TIDMCSP
RNS Number : 1666N
Inclusive Capital Partners L.P.
30 May 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE
ON TAKEOVERS AND MERGERS (THE "CODE") AND IS NOT AN ANNOUNCEMENT OF
A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND
THEREFORE THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE EVEN
IF THE PRE-CONDITIONS ARE SATISFIED OR WAIVED.
THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION AND UPON PUBLICATION OF THE ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
30 MAY 2022
Statement regarding possible offer for Countryside Partnerships
plc by Inclusive Capital Partners, L.P.
Inclusive Capital Partners, L.P. ("In-Cap") announces that, on
17 May 2022, it made a second confidential approach to the Board of
Countryside Partnerships plc ("Countryside" or the "Company")
regarding a possible offer to acquire the entire issued and to be
issued share capital of Countryside not already owned by In-Cap. In
its letter, In-Cap requested that the board of directors of
Countryside engage in good faith and provide access to due
diligence, to determine if the terms of a recommended offer could
be agreed upon.
On 26 May 2022, In-Cap was notified by Countryside that the
Company would not engage with In-Cap or provide access to due
diligence materials. This represents the second attempt made by
In-Cap to engage with the Board of Countryside over the last two
months.
The In-Cap team believes that Countryside shareholders deserve
the opportunity to decide on the merits of any offer, and that if
an approach is made in good faith, the Countryside Board should act
in the interests of its shareholders by engaging with the potential
offeror and not deny its shareholders this opportunity.
Possible Offer
In-Cap is seeking to engage with the Board of Countryside to
discuss the merits of a possible offer (the "Possible Offer") to
acquire the entire issued and to be issued ordinary share capital
of Countryside not already owned by In-Cap for 295 pence per share
(the "Cash Offer").
Whilst not set out in the second confidential approach, it is
also currently expected that as an alternative to the Cash Offer,
an eligible Countryside shareholder would be entitled to elect to
receive rollover ordinary shares (the "Rollover Securities") in
exchange for their holding of Countryside shares at a ratio to be
specified in the relevant offer documentation (the "Alternative
Offer"), subject to the indicative terms and conditions of the
Alternative Offer (detailed below and in the appendix to this
announcement).
As of 27 May 2022 (being the last business day before the date
of this announcement), In-Cap owned 45.8m shares of Countryside,
representing approximately 9.2 per cent. of Countryside's issued
ordinary share capital as at such date.
In-Cap believes that the terms of its Possible Offer represent a
compelling proposition for Countryside shareholders, providing a
unique opportunity to realise their investments at a highly
attractive premium. In-Cap further believes that the Possible Offer
would also provide shareholders with transaction certainty against
the continued and recently increased market volatility,
macro-economic uncertainty and significant business risks facing
the Company.
The terms of In-Cap's Possible Offer represent:
-- an adjusted premium of approximately 31.4% from Countryside's
closing share price as of 27 May 2022 and 28.5% from Countryside's
volume weighted average price of 242.7 pence per share since 7
April 2022, the date of Countryside's update on the conclusions of
John Martin's operational review, trading, and the Government's
Fire Safety Pledge; and
-- an implied multiple of approximately 16.5x EV / 31 Mar 2022 LTM Partnerships Adj. EBIT
In-Cap believes that an adjusted premium is the most relevant
metric, as it does not perceive it to be appropriate to offer a
premium on a one-time cash return to shareholders as a result of
the wind-down of the Company's Homebuilding segment.
In-Cap believes that the multiple implied by its Possible Offer
compares favourably to selected precedent transactions in the
sector:
-- The median EV / LTM EBIT multiple of 8.0-8.5x for selected
precedent UK Housebuilder sponsor and strategic transactions
between 1999 and 2020;
-- 8.7x EV / LTM EBIT for Countryside's acquisition of Westleigh in 2018; and
-- 5.5x EV / LTM EBIT for Bovis Homes' (now Vistry) acquisition of Galliford Try in 2020
Against the backdrop of the current business challenges and lack
of shareholder support, In-Cap believes that the Company is better
served to execute its turnaround strategy in the private markets,
where the management team can focus on operating the business for
the long-term.
About In-Cap
In-Cap is a multi-billion dollar San Francisco-based SEC
registered Investment Adviser with long-term, locked-up AUM. In-Cap
was formed by ValueAct Capital co-founders Jeff Ubben and George
Hamel, along with Lynn Forester de Rothschild and Eva Zlotnicka.
