TIDMCREI TIDMDRIP
RNS Number : 7389K
Custodian REIT PLC
03 September 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A
PROSPECTUS AND DRUM SHAREHOLDERS SHOULD NOT MAKE ANY INVESTMENT
DECISION IN RELATION TO THE NEW CUSTODIAN SHARES EXCEPT ON THE
BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT WHICH IS PROPOSED
TO BE PUBLISHED IN DUE COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
3 September 2021
RECOMMED ALL-SHARE ACQUISITION OF DRUM INCOME PLUS REIT PLC
BY CUSTODIAN REIT PLC
Summary
The Boards of Custodian REIT plc ("Custodian") and Drum Income
Plus REIT plc ("Drum") are pleased to announce that they have
reached agreement on the terms of a recommended all-share
acquisition of Drum by Custodian (the "Acquisition"), which is to
be implemented by way of a Court-sanctioned scheme of arrangement
of Drum (the "Scheme") under Part 26 of the Companies Act 2006 (the
"Companies Act").
The Boards of Custodian and Drum believe that the Acquisition
presents an attractive opportunity for Drum Shareholders to obtain
a more liquid investment and a strategic opportunity for Custodian
to grow the current property portfolio. The Acquisition seeks to
allow Drum Shareholders to transfer their investment into a company
that continues to focus on regional real estate investments with
attractive income characteristics, while at the same time offering
greater liquidity, reduced ongoing charges providing further
economies of scale and greater portfolio diversification. For
Custodian Shareholders, the Drum portfolio is complementary to
Custodian's, is expected to enhance earnings per Custodian Share
and the corporate transaction leads to savings compared with an
equivalent property acquisition.
Under the terms of the Acquisition:
Drum Shareholders will be entitled to receive 0.530
New Custodian Shares in exchange for each Drum Share (the
"Exchange Ratio").
The Exchange Ratio values the entire issued and to be issued
share capital of Drum at approximately GBP21.4 million (based on a
closing price of 105.80 pence per Custodian Share on 3 August 2021,
being the latest practicable date prior to the Possible Offer
Announcement).
The value implied by the Exchange Ratio, represents a premium of
approximately:
-- 7.8 per cent. to the bid market closing price of 52.00 pence
per Drum Share on 3 August 2021; and
-- 80.9 per cent. to the bid market closing price of 31.00 pence
per Drum Share on 4 March 2021 being the date immediately prior to
the date on which the Drum Board announced that it was undertaking
a strategic review to consider the future of Drum; and
-- 10.3 per cent. to the volume weighted average price per Drum
Share of 50.85 pence over the 12 month period ended on and
including 3 August 2021.
The Acquisition will result in the Existing Custodian
Shareholders owning 95.4 per cent. and the Drum Shareholders owning
4.6 per cent., respectively, of the share capital of the Enlarged
Custodian.
Custodian will adjust the Exchange Ratio in the event that: (a)
either Custodian or Drum announces, declares, makes or pays any one
or more dividends or other distributions prior to completion of the
Acquisition (save in relation to the making or payment of any
dividend or distribution that was announced or declared prior to
the date of the Possible Offer Announcement) that is in aggregate
in excess of 1.25 pence per Custodian Share or 0.75 pence per Drum
Share respectively (the amount of such excess in each case being
the "Excess"), in which event the adjustment to the Exchange Ratio
shall be to take account of the Excess; and/or (b) at the time of
completion of the Acquisition, either Custodian or Drum has
announced, declared, made or paid its regular quarterly dividend of
1.25 pence per Custodian Share and 0.75 pence per Drum Share as
applicable, but the other has not announced, declared, made or paid
such dividend (a "Dividend Discrepancy"), in which case the
adjustment to the Exchange Ratio shall be to take account of the
Dividend Discrepancy.
Drum announced on 22 July 2021 that the Net Asset Value per Drum
Share as at 30 June 2021 was 70.11 pence. Custodian announced on 27
July 2021 that the Net Asset Value per Custodian Share as at 30
June 2021 was 101.7 pence. The Scheme Document will contain a
valuation in respect of Drum's and Custodian's property portfolios
as at 30 June 2021 in accordance with Rule 29 of the Code.
The Drum Board considers that the Acquisition is expected to
result in a sustainable increase in the valuation of Drum
Shareholders' investments due to the higher premium to NAV at which
Custodian Shares have historically traded compared to Drum Shares.
Over the three months ended 3 August 2021 (being the latest
practicable date prior to the Possible Offer Announcement), the
Custodian Shares traded at an average premium to Net Asset Value of
1.2 per cent. and the Drum Shares traded at an average discount to
Net Asset Value per share of 15.1 per cent.
The Drum Board believes that the proposed Acquisition offers
Drum Shareholders an attractive opportunity for the following
reasons.
-- The Acquisition offers Drum Shareholders the opportunity to
continue their investment in a REIT with a similar investment
strategy to Drum, but with a broad and diversified shareholder base
offering greater liquidity.
-- The Custodian portfolio is complementary to the Drum
portfolio, with a focus on investing in regional real estate assets
and a history of strong performance.
-- Custodian offers Drum Shareholders a similar investment
objective to Drum in providing shareholders with an attractive
level of dividend, fully covered by earnings. Custodian met its
target of paying an annual dividend per Custodian Share of 5.0
pence for the financial year ending 31 March 2021.
Having reviewed a range of alternative transactions, the Drum
Board believes that the Enlarged Custodian would be attractive in
providing Drum Shareholders with greater liquidity, greater
portfolio diversification and lower ongoing charges than provided
by Drum. Furthermore, the Board believes that the Acquisition
represents an orderly, low risk and effective transfer of Drum's
property portfolio in today's market.
The Custodian Board also believes there is a compelling
strategic rationale for the Acquisition.
-- The Custodian Board believes that Drum's portfolio is
complementary to the Custodian portfolio, based on Drum's similar
property strategy and Custodian's current sector and geographical
weightings.
-- The Acquisition is expected to enhance earnings per Custodian
Share and dividend cover in the first full year of ownership
following the Acquisition. Following completion of the Acquisition,
the Enlarged Custodian portfolio would benefit from increased
tenant diversification and the increase in the asset base would
reduce the Enlarged Custodian's Ongoing Charges Ratio.
-- As the Acquisition is structured as a corporate transaction,
neither SDLT in England and Northern Ireland nor LBTT in Scotland
will be payable on acquiring the properties within the Drum
portfolio, leading to savings of approximately GBP2.1 million (net
of stamp duty payable by Custodian on the acquisition of the Drum
Shares) compared to an equivalent property acquisition.
Consequently, the Custodian Board believes that the Acquisition
is of benefit to the Existing Custodian Shareholders as it will
grow the portfolio without incurring SDLT or LBTT, diversify the
Custodian portfolio, enhance dividend cover and reduce the Ongoing
Charges Ratio.
Recommendation
The Drum Directors, who have been so advised by Dickson Minto
W.S. ("Dickson Minto") as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and
reasonable. In providing its advice to the Drum Directors, Dickson
Minto has taken into account the commercial assessment of the Drum
Directors. Dickson Minto is providing independent financial advice
to the Drum Directors for the purposes of Rule 3 of the Code.
Accordingly, the Drum Directors intend unanimously to recommend
that Drum Shareholders vote, or procure votes, in favour of the
Scheme at the Court Meeting and in favour of the Resolution
necessary to enable Drum to implement the Acquisition to be
proposed at the General Meeting. Hugh Little and Alan Robertson,
the Drum Directors who hold, or who are beneficially entitled to,
Drum Shares, have each irrevocably undertaken to vote in favour of
the Scheme in respect of their own beneficial holdings of 150,000
Drum Shares in aggregate, representing approximately 0.39 per
cent., in aggregate, of Drum's ordinary share capital in issue on 2
September 2021 (being the latest practicable date prior to this
Announcement).
Other Drum Shareholder irrevocable undertakings
Custodian has received an irrevocable undertaking to vote or
procure votes to approve the Scheme at the Court Meeting and to
vote or procure votes in favour of the Resolution necessary to be
able to implement the Acquisition to be passed at the General
Meeting from Seven Investment Management, the largest Drum
Shareholder, in respect of 26,379,190 Drum Shares, representing
approximately 69.05 per cent. of the issued share capital of Drum
as at 2 September 2021 (being the last practicable date prior to
the date of this Announcement) in respect of which Seven Investment
Management has investment management discretion and can procure the
exercise of the voting rights attaching to such Drum Shares.
The Board of Custodian notes that as part of the irrevocable
undertaking provided by Seven Investment Management in respect of
the Acquisition, Seven Investment Management has confirmed that it
is its current intention to hold the New Custodian Shares for the
medium term from the date on which the Acquisition becomes
Effective other than such New Custodian Shares as Seven Investment
Management is expecting to sell in the near term to meet the
liquidity requirements from their underlying funds. Seven
Investment Management has also given certain orderly market
undertakings to Custodian in respect of the any proposed disposals
in the medium term.
Custodian has also received an irrevocable undertaking to vote
or procure votes to approve the Scheme at the Court Meeting and to
vote or procure votes in favour of the Resolution necessary to be
able to implement the Acquisition to be passed at the General
Meeting from Drum Property Investment Group Limited in respect of
2,560,000 Drum Shares, representing approximately 6.70 per cent. of
Drum's ordinary share capital in issue on 2 September 2021 (being
the latest practicable date prior to this Announcement).
Next steps
Drum will shortly send the Scheme Document to Drum Shareholders
which will include the full terms of the Scheme, an Explanatory
Statement from Dickson Minto, an expected timetable of principal
events and notices of the Court Meeting and the General
Meeting.
The Scheme is conditional on the approval by a majority in
number representing not less than 75 per cent. in value of the Drum
Shareholders who are on the register of members of Drum at the
Voting Record Time, present and voting, whether in person or by
proxy, at the Court Meeting (or any adjournment thereof). The
implementation of the Scheme also requires the approval of the
Resolution to be proposed at the General Meeting (or any
adjournment thereof) to amend the Drum Articles to ensure that, if
the Scheme is approved at the Court Meeting, any Drum Shares issued
after the Scheme Record Time will automatically be acquired by
Custodian on the same terms as under the Scheme.
If the Scheme receives the necessary approval from the Drum
Shareholders, Drum will ask the Court to sanction the Scheme and a
copy of the Court Order will be delivered to the Registrar of
Companies in England and Wales. The Scheme will only become
Effective on delivery of the Court Order to the Registrar of
Companies.
It is expected that the Scheme will become Effective on 3
November 2021 and the New Custodian Shares which are to be issued
to Drum Shareholders will be admitted to (i) listing on the premium
listing segment of the Official List of the FCA; and (ii) trading
on the London Stock Exchange's main market for listed securities on
4 November 2021.
General
Whilst it is intended that the Acquisition will be implemented
by way of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act, Custodian reserves the right to implement the
Acquisition by way of a Takeover Offer, subject to the Panel's
consent.
The Acquisition will be subject to the conditions and further
terms set out in Appendix I to this Announcement and in the Scheme
Document. It is expected that the Scheme will become Effective on 3
November 2021, subject to the satisfaction (or, where applicable,
waiver) of such conditions and further terms. Further details of
the Acquisition will be set out in the Scheme Document which will
contain notice of the Court Meeting and the General Meeting,
together with the forms of proxy for use at those Meetings.
