TIDMVTY TIDMCSP
RNS Number : 1932Y
Vistry Group PLC
05 September 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE NEW VISTRY SHARES EXCEPT ON
THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT, THE VISTRY
PROSPECTUS AND THE VISTRY CIRCULAR WHICH ARE PROPOSED TO BE
PUBLISHED IN DUE COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
5 September 2022
RECOMMED CASH AND SHARE COMBINATION
of
Vistry Group PLC ("Vistry")
and
Countryside Partnerships PLC ("Countryside")
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The board of directors of each of Vistry and Countryside
are pleased to announce that they have reached agreement
on the terms of a recommended cash and share combination
pursuant to which Vistry will acquire the entire issued
and to be issued ordinary share capital of Countryside
(the "Combination"). The Combination is to be effected
by means of a scheme of arrangement under Part 26 of
the Companies Act.
-- Under the terms of the Combination, Countryside Shareholders
shall be entitled to receive:
for each Countryside 0.255 of a New Vistry Share
Share
and
60 pence in cash
-- Based upon Vistry's closing share price of 741 pence
as of 2 September 2022 (being the last practicable date
prior to this announcement), the Combination represents
a total implied value of 249 pence per Countryside Share,
valuing the entire issued and to be issued ordinary
share capital of Countryside at approximately GBP1,254
million.
-- Based upon Vistry's closing share price of 741 pence
as of 2 September 2022 (being the last practicable date
prior to this announcement), the Combination represents
a total implied value of 249 pence per Countryside Share,
valuing the entire issued and to be issued ordinary
share capital of Countryside at approximately GBP1,254
million.
-- The terms of the Combination represent a premium of
approximately 9.1 per cent. to the Closing Price per
Countryside Share of 228 pence on 2 September 2022 (being
the latest practicable date prior to the date of this
announcement).
-- A Mix and Match Facility will also be made available
to Countryside Shareholders (other than certain persons
in the United States and other Restricted Jurisdictions)
in order to enable them to elect, subject to off-setting
elections, to vary the proportions in which they receive
cash and New Vistry Shares in respect of their holdings
in Countryside Shares. However, the total number of
New Vistry Shares to be issued and the maximum aggregate
amount of cash to be paid under the terms of the Combination
will not be varied as a result of elections under the
Mix and Match Facility.
-- Under the terms of the Combination, Countryside Shareholders
will, in aggregate, receive approximately 128,398,747
New Vistry Shares. Immediately following Completion
of the Combination, Countryside Shareholders will own
approximately 37 per cent. of the ordinary share capital
of the Combined Group (based on the existing issued
ordinary share capital of Vistry and the fully diluted
ordinary share capital of Countryside) as at 2 September
2022 (being the latest practicable date prior to the
date of this announcement).
-- The Combination would create one of the country's leading
homebuilders, comprising a top tier housebuilder and
a leading partnerships business, with capability across
all housing tenures, and delivering much needed affordable
housing. The Combination has a strong strategic rationale
and the potential for material value creation for shareholders
in the Combined Group. In particular, the Combination
would have, among other things, the following key advantages:
-- strengthens the Vistry Group's position across
both housebuilding and partnerships to deliver
sector-leading returns;
-- a capital-light, high ROCE partnerships business,
targeting a 40 per cent. ROCE in the short term
and expected to increase to over GBP3 billion
revenue per annum in the medium term, representing
a larger part of the Vistry Group. In addition,
if the market does not recognise the full value
of the Combined Group by 2025, it is expected
that each of its two divisions would be large
enough to succeed as independent businesses, giving
the option to separate them at the time if the
board of directors of the Combined Group considered
this to be in the best interests of its shareholders;
-- increased partnerships exposure, which offers
greater resilience to the cyclicality of the housing
market, with increased earnings visibility and
a consistently strong forward order book underpinned
by a high and sustained level of demand for affordable
housing;
-- significant benefits and value creation from the
increased scale of the combined business and synergies
of at least GBP50 million and potentially from
the Countryside Group's timber frame capability,
with operational benefits including procurement
processes, an improved implementation of the Future
Homes Standard and the reduction of people risk
within the current tight labour market;
-- combined brand strength of Bovis Homes, Linden
Homes and the highly regarded Countryside's partnerships
business allows for a multiple branded, mixed-tenure
strategy that enhances market presence while driving
higher absorption rates; and
-- extensive management capability with a strong
and proven track record, led by the Vistry Group's
Chief Executive Officer Greg Fitzgerald, who is
highly qualified to integrate the two businesses
and lead the Combined Group through a new phase
of growth, together with the Vistry Group's existing
leadership team and senior executive support from
Countryside.
-- Following Completion of the Combination, both Countryside
Shareholders and Vistry Shareholders will share in the
benefits accruing to the Combined Group via the expected
realisation of meaningful cost synergies. The Vistry
Directors believe that the Combined Group can deliver
at least GBP50 million of pre-tax recurring cost synergies
on an annual run-rate basis by the end of the second
year following Completion.
-- The board of directors of each of Vistry and Countryside
also note that, in total, five Countryside Shareholders,
being Browning West, Inclusive Capital Partners, David
Capital Partners, Anson Advisors and Abrams Capital
Management, representing approximately 39.1 per cent.
of Countryside's issued ordinary share capital as at
2 September 2022 (being the latest practicable date
prior to the date of this announcement), are supportive
of the Combination and have each entered into irrevocable
undertakings to vote in favour of the Scheme at the
Court Meeting and the resolutions to be proposed at
the Countryside General Meeting.
-- The Countryside Board also notes that Inclusive Capital
Partners, representing 9.2 per cent. of Countryside's
issued ordinary share capital as at 2 September 2022
(being the latest practicable date prior to the date
of this announcement), who previously announced a possible
offer to acquire Countryside under Rule 2.4 of the Code
and had indicated that it would be willing to participate
in the Formal Sales Process, has provided an irrevocable
undertaking to Vistry in connection with the Combination.
-- Vistry intends the Combined Group to maintain a strong
and robust balance sheet, with target Gearing of less
than 10 per cent.
-- Vistry is funding the cash consideration payable pursuant
to the Combination through new debt financing arranged
by HSBC. Consistent with the Vistry Group's prudent
approach to debt financing, it is intended that this
new debt financing for funding will be repaid within
two years.
Commenting on the Combination, Greg Fitzgerald, the Chief
Executive Officer of Vistry, said:
"This proposed Combination has a highly compelling strategic
rationale. It will create a leader in the Partnerships housing
sector, with the scale and expertise to accelerate profitable
growth across both Partnerships and Housebuilding, and expand the
delivery of much needed affordable housing across England. The
proposed Combination will add the strength of the Countryside brand
to Vistry's own well-established Bovis Homes and Linden Homes
brands and will leverage the skills and market knowledge of both
the Countryside and Vistry teams.
We believe there is clear potential to generate material value
for both Vistry and Countryside Shareholders and wider stakeholders
from a combined group with enhanced scale and superior returns and
to improve the performance of key parts of Countryside's business.
We welcome the support of the Countryside Board and the support we
have already received from a significant proportion of Countryside
Shareholders for the Combination."
Commenting on the Combination, Douglas Hurt, the Chairman of
Countryside, said:
"The Combination will create a leading, enlarged partnerships
business and is an opportunity to leverage both Countryside's brand
and place-making experience with the growing Vistry partnerships
business, alongside Vistry's established housebuilding business.
The scale of the Combined Group will enable the delivery of
synergies, operating efficiencies and further growth for the
benefit of Countryside Shareholders and wider stakeholders.
The Countryside Board has carefully reviewed this Combination
and believes it offers the best potential to create the greatest
value for Countryside Shareholders. "
Dividends
-- Vistry Shareholders will be entitled to receive and retain:
-- any interim dividend that is announced, declared, paid or
made or becomes payable by Vistry in respect of the six-month
period ended 30 June 2022; and
-- any Vistry dividend that is announced, declared, paid or made
or becomes payable by Vistry in
respect of the six-month period ending 31 December 2022 (the
"December Vistry Dividend").
-- If Completion of the Combination occurs before the record
date for any December Vistry Dividend, Countryside Shareholders
will be entitled to receive and retain any December Vistry Dividend
as shareholders in the Combined Group. If Completion of the
Combination occurs after the record date for any December Vistry
Dividend that is, on or prior to Completion, announced, declared
made, paid or becomes payable by Vistry, Countryside and Vistry
have agreed that Countryside has the right to declare and pay an
equalisation dividend to Countryside Shareholders in an amount up
to (but not exceeding) the amount of the December Vistry Dividend
(calculated in accordance with the Equalisation Formula described
below), without any reduction being made to the Combination
Consideration (a "Countryside Equalisation Dividend"). Any such
Countryside Equalisation Dividend will be calculated per
Countryside Share as the amount of the December Vistry Dividend per
Vistry Share multiplied by the Exchange Ratio (the "Equalisation
Formula").
-- Vistry's existing dividend policy is to pay out to a two
times ordinary dividend cover in respect of a full financial year.
The typical timing for the record date for a dividend in respect of
the six-month period ending 31 December, where declared, is during
April each year.
-- In respect of Countryside Shares, if, on or after the date of
this announcement and on or prior to the Effective Date, any
dividend, distribution, or other return of value is announced,
declared, made, paid or becomes payable by Countryside, other than
with respect to a Countryside Equalisation Dividend that is
calculated in accordance with the Equalisation Formula, Vistry
reserves the right (without prejudice to any right Vistry may have,
with the consent of the Panel, to invoke Condition 3(g)(ii) in Part
A of Appendix I to this announcement) to (at Vistry's sole
discretion): (i) reduce the Combination Consideration by an amount
equivalent to all or any part of such dividend, distribution, or
other return of value, in which case any reference in this
announcement to the Combination Consideration will be deemed to be
a reference to the Combination Consideration as so reduced; or
alternatively (ii) declare and pay an equalisation dividend to
Vistry Shareholders so as to reflect the value attributable to the
dividend, distribution, or other return of value as is announced,
declared, made, paid or becomes payable by Countryside.
-- Under the terms of the Co-operation Agreement, Vistry has
undertaken not to declare, make or pay any dividend, distribution,
or other return of value other than as contemplated in respect of
Vistry as above. Nothing in this announcement or the Co-operation
Agreement shall require Vistry to announce, declare, make or pay
any dividend.
Termination of Formal Sales Process, Countryside Chief Executive
Officer search and Countryside Share Buyback Programme
-- As a result of the Combination, the Countryside Directors
have taken the decision to terminate the Formal Sales Process with
immediate effect and Countryside has ceased all preparations in
connection therewith.
-- The Countryside Directors have also decided to discontinue
the search for a permanent Chief Executive Officer and to terminate
the share buy-back programme previously announced (which was
discontinued for so long as the Formal Sales Process was
ongoing).
Vistry Shareholder approval of the Combination
-- The Combination constitutes a Class 1 transaction for Vistry
for the purposes of the Listing Rules. Accordingly, the Combination
will be conditional on, amongst other things, the approval of
Vistry Shareholders at the Vistry General Meeting.
Countryside Recommendation
-- The Countryside Directors, who have been so advised by
Rothschild & Co as to the financial terms of the Combination,
consider the terms of the Combination to be fair and reasonable. In
providing its advice to Countryside Directors, Rothschild & Co
has taken into account the commercial assessments of the
Countryside Directors. In addition, the Countryside Directors
consider the terms of the Combination to be in the best interests
of Countryside Shareholders as a whole.
-- Accordingly, the Countryside Directors intend to recommend
unanimously that Countryside Shareholders vote in favour of the
Scheme at the Court Meeting and the resolution to be proposed at
the Countryside General Meeting as those Countryside Directors who
hold Countryside Shares have irrevocably undertaken to do in
respect of their own beneficial holdings of 411,209 Countryside
Shares representing, in aggregate, approximately 0.08 per cent. of
the ordinary share capital of Countryside in issue on 2 September
2022 (being the latest practicable date prior to this
announcement).
Vistry Recommendation
-- The Vistry Directors consider the Combination to be in the
best interests of Vistry and the Vistry Shareholders as a whole and
intend to recommend unanimously that Vistry Shareholders vote in
favour of the Vistry Resolutions at the Vistry General Meeting, as
those Vistry Directors who hold Vistry Shares have irrevocably
undertaken to do in respect of their entire beneficial holdings of,
in aggregate, 524,654 Vistry Shares, representing approximately
0.24 per cent. of Vistry's issued ordinary share capital on 2
September 2022 (being the latest practicable date prior to this
announcement).
-- The Vistry Directors have received financial advice from HSBC
and Lazard in relation to the Combination. In providing their
advice to the Vistry Directors, HSBC and Lazard have relied upon
the Vistry Directors' commercial assessments of the
Combination.
Irrevocable Undertakings and Letters of Support
Countryside Shares
-- As noted above, Vistry has received irrevocable undertakings
from each of the Countryside Directors to vote in favour of the
Scheme at the Court Meeting and the resolutions to be proposed at
the Countryside General Meeting, in respect of a total of 411,209
Countryside Shares, representing, in aggregate, approximately 0.08
per cent. of the existing issued ordinary share capital of
Countryside on 2 September 2022 (being the latest practicable date
prior to the date of this announcement).
-- Vistry has also received irrevocable undertakings from
Browning West, Inclusive Capital Partners, David Capital Partners,
Anson Advisors and Abrams Capital Management, in respect of a total
of 195,154,871 Countryside Shares representing, in aggregate,
approximately 39.1 per cent. of Countryside's issued ordinary share
capital on 2 September 2022 (being the latest practicable date
prior to this announcement), to vote in favour of the Scheme at the
Court Meeting and the resolutions to be proposed at the Countryside
General Meeting.
-- Vistry has therefore received irrevocable undertakings in
respect of a total of 195,566,080 Countryside Shares representing,
in aggregate, approximately 39.1 per cent. of Countryside's issued
ordinary share capital on 2 September 2022 (being the latest
practicable date prior to this announcement).
Vistry Shares
-- Countryside has received irrevocable undertakings from the
Vistry Directors who hold Vistry Shares to vote in favour of the
Vistry Resolutions at the Vistry General Meeting in respect of a
total of 524,654 Vistry Shares representing, in aggregate,
approximately 0.24 per cent. of Vistry's issued ordinary share
capital on 2 September 2022 (being the latest practicable date
prior to this announcement).
-- Countryside has therefore received irrevocable undertakings
in respect of a total of 524,654 Vistry Shares representing, in
aggregate, approximately 0.24 per cent. of Vistry's issued ordinary
share capital on 2 September 2022 (being the latest practicable
date prior to this announcement).
-- Further details of these irrevocable undertakings are set out
in Appendix III to this announcement.
Information on the Combined Group
Business of the Combined Group and key brands
-- Following Completion of the Combination and a period of
integration, the Combined Group will be organised into two distinct
businesses, each of significant scale: (i) a housebuilding
business, to be known as Vistry Housebuilding, consisting of the
existing Vistry Housebuilding business, with the addition of
certain sites from the Countryside Group; and (ii) a partnerships
business, to be re-branded Countryside Partnerships, consisting of
Vistry Partnerships and the Countryside Group's core partnerships
business. Vistry's key retail brands, most notably Bovis Homes and
Linden Homes, will be retained and used across the Combined
Group.
-- The Combined Group will have a balanced split between the
Housebuilding business and the Partnerships business, and creating
a more even distribution of profits to improve our resilience and
returns. On a historical combined basis (based on the audited
financial statements of the Vistry Group and the Countryside Group
for the financial years ended 31 December 2021 and 30 September
2021, respectively), Partnerships would represent approximately 45
per cent. of the Combined Group's adjusted revenue (GBP1.9 billion)
and Housebuilding would represent approximately 55 per cent.
(GBP2.3 billion) of the Combined Group's adjusted revenue.
-- The Housebuilding business and the Partnerships business of
the Combined Group will each be supported by a strong land bank
across the Combined Group, with a total land bank of over 80,000
plots (with an average of 162 plots per site). A further in-house
strategic land capability will deliver land for both businesses,
with nearly 70,000 total combined strategic land plots (across 196
sites), based on historic Vistry Group data as at 31 December 2021
and historic Countryside Group data as at 31 March 2022. This will
enlarge the in-house strategic land capability of the Combined
Group. [1]
Key financial information regarding the Combined Group
-- The revenue of the Combined Group's Partnerships business
would be expected to increase to over GBP3 billion per annum in the
medium term, materially in excess of the Vistry Group's existing
medium term target of approximately GBP1.6 billion.
-- The Combined Group's Partnerships business will target a ROCE
of above 40 per cent. in the short term. The Countryside Group's
Partnerships business has generated a lower ROCE than the Vistry
Group's 40 per cent. target, such that the combined ROCE for the
Partnerships business of the Combined Group would be below 40 per
cent. immediately following Completion of the Combination. [2]
Following Completion of the Combination, the management team of the
Combined Group will maintain Vistry's current target of a 40 per
cent. ROCE with a combined management team working to achieve this
target in the short term. The Combination is also expected to be
ROCE enhancing from 2024.
-- Adjusted revenue of the Partnerships business of the Combined
Group represents an increase from 32 per cent. for the Vistry Group
on a standalone basis, and is expected to increase further to more
than 50 per cent. of the Combined Group's adjusted revenue in the
short term.
-- With the increased scale, the Combined Group will seek to
achieve adjusted operating profit for each of the Housebuilding
business and the Partnerships business in excess of GBP400 million
(in excess of GBP800 million in total).
Board and executive leadership team of the Combined Group
-- The Combined Group will be led by Vistry's Chief Executive
Officer, Greg Fitzgerald. Ralph Findlay, Vistry's Non-Executive
Chairman, will assume the Chairmanship of the Combined Group.
-- The board of directors will comprise the existing executive
and non-executive directors of Vistry with the addition of Tim
Lawlor, who will join the board of directors as an executive
director.
-- The Vistry Group's current strong existing executive
leadership team will comprise the executive leadership team of the
Combined Group, subject to the following changes:
-- Tim Lawlor will join the executive leadership team in his
capacity as Chief Financial Officer; and
-- Earl Sibley, currently Chief Financial Officer of the Vistry
Group, will assume the position of
Chief Operating Officer.
-- Stephen Teagle will lead the Partnerships business of the
Combined Group as Chief Executive -
Partnerships Division and Keith Carnegie will lead the
Housebuilding business of the Combined Group
as Chief Executive - Housebuilding Division.
-- As announced on 27 April 2022, Graham Prothero, Chief
Operating Officer of the Vistry Group,
has resigned as Chief Operating Officer and as a director of
Vistry with effect from 31 December 2022. Graham will remain with
the Combined Group as an executive director and member of the
executive leadership team until that date.
-- In addition, to ensure continuity and assist with the
preliminary stages of the integration of the Combined Group, Mike
Woolliscroft and Philip Chapman, currently Co-interim Chief
Executive Officers of the
Countryside Group, intend to remain with the Combined Group for
an interim period.
-- Other than as described above, all executive and
non-executive directors of the Countryside Board
will resign on the Effective Date.
Capital application policy of the Combined Group
-- It is intended that the Combined Group would initially
maintain the Vistry Group's existing policy of paying out to a two
times ordinary dividend cover in respect of a full financial year.
Any surplus capital, following investment in the business to
support the Combined Group's growth strategy and the payment of the
ordinary dividend, would be expected to be returned to the Combined
Group's shareholders through either a share buyback or special
dividend. The method would be determined by the board of directors
of the Combined Group considering all relevant factors at the time.
Vistry may, in due course following Completion and a period of
integration, review the Combined Group's capital allocation policy
to confirm whether it remains appropriate in the context of the
Combined Group and in consultation with shareholders.
Listing and trading of Vistry Shares
-- The Vistry Shares will continue to be listed on the premium
listing segment of the Official List
and will continue to trade on the Main Market of the London Stock Exchange.
Information on Vistry
-- The Vistry Group, being the combination of Bovis Homes,
Linden Homes and Vistry Partnerships, is a
leading national housebuilder with expertise and capabilities
across all housing tenures and is one of
the largest private sector providers of affordable housing in
the UK.
-- Vistry's shares are admitted to the premium listing segment
of the Official List and to trading on the Main Market of the
London Stock Exchange. Vistry's current market capitalisation is
GBP1,617 million as at 2 September 2022 (being the latest
practicable date prior to this announcement).
-- The Vistry Group's Housebuilding business delivers high
quality, traditional new homes through its leading brands, Bovis
Homes and Linden Homes. The business has national coverage with 13
operating regions, each targeting annual output of between 550 and
625 units including joint ventures, giving an overall volume
capacity for housebuilding of more than 8,000 units (2021: 6,551
completions). The business continues to make exceptional progress
with its strategy of delivering controlled volume growth and
significant margin progression from its existing business
structure.
-- The Vistry Group's Partnerships business, Vistry
Partnerships, has a firmly established position within the
fast-growing partnerships market. The business model combines
higher margin mixed-tenure development and market resilient cash
generative partner delivery. Vistry Partnerships has a strong track
record and, most importantly, excellent, long-standing
relationships across the broad partnerships' customer base,
including housing associations, local authorities, Homes England,
the private rented sector and elderly accommodation providers. The
business currently operates from 14 business units providing
national coverage, and is making excellent progress with its
strategy of driving rapid growth in higher margin mixed-tenure
revenues whilst maintaining a high ROCE in excess of 40 per cent. A
key part of this strategy has been maximising the benefits of the
larger Vistry Group, including access to capital, land buying
capability, retail brand strength, and procurement savings and
buying power.
Information on Countryside
-- Countryside is a leader in the delivery of high quality
mixed-tenure communities. Countryside's partnerships business has
been a trusted partner of housing associations, public bodies and
institutional private rental operators for over 40 years to deliver
a balanced portfolio of affordable, private rental and private for
sale homes, and playing a lead role in regenerating urban areas and
creating new communities. The Countryside Group has been rated a
five star housebuilder by the Home Builders Federation for the past
three years.
-- The Countryside Shares are admitted to the premium listing
segment of the Official List and to trading on the Main Market of
the London Stock Exchange. Countryside's market capitalisation was
GBP1,140 million as at 2 September 2022 (being the latest
practicable date prior to this announcement).
-- The Countryside Group operates a mixed-tenure partnership
model, developing sites with a mix of private, affordable and
private rental units. Forward funding affordable and private rental
units materially de-risks scheme delivery and reduces capital
intensity.
-- Historically, the Countryside Group operated a distinct
Housebuilding division. Countryside announced on 7 July 2021 that
it would focus all its resources on its successful partnerships
business with the creation of a new Home Counties division. The
Countryside Group has 15 partnership operating regions, including
four in the Home Counties, giving good coverage across the UK.
-- The Countryside Group places communities at the heart of
everything it does, from understanding the needs of the communities
and responding to the way it designs its developments, to working
closely with its partners and clients to engage and empower people
throughout the development process. The Countryside Group's
commitment to sustainability is also focused, ambitious and impact
driven and through a new approach to sustainability, it aims for
every act of planning, design and construction to eventually create
a positive impact for people and places.
-- In the Countryside Group's trading update that was published
on 7 April 2022, it identified certain issues underlying the
Countryside Group's underperformance in the first half of its 2022
financial year. The Countryside Group has outlined its priorities
in resolving these issues and has commenced implementing measures
in response to those priorities.
Timetable and Conditions
-- It is intended that the Combination will be implemented by
way of a scheme of arrangement under Part 26 of the Companies Act
(although Vistry reserves the right to implement the Combination by
way of a Takeover Offer, subject to the Panel's consent and the
terms of the Co-operation Agreement).
-- The Combination is conditional on, among other things, the
approval of the requisite majority of Countryside Shareholders at
the Court Meeting and at the Countryside General Meeting. In order
to become Effective, the Scheme must be approved by a majority in
number of the Countryside Shareholders voting at the Court Meeting,
either in person or by proxy, representing at least 75 per cent. in
value of the Countryside Shares voted. In addition, a special
resolution implementing the Scheme must be passed by Countryside
Shareholders representing at least 75 per cent. of votes cast at
the Countryside General Meeting. Following the Court Meeting, the
Scheme must also be sanctioned by the Court.
-- The Combination is also subject to the Conditions and terms
set out in Appendix I to this announcement, including, amongst
other things, the approval of Vistry Shareholders of the
Combination at the Vistry General Meeting as a Class 1 transaction
under the Listing Rules as well as the receipt of merger control
clearance in the United Kingdom, to the extent required, as well as
the further terms and conditions of the Scheme, to be set out in
the Scheme Document when issued.
-- The Scheme Document, containing further information about the
Combination and notices of the Court Meeting and the Countryside
General Meeting, will be distributed to Countryside Shareholders
(along with the Forms of Proxy for use in connection with the Court
Meeting and the Countryside General Meeting and the Forms of
Election in relation to the Mix and Match Facility) in due course.
For the purposes of paragraph 3(a) of Appendix 7 of the Code, the
Panel has consented to an extension of the applicable date for
posting.
-- Vistry will prepare, publish and send to Vistry Shareholders
the Vistry Circular and will prepare and publish the Vistry
Prospectus. The Vistry Circular will summarise the background to
and reasons for the Combination and will include a notice convening
the Vistry General Meeting containing, among other things, the
Vistry Resolutions to be proposed for the approval of the
Combination by Vistry Shareholders at the Vistry General Meeting
(or any adjournment thereof). The Vistry Prospectus is required in
connection with the issue of the New Vistry Shares and their
Admission. The Vistry Prospectus will contain information relating
to the Combination, the Combined Group and the New Vistry
Shares.
-- The Scheme Document, Vistry Circular and Vistry Prospectus
will each be made available by Vistry on its website at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and by
Countryside on its website at www.countrysidepartnerships.com .
-- It is expected that the Scheme Document, Vistry Circular and
Vistry Prospectus will be published in early October 2022 and that
the Court Meeting, the Countryside General Meeting and the Vistry
General Meeting will be held on or around the same time during late
October 2022 or early November 2022. Subject to the satisfaction or
(where applicable) waiver of the Conditions, the Combination is
expected to become Effective by the end of the first quarter of
2023.
This summary should be read in conjunction with the full text of
this announcement. The Combination will be subject to the
Conditions and further terms set out in Appendix I to this
announcement and to the full terms and conditions which will be set
out in the Scheme Document. Appendix II to this announcement
contains the sources of information and bases of calculations of
certain information contained in this announcement, Appendix III to
this announcement contains a summary of the irrevocable
undertakings received in relation to this Combination, Appendix IV
to this announcement contains details of and bases of calculation
of the anticipated quantified financial benefits of the Combination
and Appendix V to this announcement contains definitions of certain
expressions used in this summary and in this announcement.
For the purposes of Rule 28 of the Code, the Quantified
Financial Benefits Statement contained in this announcement is the
responsibility of Vistry and the Vistry Directors. Appendix IV to
this announcement sets out the anticipated Quantified Financial
Benefits Statement relating to cost savings and synergies arising
out of the Combination and provides underlying information and
bases of belief. Appendix IV to this announcement also includes
reports from Vistry's reporting accountant, PricewaterhouseCoopers,
and its financial advisers, HSBC and Lazard, in connection with
anticipated Quantified Financial Benefits Statement, as required
pursuant to Rule 28.1(a) of the Code, and provides underlying
information and bases for the accountant's and advisers' respective
reports. Each of PricewaterhouseCoopers, HSBC and Lazard has given
and not withdrawn its consent to the publication of its respective
report in this announcement in the form and context in which it is
included.
There will be an investor and analyst presentation at 9:30 a.m.
on 5 September 2022 at Numis, 45 Gresham Street, London EC2V 7BF .
