TIDMGWI TIDMO5G TIDMIRSH
RNS Number : 9680E
Globalworth Real Estate Inv Ltd
12 July 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
12 July 2021
Globalworth Real Estate Investments Limited ("Globalworth" or
the "Company")
Offer Update and Advice to Shareholders
On 14 April 2021, CPI Property Group S.A. ("CPI") and Aroundtown
SA ("Aroundtown" and, together with CPI, the "Consortium")
announced a unilateral cash offer for the Company (the "Offer"). On
26 April 2021, a committee of independent directors of the Company
(the "Independent Committee") advised shareholders that the Offer
significantly undervalued the Company and recommended that
shareholders not accept the offer.
On 5 July 2021, CPI and Aroundtown notified Globalworth that
their holdings in the Company had been combined (the
"Consolidation"), resulting in Zakiono Enterprises Limited
("Zakiono", an entity indirectly owned by the Consortium) holding
51.50% of the shares in the Company. As a result, Zakiono held
sufficient voting rights to exert statutory control over the
Company, including in due course the ability to appoint and remove
directors from the board, without the need to maintain a majority
of independent directors.
On 8 July 2021, the Consortium announced that the final
anti-trust condition to the Offer had been satisfied. The
Consortium later announced that it owned or had received valid
acceptances to the Offer in respect of 54.08 per cent. of the
issued share capital of Globalworth and that it had reduced the
percentage required to satisfy the Acceptance Condition to more
than 50 per cent. of the voting rights then normally exercisable at
a general meeting of Globalworth.
Accordingly, the Consortium declared the Offer unconditional in
all respects and that the Offer is to close on 23 July 2021.
Copies of certain announcements and documents relating to the
Offer may be viewed on the Globalworth website at
https://www.globalworth.com/investor-relations/offer-for-globalworth/.
INDEPENT COMMITTEE'S FURTHER VIEWS IN RELATION TO THE OFFER
The Independent Committee continues to believe that the Offer
significantly undervalues the Company, its assets and its
prospects.
As set out in the response circular on 26 May 2021 (the
"Response Circular"), the Independent Committee notes that the
Consortium's limited disclosure provides that it:
-- does not currently intend to make any changes to existing
employment rights, including pension rights, of the management and
employees of Globalworth and its subsidiaries;
-- does not currently intend to change the places of
Globalworth's business, including the location of its headquarters
and the headquarters' functions;
-- does not intend to redeploy any of Globalworth's fixed assets; and
-- intends to maintain Globalworth's AIM admission.
The Independent Committee notes that the Consortium's intention
to maintain Globalworth's AIM admission applies until 8 July 2022
but also notes that, if the Consortium deviates from this statement
of intention during this period, they will be required to make an
announcement in accordance with Rule 19.6(b) of the City Code on
Takeovers and Mergers. In any event (whether before or after 8 July
2022), any proposed cancellation of Globalworth's AIM admission at
the request of the Company would be conditional upon the consent of
not less than 75% of votes cast by Globalworth Shareholders at a
general meeting. In addition, Globalworth's AIM admission could be
cancelled if required by the AIM Rules.
The Consortium has also stated an intention, following the Offer
becoming or being declared unconditional in all respects, to:
-- within six months of the Offer completing, undertake a
strategic review of Globalworth's business;
-- make changes to the Globalworth Board in order to reflect the
Consortium's majority shareholding in Globalworth, with the effect
that the Consortium intends to take control of the Globalworth
Board and cause Globalworth to implement the Consortium's
(unstated) strategy going forward; and
-- consider proposals regarding the incentivisation of
management and employees that may include arrangements to secure
the ongoing participation of Globalworth's senior management.
As a result of the Consolidation, and the Offer having been
declared unconditional in all respects, the Independent Committee
now expects these actions to be taken. Furthermore, the Independent
Committee notes the following:
-- the Consortium is now able to exercise statutory control over
the Company and pass ordinary resolutions. As a result there is a
material risk that the Consortium may now seek to weaken or remove
current governance protections that benefit Globalworth's minority
shareholders;
-- by virtue of Zakiono acquiring statutory control over the
Company, the requirement in the Company's Articles for the
Globalworth Board to maintain a majority of independent directors
no longer applies;
-- the Consortium has provided no description of its anticipated
plans for Globalworth or the basis for its assertion that those
plans will improve Globalworth's business performance;
-- a combination of weakened governance protections and the
Consortium's anticipated plans for Globalworth could, among other
things, result in Globalworth generating reduced profits available
for the purpose of paying dividends, reducing income for
shareholders and depressing the value of the Globalworth
Shares;
-- there is a material risk that reduced liquidity of the
Globalworth Shares would severely impact their trading value;
-- although the Consortium may not, without the consent of the
Takeover Panel, make another offer, or acquire any further
Globalworth Shares on more favourable terms to those made available
under the Offer (or provide additional consideration for
Globalworth Shares acquired pursuant to the Offer) within six
months of closure of the Offer, the Consortium will generally be
able to acquire Globalworth Shares in the market, further
consolidating its position of control; and
-- the Consortium may de-consolidate its ownership of the
Company, which, depending on the number of Globalworth Shares held
by Zakiono at the time, may mean that each of CPI and Aroundtown
would individually be able to exert control of the Company.