In-Cap's four founders share a passion for positively leveraging
capitalism and governance in pursuit of a healthy planet and the
health of its inhabitants.
Strategic Rationale
Countryside has an impressive 30+ year track record of
regeneration in the UK and In-Cap believes that the Company is very
well-positioned in the industry. The Company has a strong track
record of working with a range of partners from local authorities
and housing associations to community groups and other key
stakeholders in a local community. In-Cap believes that Countryside
is a high-quality business and its asset-light approach to
homebuilding has the potential to generate meaningful returns on
invested capital.
In-Cap believes that Countryside's business also generates
meaningful social value: the Company partners with local
authorities to revitalise derelict communities, with a focus on
affordable housing. As the Company states in its annual report,
"building communities is the foundation of what we do... [and]
placemaking unlocks greater socio-economic value and community
well-being."
Whilst In-Cap is optimistic about the demand for Countryside's
product given the developments in the affordable housing model in
England, In-Cap believes that the Company has underperformed in
comparison to its potential over the past two years.
Countryside took the first step towards addressing its
underperformance with John Martin's operational review, the results
of which were released to shareholders on 7 April 2022, which
identified several issues that had adversely impacted performance.
As long-term shareholders, In-Cap views Mr. Martin's clear
identification of the issues facing the business as a positive
development.
However, In-Cap believes that the Company would be in a better
position to turnaround its business (which, as outlined by John
Martin's operational review, has a number of areas where it can
improve performance) as a private company rather than as a public
entity, where near-term profitability and consistent earnings
results are expected by investors. In-Cap believes that In-Cap,
with its long-term investment approach, is better placed to enable
the management team to focus on operating the business for the
long-term, to the benefit of all stakeholders.
In-Cap has a strong track record of supporting companies with
the goal of building a more inclusive, sustainable, and trusted
economic system. In addition, the team has direct experience
executing acquisitions of meaningful scale in the public markets.
In-Cap, therefore, believes its proposal offers both a certain
price for shareholders now and the opportunity for the Company to
achieve its growth ambitions over the coming years.
Alternative Offer
Under the Alternative Offer, it is proposed that eligible
Countryside shareholders would be entitled to either:
(a) elect for the Alternative Offer in relation to their entire
holding of Countryside shares; or
(b) elect for the Alternative Offer in relation to at least 50
per cent. of their holding of Countryside shares (with the
remaining percentage of such Countryside shareholder's shareholding
being settled by way of the Cash Offer).
The maximum number of Rollover Securities available to
Countryside shareholder under the Alternative Offer would be
limited to 30 per cent. of the issued ordinary share capital of any
holding company formed by In-Cap for the purposes of implementing
the Possible Offer ("Holdco") as at completion of the Possible
Offer (the "Alternative Offer Maximum").
If valid elections were to be made from eligible Countryside
shareholders that would require the issue of Rollover Securities
exceeding the Alternative Offer Maximum, the number of Rollover
Securities to be issued in respect of each Countryside share would
be rounded down on a pro rata basis, and the balance of the
consideration for each Countryside Share would be paid in cash in
accordance with the terms of the Cash Offer.
The availability of the Alternative Offer would also be
conditional upon valid elections being made for such number of
Rollover Securities as represent at least 5 per cent. of the issued
ordinary share capital of Holdco at completion of the Possible
Offer, failing which the Alternative Offer would lapse and no
Rollover Securities would be issued.
Unless otherwise determined by In-Cap and permitted by
applicable law and regulation, the Alternative Offer would not be
offered, sold or delivered, directly or indirectly, in or into any
jurisdiction where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure if
information concerning the Possible Offer is sent or made available
Countryside shareholders in that jurisdiction or where to do so
would result in compliance requirements or formalities which In-Cap
regards as unduly onerous. In addition, individual acceptances of
the Alternative Offer would only be valid if all regulatory
approvals (if any) required by the relevant Countryside shareholder
to acquire the Rollover Securities had been obtained.
Should the Possible Offer proceed, for the purposes of Rule
24.11 of the Code, Moelis & Company, as lead financial adviser
to In-Cap, would provide an estimate of the value of a Rollover
Security, together with the assumptions, qualifications and caveats
forming the basis of its estimate of value, in a letter to be
included in the relevant offer documentation.