There will be a live webcast available at
https://stream.brrmedia.co.uk/broadcast/630ddb73da906b287e9a09b1
and a recording of the investor and analyst presentation will be
available on Vistry's website at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and on
Countryside's website at www.countrysidepartnerships.com .
Enquiries:
Vistry
Earl Sibley, Chief Financial Officer
Graham Prothero, Chief Operating Officer
Clare Bates, General Counsel & Company Secretary
Susie Bell, Investor Relations +44 16 7543 7160
HSBC (Financial Adviser, Corporate Broker and Sponsor to Vistry)
Keith Welch
Diraj Ramchandani
Simon Alexander
Adam Miller +44 20 7991 8888
Lazard (Financial Adviser to Vistry)
Vasco Litchfield
Patrick Long
Louise Campbell +44 20 7187 2000
Peel Hunt (Corporate Broker to Vistry)
Harry Nicholas
Charles Batten
John Welch +44 20 7418 8900
Powerscourt (Financial Public Relations Adviser to Vistry)
Justin Griffiths
Nick Dibden
Victoria Heslop +44 20 7250 1466
Countryside
Tim Lawlor, Chief Financial Officer
Gary Whitaker, General Counsel & Company Secretary +44 1277 260 000 +44 1277 521 296
Rothschild & Co (Lead Financial Adviser to Countryside)
Alex Midgen
Peter Everest
Nikhil Walia
Jake Shackleford +44 20 7280 5000
Barclays (Joint Financial Adviser and Joint Corporate Broker to Countryside)
Robert Mayhew
Richard Bassingthwaighte +44 20 7623 2323
Numis (Joint Financial Adviser and Joint Corporate Broker to Countryside)
Heraclis Economides
Oliver Hardy +44 20 7620 1288
Brunswick Group LLP (Financial Public Relations Adviser to Countryside)
Nina Coad
Robin Wrench +44 20 7404 5959
Linklaters LLP is acting as legal adviser to Vistry. Norton Rose
Fulbright LLP is acting as legal adviser to Countryside.
Important notices
HSBC Bank plc ("HSBC"), which is authorised by the PRA and
regulated in the UK by the FCA and the PRA, is acting as financial
adviser to Vistry and no one else in connection with the
Combination and shall not be responsible to anyone other than
Vistry for providing the protections afforded to clients of HSBC
nor for providing advice in connection with the Combination or any
matter referred to herein. Neither HSBC nor any of its group
undertakings or 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 HSBC in connection with the Combination or any
matter referred to herein.
Lazard & Co., Limited ("Lazard"), which is authorised by the
PRA and regulated in the UK by the FCA and the PRA, is acting
exclusively as financial adviser to Vistry and no one else in
connection with the Combination and shall not be responsible to
anyone other than Vistry for providing the protections afforded to
clients of Lazard nor for providing advice in connection with the
Combination or any matter referred to herein. Neither Lazard nor
any of its group undertakings or 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 Lazard in connection with the
Combination or any matter referred to herein.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated
in the UK by the FCA, is acting exclusively as corporate broker to
Vistry and no one else in connection with the Combination and shall
not be responsible to anyone other than Vistry for providing the
protections afforded to clients of Peel Hunt nor for providing
advice in connection with the Combination or any matter referred to
herein. Neither Peel Hunt nor any of its group undertakings or
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 Peel Hunt in connection with the Combination or any matter
referred to herein.
N.M. Rothschild & Sons Limited ("Rothschild & Co"),
which is authorised and regulated in the UK by the FCA, is acting
exclusively as financial adviser to Countryside and no one else in
connection with the Combination and shall not be responsible to
anyone other than Countryside for providing the protections
afforded to clients of Rothschild & Co nor for providing advice
in connection with the Combination or any matter referred to
herein. Neither Rothschild & Co nor any of its affiliates (nor
their respective directors, officers, employees or agents) 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 Rothschild & Co
in connection with this announcement, any statement contained
herein, the Combination or otherwise. No representation or
warranty, express or implied, is made by Rothschild & Co as to
the contents of this announcement.
Barclays Bank PLC ("Barclays"), which is authorised by the PRA
and regulated in the United Kingdom by the FCA and the PRA, is
acting exclusively for Countryside and for no one else in
connection with the Combination and will not be responsible to
anyone other than Countryside for providing the protections
afforded to clients of Barclays nor for providing advice in
connection with the Combination or any other matter referred to
herein. Neither Barclays nor any of its group undertakings or
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 Barclays in connection with the Combination or any matter
referred to herein.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the FCA, is acting exclusively
for Countryside and no one else in connection with the Combination
and will not be responsible to anyone other than Countryside for
providing the protections afforded to clients of Numis nor for
providing advice in relation to the Combination or any other matter
referred to herein. Neither Numis nor any of its group undertakings
or 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 Numis in connection with the Combination or any matter referred
to herein.
Further information
This announcement does not constitute a prospectus or prospectus
exempted document. The New Vistry Shares are not being offered to
the public by means of this announcement.
This announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
pursuant to the Combination or otherwise.
The Combination will be made solely by means of the Scheme
Document (or, if the Combination is implemented by way of a
Takeover Offer, any document by which the Takeover Offer is made)
which, together with the Forms of Proxy and the Forms of Election
in relation to the Mix and Match Facility, will contain the full
terms and conditions of the Combination, including details of how
to vote in respect of the Combination.
This announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside England and Wales. The Combination will be
subject to the applicable requirements of the Code, the Panel, the
FCA and the London Stock Exchange.
Countryside will prepare the Scheme Document to be distributed
to Countryside Shareholders. Vistry will prepare the Vistry
Circular to be distributed to Vistry Shareholders and will also
publish the Vistry Prospectus containing information on the New
Vistry Shares and the Combined Group (and, in the event that the
Combination is to be implemented by means of a Takeover Offer, the
Offer Document). Countryside Shareholders are advised to read the
Scheme Document (including the related Forms of Proxy and the Forms
of Election in relation to the Mix and Match Facility ) (and/or, in
the event that the Combination is to be implemented by way of a
Takeover Offer, the Offer Document) and the Vistry Prospectus
carefully once these become available because they will contain
important information in relation to the Combination, the New
Vistry Shares and the Combined Group. Any vote in respect of
resolutions to be proposed at the Countryside General Meeting, and
any decision in respect of the Scheme or other response in relation
to the Combination by Countryside Shareholders, should be made only
on the basis of the information contained in the Scheme Document
(and/or, in the event that the Combination is to be implemented by
way of a Takeover Offer, the Offer Document) and the Vistry
Prospectus (including any supplementary prospectus, if relevant).
Any vote in respect of resolutions to be proposed at the Vistry
General Meeting by Vistry Shareholders should be made only on the
basis of information contained in the Vistry Circular (including
any supplementary circular, if relevant).
This announcement contains inside information in relation to
Countryside for the purposes of Article 7 of the Market Abuse
Regulation. The person responsible for arranging the release of
this announcement on behalf of Vistry is Clare Bates, General
Counsel & Company Secretary. The person responsible for
arranging the release of this announcement on behalf of Countryside
is Gary Whitaker, General Counsel & Company Secretary.
This announcement does not constitute a prospectus or prospectus
exempted document. The New Vistry Shares are not being offered to
the public by means of this announcement.
Vistry reserves the right to elect (with the consent of the
Panel, and subject to the terms of the Co-operation Agreement) to
implement the Combination by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Takeover Offer will
be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme, subject to
appropriate amendments to reflect the terms of the Co-operation
Agreement and, among other things, the change in structure by which
the Combination is to be implemented and compliance with all
applicable laws.
Overseas Shareholders
The release, publication or distribution of this announcement in
or into certain jurisdictions other than the United Kingdom may be
restricted by law. Persons who are not resident in the United
Kingdom or who are subject to other jurisdictions should inform
themselves of, and observe, any applicable requirements.
Unless otherwise determined by Vistry or required by the Code,
and permitted by applicable law and regulation, the Combination
shall not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Combination by any such use, means, instrumentality or form within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and all documents relating
to the Combination are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Combination
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Combination to Countryside Shareholders
who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident.
Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable requirements.
The New Vistry Shares may not be offered, sold or delivered,
directly or indirectly, in, into or from any Restricted
Jurisdiction or to, or for the account or benefit of, any
Restricted Overseas Persons except pursuant to an applicable
exemption from, or in a transaction not subject to, applicable
securities laws of those jurisdictions.
Additional information for US investors
The Combination relates to shares of an English company and is
proposed to be effected by means of a scheme of arrangement under
the laws of England and Wales. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act.
Accordingly, the Combination is subject to the disclosure and
procedural requirements applicable in the United Kingdom to schemes
of arrangement which differ from the disclosure requirements of
United States tender offer and proxy solicitation rules.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disproved or passed
judgement upon the fairness or the merits of the Combination or
determined if this announcement is adequate, accurate or complete.
Any representation to the contrary is a criminal offence in the
United States.
However, if Vistry were to elect to implement the Combination by
means of a Takeover Offer, such Takeover Offer shall be made in
compliance with all applicable United States laws and regulations,
including any applicable exemptions under the US Exchange Act. Such
a Takeover Offer would be made in the United States by Vistry and
no one else.
In the event that the Combination is implemented by way of a
Takeover Offer, in accordance with normal United Kingdom practice
and pursuant to Rule 14e-15(b) of the US Exchange Act, Vistry or
its nominees, or its brokers (acting as agents), may from time to
time make certain purchases of, or arrangements to purchase, shares
or other securities of Countryside outside the United States, other
than pursuant to such Takeover Offer, during the period in which
such Takeover Offer would remain open for acceptance. These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Any information
about such purchases or arrangements to purchase shall be disclosed
as required in the UK, shall be reported to a Regulatory
Information Service and shall be available on the London Stock
Exchange website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of
its Countryside Shares pursuant to the Scheme shall be a taxable
transaction for United States federal income tax purposes. Each
Countryside Shareholder is urged to consult their independent
professional adviser immediately regarding the tax consequences of
the Combination applicable to them, including under applicable
United States state and local, as well as overseas and other, tax
laws.
Financial information relating to Countryside included in this
announcement and the Scheme Document has been or shall have been
prepared in accordance with accounting standards applicable in the
United Kingdom and may not be comparable to financial information
of United States companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
The New Vistry Shares issued pursuant to the Scheme will not be
registered under any United States state securities laws and may
only be issued to persons resident in a state pursuant to an
exemption from the registration requirements of the securities laws
of such state.
For the purpose of qualifying for the exemption provided by
Section 3(a)(10) of the US Securities Act, Countryside will advise
the Court that its sanctioning of the Scheme will be relied on by
Vistry as an approval of the Scheme following a hearing on its
fairness to Countryside Shareholders, at which Court hearing all
Countryside Shareholders are entitled to attend in person or
through counsel to support or oppose the sanctioning of the Scheme
and with respect to which notification will be given to all such
holders.
Vistry and Countryside are organised under the laws of England
and Wales. Some or all of the officers and directors of Vistry and
Countryside, respectively, are residents of countries other than
the United States. In addition, all or most of the assets of Vistry
and Countryside are located outside the United States. As a result,
it may be difficult for United States shareholders of Countryside
to effect service of process within the United States upon Vistry
or Countryside or their respective officers or directors or to
enforce against them a judgement of a United States court
predicated upon the federal or state securities laws of the United
States.
Forward-looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Combination, and other information published by Countryside, Vistry
or any member of the Vistry Group contain statements which are, or
may be deemed to be, "forward-looking statements". Such
forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
on numerous assumptions regarding the business strategies and the
environment in which Vistry, Countryside, any member of the Vistry
Group or the Countryside Group or the Combined Group shall operate
in the future and are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by those statements.
The forward-looking statements contained in this announcement
relate to Vistry, Countryside, any member of the Vistry Group or
the Countryside Group or the Combined Group's future prospects,
developments and business strategies, the expected timing and scope
of the Combination and other statements other than historical
facts. In some cases, these forward-looking statements can be
identified by the use of forward-looking terminology, including the
terms "believes", "estimates", "will look to", "would look to",
"plans", "prepares", "anticipates", "expects", "is expected to",
"is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects", "intends", "may",
"will", "shall" or "should" or their negatives or other variations
or comparable terminology. Forward-looking statements may include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Vistry's, Countryside's,
any member of the Vistry Group or the Countryside Group or its or
their operations and potential cost savings and synergies resulting
from the Combination; and (iii) the effects of global economic
conditions and governmental regulation on Vistry's, Countryside's,
any member of the Vistry Group or the Countryside Group or its or
their business.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that shall occur in the future. These events and
circumstances include changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates, future business
combinations or disposals, and any epidemic, pandemic or disease
outbreak. If any one or more of these risks or uncertainties
materialises or if any one or more of the assumptions proves
incorrect, actual results may differ materially from those
expected, estimated or projected. Such forward-looking statements
should therefore be construed in the light of such factors.
Neither Vistry, Countryside, nor any member of the Vistry Group
or the Countryside Group, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
shall actually occur. Given these risks and uncertainties,
potential investors should not place any reliance on
forward-looking statements.
Specifically, statements of estimated cost savings and synergies
relate to future actions and circumstances which, by their nature,
involve risks, uncertainties and contingencies. As a result, the
cost savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Due to the scale of the
Combined Group, there may be additional changes to the Combined
Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost savings and
synergies may be materially greater or less than those
estimated.
The forward-looking statements speak only at the date of this
announcement. All subsequent oral or written forward-looking
statements attributable to any member of the Vistry Group or
Countryside Group, or any of their respective associates,
directors, officers, employees or advisers, are expressly qualified
in their entirety by the cautionary statement above.
Vistry and Countryside expressly disclaim any obligation to
update such statements other than as required by law or by the
rules of any competent regulatory authority, whether as a result of
new information, future events or otherwise.
No profit forecasts or estimates
Save as set out in paragraph 18 of this announcement, no
statement in this announcement is intended as a profit forecast or
estimate for any period and no statement in this announcement
should be interpreted to mean that earnings or earnings per share
for Vistry or Countryside, as appropriate, for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Vistry or
Countryside, as appropriate.
Quantified Financial Benefits Statement
Appendix IV to this announcement sets out the anticipated
Quantified Financial Benefits Statement and contains details of,
and bases of calculation of, the anticipated financial benefits of
the Combination, together with the related reports from Vistry's
reporting accountant, PricewaterhouseCoopers, and Vistry's
financial advisers, HSBC and Lazard, as required under Rule 28.1(a)
of the Code, and provides underlying information and bases for the
accountant's and advisers' respective reports. HSBC and Lazard, as
financial advisers to Vistry, have provided such report for the
purposes of the Code stating that, in their opinion and subject to
the terms of the report, the Quantified Financial Benefits
Statement, for which the Vistry Directors are responsible, has been
prepared with due care and consideration. Each of
PricewaterhouseCoopers, HSBC and Lazard has given and not withdrawn
its consent to the publication of its respective report in this
announcement in the form and context in which it is included.
For the purpose of Rule 28 of the Code, the Quantified Financial
Benefits Statement contained in this announcement is the
responsibility of Vistry and the Vistry Directors. Any statement of
intention, belief or expectation for the Combined Group following
the Effective Date is an intention, belief or expectation of the
Vistry Directors and not of the Countryside Directors.
The statements in the Quantified Financial Benefits Statement
relate to future actions and circumstances which, by their nature,
involve risks, uncertainties and contingencies. As a result, the
cost savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. No statement in the
Quantified Financial Benefits Statement should be construed as a
profit forecast or interpreted to mean that the Combined Group's
earnings in the first full year following the Effective Date, or in
any subsequent period, would necessarily match or be greater than
or be less than those of Vistry and/or Countryside for the relevant
preceding financial period or any other period.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. 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 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3:30 p.m. (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 per cent. 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 p.m.
(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 shall 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 Panel's website at http://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 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.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by Countryside Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Countryside may be provided to Vistry during
the Offer Period as requested under Section 4 of Appendix 4 of the
Code to comply with Rule 2.11(c) of the Code.
Publication on website and availability of hard copies
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on Vistry 's and Countryside's websites at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and
www.countrysidepartnerships.com , respectively, by no later than 12
noon (London time) on 6 September 2022. For the avoidance of doubt,
the contents of these websites are not incorporated into and do not
form part of this announcement.
Vistry Shareholders, persons with information rights and
participants in the Vistry Share Plans may request a hard copy of
this announcement by: (i) contacting Computershare during business
hours on 0370 889 3236 if calling from the United Kingdom, or
+44(0) 370 889 3236 if calling from outside the United Kingdom
(lines are open from 8:30 a.m. to 5:30 p.m., Monday to Friday
(excluding public holidays in England and Wales)); or (ii)
submitting a request in writing to Computershare at Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99
6ZY, United Kingdom. A person so entitled may also request that all
future documents, announcements and information in relation to the
Combination be sent to them in hard copy form.
Countryside Shareholders, persons with information rights and
participants in the Countryside Share Plans may request a hard copy
of this announcement by: (i) contacting Equiniti during business
hours on 0371 384 2050 if calling from the United Kingdom, or +44
121 415 0259 if calling from outside the United Kingdom (lines are
open from 8:30 a.m. to 5:30 p.m., Monday to Friday (excluding
public holidays in England and Wales)); or (ii) submitting a
request in writing to Equiniti at Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA, United Kingdom. A person so entitled
may also request that all future documents, announcements and
information in relation to the Combination be sent to them in hard
copy form.
If you are in any doubt about the contents of this announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the FSMA (as amended) if you are
resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Countryside confirms
that as at the date of this announcement, it has in issue and
admitted to trading on the Main Market of the London Stock Exchange
499,723,298 ordinary shares of GBP0.01 each (excluding 24,903,572
ordinary shares held in treasury). The International Securities
Identification Number (ISIN) of the ordinary shares is
GB00BYPHNG03.
In accordance with Rule 2.9 of the Code, Vistry confirms that,
as at the date of this announcement, it has in issue and admitted
to trading on the Main Market of the London Stock Exchange
218,259,244 ordinary shares of 50 pence each (excluding 1,500,000
ordinary shares held in treasury). The International Securities
Identification Number (ISIN) of the ordinary shares is
GB0001859296.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE NEW VISTRY SHARES EXCEPT ON
THE BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT, THE VISTRY
PROSPECTUS AND THE VISTRY CIRCULAR WHICH ARE PROPOSED TO BE
PUBLISHED IN DUE COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
5 September 2022
RECOMMED CASH AND SHARE COMBINATION
of
Vistry Group PLC ("Vistry")
and
Countryside Partnerships PLC ("Countryside")
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1 Introduction
The boards of directors of each of Vistry and Countryside are
pleased to announce that they have reached agreement on the terms
of a recommended cash and share offer pursuant to which Vistry will
acquire the entire issued and to be issued ordinary share capital
of Countryside (the "Combination"). The Combination is to be
effected by means of a scheme of arrangement under Part 26 of the
Companies Act.
2 The Combination
Under the terms of the Combination, which shall be subject to
the Conditions and further terms set out in Appendix I to this
announcement and to be set out in the Scheme Document, Countryside
Shareholders will be entitled to receive:
for each Countryside Share 0.255 of a New Vistry Share
and
60 pence in cash
Based upon Vistry's closing share price of 741 pence as of 2
September 2022 (being the last practicable date prior to this
announcement), the Combination represents a total implied value of
249 pence per Countryside Share, valuing the entire issued and to
be issued ordinary share capital of Countryside at GBP1,254
million.
The terms of the Combination represent a premium of
approximately 9.1 per cent. to the Closing Price per Countryside
Share of 228 pence on 2 September 2022 (being the latest
practicable date prior to the date of this announcement).
A Mix and Match Facility will also be made available to
Countryside Shareholders (other than certain persons in the United
States and other Restricted Jurisdictions) in order to enable them
to elect, subject to off-setting elections, to vary the proportions
in which they receive cash and New Vistry Shares in respect of
their holdings in Countryside Shares. However, the total number of
New Vistry Shares to be issued and the maximum aggregate amount of
cash to be paid under the terms of the Combination will not be
varied as a result of elections under the Mix and Match Facility.
Further details are set out in paragraph 9 of this
announcement.
Under the terms of the Combination, Countryside Shareholders
will, in aggregate, receive approximately 128,398,747 New Vistry
Shares. Immediately following Completion of the Combination,
Countryside Shareholders will own approximately 37 per cent. of the
share capital of the Combined Group (based on the existing issued
ordinary share capital of Vistry and the fully diluted ordinary
share capital of Countryside) as at 2 September 2022 (being the
latest practicable date prior to the date of this
announcement).
It is expected that the Scheme Document, Vistry Circular and
Vistry Prospectus will be published in early October 2022 and that
the Court Meeting, the Countryside General Meeting and the Vistry
General Meeting will be convened on or around the same time during
late October 2022 or early November 2022. Subject to the
satisfaction of the Conditions, it is expected that the Scheme will
become Effective by the end of the first quarter of 2023.
The Combination constitutes a Class 1 transaction for Vistry for
the purposes of the Listing Rules. Accordingly, the Combination
will be conditional on, amongst other things, the approval of
Vistry Shareholders at the Vistry General Meeting.
The Scheme Document, containing further information about the
Combination and notices of the Court Meeting and the Countryside
General Meeting will be distributed to Countryside Shareholders
(along with the Forms of Proxy for use in connection with the Court
Meeting and the Countryside General Meeting and the Forms of
Election in relation to the Mix and Match Facility) in due course.
For the purposes of paragraph 3(a) of Appendix 7 of the Code, the
Panel has consented to an extension of the applicable date for
posting. Vistry will prepare, publish and send to Vistry
Shareholders the Vistry Circular and will prepare and publish the
Vistry Prospectus. The Vistry Circular will summarise the
background to and reasons for the Combination and will include a
notice convening the Vistry General Meeting containing, among other
things, the Vistry Resolutions to be proposed for the approval of
the Combination by Vistry Shareholders at the Vistry General
Meeting (or any adjournment thereof). The Vistry Prospectus is
required in connection with the issue of the New Vistry Shares and
their Admission. The Vistry Prospectus will contain information
relating to the Combination, the Combined Group and the New Vistry
Shares.
3 Background to and reasons for the Combination
The Vistry Directors and Countryside Directors believe that the
Combination offers a compelling opportunity to create one of the
country's leading homebuilders, comprising a major private
housebuilder and a leading Partnerships mixed-tenure provider. The
Combination has a strong strategic rationale and the potential for
material value creation for shareholders in the Combined Group.
The Vistry Directors and Countryside Directors believe the
Combination will have, among other things, the following
advantages:
3.1 Strengthens Vistry's position across housebuilding and
partnerships to deliver sector-leading returns
The Vistry Directors believe strongly in the clear and
significant merits from operating a combined Housebuilding and
Partnerships business model and are committed to maximising these
benefits through the "One Vistry" model, which is focused on:
-- maintaining a strong market position and capability across all housing tenures;
-- being a leading provider of high demand, high growth affordable housing;
-- having a strategic land capability and maximising returns on
larger multi-tenure developments;
-- operating multiple brands, giving broad market reach and higher absorption rates;
-- creating greater resilience to the cyclicality of the housing market; and
-- targeting sector leading ROCE in the medium term.
The "One Vistry" model is already demonstrating the clear and
significant benefits of a combined Housebuilding and Partnerships
business, operating leading brands and capabilities across all
housing tenures.
The Combination will enable the Partnerships and Housebuilding
businesses of the Combined Group to work together to develop across
all tenures utilising their leading brands and capabilities, whilst
accelerating Vistry's growth strategy within the highly attractive
partnerships market. This will generate more rapid growth in
completions and drive higher absorption rates, generating greater
profitability than is currently possible with the Countryside Group
and the Vistry Group as standalone businesses. Consequently, the
Combined Group is expected to achieve superior returns relative to
the Countryside Group and the Vistry Group's current standalone
positions. The Combined Group intends to retain and develop some of
the land assets that Countryside had intended to dispose of and
thereby achieve, via development, an improved commercial
outcome.
The development of these assets, together with the transfer of
some land assets currently held by the Countryside Group's
partnerships business to the Vistry Group's housebuilding business,
will deliver controlled volume growth towards Vistry's stated
target of approximately 8,000 units in the Housebuilding business,
utilising excess capacity that exists in the Vistry Group's
housebuilding business and optimising operating costs to generate
significant margin progression. In addition, the Combination will
further the "One Vistry" strategy through the utilisation of modern
methods of construction and through access to the Countryside
Group's timber frame capability.
Based on the audited financial statements of the Vistry Group
and the Countryside Group for the financial years ended 31 December
2021 and 30 September 2021, respectively:
-- the revenue of the Combined Group's Partnerships business
would be expected to increase to over GBP3 billion per annum in the
medium term, materially in excess of the Vistry Group's existing
medium term target of approximately GBP1.6 billion;
-- the Combined Group would be expected to deliver in excess of
18,000 new homes in the first full year following Completion of the
Combination (which is expected to be the financial year ended 31
December 2024), providing significant scope for leveraging
Countryside's timber frame capability;
-- the Combined Group's Housebuilding business would maintain
Vistry's existing targets of a 25 per cent. gross margin and a 25
per cent. ROCE by 2025, and the calculation of these metrics will
exclude Countryside's non-core legacy assets that are currently
being run-off;
-- the Combined Group's Partnerships business will target a ROCE
of above 40 per cent. in the short term, with the Countryside
Group's increased share of earnings from higher margin mixed tenure
sites accelerating the Vistry Group's target of above 12 per cent.
operating margin across its existing partnerships business. The
Countryside Group's partnerships business has recently generated
ROCE lower than the Vistry Group's 40 per cent. target, such that
the combined ROCE for the Partnerships business of the Combined
Group would be below 40 per cent. immediately following Completion.
[3] Following Completion of the Combination, the management team of
the Combined Group will maintain the 40 per cent. target, with the
combined management team working to achieve this target in the
short term. The Combination is also expected to be ROCE enhancing
from 2024; and
-- the Combined Group's Partnerships business will also target
an operating margin of 12 per cent., with the Countryside's
partnerships business having a higher margin than Vistry's at
present (reducing the share of earnings from its lower-margin
partner delivery), accelerating delivery of this target.
In addition, if the market does not recognise the full value of
the Combined Group by 2025, it is expected that each of its two
divisions would be large enough to succeed as independent
businesses, giving the option to separate them at that time if the
board of directors of the Combined Group considered this to be in
the best interests of its shareholders.
3.2 Capital-light, high ROCE partnerships business becomes a larger part of the Vistry Group
Based on the audited financial statements of the Vistry Group
and the Countryside Group for the years ended 31 December 2021 and
30 September 2021, respectively, the adjusted revenue of the
Combined Group would have been approximately GBP4,220 million,
comprising approximately 45 per cent. (GBP1,898 million) from
Partnerships and 55 per cent. (GBP2,322 million) derived from
Housebuilding. Adjusted revenue of the Partnerships business of the
Combined Group represents an increase from 32 per cent. for the
Vistry Group on a standalone basis, and is expected to increase
further to more than 50 per cent. of the Combined Group's adjusted
revenue in the short term.
The partnerships business model also provides structurally
higher ROCE, particularly due to:
-- forward sales of affordable and private rental residential
units reducing capital intensity (the Combined Group will target a
minimum 50 per cent. pre-sold rate on Partnerships schemes);
-- a mixed-tenure approach allowing for higher absorption rates,
resulting in a higher capital return; and
-- land payments typically being phased, with lower up-front
land costs avoiding capital being tied up for long periods.
The Vistry Directors and Countryside Directors believe that
increased earnings from a capital-light partnerships business offer
an increased level of resilience and a structurally higher return
on capital, the value of which is recognised by public market
investors. In addition, both the Housebuilding business and
Partnerships business will be of sufficient scale to warrant
separate valuations based on their specific financial and operating
metrics.
