Statement re posting of response circular
November 13 2009 - 2:00AM
UK Regulatory
TIDMRUGB TIDMTCF
RNS Number : 4492C
Rugby Estates Investment Trust PLC
13 November 2009
+---+---+------------------------+------------------------+-------------------------+
| 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. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| PRESS ANNOUNCEMENT |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| EMBARGOED UNTIL 7.00 AM |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| 13 NOVEMBER 2009 |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| RUGBY ESTATES INVESTMENT TRUST PLC ("REIT" OR THE "COMPANY") |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| POSTING OF RESPONSE CIRCULAR RECOMMENDING THAT REIT SHAREHOLDERS REJECT THE TERRA |
| INVESTMENTS LIMITED ("TERRA") OFFER (THE "OFFER" OR THE "TERRA OFFER") |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board of REIT (the "Board") has today written to REIT shareholders advising |
| them why the Board considers that the offer price of 41p per REIT share made by |
| Terra substantially undervalues the Company and its prospects, and why it |
| continues to recommend that all REIT shareholders reject the Offer. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Commenting on the Offer, Philip Kendall, Non-Executive Chairman of REIT, said, |
| "The Board considers the Offer to be wholly inadequate. REIT has a diverse and |
| well located portfolio of income producing assets, with evidence of improving |
| capitalisation yields, the portfolio's value has increased, driving NAV(1) per |
| share to 72p. The Board has no hesitation in rejecting this opportunistic offer." |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The response circular posted today to REIT shareholders sets out the Board's |
| reasons for rejecting the Terra Offer, and in particular highlights the |
| following: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | REIT has an attractive portfolio of assets, based predominantly in London and |
| | the South East of England, containing a broad mix of retail, industrial and |
| | office properties. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | The portfolio has delivered strong relative performance throughout the |
| | downturn, and in terms of both capital and rental value has significantly |
| | outperformed both the CB Richard Ellis Limited ("CBRE") and Investment |
| | Property Databank ("IPD") indices. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | An external valuation of the Company's property portfolio, prepared by CBRE |
| | as at 31 October 2009 values REIT's portfolio at GBP63.5 million, which |
| | represents: |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | a 12.6 per cent. increase on a like-for-like basis as compared to CBRE's |
| | | 30 June 2009 valuation; and |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | NAV(1) per share of 72p, which is 20.1 per cent. higher than the NAV per |
| | | share of 60p based on the valuation as at 30 June 2009. |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | This valuation increase has been driven by successful asset management |
| | initiatives undertaken by Rugby Asset Management Limited ("RAM") on behalf of |
| | the Company and improving investor sentiment leading to an increase in |
| | valuations across the market: |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | since 30 June 2009, successful asset management initiatives have included |
| | | the completion of eight new leases (either lettings or lease renewals), |
| | | the documentation of four completed rent reviews and the disposal of two |
| | | assets at, in aggregate, more than 60 per cent. above the year end |
| | | valuation; and |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | improving investor sentiment, with stronger prices being achieved across |
| | | the wider market and within the main commercial auction houses for |
| | | properties comparable to many of those within REIT's portfolio. |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | It is clear that Terra's Offer of 41p, at a 43.1 per cent. discount to REIT's |
| | NAV(1) per share of 72p, fails to reflect the underlying value and growth |
| | potential of REIT. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | The Board continues to explore all strategic options with the aim of |
| | maximising value for ALL shareholders in the short to medium term, a process |
| | that was already underway before the announcement of Terra's Offer. Options |
| | being explored include: |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | maintaining the independence of REIT and seeking to narrow the discount |
| | | to NAV per REIT share; |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | exploring an orderly disposal of the Company's property portfolio over a |
| | | 12 to 24 month period; and |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| | - | exploring a possible sale of the whole Company or a combination with |
| | | another property company at a fair and reasonable price. |
+---+---+---------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | The Board is seeking to implement a capital reduction scheme with the aim of |
| | paying a dividend by the end of the first half of 2010. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board, which has been advised by Hawkpoint Partners Limited, firmly believes |
| that the Offer substantially undervalues REIT and unanimously recommends that |
| REIT shareholders reject the Offer. To reject the Offer, REIT shareholders |
| should take no action and not sign any documents that Terra or its advisers will |
| have sent to them. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| No member of the Board will be accepting the Offer in respect of their own |
| beneficial holdings. In addition, Rugby Estates Plc, the parent company of RAM, |
| has indicated that it will not be accepting the Offer in respect of the 8.5 per |
| cent. holding in REIT shares it controls. |
+-----------------------------------------------------------------------------------+
| | |
+--------------------------------+--------------------------------------------------+
| (Note 1): Net asset value ("NAV") on a pro forma basis based on the balance sheet |
| as at 30 June 2009 adjusted for CBRE's 31 October 2009 valuation and the disposal |
| of two assets that have occurred since 30 June 2009. |
+-----------------------------------------------------------------------------------+
| | |
+--------------------------------+--------------------------------------------------+
| Enquiries: |
+-----------------------------------------------------------------------------------+
| | |
+---------------------------------------------------------+-------------------------+
| Rugby Estates Investment Trust Plc | 07710 060714 |
+---------------------------------------------------------+-------------------------+
| Philip Kendall (Non-Executive Chairman) | |
+---------------------------------------------------------+-------------------------+
| | |
+---------------------------------------------------------+-------------------------+
| Hawkpoint Partners Limited | 020 7665 4500 |
+---------------------------------------------------------+-------------------------+
| Ben Mingay | |
+---------------------------------------------------------+-------------------------+
| Edward Arkus | |
+---------------------------------------------------------+-------------------------+
| | |
+---------------------------------------------------------+-------------------------+