Pre-conditions to and terms of the Possible Offer
Any announcement of a firm intention to make an offer by In-Cap
under Rule 2.7 of the Code remains subject to certain
pre-conditions, including satisfactory completion of customary due
diligence requiring the engagement of Countryside management.
In-Cap reserves the right to waive any pre-condition at any time at
its sole discretion but notes that there can be no certainty that a
formal offer will be made, even if the pre-conditions are satisfied
or waived.
For the purposes of Rule 2.5(a) of the Code, In-Cap reserves the
right to make an offer on different and potentially less favorable
terms than those set out in this announcement at any time (a) with
the consent or recommendation of the Countryside, (b) if a third
party announces (after the date of this announcement) a firm
intention to make an offer for Countryside or a possible offer on
less favourable terms than those set out in this announcement, (c)
following the announcement by Countryside of a Rule 9 waiver under
the Code, or (d) through a reduction in the proposed price by the
amount of any dividend, return of value or other distribution which
is announced, declared, made or paid by Countryside after the date
of this announcement.
In-Cap reserves the right to adjust the form and/or mix of
consideration described in this announcement.
This announcement commences an offer period in respect of
Countryside for the purposes of the Code. In accordance with Rule
2.6(a) of the Code, In-Cap is required, by no later than 5.00p.m.
(London time) on 27 June 2022, to announce a firm intention to make
an offer for Countryside in accordance with Rule 2.7 of the Code or
announce that it does not intend to make an offer, in which case
the announcement will be treated as a statement to which Rule 2.8
of the Code applies. This deadline can be extended with the consent
of the Panel in accordance with Rule 2.6(c) of the Code.
Any offer would be subject to any requisite anti-trust or
regulatory approvals and other customary conditions.
Further information
It is important to note that this is an announcement of a
possible offer pursuant to 2.4 of the Code and accordingly there
can be no certainty that any offer for Countryside will be made by
In-Cap.
Investors should note the further disclosures required by the
Code set out below and in particular, that disclosures are required
by persons with interests in securities representing more than 1
per cent. of Countryside shares.
In-Cap will make further announcements in due course.
This announcement has been made without the consent of
Countryside.
In-Cap Quote
Jeffrey Ubben, the Founder and Managing Partner of In-Cap,
said:
Countryside looks to regenerate areas, and through its
mixed-tenure approach supports communities, by developing and
building affordable homes for rent and for sale next to higher
priced private homes. In working with land owners, housing
associations and government authorities, Countryside seeks to
address an acute need for high quality affordable housing in the
UK. We believe Countryside's success is linked to this need and
also will be the source of future growth.
In-Cap was founded to support businesses which generate positive
impact on the environment and society. We believe Countryside is
meeting a critical societal need and as a holder of approximately
9% of the issued share capital of Countryside, In-Cap believes
Countryside is best positioned to serve this role and to succeed as
a private company under ownership of investors with a long-term
investment approach.
In contrast, the board of directors of Countryside has presided
over the flawed acquisition of Westleigh in 2018, a dilutive equity
financing in 2020, and the appointment of a chief executive officer
with little to no prior public company executive experience that
oversaw overly ambitious expansion into new geographies and
investment into excess manufacturing capacity that is now
generating losses.
For the reasons set out above, we believe our proposed offer
represents a highly attractive premium for Countryside
shareholders. We believe that Countryside shareholders should be
informed about our proposal to enable them to form their own
view.
For further information please contact:
Finsbury Glover Hering +44 (0) 20 7251 3801
Rollo Head In-Cap-LON@fgh.com
Alastair Elwen
James Gray
Moelis & Company (Financial Adviser to In-Cap) +44 (0) 20
7634 3500
Mark Aedy
Liam Beere
Kirkland & Ellis International LLP is acting as legal
adviser to In-Cap.
Important information
This announcement is not intended to, and does not, constitute,
represent or form part of any offer, invitation or solicitation of
an offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities whether pursuant to this
announcement or otherwise.
The distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law or regulation and
therefore any person who comes into possession of this announcement
should inform themselves about, and comply with, such restrictions.
Any failure to comply with such restrictions may constitute a
violation of the securities laws or regulations of any such
relevant jurisdiction.