3.3 Increased partnerships exposure gives greater resilience to cyclicality of housing market
The resilience of the partnerships business model derives from a
number of factors, including:
-- a very high, sustained level of demand for affordable housing across England;
-- continued public investment and cross-party political support
for affordable housing and continued public investment for schemes
that accelerate the delivery of the Future Homes Standard and
utilise modern methods of construction;
-- a large, well-funded and diverse client base reliant on the
private sector for supply of new build rental properties; and
-- forward sales to registered providers, local authorities and
investors in the private rented sector market, allowing for a
consistently strong forward order book and increased visibility
over future earnings.
The business of the Combined Group would benefit from greater
balance, with pro forma profit contribution being more evenly split
between the Housebuilding business and the Partnerships business,
and creating a more even distribution of profits to improve our
resilience and returns . With the increased scale, the Combined
Group will seek to achieve adjusted operating profit for each of
the Housebuilding business and the Partnerships business in excess
of GBP400 million (in excess of GBP800 million in total).
Cyclical exposure would also be reduced for Vistry Shareholders,
whilst Countryside Shareholders would benefit from the higher
profitability of a larger private Housebuilding business.
In addition, Vistry intends the Combined Group to maintain a
strong and robust balance sheet, with target Gearing of less than
10 per cent. Consistent with Vistry's prudent approach to debt
financing, it is intended that the new debt financing for funding
the cash consideration will be repaid within two years.
The Combined Group would also have a leading capability across
all housing tenures, with firmly established relationships with
Homes England, housing associations and local authorities.
3.4 Significant benefits from increased scale and synergies of
at least GBP50 million and potentially from the Countryside Group's
timber frame capability
The Combination would create one of the country's leading
homebuilders, with capability across all housing tenures.
Increased scale is expected to result in operational benefits,
including procurement, an improved implementation of the Future
Homes Standard and the reduction of people risk within the current
tight labour market.
Increased scale would also result in lower risk to, and more
rapid delivery of, each of Countryside's and Vistry's business
plans. In addition, the Combination will bring together the
strategic land capabilities of the Vistry Group and the Countryside
Group to expand the longer-term pipeline and drive higher
returns.
The Combined Group will be able to acquire and develop
larger-sized, higher-margin sites, and thereby drive higher
returns, whilst enjoying closer relationships with existing
partners.
In addition, the executive leadership of the Combined Group will
seek to integrate the Countryside Group's timber frame
manufacturing operations within the wider business and utilise
modern methods of construction, with the objective of improving the
integration with the development businesses, achieve procurement
savings and de-risk the supply chain.
The scale of the Combined Group would open up a larger
addressable universe of potential shareholders and significantly
improve the liquidity profile for shareholders of the Combined
Group.
The Combination is also expected to achieve meaningful pre-tax
recurring cost synergies on an annual run-rate basis by the end of
the second year following Completion (incremental to the
Countryside Group's previously announced cost savings programme).
Synergies are expected from the consolidation of central and
support functions, rationalisation of board, senior management and
public listed company costs, procurement savings driven by moving
existing business to the best price currently available to the
Vistry Group and the Countryside Group, rebate optimisation and
volume-based pricing leverage, and optimisation of divisional and
regional structures, as further described in paragraph 4 below.
The Vistry management team has a strong track record of
delivering synergies from large scale programmes, as evidenced by
the synergies achieved by Vistry in connection with the acquisition
and integration of Linden Homes and Vistry Partnerships (then known
as Galliford Try Partnerships) from Galliford Try, where synergies
exceeded the initial staged target, with Vistry stating in its
annual report for the financial year ended 31 December 2020 that it
was on track to deliver a full synergy run rate of GBP44 million by
the end of 2021, ahead of the initial target of GBP35 million and
at a lower than expected cost.
3.5 Brand strength enhanced with the addition of highly regarded Countryside brand
The Combination will leverage and bring together industry
leading brands, combining the strength of the Countryside brand
with Vistry's own well-established Bovis Homes and Linden Homes
brands for marketing private units across the Combined Group. A
multiple branded, mixed-tenure strategy will enhance land
acquisition opportunities, while driving higher absorption rates
and returns.
Countryside's brand has an excellent reputation and is highly
regarded as a leader in the partnerships housebuilding sector, with
over 40 years' experience in the delivery of high quality,
mixed-tenure communities in partnership with housing associations,
public bodies and institutional private rental operators, with a
strong focus on place-making and regeneration. The Countryside
brand will be leveraged across the Combined Group's Partnerships
business.
3.6 Extensive management capability with strong and proven track
record, supplemented by senior executive support from
Countryside
Greg Fitzgerald, Vistry's Chief Executive Officer, is highly
qualified to integrate the two businesses and lead the Combined
Group through a new phase of growth, with a demonstrated ability of
executing complex transactions, integrations and synergy
targets.
Greg has been in housebuilding for over 35 years and has a track
record of successfully integrating businesses in the sector, most
recently with the GBP1.1 billion acquisition of Linden Homes and
Vistry Partnerships (then known as Galliford Try Partnerships) in
2020 to form the Vistry Group, as a leading UK housebuilding and
partnerships business with a complementary strategic land bank. The
acquisition generated significant synergies, achieved ahead of the
initial target and at a lower cost than initially expected,
providing additional value creation for Vistry Shareholders. This
followed on from Greg having led the successful two-year
operational turnaround of Bovis Homes which he joined in April 2017
as its Chief Executive Officer at a time when that business was
facing material operational challenges.
In addition, Vistry's highly experienced executive leadership
team have a strong track record across housebuilding and
partnerships, many of whom were critical to the formation of the
Vistry Group in 2020 and have experience in operational turnarounds
and integrations (including that of Bovis Homes).
They will be supported by the addition of Tim Lawlor joining the
Combined Group as Chief Financial Officer, providing continuity and
knowledge of the Countryside Group's business as well as
significant relevant public company experience both at the
Countryside Group and as Chief Financial Officer of Wincanton Group
for the six years prior.
The Combination will also leverage the skills and market
knowledge of both Countryside's and Vistry's respective regional
and divisional teams, bringing together two complementary and
highly engaged team cultures to build one firm with a rich and
skilled talent pool. Key leadership positions in the Combined
Group's Partnerships business are also expected to be filled with a
mix of the Vistry and the Countryside team. In addition, the
Combination will benefit from a highly experienced operational
management team across the Combined Group, with a strong record
across Housebuilding and Partnerships, many of whom have been
crucial to the successful creation of the Vistry Group.
4 Financial benefits and effects of the Combination and potential synergies
The Vistry Directors, having reviewed and analysed the potential
cost synergies of the Combination, and taking into account the
factors they can influence, believe that the Combined Group can
deliver at least GBP50 million of pre-tax recurring cost synergies
on an annual run-rate basis by the end of the second year following
Completion.
The quantified cost synergies, which are expected to originate
from the cost bases of both the Vistry Group and the Countryside
Group, are expected to be realised primarily from:
(i) procurement-related savings (primarily direct materials) driven by:
-- price harmonisation through moving existing business to the
best price currently available to the Vistry Group and the
Countryside Group;
-- rebate optimisation based on the Vistry Group's and the
Countryside Group's existing rebate structure; and
-- volume-based pricing leverage and harmonisation of
specifications across the Combined Group,
expected to contribute approximately 33 per cent. (GBP16.7
million) of the full run-rate pre-tax cost synergies;
(ii) consolidation of central and support functions, including
third party costs, expected to contribute approximately 32 per
cent. (GBP16.2 million) of the full run-rate pre-tax cost
synergies;
(iii) optimisation of the Partnerships operating model,
including divisional and regional structures, expected to
contribute approximately 21 per cent. (GBP10.3 million) of the full
run-rate pre-tax cost synergies; and
(iv) rationalisation of board, senior management and duplicate
public company costs, expected to contribute approximately 14 per
cent. (GBP6.8 million) of the full run-rate pre-tax cost
synergies.
The Vistry Directors expect that approximately 70 per cent.
(GBP35 million) of the annual run-rate pre-tax cost synergies will
be realised by the end of the first year following Completion, with
the full run-rate achieved by the end of the second year following
Completion.
The Vistry Directors estimate that the realisation of the
quantified cost synergies will result in one-off costs of
approximately GBP48 million, with approximately 95 per cent.
incurred in the first year following Completion and the remainder
by the end of the second year following Completion.
Potential areas of dis-synergy expected to arise in connection
with the Combination have been considered and were determined by
the Vistry Directors to be immaterial to the above analysis.
The identified cost synergies will accrue as a direct result of
the Combination, would not be achieved on a standalone basis and
are incremental to the Countryside Group's previously announced
cost-saving programme. The identified pre-tax cost synergies
reflect both the beneficial elements and relevant costs.
These statements of estimated cost savings and synergies relate
to future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those actually achieved
could be materially different from those estimated. For the
purposes of Rule 28 of the Code, the statements of estimated cost
savings and synergies contained in this announcement are solely the
responsibility of Vistry and the Vistry Directors .
These statements are not intended as a profit forecast and
should not be interpreted as such.
Appendix IV to this announcement includes a copy of these
statements of anticipated cost savings and synergies arising out of
the Combination and provides underlying information and bases of
belief. Appendix IV to this announcement also includes reports from
Vistry's reporting accountant, PricewaterhouseCoopers, and its
financial advisers, HSBC and Lazard, in connection with anticipated
quantified financial benefits statements, as required pursuant to
Rule 28.1(a) of the Code, and provides underlying information and
bases for the accountant's and advisers' respective reports. Each
of PricewaterhouseCoopers , HSBC and Lazard has given and not
withdrawn its consent to the publication of its report in this
announcement in the form and context in which it is included.
5 Background to and reasons for the recommendation
Countryside is a leader in the delivery of high-quality
mixed-tenure communities in partnership with housing associations,
public bodies and institutional private rental operators, with a
strong focus on place-making and regeneration.
On 30 May 2022, the Countryside Board confirmed it had received
two unsolicited, non-binding, conditional proposals from Inclusive
Capital Partners in relation to a possible offer for the entire
issued, and to be issued, share capital of Countryside. The
Countryside Board carefully evaluated each of the proposals with
its lead financial adviser, Rothschild & Co, and concluded that
the proposals materially undervalued Countryside and its prospects.
Accordingly, both proposals were rejected by the Countryside
Board.
Following Inclusive Capital Partners' proposals, the Countryside
Board received feedback from several of its significant
shareholders regarding the future of the Countryside Group. These
shareholders confirmed their view that Countryside would be better
positioned to capitalise on the opportunities ahead either as a
privately-owned company or as part of a larger business and asked
the Countryside Board to actively seek offers for Countryside.
In light of this feedback, the Countryside Board announced the
launch of the Formal Sales Process on 13 June 2022, to establish
whether an offeror was prepared to offer a value that the
Countryside Board considered to be compelling relative to the
long-term, standalone prospects of Countryside as a listed
company.
Vistry approached the Countryside Board with a formal proposal
for the Combination shortly after the launch of the Formal Sales
Process. This was the third proposal received from Vistry in recent
months, albeit that at the time of the announcement of the Formal
Sales Process, the Countryside Board was not in discussions with
Vistry, having rejected two previous proposals.
The Combination Consideration comprises a mix of cash and shares
and provides Countryside Shareholders with the opportunity to
realise a flexible cash component, through the Mix and Match
Facility, while maintaining ownership of approximately 37 per cent.
of the Combined Group (based on the existing issued ordinary share
capital of Vistry and the fully diluted ordinary share capital of
Countryside) as at 2 September 2022 (being the latest practicable
date prior to the date of this announcement).
For the reasons described in paragraph 3 above, the Countryside
Board believes that there is a strong strategic rationale for the
Combination with Vistry, which has the potential for material value
creation for both Countryside Shareholders and Vistry Shareholders
over the medium term, arising from the significant strategic,
operational and financial benefits of the Combination.
Alongside its lead financial adviser Rothschild & Co, the
Countryside Board has considered the Combination and concluded that
it offers the following benefits to Countryside Shareholders:
-- the implied offer value of 249 pence per Countryside Share
represents a premium of 4.3 per cent. to the Closing Price per
Countryside Share of 239 pence on 27 May 2022 (being the last
Business Day prior to the announcement of Inclusive Capital
Partners' possible offer for Countryside under Rule 2.4 of the
Code);
-- the Combination is expected to be significantly earnings
accretive for Countryside Shareholders, and is expected to bring
about a much earlier restoration of dividends;
-- the Combination provides Countryside Shareholders with a cash
return component while maintaining a meaningful ongoing
participation in the Combined Group at a relative premium when
considering the respective ratings of both Countryside and Vistry;
and
-- the ongoing participation in the Combined Group enables
Countryside Shareholders to benefit from the significant value
creation expected from the strategic, operational and financial
benefits of the Combination, as well as any future possible
re-rating.
The Countryside Board also notes the significant Countryside
Shareholder support for the Combination, with approximately 39.1
per cent. of the issued ordinary share capital of Countryside
providing irrevocable undertakings to vote in favour of the Scheme
at the Court Meeting and the resolutions to be proposed at the
Countryside General Meeting, further details of which are set out
in paragraph 8 below and Appendix III to this announcement.
The Countryside Board also notes that Inclusive Capital
Partners, who previously announced a possible offer to acquire
Countryside under Rule 2.4 of the Code and had indicated that it
would be willing to participate in the Formal Sales Process, has
provided an irrevocable undertaking to Vistry in connection with
the Combination .
The Countryside Board continues to believe in the standalone
prospects of Countryside, the strength of the operational
management team, growth potential and position as a leader in
partnerships housebuilding. However, the Countryside Board
considers the terms of the Combination with Vistry to be fair and
to have strong potential to create the greatest value to
Countryside Shareholders over the medium term against alternative
strategies. Accordingly, the Countryside Board is pleased to be
recommending the Combination to Countryside Shareholders and will
therefore not be proceeding further with the Formal Sales
Process.
6 Termination of Formal Sales Process, Countryside Chief
Executive Officer Search and Countryside Share Buyback
Programme
On 13 June 2022, the Countryside Directors announced their
intention to undertake a Formal Sales Process. As a result of the
Combination, the Countryside Directors have taken the decision to
terminate the Formal Sales Process with immediate effect and
Countryside has ceased all preparations in connection
therewith.
In addition, in light of the announcement of the Combination the
Countryside Directors have also decided to discontinue the search
for a permanent Chief Executive Officer and to terminate the share
buy-back programme previously announced (which was discontinued for
so long as the Formal Sales Process was ongoing).
7 Recommendations
Countryside Recommendation
The Countryside Directors, who have been so advised by
Rothschild & Co as to the financial terms of the Combination,
consider the terms of the Combination to be fair and reasonable. In
providing its advice to Countryside Directors, Rothschild & Co
has taken into account the commercial assessments of the
Countryside Directors. In addition, the Countryside Directors
consider the terms of the Combination to be in the best interests
of Countryside Shareholders as a whole.
Accordingly, the Countryside Directors intend to recommend
unanimously that Countryside Shareholders vote in favour of the
Scheme at the Court Meeting and the resolution to be proposed at
the Countryside General Meeting as those Countryside Directors who
hold Countryside Shares have irrevocably undertaken to do in
respect of their own beneficial holdings of 411,209 Countryside
Shares representing, in aggregate, approximately 0.08 per cent. of
the ordinary share capital of Countryside in issue on 2 September
2022 (being the latest practicable date prior to this
announcement).
Vistry Recommendation
The Vistry Directors consider the Combination to be in the best
interests of Vistry and the Vistry Shareholders as a whole and
intend to recommend unanimously that Vistry Shareholders vote in
favour of the Vistry Resolutions at the Vistry General Meeting, as
those Vistry Directors who hold Vistry Shares have irrevocably
undertaken to do in respect of their entire beneficial holdings of,
in aggregate, 524,654 Vistry Shares, representing approximately
0.24 per cent. of Vistry's issued ordinary share capital on 2
September 2022 (being the latest practicable date prior to this
announcement).
The Combination is expected to be single-digit dilutive on
Vistry's earnings per share in the first full year following
Completion of the Combination (expected to be the financial year
ending 31 December 2024). In the assessment of the Vistry
Directors, this short term dilution is outweighed by the relative
value of the Combined Group's expected Partnerships earnings, the
medium term earnings accretion and the strategic merits of the
Combination. The Combination is also expected to be ROCE enhancing
from 2024.
The Vistry Directors have received financial advice from HSBC
and Lazard in relation to the Combination. In providing their
advice to the Vistry Directors, HSBC and Lazard have relied upon
the Vistry Directors' commercial assessments of the
Combination.
8 Irrevocable undertakings and letters of support
Countryside Shares
Vistry has received irrevocable undertakings from each of the
Countryside Directors to vote in favour of the Scheme at the Court
Meeting and the resolution to be proposed at the Countryside
General Meeting, in respect of a total of 411,209 Countryside
Shares, representing, in aggregate, approximately 0.08 per cent. of
the ordinary share capital of Countryside in issue on 2 September
2022 (being the latest practicable date prior to this
announcement).
Vistry has also received irrevocable undertakings from Browning
West, Inclusive Capital Partners, David Capital Partners, Anson
Advisors and Abrams Capital Management in respect of a total of
195,154,871 Countryside Shares, representing, in aggregate,
approximately 39.1 per cent. of Countryside's issued ordinary share
capital on 2 September 2022 (being the latest practicable date
prior to this announcement), to vote in favour of the Scheme at the
Court Meeting and the resolution to be proposed at the Countryside
General Meeting.
Vistry has therefore received irrevocable undertakings in
respect of a total of 195,566,080 Countryside Shares, representing,
in aggregate, approximately 39.1 per cent. of Countryside's issued
ordinary share capital on 2 September 2022 (being the latest
practicable date prior to this announcement).
Vistry Shares
Countryside has received irrevocable undertakings from the
Vistry Directors who hold Vistry Shares to vote in favour of the
Vistry Resolutions at the Vistry General Meeting in respect of a
total of 524,654 Vistry Shares, representing, in aggregate,
approximately 0.24 per cent. of Vistry's issued ordinary share
capital on 2 September 2022 (being the latest practicable date
prior to this announcement).
Countryside has therefore received irrevocable undertakings in
respect of a total of 524,654 Vistry Shares, representing, in
aggregate, approximately 0.24 per cent. of Countryside's issued
ordinary share capital on 2 September 2022 (being the latest
practicable date prior to this announcement).
Further details of these irrevocable undertakings are set out in
Appendix III to this announcement.
9 Mix and Match Facility
Countryside Shareholders (other than certain persons in the
United States and other Restricted Jurisdictions) may elect,
subject to availability, to vary the proportions in which they
receive cash and New Vistry Shares in respect of their holdings in
Countryside Shares. However, the total number of New Vistry Shares
to be issued and the maximum aggregate amount of cash to be paid
under the terms of the Combination will not be varied as a result
of elections under the Mix and Match Facility. Accordingly,
satisfaction of elections made by Countryside Shareholders under
the Mix and Match Facility will depend on the extent to which other
Countryside Shareholders make offsetting elections.
To the extent that elections cannot be satisfied in full, they
will be scaled down on a pro rata basis. As a result, Countryside
Shareholders who make an election under the Mix and Match Facility
will not necessarily know the exact number of New Vistry Shares or
the amount of cash they will receive until settlement of the
consideration due to them under the terms of the Combination. The
Mix and Match Facility is conditional upon the Combination becoming
Effective.
Elections under the Mix and Match Facility will not affect the
entitlements of those Countryside Shareholders who do not make such
elections.
Further details in relation to the Mix and Match Facility will
be contained in the Scheme Document.
10 Information on the Combined Group
10.1 Business of the Combined Group and key brands
Following Completion of the Combination and a period of
integration, the Combined Group will be organised into two distinct
businesses, each of significant scale: (i) a housebuilding
business, to be known as Vistry Housebuilding, consisting of the
existing Vistry Housebuilding business, with the addition of
certain sites from the Countryside Group; and (ii) a partnerships
business, to be re-branded Countryside Partnerships, consisting of
Vistry Partnerships and the Countryside Group's core partnerships
business. Vistry's key retail brands, most notably Bovis Homes and
Linden Homes, will be retained and used across the Combined
Group.
The Combined Group will have a balanced split between the
Housebuilding business and the Partnerships business, and creating
a more even distribution of profits to improve our resilience and
returns. On a historical combined basis (based on the audited
financial statements of the Vistry Group and the Countryside Group
for the financial years ended 31 December 2021 and 30 September
2021, respectively), Partnerships would represent approximately 45
per cent. of the Combined Group's adjusted revenue (GBP1.9 billion)
and Housebuilding would represent approximately 55 per cent.
(GBP2.3 billion) of the Combined Group's adjusted revenue.
The Housebuilding business and the Partnerships business of the
Combined Group will each be supported by a strong land bank across
the Combined Group, with a total land bank of over 80,000 plots
(with an average of 162 plots per site). A further in-house
strategic land capability will deliver land for both businesses,
with nearly 70,000 total combined strategic land plots (across 196
sites), based on historic Vistry Group data as at 31 December 2021
and historic Countryside Group data as at 31 March 2022. This will
enlarge the in-house strategic land capability of the Combined
Group. [4]
10.2 Key financial information regarding the Combined Group
The revenue of the Combined Group's Partnerships business would
be expected to increase to over GBP3 billion per annum in the
medium term, materially in excess of the Vistry Group's existing
medium term target of approximately GBP1.6 billion.
The Combined Group's Partnerships business will target a ROCE of
above 40 per cent. in the short term. The Countryside Group's
Partnerships business has generated a lower ROCE than the Vistry
Group's 40 per cent. target, such that the combined ROCE for the
Partnerships business of the Combined Group would be below 40 per
cent. immediately following Completion of the Combination. [5]
Following Completion of the Combination, the management team of the
Combined Group will maintain Vistry's current target of a 40 per
cent. ROCE with a combined management team working to achieve this
target in the short term. The Combination is also expected to be
ROCE enhancing from 2024.
Adjusted revenue of the Partnerships business of the Combined
Group represents an increase from 32 per cent. for the Vistry Group
on a standalone basis, and is expected to increase further to more
than 50 per cent. of the Combined Group's adjusted revenue in the
short term.
With the increased scale, the Combined Group will seek to
achieve adjusted operating profit for each of the Housebuilding
business and the Partnerships business in excess of GBP400 million
(in excess of GBP800 million in total).
10.3 Board and executive leadership team of the Combined Group
The Combined Group will be led by Vistry's Chief Executive
Officer, Greg Fitzgerald. Ralph Findlay, Vistry's Non-Executive
Chairman, will assume the Chairmanship of the Combined Group.
The board of directors will comprise the existing executive and
non-executive directors of Vistry with the addition of Tim Lawlor,
who will join the board of directors as an executive director.
The Vistry Group's current strong existing executive leadership
team will comprise the executive leadership team of the Combined
Group, subject to the following changes:
-- Tim Lawlor will join the executive leadership team in his
capacity as Chief Financial Officer; and
-- Earl Sibley, currently Chief Financial Officer of the Vistry
Group, will assume the position of Chief Operating Officer.
Stephen Teagle will lead the Partnerships business of the
Combined Group as Chief Executive - Partnerships Division and Keith
Carnegie will lead the Housebuilding business of the Combined Group
as Chief Executive - Housebuilding Division.
As announced on 27 April 2022, Graham Prothero, Chief Operating
Officer of the Vistry Group, has resigned as Chief Operating
Officer and as a director of Vistry with effect from 31 December
2022. Graham will remain with the Combined Group as an executive
director and member of the executive leadership team until that
date.
In addition, to ensure continuity and assist with the
preliminary stages of the integration of the Combined Group, Mike
Woolliscroft and Philip Chapman, currently Co-interim Chief
Executive Officers of the Countryside Group, intend to remain with
the Combined Group for an interim period.
Other than as described above, all executive and non-executive
directors of the Countryside Board will resign on the Effective
Date.
10.4 Capital application policy of the Combined Group
It is intended that the Combined Group would initially maintain
the Vistry Group's existing policy of paying out to a two times
ordinary dividend cover in respect of a full financial year. Any
surplus capital, following investment in the business to support
the Combined Group's growth strategy and the payment of the
ordinary dividend, would be expected to be returned to the Combined
Group's shareholders through either a share buyback or special
dividend. The method would be determined by the board of directors
of the Combined Group considering all relevant factors at the time.
Vistry may, in due course following Completion and a period of
integration, review the Combined Group's capital allocation policy
to confirm whether it remains appropriate in the context of the
Combined Group and in consultation with shareholders.
10.5 Listing and trading of Vistry Shares
The Vistry Shares will continue to be listed on the premium
listing segment of the Official List and will continue to trade on
the Main Market of the London Stock Exchange.
11 Information on Vistry
The Vistry Group, being the combination of Bovis Homes, Linden
Homes and Vistry Partnerships, is a leading national housebuilder
with expertise and capabilities across all housing tenures and is
one of the largest private sector providers of affordable housing
in the UK.
Vistry's shares are admitted to the premium listing segment of
the Official List and to trading on the Main Market of the London
Stock Exchange. Vistry's current market capitalisation is GBP1,617
million as at 2 September 2022 (being the latest practicable date
prior to this announcement).
The Vistry Group's Housebuilding business delivers high quality,
traditional new homes through its leading brands, Bovis Homes and
Linden Homes. The business has national coverage with 13 operating
regions, each targeting annual output of between 550 and 625 units
including joint ventures, giving an overall volume capacity for
Housebuilding of more than 8,000 units (2021: 6,551 completions).
The business continues to make exceptional progress with its
strategy of delivering controlled volume growth and significant
margin progression from its existing business structure.
The Vistry Group's Partnerships business, Vistry Partnerships,
has a firmly established position within the fast-growing
partnerships market. The business model combines higher margin
mixed-tenure development and market resilient cash generative
partner delivery. Vistry Partnerships has a strong track record
and, most importantly, excellent, long-standing relationships
across the broad partnerships' customer base, including housing
associations, local authorities, Homes England, the private rented
sector and elderly accommodation providers. The business currently
operates from 14 business units providing national coverage, and is
making excellent progress with its strategy of driving rapid growth
in higher margin mixed-tenure revenues whilst maintaining a high
return on capital in excess of 40 per cent. A key part of this
strategy has been maximising the benefits of the larger Vistry
Group, including access to capital, land buying capability, retail
brand strength, and procurement savings and buying power.
12 Information on Countryside
Countryside is a leader in the delivery of high quality
mixed-tenure communities. Countryside's partnerships business has
been a trusted partner of housing associations, public bodies and
institutional private rental operators for over 40 years to deliver
a balanced portfolio of affordable, private rental and private for
sale homes, and playing a lead role in regenerating urban areas and
creating new communities.
The Countryside Shares are admitted to the premium listing
segment of the Official List and to trading on the Main Market of
the London Stock Exchange. Countryside's current market
capitalisation was GBP1,140 million as at 2 September 2022 (being
the latest practicable date prior to this announcement).
The Countryside Group operates a mixed-tenure partnership model,
developing sites with a mix of private, affordable and private
rental units. Forward funding affordable and private rental units
materially de-risks scheme delivery and reduces capital
intensity.
Historically, the Countryside Group operated a distinct
Housebuilding division. Countryside announced on 7 July 2021 that
it would focus all its resources on its successful partnerships
business with the creation of a new Home Counties division. The
Countryside Group has 15 partnership operating regions, including
four in the Home Counties, giving good coverage across the UK.