Commenting on the Acquisition, Hugh Little, Chairman of Drum
said:
"This transaction gives Drum Shareholders the opportunity to
participate in a portfolio of regional real estate assets that has
similar characteristics to the existing Drum portfolio but is
larger and, as a result, more diversified. Drum Shareholders will
benefit from lower costs as a proportion of net assets and from the
greater premium to NAV at which the Custodian Shares may trade. The
Board is grateful to Drum Real Estate Investment Management Limited
for the skill and effort it has devoted to the Company since IPO
and looks forward, on behalf of Shareholders, to a continuing
investment with Custodian."
Commenting on the Acquisition, David Hunter, Chairman of
Custodian said:
"I am delighted to announce this important transaction for
Custodian, which I am confident should benefit both our new and
existing shareholders. The property portfolios of each company are
complementary, and the Acquisition is expected to deliver increased
earnings and dividend cover, to further diversify our portfolio and
to reduce our Ongoing Charges Ratio."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including its
appendices).
The Acquisition will be subject to the conditions and further
terms of the Acquisition set out in Appendix I to this
Announcement, and to the full terms and conditions to be set out in
the Scheme Document. Appendix II to this Announcement contains the
sources of certain information and bases of calculation used in
this Announcement. Appendix III to this Announcement contains
details of the irrevocable undertakings received in relation to the
Acquisition that are referred to in this Announcement. Appendix IV
to this Announcement contains definitions of certain terms used in
this Announcement.
Enquiries:
Custodian REIT plc
Richard Shepherd-Cross / Ed Moore +44 (0)11 6240 8700
Numis Securities Ltd (Financial Adviser
and Broker to Custodian)
Hugh Jonathan / Stuart Ord +44 (0) 20 7260 1000
Camarco (Communications adviser to Custodian)
Ed Gascoigne-Pees +44 (0) 20 3757 4984
Drum Income Plus REIT plc info@dripreit.com
Stuart Oag
Dickson Minto (Sponsor and Rule 3 Adviser
to Drum)
Douglas Armstrong +44 (0) 20 7649 6823
Important notices
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting as financial adviser and corporate broker exclusively for
Custodian and no one else in connection with the matters referred
to in this Announcement. In connection with such matters, Numis
will not regard any other person as their client, nor will it be
responsible to any person other than Custodian for providing the
protections afforded to clients of Numis or for providing advice in
relation to the contents of this Announcement or any other matter
referred to herein. Neither Numis nor any of its affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct, indirect, consequential, whether in contract, in tort,
under statute or otherwise) to any person who is not a client of
Numis in connection with the Acquisition, the matters referred to
in this Announcement, any statement contained herein or
otherwise.
Dickson Minto W.S. ("Dickson Minto"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom,
is acting exclusively for Drum and for no one else in connection
with the matters referred to in this Announcement and will not be
responsible to anyone other than Drum for providing the protections
afforded to its clients or for providing advice in connection with
the Acquisition referred to in this Announcement.
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 Financial Services and Market
Act 2000 (as amended) if you are resident in the United Kingdom or
from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons who are
subject to the laws of any jurisdiction other than the United
Kingdom into whose possession this Announcement comes should inform
themselves about and observe such restrictions. Any failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This Announcement has been prepared in connection with proposals
in relation to a scheme of arrangement and for the purposes of
complying with the laws of England and Wales, the Code, the Listing
Rules and the rules of the London Stock Exchange 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 and regulations of any jurisdiction outside of
England and Wales.
Overseas Shareholders should consult their own legal and tax
advisers with respect to the legal and tax consequences of the
Scheme. It is the responsibility of any person into whose
possession this Announcement comes to satisfy themselves as to the
full observance of the laws of the relevant jurisdiction in
connection with the Acquisition including the obtaining of any
governmental, exchange control or other consents which may be
required and/or compliance with other necessary formalities which
are required to be observed and the payment of any issue, transfer
or other taxes or levies due in such jurisdiction.
US shareholders
US Shareholders should note that the Acquisition relates to the
shares in a company incorporated in England and Wales and is
proposed to be made by means of a scheme of arrangement provided
for under the laws of England and Wales. A transaction effected by
means of a scheme of arrangement is not subject to the proxy
solicitation or tender offer rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements, rules and practices applicable to schemes of
arrangement involving a target company incorporated in England and
Wales and listed on the London Stock Exchange, which differ from
the requirements of US proxy solicitation or tender offer
rules.
Forward-looking statements
This Announcement contains certain forward-looking statements
with respect to Custodian, Drum and the Enlarged Custodian. These
forward- looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often use words such as, without limitation,
"anticipate", "target", "expect", "estimate", "intend", "plan",
"believe", "aim", "will", "may", "hope", "continue", "would",
"could" or "should" or other words of similar meaning or the
negative thereof. Forward-looking statements include, but are not
limited to, statements relating to the following: (i) future
capital expenditures, expenses, revenues, economic performance,
financial conditions, dividend policy, losses and future prospects,
(ii) business and management strategies and the expansion and
growth of the operations of Custodian or Drum or the Enlarged
Custodian, and (iii) the effects of government regulation on the
business of Custodian or Drum or the Enlarged Custodian. There are
many factors which could cause actual results to differ materially
from those expressed or implied in forward looking statements.
Among such factors are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business combinations or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations.
These forward-looking statements are based on assumptions
regarding the present and future business strategies of such
persons and the environment in which each will operate in the
future. Except as expressly provided in this Announcement, they
have not been reviewed by the auditors of Custodian or Drum. By
their nature, these forward-looking statements involve known and
unknown risks, uncertainties because they relate to events and
depend on circumstances that will occur in the future. The factors
described in the context of such forward-looking statements in this
Announcement may cause the actual results, performance or
achievements of any such person, or industry results and
developments, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. No assurance can be given that such
expectations will prove to have been correct and persons reading
this Announcement are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at
the date of this Announcement. None of Custodian or Drum, nor their
respective members, directors, officers or employees, advisers or
any person acting on their behalf, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur. No forward-looking or other statements have
been reviewed by the auditors of Custodian or Drum.
None of Custodian or Drum or their respective members,
directors, officers, employees, advisers and any person acting on
behalf of one or more of them undertakes any intention or
obligation to update publicly or revise forward-looking statements,
whether as a result of new information, future events or otherwise,
except to the extent legally required.
Neither Custodian nor Drum, nor any of their respective
associates, directors, officers, employees 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 will actually occur.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for Custodian or Drum for any period and no
statement in this Announcement should be interpreted to mean that
earnings or earnings per Ordinary Share for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per Ordinary Share.
Dealing disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk ,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on website
A copy of this Announcement and the documents required to be
published pursuant to Rule 26.1 and Rule 26.3 of the Code will be
made available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) free of charge, on Drum's
website at https://www.dripreit.co.uk/investor-centre/ and on
Custodian's website at
https://www.custodianreit.com/offer-for-drum-income-plus-reit-plc/
by no later than 12 noon on the Business Day following the date of
this Announcement.
Neither the contents of these websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
Availability of hard copies
In accordance with Rule 30.3 of the Code, a person so entitled
may request a copy of this Announcement (and any information
incorporated into it by reference to another source) in hard copy
form free of charge. A person may also request that all future
documents, announcements and information sent to that person in
relation to the Acquisition should be in hard copy form. For
persons who have received a copy of this Announcement in electronic
form or via a website notification, a hard copy of this
Announcement will not be sent to you unless you have previously
notified the Registrar that you wished to receive all documents in
hard copy form or unless requested in accordance with the procedure
set out below.
If you would like to request a hard copy of this Announcement
please contact Computershare on +44 (0370) 707 1222.
Scheme process
In accordance with Rule 5 of Appendix 7 of the Code, Drum will
announce through a Regulatory Information Service key events in the
Scheme process including the outcomes of the Meetings and the
Sanction Hearing.
Unless otherwise consented to by the Court and the Panel, any
modification or revision to the Scheme will be made no later than
the date which is 14 days prior to the Meetings (or any later date
to which such Meetings are adjourned). In accordance with Rule 11
of Appendix 7 of the Code, if the Scheme lapses or is withdrawn all
documents of title and other documents lodged with any form of
election will be returned as soon as practicable and in any event
within 14 days of such lapsing or withdrawal.
Information relating to Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Drum may be provided to Custodian during the
Offer Period as required under Rule 4 of Appendix 4 of the Code in
order to comply with Rule 2.11(c) of the Code.
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.
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
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A
PROSPECTUS AND DRUM SHAREHOLDERS SHOULD NOT MAKE ANY INVESTMENT
DECISION IN RELATION TO THE NEW CUSTODIAN SHARES EXCEPT ON THE
BASIS OF THE INFORMATION IN THE SCHEME DOCUMENT WHICH IS PROPOSED
TO BE PUBLISHED IN DUE COURSE
FOR IMMEDIATE RELEASE
3 September 2021
RECOMMED ALL-SHARE ACQUISITION OF DRUM INCOME PLUS REIT PLC
BY CUSTODIAN REIT PLC
1. Introduction
The Boards of Custodian and Drum are pleased to announce that
they have reached agreement on the terms of a recommended all-share
acquisition of Drum by Custodian (the "Acquisition"). It is
proposed that the Acquisition will be effected by way of a
Court-sanctioned scheme of arrangement between Drum and the Drum
Shareholders under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition:
Drum Shareholders will be entitled to receive 0.530
New Custodian Shares in exchange for each Drum Share (the
"Exchange Ratio").
The Exchange Ratio values the entire issued and to be issued
share capital of Drum at approximately GBP21.4 million (based on a
closing price of 105.80 pence per Custodian Share on 3 August 2021,
being the latest practicable date prior to the Possible Offer
Announcement).
The value implied by the Exchange Ratio, represents a premium of
approximately:
-- 7.8 per cent. to the bid market closing price of 52.00 pence
per Drum Share on 3 August 2021; and
-- 80.9 per cent. to the bid market closing price of 31.00 pence
per Drum Share on 4 March 2021 being the date immediately prior to
the date on which the Drum Board announced that it was undertaking
a strategic review to consider the future of Drum; and
-- 10.3 per cent. to the volume weighted average price per Drum
Share of 50.85 pence over the 12 month period ended on and
including 3 August 2021.
The Acquisition will result in the Existing Custodian
Shareholders owning 95.4 per cent., and the Drum Shareholders
owning 4.6 per cent., respectively, of the share capital of the
Enlarged Custodian.
Custodian will adjust the Exchange Ratio in the event that: (a)
either Custodian or Drum announces, declares, makes or pays any one
or more dividends or other distributions prior to completion of the
Acquisition (save in relation to the making or payment of any
dividend or distribution that was announced or declared prior to
the date of the Possible Offer Announcement) that is in aggregate
in excess of 1.25 pence per Custodian Share or 0.75 pence per Drum
Share respectively (the amount of such excess in each case being
the "Excess"), in which event the adjustment to the Exchange Ratio
shall be to take account of the Excess; and/or (b) at the time of
completion of the Acquisition, either Custodian or Drum has
announced, declared, made or paid its regular quarterly dividend of
1.25 pence per Custodian Share and 0.75 pence per Drum Share as
applicable, but the other has not announced, declared, made or paid
such dividend (a "Dividend Discrepancy"), in which case the
adjustment to the Exchange Ratio shall be to take account of the
Dividend Discrepancy.