The Alternative Offer will not be registered and it is proposed
that the Alternative Offer will be made pursuant to an applicable
exemption.
Moelis & Company UK LLP ("Moelis & Company"), which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, is acting exclusively for In-Cap and for no one
else in connection with the matters described in this announcement
and will not be responsible to anyone other than In-Cap for
providing the protections afforded to clients of Moelis &
Company nor for providing advice in connection with the matters
referred to herein. Neither Moelis & Company nor any of its
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of Moelis & Company in connection with this announcement, any
statement contained herein or otherwise.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing. If two or more
persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in
relevant securities of an offeree company or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 26.1
In accordance with Rule 26.1 of the Code, a copy of this
announcement will be available on the Company's website at https://
www.relevant-documents.com . The content of the website referred to
in this announcement is not incorporated into and does not form
part of this announcement.
If the Possible Offer results in an offer being made, any offer
document or scheme document published in connection with such offer
will contain, except with the consent of the Takeover Panel, in
accordance with Rule 29 of the Code, either an updated property
valuation in respect of Countryside's property portfolio or no
material difference statement in respect of the last reported
valuation of Countryside's property portfolio.
Sources of Information and Bases of Calculation
1. Volume weighted average price of 242.7 pence per Countryside
share derived from Bloomberg for the period from 7 April 2022 to 27
May 2022;
2. The value attributed to the entire issued and to be issued
share capital of Countryside is based on a value of 295 pence per
Countryside share, and:
a. 499 ,472,051 ordinary shares in issue (excluding treasury
shares) as per the 20 May 2022 announcement regarding a transaction
in own shares;
b. 6.14m ordinary shares which may be issued on or after the
date of this announcement to satisfy the exercise of Long-Term
Incentive Plan and Deferred Bonus Plan options and vesting of
awards, as per the 2021 Annual Report;
c. 0.61m ordinary shares which may be issued on or after the
date of this announcement to satisfy the exercise of
Savings-Related Share Option Scheme options and vesting of awards
at an exercise price of 245 pence per option, as per the 2021
Annual Report;
3. Enterprise value is based on 506.22m fully diluted number of
issued shares (excluding treasury shares) as of 20 May 2022, daily
net debt position over the first six months of FY2022 leading up to
the 19 May 2022 H1 Report, excluding GBP71.1m of lease liabilities
as of the 2022 H1 Report, and estimated total cladding provision of
GBP146.9m per the 2022 H1 Report;
4. Partnerships enterprise value adjusted to reflect the GBP300m
/ 59 pence per share value in cash expected to be generated from
the wind-down of the Company's Homebuilding segment;
5. 31 Mar 2022 LTM Partnerships Adj. EBIT is equal to GBP87.3m
based on the 2022 H1 Report and Partnerships Adj. EBIT of GBP31.6m
in 2022 H1, GBP52.0m in 2021 H1 and GBP107.7m in FY21A, adjusted
for GBP15m of excess operating profit realised in FY21, relating to
1,000+ completions deferred into 1H21 due to COVID related delays
in FY20;
6. Unless otherwise stated, the financial information relating
to Countryside is extracted (without material adjustment) from the
2021 Annual Report;
7. Selected precedent strategic transactions:
Date Target Acquiror EV / LTM
EBIT
---------- ------------------------ ------------------------ ---------
Galliford Try (Housing
Sep-2019 Businesses) Bovis Homes 5.5x
---------- ------------------------ ------------------------ ---------
Jul-2019 Telford Homes CBRE 8.1x
---------- ------------------------ ------------------------ ---------
Apr-2018 Westleigh Group Countryside Properties 8.7x
---------- ------------------------ ------------------------ ---------
Mar-2014 Banner Homes CALA 12.8x
---------- ------------------------ ------------------------ ---------
Mar-2007 George Wimpey Taylor Woodrow 6.5x
---------- ------------------------ ------------------------ ---------
Feb-2007 Linden Galliford Try 7.8x
---------- ------------------------ ------------------------ ---------
Feb-2007 Wilson Bowden Barratt Developments 9.6x
---------- ------------------------ ------------------------ ---------
Nov-2005 Westbury Persimmon 6.4x
---------- ------------------------ ------------------------ ---------
Sep-2005 Fairclough Homes The Miller Group 6.7x
---------- ------------------------ ------------------------ ---------
Copthorn Ltd (Uberior
Nov-2004 Countryside Properties / MBO) 11.6x
---------- ------------------------ ------------------------ ---------
Sep-2003 Wilson Connolly Taylor Wimpey 9.7x
---------- ------------------------ ------------------------ ---------
Laing Homes (Premium
Oct-2002 Homes) George Wimpey 5.8x
---------- ------------------------ ------------------------ ---------
Aug-2001 Alfred McAlpine George Wimpey 8.6x
---------- ------------------------ ------------------------ ---------
Jan-2001 Beazer Persimmon 6.4x
---------- ------------------------ ------------------------ ---------
Jan-2001 Bryant Taylor Woodrow 6.3x
---------- ------------------------ ------------------------ ---------
Apr-1999 Fairclough Homes Centex-UK 9.8x
---------- ------------------------ ------------------------ ---------
Median 8.0x
-------------------------------------------------------------- ---------
"Selected Precedent Transactions" - Enterprise Value over LTM
EBIT multiples are based on publicly available information as set
out below.
