors should put forward proposals for the winding up of the Company. However, the Board did not believe that the SWUF proposals maximised value for all Shareholders. The Board also believed that they should market the Property Portfolio openly in order to ensure that it was sold for the best possible price. On 8 June 2007, the Board announced that it was undertaking an open marketing of all or part of the Property Portfolio and that it intended to propose a winding up of the Company that would offer Shareholders the opportunity to receive cash or to roll-over their investment into a vehicle that had a similar investment objective to the Company. This announcement sets out the results of the competitive marketing process undertaken by the Board and the Directors' proposals for the winding up and reconstruction of the Company. The Sale Following the service of the SWUF Requisition, the Board appointed Savills, an independent property agent, to undertake competitive marketing of all or part of the Company's Property Portfolio in order to ensure that the Board obtained the full market price for the Property Portfolio. Savills, in conjunction with Cordatus Partners, identified and discussed the proposed sale with a wide range of potential purchasers and assisted the interested parties in undertaking initial commercial due diligence on the Property Portfolio. As a result of those discussions, the Board received indicative offers from certain of those interested parties and the Board resolved to enter into exclusive negotiations with GE Real Estate as the preferred bidder. During the period of exclusivity, GE Real Estate undertook detailed due diligence on the Property Portfolio and the Subsidiary Companies which hold the Property Portfolio. Following this sale process, the Company entered into a conditional share purchase agreement with GE Real Estate dated 20 July 2007. The Sale is conditional on the approval of Shareholders by ordinary resolution at the Sale EGM. The Sale is also conditional on there having been no material breaches of the warranties provided to the Buyer under the Share Purchase Agreement prior to completion of the Sale and on the Company having complied with certain obligations imposed on it under the Share Purchase Agreement. The Sale involves the sale of the Company's entire interests in its subsidiaries, UKPH and UKPH No.1, which hold the entire Property Portfolio. GE Real Estate is one of the world's premier commercial real estate companies with more than $62 billion in assets and a presence in 32 countries. GE Real Estate is backed by GE Capital Corporation's AAA rating. The consideration for the Sale is cash of #417.5 million, being the agreed sale price for the Property Portfolio, and is subject to adjustment based on the other assets and liabilities of the Subsidiary Companies. The Sale Consideration effectively applies a value to the Company's Property Portfolio of #417.5 million. Net of the property sale costs, this equates to a premium of #14.76 million (3.7 per cent.) over the external valuation of #397.42 million as at 12 June 2007. Since 12 June 2007, the property at Southend was sold to a separate third party for an aggregate consideration of #2 million (valuation as at 12 June 2007: #1.985 million). The Share Purchase Agreement contains a limited number of warranties that are typical for an agreement of its nature but the period for claims to be made under the warranties expires on the winding up date of the Company. The Share Purchase Agreement obliges the Directors to convene an extraordinary general meeting to consider an ordinary resolution to approve the Sale to be held no later than 31 August 2007. If Shareholders approve the Sale, the Sale is expected to complete two business days after such approval. Reconstruction Proposals Subject to the Sale becoming unconditional, the Directors intend to issue a further circular to Shareholders to put forward proposals for a reconstruction of the Company that will offer Shareholders the opportunity to roll-over all or part of their investment in the Company in a tax efficient manner into another listed property investment company. The Reconstruction Proposals will involve the winding up of the Company. If those Reconstruction Proposals are approved, the Directors anticipate that the winding up of the Company will commence by mid-October 2007. Shareholders will be offered the opportunity to receive in cash their full entitlement in the winding up or to roll over all or part of their entitlement into ordinary shares issued by F&C Commercial Property Trust Limited at their net asset value. Shareholders who make no election will be deemed to have elected to receive shares in FCCPT. The Directors have been advised that the roll-over into FCCPT should not be treated as a realisation for UK capital gains tax purposes. The net asset value of the FCCPT shares at the time of roll-over may represent a premium over the then current market price of the FCCPT shares. FCCPT is a London listed and Guernsey registered property investment company with an investment objective to provide shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio. FCCPT was launched in March 2005. As at 30 