The Countryside Group places communities at the heart of
everything it does, from understanding the needs of the communities
and responding to the way it designs its developments, to working
closely with its partners and clients to engage and empower people
throughout the development process. The Countryside Group's
commitment to sustainability is also focused, ambitious and impact
driven and through a new approach to sustainability it aims for
every act of planning, design and construction to eventually create
a positive impact for people and places.
In the Countryside Group's trading update that was published on
7 April 2022, it identified certain issues underlying the
Countryside Group's underperformance in the first half of its 2022
financial year. The Countryside Group has outlined its priorities
in resolving these issues and has commenced implementing measures
in response to those priorities.
13 Strategic plans for the Countryside Group, its Directors,
management, employees and locations
Following Completion of the Combination and a period of
integration as described in further detail below, the Combined
Group will be organised into two distinct businesses, each of
significant scale: (i) a housebuilding business, to be known as
Vistry Housebuilding, consisting of the existing Vistry
Housebuilding business, with the addition of certain sites from the
existing Countryside Group; and (ii) a partnerships business, to be
branded Countryside Partnerships, consisting of Vistry Partnerships
and Countryside's core partnerships business.
Vistry's intentions and strategic plans for Countryside
Prior to this announcement, consistent with market practice,
Vistry has been granted due diligence access to targeted
information and Countryside's senior management for the purposes of
confirmatory due diligence and conducting its synergy assessment.
This process has informed Vistry's view on the prospects of the
Combined Group, the synergies described in paragraph 4 above and
Vistry's initial plans for the integration of the Countryside
Group.
In connection with the work described above, the Vistry Group's
management, following discussions with the senior leadership of the
Countryside Group and having considered the Countryside Group's
priorities as set out in paragraph 12 above, has undertaken a
preliminary operational review of the Combined Group and developed
an integration plan for the Combined Group. Vistry is confident,
based on the information available and work conducted to date, that
the integration plan is robust and will equip the Combined Group to
conduct an efficient integration whilst ensuring continuity in the
delivery of the Combined Group's operations. Vistry will continue
to review Countryside's business in the period prior to Completion
of the Combination and Vistry expects that the operational review
and more detailed integration plan work will be substantially
concluded during the period to Completion of the Combination.
Following Completion of the Combination, Vistry will be well placed
to review, refine and implement this plan. Key areas of focus in
the operational review and development of an integration plan
include:
-- retaining the best talent to ensure best-in-class offering
for customers, partners and communities;
-- optimising regional structures for the Combined Group's
Partnerships business with rigorous central oversight;
-- building upon and furthering the initial synergy assessment
undertaken to date to further consider the potential synergy
benefits that might be possible, including with access to further
Countryside Group data;
-- identifying and reallocating appropriate Countryside Group
sites to the Combined Group's Housebuilding business, with a view
to reducing the Combined Group's requirements for open market land
acquisitions;
-- improving the performance of key parts of the Countryside
Group's operations in the context of the Combined Group;
-- building on the strong existing sense of purpose at each of
the Vistry Group and the Countryside Group to create a distinct
corporate culture for the Combined Group;
-- undertaking a strategic review of the Countryside Group's
timber frame manufacturing operations, with the intention of
improving the integration with the development businesses and fully
realising the opportunity to exploit modern methods of
construction; and
-- fostering an environment which maximises the potential of
each business to meet the needs and interests of existing and
future customers, partners and markets of the Combined Group, with
a focus on growth and expansion.
In further refining, and in implementing, the integration plan,
there will be a clear focus on maintaining operational excellence
and client and customer service. A key objective of integration
will be the careful delivery of the cost synergies and other
benefits of the Combination. Based on the work conducted to date,
Vistry believes that both integration planning and execution will
be assisted by:
-- the strong experience of the Vistry Group, and lessons
learned, in creating the Vistry Group and successfully integrating
businesses, in particular in connection with the integration of
Linden Homes, Bovis Homes and Vistry Partnerships (then known as
Galliford Try Partnerships);
-- the skills, experience and commitment of both the Vistry and Countryside teams;
-- similarities between the Vistry Group's and the Countryside
Group's statements of purpose, business models and operating
platforms; and
-- the use of common processes and systems.
Vistry intends to substantially complete the implementation of
an integration plan within six months of Completion of the
Combination, with synergies expected to be realised fully within
two years following Completion.
Board and executive leadership team of the Combined Group
The Combined Group will be led by Vistry's Chief Executive
Officer, Greg Fitzgerald. Ralph Findlay, Vistry's Non-Executive
Chairman, will assume the Chairmanship of the Combined Group.
The board of directors will comprise the existing executive and
non-executive directors of Vistry with the addition of Tim Lawlor,
who will join the board of directors as an executive director.
The Vistry Group's current strong existing executive leadership
team will comprise the executive leadership team of the Combined
Group, subject to the following changes:
-- Tim Lawlor will join the executive leadership team in his
capacity as Chief Financial Officer of the Combined Group; and
-- Earl Sibley, currently Chief Financial Officer of the Vistry
Group, will assume the position of Chief Operating Officer of the
Combined Group.
Stephen Teagle will lead the Partnerships business of the
Combined Group as Chief Executive - Partnerships Division and Keith
Carnegie will lead the Housebuilding business of the Combined Group
as Chief Executive - Housebuilding Division.
As announced on 27 April 2022, Graham Prothero, Chief Operating
Officer of the Vistry Group, has resigned as Chief Operating
Officer and as a director of Vistry with effect from 31 December
2022. Graham will remain with the Combined Group as an executive
director and member of the executive leadership team until that
date.
In addition, to ensure continuity and assist with the
preliminary stages of the integration of the Combined Group, Mike
Woolliscroft and Philip Chapman, currently Co-interim Chief
Executive Officers of the Countryside Group, intend to remain with
the Combined Group for an interim period.
Other than as described above, all executive and non-executive
directors of Countryside's board of directors will resign on the
Effective Date.
Employees and management
Vistry attaches great importance to the active participation and
continued commitment of Countryside's management and employees, and
recognises that they, together with Vistry's management and
employees, will be key to the success of the Combined Group. Vistry
is excited for the employees and management of the Countryside
Group to join the Vistry Group's employees and management as part
of the Combined Group, in particular for the opportunities it will
create to excel in a larger environment while at the same time
utilising the collective know-how and talents of the enlarged
workforce across the United Kingdom.
Following Completion of the Combination, Vistry intends to
retain the best talent of Vistry and Countryside to support its
customers, clients and partners, in order to utilise the knowledge
and expertise across Vistry and Countryside and maintain
operational momentum and a focus on growth. Vistry expects that, in
order to achieve the expected benefits of the Combination, some
operational and administrative restructuring will be required
following Completion of the Combination. This will also facilitate
the integration of the two businesses. The synergy work carried out
to date has confirmed the potential to reduce the duplication of
roles, including in overlapping central and support functions
between Vistry and Countryside and with regard to senior
management. It has also confirmed the benefits from consolidating
operations (including as a result of Countryside ceasing to be a
standalone public listed company). Based on the work undertaken to
date, Vistry recognises that there will be a reduction in the total
number of roles by approximately four per cent. of the Combined
Group's total number of employees (on a full-time equivalent basis)
as a result of the Combination, some of which will take place via
natural attrition. In addition, Vistry expects that the Vistry
Group's growth plans for its Partnerships business (particularly in
the South East, Thames Valley, the Midlands and Yorkshire) can be
resourced through employees and management of the Countryside Group
rather than through active recruitment. Vistry intends to look,
where possible, to reallocate staff from discontinued roles arising
from the integration to other appropriate new
roles or growth-related new opportunities as referred to above
(including where there are existing vacancies). In addition, the
Vistry Group and the Countryside Group each currently engage
members of staff on a temporary or contractor basis, rather than on
a permanent basis, whilst vacancies in permanent positions in each
business are filled. Vistry intends to first retain employees in
permanent positions in relation to any reduction of roles.
Vistry also intends that the Combined Group's larger divisional
and regional structure will include a number of members of the
Countryside Group's management team due to new opportunities being
created as the Combined Group seeks to grow and targets
opportunities for expansion. The composition of the management of
the larger divisional and regional structure will be a component of
the post-Completion evaluation and integration planning for the
Combined Group, as referred to above.
Vistry expects that any restructuring referred to above would be
phased over six months following Completion of the Combination. The
detailed steps for such restructuring are subject to further review
and would be subject to comprehensive and detailed planning,
appropriate engagement with representatives and other stakeholders,
including affected employees and any appropriate employee
representative bodies in accordance with the legal obligations of
the Combined Group. Vistry intends to commence this engagement
process long enough before any final decisions are taken so as to
ensure that relevant legal obligations are complied with.
Other than as described above, Vistry does not anticipate that
there will be any material change to the balance of skills and
functions of the employees and management in the Combined
Group.
Vistry intends to safeguard the existing contractual and
statutory employment rights of the employees of Vistry and
Countryside in accordance with applicable law upon Completion of
the Combination. Vistry's plans for Countryside do not involve any
material change in the employment of, or in the conditions of
employment of, Countryside employees, unless otherwise agreed with
the relevant employee. Following Completion of the Combination and
as part of integration planning, Vistry may review the alignment of
the remuneration and incentivisation arrangements as between
employees and management of the Vistry Group and the Combined
Group, as well as redundancy and other policies operated within the
Combined Group, with a view to harmonising the position for
employees and management across the Combined Group (in particular,
those in equivalent positions) over time as is appropriate, however
Vistry does not have any detailed plans or intentions in this
regard.
Pension schemes
Vistry does not intend to make any changes to the agreed
employer contributions into Countryside's existing defined
contribution pension schemes or the admission of new members to
such pension schemes following Completion of the Combination.
Headquarters and locations
The Combination also provides the opportunity to optimise some
of the Vistry Group's offices with the Countryside Group's offices.
After Completion of the Combination, Vistry will review the
expanded office footprint, and consider, where the Combined Group
has co-located offices, whether there is scope for consolidation in
order to optimise rental and lease expenses, and to enable
colleagues to work more closely together and enhance the corporate
culture. This review will include all Vistry Group and Countryside
Group offices, and it is intended that a combination of existing
Vistry Group and Countryside Group offices would be retained rather
than only retaining Vistry Group offices. Notwithstanding this,
Vistry intends that the Combined Group will maintain its current
registered office in West Malling, Kent, United Kingdom and that
Countryside's current headquarters in Brentwood, United Kingdom,
will be retained as one of the Combined Group's main offices.
Vistry does not envisage any other changes to the redeployment
of Vistry's or Countryside's existing material fixed assets, which
are minimal. Owing to the nature of its business, the Countryside
Group does not have a research and development function.
Brands
Following Completion, the Combined Group's Housebuilding
business will be known as Vistry Housebuilding and the Combined
Group's Partnerships business will be re-branded as Countryside
Partnerships. Vistry's key brands, most notably Bovis Homes and
Linden Homes, will be retained and used across the Combined
Group.
Trading facilities
The Countryside Shares are currently admitted to the premium
listing segment of the Official List and to trading on the Main
Market of the London Stock Exchange and, as set out in paragraph 23
below, application shall be made to the FCA and the London Stock
Exchange to cancel such admissions to listing and trading from
Completion. It is also proposed that, following the Effective Date
and after its shares are de-listed, Countryside shall be
re-registered as a private limited company.
No statements in this paragraph 13 constitute "post-offer
undertakings" for the purposes of Rule 19.5 of the Code.
Views of Countryside's Board
In considering the recommendation of the Combination to
Countryside Shareholders, the Countryside Directors have given due
consideration to the assurances given to employees within the
Countryside Group. The Countryside Board welcomes Vistry's
intentions with respect to the future operations of the business
and its employees, in particular the intentions to observe the
existing contractual and statutory employment rights of Countryside
employees and pension obligations
14 Arrangements between Vistry and Countryside management
Directors
Following Completion of the Combination, Vistry intends to
review its existing incentive arrangements, including its approach
to remuneration for its executive directors (as well as Tim
Lawlor), and may consider implementing new or revised incentives
and/or a new or revised directors' remuneration policy in due
course. Vistry intends to review such arrangements in consultation
with the shareholders of the Combined Group, and any revisions to
its approach to remuneration for the Combined Group's executive
directors would be submitted to shareholders of the Combined Group
for approval at the relevant time.
Mike Woolliscroft and Philip Chapman
As referenced above, to ensure continuity and assist with the
preliminary stages of the integration of the Combined Group, Mike
Woolliscroft and Philip Chapman, currently Co-interim Chief
Executive Officers of Countryside, intend to remain with the
Combined Group for an interim period, Vistry have agreed the terms
set out below.
Mike Woolliscroft
Vistry has agreed that Mike Woolliscroft's employment will
continue from Completion of the Combination until 31 May 2023.
Subject to the variations explained below, Mike Woolliscroft's
current remuneration arrangements will continue during his service
with the Combined Group. Mike Woolliscroft's maximum bonus
opportunity will continue to be 150 per cent. of base salary, which
will be subject to new and suitable objectives that will be set for
Mike Woolliscroft. On termination of Mike Woolliscroft's employment
on 31 May 2023, Mike Woolliscroft will not be required to serve any
notice period and will be paid his basic salary and contractual
benefits in lieu of 12 months' notice, which will be paid in equal
monthly instalments in accordance with Mike Woolliscroft's contract
of employment. Mike Woolliscroft's employment contract contains a
duty to mitigate, which Vistry have agreed will not be applied.
Provided Mike Woolliscroft has complied with the terms of the
post-employment restrictive covenants in his contract of employment
(other than the non-compete covenant, from which he will be
released from 31 May 2023) and he has met certain other conditions,
Mike Woolliscroft will receive on 31 May 2024 the payment of,
subject to the Combined Group's assessment of Mike Woolliscroft's
performance against the bonus objectives referred to above, a
pro-rata bonus for the period from Completion of the Combination to
31 July 2023.
Philip Chapman
Vistry has agreed that Philip Chapman's employment will continue
from Completion of the Combination until 31 March 2023. Subject to
the variations explained below, Philip Chapman's current
remuneration arrangements will continue during his service with the
Combined Group. Philip Chapman's maximum bonus opportunity will
continue to be 150 per cent. of base salary, which will be subject
to new and suitable objectives that will be set for Philip Chapman.
This bonus opportunity will be Philip Chapman's annual bonus
opportunity and from Completion of the Combination will replace the
second tranche of his bonus opportunity under Countryside's legacy
bonus scheme. On termination of Philip Chapman's employment on 31
March 2023, Philip Chapman will not be required to serve any notice
period and will be paid his basic salary and contractual benefits
in lieu of 12 months' notice period, which will be paid in equal
monthly instalments in accordance with Philip Chapman's contract of
employment. Philip Chapman's employment contract contains a duty to
mitigate, which Vistry have agreed will not be applied. Provided
Philip Chapman has complied with the terms of the post-employment
restrictive covenants in his contract of employment (other than the
non-compete covenant, from which he will be released from 31 March
2023) and he has met certain other conditions, Philip Chapman will
receive on 31 December 2023, subject to the Combined Group's
assessment of Philip Chapman's performance against the bonus
objectives referred to above, a pro-rata bonus for the period from
Completion of the Combination to 31 March 2023.
Legacy bonus scheme
Countryside put in place a legacy bonus scheme for nine senior
managers (including Philip Chapman) for the period 1 October 2021
to 30 September 2023. Countryside and Vistry have agreed that the
Countryside Remuneration Committee will assess performance under
this scheme for the period 1 October 2022 until Completion of the
Combination with payment being made to participants within one
month of Completion of the Combination (following Countryside's
shares being de-listed).
In place of their participation in the legacy bonus scheme for
the period from Completion of the Combination, Vistry will enhance
the annual bonus arrangement of participants in the legacy bonus
scheme with appropriate metrics for the enhanced element. Such
enhanced element would not be more or less generous than the
existing scheme.
As required by, and solely for the purposes of, Rule 16.2 of the
Code, Rothschild & Co has (in its capacity as independent
adviser to Countryside for the purposes of Rule 3 of the Code)
reviewed the terms agreed and discussed in respect of Mike
Woolliscroft and Philip Chapman and the legacy bonus scheme as
described above and considers them to be fair and reasonable. In
providing its advice, Rothschild & Co has taken into account
the commercial assessments of the Countryside Directors.
Vistry has otherwise not entered into, and has not had
discussions on proposals to enter into, any form of remuneration or
incentivisation arrangements with members of Countryside's
management.
15 Countryside Share Plans
Participants in the Countryside Share Plans will be contacted
regarding the effect of the Combination on their rights under the
Countryside Share Plans and appropriate proposals will be made to
such participants in due course. The terms of such appropriate
proposals shall be included in the Scheme Document and set out in
separate letters to be sent to the participants of the Countryside
Share Plans in due course.
16 Financing
16.1 Financing for the Combination
Vistry is funding the cash consideration payable pursuant to the
Combination through new debt financing arranged by HSBC. The cash
consideration is to be provided under the Facility Agreement.
The total commitments under the Facility Agreement are GBP400
million. Vistry will use approximately GBP300 million under the
Facility for funding the cash consideration payable pursuant to the
Combination. The remaining balance of approximately GBP100 million
is intended to be used to satisfy other costs associated with the
Combination and in connection with the Vistry Group's or the
Combined Group's working capital requirements. The termination date
of the Facility Agreement is 31 March 2025. The opening margin
applicable to the Facility Agreement is 2.20 per cent. per annum
and thereafter adjusted by reference the Gearing ratio of the
Combined Group every six months.
Under the Facility Agreement, Vistry has agreed that it shall
not, except as required or requested by the Panel, the Court, the
Code or any other applicable law, regulation or regulatory body or
necessary or desirable to comply with their requirements or
requests (as applicable) amend, vary or treat as satisfied in whole
or in part any term or condition from that set out in this
announcement in a manner which would reasonably be expected to be
materially prejudicial to the interests of the mandated lead
arranger, the lenders and the agent (taken as a whole) under the
Facility Agreement without the consent of the agent (acting on the
instructions of the majority lenders, and such consent not to be
unreasonably withheld or delayed). In addition, Vistry has agreed
that, in the event of a switch to a Takeover Offer, the acceptance
condition will not be set at a level below 75 per cent. without
their consent. The funds borrowed by Vistry to fund the cash
consideration will be provided to Vistry.
HSBC and Lazard, in their capacity as financial advisers to
Vistry, are satisfied that sufficient resources are available to
Vistry to satisfy in full the cash consideration payable to
Countryside Shareholders under the terms of the Combination.
16.2 Expected debt facilities of the Combined Group
Consistent with the Vistry Group's existing prudent approach to
debt financing, it is intended that the Facility Agreement will be
repaid within two years following Completion of the Combination.
The Combined Group will use financial leverage to support
shareholder returns through the cycle, while minimising risk by
maintaining conservative Gearing, with a target Gearing of less
than 10 per cent.
The debt facilities available to the Combined Group as at
Completion are expected to be as follows:
Margin Total commitment Maturity
----------------- ------------ --------------------- ----------------- ---------
Existing SONIA + 160-250 GBP500 million 2025
Vistry Group Revolving bps
facilities credit
facility
----------------- ------------ --------------------- ----------------- ---------
403 bps GBP100 million 2027
USPP loan
----------------- ------------ --------------------- ----------------- ---------
Term loan GBP50 million 2023
SONIA + applicable
credit adjustment
spread + 265
bps
----------------- ------------ --------------------- ----------------- ---------
Facility SONIA + 190-310 GBP400 million 2025
New facilities Agreement bps
for the
Combined
Group
----------------- ------------ --------------------- ----------------- ---------
A one-year extension to the Vistry Group's revolving credit
facility will be sought following the publication of this
announcement.
Countryside intends to repay and cancel the existing third-party
debt facilities available to the Countryside Group on or
immediately prior to Completion of the Combination.
17 Dividends and capital allocation policy
17.1 Dividends
Vistry Shareholders will be entitled to receive and retain:
-- any interim dividend that is announced, declared, paid or
made or becomes payable by Vistry in respect of the six-month
period ended 30 June 2022; and
-- any December Vistry Dividend.
If the Completion of the Combination occurs before the record
date for any December Vistry Dividend, Countryside Shareholders
will be entitled to receive and retain any December Vistry Dividend
as shareholders in the Combined Group. If Completion of the
Combination occurs after the record date for any December Vistry
Dividend that is, on or prior to Completion, announced, declared,
made, paid or becomes payable by Vistry, Countryside and Vistry
have agreed that Countryside has the right to declare and pay a
Countryside Equalisation Dividend (calculated in accordance with
the Equalisation Formula described below) without any reduction to
the Combination Consideration. The Equalisation Formula is
calculated per Countryside Share as the amount of the December
Vistry Dividend per Vistry Share multiplied by the Exchange
Ratio.
Vistry's existing dividend policy is to pay out to a two times
ordinary dividend cover in respect of a full financial year. The
typical timing for the record date for a dividend in respect of the
six-month period ending 31 December, where declared, is during
April each year.
In respect of Countryside Shares, if, on or after the date of
this announcement and on or prior to the Effective Date, any
dividend, distribution, or other return of value is announced,
declared, made, paid or becomes payable by Countryside, other than
with respect to a Countryside Equalisation Dividend that is
calculated in accordance with the Equalisation Formula, Vistry
reserves the right (without prejudice to any right Vistry may have,
with the consent of the Panel, to invoke Condition 3(g)(ii) in Part
A of Appendix I to this announcement) to (at Vistry's sole
discretion): (i) reduce the Combination Consideration by an amount
equivalent to all or any part of such dividend, distribution, or
other return of value, in which case any reference in this
announcement to the Combination Consideration will be deemed to be
a reference to the Combination Consideration as so reduced; or
alternatively (ii) declare and pay an equalisation dividend to
Vistry Shareholders so as to reflect the value attributable to the
dividend, distribution, or other return of value as is announced,
declared, made, paid or becomes payable by Countryside.
Under the terms of the Co-operation Agreement, Vistry has
undertaken not to declare, make or pay any dividend, distribution,
or other return of value other than as contemplated in respect of
Vistry as above. Nothing in this announcement or the Co-operation
Agreement shall require Vistry to announce, declare, make or pay
any dividend.
17.2 Capital allocation policy
It is intended that the Combined Group would initially maintain
the Vistry Group's existing policy of paying out to a two times
ordinary dividend cover in respect of a full financial year. Any
surplus capital, following investment in the business to support
the Combined Group's growth strategy and the payment of the
ordinary dividend, would be expected to be returned to the Combined
Group's shareholders through either a share buyback or special
dividend. The method would be determined by the board of directors
of the Combined Group considering all relevant factors at the time.
Vistry may, in due course following Completion and a period of
integration, review the Combined Group's capital allocation policy
to confirm whether it remains appropriate in the context of the
Combined Group and in consultation with shareholders.
18 Current trading and outlook
18.1 The Countryside Group
Countryside's current trading
On 21 July 2022, the Countryside Group released a trading
statement for the period from 1 April 2022 to 30 June 2022. A copy
of the trading statement is available on Countryside's website at
https://investors.countrysidepartnerships.com/results-and-news/results-reports-and-presentations
.
The Countryside Group has made solid progress in the fourth
quarter of 2022 to-date, the Countryside Group's most significant
trading quarter of the year, in which approximately 40 per cent. of
the Countryside Group's annual completions are expected.
Countryside reiterates its 2022 financial year guidance of
approximately GBP150 million adjusted operating profit.
Countryside Profit Forecast
The Countryside Group's half year results for the period ended
31 March 2022 included the following statement:
"As announced on 7 April 2022, the Board expects adjusted
operating profit for the full year of approximately GBP150m (2021:
GBP167.3m) including a significant profit growth in the second
half."
This statement constitutes a profit forecast for the purposes of
Rule 28 of the Code (the "Countryside Profit Forecast"). The
Countryside Profit Forecast was repeated in the trading update
published by the Countryside Group on 21 July 2022 in respect of
the period from 1 April 2022 to 30 June 2022, as follows:
"FY 2022 guidance unchanged at approximately GBP150m adjusted
operating profit."
"While we are mindful of the challenging macro-economic
backdrop, we reiterate our FY 22 guidance of approximately GBP150m
adjusted operating profit. "
Set out below is the basis of preparation of the Countryside
Profit Forecast and the assumptions on which it is based.
Basis of preparation
The Countryside Profit Forecast has been prepared on a basis
consistent with the Countryside Group's accounting policies which
are in accordance with IFRS. These policies are consistent with
those expected to be applied in the preparation of the Countryside
Group's annual results for the year ended 30 September 2021.
Assumptions
The Countryside Profit Forecast is based on the assumptions
listed below.
Factors outside the influence or control of the Countryside
Directors:
(i) there will be no material changes to existing prevailing macroeconomic, regulatory or political conditions in the markets and regions in which the Countryside Group operates;
(ii) the interest, inflation and tax rates in the markets and
regions in which the Countryside Group operates will remain
materially unchanged from the prevailing rates;
(iii) there will be no material adverse events that will have a significant impact on the Countryside Group's financial performance;
(iv) there will be no material change in the availability or
cost of key subcontractors and resources from prevailing
conditions;
(v) there will be no material change in the availability of
mortgage financing for the Countryside Group's private home
customers;
(vi) there will be no material impact on stakeholder
relationships arising from Countryside's sale process;
(vii) there will be no material change in employee attrition rates; and
(viii) there will be no material changes in legislation or
regulatory requirements impacting on the Countryside Group's
operations or on its accounting policies.
Factors within the influence or control of the Countryside
Directors:
(i) there will be no material change to the present management
of the Countryside Group; and
(ii) there will be no material change in the operational
strategy of the Countryside Group.
The Countryside Directors' confirmation
The Countryside Directors have considered the Countryside Profit
Forecast and confirm that it remains valid as at the date of this
announcement, has been properly compiled on the basis of the
assumptions set out above and the basis of the accounting used is
consistent with the Countryside Group's accounting policies.
18.2 The Vistry Group
Views on Countryside Profit Forecast
Vistry welcomes the profit forecast issued by the Countryside
Group as set out above. In doing so, Vistry recognises variations
that can occur in the timing of completions and that such
variations can affect the financial period in which completions are
booked while not affecting operational performance.
In addition, as part of the due diligence, Vistry has reviewed
the basis and composition of Countryside's proposed cladding
provision. The provision comprises both buildings which have been
subject to intrusive investigations, resulting in detailed
remediation plans, and buildings where there are initial estimates
of the potential scope of issues which are yet to be verified by
physical inspection.
The cladding provisions held by Countryside have been compiled
applying different methodologies to those applied by Vistry. Vistry
has taken account of these differences when assessing the
acquisition of Countryside, and believes that aligning the cladding
provision methodology following Completion of the Combination will
lead these provisions to increase. Vistry also anticipates that the
impact of DLUHC's proposed long form agreement will in due course
result in increases to both Countryside's and Vistry's
provisions.
Vistry's current trading
On 8 July 2022, the Vistry Group released a trading update for
the period from 1 January 2022 to 30 June 2022. A copy of the
trading update is available on Vistry's website at
www.vistrygroup.co.uk/investor-centre/results-reports-presentations
.