-- Galliford Try (Housing Businesses) / Bovis Homes: 5.5x
- Enterprise value: GBP1,075m (Source: "Circular to Shareholders
and Notice of General Meeting" announcement released on 7 November,
2019, page 9)
- EBIT: GBP195m (Source: "Circular to Shareholders and Notice of
General Meeting" announcement released on 7 November, 2019, page 14
and 15)
-- Telford Homes / CBRE: 8.1x
- Enterprise value: GBP340m based on a market capitalisation of
GBP267m (Source: Scheme of Arrangement released on 11 July, 2019,
page 7) and borrowings minus cash and cash equivalents of GBP73m
(Source: Telford Homes Annual Report for Year Ended 31 March, 2019,
page 73)
- EBIT: GBP42m (Source: Telford Homes Annual Report for Year
Ended 31 March, 2019, page 68)
-- Westleigh Group / Countryside Properties: 8.7x
- Enterprise value: GBP135m (Source: "Acquisition of Westleigh
Group Limited" announcement released on 12 April, 2018, page 1)
- EBIT: GBP16m (Source: "Acquisition of Westleigh Group Limited"
announcement released on 12 April, 2018, page 1)
-- Banner Homes / CALA: 12.8x
- Enterprise value: GBP210m based on GBP82m in total cash
consideration and borrowings minus cash and cash equivalents of
GBP127m (Source: CALA Group Annual Report for Year Ended 30 June,
2014, page 71)
- EBIT: GBP16m (Source: Banner Homes Group Annual Report for
Year Ended 31 May, 2013, page 6)
-- George Wimpey / Taylor Woodrow: 6.5x
- Enterprise value: GBP2,749m (Source: Scheme of Arrangement
released on 26 March, 2007, page 24)
- EBIT: GBP423m (Source: George Wimpey Annual Report for Year
Ended 31 December, 2006, page 52)
-- Linden / Galliford Try: 7.8x
- Enterprise value: GBP245m based on GBP109m in total cash
consideration and net indebtedness of GBP136m (Source: "Proposed
Acquisition of Linden Holdings" announcement released 8 February,
2007, page 1)
- EBIT: EBIT: GBP31m (Source: Linden Holdings Annual Report for
Year Ended 31 December, 2006, page 7)
-- Wilson Bowden / Barratt Developments: 9.6x
- Enterprise value: GBP2,337m based on implied market
capitalisation of GBP2,168m from 96.6m fully diluted number of
shares and 2,245p offer price (Source: "Recommended Cash and Share
Offer" released on 5 February, 2007) and net indebtedness of
GBP169m (Source: Wilson Bowden Plc Annual Report for Year Ended 31
December, 2006, page 2)
- EBIT: EBIT: GBP243m (Source: Wilson Bowden Plc Annual Report
for Year Ended 31 December, 2006, page 26)
-- Westbury / Persimmon: 6.4x
- Enterprise value: GBP917m based on GBP643m in total cash
consideration (Source: "Cash Offer for Westbury" announcement
released 24 November, 2005, page 1) and net indebtedness of GBP274m
(Source: Westbury Plc Interim Report for Period Ended 31 August,
2005)
- EBIT: GBP142m (Source: Westbury Plc Annual Report for Year
Ended 28 February, 2005, page 46)
-- Fairclough Homes / The Miller Group: 6.7x
- Enterprise value: Enterprise value: GBP292m based on GBP264m
in total cash consideration (Source: Miller Group announcement
released 19 September, 2005) and net indebtedness of GBP28m
(Source: Fairclough Homes Annual Report for Year Ended 31 March,
2005, page 19)
- EBIT: GBP44m (Source: Fairclough Homes Annual Report for Year
Ended 31 March, 2005, page 6)
-- Countryside Properties / Copthorn Ltd (Uberior / MBO): 11.6x
- Enterprise value: GBP324m based on implied market
capitalisation of GBP222m (Source: "Recommended Increased Cash
Offer for Countryside Properties" announcement released 24 January,