June 2007, FCCPT had gross assets of #1.3 billion and net assets of #1.1 billion. Its property portfolio comprises 29 properties and holdings in two indirect property funds across the retail, office and industrial sectors. FCCPT's properties had a running income yield of 4.5 per cent. per annum and a weighted average lease length of 9.1 years. The sector allocation of FCCPT's portfolio at 30 June 2007 was 41.2 per cent. offices, 19.9 per cent. retail, 17.6 per cent. retail warehouses, 10.7 per cent. industrial and 10.6 per cent. shopping centres. Since the launch of FCCPT in March 2005, the total return on its property portfolio has been 56.4 per cent. compared to an increase in the IPD UK Monthly Index of 42.7 per cent. Over this same period the net asset total return of an FCCPT Share has been 64.7 per cent. The net asset value of an FCCPT Share as at 30 June 2007 was 147.4p before provision for the quarterly interim dividend which will be paid on 27 July 2007. The adjusted net asset value per share, after deducting such quarterly dividend, was 145.9p per share. FCCPT currently pays gross annual dividends of 6p per share. The roll-over into FCCPT will be limited to 44.5 million FCCPT Shares in aggregate, equivalent to approximately #65.6 million in net asset value (approximately 20 per cent. of the net asset value of the Company). Based on the discussions with Shareholders, the Directors are satisfied that this amount will be more than sufficient to satisfy expected demand for the roll-over option. In line with common market practice, the Company and FCCPT have procured that F& C Asset Management plc, the parent company of the investment manager of FCCPT, make a contribution to the costs of the Reconstruction Proposals. The contribution agreed is of an amount equal to 0.375 per cent. of the value of the assets rolled over into FCCPT (excluding any funds managed or advised by F&C Asset Management plc or its subsidiaries). For the purposes of this announcement, the Directors have assumed no costs contribution from F&C Asset Management plc. Following the Sale of the Property Portfolio, the investment business of the Company will be managed by Cordatus Partners until the date of liquidation. The proposed liquidators of the Company have indicated that they expect to retain approximately #1 million (being approximately 0.3 per cent. of the Company's net assets) in the winding up to cover potential liabilities for unknown liabilities. To the extent this amount is not used it will be returned to Shareholders. Financial effects of the Proposals The Directors estimate that, assuming the Sale becomes unconditional, after the costs of the Sale and the Winding up as referred to below and the repayment of the floating rate notes issued by the Company but before the Liquidators' Retention, the NAV of a Share on the Winding up would equate to approximately 169.5p. This is a premium of 5.7 per cent. over the NAV per Share as at 30 June 2007. This figure has been adjusted to deduct the dividends expected to be paid on the Shares up to the date of the Winding up and an estimate of the income and costs of the Company up to the date of the Winding up. This figure is otherwise calculated on the basis of the NAV per Share as at 30 June 2007 but with the value of the interest rate swap at the lower valuation as at 18 July 2007. The proceeds of the Sale will be held on deposit and in cash equivalent securities. Part of the proceeds will be held pending re-investment in respect of the anticipated assets to be rolled over to FCCPT under the Reconstruction Proposals. It is expected that, based on current interest rates, the Company's income following the Sale will be similar to the net income generated from the Property Portfolio. Shareholders should note that if interest rates should fall between 30 June 2007 and the date of the repayment of the floating rate notes, the marked to market value of the interest rate swap relating to the floating rate notes would decrease and the NAV per Share would decrease. If interests rates rise over this period, the marked to market value of the interest rate swap would increase. As at 18 July 2007, the marked to market value of the interest rate swap was #10.6 million. Shareholders should also note that these figures are estimates only and that the potential for a cash realisation of a Shareholder's investment is contingent on a number of Shareholder approvals. There is no guarantee that such Shareholder approvals will be obtained and that the Proposals will become effective. Benefits of the Proposals The Directors believe that the Proposals are in the best interests of all Shareholders. The Directors are of the view that the Proposals offer the following benefits for Shareholders. * By undertaking a competitive sale of the Company's Property Portfolio, the Directors have significantly increased value for Shareholders. * The Sale Consideration for the Property Portfolio is at a significant premium to the external valuation reflecting the attraction to a potential purchaser of a sale of the portfolio as a whole and the transaction cost reduction resulting from the Group's holding structure. * By undertaking a sale of the Property