TIDMLXB
RNS Number : 8508D
LXB Retail Properties Plc
05 February 2018
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
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
5 February 2018
LXB Retail Properties Plc
(the "Company" or the "Group")
Proposed Scheme of Arrangement
Proposed Returns of Cash
and
Notices of Court Meeting and Annual General Meeting
LXB Retail Properties Plc, the Jersey resident closed-ended real
estate investment company focused on edge of town and out of town
retail assets, announces that on 3 February 2018 it posted to its
Shareholders ("Shareholders") documentation regarding:
-- a proposed reorganisation of the Company (the
"Reorganisation") by way of a Jersey Scheme of Arrangement (the
"Scheme");
-- the convening by the Royal Court of Jersey Samedi Division
(the "Court") of a meeting of the Shareholders to consider the
Scheme (the "Court Meeting"), the notice of which is contained in
the scheme circular (the "Scheme Circular");
-- a proposal to enable the directors of the Company (the
"Directors") to make returns of cash to Shareholders on an ongoing
basis (the "Returns of Cash"); and
-- the convening by the Company of its 2018 annual general
meeting (the "Annual General Meeting") to consider for approval the
Returns of Cash and certain other ordinary business, notice of
which is contained in the circular (the "Return of Cash
Circular").
Both the Court Meeting and the Annual General Meeting have been
convened for 27 February 2018 at the offices of the Company
Secretary, Intertrust Fund Services (Jersey) Limited, 44 Esplanade,
St Helier, Jersey, JE4 9WG. The Court Meeting will commence at
12.00 noon and the Annual General Meeting will commence at 12.30
p.m. (or as soon thereafter as the Court Meeting is concluded or
adjourned).
Copies of the documents posted to Shareholders and of this
announcement will be available on the Company's website
(www.lxbproperties.com) from later today.
Summary of the Scheme
As previously indicated in the Chairman's Statement of 5
December 2017 accompanying the results for the year ended 30
September 2017, the Company is now proposing the Reorganisation
(which will constitute Proposals for the purposes of its articles
of association) in line with the Shareholders' mandate to the board
of Directors (the "Board") to return as much cash as possible to
Shareholders in the short term and to bring the life of the Company
to an end.
If the Scheme becomes effective in accordance with its terms, it
would enable the Group to return value to Shareholders in the
period up to 31 March 2019 and for the possibility of the Company
being dissolved shortly thereafter, thereby providing the finality
desired.
In summary, the Reorganisation, which is explained in detail in
the Scheme Circular, will involve:
-- shortly after the Scheme becoming effective (which is
currently anticipated to be on or around 19 March 2018), the
transfer of certain assets and associated liabilities (actual and
contingent) of the Company's group of companies (the "Group"),
which will endure beyond 31 March 2019, to IW Midco Limited ("IW
Midco"), a third party company owned and managed by Brendan O'Grady
a current member of the Investment Adviser team, together with an
appropriate amount of cash to collateralise those liabilities;
-- a payment to IW Midco to provide for its operating costs
(including remuneration) for the period for which it is expected to
manage the transferred liabilities;
-- the Company realising as much value as possible from its
remaining assets and agreeing to return the resulting cash to
Shareholders by means of the Returns of Cash prior to the
dissolution of the Company in accordance with the Scheme or
otherwise in connection with it (please see below for further
information);
-- the transfer to IW Midco of any assets and associated
liabilities remaining in the Group which have not otherwise been
disposed of or discharged by that time; and
-- as soon as possible after 31 March 2019, the cancellation of
trading in the Company's ordinary shares on AIM and the delisting
of the Company from the International Stock Exchange (the TISE)
shortly prior to the dissolution of the Company pursuant to the
Scheme subject, respectively, to the approval of Shareholders and
the discretion of the Court at the relevant time.
As part of the actions to be completed following the Effective
Time pursuant to the Scheme, the Company has agreed to pay the
running costs (including remuneration) of the IW Group for the
period from the Effective Time until the fifth anniversary of the
Effective Time, for its services managing the transferred assets
and associated liabilities it will have assumed under the Scheme.
Further particulars of these arrangements are set out in the Scheme
Circular.
Benefits of the Scheme
In arriving at the proposals comprising the Reorganisation, the
Board has considered a number of alternative options to satisfy the
mandate of the Shareholders that the life of the Company be brought
to an end as soon as possible whilst ensuring that value is
maximised from its remaining assets and that longer-term
obligations can still be satisfied. These options, together with
the Board's evaluation of each, are set out in detail in the Scheme
Circular. The Board is satisfied that the cost for Shareholders of
alternatives would be significantly greater than the costs involved
with the proposed Scheme and, for the reasons set out in the Scheme
Circular, the Board, having been advised by BDO LLP, considers the
terms of the Reorganisation to be effected by the Scheme, to be
fair and reasonable.