2005) and net indebtedness of GBP102m (Source: Countryside
Properties Annual Report for Year Ended 30 September, 2004, page
16)
- EBIT: GBP28m (Source: Countryside Properties Annual Report for
Year Ended 30 September, 2004, page 4)
-- Wilson Connolly / Taylor Wimpey: 9.7x
- Enterprise value: GBP650m (Source: "Recommended Offer"
announcement released on 1 September, 2003, page 21)
- EBIT: GBP67m (Source: "Recommended Offer" announcement
released on 1 September, 2003, page 21)
-- Laing Homes (Premium Homes) / George Wimpey: 5.8x
- Enterprise value: GBP297m (Source: "Acquisition of Laing Homes
Limited" announcement released on 16 October, 2002)
- EBIT: GBP52m (Source: "Acquisition of Laing Homes Limited"
announcement released on 16 October, 2002)
-- Alfred McAlpine / George Wimpey: 8.6x
- Enterprise value: GBP461m (Source: "Proposed Acquisition of
Alfred McAlpine Homes" announcement released on 14 August,
2001)
- EBIT: GBP54m (Source: "Proposed Acquisition of Alfred McAlpine
Homes" announcement released on 14 August, 2001)
-- Beazer / Persimmon: 6.4x
- Enterprise value: GBP665m based on implied market
capitalisation of GBP538m (Source: "Final Offer for Beazer Group"
announcement released 24 January, 2001) and net indebtedness of
GBP127m (Source: Beazer Group Annual Report for Year Ended 30 June,
2000, page 59)
- EBIT: GBP104m (Source: Beazer Group Annual Report for Year
Ended 30 June, 2000, page 50)
-- Bryant / Taylor Woodrow: 6.3x
- Enterprise value: GBP605m based on implied market
capitalisation of GBP556m (Source: "Offer Update" announcement
released 22 January, 2001) and net indebtedness of GBP50m (Source:
Bryant Group Annual Report for Year Ended 31 May, 2000, page
42)
- EBIT: GBP96m (Source: Bryant Group Annual Report for Year
Ended 31 May, 2000, page 30)
-- Fairclough Homes / Centex-UK: 9.8x
- Enterprise value: GBP187m based on GBP136m in total cash
consideration (Source: Centex Annual Report for Year Ended 31
March, 2001, page 81, $219m converted at 1.611 GBP / USD on 16
April, 1999) and net indebtedness of GBP51m (Source: Fairclough
Homes Annual Report for Year Ended 31 December, 1998, page 17)
- EBIT: GBP19m (Source: Fairclough Homes Annual Report for Year
Ended 31 December, 1998, page 5)
8. Selected precedent sponsor transactions:
Date Target Acquiror EV / LTM
EBIT
---------- -------------------- ------------------------- ---------
Mar-2018 CALA (52.1% stake) L&G Capital 7.4x
---------- -------------------- ------------------------- ---------
Aug-2017 Miller Homes Bridgepoint 6.4x
---------- -------------------- ------------------------- ---------
Sep-2014 Keepmoat TDR / Sun Capital 8.4x
---------- -------------------- ------------------------- ---------
Mar-2013 CALA Patron / L&G 8.8x
---------- -------------------- ------------------------- ---------
Mar-2007 Crest Nicholson HBOS, West Coast Capital 8.8x
---------- -------------------- ------------------------- ---------
Uberior, Aldersgate,
Aug-2006 McCarthy & Stone West Coast Capital 9.1x
---------- -------------------- ------------------------- ---------
Dec-2000 Fairview 3i 4.7x
---------- -------------------- ------------------------- ---------
May-1999 CALA Dotterel 8.6x
---------- -------------------- ------------------------- ---------
Median 8.5x
-------------------------------- ------------------------- ---------
"Selected Precedent Transactions" - Enterprise Value over LTM
EBIT multiples are based on publicly available information as set
out below.