Portfolio for cash, the Directors have crystallised a certain value for the Property Portfolio and reduced the transactional risk that may exist in any alternative proposal. * By offering a roll-over option into FCCPT, the Directors are able to offer Shareholders the opportunity to continue an investment exposure to UK commercial property in a tax efficient manner. Costs of the Proposals In putting forward the Proposals the Board has been conscious of the need to keep costs to a minimum, in particular until they were able to sign a contract for the sale of the Property Portfolio. The Board has therefore sought to appoint key advisers on a fee basis that incentivises them to obtain the highest value for the Property Portfolio. Notwithstanding such requirements, the Board is pleased that it has managed to keep the costs of the Proposals within market standard levels. It is estimated that if the Sale becomes unconditional, the total property sale costs on the Sale (inclusive of the incentive fees payable to Cordatus Partners and Savills discussed below) will amount to approximately #5.3 million. This is equal to approximately 1.27 per cent. of the aggregate Sale Consideration which is in line with typical sale costs for a portfolio of this nature of approximately 1.25 per cent. of gross consideration. It is further estimated that, if the Reconstruction Proposals become unconditional, the total costs of the Reconstruction Proposals will amount to approximately #2.1 million. This is equal to approximately 0.5 per cent. of the gross assets of the Company (based on the Sale Consideration) which compares favourably with typical costs for the reconstruction of a UK investment trust of 0.5 per cent. of gross assets. It is therefore estimated that the total costs of the Proposals will amount to approximately 1.77 per cent. of the gross assets of the Company (based on the Sale Consideration). Shareholders should note that if the Sale is not approved by Shareholders, the Company will incur abortive costs of #5.28 million, equal to approximately 1.24 per cent. of the gross assets of the Company. These costs include the payment of a fee to GE Real Estate of #2 million that would be incurred by the Company if the Sale is not approved by Shareholders. Cordatus Partners In the event that the Company is wound up, the appointment of Cordatus Partners Limited as the Company's investment manager will be terminated with no termination compensation payable. Cordatus Partners have been heavily involved in achieving the terms of the Sale and assisting the Buyer in the due diligence on the Property Portfolio and the Subsidiary Companies. After the Company entered into exclusivity with GE Real Estate and in consideration for the additional work undertaken by Cordatus Partners in connection with the Sale, the Company agreed to pay an additional fee to Cordatus Partners. This fee is an incentive fee based on the consideration for the sale of the Property Portfolio. If the Sale becomes unconditional, Cordatus Partners will be entitled to an incentive fee of #2.3 million. If the Sale is not approved by Shareholders, Cordatus Partners will be entitled to an abort fee of #500,000. If, after entering into the exclusivity with GE Real Estate, the Company had not entered into a legally binding contract, Cordatus Partners would have been entitled to an abort fee of #250,000. The Company has also appointed Savills to provide independent advice to the board on the terms of the sale of the Property Portfolio. The success fees payable to Savills and Cordatus Partners, as referred to above, on the Sale becoming unconditional are in aggregate equal to approximately 1.0 per cent. of the Sale consideration. The Directors believe that these fees are appropriate and in line with the maximum capped incentive fees that would typically be paid for the sale of a property portfolio similar to the Property Portfolio, in particular given the overall terms of the Sale, the time constraints imposed on the sale process and the level of the abort fees payable. It is expected that Cordatus Partners will provide services to the liquidators after the Company is wound up. On any sale of a property portfolio there is a significant amount of post sale reconciliation work to be undertaken given the size and complexity of the Property Portfolio and the fact that there are over 392 tenants. It is expected that Cordatus Partners will be paid a reduced management fee for this work of #150,000 per month for a minimum period of two months. The Buyer has indicated that it may discuss with Cordatus Partners the possibility of Cordatus Partners providing certain property management services to the Buyer in respect of the Property Portfolio following Completion, at least on a transitional basis. The Company has not been a party to these discussions although it understands that no contractual documentation has been put in place in respect of such services. As a result of the requisition served by SWUF and the terms of the SWUF proposals, the Directors wrote off the entire value of the equity stake held by the Company in Cordatus Partners Holdings Limited. That stake had a book value of #100,000. Under the terms of the