In providing advice to the Directors, BDO LLP has taken into
account the commercial assessments of the Directors.
The Board has concluded that there are a number of benefits of
the Scheme, as follows:
-- in terms of market capitalisation, the Company is now so
relatively small that it is no longer investable for the majority
of the Shareholder base and accordingly, an end to the life of the
Company in the foreseeable future is considered highly
desirable;
-- by extending the Company's life beyond the expected
completion of further phases at Rushden Lakes and the cinema at
Stafford, the Scheme provides an opportunity to maximise the value
of those two significant investments and for Shareholders to
participate fully in that prior to 31 March 2019;
-- the Scheme provides a cost-effective mechanism whereby all of
the readily realisable value in the Company's other assets may also
be realised, and for cash to be returned to Shareholders in stages
in the period to 31 March 2019, after which dissolution of the
Company will be sought, thereby giving relative certainty to ending
Shareholders' investment in the Group;
-- the Scheme allows for all of the remaining liabilities of the
Group, both actual and contingent, to be dealt with so that the
remaining companies in the Group can, after the Scheme becomes
effective, be wound up or transferred during the process;
-- the cost of funding the IW Group in order for it to assume
and manage the residual assets and associated liabilities of the
Group proposed to be transferred to IW Midco under the Scheme and
the anticipated costs of the Company up to 31 March 2019 is, the
Board believes, in aggregate likely to be significantly less than
the costs of continuing to run the Company for the period of time
it would take to deal with and discharge these liabilities as part
of a winding up of the Company or of appointing a liquidator;
and
-- the Scheme provides for the transfer to IW Midco of any Group
liabilities and assets that cannot be dealt with before the
dissolution of the Company (proposed to be shortly after 31 March
2019, subject to the discretion of the Court), together with an
appropriate amount of cash to collateralise and manage those
liabilities. Any remaining value that may be transferred to IW
Midco as part of the Scheme will, in the Board's view, almost
certainly be out-weighed by the cost saving achieved by terminating
the current Group structure earlier than would otherwise be the
case.
Conditions to the Scheme
The Scheme is conditional upon the following being satisfied by
30 April 2018, or such later date as the Company and IW Topco
Limited (the sole shareholder of IW Midco) ("IW Topco") may agree
and the Court (if required) may allow;
-- the approval by a majority in number representing not less
than 75 per cent. of the voting rights of the holders of Scheme
Shares (or the relevant class or classes thereof, if applicable)
present and voting, either in person or by proxy, at the Court
Meeting and at any separate class meeting which may be required by
the Court;
-- the resolutions required to authorise the Returns of Cash to
be proposed at the Annual General Meeting being duly passed by the
requisite majority and, where applicable, becoming unconditional in
accordance with its terms;
-- no material amendment, unless approved by the Court, having
been made to the executed framework agreement entered into by,
among others, the Company and IW Topco to implement certain steps
and undertake certain actions required to give effect to parts of
the Scheme;
-- IW Topco, IW Midco and Mr O'Grady and his immediate family
members that directly or indirectly hold Ordinary Shares each
undertaking to the Court to be bound by the Scheme;
-- the Company not having withdrawn the Scheme, which it shall
be entitled to do at any time, and for any reason, prior to the
point at which the Jersey Court issues an order sanctioning the
Scheme pursuant to Article 125 of the Jersey Companies Law; and
-- the sanction of the Scheme by the Jersey Court with or
without modification (but subject to any such modification being
acceptable to the Company and IW Midco) and the delivery of the
relevant court order to the Registrar of Companies for Jersey.
Returns of Cash
The Company is also proposing resolutions at the Annual General
Meeting to authorise the Directors to return cash to Shareholders
as it is realised from time to time without the need for multiple
ongoing general meetings in respect of such returns, as was the
case in 2016 (being the Returns of Cash).
Although the Returns of Cash are not conditional on the Scheme
becoming effective in accordance with its terms, the Scheme itself
is conditional upon the relevant resolutions in respect of the
Returns of Cash being approved at the Annual General Meeting.
As was the case in 2016, the Returns of Cash have been
structured to give Shareholders a choice between receiving their
cash proceeds as capital, income or a combination of the two. This
method of return has been chosen as it allows Shareholders to be
treated equally, and gives each Shareholder (save for certain
overseas restricted Shareholders) the choice of the form in which
to receive the Return of Cash.
The Company currently intends to make a Return of Cash following
completion of the Riverside sale of approximately GBP10 million
(approximately 6 pence per ordinary share) and thereafter will
consider making one or more Returns of Cash prior to or in
connection with the dissolution of the Company in accordance with
the Scheme, or if the Scheme does not become effective in
accordance with its terms, at the appropriate time following the
realisation of value from the sale of the Group's remaining
assets.