Drum announced on 22 July 2021 that the Net Asset Value per Drum
Share as at 30 June 2021 was 70.11 pence. Custodian announced on 27
July 2021 that the Net Asset Value per Custodian Share as at 30
June 2021 was 101.7 pence. The Scheme Document will contain a
valuation in respect of Drum and Custodian's property portfolios as
at 30 June 2021 in accordance with Rule 29 of the Code.
The Drum Board considers that the Acquisition is expected to
result in a sustainable increase in the valuation of Drum
Shareholders' investments due to the higher premium to NAV at which
Custodian Shares have historically traded compared to Drum Shares.
On 4 March 2021, the date immediately prior to the date on which
Drum announced it was undertaking its strategic review, Drum's
closing bid price was 31.00 pence per share. Over the three months
ended 3 August 2021 (being the latest practicable date prior to the
Possible Offer Announcement), the Custodian Shares traded at an
average premium to NAV of 1.2 per cent. and the Drum Shares traded
at an average discount to NAV per Drum Share of 15.1 per cent.
3. Background to and reasons for the recommendation
Drum was established in 2015 with the objective of providing
investors with a regular dividend income, plus the prospect of
income and capital growth over the long term, by investing in
regional real estate assets.
Since launch, the Drum Board has been conscious that Drum, with
a market capitalisation of GBP19.9 million as of 3 August 2021 and
with approximately 69.05 per cent. of its voting rights controlled
by a single institutional discretionary investment manager on
behalf of underlying retail investors who hold the beneficial
interest to such Drum Shares, offers the Drum Shareholders and
potential investors limited liquidity for dealings. The Drum Board
believes that this has constrained investor appetite for the Drum
Shares and it has placed substantial limitations on potential
further offerings of Drum Shares, notwithstanding the attractive
investment strategy and performance that Drum offers.
The Drum Board notes that, Custodian, with a market
capitalisation of GBP445 million as of 3 August 2021 and with a
shareholder base that is both broad and diversified would,
following the Effective Date offer Drum Shareholders greater
liquidity whilst at the same time providing a similar investment
profile of investing in regional real estate assets and exposure to
an established portfolio, including the assets currently held by
Drum, with a history of strong performance.
Having reviewed a range of alternative transactions, the Drum
Board believes that the Enlarged Custodian would be attractive in
providing Drum Shareholders with greater liquidity, greater
portfolio diversification and lower ongoing charges than provided
by Drum; and, furthermore, that the Acquisition represents an
orderly, low-risk and effective transfer of Drum's property
portfolio in today's markets.
4. Background to and reasons for the Acquisition
The Custodian Board believes there is a compelling strategic
rationale for the Acquisition. The Custodian Board views Drum's
portfolio as complementary to the Custodian portfolio based on
Drum's similar property strategy and Custodian's current sector and
geographical weightings.
The Acquisition is expected to enhance earnings per Custodian
Share and dividend cover in the first full year following the
Acquisition. Following completion of the Acquisition, the Enlarged
Custodian portfolio would benefit from increased tenant
diversification and the increase in asset base will reduce the
Enlarged Custodian's Ongoing Charges Ratio.
As the Acquisition is structured as a corporate transaction,
neither SDLT in England and Northern Ireland nor LBTT in Scotland
will be payable on acquiring the properties within the Drum
portfolio, leading to savings of approximately GBP2.1 million (net
of stamp duty payable by Custodian on the acquisition of the Drum
Shares) compared to an equivalent property acquisition.
Consequently, the Custodian Board believes that the Acquisition
is of benefit to the Existing Custodian Shareholders as it will
grow the portfolio without incurring SDLT or LBTT, diversify the
Custodian portfolio, enhance dividend cover and reduce the Ongoing
Charges Ratio.
5. Recommendation
The Drum Directors, who have been so advised by Dickson Minto as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing its advice
to the Drum Directors, Dickson Minto has taken into account the
commercial assessment of the Drum Directors. Dickson Minto is
providing independent financial advice to the Drum Directors for
the purposes of Rule 3 of the Code.
Accordingly, the Drum Directors intend unanimously to recommend
that Drum Shareholders vote in favour of the Scheme at the Court
Meeting and the Resolution necessary to enable Drum to implement
the Acquisition to be proposed at the Drum General Meeting, as Hugh
Little and Alan Robertson, being those Drum Directors who hold or
who are beneficially entitled to Drum Shares have irrevocably
undertaken to do in respect of their own beneficial holdings of
150,000 Drum Shares in aggregate, representing approximately 0.39
per cent. in aggregate of Drum's ordinary share capital in issue on
2 September 2021 (being the latest practicable date prior to this
Announcement).
Custodian does not require the approval of the Custodian
Shareholders in connection with the Acquisition.
6. Irrevocable undertakings
Custodian has received irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and to vote in favour of
the Resolution necessary to enable Drum to implement the
Acquisition in respect of a total of 29,089,190 Drum Shares,
representing, in aggregate, approximately76.15 per cent. of Drum's
ordinary share capital in issue on 2 September 2021 (being the
latest practicable date prior to this Announcement), from:
(i) as referred to in paragraph 5 above, those of the Drum
Directors who hold or are beneficially entitled to Drum Shares,
being Hugh Little and Alan Robertson, in respect of 150,000 Drum
Shares, in aggregate, representing approximately 0.39 per cent. in
aggregate of Drum's ordinary share capital in issue on 2 September
2021 (being the latest practicable date prior to this
Announcement);
(ii) Seven Investment Management, in respect of 26,379,190 Drum
Shares, representing, in aggregate, approximately 69.05 per cent.
of Drum's ordinary share capital in issue on 2 September 2021
(being the latest practicable date prior to this Announcement), in
respect of which Seven Investment Management has investment
management discretion and can procure the exercise of the voting
rights attaching to such Drum Shares; and
(iii) Drum Property Investment Group Limited, in respect of in
2,560,000 Drum Shares, representing approximately 6.70 per cent. of
Drum's ordinary share capital in issue on 2 September 2021 (being
the latest practicable date prior to this Announcement).
Further details of the irrevocable undertakings in relation to
the Acquisition are set out in Appendix III to this
Announcement.
7. Directors, management, employees, pensions and locations
Following completion of the Acquisition, the Drum Board, as
currently constituted, will resign as directors of Drum on the
Effective Date. The agreements in place between Drum and each of
its service providers, including Drum Real Estate Investment
Management Limited will be terminated with effect from the
Effective Date, with notice having been served on the date of this
Announcement. This is expected to result in a termination payment
of GBP159,553 being made to Drum Real Estate Investment Management
Limited, and further termination payments of GBP26,750 in aggregate
to the other service providers to Drum. The fees paid to Drum Real
Estate Investment Management Limited are detailed in Drum's annual
report and accounts and amounted to GBP205,000 in the year to 30
September 2020.
As an externally managed REIT, Drum has no employees and
therefore does not operate any pension scheme, nor does it have any
arrangement in place for any employee involvement in its capital.
Drum has no fixed assets other than its property portfolio, nor
does it have a place of business, research and development function
or headquarters. Ownership of the property portfolio will transfer
to Custodian pursuant to the Acquisition and will be managed as
part of Custodian's overall property portfolio according to the
policies and processes of Custodian and Custodian Capital.
The Custodian Board will continue to serve as currently
constituted on the Board of the Enlarged Custodian. Custodian's
existing management and service providers, including Custodian
Capital, will remain in place and its investment objective,
investment policy and dividend policy will continue unchanged.
Custodian Capital intends to undertake a review of the Drum
portfolio and expects to manage it in line with Custodian's
existing investment policy, which includes letting vacant space to
maximise income, refurbishing the properties, as required, to
maximise value and fully incorporating the properties into the
existing Custodian portfolio.
Enlarged Custodian will continue to be listed on the premium
listing segment of the Official List of the FCA and admitted to
trading on the London Stock Exchange's main market for listed
securities. Custodian will continue to have its registered office
at 1 New Walk Place, Leicester LE1 6RU and be managed by Custodian
Capital which will also continue to have its headquarters at 1 New
Walk Place, Leicester LE1 6RU. The fees paid to Custodian Capital
are detailed in Custodian's annual report and accounts and amounted
to GBP3.75 million in the year to 31 March 2021.
8. Dividends and dividend policy
The Boards of Custodian and Drum have agreed to retain their
current dividend policies for the period prior to the Effective
Date. In addition, the Custodian Board has confirmed that Custodian
will continue its existing dividend policy following completion of
the Acquisition. The dividend policy of Custodian is to grow the
dividend on a sustainable basis, at a rate which is fully covered
by projected net rental income and does not inhibit the flexibility
of the Company's investment strategy.
Custodian will adjust the Exchange Ratio in the event that: (a)
either Custodian or Drum announces, declares, makes or pays any one
or more dividends or other distributions prior to completion of the
Acquisition (save in relation to the making or payment of any
dividend or distribution that was announced or declared prior to
the date of the Possible Offer Announcement) that is in aggregate
in excess of 1.25 pence per Custodian Share or 0.75 pence per Drum
Share respectively (the amount of such excess in each case being
the "Excess"), in which event the adjustment to the Exchange Ratio
shall be to take account of the Excess; and/or (b) at the time of
completion of the Acquisition, either Custodian or Drum has
announced, declared, made or paid its regular quarterly dividend of
1.25 pence per Custodian Share and 0.75 pence per Drum Share as
applicable, but the other has not announced, declared, made or paid
such dividend (a "Dividend Discrepancy"), in which case the
adjustment to the Exchange Ratio shall be to take account of the
Dividend Discrepancy.
It is anticipated that Enlarged Custodian will pay an interim
dividend of a minimum of 1.25 pence per Custodian Share, in the
absence of unforeseen circumstances and assuming rent collection
levels remain in line with forecast, in respect of the quarter
ended 30 September 2021 by reference to a record date after the
Scheme becomes Effective and that Drum Shareholders who receive New
Custodian Shares will be entitled to this dividend alongside
Existing Custodian Shareholders.
9. Information relating to Custodian
Custodian, established in 2014, is a UK real estate investment
trust with a portfolio comprising properties predominantly let to
institutional grade tenants throughout the UK, principally
characterised by properties with individual values of less than
GBP10 million at acquisition.
Custodian seeks to provide investors with an attractive level of
income and the potential for capital growth, striving to be the
REIT of choice for private and institutional investors seeking high
and stable dividends from well diversified UK real estate.
Custodian has grown significantly since its launch in March
2014, increasing its property portfolio from GBP95.2 million to
approximately GBP575.4 million as at 30 June 2021, comprising 159
assets at that date.
Custodian is externally managed by Custodian Capital, a property
management and investment business which is, regulated by the FCA.