investment in Cordatus Partners Holdings Limited, the Company is required to sell that stake to the management team of Cordatus Partners on the winding up of the Company. The Company has agreed, immediately on the Sale completing, to transfer that equity stake to the management team of Cordatus Partners for #50,000. The Company has also agreed, if the Sale does not become unconditional, to transfer that equity stake to the management team of Cordatus Partners for its current written down value of nil. The Company has not reimbursed to Cordatus Partners the compensation of #1.35 million paid by Cordatus Partners to SWIP in connection with the termination of the investment management agreement between the Company and SWIP. Cordatus Partners replaced SWIP as the investment manager of the Company on 1 May 2007. In order to enable the liquidators to distribute cash to Shareholders and to undertake the roll-over of Shareholders' investments, the liquidators will require certain representations from Cordatus Partners. In addition, the liquidators will require a formal release and waiver of all and any claims that Cordatus Partners may have against the Company. In consideration for the incentive fee arrangements, Cordatus Partners has also agreed to give these representations and the release and waiver upon payment of the full incentive fee. In accordance with the UK Listing Authority's Listing Rules, these arrangements with Cordatus Partners are a related party transaction. The Board has appointed Noble Grossart to advise the Board on the terms of these arrangements. Noble Grossart is entirely independent of the Board, the Company, Cordatus Partners and the other advisers to the Company. Noble Grossart has had no other involvement with the Company in relation to the change of investment manager, the SWUF proposals or the Board's Proposals. Noble Grossart has advised the Board that the terms agreed with Cordatus Partners are fair and reasonable so far as the Shareholders are concerned. In accordance with the Listing Rules the arrangements with Cordatus Partners are not subject to Shareholder approval. However, as noted above, the arrangements with Cordatus Partners, other than the abort fee, are conditional on Shareholders' approval of the terms of the Sale or Shareholders' approval of the winding up of the Company. Dividend In the absence of unforeseen circumstances, the Directors intend to maintain the payment of a dividend on the Shares at the forecast rate of 7.5p per Share per annum (this is not a profit forecast). Accordingly, the Directors intend to pay a final interim dividend immediately prior to the proposed Winding up of the Company, which shall be accrued from 1 July 2007 to the proposed date of the Winding up. The Directors will make an announcement of the expected level of that final interim dividend when they convene the extraordinary general meeting for the Winding up of the Company. Prepayment of the floating rate notes In accordance with the terms of the Notes, the Company is entitled to prepay the Notes without penalty on a quarterly interest payment date subject to the Company giving not less than 45 days' prior written notice. Prepayment of the Notes is effected by the Company giving notice to UK Balanced Property Finance Limited of repayment of the loan due from the Company and UK Balanced Property Finance Limited then gives notice to the holders of the Notes of the prepayment of the Notes. These notices are irrevocable. The next interest payment date is 8 October 2007 and accordingly the first notice must be given no later than 23 August 2007. It is the Directors' intention that, subject to Shareholders approving the Sale, the Directors will give notice of the prepayment of the Notes immediately on the Sale becoming unconditional and will repay the Notes on 8 October 2007. It is expected that the Company will be wound up shortly following the prepayment of the Notes. Expected Timetable The expected timetable for the Proposals is as follows. These indicative dates are subject to change at the sole discretion of the Directors. EGM to approve the Sale 17 August 2007 Sale completes by 23 August 2007 Circular convening the EGM to wind up early September 2007 the Company published Final interim dividend early October 2007 Notes prepaid 8 October 2007 EGM to approve the winding up of the Company Mid-October 2007 Cash distributions made and roll-over mid-October 2007 shares issued to Shareholders Status of the SWUF Proposals The SWUF Proposals are set out in the circular published by the Company dated 8 June 2007. SWUF sent a document to Shareholders dated 10 July 2007 in which it confirmed that it was seeking to replace the independent Board with the SWUF Nominated Directors and to put forward plans to liquidate the Company and to roll-over the Company's assets into a new vehicle, majority owned by SWUF and to be managed by Scottish Widows Investment Partnership Limited, including providing a cash exit for Shareholders who did not wish to roll-over. The SWUF document indicated that Shares would be valued at closing NAV at the time of liquidation/reconstruction. The SWUF document stated "we estimate that our Proposals would have valued your