It is anticipated that, if implemented in full, the Returns of
Cash would have the effect of returning to Shareholders
substantially all of the Group's available cash representing the
completion of the sale of all of its material investments prior to
the dissolution of the Company in accordance with the Scheme.
However, as noted above the Returns of Cash are not conditional on
the Scheme itself becoming effective in accordance with its terms
and will, if the Scheme does not become effective, be available to
the Directors to enable them to return value so realised.
Action to be taken by Shareholders
Detailed instructions on the actions to be taken by Shareholders
in relation to both the Court Meeting and the Annual General
Meeting are set out in, respectively, the Scheme Circular and the
Return of Cash Circular.
Timetable
The following timetable sets out the expected dates for
implementation of the Scheme and the Returns of Cash (some of which
are indicative):
Time and/or
date
Latest time for lodging blue Form 12.00 noon on
of Proxy for the Court Meeting 23 February
2018
Latest time for lodging the white 12.30 p.m. on
form of proxy for the Annual General 23 February
Meeting 2018
Voting Record Time 6.00 p.m. on
25 February
2018
Court Meeting 12.00 noon on
27 February
2018
Annual General Meeting 12.30 p.m. on
27 February
2018(1)
Scheme Record Time 6.00 p.m. on
15 March 2018
Court Sanction Hearing 10.00 a.m. on
16 March 2018
Effective Date 19 March 2018
Effective Time 9.00 a.m. on
30 March 2018
Scheme Long Stop Date 30 April 2018
Cancellation of trading of Ordinary As soon as possible
Shares on AIM and delisting from after 31 March
the TISE and dissolution of the 2019 and subject
Company to the approval
of the Shareholders
in accordance
with AIM Rules
and to the discretion
of the Court
Note 1: Or as soon thereafter as the Court Meeting is concluded
or adjourned.
For further information please contact:
LXB Adviser LLP Tel: 020 7432 7900
Tim Walton, CEO
Brendan O'Grady, FD
J.P. Morgan Cazenove (NOMAD) Tel: 020 7742 4000
Bronson Albery/Paul Hewlett
Buchanan Tel: 020 7466 5000
Charles Ryland/Victoria Hayns
BDO LLP Tel: 0207 486 5888
John Stephan
Further information
This Announcement is not intended to and does not constitute, or
form part of, an offer, invitation or the solicitation of an offer
to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Reorganisation,
Returns of Cash or otherwise. The Reorganisation and Returns of
Cash will be made solely on the terms set out in, respectively, the
Scheme Circular and Return of Cash Circular, which (as applicable)
contain the full terms and conditions of the Scheme and Returns of
Cash including details of how to vote in respect of them. Any vote
in respect of the Scheme and Returns of Cash or other response in
relation to them should be made only on the basis on the
information contained in the Scheme Document and Return of Cash
Circular (as the case may be). Shareholders are advised to read
carefully the Scheme Document and Return of Cash Circular related
forms of proxy.
Overseas jurisdictions
The release, publication or distribution of this announcement
in, into or from jurisdictions other than the UK and Jersey may be
restricted by law and therefore any persons who are subject to the
law of any jurisdiction other than the UK and Jersey should inform
themselves about, and observe, any applicable legal or regulatory
requirements. In particular the ability of persons who are not
resident in the UK or Jersey, to vote their Ordinary Shares with
respect to the Scheme at the Court Meeting and/or the Return of
Cash at the Annual General Meeting, or to appoint another person as
proxy to vote at the Court Meeting and/or the Annual General
Meeting on their behalf, or to participate in parts of the Returns
of Cash may be affected by the laws of the relevant jurisdictions
in which they are located. Any failure to comply with the
applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction.
Shareholders who are not resident in the UK or Jersey or who are
citizens, residents or nationals of jurisdictions other than the UK
or Jersey should consult their professional advisers to ascertain
whether the Scheme and/or the Returns of Cash will be subject to
any restrictions or require compliance with any formalities imposed
by the laws or regulations of, or any body or authority located in,
the jurisdiction in which they are resident or to which they are
subject. In particular, it is the responsibility of any Shareholder
not resident in the UK or who is a citizen, resident or national of
a jurisdiction other than the UK to satisfy himself as to full
observance of the laws of each relevant jurisdiction in connection
with the Scheme and the Returns of Cash.
To the fullest extent permitted by applicable law, the Company
disclaims any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared for
the purposes of complying with Jersey and English law and the
information disclosed may not be the same as that which would have
been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside England and Wales and
Jersey.
Further details in relation to Overseas Shareholders is
contained in the Scheme Document and the Return of Cash
Circular.
Publication on website and hard copies
Copies of the documents posted to Shareholders and of this
announcement will be available on the Company's website
(www.lxbproperties.com) from later today.
Time
All times shown in this announcement are London times, unless
otherwise stated.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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