Custodian Capital is a wholly owned subsidiary of Mattioli Woods
plc, the specialist wealth management and employee benefits
business, with approximately GBP12.0 billion of assets under
management, administration or advice. Custodian entered the UK REIT
regime on 27 March 2014. As a consequence of Custodian continuing
to be a UK REIT and meeting the relevant conditions, it should not
be subject to UK corporation tax on the profits (income and capital
gains) derived from its investment in its property portfolio and
while Custodian remains within the UK REIT regime, the disposal of
any properties currently held by it should continue to be tax
exempt.
The Scheme Document will contain a valuation in respect of
Custodian's property portfolio as at 30 June 2021 in accordance
with Rule 29 of the Code.
10. Information relating to Drum
Drum was established in May 2015 to provide investors with a
regular dividend income, together with the prospect of income and
capital growth over the longer term, by investing in regional real
estate assets.
Drum offers investors the opportunity to access a diversified
portfolio of UK commercial real estate through a closed-ended fund.
By targeting smaller lot size properties, Drum's objective is to
provide investors with an attractive level of income and the
potential for income and capital growth over the longer term.
Drum's market capitalisation was GBP19.9 million as at 3 August
2021 (being the last practicable date prior to the Possible Offer
Announcement). Drum had a portfolio comprising 10 assets with an
aggregate value of GBP48.9 million as at 30 June 2021. As at 30
June 2021 Drum had 82 tenants spread across the UK with gross
contracted rent per annum totalling approximately GBP3.64
million.
Drum is externally managed by Drum Real Estate Investment
Management Limited, a property management and investment business
which is part of Drum Property Investment Group Limited's
co-investment division. Drum Real Estate Investment Management
Limited's multi-disciplinarian team has a long track record of
successfully developing and managing commercial property
investments throughout the UK.
The Scheme Document will contain a valuation in respect of
Drum's property portfolio as at 30 June 2021 in accordance with
Rule 29 of the Code.
11. Structure of the Acquisition
It is intended that the Acquisition will be implemented by way
of a Court-sanctioned scheme of arrangement between Drum and the
Drum Shareholders, under Part 26 of the Companies Act, in
accordance with which Custodian will acquire all of the Drum
Shares. However, Custodian reserves the right to implement the
Acquisition by way of a Takeover Offer, subject to Panel
consent.
The purpose of the Scheme is to provide for Custodian to become
the holder of the entire issued and to be issued ordinary share
capital of Drum. This is to be achieved by the transfer of the Drum
Shares to Custodian in consideration for which Drum Shareholders
will receive New Custodian Shares on the basis of the Exchange
Ratio, as set out in paragraph 2 of this Announcement.
Once the Drum Shareholder approvals have been obtained at the
Court Meeting and the General Meeting, and the other Conditions
have been satisfied or (where applicable) waived, the Scheme must
be sanctioned by the Court at the Sanction Hearing.
The Scheme will become Effective in accordance with its terms on
delivery of the Court Order to the Registrar of Companies. Upon the
Scheme becoming Effective, it will be binding on all Drum
Shareholders, irrespective of whether or not they attended or voted
at the Court Meeting or the General Meeting (and if they attended
and voted, whether or not they voted in favour), and share
certificates in respect of Drum Shares will cease to be valid and
entitlements to Drum Shares held within the CREST system will be
cancelled.
Drum Shares will be acquired by Custodian pursuant to the Scheme
fully paid and free from all liens, charges, equities,
encumbrances, rights of pre-emption and any other interests of any
nature whatsoever and together with all rights attaching thereto,
including voting rights and the rights to receive and retain in
full all dividends and other distributions declared, made or paid
on or after the Effective Date, save where the record date for such
dividend or other distribution falls prior to the Effective Date or
otherwise where Custodian and Drum agree.
The New Custodian Shares issued to Drum Shareholders pursuant to
the Scheme will be issued credited as fully paid and will rank pari
passu in all respects with existing Custodian Shares, including the
right to receive dividends and other distributions declared, made
or paid on Custodian Shares by reference to a record date falling
after the Effective Date. The New Custodian Shares will be issued
in registered form and will trade under the same ISIN number as the
existing Custodian Shares.
Fractions of New Custodian Shares will not be allotted or issued
to Drum Shareholders and entitlements will be rounded down to the
nearest whole number of Custodian Shares. No cash payments shall be
made or returned in respect of any fractional entitlements which
will be retained for the benefit of the Enlarged Custodian.
If the Scheme does not become Effective on or before 31 December
2021 being the Long Stop Date (or such later date as Custodian and
Drum may agree with the consent of the Panel), it will lapse and
the Acquisition will not proceed.
If the Scheme becomes Effective, Drum will become a wholly owned
subsidiary of Custodian. Following the Effective Date, it is
intended that Drum's name will be changed to Custodian Real Estate
(Drop Holdings) plc and the name of Drum Subsidiary will be changed
to Custodian Real Estate (Drop) Limited. The properties that are
currently held by Drum Subsidiary are expected to continue to held
by the Drum Subsidiary (albeit it will have a new name). Drum
Subsidiary will join the Custodian REIT group on the Effective
Date. In the event that the properties held by Drum Subsidiary are
sold after the Effective Date, their disposal should continue to be
exempt from UK corporation tax under the provisions of the REIT
regime.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the General Meeting.
The Scheme Document will also contain the expected timetable for
the Acquisition and will specify the necessary actions to be taken
by Drum Shareholders.
12. Conditions of the Acquisition
The Acquisition is subject to a number of Conditions and certain
further terms set out in Appendix I to this Announcement and to the
full terms and conditions to be set out in the Scheme Document,
including, amongst other things:
12.1. the Scheme becoming unconditional and Effective by the
Long Stop Date, failing which the Scheme will lapse;
12.2. the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Drum
Shareholders who are on the register of members of Drum at the
Voting Record Time, present and voting, whether in person or by
proxy, at the Court Meeting (or any adjournment thereof);
12.3. the approval of the Resolution necessary to implement the
Acquisition by the requisite majority of Drum Shareholders at the
General Meeting (or any adjournment thereof) to amend the Drum
Articles to ensure that, if the Scheme is approved at the Court
Meeting, any Drum Shares issued after the Scheme Record Time will
automatically be acquired by Custodian on the same terms as under
the Scheme;
12.4. the Scheme being sanctioned by the Court (without
modification, or with modification on terms agreed by Custodian and
Drum) on or before the 22nd day after the expected date of the
Sanction Hearing to approve the Scheme as will be set out in the
Scheme Document to be sent to Drum Shareholders in due course (or
such later date as may be agreed between Custodian and Drum in
writing and the Court may allow);
12.5. the delivery, by no later than the Long Stop Date, of a
copy of the Court Order to the Registrar of Companies in England
and Wales; and
12.6. the FCA and the London Stock Exchange having acknowledged
to Custodian or its agent (and such acknowledgement not having been
withdrawn) that the application for Admission of the New Custodian
Shares has been approved and (subject to satisfaction of any
conditions to which such approval is expressed) will become
effective as soon as a dealing notice has been issued by the FCA
and the London Stock Exchange having acknowledged to Custodian or
its agent (and such acknowledgement not having been withdrawn) that
the New Custodian Shares will be admitted to: (i) listing on the
premium listing segment of the Official List of the FCA; and (ii)
trading on the London Stock Exchange's main market for listed
securities.
13. Scheme timetable/further information
Full details of the expected timetable will be set out in the
Scheme Document which will be posted to Drum Shareholders (together
with the notices of the Court Meeting and the General Meeting and
the Forms of Proxy) as soon as practicable and, in any event,
within 28 days of the date of this Announcement unless Drum and
Custodian otherwise agree, and the Panel consents, to a later date.
Subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, the Scheme Document will also be made
available on Drum's website at
https://www.dripreit.co.uk/investor-centre/ and Custodian's website
at https://www.custodianreit.com/
offer-for-drum-income-plus-reit-plc/.
14. Right to switch to a Takeover Offer
Subject to obtaining the consent of the Panel, Custodian
reserves the right to elect to implement the Acquisition by way of
a Takeover Offer as an alternative to the Scheme.
In such event, such Takeover Offer will be implemented on the
same terms and conditions, so far as applicable, as those which
would apply to the Scheme subject to appropriate amendments to
reflect the change in method of effecting the Acquisition,
including (without limitation) the inclusion of an acceptance
condition set at 90 per cent. of the Drum Shares to which the
Takeover Offer relates, (or such lesser percentage as may be agreed
after consultation with the Panel (if necessary), being in any case
more than 50 per cent. of the voting rights normally exercisable at
a general meeting of Drum, including, for this purpose, any such
voting rights attaching to Drum Shares that are issued before the
Takeover Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise). Further, if
sufficient acceptances of the Takeover Offer are received and/or
sufficient Drum Shares are otherwise acquired, it is the intention
of Custodian to apply the provisions of Chapter 3 of Part 28 of the
Companies Act to compulsorily acquire any outstanding Drum Shares
to which such Takeover Offer relates.
15. Listing, dealings and settlement of the New Custodian Shares
Applications will be made to the FCA and the London Stock
Exchange, respectively for the New Custodian Shares to be admitted
to: (i) the premium listing segment of the Official List of the
FCA; and (ii) trading on the London Stock Exchange's main market
for listed securities. It is expected that Admission will become
effective and that dealings for normal settlement in the New
Custodian Shares will commence on the London Stock Exchange at 8.00
a.m. on the Business Day immediately following the Effective
Date.
16. De-listing
It is intended that dealings in Drum Shares will be suspended
shortly before the Effective Date at a time to be set out in the
Scheme Document. It is further intended that applications will be
made to the London Stock Exchange to cancel trading in Drum Shares
on the Main Market of the London Stock Exchange, and to the FCA to
cancel the listing of the Drum Shares on the Official List, in each
case with effect from or shortly following the Effective Date.
On the first Business Day after the Effective Date, entitlements
to Drum Shares held within the CREST system will be cancelled and
share certificates in respect of Drum Shares will cease to be
valid.
Drum does not hold any Drum Shares in treasury.
17. Disclosure of interests in Drum Shares
As at the close of business on 2 September 2021 (being the last
practicable date prior to the publication of this Announcement),
save for: (i) the disclosures in this paragraph 17; and (ii) the
irrevocable undertakings referred to in paragraph 6 above, none of
Custodian or any of its directors or, so far as Custodian and the
Custodian Directors are aware, any person acting, or deemed to be
acting, in concert with Custodian:
17.1. had an interest in, or right to subscribe for, relevant securities of Drum;
17.2. had any short position in (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 of, relevant securities of Drum;
17.3. had procured an irrevocable commitment or letter of intent
to accept the Acquisition in respect of relevant securities of
Drum; or
17.4. had borrowed or lent any Drum Shares.
Furthermore, no arrangement exists with Custodian, Drum or an
associate of Custodian in relation to Drum Shares. For these
purposes, an "arrangement" includes any indemnity or option
arrangement, any agreement or any understanding, formal or
informal, of whatever nature, relating to Drum Shares which may be
an inducement to deal or refrain from dealing in such
securities.
18. Overseas Shareholders
The availability of the New Custodian Shares and the
distribution of this Announcement to persons resident in, or
citizens of, or otherwise subject to, jurisdictions outside the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. Drum Shareholders who are in any doubt regarding such
matters should consult an appropriate independent professional
adviser in the relevant jurisdiction without delay.