Shares at 163.0p per Share had the closing NAV been calculated as at 30 June 2007". As explained above, your independent Board has procured an offer for its assets which would value the Property Portfolio at #417.5 million, which represents, after all property sale costs, a premium of #14.76 million (3.7 per cent.) over the external valuation of the Property Portfolio of #397.42 million as at 12 June 2007. As set out above, the independent Board's proposals would, after the costs of the Sale and the Winding up and repayment of the floating rate notes, equate to a NAV per Share on a Winding up of approximately 169.5p and allow the Company to pay a dividend at the rate of 1.875p per quarter (this is not a profit forecast). The Board has carefully considered the best interests of Shareholders. If the Board had considered the SWUF proposals to be in the best interests of Shareholders it would have recommended them to Shareholders. The Board has concluded that it is in the best interests of Shareholders to proceed with the Sale which the Board estimates will deliver value of approximately 169.5p per Share rather than the SWUF proposals which SWUF has stated would deliver 163.0p per Share based on SWUF's assumptions (in both cases prior to any final dividend). Further details on the SWUF proposals, and your Directors concerns in relation to the SWUF proposals, are set out below. Following the service of the requisition by SWUF, Directors of the Company and the Company's advisers met with Jim McConville, the Chairman of SWUF, and SWUF's advisers. The Directors encouraged SWUF to provide some certainty on the value of its offer as SWUF was not guaranteeing a certain value for the Property Portfolio. As the Directors believed that the SWUF proposals undervalued the Property Portfolio, the Directors also encouraged SWUF to increase the value of its proposals to Shareholders. The Directors also offered SWUF the opportunity to bid for the Property Portfolio through the open marketing process. SWUF refused to participate in the open marketing process and has not increased the value of its proposals to Shareholders. SWUF's refusal to increase the value of its proposals to Shareholders was confirmed in its correspondence to Shareholders on 10 July 2007. The SWUF proposals do not involve any legally binding obligation on SWUF to put forward the SWUF proposals. There is no guarantee that the SWUF proposals would be offered to Shareholders. The SWUF proposals would involve a winding up of the Company by means of a special resolution which requires a 75 per cent. vote in favour. As a result of the structure of the SWUF proposals, the resolution to approve the SWUF proposals will be a related party transaction under the Listing Rules and SWUF and its associates will not be entitled to vote on the resolution. There is no guarantee that independent Shareholders would vote in sufficient numbers to implement the SWUF proposals. SWUF and its associates currently hold over 29 per cent. of the issued share capital of the Company. As mentioned above, in connection with entering into the Share Purchase Agreement, the Company has agreed to pay certain fees and expenses which will be incurred if the Sale does not proceed and would also be incurred under the SWUF proposals. Accordingly, the Directors estimate that if the SWUF Proposals could be implemented on the same timetable as the Board's Proposals, they would result in a terminal asset value per Share of approximately 161.3p after such abortive fees were incurred, which is 5 per cent. below the Directors' estimate of the value of the Board's Proposals. Accordingly, the Directors do not believe that the SWUF proposals are in the best interests of Shareholders. The Directors believe that they offer less value to Shareholders, less certainty of delivery and a less attractive roll-over investment opportunity. The Directors believe that the Board's Proposals offer the best value for Shareholders and are the only viable proposals. The SWUF requisitioned EGM The extraordinary general meeting convened by SWUF to remove the Directors, to appoint the SWUF Nominated Directors and to instruct them to implement the SWUF proposals has been convened by the Board to be held on 31 July 2007. In order that the Board can proceed with the Sale and the Proposals as described in this announcement, it is important that the SWUF Resolutions are not passed. The Directors urge Shareholders to vote against the SWUF Resolutions. Sale EGM The Sale is conditional upon the approval of Shareholders. The Sale EGM will be held at 10.00 a.m. on 17 August 2007 at Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3NQ at which the Sale Resolution will be proposed to approve the Sale. A circular will be despatched shortly to Shareholders convening the Sale EGM. Enquiries: Douglas Armstrong, Dickson Minto W.S. 0131 225 4455 Nigel Russell/Graeme Caton/Graham Reaves, G&N Collective Funds Services Limited 0131 226 4411 Stephanie Highett/Dido Laurimore, Financial Dynamics 020 7831 3113 Additional copies of the circular from the independent Directors dated 8 June 2007 and the form of proxy can be obtained by telephoning 020 7621 1358. If you hold your shares