-- CALA (52.1% stake) / L&G Capital: 7.4x
- Enterprise value: GBP683m based on implied GBP605m in total
cash consideration and borrowings minus cash and cash equivalents
of GBP78m (Source: CALA Group Annual Report for Year Ended 30 June,
2017, page 39)
- EBIT: GBP93m (Source: "Legal & General Capital acquires
full ownership of CALA Homes" announcement released on 13 March,
2018)
-- Miller Homes / Bridgepoint: 6.4x
- Enterprise value: GBP655m (Source: "Miller Homes to be
acquired by Bridgepoint" announcement released on 2 August,
2017)
- EBIT: GBP103m (Source: "Miller Homes to be acquired by
Bridgepoint" announcement released on 2 August, 2017)
-- Keepmoat / TDR and Sun Capital: 8.4x
- Enterprise value: GBP400m (Source: "Travers Smith advises
management on the sale of Keepmoat to Sun Capital and TDR Capital"
announcement released on 12 September, 2014)
- EBIT: EBIT: GBP48m (Source: Keepmoat Annual Report for Year
Ended 31 March, 2014, page 22)
-- CALA / Patron and L&G: 8.8x
- Enterprise value: GBP210m (Source: "CALA announces new
investment partners Patron and Legal & General to acquire the
Group" announcement released on 18 March, 2013)
- EBIT: EBIT: GBP24m (Source: CALA Group Annual Report for Year
Ended 30 June, 2012, page 28)
-- Crest Nicholson / HBOS and West Coast Capital: 8.8x
- Enterprise value: GBP870m based on implied market
capitalisation of GBP715m (Source: "Recommended Proposal for the
Acquisition of Crest Nicholson by Castle BidCo" announcement
released 8 March, 2007) and net indebtedness of GBP155m (Source:
Crest Nicholson Trading Statement on 25 January, 2007)
- EBIT: GBP99m (Source: Crest Nicholson Trading Statement on 25
January, 2007)
-- McCarthy & Stone / Uberior, Aldersgate and West Coast Capital: 9.1x
- Enterprise value: GBP1,138m based on implied market
capitalisation of GBP1,134m from 105.4m fully diluted number of
shares and 1,075p offer price (Source: "Offer for McCarthy &
Stone by Mother BidCo" released on 1 August, 2006) and net debt of
GBP5m (Source: McCarthy & Stone Interim Report for Period Ended
28 February, 2006)
- EBIT: GBP126m (Source: McCarthy & Stone Annual Report for
Year Ended 31 August, 2005, page 44)
-- Fairview / 3i: 4.7x
- Enterprise value: GBP318m based on implied market
capitalisation of GBP307m (Source: "Recommended Cash Offer"
announcement released on 21 December, 2000) and net indebtedness of
GBP11m (Source: Fairview Interim Report for Period Ended 30 June,
2000)
- EBIT: GBP68m (Source: Fairview Interim Report for Period Ended
30 June, 2000, LTM figures)
-- CALA / Dotterel: 8.6x
- Enterprise value: GBP99.2m based on implied market
capitalisation of GBP98.6m (Source: "Increased and Final Cash Offer
for CALA" announcement released on 1 June, 1999) and net debt of
GBP0.6m (Source: CALA Annual Report for Year Ended 30 June, 1998,
page 3)
- EBIT: EBIT: GBP12m (Source: CALA Annual Report for Year Ended
30 June, 1998, page 26)
Appendix 1 - Indicative terms of Rollover Securities
Set out below are the indicative terms of the Rollover
Securities, subject to tax structuring
1. Voting Rights
Rollover Securities would not carry any general voting rights at
general meetings of Holdco.
2. Substantial Shareholder
Any holder of Rollover Securities holding more than 10 per cent.
of the issued ordinary share capital of Holdco following completion
(a "Substantial Shareholder") would be entitled to appoint an
observer to attend and speak (but not vote) at meetings of the
board of Holdco.
A Substantial Shareholder would have the right to receive annual
audited accounts and quarterly financial reports.
3. Unlisted
The Rollover Securities would be unlisted.