This Announcement is not intended and does not constitute or
form part of any offer to sell or to subscribe for, or any
invitation to purchase or subscribe for, or the solicitation of any
offer to purchase or otherwise subscribe for any securities. Drum
Shareholders are advised to read the Scheme Document carefully once
this has been received.
19. General
The Acquisition 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.
The Scheme Document will be despatched to Drum Shareholders as soon
as practicable and, in any event, within 28 days of the date of
this Announcement, unless Drum and Custodian otherwise agree, with
the consent of the Panel, to a later date.
In deciding whether or not to vote or procure votes to approve
the Scheme at the Court Meeting or to vote or procure votes in
favour of the Resolution necessary to implement the Acquisition at
the General Meeting in respect of their Drum Shares, Drum
Shareholders should rely on the information contained, and follow
the procedures described, in the Scheme Document.
Dickson Minto 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.
The Scheme Document will not be reviewed by any federal state
securities commission or regulatory authority in the US, nor will
any commission or authority pass upon the accuracy or adequacy of
the Scheme Document. Any representation to the contrary is unlawful
and may be a criminal offence.
Appendix II to this Announcement contains the sources of certain
information and bases of calculation used in this Announcement.
Appendix III to this Announcement contains details of the
irrevocable undertakings received in relation to the Acquisition
that are referred to in this Announcement. Appendix IV to this
Announcement contains definitions of certain terms used in this
Announcement.
20. Documents published on a website
Copies of the following documents will, by no later than 12 noon
(London time) on the Business Day following the date of this
Announcement, be made available on Drum's website at
https://www.dripreit.co.uk/investor-centre/ and Custodian's website
at https://www.custodianreit.com/
offer-for-drum-income-plus-reit-plc/ until the end of the Offer
Period:
(a) this Announcement;
(b) the consent letters from each of Numis and Dickson Minto; and
(c) the Irrevocable Undertakings referred to in paragraph 6 and
Appendix III to this Announcement.
None of the contents of Drum's website, the contents of
Custodian's website or the contents of the or the content of any
other website accessible from hyperlinks on either such website, is
incorporated into or forms part of, this Announcement.
Enquiries:
Custodian REIT plc
Richard Shepherd-Cross / Ed Moore +44 (0)11 6240 8700
Numis Securities Ltd (Financial Adviser
and Broker to Custodian)
Hugh Jonathan / Stuart Ord +44 (0) 20 7260 1000
Camarco (Communications adviser to Custodian)
Ed Gascoigne-Pees +44 (0) 20 3757 4984
Drum Income Plus REIT plc info@dripreit.co.uk
Stuart Oag
Dickson Minto W.S. (Sponsor and Rule 3
Adviser to Drum)
Douglas Armstrong +44 (0) 20 7649 6823
Important Notices
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority,
is acting as financial adviser and corporate broker exclusively for
Custodian and no one else in connection with the matters referred
to in this Announcement. In connection with such matters, Numis
will not regard any other person as their client, nor will it be
responsible to any person other than Custodian for providing the
protections afforded to clients of Numis or for providing advice in
relation to the contents of this Announcement or any other matter
referred to herein. Neither Numis nor any of its affiliates owes or
accepts any duty, liability or responsibility whatsoever (whether
direct, indirect, consequential, whether in contract, in tort,
under statute or otherwise) to any person who is not a client of
Numis in connection with the Acquisition, the matters referred to
in this Announcement, any statement contained herein or
otherwise.
Dickson Minto W.S. ("Dickson Minto"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom,
is acting exclusively for Drum and for no one else in connection
with the matters referred to in this Announcement and will not be
responsible to anyone other than Drum for providing the protections
afforded to its clients or for providing advice in connection with
the Acquisition referred to in this Announcement.
The Scheme Document (or in the event that the Acquisition is to
be implemented by means of a Takeover Offer, the offer document),
will contain the full terms and conditions of the Acquisition,
including details of how to vote in respect of the Scheme. Any
voting decision or response in relation to the Acquisition should
be made solely on the basis of the Scheme Document.
The contents of this Announcement do not amount to legal, tax or
financial advice. The statements contained in this Announcement are
made as at the date of this Announcement, unless some other time is
specified in relation to them, and service of this Announcement
shall not give rise to any implication that there has been no
change in the facts set forth in this Announcement since such
date.
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 Financial Services and Market
Act 2000 (as amended) if you are resident in the United Kingdom, or
authorised or exempted under the Investment Intermediaries Act 1995
of Ireland or the European Communities (Markets in Financial
Instruments) Regulations (Numbers 1 to 3) 2007 if you are resident
in Ireland, or from another appropriately authorised independent
financial adviser.
Overseas jurisdictions
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons who are
subject to the laws of any jurisdiction other than the United
Kingdom into whose possession this Announcement comes should inform
themselves about and observe such restrictions. Any failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This Announcement has been prepared in connection with proposals
in relation to a scheme of arrangement and for the purposes of
complying with the laws of England and Wales, the Code, the Listing
Rules and the rules of the London Stock Exchange 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 and regulations of any jurisdiction outside of
England and Wales.
Overseas Shareholders should consult their own legal and tax
advisers with respect to the legal and tax consequences of the
Scheme. It is the responsibility of any person into whose
possession this Announcement comes to satisfy themselves as to the
full observance of the laws of the relevant jurisdiction in
connection with the Acquisition including the obtaining of any
governmental, exchange control or other consents which may be
required and/or compliance with other necessary formalities which
are required to be observed and the payment of any issue, transfer
or other taxes or levies due in such jurisdiction.
US shareholders
US Shareholders should note that the Acquisition relates to the
shares in a company incorporated in England and Wales and is
proposed to be made by means of a scheme of arrangement provided
for under the laws of England and Wales. A transaction effected by
means of a scheme of arrangement is not subject to the proxy
solicitation or tender offer rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements, rules and practices applicable to schemes of
arrangement involving a target company incorporated in England and
Wales and listed on the London Stock Exchange, which differ from
the requirements of US proxy solicitation or tender offer
rules.
Forward-looking statements
This Announcement contains certain forward-looking statements
with respect to Custodian, Drum and the Enlarged Custodian. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often use words such as, without limitation,
"anticipate", "target", "expect", "estimate", "intend", "plan",
"believe", "aim", "will", "may", "hope", "continue", "would",
"could" or "should" or other words of similar meaning or the
negative thereof. Forward-looking statements include, but are not
limited to, statements relating to the following: (i) future
capital expenditures, expenses, revenues, economic performance,
financial conditions, dividend policy, losses and future prospects,
(ii) business and management strategies and the expansion and
growth of the operations of Custodian or Drum or Enlarged
Custodian, and (iii) the effects of government regulation on the
business of Custodian or Drum or Enlarged Custodian. There are many
factors which could cause actual results to differ materially from
those expressed or implied in forward looking statements. Among
such factors are changes in the global, political, economic,
business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business combinations or disposals. Such statements are qualified
in their entirety by the inherent risks and uncertainties
surrounding future expectations.
These forward-looking statements are based on assumptions
regarding the present and future business strategies of such
persons and the environment in which each will operate in the
future. Except as expressly provided in this Announcement, they
have not been reviewed by the auditors of Custodian or Drum. By
their nature, these forward-looking statements involve known and
unknown risks, uncertainties because they relate to events and
depend on circumstances that will occur in the future. The factors
described in the context of such forward-looking statements in this
Announcement may cause the actual results, performance or
achievements of any such person, or industry results and
developments, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. No assurance can be given that such
expectations will prove to have been correct and persons reading
this Announcement are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at
the date of this Announcement. None of Custodian or Drum, nor their
respective members, directors, officers or employees, advisers or
any person acting on their behalf, provides any representation,
assurance or guarantee that the occurrence of the events expressed
or implied in any forward-looking statements in this Announcement
will actually occur. No forward-looking or other statements have
been reviewed by the auditors of Custodian or Drum.
None of Custodian or Drum or their respective members,
directors, officers, employees, advisers and any person acting on
behalf of one or more of them undertakes any intention or
obligation to update publicly or revise forward-looking statements,
whether as a result of new information, future events or otherwise,
except to the extent legally required.
Neither Custodian nor Drum, nor any of their respective
associates, directors, officers, employees 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 will actually occur.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for Custodian or Drum for any period and no
statement in this Announcement should be interpreted to mean that
earnings or earnings per Ordinary Share for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per Ordinary Share.
Dealing disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one 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 tenth Business Day (as
defined in the Code) following the commencement of the Offer Period
and, if appropriate, by no later than 3.30 p.m. (London time) on
the tenth Business Day (as defined in the Code) 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 one 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,
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 (as defined in the Code) following the
date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk , including
details of the number of relevant securities in issue, when the
Offer Period commenced and when any offeror was first identified.
If you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638
0129.
Publication on website
A copy of this Announcement and the documents required to be
published pursuant to Rule 26.1 and Rule 26.3 of the Code will be
made available (subject to certain restrictions relating to persons
resident in Restricted Jurisdictions) free of charge, on Drum's
website at https://www.dripreit.co.uk/investor-centre/ and on
Custodian's website at
https://www.custodianreit.com/offer-for-drum-income-plus-reit-plc/
by no later than 12 noon on the Business Day following the date of
this Announcement.
Neither the contents of these websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
Availability of hard copies
In accordance with Rule 30.3 of the Code, a person so entitled
may request a copy of this Announcement (and any information
incorporated into it by reference to another source) in hard copy
form free of charge. A person may also request that all future
documents, announcements and information sent to that person in
relation to the Acquisition should be in hard copy form. For
persons who have received a copy of this Announcement in electronic
form or via a website notification, a hard copy of this
Announcement will not be sent to you unless you have previously
notified the Registrar that you wished to receive all documents in
hard copy form or unless requested in accordance with the procedure
set out below.
If you would like to request a hard copy of this Announcement
please contact Computershare on +44 (0370) 707 1222.
Scheme process
In accordance with Rule 5 of Appendix 7 of the Code, Drum will
announce through a Regulatory Information Service key events in the
Scheme process including the outcomes of the Meetings and the
Sanction Hearing.
Unless otherwise consented to by the Court and the Panel, any
modification or revision to the Scheme will be made no later than
the date which is 14 days prior to the Meetings (or any later date
to which such Meetings are adjourned). In accordance with Rule 11
of Appendix 7 of the Code, if the Scheme lapses or is withdrawn all
documents of title and other documents lodged with any form of
election will be returned as soon as practicable and in any event
within 14 days of such lapsing or withdrawal.
Information relating to Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Drum may be provided to Custodian during the
Offer Period as required under Rule 4 of Appendix 4 of the Code in
order to comply with Rule 2.11(c) of the Code.
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.
APPIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part A
Conditions to the Acquisition
The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming 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 Custodian and Drum may agree, with the consent of the
Panel, and the Court may allow.