The Independent Committee notes that the Consortium has ignored
all offers by the Independent Committee to engage and explore
avenues that may result in delivering greater value to all
Globalworth Shareholders.
The Independent Committee, which has been so advised by J.P.
Morgan and Panmure Gordon as to the financial terms of the Offer,
continues to believe that the Offer significantly undervalues
Globalworth, its assets and its prospects. In providing its
financial advice to the Independent Committee, each of J.P. Morgan
and Panmure Gordon has taken into account the commercial assessment
of the Independent Committee. Panmure Gordon is providing
independent financial advice to the Independent Committee for the
purposes of Rule 3 of the Code.
However, the Independent Committee advises Globalworth
Shareholders to consider the factors set out above in making a
decision as to whether to accept the Offer. In particular,
Globalworth Shareholders should weigh, in light of their individual
circumstances, the significant undervaluation that the Offer terms
represent against the detrimental impact the Consolidation and
further increases in the Consortium's shareholding, whether
pursuant to the Offer or subsequently, may have on governance,
liquidity and the price at which Globalworth Shares trade.
The members of the Independent Committee who hold Globalworth
Shares, having considered their own positions in light of the above
factors, intend to accept the Offer in respect of all or part of
their own interests in Globalworth Shares.
Whilst the Globalworth CEO believes that the Offer Price does
not reflect the fundamental value of the Company, in light of his
personal circumstances and concern as to the future liquidity and
trading value of the Globalworth Shares, the Globalworth CEO
intends to accept the Offer.
Globalworth Shareholders should be aware that Zakiono is able to
acquire further Globalworth Shares in the market without being
required to make any further offer, which would both consolidate
its control of the Company and reduce the liquidity of Globalworth
Shares.
Terms used but not defined in this announcement shall have the
meanings given to them in the Response Circular.
Enquiries:
Globalworth Via advisers
Geoff Miller, Chair of the Board
----------------------
J.P. Morgan Cazenove (Financial Adviser) Tel: +44 20 7742 4000
----------------------
Massimo Saletti / Leon Li
Dwayne Lysaght / Jonty Edwards
----------------------
Panmure Gordon (Rule 3 Adviser, Nominated Tel: +44 20 7886 2500
Adviser and Joint Broker)
----------------------
Dominic Morley / Alina Vaskina
----------------------
Important notices
This announcement is not intended to and does not constitute an
offer to buy or the solicitation of an offer to subscribe for or
sell or an invitation to purchase or subscribe for any securities
or the solicitation of any vote in any jurisdiction. The release,
publication or distribution of this announcement in whole or in
part in, into or from certain jurisdictions may be restricted by
law and therefore persons in such jurisdictions should inform
themselves about and observe such restrictions.
The person responsible for arranging for the release of this
announcement on behalf of the Company is Nicola Marrin, Company
Secretary.
Disclaimers
J.P. Morgan Securities plc, which conducts its UK investment
banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"),
is authorised in the United Kingdom by the Prudential Regulation
Authority (the "PRA") and regulated in the United Kingdom by the
PRA and the Financial Conduct Authority. J.P. Morgan Cazenove is
acting as financial adviser exclusively for Globalworth and no one
else in connection with the matters set out in this announcement
and will not regard any other person as its client in relation to
the matters in this announcement and will not be responsible to
anyone other than Globalworth for providing the protections
afforded to clients of J.P. Morgan Cazenove or its affiliates, nor
for providing advice in relation to any matter referred to
herein.
Panmure Gordon (UK) Limited ("Panmure Gordon") which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively for Globalworth and no one
else in connection with the matters set out in this announcement
and will not regard any other person as its client in relation to
the matters in this document and will not be responsible to anyone
other than Globalworth for providing the protections afforded to
clients of Panmure Gordon or its affiliates, nor for providing
advice in relation to any matter referred to herein.
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END
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