An update on the Vistry Group's trading in the period from 1
January 2022 to 4 September 2022 is as follows:
-- the Vistry Group's average private weekly sales rate for the
year to date remains ahead of last year at 0.78 (2021: 0.75) with
demand in the second half reflecting the more typical seasonal
trends seen prior to 2020;
-- the Vistry Group continues to see a good level of prospects,
and pricing remains firm;
-- the Vistry Group's partnerships business is extremely well
positioned to meet the very high level of counter-cyclical demand
across all tenures, though the Vistry Group is seeing some early
signs that the land market is settling after a more heightened
period of demand;
-- the Vistry Group's forward sales position has been further strengthened with total housebuilding and partnerships' mixed tenure forward sales up ten per cent. as compared to the prior year position at GBP2,287 million as at 3 September 2022 (3 September 2021: GBP2,078 million), representing 96 per cent. of total forecast units secured for the 2022 financial year;
-- the partner delivery forward order book totals GBP827 million
as at 3 September 2022 (3 September 2021: GBP890 million), with 96
per cent. of forecast revenue secured for the 2022 financial
year;
-- the Vistry Group's total costs were up on average six per
cent. in the first half of 2022 and, reflecting increasing energy
prices, cost inflation is now running at approximately eight per
cent. Price increases have offset cost increases in the year to
date; and
-- the Vistry Group continues to expect to deliver a significant
improvement in year on year profitability in both its housebuilding
and partnerships businesses in the 2022 financial year, ahead of
the Vistry Group's expectations at the start of the year.
Whilst the Vistry Group is mindful of the wider economic
uncertainties, it remains positive on its outlook and continues to
expect adjusted profit before tax for the 2022 financial year to be
approximately GBP417 million.
Vistry Profit Forecast
In addition to the statement above, Vistry has made the
following statement in relation to the Vistry Group's 2022
financial year guidance in the investor and analyst presentation
published by Countryside and Vistry today in connection with the
Combination:
"While mindful of the wider economic uncertainties, Vistry
remains positive on its outlook and continues to expect adjusted
profit before tax for the 2022 financial year to be approximately
GBP417m(.) "
These statements substantially repeat the same statement
originally made in the Vistry Group's trading update published on
18 May 2022 in respect of the period from 1 January 2022 to 18 May
2022, as follows (the "Vistry Profit Forecast"):
"Whilst we are mindful of the wider market uncertainties, we
remain positive on our outlook. Our expectation for profit in the
first half has moved forward, and for 2022 we expect adjusted
profit before tax to be at the top end of market forecasts(1)
...
(1) Bloomberg (17/05/2022) - Adjusted profit before tax: High -
GBP415.0m, Mean - GBP396.3m. "
The Vistry Profit Forecast was also substantially repeated in
the Vistry Group's trading update published on 8 July 2022 in
respect of the period from 1 January 2022 to 30 June 2022, as
follows:
"Whilst mindful of the wider economic uncertainties, we are
positive on the outlook for the Group and expect to see significant
margin progression in the full year, with adjusted profit before
tax for FY 22 to be at the top end of market forecasts(1)
...
(1) Bloomberg (07/07/2022) - Adjusted profit before tax: High -
GBP417.0m, Mean - GBP397.7m. "
The Vistry Profit Forecast (and its subsequent repetition)
constitutes a profit forecast for the purposes of Rule 28 of the
Code. The Vistry Profit Forecast was first published before Vistry
approached Countryside with regard to a possible offer and
therefore falls within Rule 28.1(c) of the Code. Set out below is
the below is the basis of preparation of the Vistry Profit Forecast
(and its subsequent repetition) and the assumptions on which it is
based.
Basis of preparation
The Vistry Directors confirm that the Vistry Profit Forecast
(and its subsequent repetition) has been properly compiled and is
based on one or more of the following sources of financial
information: (i) the Vistry Group's draft unaudited half year
results for the six-month period ended 30 June 2022; (ii) the
Vistry Group's unaudited management accounts for the one-month
period ended 31 July 2022; and (iii) an internal unpublished
forecast of the Vistry Group for the period ending 31 December 2022
constituting the remainder of the current financial year.
The Vistry Profit Forecast (and its subsequent repetition) does
not take into account the costs and impact of the Combination.
In confirming the Vistry Profit Forecast, the Vistry Directors
have made the following assumptions in respect of the relevant
period:
Assumptions outside of the Vistry Group's influence of
control
(i) there will be no material changes to existing prevailing
macroeconomic, regulatory or political conditions in the markets
and regions in which the Vistry Group operates;
(ii) the inflation and tax rates in the markets and regions in
which the Vistry Group operates will remain materially unchanged
from the prevailing rates;
(iii) there will be no material adverse events that will have a
significant impact on the Vistry Group's financial performance,
including adverse weather events or natural catastrophes that
affect key products, supply chain or markets or the construction
process;
(iv) there will be no material change in the availability or
cost of key subcontractors and direct materials from prevailing
conditions
(v) there will be no material changes in market conditions over
the forecast period to 31 December 2022 in relation to either
customer demand or competitive environment, including the
availability of mortgage financing for the Vistry Group's private
home customers, house prices, interest rates or legislative or
regulatory requirements;
(vi) there will be no material impact on stakeholder
relationships arising from the Combination;
(vii) there will be no material change in employee attrition
rates and no material change in the Vistry Group's labour costs,
including medical and pension and other post-retirement benefits
driven by external parties or regulations; and
(viii) there will be no material changes in legislation or
regulatory requirements impacting on the Vistry Group's operations
or on its accounting policies.
Assumptions within the Vistry Group's influence of control
(i) there will be no material change to the present management
of the Vistry Group except for the announcement of the resignation
of Graham Prothero;
(i) there will be no major corporate acquisitions or disposals prior to 31 December 2022;
(ii) the Vistry Group's accounting policies will be consistently
applied over the forecast period; and
(iii) there will be no material change in the operational strategy of the Vistry Group.
The Vistry Directors' confirmation
The Vistry Directors have considered the Vistry Profit Forecast
and confirm that it remains valid as at the date of this
announcement, that it has been properly compiled on the basis of
the assumptions set out above and that the basis of the accounting
policies used is consistent with the accounting policies of the
Vistry Group, which are in accordance with IFRS. These policies are
consistent with those applied in the preparation of the Vistry
Group's consolidated financial statements for the financial year
ended 31 December 2022.
19 Offer-related arrangements
Confidentiality Agreement
Vistry and Countryside have entered into the Confidentiality
Agreement pursuant to which each party has undertaken to: (i)
subject to certain exceptions, keep confidential information
relating to, inter alia, the Combination and the other party and
not to disclose it to third parties (other than to certain
permitted parties) unless required by law or regulation; and (ii)
use the confidential information only in connection with the
Combination.
These confidentiality obligations shall remain in force until
Completion of the Combination or, in the event that the Combination
terminates, for a period of 12 months from the date of the
Confidentiality Agreement. Vistry also agreed to certain standstill
undertakings, all of which ceased to apply upon the release of this
announcement.
This agreement also includes customary non-solicitation
obligations on the Vistry Group and the Countryside Group.
Co-operation Agreement
Vistry and Countryside have entered into a Co-operation
Agreement pursuant to which:
-- Vistry has agreed to use all reasonable efforts to implement
the Combination substantially in the form contemplated by this
announcement;
-- Vistry has agreed to be primarily responsible for contacting
and corresponding with the relevant regulatory authorities in
relation to the Clearances and Regulatory Conditions with a view to
satisfying the Regulatory Conditions as soon as reasonably
practicable (so as to enable Completion of the Combination to occur
by the Long-stop Date), subject to Vistry consulting and updating
Countryside to a reasonable extent;
-- Vistry and Countryside have agreed to certain customary
undertakings to co-operate in relation to such Regulatory
Conditions and Clearances; and
-- Vistry has agreed to provide Countryside with certain
information as may be reasonably requested and is required for the
Scheme Document and Countryside has agreed to provide Vistry with
information as may be reasonably requested and is required for the
Vistry Circular and the Vistry Prospectus.
The Co-operation Agreement records the intention of Vistry and
Countryside to implement the Combination by way of the Scheme,
subject to Vistry's right to switch to a Takeover Offer in certain
circumstances. Vistry and Countryside have agreed to certain
customary provisions if the Scheme should switch to a Takeover
Offer.
The Co-operation Agreement also contains provisions that shall
apply in respect of Vistry Shareholders' and Countryside
Shareholders' dividend entitlements, directors' and officers'
insurance and the Countryside Share Plans and other incentive
arrangements.
The Co-operation Agreement shall be terminated with immediate
effect:
-- if Vistry and Countryside so agree in writing at any time
prior to the Effective Date;
-- if this announcement is not released at or before 8:00 a.m.
on 5 September 2022 (unless otherwise agreed between Vistry and
Countryside prior to that time);
-- upon service of written notice by Vistry to Countryside if:
(i) prior to the Long-stop Date, a third party announces a firm
intention to make an offer or revised offer for Countryside which
is publicly recommended by the Countryside Directors; (ii) the
Countryside Directors change their recommendation in certain
circumstances; or (iii) prior to the Long-stop Date, a competing
proposal completes, becomes effective or is declared or becomes
unconditional;
-- upon service of written notice by Countryside to Vistry if:
(i) the Vistry Directors change their recommendation in certain
circumstances; or (ii) a competing proposal completes, becomes
effective or is declared or becomes unconditional;
-- upon service of written notice by Vistry to Countryside if
the Combination is being implemented by Scheme and the Court
Meeting, if the Countryside General Meeting and/or the Court
Hearing is not held on or before the 22nd day after the expected
date set out in the Scheme Document (or such later date as agreed
by Vistry and Countryside and allowed by the Court, if
required);
-- upon written notice by either party to the other if: (i) an
adverse Vistry shareholder vote occurs; (ii) the Scheme is not
approved by the requisite majority of Countryside Shareholders at
the Court Meeting or Countryside resolutions are not passed by the
requisite majority of Countryside Shareholders at the Countryside
General Meeting; (iii) the Court refuses to sanction the Scheme
definitively; or (iv) prior to the Long-stop Date, a third party
announces a firm intention to make an offer for Countryside which
completes, becomes effective or is declared or becomes
unconditional in all respects;
-- upon service of written notice by Vistry to Countryside
stating that a Condition has been invoked by Vistry (where the
invocation of the relevant Condition has been permitted by the
Panel) and such Condition is incapable of waiver or satisfaction by
the Long-stop Date;
-- upon service of written notice by Vistry to Countryside if a
competing proposal: (i) completes, becomes effective, or is
declared or becomes unconditional; or (ii) is recommended by the
Countryside Directors;
-- if the Combination is withdrawn, lapses or terminates on or
prior to the Long-stop Date other than: (i) as a result of Vistry's
right to switch to a Takeover Offer; or (ii) it is otherwise to be
followed within five business days by a firm offer announcement
made by Vistry by a different offer or scheme; or
-- unless otherwise agreed by the parties in writing or required
by the Panel, on the Effective Date, if it has not occurred on or
before the Long-stop Date.
Regulatory Clean Team Protocol
Vistry and Countryside have put in place the Regulatory Clean
Team Protocol which sets out how confidential information that is
competitively sensitive can be disclosed, used or shared between
Vistry's external legal counsel and/or Vistry's experts and/or
specific Vistry individuals and Countryside's external legal
counsel and/or Countryside's experts and/or specific Countryside
individuals for the purposes of (amongst other things) mutual due
diligence in relation to the Combination and obtaining the consent
of competition authorities and/or regulatory clearances in
connection with the Combination.
Confidentiality and Joint Defence Agreement
Vistry, Countryside and their respective external legal counsels
have entered into the Confidentiality and Joint Defence Agreement,
the purpose of which is to ensure that the exchange and/or
disclosure of certain materials relating to the parties only takes
place between their respective external legal counsels and external
experts, and does not diminish in any way the confidentiality of
such materials and does not result in a waiver of privilege, right
or immunity that might otherwise be available.
20 New Vistry Shares and fractional entitlements
The New Vistry Shares will, when issued, be ordinary shares in
the capital of Vistry with a nominal value of 50 pence each, will
be fully paid and rank pari passu in all respects with the Vistry
shares in issue at the date of this announcement.
Fractions of New Vistry Shares will not be issued pursuant to
the Combination. Entitlements to New Vistry Shares pursuant to the
Combination will be rounded down to the nearest whole number of New
Vistry Shares.
Fractional entitlements to New Vistry Shares will be aggregated
and allotted and issued to a nominee appointed by Vistry and such
shares will then be sold in the market and the net proceeds of sale
will be distributed in due proportion to the Countryside
Shareholders entitled to them. However, where any one Countryside
Shareholder's entitlement is GBP5.00 or less, such Countryside
Shareholder's entitlement will not be paid to them but will be
retained for the benefit of the Combined Group.
21 Structure of and Conditions to the Combination
It is intended that the Combination will be effected by means of
a Court-approved Scheme of Arrangement between Countryside and
Countryside Shareholders under Part 26 of the Companies Act,
although Vistry reserves the right to implement the Combination by
means of a Takeover Offer (subject to Panel consent and the terms
of the Co-operation Agreement).
The purpose of the Scheme is to provide for Vistry to become the
holder of the entire issued and to be issued ordinary share capital
of Countryside. This is to be achieved by the transfer of the
Countryside Shares to Vistry, in consideration for which the
Countryside Shareholders shall receive cash consideration and the
New Vistry Shares on the basis set out in paragraph 2 above.
The Combination will be subject to the Conditions and further
terms set out below and in Appendix I to this announcement and to
be set out in the Scheme Document and shall only become Effective
if, among other things, the following events occur on or before
11:59 p.m. on the Long-stop Date:
(i) the approval of the Scheme by a majority in number of the
Countryside Shareholders who are present and vote, whether in
person or by proxy, at the Court Meeting and who represent 75 per
cent. in value of the Countryside Shares voted by those Countryside
Shareholders;
(ii) the resolutions required to approve and implement the
Scheme being duly passed by Countryside Shareholders representing
the requisite majority or majorities of votes cast at the
Countryside General Meeting (or any adjournment thereof);
(iii) the approval of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Countryside and Vistry);
(iv) the delivery of a copy of the Court Order to the Registrar of Companies;
(v) satisfaction of merger control conditions in respect of the
United Kingdom as applicable and if and to the extent required;
(vi) the Vistry Resolutions being passed by the requisite
majority of Vistry Shareholders at the Vistry General Meeting;
and
(vii) the FCA having acknowledged that the application for
Admission has been approved and the London Stock Exchange having
acknowledged that the New Vistry Shares will be admitted to trading
on the Main Market.
The Scheme will lapse if:
-- the Court Meeting and the Countryside General Meeting are not
held by the 22nd day after the expected date of such meetings to be
set out in the Scheme Document in due course (or such later date as
may be agreed between Vistry and Countryside);
-- the Court Hearing is not held by the 22nd day after the
expected date of such hearing to be set out in the Scheme Document
in due course (or such later date as may be agreed between Vistry
and Countryside); or
-- the Scheme does not become Effective by no later than 11:59
p.m. on the Long-stop Date,
provided, however, that the deadlines for the timing of the
Court Meeting, the Countryside General Meeting and the Court
Hearing as set out above may be waived by Vistry, and the deadline
for the Scheme to become Effective may be extended by agreement
between Countryside and Vistry.
Subject to satisfaction (or waiver, where applicable) of the
Conditions, the Scheme is expected to become Effective by the end
of the first quarter of 2023.
Upon the Scheme becoming Effective, it will be binding on all
Countryside Shareholders, irrespective of whether or not they
attended or voted at the Court Meeting or the Countryside General
Meeting.
Further details of the Scheme, including an indicative timetable
for its implementation, will be set out in the Scheme Document
which shall be distributed to Countryside Shareholders (along with
the Forms of Proxy and the Forms of Election in relation to the Mix
and Match Facility for use in connection with the Court Meeting and
the Countryside General Meeting) in due course. For the purposes of
paragraph 3(a) of Appendix 7 of the Code, the Panel has consented
to an extension of the applicable date for posting.
22 Vistry Shareholder approval and the Vistry Circular and Vistry Prospectus
In view of the size of the transaction, the Combination
constitutes a Class 1 transaction (as defined in the Listing Rules)
for Vistry. Accordingly, Vistry is required to seek the approval of
Vistry Shareholders for the Combination at the Vistry General
Meeting.
As noted above, the Combination is conditional on, amongst other
things, the Vistry Resolutions being passed by Vistry Shareholders
at the Vistry General Meeting (but not, for the avoidance of doubt,
any other resolutions to be proposed at the Vistry General Meeting
which will not be Conditions to the Combination). The Vistry
Directors also do not currently have sufficient authority to issue
and allot the New Vistry Shares in accordance with section 551 of
the Companies Act and, accordingly, the approval of Vistry
Shareholders is required to grant the Vistry Directors this
authority.
The Vistry Directors intend to recommend unanimously that Vistry
Shareholders vote in favour of the Vistry Resolutions at the Vistry
General Meeting.
Vistry will prepare, publish and send to Vistry Shareholders the
Vistry Circular and will prepare and publish the Vistry Prospectus.
The Vistry Circular will summarise the background to and reasons
for the Combination and will include a notice convening the Vistry
General Meeting containing, among other things, the Vistry
Resolutions to be proposed for the approval of Vistry Shareholders
at the Vistry General Meeting (or any adjournment thereof). The
Vistry Prospectus is required in connection with the issue of the
New Vistry Shares and their Admission to the Main Market of the
London Stock Exchange. The Vistry Prospectus will contain
information relating to the Combination, the Combined Group and the
New Vistry Shares.
The Vistry Circular and the Vistry Prospectus (along with the
Forms of Proxy for use in connection with the Vistry General
Meeting), are expected to be published, and in respect of the
Vistry Circular, distributed, at or around the same time as the
Scheme Document is published, such that the Vistry General Meeting
will be held at or around the same time and on the same date as the
Court Meeting and the Countryside General Meeting. It is expected
that the Scheme Document, the Vistry Circular and the Vistry
Prospectus will be published in early October 2022 and that the
Court Meeting, the Countryside General Meeting and the Vistry
General Meeting will be held during late October 2022 or early
November 2022.
23 Listing of New Vistry Shares and De-listing of Countryside Shares and re-registration
Application will be made to the FCA and the London Stock
Exchange respectively for Admission of the New Vistry Shares. It is
expected that Admission will become effective and dealings for
normal settlement in the New Vistry Shares will commence at or
shortly after 8:00 a.m. on the first Business Day following the
Effective Date.
Prior to the Scheme becoming Effective, application will be made
by Countryside to the FCA and the London Stock Exchange for the
cancellation of the admission of the Countryside Shares to the
premium listing segment of the Official List and the cancellation
of the admission to trading of the Countryside Shares on the London
Stock Exchange's Main Market, respectively, in each case to take
effect on or shortly after the Effective Date. The last day of
dealings in Countryside Shares on the Main Market of the London
Stock Exchange is expected to be the Business Day immediately prior
to the Effective Date and no transfers shall be registered after
6:00 p.m. on that date.
On the Effective Date, share certificates in respect of
Countryside Shares shall cease to be valid and entitlements to
Countryside Shares held within the CREST system shall be
cancelled.
It is also proposed that, following the Effective Date and after
its shares are de-listed, Countryside will be re-registered as a
private limited company.
24 Disclosure of Interests in Countryside
Save in respect of the irrevocable undertakings referred to in
paragraph 8 above, as at the close of business on 2 September 2022
(being the last practicable date prior to the date of this
announcement) neither Vistry, nor any of its directors, nor, so far
as Vistry is aware, any person acting in concert (within the
meaning of the Code) with it has:
(i) any interest in or right to subscribe for any relevant securities of Countryside;
(ii) any short positions in respect of relevant Countryside
Shares (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any
agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery;
(iii) any Dealing Arrangement in relation to Countryside Shares
or in relation to any securities convertible or exchangeable into
Countryside Shares; or
(iv) borrowed or lent any relevant Countryside Shares
(including, for these purposes, any financial collateral
arrangements of the kind referred to in Note 4 on Rule 4.6 of the
Code), save for any borrowed shares which had been either on-lent
or sold .
"Interests in securities" for these purposes arise, in summary,
when a person has long economic exposure, whether absolute or
conditional, to changes in the price of securities (and a person
who only has a short position in securities is not treated as
interested in those securities) . In particular, a person shall be
treated as having an "interest" by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to
purchase, option in respect of, or derivative referenced to,
securities.
It has not been practicable for Vistry to make enquiries of all
of its concert parties in advance of the release of this
announcement. Therefore, all relevant details in respect of
Vistry's concert parties shall be included in the Opening Position
Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule
8 of the Code.
25 General
Vistry reserves the right to elect (with the consent of the
Panel , and subject to the terms of the Co-operation Agreement ) to
implement the Combination by way of a Takeover Offer for the
Countryside Shares as an alternative to the Scheme. In such event,
the Takeover Offer shall be implemented on the same terms, so far
as applicable , and subject to the terms of the Co-operation
Agreement , as those which would apply to the Scheme, subject to
appropriate amendments, including (without limitation) an
acceptance condition set (subject to the terms of the Co-operation
Agreement) at a level permitted by the Panel.
The Combination will be made subject to the Conditions and
further terms set out in Appendix I to this announcement and to be
set out in the Scheme Document. The bases and sources of certain
financial information contained in this announcement are set out in
Appendix II to this announcement. A summary of the irrevocable
undertakings given in relation to the Combination is contained in
Appendix III to this announcement. Appendix IV to this announcement
sets out the anticipated Quantified Financial Benefits Statement
and contains details of and bases of calculation of the anticipated
financial benefits of the Combination. Certain terms used in this
announcement are defined in Appendix V to this announcement.
The Scheme Document, containing further information about the
Combination and notices of the Court Meeting and the Countryside
General Meeting, will be distributed to Countryside Shareholders
(along with the Forms of Proxy for use in connection with the Court
Meeting and the Countryside General Meeting and the Forms of
Election in relation to the Mix and Match Facility) in due course.
For the purposes of paragraph 3(a) of Appendix 7 of the Code, the
Panel has consented to an extension of the applicable date for
posting. The Scheme Document and Forms of Proxy and Forms of
Election shall be made available to all Countryside Shareholders at
no charge to them.
In addition, the Vistry Circular and the Vistry Prospectus
containing information about the Combined Group and the New Vistry
Shares and, in respect of the Vistry Circular, details of the
Combination and the notice of the Vistry General Meeting (along
with the Forms of Proxy for use in connection with the Vistry
General Meeting) at which, amongst other things, the Vistry
Resolutions will be proposed for approval by Vistry Shareholders,
are expected to be published, and in respect of the Vistry
Circular, distributed, at or around the same time as the Scheme
Document is published, such that the Vistry General Meeting will be
held at or around the same time and on the same date as the Court
Meeting and the Countryside General Meeting. The Vistry Circular
(including the Forms of Proxy) and the Vistry Prospectus will be
made available to Countryside Shareholders and/or Vistry
Shareholders (as applicable) at no charge to them.
It is expected that the Scheme Document, the Vistry Circular and
the Vistry Prospectus will be published in early October 2022 and
that the Court Meeting, the Countryside General Meeting and the
Vistry General Meeting will be held on or around the same time
during late October 2022 or early November 2022.
HSBC, Lazard, Rothschild & Co, Barclays and Numis have each
given and not withdrawn their consent to the publication of this
announcement with the inclusion herein of the references to their
names in the form and context in which they appear.
There will be an investor and analyst presentation at 9:30 a.m.
on 5 September 2022 at Numis, 45 Gresham Street, London EC2V 7BF .
There will be a live webcast available at
https://stream.brrmedia.co.uk/broadcast/630ddb73da906b287e9a09b1
and a recording of the investor and analyst presentation will be
available on Vistry's website at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and on
Countryside's website at www.countrysidepartnerships.com .
26 Documents available on website
Copies of the following documents will be made available on
Vistry's and Countryside's websites at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and
www.countrysidepartnerships.com respectively until the Effective
Date:
-- this announcement;
-- the Confidentiality Agreement;
-- the Co-operation Agreement;
-- the Regulatory Clean Team Protocol;
-- the Confidentiality and Joint Defence Agreement;
-- the irrevocable undertakings referred to in paragraph 8 above
and summarised in Appendix III to this announcement;
-- documents relating to the financing of the Scheme referred to
in paragraph 16 above, including the Facility Agreement; and
-- consent letters from each of HSBC, Lazard, Peel Hunt,
Rothschild, Barclays and Numis .
Enquiries:
Vistry
Earl Sibley , Chief Financial Officer
Graham Prothero , Chief Operating Officer
Clare Bates , General Counsel & Company
Secretary
Susie Bell , Investor Relations +44 16 7543 7160
HSBC (Financial Adviser, Corporate Broker and Sponsor
to Vistry)
Keith Welch
Diraj Ramchandani
Simon Alexander
Adam Miller +44 20 7991 8888
Lazard (Financial Adviser to Vistry)
Vasco Litchfield
Patrick Long
Louise Campbell +44 20 7187 2000
Peel Hunt (Corporate Broker to Vistry)
Harry Nicholas
Charles Batten
John Welch +44 20 7418 8900
Powerscourt (Financial Public Relations Adviser to Vistry)
Justin Griffiths
Nick Dibden
Victoria Heslop +44 20 7520 1446
Countryside
Tim Lawlo r, Chief Financial Officer
Gary Whitaker, General Counsel & Company +44 1277 260 000
Secretary +44 1277 521 296
Rothschild & Co (Lead Financial Adviser
to Countryside)
Alex Midgen
Peter Everest
Nikhil Walia
Jake Shackleford +44 20 7280 5000
Barclays (Joint Financial Adviser and Joint Corporate
Broker to Countryside)
Robert Mayhew
Richard Bassingthwaighte +44 20 7623 2323
Numis (Joint Financial Adviser and Joint Corporate Broker
to Countryside)
Heraclis Economides +44 20 7620
Oliver Hardy 1288
Brunswick Group LLP (Financial Public Relations Adviser
to Countryside):
Nina Coad
Robin Wrench +44 20 7404 5959
Linklaters LLP is acting as legal adviser to Vistry. Norton Rose
Fulbright LLP is acting as legal adviser to Countryside.
Important notices
HSBC, which is authorised by the PRA and regulated in the UK by
the FCA and the PRA, is acting as financial adviser to Vistry and
no one else in connection with the Combination and shall not be
responsible to anyone other than Vistry for providing the
protections afforded to clients of HSBC nor for providing advice in
connection with the Combination or any matter referred to herein.
Neither HSBC nor any of its group undertakings or 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 HSBC in
connection with the Combination or any matter referred to
herein.
Lazard, which is authorised by the PRA and regulated in the UK
by the FCA and the PRA, is acting exclusively as financial adviser
to Vistry and no one else in connection with the Combination and
shall not be responsible to anyone other than Vistry for providing
the protections afforded to clients of Lazard nor for providing
advice in connection with the Combination or any matter referred to
herein. Neither Lazard nor any of its group undertakings or
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 Lazard in connection with the Combination or any matter referred
to herein.
Peel Hunt, which is authorised and regulated in the UK by the
FCA, is acting exclusively as corporate broker to Vistry and no one
else in connection with the Combination and shall not be
responsible to anyone other than Vistry for providing the
protections afforded to clients of Peel Hunt nor for providing
advice in connection with the Combination or any matter referred to
herein. Neither Peel Hunt nor any of its group undertakings or
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 Peel Hunt in connection with the Combination or any matter
referred to herein.
Rothschild & Co, which is authorised and regulated in the UK
by the FCA, is acting exclusively as financial adviser to
Countryside and no one else in connection with the Combination and
shall not be responsible to anyone other than Countryside for
providing the protections afforded to clients of Rothschild &
Co nor for providing advice in connection with the Combination or
any matter referred to herein. Neither Rothschild & Co nor any
of its affiliates (nor their respective directors, officers,
employees or agents) 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 Rothschild & Co in connection with this
announcement, any statement contained herein, the Combination or
otherwise. No representation or warranty, express or implied, is
made by Rothschild & Co as to the contents of this
announcement.
Barclays, which is authorised by the PRA and regulated in the
United Kingdom by the FCA and the PRA, is acting exclusively for
Countryside and for no one else in connection with the Combination
and will not be responsible to anyone other than Countryside for
providing the protections afforded to clients of Barclays nor for
providing advice in connection with the Combination or any other
matter referred to herein. Neither Barclays nor any of its group
undertakings or 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 Barclays in connection with the Combination or any
matter referred to herein.