Scheme approval
The Scheme will be conditional upon:
(a) the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Drum
Shareholders who are on the register of members of Drum at the
Voting Record Time, present and voting, whether in person or by
proxy, at the Court Meeting (or any adjournment thereof);
(b) the approval of the Resolution necessary to implement the
Acquisition by the requisite majority of Drum Shareholders at the
General Meeting (or any adjournment thereof) to amend the Drum
Articles to ensure that, if the Scheme is approved at the Court
Meeting, any Drum Shares issued after the Scheme Record Time will
automatically be acquired by Custodian on the same terms as under
the Scheme;
(c) the Scheme being sanctioned by the Court (without
modification, or with modification on terms agreed by Custodian and
Drum) on or before the 22nd day after the expected date of the
Sanction Hearing to approve the Scheme as will be set out in the
Scheme Document to be sent to Drum Shareholders in due course (or
such later date as may be agreed between Custodian and Drum in
writing and the Court may allow);
(d) the delivery, by no later than the Long Stop Date, of a copy
of the Court Order to the Registrar of Companies in England and
Wales; and
(e) the FCA and the London Stock Exchange having acknowledged to
Custodian or its agent (and such acknowledgement not having been
withdrawn) that the application for Admission of the New Custodian
Shares has been approved and (subject to satisfaction of any
conditions to which such approval is expressed) will become
effective as soon as a dealing notice has been issued by the FCA
and the London Stock Exchange having acknowledged to Custodian or
its agent (and such acknowledgement not having been withdrawn) that
the New Custodian Shares will be admitted to: (i) listing on the
premium listing segment of the Official List of the FCA; and (ii)
trading on the London Stock Exchange's main market for listed
securities.
In addition, Custodian and Drum have agreed that, subject to the
requirements of the Panel and in accordance with the Code, the
Acquisition will also be conditional upon the following Conditions
and, accordingly, the necessary actions to make the Scheme
Effective will not be taken unless the following Conditions (as
amended if appropriate) have been satisfied or, where relevant,
waived:
Regulatory approvals
(i) if, in the reasonable opinion of Custodian, approval from a
Relevant Authority is required for, or a Relevant Authority decides
to review, the Acquisition or any matter arising from or related to
the Acquisition, it being established in terms satisfactory to
Custodian that such Relevant Authority approves (or is deemed to
approve) or will permit the Acquisition to proceed on terms
satisfactory to Custodian;
General Third Party Clearances
(ii) the waiver (or non-exercise within any applicable time
limits) by any relevant government or governmental,
quasi-governmental, supranational, statutory, regulatory,
administrative, environmental, professional or investigative body,
court, trade agency, association, institution, any entity owned or
controlled by any relevant government or state, or any other body
or person whatsoever in any jurisdiction (each a "Third Party") of
any termination right, right of pre-emption, first refusal or
similar right arising as a result of or in connection with the
Acquisition including, without limitation, its implementation and
the proposed acquisition of any shares or other securities in, or
in control of, Drum by Custodian;
(iii) other than in relation to the regulatory approvals
referred to in paragraph (i) above, no Third Party having decided
to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference, or enacted, made or
proposed any statute, regulation, decision or order, or having
taken any other steps which would or might reasonably be expected
to (in any case which is material in the context of the
Acquisition):
-- require, prevent or delay the divestiture, or alter the terms
envisaged for any proposed divestiture by any member of the
Custodian Group or any member of the Drum Group of all or any
portion of their respective businesses, assets or property or
impose any limitation on the ability of any of them to conduct
their respective businesses (or any of them) or to own, control or
manage any of their respective assets or properties or any part
thereof;
-- require, prevent or delay, or alter the terms envisaged for,
any proposed divestiture by any member of the Custodian Group of
any shares or other securities in Drum;
-- impose any limitation on, or result in a delay in, the
ability of any member of the Custodian Group directly or indirectly
to acquire or to hold or to exercise effectively, directly or
indirectly, all or any rights of ownership in respect of shares or
loans or securities convertible into shares or any other securities
(or the equivalent) in any member of the Drum Group or to exercise
management control over any such member, in each case, to an extent
which is material in the context of the Drum Group;
-- otherwise adversely affect the business, assets, profits or
prospects of any member of the Custodian Group or of any member of
the Drum Group;
-- make the Scheme or the Acquisition or, in each case, its
implementation or the acquisition or proposed acquisition by
Custodian or any member of the Custodian Group of any shares or
other securities in, or control or management of Drum or any member
of the Drum Group void, illegal, and/or unenforceable under the
laws of any relevant jurisdiction, or otherwise, directly or
indirectly, restrain, restrict, prohibit, delay or otherwise
adversely interfere with the same, or impose additional conditions
or obligations with respect thereto, or otherwise challenge or
interfere therewith;
-- require (save as envisaged pursuant to the Acquisition or
Chapter 3 of Part 28 of the Companies Act) any member of the
Custodian Group or the Drum Group to offer to acquire any shares or
other securities (or the equivalent) or interest in any member of
the Drum Group or the Custodian Group owned by any third party;
or
-- impose any limitation on or result in any delay in the
ability of any member of the Custodian Group to integrate or
co-ordinate its business, or any part of it, with the businesses or
any part of the businesses of any other member of the Drum Group
which is adverse in the context of the Drum Group or the Custodian
Group,
and all applicable waiting and other time periods (including
extensions thereof) during which any such Third Party could
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the
laws of any jurisdiction in respect of the Acquisition or the
acquisition or proposed acquisition of any Drum Shares having
expired, lapsed or been terminated;
(iv) in addition to the regulatory approvals referred to in
paragraph (i) above, all necessary filings, applications and/or
notifications which are necessary or considered appropriate by
Custodian (acting reasonably) having been made in connection with
the Acquisition and all necessary waiting periods and other time
periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired,
lapsed or been terminated and all statutory or regulatory
obligations in any jurisdiction having been complied with in
connection with the Acquisition or the acquisition by any member of
the Custodian Group of any shares or other securities in, or
control or management of, Drum or any member of the Drum Group or
the carrying on by any member of the Drum Group of its
business;
(v) in addition to the regulatory approvals referred to in
paragraph (i) above, all authorisations, orders, recognitions,
grants, consents, licences, confirmations, clearances, permissions
and approvals for the proposed acquisition of any shares or other
securities in, or control of, Drum by any member of the Custodian
Group having been obtained in terms and in a form reasonably
satisfactory to Custodian from all necessary Third Parties or
persons with whom any member of the Drum Group has entered into
contractual arrangements or other material business relationships,
and all such authorisations, orders, recognitions, grants,
consents, licences, confirmations, clearances, permissions and
approvals together with all authorisations orders, recognitions,
grants, licences, confirmations, clearances, permissions and
approvals necessary or appropriate to carry on the business of any
member of the Drum Group, remaining in full force and effect and
all filings necessary for such purpose have been made and there
being no notice or intimation of any intention to revoke, suspend,
restrict, modify or not to renew any of the same at the time at
which the Acquisition becomes otherwise unconditional and all
necessary statutory or regulatory obligations in any jurisdiction
having been complied with;
Certain matters arising as a result of any arrangement,
agreement etc.
(vi) except as Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Drum Group is a party or by or to which any
such member or any of its assets are or may be bound, entitled or
subject, which, in each case as a consequence of the Scheme or the
Acquisition or because of a change in the control or management of
Drum or otherwise, would or would reasonably be expected to result
in (in each case to an extent which is material in the context of
the Drum Group as a whole, or in the context of the
Acquisition):
-- any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any
member of the Drum Group, being or becoming repayable or capable of
being declared repayable immediately or earlier than their or its
stated maturity date or repayment date or the ability of any member
of the Drum Group to borrow monies or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being
withdrawn or inhibited;
-- any assets or interests of any such member being or falling
to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest
could be required to be disposed of or charged or could cease to be
available to any such member other than in the ordinary course of
business;
-- the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property, assets or interests of any member of the Drum Group or
any such mortgage, charge or other security interest (whenever
arising or having arisen) becoming enforceable;
-- the rights, liabilities, obligations or interests of any
member of the Drum Group in, or the business of any such member
with, any person, firm, Company or body (or any arrangement or
arrangements relating to any such interest or business) being
terminated, adversely modified or affected;
-- the value of any member of the Drum Group or its financial or
trading position or prospects being prejudiced or adversely
affected;
-- the creation of any liability, actual or contingent, by any
member of the Drum Group, other than trade creditors or other
liabilities incurred in the ordinary course of business; or
-- any requirement on any such member to acquire, subscribe, pay
up or repay any shares or other securities (or the equivalent),
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Drum Group is a party or by or to which any
member of the Drum Group or any of its assets may be bound,
entitled or subject, would or might reasonably be expected to
result in any of the events or circumstances as are referred to in
this Condition (vi), in each case which is or would be material in
the context of the Drum Group taken as a whole;
No material transactions, claims or changes in the conduct of
the business of the Drum Group
(vii) except as Disclosed, no member of the Drum Group having, since 30 June 2021:
-- save as between Drum and the Drum Group, issued, agreed to
issue, authorised or proposed the issue of additional shares of any
class or securities convertible into shares of any class or rights,
warrants or options to subscribe for, or acquire, any such shares
or convertible securities;
-- other than to another member of the Drum Group, sold (or
agreed to transfer or sell) any treasury shares;
-- save for intra-Drum Group transactions, made or authorised or
proposed or announced an intention to propose any material change
in its loan capital or issued or authorised the issue of any
debentures or incurred or increased any indebtedness or contingent
liability;
-- issued, authorised or proposed the issue of any debentures or
(save for intra-Drum Group transactions), save in the ordinary
course of business, incurred or increased any indebtedness or
become subject to any liability (actual or contingent);
-- purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, save in respect to the matters mentioned in the
first bullet under this Condition (vii), made any other change to
any part of its share capital;
-- implemented, or authorised, proposed or announced its
intention to implement, any reconstruction or other transaction or
arrangement otherwise than in the ordinary course of business or
entered into or changed the terms of any contract with any director
or senior executive;
-- other than pursuant to the Acquisition, implemented,
effected, authorised or announced its intention to implement,
effect, authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme or acquisition or disposal of assets or shares
in any undertaking or undertakings in any such case to an extent
which is material and adverse in the context of the Drum Group or
in the context of the Acquisition;
-- entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term, onerous or unusual nature or magnitude or
which is or could be restrictive on the businesses of any member of
the Drum Group or the Custodian Group or which involves an
obligation of such a nature or magnitude or which is other than in
the ordinary course of business and which, in any such case, is
material in the context of the Drum Group taken as a whole;
-- entered into, implemented or authorised the entry into of any
joint venture, asset or profit sharing arrangement, partnership or
merged with, demerged or acquired any body corporate, partnership
or business or acquired or disposed of or transferred, mortgaged or
charged or created any security interest over any assets or any
right, title or interest in any assets (including shares in any
undertaking and trade investments or authorised the same;
-- been unable or deemed unable, or admitted in writing that it
is unable, to pay its debts as they fall due 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 which, in any such case, is
material in the context of the Drum Group taken as a whole;
-- (other than in respect of a member of the Drum Group which is
dormant and was solvent at the relevant time) taken any corporate
action or had any legal proceedings started or threatened against
it for its winding-up (voluntary or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of all or any