through a nominee, please contact that nominee as soon as possible to ensure that you have the opportunity to vote on the resolutions at the extraordinary general meeting on 31 July 2007. Definitions: "Board" means the board of directors of the Company "Company" means The UK Balanced Property Trust Limited "Completion" means the completion of the Sale in accordance with the Share Purchase Agreement "Cordatus Partners" or "Investment Manager" means Cordatus Partners Limited "Directors" means the directors of the Company "FCCPT" means F&C Commercial Property Trust Limited "FCCPT Shares" means ordinary shares of 90p each in the capital of FCCPT "GE Real Estate" or "Buyer" means GE Real Estate, a division of GE Capital Corporation, Inc. "Group" means the Company and all the subsidiaries of the Company as a group "Intercompany Indebtedness" means indebtedness owing by the Subsidiary Companies to the Company at Completion "Liquidators' Retention" means that amount proposed to be retained by the liquidators from the assets in liquidation to provide for unforeseen or contingent liabilities "Listing Rules" means the listing rules made by the Financial Services Authority in exercise of its functions as competent authority pursuant to Part VI of FSMA "NAV" means net asset value "Notes" means the #170,000,000 floating rate secured notes due 2017 issued by UK Balanced Property Finance Limited "Proposals" means the Sale and the Reconstruction Proposals "Properties" or "Property Portfolio" means the real properties situated in the United Kingdom and wholly owned or leased by any of the Subsidiary Companies "Reconstruction Proposals" means proposals intended by the Directors to be put forward for a voluntary winding up and reconstruction of the Company, as more fully described in this announcement "Sale" means the proposed sale by the Company of the Subsidiary Companies to the Buyer under the terms and subject to the conditions of the Share Purchase Agreement "Sale Consideration" means #417.5 million, comprising #417.5 million less the amount of the Intercompany Indebtedness plus repayment of all Intercompany Indebtedness "Sale EGM" means the extraordinary general meeting of the Company to be held on 17 August 2007 at which a resolution will be proposed to approve the Share Purchase Agreement "Sale Resolution" means the ordinary resolution to approve the Sale to be proposed at the Sale EGM "Share Purchase Agreement" means the share purchase agreement dated 20 July 2007 between the Company and the Buyer "Shareholders" means the holders of Shares "Shares" means ordinary shares of 25p each in the capital of the Company "Subsidiary Companies" means UKPH, UKPH No. 1, UKPH Nominee 1 Limited, UKPH Nominee 2 Limited, UKPH Nominee 3 Limited, UKPH Nominee 4 Limited, UKPH Nominee 5 Limited, UKPH Nominee 6 Limited, UKPH Nominee 7 Limited, UKPH Nominee 8 Limited, UKPH Nominee 9 Limited, UKPH Nominee 10 Limited, UKPH Nominee 11 Limited, UKPH Nominee 12 Limited, UKPH Nominee 13 Limited, UKPH Nominee 14 Limited, UKPH Nominee 15 Limited, UKPH Nominee 16 Limited, UKPH Nominee 17 Limited, UKPH Nominee 18 Limited, UKPH Nominee 19 Limited, UKPH Nominee 20 Limited, UKPH Nominee 21 Limited and UKPH Nominee 22 Limited "SWIP" means Scottish Widows Investment Partnership Limited "SWUF" means Scottish Widows Unit Funds Limited "SWUF Nominated Directors" means Malcolm King, Richard Prosser and Charles Wilkinson "SWUF Requisition" means the requisition served by State Street Nominees on behalf of SWUF on 21 May 2007 that requisitions, pursuant to section 70 of the Companies (Guernsey) Law, 1994 (as amended) and in accordance with Article 46 of the Articles, that an extraordinary general meeting of the Company be convened to consider the resolutions included in the notice of the Extraordinary General Meeting set out at page 12 of the circular issued by the Company to Shareholders on 8 June 2007 "SWUF Resolutions" means the resolutions proposed by SWUF set out at page 12 of the circular issued by the Company to Shareholders on 8 June 2007 "UKPH" means UK Property Holdings Limited "UKPH No.1" means UKPH No.1 Limited "Winding up" means the proposed voluntary winding up of the Company under the Proposals Important Note: Dickson Minto W.S., which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting solely for The UK Balanced Property Trust Limited and for no one else in connection with the matters set out in this announcement and will not regard any other person as its client or be responsible to anyone other than The UK Balanced Property Trust Limited for providing the protections afforded to clients of Dickson Minto W.S. or for providing advice in relation to these matters or the contents of this announcement. This announcement, which has been issued by The UK Balanced Property Trust Limited, has been approved by Dickson Minto W.S. solely for the purposes of section 21 of the Financial Services and Markets Act 2000. This announcement does not constitute, or form part of, any offer, or solicitation of any offer, for securities. This information is provided by RNS The company news service from the London Stock Exchange END REPUOUNRBBRBURR
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