Numis, which is authorised and regulated in the United Kingdom
by the FCA, is acting exclusively for Countryside and no one else
in connection with the Combination and will not be responsible to
anyone other than Countryside for providing the protections
afforded to clients of Numis nor for providing advice in relation
to the Combination or any other matter referred to herein. Neither
Numis nor any of its group undertakings or 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 Numis in connection
with the Combination or any matter referred to herein.
Further information
This announcement does not constitute a prospectus or prospectus
exempted document. The New Vistry Shares are not being offered to
the public by means of this announcement.
This announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
pursuant to the Combination or otherwise.
The Combination will be made solely by means of the Scheme
Document (or, if the Combination is implemented by way of a
Takeover Offer, any document by which the Takeover Offer is made)
which, together with the Forms of Proxy and the Forms of Election
in relation to the Mix and Match Facility, will contain the full
terms and conditions of the Combination, including details of how
to vote in respect of the Combination.
This announcement has been prepared for the purpose of complying
with English law and the Code and the information disclosed may not
be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside England and Wales. The Combination will be
subject to the applicable requirements of the Code, the Panel, the
FCA and the London Stock Exchange.
Countryside will prepare the Scheme Document to be distributed
to Countryside Shareholders. Vistry will prepare the Vistry
Circular to be distributed to Vistry Shareholders and will also
publish the Vistry Prospectus containing information on the New
Vistry Shares and the Combined Group (and, in the event that the
Combination is to be implemented by means of a Takeover Offer, the
Offer Document). Countryside Shareholders are advised to read the
Scheme Document (including the related Forms of Proxy and the Forms
of Election in relation to the Mix and Match Facility) (and/or, in
the event that the Combination is to be implemented by way of a
Takeover Offer, the Offer Document) and the Vistry Prospectus
carefully once these become available because they will contain
important information in relation to the Combination, the New
Vistry Shares and the Combined Group. Any vote in respect of
resolutions to be proposed at the Countryside General Meeting, and
any decision in respect of the Scheme or other response in relation
to the Combination by Countryside Shareholders, should be made only
on the basis of the information contained in the Scheme Document
(and/or, in the event that the Combination is to be implemented by
way of a Takeover Offer, the Offer Document) and the Vistry
Prospectus (including any supplementary prospectus, if relevant).
Any vote in respect of resolutions to be proposed at the Vistry
General Meeting by Vistry Shareholders should be made only on the
basis of information contained in the Vistry Circular (including
any supplementary circular, if relevant).
This announcement contains inside information in relation to
Countryside for the purposes of Article 7 of the Market Abuse
Regulation. The person responsible for arranging the release of
this announcement on behalf of Vistry is Clare Bates, General
Counsel & Company Secretary. The person responsible for
arranging the release of this announcement on behalf of Countryside
is Gary Whitaker, General Counsel & Company Secretary.
This announcement does not constitute a prospectus or prospectus
exempted document. The New Vistry Shares are not being offered to
the public by means of this announcement.
Vistry reserves the right to elect (with the consent of the
Panel, and subject to the terms of the Co-operation Agreement) to
implement the Combination by way of a Takeover Offer as an
alternative to the Scheme. In such event, the Takeover Offer will
be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme, subject to
appropriate amendments to reflect the terms of the Co-operation
Agreement and, among other things, the change in structure by which
the Combination is to be implemented and compliance with all
applicable laws.
Overseas Shareholders
The release, publication or distribution of this announcement in
or into certain jurisdictions other than the United Kingdom may be
restricted by law. Persons who are not resident in the United
Kingdom or who are subject to other jurisdictions should inform
themselves of, and observe, any applicable requirements.
Unless otherwise determined by Vistry or required by the Code,
and permitted by applicable law and regulation, the Combination
shall not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Combination by any such use, means, instrumentality or form within
a Restricted Jurisdiction or any other jurisdiction if to do so
would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and all documents relating
to the Combination are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Combination
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Combination to Countryside Shareholders
who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident.
Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable requirements.
The New Vistry Shares may not be offered, sold or delivered,
directly or indirectly, in, into or from any Restricted
Jurisdiction or to, or for the account or benefit of, any
Restricted Overseas Persons except pursuant to an applicable
exemption from, or in a transaction not subject to, applicable
securities laws of those jurisdictions.
Additional information for US investors
The Combination relates to shares of an English company and is
proposed to be effected by means of a scheme of arrangement under
the laws of England and Wales. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act.
Accordingly, the Combination is subject to the disclosure and
procedural requirements applicable in the United Kingdom to schemes
of arrangement which differ from the disclosure requirements of
United States tender offer and proxy solicitation rules.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disproved or passed
judgement upon the fairness or the merits of the Combination or
determined if this announcement is adequate, accurate or complete.
Any representation to the contrary is a criminal offence in the
United States.
However, if Vistry were to elect to implement the Combination by
means of a Takeover Offer, such Takeover Offer shall be made in
compliance with all applicable United States laws and regulations,
including any applicable exemptions under the US Exchange Act. Such
a Takeover Offer would be made in the United States by Vistry and
no one else.
In the event that the Combination is implemented by way of a
Takeover Offer, in accordance with normal United Kingdom practice
and pursuant to Rule 14e-15(b) of the US Exchange Act, Vistry or
its nominees, or its brokers (acting as agents), may from time to
time make certain purchases of, or arrangements to purchase, shares
or other securities of Countryside outside the United States, other
than pursuant to such Takeover Offer, during the period in which
such Takeover Offer would remain open for acceptance. These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Any information
about such purchases or arrangements to purchase shall be disclosed
as required in the UK, shall be reported to a Regulatory
Information Service and shall be available on the London Stock
Exchange website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of
its Countryside Shares pursuant to the Scheme shall be a taxable
transaction for United States federal income tax purposes. Each
Countryside Shareholder is urged to consult their independent
professional adviser immediately regarding the tax consequences of
the Combination applicable to them, including under applicable
United States state and local, as well as overseas and other, tax
laws.
Financial information relating to Countryside included in this
announcement and the Scheme Document has been or shall have been
prepared in accordance with accounting standards applicable in the
United Kingdom and may not be comparable to financial information
of United States companies or companies whose financial statements
are prepared in accordance with generally accepted accounting
principles in the United States.
The New Vistry Shares issued pursuant to the Scheme will not be
registered under any United States state securities laws and may
only be issued to persons resident in a state pursuant to an
exemption from the registration requirements of the securities laws
of such state.
For the purpose of qualifying for the exemption provided by
Section 3(a)(10) of the US Securities Act, Countryside will advise
the Court that its sanctioning of the Scheme will be relied on by
Vistry as an approval of the Scheme following a hearing on its
fairness to Countryside Shareholders, at which Court hearing all
Countryside Shareholders are entitled to attend in person or
through counsel to support or oppose the sanctioning of the Scheme
and with respect to which notification will be given to all such
holders.
Vistry and Countryside are organised under the laws of England
and Wales. Some or all of the officers and directors of Vistry and
Countryside, respectively, are residents of countries other than
the United States. In addition, all or most of the assets of Vistry
and Countryside are located outside the United States. As a result,
it may be difficult for United States shareholders of Countryside
to effect service of process within the United States upon Vistry
or Countryside or their respective officers or directors or to
enforce against them a judgement of a United States court
predicated upon the federal or state securities laws of the United
States.
Forward-looking statements
This announcement (including information incorporated by
reference in this announcement), oral statements made regarding the
Combination, and other information published by Countryside, Vistry
or any member of the Vistry Group contain statements which are, or
may be deemed to be, "forward-looking statements". Such
forward-looking statements are prospective in nature and are not
based on historical facts, but rather on current expectations and
on numerous assumptions regarding the business strategies and the
environment in which Vistry, Countryside, any member of the Vistry
Group or the Countryside Group or the Combined Group shall operate
in the future and are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by those statements.
The forward-looking statements contained in this announcement
relate to Vistry, Countryside, any member of the Vistry Group or
the Countryside Group or the Combined Group's future prospects,
developments and business strategies, the expected timing and scope
of the Combination and other statements other than historical
facts. In some cases, these forward-looking statements can be
identified by the use of forward-looking terminology, including the
terms "believes", "estimates", "will look to", "would look to",
"plans", "prepares", "anticipates", "expects", "is expected to",
"is subject to", "budget", "scheduled", "forecasts", "synergy",
"strategy", "goal", "cost-saving", "projects", "intends", "may",
"will", "shall" or "should" or their negatives or other variations
or comparable terminology. Forward-looking statements may include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Vistry's, Countryside's,
any member of the Vistry Group or the Countryside Group or its or
their operations and potential cost savings and synergies resulting
from the Combination; and (iii) the effects of global economic
conditions and governmental regulation on Vistry's, Countryside's,
any member of the Vistry Group or the Countryside Group or its or
their business.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that shall occur in the future. These events and
circumstances include changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates, future business
combinations or disposals, and any epidemic, pandemic or disease
outbreak. If any one or more of these risks or uncertainties
materialises or if any one or more of the assumptions proves
incorrect, actual results may differ materially from those
expected, estimated or projected. Such forward-looking statements
should therefore be construed in the light of such factors.
Neither Vistry, Countryside, nor any member of the Vistry Group
or the Countryside Group, nor any of their respective associates or
directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this announcement
shall actually occur. Given these risks and uncertainties,
potential investors should not place any reliance on
forward-looking statements.
Specifically, statements of estimated cost savings and synergies
relate to future actions and circumstances which, by their nature,
involve risks, uncertainties and contingencies. As a result, the
cost savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Due to the scale of the
Combined Group, there may be additional changes to the Combined
Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost savings and
synergies may be materially greater or less than those
estimated.
The forward-looking statements speak only at the date of this
announcement. All subsequent oral or written forward-looking
statements attributable to any member of the Vistry Group or
Countryside Group, or any of their respective associates,
directors, officers, employees or advisers, are expressly qualified
in their entirety by the cautionary statement above.
Vistry and Countryside expressly disclaim any obligation to
update such statements other than as required by law or by the
rules of any competent regulatory authority, whether as a result of
new information, future events or otherwise.
No profit forecasts or estimates
Save as set out in paragraph 18 of this announcement, no
statement in this announcement is intended as a profit forecast or
estimate for any period and no statement in this announcement
should be interpreted to mean that earnings or earnings per share
for Vistry or Countryside, as appropriate, for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Vistry or
Countryside, as appropriate.
Quantified Financial Benefits Statement
Appendix IV to this announcement sets out the anticipated
Quantified Financial Benefits Statement and contains details of,
and bases of calculation of, the anticipated financial benefits of
the Combination, together with the related reports from Vistry's
reporting accountant, PricewaterhouseCoopers, and Vistry's
financial advisers, HSBC and Lazard, as required under Rule 28.1(a)
of the Code, and provides underlying information and bases for the
accountant's and advisers' respective reports. HSBC and Lazard, as
financial advisers to Vistry, have provided such report for the
purposes of the Code stating that, in their opinion and subject to
the terms of the report, the Quantified Financial Benefits
Statement, for which the Vistry Directors are responsible, has been
prepared with due care and consideration. Each of
PricewaterhouseCoopers, HSBC and Lazard has given and not withdrawn
its consent to the publication of its respective report in this
announcement in the form and context in which it is included.
For the purpose of Rule 28 of the Code, the Quantified Financial
Benefits Statement contained in this announcement is the
responsibility of Vistry and the Vistry Directors. Any statement of
intention, belief or expectation for the Combined Group following
the Effective Date is an intention, belief or expectation of the
Vistry Directors and not of the Countryside Directors.
The statements in the Quantified Financial Benefits Statement
relate to future actions and circumstances which, by their nature,
involve risks, uncertainties and contingencies. As a result, the
cost savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. No statement in the
Quantified Financial Benefits Statement should be construed as a
profit forecast or interpreted to mean that the Combined Group's
earnings in the first full year following the Effective Date, or in
any subsequent period, would necessarily match or be greater than
or be less than those of Vistry and/or Countryside for the relevant
preceding financial period or any other period.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. 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 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3:30 p.m. (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 per cent. 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 p.m.
(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 shall 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 Panel's website at http://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 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.
Electronic communications
Please be aware that addresses, electronic addresses and certain
information provided by Countryside Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Countryside may be provided to Vistry during
the Offer Period as requested under Section 4 of Appendix 4 of the
Code to comply with Rule 2.11(c) of the Code.
Publication on website and availability of hard copies
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on Vistry 's and Countryside's websites at
www.vistrygroup.co.uk/investor-centre/Countryside-offer and
www.countrysidepartnerships.com , respectively, by no later than 12
noon (London time) on 6 September 2022. For the avoidance of doubt,
the contents of these websites are not incorporated into and do not
form part of this announcement.
Vistry Shareholders, persons with information rights and
participants in the Vistry Share Plans may request a hard copy of
this announcement by: (i) contacting Computershare during business
hours on 0370 889 3236 if calling from the United Kingdom, or
+44(0) 370 889 3236 if calling from outside the United Kingdom
(lines are open from 8:30 a.m. to 5:30 p.m., Monday to Friday
(excluding public holidays in England and Wales)); or (ii)
submitting a request in writing to Computershare at Computershare
Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99
6ZY, United Kingdom. A person so entitled may also request that all
future documents, announcements and information in relation to the
Combination be sent to them in hard copy form.
Countryside Shareholders, persons with information rights and
participants in the Countryside Share Plans may request a hard copy
of this announcement by: (i) contacting Equiniti during business
hours on 0371 384 2050 if calling from the United Kingdom, or +44
121 415 0259 if calling from outside the United Kingdom (lines are
open from 8:30 a.m. to 5:30 p.m., Monday to Friday (excluding
public holidays in England and Wales)); or (ii) submitting a
request in writing to Equiniti at Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA, United Kingdom. A person so entitled
may also request that all future documents, announcements and
information in relation to the Combination be sent to them in hard
copy form.
If you are in any doubt about the contents of this announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the FSMA (as amended) if you are
resident in the United Kingdom or, if not, from another
appropriately authorised independent financial adviser.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Countryside confirms
that as at the date of this announcement, it has in issue and
admitted to trading on the Main Market of the London Stock Exchange
499,723,298 ordinary shares of GBP0.01 each (excluding 24,903,572
ordinary shares held in treasury). The International Securities
Identification Number (ISIN) of the ordinary shares is
GB00BYPHNG03.
In accordance with Rule 2.9 of the Code, Vistry confirms that,
as at the date of this announcement, it has in issue and admitted
to trading on the Main Market of the London Stock Exchange
218,259,244 ordinary shares of 50 pence each (excluding 1,500,000
ordinary shares held in treasury). The International Securities
Identification Number (ISIN) of the ordinary shares is
GB0001859296.
APPIX I
CONDITIONS AND FURTHER TERMS OF THE COMBINATION
Part A: Conditions to the Scheme and the Combination
1 The Combination is conditional upon the Scheme becoming
unconditional and Effective, subject to the Code, by no later than
11:59 p.m. on the Long-stop Date or such later date (if any) as
Vistry and Countryside may, with the consent of the Panel, agree
and, if required, the Court may allow.
2 The Scheme shall be subject to the following conditions:
2.1
(i) its approval by a majority in number of the Countryside
Shareholders who are present and vote, whether in person or by
proxy, at the Court Meeting and who represent 75 per cent. or more
in value of the Countryside Shares voted by those Countryside
Shareholders; and
(ii) such Court Meeting being held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the
Scheme Document in due course (or such later date as may be agreed
by Vistry and Countryside and, if required, the Court may allow )
;
2.2
(i) the resolutions required to implement the Scheme being duly
passed by Countryside Shareholders representing 75 per cent. or
more of votes cast at the Countryside General Meeting;
(ii) such Countryside General Meeting being held on or before
the 22nd day after the expected date of the Countryside General
Meeting to be set out in the Scheme Document in due course (or such
later date as may be agreed by Vistry and Countryside and, if
required, the Court may allow );
2.3
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Countryside and Vistry) and the delivery of a copy of
the Court Order to the Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing to be set out in the
Scheme Document in due course (or such later date as may be agreed
by Vistry and Countryside and, if required, the Court may
allow);
3 In addition, subject as stated in Part B below and to the
requirements of the Panel, the Combination shall be conditional
upon the following Conditions and, accordingly, the Court Order
shall not be delivered to the Registrar of Companies unless such
Conditions (as amended, if appropriate) have been satisfied or,
where relevant, waived:
Vistry Shareholder approval
(a) the passing by the requisite majority or majorities of
Vistry Shareholders at the Vistry General Meeting (or at any
adjournment thereof) of the Vistry Resolutions and any other
resolution or resolutions as are necessary to approve, implement
and effect the Combination;
Admission of the New Vistry Shares
(b)
(i) the FCA having acknowledged to Vistry or its agent (and such
acknowledgement not having been withdrawn) that the application for
the Admission of the New Vistry Shares to the premium listing
segment of the Official List has been approved and (after
satisfaction of any conditions to which such approval is expressed
to be subject ("listing conditions")) will become effective as soon
as a dealing notice has been issued by the FCA and any listing
conditions have been satisfied; and
(ii) the London Stock Exchange having acknowledged to Vistry or
its agent (and such acknowledgement not having been withdrawn) that
the New Vistry Shares will be admitted to trading on the Main
Market of the London Stock Exchange;
Official authorisations, regulatory clearances and Third Party
clearances
Competition and Markets Authority Clearance
(c) either:
(i) where the CMA opens an investigation into the Combination,
confirmation that the Combination will not be subject to a
reference under Section 33 of the Enterprise Act 2002; or
(ii) confirmation that the CMA has no further questions in
relation to the Combination following the submission of a briefing
paper to the CMA by Vistry and as at the date on which all other
Conditions are satisfied or waived, the CMA not having: (A) opened
an investigation into the Combination; and/or (B) indicated that it
will open an investigation into the Combination (including, for the
avoidance of doubt, by providing Vistry and/or Countryside with the
option of submitting a merger notice, sending Vistry and/or
Countryside an enquiry letter or engaging in prenotification
discussions with Vistry and/or Countryside (in each case in
relation to the Combination));
Notifications, waiting periods and Authorisations
(d) other than in relation to the matters referred to in
Condition 3(c), all necessary and material notifications, filings
or applications having been made in connection with the Combination
and all appropriate waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and/or regulatory obligations in any
jurisdiction having been complied with in each case in respect of
the Combination and all Authorisations deemed reasonably necessary
or appropriate by Vistry in any jurisdiction for or in respect of
the Combination and, except pursuant to Chapter 3 of Part 28 of the
Companies Act, the acquisition or the proposed acquisition of any
shares or other securities in, or control or management of,
Countryside or any other member of the Wider Countryside Group by
any member of the Wider Vistry Group having been obtained in terms
and in a form reasonably satisfactory to Vistry from all
appropriate Third Parties or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member of
the Wider Countryside Group or the Wider Vistry Group has entered
into contractual arrangements and all such Authorisations
necessary, appropriate or desirable to carry on the business of any
member of the Wider Countryside Group in any jurisdiction having
been obtained and all such Authorisations remaining in full force
and effect at the time at which the Combination becomes otherwise
unconditional and there being no notice or intimation of an
intention to revoke, suspend, restrict, modify or not to renew such
Authorisations;
(e) other than in relation to the matters referred to in
Condition 3(c), no antitrust regulator or Third Party having given
notice of a decision to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference (and
in each case, not having withdrawn the same), or having required
any action to be taken or otherwise having done anything, or having
enacted, made or proposed any statute, regulation, decision, order
or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might
reasonably be expected to:
(i) require, prevent or delay the divestiture or alter the terms
envisaged for such divestiture by any member of the Wider Vistry
Group or by any member of the Wider Countryside Group of all or any
part of its businesses, assets or property or impose any limitation
on the ability of all or any of them to conduct their businesses
(or any part thereof) or to own, control or manage any of their
assets or properties (or any part thereof) which, in any such case,
is material in the context of the Wider Vistry Group or the Wider
Countryside Group;
(ii) except pursuant to Chapter 3 of Part 28 of the Companies
Act, require any member of the Wider Vistry Group or the Wider
Countryside Group to acquire or offer to acquire any shares, other
securities (or the equivalent) or interest in any member of the
Wider Countryside Group or any asset owned by any Third Party
(other than in the implementation of the Combination);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Vistry Group
directly or indirectly to acquire, hold or exercise effectively all
or any rights of ownership in respect of shares or other securities
in Countryside or on the ability of any member of the Wider
Countryside Group or any member of the Wider Vistry Group directly
or indirectly to hold or exercise effectively all or any rights of
ownership in respect of shares or other securities (or the
equivalent) in, or to exercise voting or management control over,
any member of the Wider Countryside Group;
(iv) otherwise adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider Countryside
Group or any member of the Wider Vistry Group to any extent which
is material in the context of the Wider Vistry Group or the Wider
Countryside Group;
(v) result in any member of the Wider Countryside Group or any
member of the Wider Vistry Group (to an extent which is material in
the context of the Wider Vistry Group or the Wider Countryside
Group) ceasing to be able to carry on business under any name under
which it presently carries on business;
(vi) make the Combination, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, Countryside by any member of the Wider
Vistry Group void, unenforceable and/or illegal under the laws of
any relevant jurisdiction, or otherwise, directly or indirectly
prevent or prohibit, restrict, restrain, or delay or otherwise
interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise challenge,
impede, interfere or require amendment of the Combination or the
acquisition or proposed acquisition of any shares or other
securities in, or control or management of, Countryside by any
member of the Wider Vistry Group to any extent which is material in
the context of the Wider Vistry Group or the Wider Countryside
Group;
(vii) require, prevent or delay a divestiture by any member of
the Wider Vistry Group of any shares or other securities (or the
equivalent) in any member of the Wider Countryside Group or any
member of the Wider Vistry Group to any extent which is material in
the context of the Wider Vistry Group or the Wider Countryside
Group; or
(viii) impose any limitation on the ability of any member of the
Wider Vistry Group or any member of the Wider Countryside Group (to
any extent which is material in the context of the Wider Vistry
Group or the Wider Countryside Group) to conduct, integrate or
co-ordinate all or any part of its business with all or any part of
the business of any other member of the Wider Vistry Group and/or
the Wider Countryside Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such antitrust regulator or
Third Party could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or
reference or take any other step under the laws of any jurisdiction
in respect of the Combination or the acquisition or proposed
acquisition of any Countryside Shares or otherwise intervene having
expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
(f) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Countryside Group is a
party or by or to which any such member or any of its assets is or
may be bound, entitled or be subject or any event or circumstance
which, as a consequence of the Combination or the acquisition or
the proposed acquisition by any member of the Wider Vistry Group of
any shares or other securities (or the equivalent) in Countryside
or because of a change in the control or management of any member
of the Wider Countryside Group or otherwise, could or might
reasonably be expect to result in:
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider
Countryside Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of any member of the Wider Countryside Group or any such
mortgage, charge or other security interest (whenever created,
arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the
rights, liabilities, obligations or interests of any member of the
Wider Countryside Group being materially adversely modified or
adversely affected or any obligation or liability arising or any
adverse action being taken or arising thereunder;
(iv) any liability of any member of the Wider Countryside Group
to make any severance, termination, bonus or other payment to any
of its directors, or other officers;
(v) the rights, liabilities, obligations, interests or business of any member of the Wider Countryside Group or any member of the Wider Vistry Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider Countryside Group or any member of the Wider Vistry Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or
materially adversely modified or affected or any onerous
obligation or liability arising or any adverse action being taken
thereunder;
(vi) any member of the Wider Countryside Group ceasing to be
able to carry on business under any name under which it presently
carries on business;
(vii) the value of, or the financial or trading position or
prospects of, any member of the Wider Countryside Group being
materially prejudiced or adversely affected; or
(viii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider Countryside Group other than
trade creditors or other liabilities incurred in the ordinary
course of business,
and no event having occurred which, under any provision of any
arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider Countryside Group is a
party or by or to which any such member or any of its assets are
bound, entitled or subject, would or might result in any of the
events or circumstances as are referred to in Conditions 3(f)(i) to
(viii);
Certain events occurring since 30 September 2021
(g) except as Disclosed, no member of the Wider Countryside
Group having since 30 September 2021:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of
Countryside Shares out of treasury (except, where relevant, as
between Countryside and wholly-owned subsidiaries of Countryside or
between the wholly-owned subsidiaries of Countryside and except for
the issue or transfer out of treasury of Countryside Shares on the
exercise of employee share options or vesting of employee share
awards in the ordinary course under the Countryside Share
Plans);
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly-owned subsidiary of
Countryside to Countryside or any of its wholly-owned
subsidiaries;
(iii) other than pursuant to the Combination (and except for
transactions between Countryside and its wholly-owned subsidiaries
or between the wholly-owned subsidiaries of Countryside and
transactions in the ordinary course of business) implemented,
effected, authorised or proposed or announced its intention to
implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or
disposal of assets or shares or loan capital (or the equivalent
thereof) in any undertaking or undertakings in any such case to an
extent which is material in the context of the Wider Countryside
Group taken as a whole;
(iv) except for transactions between Countryside and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Countryside, and except for transactions in the ordinary course
of business, disposed of, or transferred, mortgaged or created any
security interest over any asset or any right, title or interest in
any asset or authorised, proposed or announced any intention to do
so, in any such case to any extent which is material in the context
of the Wider Countryside Group;
(v) except for transactions between Countryside and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Countryside, issued, authorised or proposed or announced an
intention to authorise or propose, the issue of or made any change
in or to the terms of any debentures or become subject to any
contingent liability or incurred or increased any indebtedness
which is material in the context of the Wider Countryside Group as
a whole;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or
onerous nature or magnitude or which is or which involves or could
involve an obligation of a nature or magnitude which is or could be
restrictive on the business of any member of the Wider Countryside
Group which is or could be material in the context of the Wider
Countryside Group as a whole;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary the terms
of any contract, service agreement, commitment or arrangement with
any director or senior executive of any member of the Wider
Countryside Group;
(viii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any employee of the
Wider Countryside Group which are material in the context of the
Wider Countryside Group taken as a whole;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, except in respect of the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital, in any such case to any extent which is material in
the context of the Wider Countryside Group;
(x) except in the ordinary course of business, waived,
compromised or settled any claim which is material in the context
of the Wider Countryside Group as a whole;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Countryside Group and
any other person in a manner which would or might reasonably be
expected to have a material adverse effect on the financial
position of the Wider Countryside Group taken as a whole;
(xii) made any alteration to its memorandum or articles of
association or other incorporation documents;
(xiii) except in relation to changes made or agreed as a result
of, or arising from, changes to legislation, made or agreed or
consented to any change to:
(a) the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider
Countryside Group for its directors, employees or their
dependents;
(b) the contributions payable to any such scheme(s) or to the
benefits which accrue, or to the pensions which are payable,
thereunder;
(c) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions contributions are
calculated or determined; or
(d) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued, made, agreed or consented
to,
to an extent which is in any such case material in the context
of the Wider Countryside Group;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
(xv) taken or proposed any steps, corporate action or had any
legal proceedings instituted or threatened against it in relation
to the suspension of payments, a moratorium of any indebtedness,
its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator,
manager, administrative receiver, trustee or similar officer of all
or any of its assets or revenues or any analogous or equivalent
steps or proceedings in any jurisdiction or appointed any analogous
person in any jurisdiction or had any such person appointed;
(xvi) (except for transactions between Countryside and its
wholly-owned subsidiaries or between the wholly-owned
subsidiaries), made, authorised, proposed or announced an intention
to propose any change in its loan capital;
(xvii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities;
(xviii) having taken (or agreed or proposed to take) any action
which requires or would require the consent of the Panel or the
approval of Countryside Shareholders in general meeting in
accordance with, or as contemplated by, Rule 21.1 of the Code;
or
(xix) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition 3 (g) ;
No adverse change, litigation, regulatory enquiry or similar
(h) except as Disclosed, since 30 September 2021 there having been:
(i) no adverse change and no circumstance having arisen which
would or might be expected to result in any adverse change in, the
business, assets, financial or trading position or profits or
prospects or operational performance of any member of the Wider
Countryside Group, in any such case to any extent which is material
in the context of the Wider Countryside Group;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened, announced or
instituted by or against or remaining outstanding against or in
respect of any member of the Wider Countryside Group or to which
any member of the Wider Countryside Group is or may become a party
(whether as claimant, defendant or otherwise) having been
threatened, announced, instituted or remaining outstanding by,
against or in respect of, any member of the Wider Countryside
Group, in each case which might reasonably be expected to have a
material adverse effect on the Wider Countryside Group taken as a
whole;
(iii) no enquiry, review or investigation by, or complaint or
reference to any Third Party against or in respect of any member of
the Wider Countryside Group having been threatened, announced or
instituted or remaining outstanding by, against or in respect of
any member of the Wider Countryside Group, in each case which might
reasonably be expected to have a material adverse effect on the
Wider Countryside Group taken as a whole;
(iv) no contingent or other liability having arisen or become
apparent to Vistry or increased other than in the ordinary course
of business which is reasonably likely to affect adversely the
business, assets, financial or trading position or profits or
prospects of any member of the Wider Countryside Group to an extent
which is material in the context of the Wider Countryside Group
taken as a whole; and
(v) no steps having been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Countryside Group which is necessary for the proper
carrying on of its business;
No discovery of certain matters regarding information,
liabilities and environmental issues
(i) Vistry not having discovered that:
(i) any financial, business or other information concerning the
Wider Countryside Group publicly announced prior to the date of
this announcement or disclosed at any time to any member of the
Wider Vistry Group by or on behalf of any member of the Wider
Countryside Group prior to the date of this announcement is
misleading, contains a misrepresentation of any fact, or omits to
state a fact necessary to make that information not misleading, in
any such case to a material extent;
(ii) any member of the Wider Countryside Group or any
partnership, company or other entity in which any member of the
Wider Countryside Group has a significant economic interest and
which is not a subsidiary undertaking of Countryside is, otherwise
than in the ordinary course of business, subject to any liability,
contingent or otherwise and which is material in the context of the
Wider Countryside Group taken as a whole;
(iii) any past or present member of the Wider Countryside Group
has not complied in any material respect with all applicable
legislation, regulations or other requirements of any jurisdiction
or any Authorisations relating to the use, treatment, storage,
carriage, disposal, discharge, spillage, release, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment (including property) or harm human or animal
health or otherwise relating to environmental matters or the health
and safety of humans, which non-compliance would be likely to give
rise to any material liability including any penalty for
non-compliance (whether actual or contingent) on the part of any
member of the Wider Countryside Group;
(iv) there has been a material disposal, discharge, spillage,
accumulation, release, leak, emission or the migration, production,
supply, treatment, storage, transport or use of any waste or
hazardous substance or any substance likely to impair the
environment (including any property) or harm human or animal health
which (whether or not giving rise to non-compliance with any law or
regulation), would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the
Wider Countryside Group;
(v) there is or is likely to be any obligation or liability
(whether actual or contingent) or requirement to make good,
remediate, repair, reinstate or clean up any property, asset or any
controlled waters currently or previously owned, occupied, operated
or made use of or controlled by any past or present member of the
Wider Countryside Group (or on its behalf), or in which any such
member may have or previously have had or be deemed to have had an
interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto or
otherwise in any such case to any extent which is material in the
context of the Wider Countryside Group; or
(vi) circumstances exist (whether as a result of making the
Combination or otherwise) which would be reasonably likely to lead
to any Third Party instituting (or whereby any member of the Wider
Countryside Group would be likely to be required to institute), an
environment audit or take any steps which would in any such case be
reasonably likely to result in any actual or contingent liability
to improve or install new plant or equipment or to make good,
repair, reinstate or clean up any property of any description or
any asset now or previously owned, occupied or made use of by any
past or present member of the Wider Countryside Group (or on its
behalf) or by any person for which a member of the Wider
Countryside Group is or has been responsible, or in which any such
member may have or previously have had or be deemed to have had an
interest in any such case to any extent which is material in the
context of the Wider Countryside Group;
Anti-corruption
(j) Vistry not having discovered that:
(i) any member of the Wider Countryside Group or any person that
performs or has performed services for or on behalf of any such
company is or has engaged in any activity, practice or conduct
which would constitute an offence under the Bribery Act 2010 or any
other applicable anti-corruption legislation;
(ii) any member of the Wider Countryside Group is ineligible to
be awarded any contract or business under regulation 57 of the
Public Contracts Regulations 2015 or regulation 80 of the Utilities
Contracts Regulations 2015 (each as amended); or
(iii) any member of the Wider Countryside Group has engaged in
any transaction which would cause any member of the Wider Vistry
Group to be in breach of applicable law or regulation upon
Completion of the Combination, including the economic sanctions of
the United States Office of Foreign Assets Control or HM Treasury,
or any government, entity or individual targeted by any of the
economic sanctions of the United Nations, United States or the
European Union or any of its member states, save that this shall
not apply if and to the extent that it is or would be unenforceable
by reason of breach of any applicable Blocking Law;
No criminal property
(k) Vistry not having discovered that any asset of any member of
the Wider Countryside Group constitutes criminal property as
defined by Section 340(3) of the Proceeds of Crime Act 2002 (but
disregarding paragraph (b) of that definition).