4. Transfers of the Rollover Securities
Rollover Securities would not be transferable (directly or
indirectly) during an initial five-year lock-up period (the
"Lock-up Period") without the prior written consent of In-Cap
except pursuant to the drag and tag rights described below, a
reorganisation approved by In-Cap or in respect of customary
permitted transfers to associates.
Following the expiration of the Lock-up Period, a holder of
Rollover Securities (a "Rollover Shareholder") would be entitled to
transfer its Rollover Securities (provided that any such transfer
is for all (but not part) of the Rollover Securities held by such
Rollover Shareholder), subject to a right of first refusal on the
part of In-Cap or its nominee and to certain other restrictions in
respect of the identity of the proposed transferee. In particular,
any proposed transferee of Rollover Securities after the Lock-up
Period:
-- would be required to adhere to the relevant shareholders' agreement;
-- would be required to complete any applicable anti-money
laundering, anti-bribery and corruption, anti-sanctions and "know
your client" checks reasonably required by In-Cap and/or any
antitrust or regulatory change in control approvals required by any
regulator; and
-- must not be considered by In-Cap to be a competitor of the
Company or a person whose investment is likely to result in
reputational harm to the Company, In-Cap or their respective
affiliates
5. Additional Rollover Security Issues
The Rollover Shareholders would be entitled to participate pro
rata in securities issues after completion, subject to customary
exceptions, including issuances (i) by one wholly owned member of
the group to another wholly owned member of the group; (ii) to any
affiliate of In-Cap to finance the Acquisition; (iii) to actual or
potential employees, directors or consultants (whether directly or
indirectly), (iv) other than to In-Cap or its affiliates, for
non-cash consideration on the acquisition of, or merger with, all
or part of another business, undertaking, company or assets; (v)
other than to In-Cap or its affiliates, in connection with the debt
financing arrangements of the group; and (vi) in connection with an
IPO or a pre-IPO reorganisation.
Emergency security issues on a non-pre-emptive basis shall be
permitted with customary pro rata "catch up" rights.
6. Exit Arrangements
Any future share sale, asset sale, IPO, winding-up or other form
of liquidity event relating to the group (an "Exit") would occur at
the absolute discretion of In-Cap.
All holders of Rollover Securities would be required to
co-operate and take such actions in respect of any proposed Exit as
are reasonably requested by In-Cap. This shall include, without
limitation: any reorganisation, restructuring or other corporate
(or similar) action required to facilitate such Exit; providing
warranties as to the title to the Rollover Securities held by such
holder and its capacity to transfer such Rollover Securities; and,
in the case of an IPO, entering into customary "lock-up"
undertakings.
7. Drag-Along and tag-along
In-Cap shall have a customary drag right (i.e. force a sale) on
the same economic terms on any transfers of direct or indirect
shareholdings which would result in a change of control.
Rollover Shareholders shall have a customary tag right on the
same economic terms on any transfer of direct or indirect
shareholdings by In-Cap (other than in respect of certain excluded
instances including, but not limited to, customary permitted
transfers to affiliates, any current or prospective director,
officer, employee or consultant of the group, reorganisation, IPO,
where a drag right has been exercised, and/or any "silent
syndication" to limited partners and/or co-investors).
8. Risk factors
If the Possible Offer proceeds, a more detailed set of risk
factors will be set out in any firm intention announcement under
Rule 2.7 of the Code but will include, among other things, the
following
-- the Rollover Securities will comprise securities in a private
and unquoted company, and there is no current expectation that they
will be listed or admitted to trading on any exchange or market for
the trading of securities, and will therefore be illiquid;
-- the value of the Rollover Securities will at all times be
uncertain and there can be no assurance that any such securities
will be capable of being sold in the future or that they will be
capable of being sold at the value to be estimated by Moelis &
Company in any offer documentation;
-- the holders of Rollover Securities will not enjoy any
minority protections or other rights save for those rights
prescribed by applicable law; and
-- the holders of Rollover Securities will not be afforded the
same level of protections and disclosure of information that they
currently benefit from as shareholders in the Company as a listed
company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
OFDFIFLIESIIVIF
(END) Dow Jones Newswires
May 30, 2022 02:01 ET (06:01 GMT)
Countryside Partnerships (LSE:CSP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Countryside Partnerships (LSE:CSP)
Historical Stock Chart
From Jul 2023 to Jul 2024