of its assets or revenues or any analogous proceedings in any
jurisdiction or had any such person appointed;
-- commenced negotiations with any of its creditors or taken any
step with a view to rescheduling or restructuring any of its
indebtedness or entered into a composition, compromise, assignment
or arrangement with any of its creditors whether by way of a
voluntary arrangement, scheme of arrangement, deed of compromise or
otherwise which, in any such case, is material in the context of
the Drum Group taken as a whole, or been declared insolvent;
-- entered into any contract, transaction or arrangement which
would be restrictive on the business of any member of the Drum
Group or the Custodian Group other than to a nature and extent
which is normal in the context of the business concerned;
-- waived, settled, abandoned or compromised any claim or
admitted any dispute, claim or counter-claim whether made or
potential and whether by or against any member of the Drum Group
(otherwise than in the ordinary course of business) and which is
material in the context of the Drum Group taken as a whole;
-- entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this condition and which is material in the context
of the Drum Group taken as a whole;
-- made any material alteration to its constitutional documents; or
-- having taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the
approval of Drum Shareholders in a general meeting in accordance
with, or as contemplated by, Rule 21.1 of the Code;
No adverse change, litigation or regulatory enquiry
(viii) except as Disclosed, since 30 June 2021:
-- no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of any member of the Drum Group which is material in the
context of the Drum Group taken as a whole;
-- no litigation, arbitration proceedings, prosecution or other
legal or regulatory proceedings to which any member of the Drum
Group is or may become a party (whether as a plaintiff, defendant
or otherwise) and no investigation by any Third Party against or in
respect of any member of the Drum Group having been instituted,
announced or threatened by or against or remaining outstanding in
respect of any member of the Drum Group which is material in the
context of the Drum Group taken as a whole;
-- no contingent or other liability of any member of the Drum
Group having arisen, increased or become apparent which would be
reasonably likely to be adverse in the context of the Drum Group,
taken as a whole;
-- no steps having been taken which might reasonably be expected
to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Drum Group
which is necessary for the proper carrying on of its business and
the withdrawal, cancellation, termination or modification or which
would reasonable be expected to have a material adverse effect on
the Drum Group; and
-- no member of the Drum Group having conducted its business in
breach of any applicable laws and regulations which in any case is
material in the context of the Drum Group taken as a whole;
No discovery of certain matters
(ix) except as Disclosed, Custodian not having discovered:
-- that any financial, business or other information concerning
the Drum Group disclosed at any time by or on behalf of any member
of the Drum Group, whether publicly, to any member of the Custodian
Group or to any of their advisers or otherwise, is misleading,
contains a misrepresentation of fact or omits to state a fact
necessary to make that information not misleading and which was not
subsequently corrected before the date of this Announcement by
disclosure by or on behalf of the Drum Group; or
-- that any member of the Drum Group is subject to any liability
(actual or contingent) which has not been disclosed at any time by
or on behalf of the Drum Group, whether publicly, to any member of
the Custodian Group or to any of their advisers,
in each case, to the extent which is material in the context of
the Drum Group taken as a whole;
(x) except as Disclosed, Custodian not having discovered that:
-- any past or present member of the Drum Group has failed to
comply in any material respect with any and/or all applicable
legislation or regulations, of any jurisdiction with regard to the
use, storage, carriage, disposal, spillage, release, discharge,
leak or emission of any waste or hazardous substance or any
substance likely to impair materially the environment (including
property) or harm human health or animal health or otherwise
relating to environmental matters or the health and safety of
humans, or that there has otherwise been any such storage,
carriage, disposal, spillage, release, discharge, leak or emission
(whether or not the same constituted a non-compliance by any person
with any such legislation or regulations, and wherever the same may
have taken place) any of which storage, carriage, disposal,
spillage, release, discharge, leak or emission would be likely to
give rise to any material liability (actual or contingent) on the
part of any member of the Drum Group; or
-- there is, or is likely to be, for that or any other reason
whatsoever, any material liability (actual or contingent) of any
past or present member of the Drum Group to make good, repair,
reinstate or clean up any property now or previously owned,
occupied, operated or made use of or controlled by any such past or
present member of the Drum Group, under any environmental
legislation, regulation, notice, circular or order of any
government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body,
agency, court, association or any other person or body in any
jurisdiction.
Anti-corruption, sanctions and criminal property
(xi) save as Disclosed, Custodian not having discovered that:
-- any past or present member, director or officer of the Drum
Group or any person that performs or has performed services on
behalf of the Drum Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption;
-- any asset of any member of the Drum Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that
definition);
-- any past or present member, director or officer of the Drum
Group, or any other person for whom any such person may be liable
or responsible, has engaged in any business with, made any
investments in, made any funds or assets available to or received
any funds or assets from: (a) any government, entity or individual
in respect of which US or European Union persons, or persons
operating in those territories, are prohibited from engaging in
activities or doing business, or from receiving or making available
funds or economic resources, by US or European Union laws or
regulations, including the economic sanctions administered by the
US Office of Foreign Assets Control, or HM Treasury in the UK; or
(b) any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the US, the European
Union or any of its member states; or
-- no member of the Drum Group has been engaged in any
transaction which would cause Custodian to be in breach of any law
or regulation upon its acquisition of Drum, including the economic
sanctions of the US Office of Foreign Assets Control, or HM
Treasury & Customs in the UK, or any government, entity or
individual targeted by any of the economic sanctions of the United
Nations, the US, the European Union or any of its member
states.
Part B
Waiver and invocation of the Conditions
Subject to the requirements of the Panel in accordance with the
Code, Custodian reserves the right to waive, in whole or in part,
all or any of the Conditions in Part A above, except for Conditions
(a), (b), (c) and (d) (Scheme Approval), which cannot be
waived.
The Acquisition will be subject to the satisfaction (or waiver,
if permitted) of the Conditions in Part A above, and to certain
further terms set out in Part D below, and to the full terms and
conditions which will be set out in the Scheme Document to be
published in due course.
The Conditions in Part A (a) and (b) and (ii) to (xi)
(inclusive) must be fulfilled, or waived by, no later than 11.59
p.m. on the date immediately preceding the date of the Sanction
Hearing. The Acquisition will lapse if it does not become Effective
by 11.59 p.m. on the Long Stop Date. Custodian shall be under no
obligation to waive or treat as satisfied any of the Conditions
which are capable of waiver by a date earlier than the latest date
specified above for the fulfilment or waiver thereof,
notwithstanding that the other Conditions to the Acquisition 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.
Custodian may only invoke a Condition so as to cause the
Acquisition not to proceed, to lapse or to be withdrawn with the
consent of the Panel. The Panel will normally only give its consent
if the circumstances which give rise to the right to invoke the
Condition are of material significance to Custodian in the context
of the Acquisition. This will be judged by reference to the facts
of each case at the time that the relevant circumstances arise. The
Conditions contained in Part A, paragraph (i) and, if applicable,
the Acquisition condition referred to in Part C, are not subject to
this provision of the Code. Any Condition that is subject to Rule
13.5(a) of the Code may be waived by Custodian.
Part C
Implementation by way of Takeover Offer
Subject to obtaining the consent of the Panel, Custodian
reserves the right to elect to implement the Acquisition by way of
a Takeover Offer as an alternative to the Scheme.
In such event, such Takeover Offer will be implemented on the
same terms and conditions, so far as applicable, as those which
would apply to the Scheme subject to appropriate amendments to
reflect the change in method of effecting the Takeover Offer,
including (without limitation) the inclusion of an acceptance
condition set at 90 per cent. of the Drum Shares to which the
Takeover Offer relates, (or such lesser percentage as may be agreed
after consultation with the Panel (if necessary) and if that
percentage is less than 75 per cent. of the Drum Shares to which
the Takeover Offer relates, with the consent of Drum, being in any
case more than 50 per cent. of the voting rights normally
exercisable at a general meeting of Drum, including, for this
purpose, any such voting rights attaching to Drum Shares that are
issued before the Takeover Offer becomes or is declared
unconditional as to acceptances, whether pursuant to the exercise
of any outstanding subscription or conversion rights or otherwise).
Further, if sufficient acceptances of the Takeover Offer are
received and/or sufficient Drum Shares are otherwise acquired, it
is the intention of Custodian to apply the provisions
of Chapter 3 of Part 28 of the Companies Act to compulsorily
acquire any outstanding Drum Shares to which such Takeover Offer
relates.
Part D
Certain further terms of the Acquisition
If Custodian is required by the Panel to make an offer for Drum
Shares under a mandatory offer for Drum under Rule 9 of the Code,
Custodian may make such alterations to the above Conditions as are
necessary to comply with that Rule and applicable law.
The availability of the Acquisition to persons not resident in
the UK may be affected by the laws of the relevant jurisdictions.
Persons who are not resident in the UK should inform themselves
about, and observe, any applicable requirements. Drum Shareholders
who are in any doubt about such matters should consult an
appropriate independent professional adviser in the relevant
jurisdiction without delay and observe any applicable requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
The Drum Shares will be acquired by Custodian fully paid and
free from all liens, equitable interests, charges, encumbrances,
rights of pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital, repurchase or redemption or otherwise) made on or
after the date of this Announcement in respect of the Drum
Shares.
The Scheme will be governed by the laws of England and Wales and
be subject to the jurisdiction of the Court and to the conditions
and further terms set out in this Appendix I and to be set out in
the Scheme Document. The Acquisition will also be subject to the
applicable requirements of the Companies Act, the Court, the FCA,
the London Stock Exchange and the Code. This Announcement does not
constitute, or form part of, an offer or invitation to purchase
Drum Shares or any other securities.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement:
1. Unless otherwise stated, all financial information relating
to Custodian has been extracted or derived (without adjustment)
from the audited consolidated financial statements for Custodian
for the financial year ended 31 March 2021.
2. Unless otherwise stated, all financial information relating
to Drum has been extracted or derived (without adjustment) from the
unaudited consolidated financial statements for Drum for the six
months ended 31 March 2021.
3. Unless otherwise stated, all Closing Bid Prices for the Drum
Shares and the Custodian Shares are derived from the London Stock
Exchange Daily Official List.
4. The issued share capital of Drum is 38,201,990 Drum Shares,
and the issued share capital of Custodian is 420,603,344 Custodian
Shares, both as at 2 September 2021 (being the latest practicable
date prior to the date of this Announcement) .
5. The average premium to Net Asset Value per share is based on:
(a) the daily closing bid price per Drum Share and per Custodian
Share, as per Datastream, over the three month period ended on and
including 3 August 2021 (being the latest practicable date prior to
the Possible Offer Announcement);
(b) the daily Net Asset Value for Custodian as per Datastream,
over the last three month period ended on and including 3 August
2021 (being the latest practicable date prior to the Possible Offer
Announcement); and
(c) the daily Net Asset Value for Drum as per Datastream, over
the last three month period ended on and including 3 August 2021
(being the latest practicable date prior to the Possible Offer
Announcement).
APPIX III
IRREVOCABLE UNDERTAKINGS
Directors' Irrevocable undertakings
The following Drum Directors being those Drum Directors who hold
Drum Shares have given irrevocable undertakings to vote in favour
of the Scheme at the Court Meeting (or otherwise be bound by the
Scheme) and the Resolution to be proposed at the General Meeting in
relation to the following Drum Shares:
Name Number of Drum Shares Percentage of Drum
Shares
Hugh Little 100,000 0.26
Alan Robertson 50,000 0.13
---------------------- -------------------
Each irrevocable undertaking includes undertakings to, amongst
other things, vote (or procure the vote) in favour of all
resolutions to approve or give effect to the Scheme and any related
matters proposed at the General Meeting. These irrevocable
undertakings will continue to be binding in the event that a higher
competing offer is made for Drum.