Part B: Certain further terms of the Combination
1 Subject to the requirements of the Panel, Vistry reserves the
right, in its sole discretion, to waive, in whole or in part, all
or any of the Conditions set out in Part A of Appendix I above ,
except Conditions 2.1 (i) , 2.2 (i), 2.3 (i) , 3(a) and 3(b), which
cannot be waived. If any of Conditions 2.1 (ii) , 2.2 (ii) and 2.3
(ii) is not satisfied by the relevant deadline specified in the
relevant Condition, Vistry shall make an announcement by 8:00 a.m.
on the Business Day following such deadline confirming whether it
has invoked the relevant Condition, waived the relevant deadlines,
or agreed with Countryside to extend the relevant deadline.
2 If Vistry is required by the Panel to make an offer for
Countryside Shares under the provisions of Rule 9 of the Code,
Vistry may make such alterations to any of the above Conditions and
terms of the Combination as are necessary to comply with the
provisions of that Rule.
3 Vistry shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions in Part A of Appendix I above that
are capable of waiver by a date earlier than the latest date for
the fulfilment of that Condition notwithstanding that the other
Conditions of the Combination may at such earlier date have been
waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be
capable of fulfilment.
4 Under Rule 13.5(a) of the Code and subject to paragraph 5
below , Vistry may only invoke a Condition so as to cause the
Combination not to proceed, to lapse, or to be withdrawn with the
consent of the Panel. The Panel shall normally only give its
consent if the circumstances which give rise to the right to invoke
the Condition are of material significance to Vistry in the context
of the Combination. This shall be judged by reference to the facts
of each case at the time that the relevant circumstances arise.
5 Condition 1 , Conditions 2.1 , 2.2 , 2.3 , 3 (a) and 3 (b) ,
in Part A of Appendix I above, and, i f app l i cab l e , an y
acceptance condition if the Combination is i m plem e nt e d b y
mean s o f a Tak eove r Offe r, are not subject to Rule 13.5(a) of
the Code.
6 Any Condition that is subject to Rule 13.5(a) of the Code may be waived by Vistry.
7 The Countryside Shares acquired under the Combination shall be
acquired fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all
rights now or hereafter attaching or accruing to them, including,
without limitation, voting rights and the right to receive and
retain in full all dividends and other distributions (if any)
declared, made or paid, or any other return of value (whether by
reduction of share capital or share premium account or otherwise)
made on or after the Effective Date (other than the Countryside
Equalisation Dividend).
8 In respect of Countryside Shares, if, on or after the date of
this announcement and on or prior to the Effective Date, any
dividend, distribution, or other return of value is declared, made,
or paid or becomes payable by Countryside, other than with respect
to a Countryside Equalisation Dividend that is calculated in
accordance with the Equalisation Formula, Vistry reserves the right
(without prejudice to any right Vistry may have, with the consent
of the Panel, to invoke Condition 3(g)(ii) in Part A of Appendix I
to this announcement) to (at Vistry's sole discretion): (i) reduce
the Combination Consideration by an amount equivalent to all or any
part of such dividend, distribution, or other return of value or
such excess, in which case any reference in this announcement to
the Combination Consideration will be deemed to be a reference to
the Combination Consideration as so reduced; or alternatively (ii)
declare and pay an equalisation dividend to Vistry Shareholders so
as to reflect the value attributable to such dividend,
distribution, or other return of value is declared or such
excess.
If and to the extent that such a dividend, distribution, or
other return of value has been declared or announced, but not paid
or made, or is not payable by reference to a record date on or
prior to the Effective Date and is or shall be: (i) transferred
pursuant to the Combination on a basis which entitles Vistry to
receive the dividend, distribution, or other return of value and to
retain it; or (ii) cancelled, the consideration payable under the
terms of the Combination shall not be subject to change in
accordance with this paragraph 8.
Vistry also reserves the right to reduce the consideration
payable under the Combination in such circumstances as are, and by
such amount as is, permitted by the Panel.
Any exercise by Vistry of its rights referred to in this
paragraph 8. shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any
revision or variation of the Combination.
9 Vistry reserves the right to elect (with the consent of the
Panel , and subject to the terms of the Co-operation Agreement ) to
implement the Combination by way of a Takeover Offer for the
Countryside Shares as an alternative to the Scheme. In such event,
the Takeover Offer shall be implemented on the same terms, so far
as applicable , and subject to the terms of the Co-operation
Agreement , as those which would apply to the Scheme, subject to
appropriate amendments, including (without limitation) an
acceptance condition set at a level permitted by the Panel.
10 The availability of the Combination to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements. The New Vistry Shares to be issued pursuant to the
Combination have not been and will not be registered under the US
Securities Act or the laws of any state, district or other
jurisdiction of the United States or under any of the relevant
securities laws of any other Restricted Jurisdiction. Accordingly,
the New Vistry Shares may not be offered, sold or delivered,
directly or indirectly, in the United States or any other
Restricted Jurisdiction, except pursuant to exemptions from
applicable requirements of any such jurisdiction (including the
exemption from the registration requirements of the US Securities
Act provided by Section 3(a)(10) thereof).
11 The Combination is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of, any Restricted Jurisdiction where to
do so would violate the laws of that jurisdiction.
12 The Combination is governed by the law of England and Wales
and is subject to the jurisdiction of the courts of England and
Wales and to the Conditions and further terms set out in this
Appendix I to this announcement and to be set out in the Scheme
Document. The Combination is subject to the applicable requirements
of the Code, the Panel, the FCA, and the London Stock Exchange.
13 The New Vistry Shares will be issued credited as fully paid
and will rank pari passu in all aspects with the existing Vistry
Shares in issue at the time including the right to receive and
retain in full all dividends and other distributions (if any)
announced, declared, made or paid, or any other return of capital
(whether by reduction of share capital or share premium account or
otherwise) made, in each case by reference to a record date falling
on or after the Effective Date.
14 Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
15 The Combination is subject to, inter alia, the Conditions set
out in Part A and Part B of this Appendix I to this announcement.
The Combination is also subject to the full terms and conditions
which will be set out in the Scheme Document and such further terms
as may be required to comply with the Listing Rules and the
provisions of the Code.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
(i) As at 2 September 2022 (being the latest practicable date
prior to the date of this announcement), there were 499,723,298
Countryside Shares in issue (excluding 24,903,572 ordinary shares
held in treasury). The International Securities Identification
Number for the Countryside Shares is GB00BYPHNG03.
(ii) Any references to the issued and to be issued ordinary
share capital of Countryside are based on:
-- the 499,723,298 Countryside Shares referred to in paragraph (i) above; plus
-- up to 3,801,199 Countryside Shares which may be issued after
the date of this announcement to satisfy the exercise of options or
vesting award pursuant to the Countryside Share Plans, which has
been calculated on the following basis:
-- up to 191,496 Countryside Shares that may be issued to
satisfy the exercise of options or vesting of awards pursuant to
the Countryside Long Term Incentive Plan; plus
-- up to 3,609,703 Countryside Shares that may be issued to
satisfy the exercise of options under the 2019, 2020, 2021 and 2022
SAYE Plans up to the Long-stop Date.
The outstanding awards under Countryside's Buy-Out Plan over
80,214 Countryside Shares and Deferred Bonus Plan over 441,113
Countryside Shares cannot be satisfied with newly issued shares.
The 41,247 Countryside Shares held by the Countryside employee
benefit trust will be used to satisfy the vesting and exercise of
part of those outstanding awards. The remaining outstanding awards
over 480,080 Countryside Shares will be satisfied with Countryside
Shares purchased in the market.
(iii) The value of the Combination based on the Combination
Consideration of 60 pence in cash and 0.255 of a New Vistry Share
per Countryside Share is calculated on the basis of the issued and
to be issued ordinary share capital of Countryside (as set out in
paragraph (ii) above).
(iv) The Closing Prices on each relevant date are taken from the Daily Official List.
(v) Unless otherwise stated, the financial information relating
to Countryside is extracted from:
-- the audited consolidated financial statements of the
Countryside Group for the financial year ended 30 September 2021 ,
prepared in accordance with IFRS; and
-- the consolidated financial statements of the Countryside for
the six months ended 31 March 2022, prepared in accordance with
IFRS.
(vi) The enlarged share capital of Vistry immediately following
Completion has been calculated as the sum of:
-- the current share capital of Vistry of 218,259,244 Vistry
Shares (excluding 1,500,000 ordinary shares held in treasury);
plus
-- up to 128,398,747 Vistry Shares, which may be issued under
the terms of the Combination (calculated as the number of the
issued and to be issued ordinary share capital of Countryside as
set out in paragraph (ii) above) multiplied by the Exchange
Ratio.
The total number of Vistry Shares to be issued under the terms
of the Combination will therefore be up to 346,657,991 Vistry
Shares (excluding 1,500,000 ordinary shares held in treasury).
(vii) Unless otherwise stated, the financial information
relating to Vistry is extracted from the audited consolidated
financial statements of Vistry for the year ended 31 December 2021
, prepared in accordance with IFRS.
APPIX III
IRREVOCABLE UNDERTAKINGS
(a) Irrevocable Undertakings from Countryside Directors and Countryside Shareholders
The following holders or controllers of Countryside Shares have
given irrevocable undertakings to vote in favour of the Scheme at
the Court Meeting and the resolutions to be proposed at the
Countryside General Meeting and, if Vistry exercises its right to
implement the Combination by way of a Takeover Offer, to accept or
procure acceptance of such offer:
Part A - Countryside Directors' Irrevocable Undertakings
Name of Countryside Number of Countryside Percentage of Countryside
Director Shares in respect issued ordinary
of which undertaking share capital as
is given at 2 September 2022
(excluding shares
under options or
awards)
Douglas Hurt 5,800 0.00%
---------------------- --------------------------
Timothy Lawlor 367,459 0.07%
---------------------- --------------------------
Amanda Burton 13,372 0.00%
---------------------- --------------------------
Baroness Sally
Morgan 12,638 0.00%
---------------------- --------------------------
William Townsend 11,940 0.00%
---------------------- --------------------------
Peter Lee 0 0.00%
---------------------- --------------------------
Amanda Clack 0 0.00%
---------------------- --------------------------
TOTAL 411,209 0.08%
---------------------- --------------------------
These irrevocable undertakings also extend to any shares
acquired by the Countryside Directors as a result of the vesting of
awards or the exercise of options under the Countryside Share
Plans.
The obligations of the Countryside Directors under the
irrevocable undertakings shall lapse and cease to have effect on
and from the following occurrences:
-- this announcement is not released by 8:00 a.m. on 7 September
2022 (or such later date as Countryside and Vistry may agree);
-- Vistry announces, with the consent of the Panel, and before
the Scheme Document is published, that it does not intend to
proceed with the Combination and no new, revised or replacement
Scheme is announced by Vistry in accordance with Rule 2.7 of the
Code;
-- the Scheme is withdrawn or lapses in accordance with its
terms, except where such occurrence is as a result of: (i) Vistry
exercising its right to implement the Combination by way of a
Takeover Offer rather than a Scheme; or (ii) if the lapse or
withdrawal either is not confirmed by Vistry or is followed within
10 business days by an announcement under Rule 2.7 of the Code by
Vistry to implement the Combination either by a new, revised or
replacement Scheme of Arrangement or Takeover Offer;
-- any competing offer for Countryside is made which becomes or
is declared unconditional or otherwise becomes effective; or
-- the Long-stop Date.
These irrevocable undertakings remain binding in the event of a
competing offer.
Part B - Non-director Countryside Shareholder irrevocable
undertakings
Name of Countryside Number of Countryside Percentage of Countryside
Shareholder giving Shares in respect issued ordinary
undertaking of which undertaking share capital as
is given at 2 September 2022
Browning West,
LP ("Browning
West") 75,277,738 15.1%
---------------------- --------------------------
Inclusive Capital
Partners LLP
("Inclusive Capital
Partners") 45,812,728 9.2%
---------------------- --------------------------
David Capital
Partners, LLC
("David Capital
Partners") 31,600,000 6.3%
---------------------- --------------------------
Anson Advisors
Inc. 28,413,878 5.7%
("Anson Advisors")
---------------------- --------------------------
Abrams Capital
Management L.P.
("Abrams Capital
Management") 14,050,527 2.8%
---------------------- --------------------------
TOTAL 195,154,871 39.1%
---------------------- --------------------------
Anson Advisors presently has an interest in Countryside ordinary
shares pursuant to derivatives. Anson Advisors has undertaken
to:
-- close out and settle the derivatives as soon as possible
following this announcement under Rule 2.7 of the Code and then use
reasonable endeavours to purchase the number of Countryside Shares
in respect of which its irrevocable undertaking has been given
(provided that, if Countryside Shares were required to be purchased
on a publicly traded exchange, prior consent from the Panel to such
acquisition would be required) and vote in favour of the Scheme and
the resolutions to be proposed at the Countryside General Meeting (
and, if Vistry exercises its right to implement the Combination by
way of a Takeover Offer, to accept or procure acceptance of such
offer ) in respect of the Countryside Shares purchased; and
-- the extent that it is unable to purchase the total number of
Countryside Shares in respect of which its irrevocable undertaking
has been given despite using reasonable endeavours to do so, to
comply with the undertaking in respect of any Countryside Shares
which it has been able to purchase and use reasonable endeavours to
procure that the registered holder(s) of a number of Countryside
Shares equal to the shortfall do(es) so.
The irrevocable undertakings shall lapse and cease to have
effect:
-- in the case of: (i) Abrams Capital Management, Anson Advisors
and David Capital Partners, if an announcement under Rule 2.7 of
the Code is not issued by Vistry on or before the date which is 56
calendar days after 13 July 2022; (ii) Browning West, if an
announcement under Rule 2.7 of the Code is not issued by Vistry on
or before 9 September 2022; and (ii) Inclusive Capital Partners, if
an announcement under Rule 2.7 of the Code is not issued by Vistry
by 8:00 a.m. (London time) on 5 September 2022 (or such later date
as agreed between Vistry and Countryside);
-- if Vistry announces (with the consent of the Panel, if
required) that it does not intend to proceed with the Combination
and no new, revised or replacement Scheme of Arrangement or
takeover offer (as applicable) is announced by Vistry in accordance
with Rule 2.7 of the Code;
-- in the case of Abrams Capital Management, Anson Advisors,
Browning West and David Capital Partners, if the Scheme does not
become Effective (or, if the Combination were to be implemented by
a Takeover Offer, that such offer does not become or is not
declared unconditional in all respects) on or before the date that
is six months after the date on which an announcement under Rule
2.7 of the Code is issued by Vistry, provided that this shall not
apply where the Combination is withdrawn or lapses solely as a
result of Vistry exercising its right to implement the Combination
by way of a takeover offer rather than a scheme of arrangement (or
vice versa). In the case of Abrams Capital Management, such period
shall be extended by six months if an in-depth anti-trust
proceeding has been issued in respect of the Combination;
-- in the case of Inclusive Capital Partners, if the Scheme (or
Takeover Offer, as applicable): (i) has not become effective by
6:00 p.m. (London time) on the Long-stop Date (or such later time
as agreed between Vistry and Countryside with Court and/or Panel
approval, if required); or (ii) does not become effective, is
withdrawn or lapses in accordance with its terms, provided that
this shall not apply where the Combination is withdrawn or lapses
solely as a result of Vistry exercising its right to implement the
Combination by way of a takeover offer rather than a scheme of
arrangement (or vice versa), or the lapse or withdrawal is followed
within five business days by an announcement under Rule 2.7 of the
Code by Vistry by a new, revised or replaced scheme of arrangement
or takeover offer; or
-- if a competing takeover offer is declared unconditional in
all respects or, if implemented by way of a scheme of arrangement,
becomes effective.
The irrevocable undertakings therefore remain binding in the
event an alternate or higher competing possible offer or offer is
made for Countryside. In addition:
-- the irrevocable undertakings given by Anson Advisors, Abrams
Capital Management, David Capital Partners and Inclusive Capital
Partners prevent them from (amongst other things) disposing of all
or any part of the Countryside Shares subject to their respective
irrevocable undertakings unless pursuant to the terms of the
Combination; and
-- the irrevocable undertaking given by Browning West prevents
it from (amongst other things) disposing of all or any part of the
Countryside Shares subject to the irrevocable undertaking unless
pursuant to the terms of the Combination, provided that (unless
otherwise agreed by Browning West in writing) after 30 September
2022 Browning West is permitted to dispose of up to 23,974,658
Countryside Shares in aggregate (subject to applicable law) and the
number of Countryside Shares subject to the terms of the
irrevocable undertaking shall be reduced accordingly.
(b) Irrevocable undertakings from Vistry Directors
The following Vistry Directors have given irrevocable
undertakings to vote (or procure the vote) in favour of the Vistry
Resolutions to be proposed at the Vistry General Meeting in
relation to the following Vistry Shares currently held by them as
well as any further Vistry Shares they may acquire:
Name Number of Vistry Shares Percentage of Vistry
in respect of which issued ordinary
undertaking is given share capital as
at 2 September
2022 (excluding
shares under option
or awards)
Gregory Fitzgerald 486,242 0.22%
------------------------ ---------------------
Earl Sibley 14,272 0.01%
------------------------ ---------------------
Margaret Browne 9,832 0.00%
------------------------ ---------------------
Graham Prothero 7,531 0.00%
------------------------ ---------------------
Ashley Steel 3,059 0.00%
------------------------ ---------------------
Ralph Findlay 2,868 0.00%
------------------------ ---------------------
Katherine Innes
Ker 850 0.00%
------------------------ ---------------------
TOTAL 524,654 0.24%
------------------------ ---------------------
These irrevocable undertakings also extend to any shares
acquired by the Vistry Directors as a result of the vesting of
awards or the exercise of options under the Vistry Share Plans.
The obligations of the Vistry Directors under the irrevocable
undertakings shall lapse and cease to have effect on and from the
following occurrences:
-- this announcement is not released by 8:00 a.m. on 7 September
2022 (or such later date as
Countryside and Vistry may agree);
-- Vistry announces, with the consent of the Panel, and before
the Offer Document or Scheme Document and the Vistry Circular is
published, that it does not intend to proceed with the Combination
and no new, revised or replacement Scheme is announced by Vistry in
accordance with Rule 2.7 of the Code;
-- the Scheme is withdrawn or lapses in accordance with its
terms, except where such occurrence is as a result of: (i) Vistry
exercising its right to implement the Combination by way of a
Takeover Offer rather than a Scheme; or (ii) if the lapse or
withdrawal either is not confirmed by Vistry or is followed within
10 business days by an announcement under Rule 2.7 of the Code by
Vistry to implement the Combination either by a new, revised or
replacement Scheme of Arrangement or Takeover Offer;
-- any competing offer for Countryside is made which becomes or
is declared unconditional or otherwise becomes effective; or
-- the Long-stop Date.
APPIX IV
STATEMENT ON QUANTIFIED FINANCIAL BENEFITS
PART A
Vistry has made the following quantified financial benefits
statement in paragraph 4 of the announcement (the "Quantified
Financial Benefits Statement"):
"The Vistry Directors, having reviewed and analysed the
potential cost synergies of the Combination, and taking into
account the factors they can influence, believe that the Combined
Group can deliver at least GBP50 million of pre-tax recurring cost
synergies on an annual run-rate basis by the end of the second year
following Completion.
The quantified cost synergies, which are expected to originate
from the cost bases of both the Vistry Group and the Countryside
Group, are expected to be realised primarily from:
(i) procurement-related savings (primarily direct materials) driven by:
-- price harmonisation through moving existing business to the
best price currently available to the Vistry Group and the
Countryside Group;
-- rebate optimisation based on the Vistry Group's and the
Countryside Group's existing rebate structure; and
-- volume-based pricing leverage and harmonisation of
specifications across the Combined Group,
expected to contribute approximately 33 per cent. (GBP16.7
million) of the full run-rate pre-tax cost synergies;
(ii) consolidation of central and support functions, including
third party costs, expected to contribute approximately 32 per
cent. (GBP16.2 million) of the full run-rate pre-tax cost
synergies;
(iii) optimisation of the Partnerships operating model,
including divisional and regional structures, expected to
contribute approximately 21 per cent. (GBP10.3 million) of the full
run-rate pre-tax cost synergies; and
(iv) rationalisation of board, senior management and duplicate
public company costs, expected to contribute approximately 14 per
cent. (GBP6.8 million) of the full run-rate pre-tax cost
synergies.
The Vistry Directors expect that approximately 70 per cent.
(GBP35 million) of the annual run-rate pre-tax cost synergies will
be realised by the end of the first year following Completion, with
the full run-rate achieved by the end of the second year following
Completion.
The Vistry Directors estimate that the realisation of the
quantified cost synergies will result in one-off costs of
approximately GBP48 million, with approximately 95 per cent.
incurred in the first year following Completion and the remainder
by the end of the second year following Completion.
Potential areas of dis-synergy expected to arise in connection
with the Combination have been considered and were determined by
the Vistry Directors to be immaterial to the above analysis.
The identified cost synergies will accrue as a direct result of
the Combination, would not be achieved on a standalone basis and
are incremental to the Countryside Group's previously announced
cost-saving programme. The identified pre-tax cost synergies
reflect both the beneficial elements and relevant costs. "
The Vistry Directors believe that the Combined Group will be
able to achieve the synergies set out in the Quantified Financial
Benefits Statement.
Further information on the bases of belief supporting the
Quantified Financial Benefits Statement, including the principal
assumptions and sources of information, is set out below.
Bases of calculation of the Quantified Financial Benefits
Statement
In preparing the Quantified Financial Benefits Statement,
Countryside has provided Vistry with certain operating and
financial information to facilitate a detailed analysis in support
of evaluating the potential synergies available from the
Combination. In circumstances where data has been limited for
commercial, regulatory or other reasons, Vistry management has made
estimates and assumptions to aid its development of individual
synergy initiatives. The assessment and quantification of the
potential synergies have, in turn, been informed by the Vistry
management's industry experience and knowledge of the existing
businesses, together with close consultation with Countryside.