These irrevocable undertakings shall automatically terminate and
be of no further effect in the event that:
(i) the Acquisition terminates, lapses or is withdrawn in accordance with its terms; or
(ii) the Scheme has not become Effective, or the offer announced
has not been declared unconditional in all respects in accordance
with the requirements of the Code on the Long Stop Date (or such
later time or date as agreed between Custodian and Drum, with the
approval of the Court and/or the Panel, if required).
Other Drum Shareholders' Irrevocable Undertakings
The following Drum Shareholders have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
(or otherwise be bound by the Scheme) and the Resolution to be
proposed at the General Meeting in relation to the following Drum
Shares:
Name Number of Drum Shares Percentage of Drum
Shares
Seven Investment Management 26,379,190 69.05
LLP
Drum Property Investment 2,560,000 6.70
Group Limited
---------------------- -------------------
Each irrevocable undertaking includes undertakings to, amongst
other things, vote (or procure the vote) in favour of all
resolutions to approve or give effect to the Scheme and any related
matters proposed at the General Meeting. These irrevocable
undertakings will all continue to be binding in the event that a
higher competing offer is made for Drum. The irrevocable
undertaking given by Seven Investment Management also sets out its
current expectation that it will hold its New Custodian Shares for
the medium term from the date on which the Acquisition becomes
Effective (other than such New Custodian Shares as Seven Investment
Management is expecting to sell in the near term to meet the
liquidity requirements from their underlying funds). Seven
Investment Management has also given certain orderly market
undertakings to Custodian in respect of any proposed disposals in
the medium term.
Seven Investment Management's irrevocable undertaking will cease
to have any effect if:
(i) the Scheme Document, or the Offer Document (as the case may
be) is not posted within 28 days of this Announcement;
(ii) where the Acquisition is implemented by way of a Scheme,
the Court convened shareholder meeting of the Drum Shareholders in
respect of the Scheme is not scheduled to take place within 28 days
of the date of the Scheme Document;
(iii) the Acquisition is withdrawn or lapses or does not become
wholly unconditional or Effective in accordance with its terms by
the Long Stop Date or such later date as may be agreed in writing
between Custodian and Drum with the consent of the Panel (if
required) for the sole purpose of satisfaction of any outstanding
material official authorisations and/or regulatory clearances only,
such time period not to be greater than two months; or
(iv) Seven Investment Management is required to withdraw any of
the undertakings given in its irrevocable undertaking by any court
of competent jurisdiction or a competent regulator.
The irrevocable undertaking given by Drum Property Investment
Group Limited shall automatically terminate and be of no further
effect in the event that:
(i) the Acquisition terminates, lapses or is withdrawn in accordance with its terms; or
(ii) the Scheme has not become Effective, or the offer announced
has not been declared unconditional in all respects in accordance
with the requirements of the Code on the Long Stop Date (or such
later time or date as agreed between Custodian and Drum, with the
approval of the Court and/or the Panel if required.
APPIX IV
DEFINITIONS
Acquisition the proposed acquisition by Custodian of the
entire issued and to be issued ordinary share
capital of Drum, to be implemented by means
of the Scheme as described in this Announcement
(or, should Custodian so elect, by a Takeover
Offer under certain circumstances described
in this Announcement)
Admission the admission of the New Custodian Shares to
listing on the premium listing segment of the
Official List of the FCA; and (ii) trading
on the London Stock Exchange's main market
for listed securities
Announcement this Announcement made pursuant to Rule 2.7
of the Code, including its Appendices
Appendices the appendices to this Announcement, and "Appendix"
has the corresponding meaning, save where the
context otherwise requires
Articles the articles of association of Drum from time
to time
Business Day a day, not being a public holiday, Saturday
or Sunday, on which banks in the City of London
are open for normal business
Code The City Code on Takeovers and Acquisitions
Companies Act the Companies Act 2006 (as amended)
Conditions the conditions to the implementation of the
Acquisition (including the Scheme) as set out
in Appendix I to this Announcement and to be
set out in the Scheme Document
Court the High Court of England and Wales
Court Meeting the meeting or meetings of the Drum Shareholders
to be convened by order of the Court for the
purpose of considering and, if thought fit,
approving the Scheme, including any adjournment,
postponement reconvention of any meeting
Court Order the order of the Court sanctioning the Scheme
Custodian Custodian REIT plc, a public limited company
incorporated in England and Wales with registered
number 08863271 and with a registered office
at 1 New Walk Place, Leicester LE1 6RU
Custodian Board the board of Custodian Directors
Custodian Capital Custodian Capital limited, a limited company
incorporated in England and Wales with registered
number 06504305 and with its registered office
at 1 New Walk Place, Leicester LE1 6RU
Custodian Directors the Directors of Custodian as at the date of
this Announcement or, where the context so
requires, the directors from Custodian from
time to time
Custodian Group Custodian and its subsidiaries
Custodian Shareholders the holders of Custodian Shares from time to
time
Custodian Shares the ordinary shares of 1 pence each in the
capital of Custodian
Dickson Minto Dickson Minto W.S.
Disclosed (i) information in the annual report and consolidated
financial statements of the Drum Group for
the financial year ended 30 September 2020;
(ii) matters disclosed in any public announcement
to a Regulatory Information Service made by
Drum prior to the date of this Announcement;
(iii) information in this Announcement; or
(iv) as otherwise fairly disclosed in writing
to Custodian (or Custodian's financial, accounting,
taxation or legal advisers (specifically in
their capacity as Custodian's advisers in relation
to the Acquisition) prior to 12 noon on the
Business Day before the date of this Announcement
(including all information provided in the
electronic data rooms created by Dickson Minto
and Brodies LLP and made available to Custodian
and its advisers for the purposes of the Acquisition)
Dividend Discrepancy shall have the meaning given to it where used
in the body of this Announcement
Drum Drum Income Plus REIT plc, a public limited
company incorporated in England and Wales with
registered number 09511797 and with its registered
office at Level 13, Broadgate Tower, 20 Primrose
Street, London EC2A 2EW
Drum Board the board of Drum Directors
Drum Directors the Directors of Drum as at the date of this
Announcement or, where the context so requires,
the directors from Drum from time to time
Drum Group Drum and its subsidiaries from time to time,
including the Drum Subsidiary
Drum Shareholders the holders of Drum Shares from time to time
Drum Shares the ordinary shares of 10 pence each in the
capital of Drum
Drum Subsidiary Drum Income Plus Limited, a private limited
company incorporated in England and Wales with
registered number 09515513 and with its registered
office at Level 13, Broadgate Tower, 20 Primrose
Street, London EC2A 2EW
Effective (a) if the Acquisition is implemented by way
of the Scheme, means the Scheme having become
effective pursuant to its terms; or (b) if
the Acquisition is implemented by way of Takeover
Offer, means the Takeover Offer having been
declared or become unconditional in all respects
in accordance with the requirements of the
Code
Effective Date if the Acquisition is implemented by way of
the Scheme, the date on which the Scheme becomes
effective pursuant to its terms, or, if the
Acquisition is implemented by way of a Takeover
Offer, the Takeover Offer having been declared
or become unconditional in all respects in
accordance with the requirements of the Code
Enlarged Custodian Custodian following completion of the Acquisition
Excess shall have the meaning given to it where used
in the body of this Announcement
Exchange Ratio the exchange ratio set out in paragraph 2 of
this Announcement
Existing Custodian holders of Custodian Shares immediately prior
Shareholders to the Effective Date
General Meeting the General Meeting of the Drum Shareholders
to be convened for the purpose of considering,
and if thought fit, approving the Resolution
necessary to enable Drum to implement the Acquisition,
notice of which will be contained in the Scheme
Document
Irrevocable Undertakings the irrevocable undertakings to vote or procure
votes in favour of the Scheme at the Court
Meeting and all resolutions necessary to be
passed at the General Meeting in order to implement
the Scheme, as detailed in Appendix III to
this Announcement
LBTT Scotland's Land and Buildings Transaction Tax
London Stock Exchange the London Stock Exchange plc
Long Stop Date 31 December 2021, or such later date (if any)
as Drum and Custodian may agree, with the consent
of the Panel, and (if required) the Court may
allow;
Meetings the Court Meeting and the General Meeting
New Custodian the new Custodian Shares to be issued to Drum
Shares Shareholders in accordance with the terms of
the Acquisition
Net Asset Value the net asset value of Drum or Custodian, as
or NAV the context requires, in total or (as the context
requires) per Drum Share or Custodian Share
calculated in accordance with the relevant
companies valuation policy
Numis Numis Securities Limited a limited company
incorporated in England and Wales with registered
number 2285918 and with a registered office
at 45 Gresham Street, London, EC2V 7BF
Offer Period as defined in the City Code
Ongoing Charges annual expenses (excluding operating expenses
Ratio of rental property rechargeable to tenants)
divided by average quarterly NAV
Opening Position an announcement containing details of interests
Disclosure or short positions in, or rights to subscribe
for, any relevant securities of a party to
the offer if the person concerned has such
a position, as defined in Rule 8 of the Code
Overseas Shareholders means Drum Shareholders who have a registered
address in a jurisdiction outside of the UK
Panel the UK Panel on Takeovers and Acquisitions
Possible Offer the announcement released by Drum pursuant
Announcement to Rule 2.4 of the Code on 4 August 2021
Relevant Authority any central bank, ministry, governmental, quasigovernmental,
Resolution supranational (including the European Union),
statutory, regulatory or investigative body,
authority or tribunal (including any national
or supranational antitrust, 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
the special resolution to be proposed by Drum
at the General Meeting in connection with,
among other things, the approval of the Scheme
and the alteration of the Drum Articles
Restricted Jurisdictions any jurisdictions where local laws or regulations
may result in a significant risk of civil,
regulatory or criminal exposure if information
concerning the Acquisition is sent or made
available to Drum Shareholders in that jurisdiction
Sanction Hearing the hearing by the Court to sanction the Scheme
and, if such hearing is adjourned, references
to the commencement of any such hearing shall
mean the commencement of the final adjournment
thereof;
Scheme means a Court sanctioned scheme of arrangement
in accordance with Part 26 of the Companies
Act
Scheme Document the document to be sent to Drum Shareholders,
including amongst other things, the Scheme,
an explanatory statement and the notices convening
the Meetings
Scheme Record 6.00 p.m. on the Business Day immediately following
Time the date of the Sanction Hearing
SDLT UK Stamp Duty Land Tax
Takeover Offer if the Acquisition is to be implemented by
way of a takeover offer, the offer to be made
by Custodian
Third Party any relevant government or governmental, quasi-governmental,
supranational, statutory, regulatory, administrative,
environmental, professional or investigative
body, court, trade agency, association, institution,
any entity owned or controlled by any relevant
government or state, or any other body or person
whatsoever in any jurisdiction
Voting Record 6.00 p.m. on the day which is two Business
Time Days before the date of the Court Meeting or,
if the Court Meeting is adjourned, 6.00 p.m.
on the day which is two Business Days before
the date set for the adjourned Court Meeting
(as the case may be)
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END
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