The cost base used as the basis for the quantified exercise
is:
-- relating to non-staff costs:
-- financial information for the last 12 months for both the
Vistry Group and the Countryside Group (for the 12 months to 30
June 2022 and 31 March 2022, respectively); and
-- procurement-related savings have been quantified based on
unit volumes for the Vistry Group and the Countryside Group for the
years ending 31 December 2022 and 30 September 2022, respectively.
Direct procurement cost savings, which have been assessed using a
clean team exercise run by a third party, have been quantified
based on current unit costs; and
-- relating to staff costs, the latest available headcount and
associated annualised direct per-head costs for both the Vistry
Group and the Countryside Group.
For the potential synergies arising from the combination of
group functions, organisation information was reviewed. The
assessment and quantification of such potential synergies have in
turn been informed by Vistry management's industry experience as
well as their experience of executing and integrating past
acquisitions.
Cost-saving assumptions were based on a detailed, bottom-up
evaluation of the benefits available from elimination of duplicate
activities, the leverage of combined scale economics and
operational efficiencies arising from consolidation of procurement
and activities within operational facilities. In determining the
estimate of costs savings achievable through the combination of
Vistry and Countryside, no savings relating to operations have been
included where no overlap exists.
In general, the synergy assumptions have in turn been
risk-adjusted, exercising a degree of prudence in the calculation
of the estimated synergy benefit set out above.
Where appropriate, assumptions were used to estimate the costs
of implementing the new structures, systems and processes required
to realise the synergies. In particular, the Vistry Directors have
made the following assumptions, which are outside the influence of
Vistry:
-- there will be no material impact on the underlying operations
of either the Vistry Group or the Countryside Group as a result of
the Combination or their ability to continue to conduct their
businesses;
-- there will be no material divestments from the Countryside Group;
-- there will be no material change to macroeconomic, political,
inflationary, regulatory or legal conditions in the markets or
regions in which the Vistry Group and the Countryside Group operate
that will materially impact on the implementation of the synergy
plans or costs to achieve the proposed cost savings;
-- there will be no material change in current foreign exchange rates or interest rates;
-- there will be no material change in accounting standards; and
-- there will be no change in tax legislation or tax rates or
other legislation in the United Kingdom that could materially
impact the ability to achieve any benefits.
In addition, the Vistry Directors have made an assumption within
the influence of Vistry that there will be no material divestments
from the Vistry Group.
In addition, the Vistry Directors have assumed that the cost
synergies are substantively within Vistry's control, albeit that
certain elements are dependent in part on negotiations with third
parties.
Reports
As required by Rule 28.1(a) of the Code, PricewaterhouseCoopers,
as reporting accountants to Vistry, have provided a report stating
that, in their opinion, the Quantified Financial Benefits Statement
has been properly compiled on the basis stated. In addition, HSBC
and Lazard as financial advisers to Vistry, have each provided a
report stating that, in their view, the Quantified Financial
Benefits Statement has been prepared with due care and
consideration.
Copies of these reports are included in this Appendix IV to this
announcement. Each of PricewaterhouseCoopers, HSBC and Lazard has
given and not withdrawn its consent to the publication of its
report in this announcement in the form and context in which it is
included.
Important Notes
1. The statements of estimated pre-tax cost synergies relate to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
synergies referred to may not be achieved, or those achieved could
be materially different from those estimated.
2. No statement in the Quantified Financial Benefits Statement,
or this announcement generally , should be construed as a profit
forecast or interpreted to mean that Vistry's earnings in the full
first full year following the Combination, or in any subsequent
period, would necessarily match or be greater than or be less than
those of Vistry and/or Countryside for the relevant preceding
financial period or any other period.
3. Due to the scale of the Combined Group, there may be
additional changes to the Combined Group's operations. As a result,
and given the fact that the changes relate to the future, the
resulting pre-tax cost synergies may be materially greater or less
than those estimated.
PART B
REPORT FROM PRICEWATERHOUSECOOPERS LLP ON QUANTIFIED FINANCIAL
BENEFITS STATEMENT
The Directors (the "Directors")
Vistry Group PLC
11 Tower View
Kings Hill
West Malling
ME19 4UY
United Kingdom
HSBC Bank plc
8 Canada Square
London
E14 5HQ
United Kingdom
Lazard & Co., Limited (together with HSBC Bank plc, the
"Joint Financial Advisors")
50 Stratton St
London
W1J 8LL
United Kingdom
5 September 2022
Dear Ladies and Gentlemen
Report on the Quantified Financial Benefits Statement by Vistry
Group PLC (the "Company")
We report on the quantified financial benefits statement (the
"Statement") by the Directors included in the announcement dated 5
September 2022 (the "Announcement") to the effect that:
"The Vistry Directors, having reviewed and analysed the
potential cost synergies of the Combination, and taking into
account the factors they can influence, believe that the Combined
Group can deliver at least GBP50 million of pre-tax recurring cost
synergies on an annual run-rate basis by the end of the second year
following Completion.
The quantified cost synergies, which are expected to originate
from the cost bases of both the Vistry Group and the Countryside
Group, are expected to be realised primarily from:
(i) procurement-related savings (primarily direct materials) driven by:
-- price harmonisation through moving existing business to the
best price currently available to the Vistry Group and the
Countryside Group;
-- rebate optimisation based on the Vistry Group's and the
Countryside Group's existing rebate structure; and
-- volume-based pricing leverage and harmonisation of
specifications across the Combined Group,
expected to contribute approximately 33 per cent. (GBP16.7
million) of the full run-rate pre-tax cost synergies;
(ii) consolidation of central and support functions, including
third party costs, expected to contribute approximately 32 per
cent. (GBP16.2 million) of the full run-rate pre-tax cost
synergies;
(iii) optimisation of the Partnerships operating model,
including divisional and regional structures, expected to
contribute approximately 21 per cent. (GBP10.3 million) of the full
run-rate pre-tax cost synergies; and
(iv) rationalisation of board, senior management and duplicate
public company costs, expected to contribute approximately 14 per
cent. (GBP6.8 million) of the full run-rate pre-tax cost
synergies.
The Vistry Directors expect that approximately 70 per cent.
(GBP35 million) of the annual run-rate pre-tax cost synergies will
be realised by the end of the first year following Completion, with
the full run-rate achieved by the end of the second year following
Completion.
The Vistry Directors estimate that the realisation of the
quantified cost synergies will result in one-off costs of
approximately GBP48 million, with approximately 95 per cent.
incurred in the first year following Completion and the remainder
by the end of the second year following Completion.
Potential areas of dis-synergy expected to arise in connection
with the Combination have been considered and were determined by
the Vistry Directors to be immaterial to the above analysis.
The identified cost synergies will accrue as a direct result of
the Combination, would not be achieved on a standalone basis and
are incremental to the Countryside Group's previously announced
cost-saving programme. The identified pre-tax cost synergies
reflect both the beneficial elements and relevant costs. "
This report is required by Rule 28.1(a)(i) of the City Code on
Takeovers and Mergers (the "Takeover Code") and is given for the
purpose of complying with that requirement and for no other
purpose.
Opinion
In our opinion, the Statement has been properly compiled on the
basis stated.
The Statement has been made in the context of the disclosures in
Part A of Appendix IV to the Announcement setting out the basis of
the Directors' belief (including the principal assumptions and
sources of information) supporting the Statement and their analysis
and explanation of the underlying constituent elements.
Responsibilities
It is the responsibility of the Directors to prepare the
Statement in accordance with the requirements of Rule 28 of the
Takeover Code.
It is our responsibility to form our opinion, as required by
Rule 28.1(a)(i) of the Takeover Code, as to whether the Statement
has been properly compiled on the basis stated and to report that
opinion to you.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed or to the shareholders
of the Company as a result of the inclusion of this report in the
Announcement, and for any responsibility arising under Rule
28.1(a)(i) of the Takeover Code to any person as and to the extent
therein provided, to the fullest extent permitted by law we do not
assume any responsibility and will not accept any liability to any
other person for any loss suffered by any such other person as a
result of, arising out of, or in connection with this report or our
statement, required by and given solely for the purposes of
complying with Rule 23.2 of the Takeover Code, consenting to its
inclusion in the Announcement.
Basis of preparation of the Statement
The Statement has been prepared on the basis stated in Part A of
Appendix IV to the Announcement.
Basis of opinion
We conducted our work in accordance with the Standards for
Investment Reporting issued by the Financial Reporting Council
("FRC") in the United Kingdom. We are independent in accordance
with the FRC's Ethical Standard as applied to Investment Circular
Reporting Engagements, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We have discussed the Statement, together with the underlying
plans (relevant bases of belief/including sources of information
and assumptions), with the Directors and the Joint Financial
Advisors. Our work did not involve any independent examination of
any of the financial or other information underlying the
Statement.
We planned and performed our work so as to obtain the
information and explanations we considered necessary in order to
provide us with reasonable assurance that the Statement has been
properly compiled on the basis stated.
We do not express any opinion as to the achievability of the
benefits identified by the Directors in the Statement.
Since the Statement and the assumptions on which it is based
relate to the future and may therefore be affected by unforeseen
events, we express no opinion as to whether the actual benefits
achieved will correspond to those anticipated in the Statement and
the differences may be material.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a limited liability partnership
registered in England with registered number OC303525. The
registered office of PricewaterhouseCoopers LLP is 1 Embankment
Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised
and regulated by the Financial Conduct Authority for designated
investment business.
PART C
REPORT FROM HSBC BANK PLC AND LAZARD & CO., LIMITED ON
QUANTIFIED FINANCIAL BENEFITS STATEMENT
The Directors (the "Directors")
Vistry Group PLC
11 Tower View
Kings Hill
West Malling
ME19 4UY
United Kingdom
5 September 2022
Dear Sirs
Possible combination of Vistry and Countryside - Quantified
Financial Benefits Statement made by Vistry
We refer to the Quantified Financial Benefits Statement, the
bases of belief thereof and the notes thereto (together, the
"Statement") made by Vistry as set out in Part A of the Appendix to
this announcement, for which the board of directors of Vistry (the
"Directors") are solely responsible under Rule 28 of the City Code
on Takeovers and Mergers (the "Code").
We have discussed the Statement (including the assumptions and
sources of information referred to therein), with the Directors and
those officers and employees of Vistry who developed the underlying
plans, as well as with PricewaterhouseCoopers LLP. The Statement is
subject to uncertainty as described in this announcement and our
work did not involve an independent examination of any of the
financial or other information underlying the Statement.
We have relied upon the accuracy and completeness of all the
financial and other information provided to us by, or on behalf of,
Vistry, or otherwise discussed with or reviewed by us, and we have
assumed such accuracy and completeness for the purposes of
providing this letter.
We do not express any opinion as to the achievability of the
quantified financial benefits identified by the Directors.
We have also reviewed the work carried out by
PricewaterhouseCoopers LLP and have discussed with them the opinion
set out in Part B of the Appendix IV to this announcement addressed
to yourselves and ourselves on this matter.
This letter is provided to you solely in connection with Rule
28.1(a)(ii) of the Code and for no other purpose. We accept no
responsibility to Vistry or its shareholders or any person other
than the Directors in respect of the contents of this letter. Each
of us is acting as financial adviser to Vistry and no one else in
connection with the transaction referred to in this announcement
and it was solely for the purpose of complying with Rule
28.1(a)(ii) of the Code that Vistry requested us to prepare this
report on the Statement. No person other than the Directors can
rely on the contents of this letter, and to the fullest extent
permitted by law, we exclude all liability (whether in contract,
tort or otherwise) to any other person, in respect of this letter,
its contents, or the work undertaken in connection with this
letter, or any of the results or conclusions that can be derived
from this letter or any written or oral information provided in
connection with this letter, and any such liability is expressly
disclaimed except to the extent that such liability cannot be
excluded by law.
On the basis of the foregoing, we consider that the Statement,
for which you as the Directors are solely responsible, has been
prepared with due care and consideration.
Yours faithfully
HSBC Bank plc
Lazard & Co., Limited
APPIX V
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
Adjusted EBIT earnings before interest and tax including
share of operating profit from joint
ventures and associates and excluding
non-underlying items
Adjusted Revenue revenue including share of revenue
from joint ventures and associates
Admission admission of the New Vistry Shares
to the premium listing segment of
the Official List and to trading on
the Main Market of the London Stock
Exchange
Authorisations regulatory authorisations, orders,
recognitions, grants, consents, clearances,
confirmations, certificates, licences,
permissions or approvals
Blocking Law (i) any provision of Council Regulation
(EC) No 2271/1996 of 22 November 1996
(or any law or regulation implementing
such Regulation in any member state
of the European Union); or (ii) any
provision of Council Regulation (EC)
No 2271/1996 of 22 November 1996,
as it forms part of domestic law of
the United Kingdom by virtue of the
European Union (Withdrawal) Act 2018
bps basis points
Business Day a day (other than Saturdays, Sundays
and public holidays in the UK) on
which banks are open for business
in London
Clearances any approvals, consents, clearances,
permissions, confirmations, comfort
letters and waivers that may need
to be obtained and waiting periods
that may need to have expired, from
or under any of the laws, regulations
or practices applied by any Relevant
Authority (or under any agreements
or arrangements to which any Relevant
Authority is a party), in each case
that are necessary and/or expedient
to satisfy the Regulatory Conditions
Closing Price the closing middle market price of
a Countryside Share on a particular
trading day as derived from the Daily
Official List
CMA the UK Competition and Markets Authority,
the competent UK authority, department
of the government of the United Kingdom,
responsible for competition
Code the City Code on Takeovers and Mergers
Combination the recommended cash and share offer
being made by Vistry to acquire the
entire issued and to be issued ordinary
share capital of Countryside to be
effected by means of the Scheme (or
by way of a Takeover Offer under certain
circumstances described in this announcement)
and, where the context admits, any
subsequent revision, variation, extension
or renewal thereof
Combination Consideration the consideration offered by Vistry
under the terms of Combination in
the form of 60 pence in cash and 0.255
of a New Vistry Share for each Countryside
Share
Combined Group the combined Countryside Group and
Vistry Group following Completion
of the Combination
Companies Act the Companies Act 2006, as amended
from time to time
Competition and Markets a UK statutory body established under
Authority the Enterprise and Regulatory Reform
Act 2013
Computershare Computershare Investor Services PLC
Conditions the conditions to the implementation
of the Combination, as set out in
Appendix I to this announcement and
to be set out in the Scheme Document
Confidentiality Agreement the confidentiality and standstill
agreement dated 22 July 2022 between
Vistry and Countryside as described
in paragraph 19 of this announcement
Confidentiality and Joint the confidentiality and joint defence
Defence Agreement agreement dated 10 August 2022 between
Vistry, Countryside and their respective
legal advisers, as described in paragraph
19 of this announcement
Co-operation Agreement the agreement dated 5 September 2022
between Vistry and Countryside relating
to, among other things, the implementation
of the Combination, as described in
paragraph 19 of this announcement
Countryside Countryside Partnerships PLC
Countryside Board the board of directors of Countryside
at the time of this announcement or,
where the context so requires, the
board of directors of Countryside
from time to time
Countryside Directors the directors of Countryside at the
time of this announcement or, where
the context so requires, the directors
of Countryside from time to time
Countryside General Meeting the general meeting of Countryside
Shareholders (including any adjournment
thereof) to be convened in connection
with the Scheme
Countryside Group Countryside and its subsidiary undertakings
and, where the context permits, each
of them
Countryside Share Plans each of Countryside's share plans,
including the long-term incentive
plan, the deferred bonus plan and
the save as you earn plan
Countryside Shareholders the holders of Countryside Shares
Countryside Shares the existing unconditionally allotted
or issued and fully paid ordinary
shares of GBP0.01 each in the capital
of Countryside and any further such
ordinary shares which are unconditionally
allotted or issued before the Scheme
becomes Effective
Court the High Court of Justice in England
and Wales
Court Hearing the hearing by the Court of the application
to sanction the Scheme under Part
26 of the Companies Act
Court Meeting the meeting of Countryside Shareholders
to be convened pursuant to an order
of the Court under the Companies Act
for the purpose of considering and,
if thought fit, approving the Scheme
(with or without amendment), including
any adjournment thereof, notice of
which is to be contained in the Scheme
Document
Court Order the order of the Court sanctioning
the Scheme
CREST the system for the paperless settlement
of trades in securities and the holding
of uncertificated securities operated
by Euroclear
Daily Official List the Daily Official List published
by the London Stock Exchange
Dealing Arrangement an arrangement of the kind referred
to in Note 11(a) on the definition
of acting in concert in the Code
Dealing Disclosure has the same meaning as in Rule 8
of the Code
Disclosed the information disclosed by or on
behalf of Countryside: (i) in the
annual report and accounts of the
Countryside Group for the financial
year ended 30 September 2021; (ii)
in this announcement; (iii) in any
other announcement to a Regulatory
Information Service by, or on behalf
of Countryside in the calendar year
prior to the date of this announcement;
or (iv) as otherwise fairly disclosed
to Vistry (or its respective officers,
employees, agents or advisers) prior
to the date of this announcement
DLUHC the UK Government's Department for
Levelling Up, Housing and Communities
EBIT earnings before interest and taxes
Effective in the context of the Combination:
(a) if the Combination is implemented
by way of the Scheme, the Scheme having
become effective pursuant to its terms;
or
(b) if the Combination is implemented
by way of a Takeover Offer, such Takeover
Offer having been declared and become
unconditional in accordance with the
Code
Effective Date or Completion the date on which either: (i) the
Scheme becomes Effective in accordance
with its terms; or (ii) if Vistry
elects (with the consent of the Panel,
and subject to the terms of the Co-operation
Agreement) to implement the Combination
by way of a takeover offer (as defined
in Chapter 3 of Part 28 of the Companies
Act), the date on which such takeover
offer becomes or is declared unconditional
Equiniti Equiniti Limited
Euroclear Euroclear UK & International Limited
Exchange Ratio the share exchange ratio under the
Combination of 0.255 of a New Vistry
Share in exchange for each Countryside
Share
Facility Agreement the pound sterling term loan facility
agreement dated 5 September 2022 between,
among others, Vistry as company and
original borrower and HSBC as mandated
lead arranger, original lender and
agent, to provide, among other things,
the funding of the cash consideration
for the Combination
FCA the Financial Conduct Authority acting
in its capacity as the competent authority
for the purposes of Part VI of the
FSMA
Formal Sales Process the formal sales process announced
by Countryside on 13 June 2022
Forms of Election the form or forms of election for
use in connection with the Mix and
Match Facility
Forms of Proxy the forms of proxy for use in connection
with each of the Court Meeting and
the Countryside General Meeting, which
shall accompany the Scheme Document
and/or the forms of proxy for use
in connection with the Vistry General
Meeting, which shall accompany the
Vistry Circular, as applicable
FSMA the Financial Services and Markets
Act 2000, as amended from time to
time
Gearing net debt divided by tangible net asset
value, where net debt is calculated
as total borrowings (including current
and non-current borrowings as shown
in the balance sheet and excluding
land creditors) less cash and cash
equivalents, and tangible net asset
value is calculated as total equity
less intangible assets
HSBC HSBC Bank plc
IFRS International Financial Reporting
Standards as adopted by the UK
Lazard Lazard & Co., Limited
Listing Rules the listing rules made by the FCA
under Part VI of the FSMA and forming
part of the FCA Handbook, as amended
from time to time
London Stock Exchange London Stock Exchange plc
Long-stop Date 6 September 2023, or such later date
as may be agreed by Vistry and Countryside
(with the Panel's consent and as the
Court may approve (if such approval(s)
are required))
Main Market the London Stock Exchange's main market
for listed securities
Market Abuse Regulation Regulation (EU) No 596/2014 and the
delegated acts, implementing acts,
technical standards and guidelines
thereunder as it forms part of domestic
law of the United Kingdom by virtue
of the European Union (Withdrawal)
Act 2018, as amended from time to
time
Mix and Match Facility the facility under which Countryside
Shareholders are entitled to elect
to vary the proportions in which they
receive New Vistry Shares and in which
they receive cash in respect of their
holdings of Countryside Shares to
the extent that other such Countryside
Shareholders make off-setting elections
New Vistry Shares the new Vistry Shares proposed to
be issued to Countryside Shareholders
in connection with the Combination
Offer Document the document containing a Takeover
Offer
Offer Period the offer period (as defined by the
Code) relating to Countryside, which
commenced on 5 September 2022
Official List the Official List of the FCA
Opening Position Disclosure has the same meaning as in Rule 8
of the Code
Overseas Shareholders Countryside Shareholders (or nominees
of, or custodians or trustees for
Countryside Shareholders) not resident
in, or nationals or citizens of, the
United Kingdom
Panel the Panel on Takeovers and Mergers
PRA the Prudential Regulation Authority
PricewaterhouseCoopers PricewaterhouseCoopers LLP
Quantified Financial the statements of estimated cost savings
Benefits Statement and synergies arising out of the Combination
set out in Appendix IV to this announcement
Registrar of Companies the Registrar of Companies in England
and Wales
Regulatory Clean Team the Regulatory Clean Team Protocol
Protocol put in place on 22 July 2022 by Vistry
and Countryside in relation to the
disclosure of competitively sensitive
confidential information between Vistry's
external legal counsel and/or Vistry's
experts and/or specific Vistry individuals
and Countryside's external legal counsel
and/or Countryside's experts and/or
specific Countryside individuals for
the purposes of, inter alia, planning
for the Combination and obtaining
the consent of competition authorities
and/or other regulatory clearances
in connection with the Combination,
as described in paragraph 19 of this
announcement
Regulatory Conditions the Conditions set out in paragraphs
3.3(c) to 3.3(e) (inclusive) of Part
A of Appendix I of this announcement
Regulatory Information any information service authorised
Service from time to time by the FCA for the
purpose of disseminating regulatory
announcements
Relevant Authority any central bank, ministry, governmental,
quasi-governmental, supranational
(including the European Union), statutory,
regulatory or investigative body ,
authority or tribunal (including any
national or supranational anti-trust,
competition or merger control authority,
any sectoral ministry or regulator
and any foreign investment review
body), national, state, municipal
or local government (including any
subdivision, court, tribunal, administrative
agency or commission or other authority
thereof), any entity owned or controlled
by them, any private body exercising
any regulatory, taxing, importing
or other authority, trade agency,
association, institution or professional
or environmental body in any jurisdiction,
including, for the avoidance of doubt,
the Panel
Restricted Jurisdiction any jurisdiction where local laws
or regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning
the Combination is sent or made available
to Countryside Shareholders
Restricted Overseas Person Countryside Shareholders resident
in, or nationals or citizens of, Restricted
Jurisdictions or who are nominees
or custodians, trustees or guardians
for, citizens, residents or nationals
of such Restricted Jurisdictions
ROCE return on capital employed
Rothschild & Co N.M. Rothschild & Sons Limited
Scheme or Scheme of Arrangement the proposed scheme of arrangement
under Part 26 of the Companies Act
between Countryside and the Countryside
Shareholders in connection with the
Combination, with or subject to any
modification, addition or condition
approved or imposed by the Court and
agreed by Countryside and Vistry
Scheme Document the document to be sent to Countryside
Shareholders containing, amongst other
things, the Scheme and the notices
convening the Court Meeting and the
Countryside General Meeting
SEC the US Securities and Exchange Commission
Share Buyback Programme the share buyback programme announced
by Countryside on 7 July 2021
Significant Interest in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of the total voting rights
conferred by the equity share capital
(as defined in Section 548 of the
Companies Act) of such undertaking
SONIA the sterling overnight index average
Takeover Offer should the Combination be implemented
by way of a Takeover Offer as defined
in Chapter 3 of Part 28 of the Companies
Act, the offer to be made by or on
behalf of Vistry to acquire the entire
issued and to be issued ordinary share
capital of Countryside and, where
the context admits, any subsequent
revision, variation, extension or
renewal of such takeover offer
Third Party each of a central bank, government
or governmental, quasi-governmental,
supranational, statutory, regulatory,
environmental, administrative, fiscal
or investigative body, court, trade
agency, association, institution,
environmental body, employee representative
body or any other body or person whatsoever
in any jurisdiction
United Kingdom or UK the United Kingdom of Great Britain
and Northern Ireland
United States or US the United States of America, its
territories and possessions, any state
of the United States of America, the
District of Columbia and all other
areas subject to its jurisdiction
and any political sub-division thereof
US Exchange Act the United States Securities Exchange
Act 1934
Vistry Vistry Group PLC
Vistry Circular the circular relating to approval
of the Combination to be sent by Vistry
to Vistry Shareholders summarising
the background to and reasons for
the Combination, which will include
a notice convening the Vistry General
Meeting containing the Vistry Resolutions
Vistry Directors the directors of Vistry at the time
of this announcement or, where the
context so requires, the directors
of Vistry from time to time
Vistry General Meeting the general meeting of Vistry (including
any adjournment thereof) to be convened
for the purpose of considering, and
if thought fit approving, the Vistry
Resolutions (as well as any incidental
or related matter that Vistry may
wish to place before such meeting),
notice of which will be sent to Vistry
Shareholders
Vistry Group Vistry and its subsidiary undertakings
and, where the context permits, each
of them
Vistry Prospectus the prospectus be produced by Vistry
in respect of the New Vistry Shares
to be issued to Countryside Shareholders
in connection with the Combination
Vistry Resolutions means the shareholder resolutions
of Vistry necessary to approve, effect
and implement the Combination, including,
without limitation, to: (i) approve
the Combination as a Class 1 transaction
for the purposes of the Listing Rules;
and (ii) grant authority to the Vistry
Directors to allot the New Vistry
Shares, and any amendment(s) thereof
Vistry Share Plans means the employee share plans of
Vistry as described in the Vistry
annual report for the 12 months ended
31 December 2021
Vistry Shareholders the holders of Vistry Shares
Vistry Shares the allotted and issued ordinary shares
of 50 pence each in the capital of
Vistry
Wider Countryside Group Countryside and associated undertakings
and any other body corporate, partnership,
joint venture or person in which Countryside
and such undertakings (aggregating
their interests) have a Significant
Interest
Wider Vistry Group Vistry and associated undertakings
and any other body corporate, partnership,
joint venture or person in which Vistry
and all such undertakings (aggregating
their interests) have a Significant
Interest
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "undertaking" and "associated undertaking" have the
respective meanings given thereto by the Companies Act.
All references to "GBP" and "pence" are to the lawful currency
of the United Kingdom.
All the times referred to in this announcement are London times
unless otherwise stated.
References to the singular include the plural and vice
versa.
[1] Including 100% of joint venture plots and applying the
Vistry Group's own definition of the distinction between "land
bank" and "strategic land" to the Countryside Group's land
assets.
[2] The Countryside Group's partnerships business generated a
ROCE of 20 per cent. for the financial year ended 30 September 2021
as compared to the Vistry Group's ROCE for its partnerships
business of over 40 per cent. for the financial year ended 31
December 2021.
[3] The Countryside Group's partnerships business generated a
ROCE of 20 per cent. for the financial year ended 30 September 2021
as compared to the Vistry Group's ROCE for its partnerships
business of over 40 per cent. for the financial year ended 31
December 2021.
[4] Including 100% of joint venture plots and applying the
Vistry Group's own definition of the distinction between "land
bank" and "strategic land" to the Countryside Group's land
assets.
[5] The Countryside Group's partnerships business generated a
ROCE of 20 per cent. for the financial year ended 30 September 2021
as compared to the Vistry Group's ROCE for its partnerships
business of over 40 per cent. for the financial year ended 31
December 2021.
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