| Collins Stewart Europe Limited | 020 7523 8350 |
+---------------------------------------------------------+-------------------------+
| Hugh Field | |
+---------------------------------------------------------+-------------------------+
| Bruce Garrow | |
+---------------------------------------------------------+-------------------------+
| | |
+---------------------------------------------------------+-------------------------+
| Financial Dynamics | 020 7831 3113 |
+---------------------------------------------------------+-------------------------+
| Stephanie Highett | |
+---------------------------------------------------------+-------------------------+
| Dido Laurimore | |
+---------------------------------------------------------+-------------------------+
| |
+-----------------------------------------------------------------------------------+
| Further information for REIT shareholders, including the bases of calculation and |
| sources for the information set out in this announcement and the definitions of |
| certain terms used in this announcement, is contained in the circular being |
| posted today, a copy of which, together with a copy of this announcement, is |
| available at the website of the Company at http://www.rugbyreit.co.uk/. and |
| available for inspection at the offices of Nabarro LLP, Lacon House, 84 |
| Theobald's Road, London WC1X 8RW. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The directors of the Company accept responsibility for the information contained |
| in this announcement. To the best of the knowledge and belief of the directors of |
| the Company (who have taken all reasonable care to ensure such is the case) the |
| information contained in this announcement is in accordance with the facts and |
| does not omit anything likely to affect the import of such information. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Hawkpoint Partners Limited, which is authorised and regulated in the United |
| Kingdom by the Financial Services Authority, is acting for REIT and no-one else |
| in connection with the matters referred to herein and will not be responsible to |
| anyone other than REIT for providing the protections afforded to clients of |
| Hawkpoint Partners Limited or for giving advice in relation to such matters. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Collins Stewart Europe Limited, which is authorised and regulated in the United |
| Kingdom by the Financial Services Authority, is acting for REIT and no-one else |
| in connection with the matters referred to herein and will not be responsible to |
| anyone other than REIT for providing the protections afforded to clients of |
| Collins Stewart Europe Limited or for giving advice in relation to such matters. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Forward Looking Statements |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| This announcement may contain certain "forward looking statements". By their |
| nature, forward looking statements involve risk and uncertainty because they |
| relate to future events and circumstances. Actual outcomes and results may differ |
| materially from any outcomes or results expressed or implied by such forward |
| looking statements. Any forward looking statements made by or on behalf of REIT |
| speak only as of the date they are made and no representation or warranty is |
| given in relation to them, including as to their completeness or accuracy or the |
| basis on which they were prepared. REIT does not undertake to update forward |
| looking statements to reflect any changes in REIT's expectations with regard |
| thereto or any changes in events, conditions or circumstances on which any such |
| statement is based. Information contained in this announcement relating to REIT |
| should not be relied upon as an indicator of future performance. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Dealing Disclosure Requirements |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or |
| becomes, "interested" (directly or indirectly) in 1% or more of any class of |
| "relevant securities" of REIT, all "dealings" in any "relevant securities" of |
| that company (including by means of an option in respect of, or a derivative |
| referenced to, any such "relevant securities") must be publicly disclosed by no |
| later than 3.30 p.m. (London time) on the London business day following the date |
| of the relevant transaction. This requirement will continue until the date on |
| which the offer becomes, or is declared, unconditional as to acceptances, lapses |
| or is otherwise withdrawn or on which the "offer period" otherwise ends. If two |
| or more persons act together pursuant to an agreement or understanding, whether |
| formal or informal, to acquire an "interest" in "relevant securities" of REIT, |
| they will be deemed to be a single person for the purpose of Rule 8.3. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in |
| "relevant securities" of REIT by Terra Investments Limited or by REIT, or by any |
| of their respective "associates", must be disclosed by no later than 12.00 noon |
| (London time) on the London business day following the date of the relevant |
| transaction. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| A disclosure table, giving details of the companies in whose "relevant |
| securities" "dealings" should be disclosed, and the number of such securities in |
| issue, can be found on the Takeover Panel's website at |
| www.thetakeoverpanel.org.uk. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| "Interests in securities" arise, in summary, when a person has long economic |
| exposure, whether conditional or absolute, to changes in the price of securities. |
| In particular, a person will be treated as having an "interest" by virtue of the |
| ownership or control of securities, or by virtue of any option in respect of, or |
| derivative referenced to, securities. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Terms in quotation marks are defined in the Takeover Code, which can also be |
| found on the Panel's website. If you are in any doubt as to whether or not you |
| are required to disclose a "dealing" under Rule 8, you should consult the Panel. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The following is the text of the "Letter from the Chairman of REIT" contained in |
| the response circular posted today to REIT shareholders. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| LETTER FROM THE CHAIRMAN OF REIT |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Dear REIT Shareholder, |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| REJECT THE TERRA OFFER - IT IS WHOLLY INADEQUATE AND OPPORTUNISTIC |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| On 13 October 2009, Terra Investments Limited, a vehicle backed by Laxey Partners |
| Limited, announced an unsolicited mandatory rule 9 offer to acquire your Company |
| for 41p in cash for each REIT Share. I am writing to set out the reasons why your |
| Board believes Terra's opportunistic Offer substantially undervalues REIT and |
| therefore why the Board continues to recommend strongly that you reject Terra's |
| Offer and take no action. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| REIT HAS AN ATTRACTIVE PORTFOLIO OF ASSETS |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Your Company's property portfolio includes a diverse, well located group of |
| income producing assets: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | by value, approximately 56 per cent. of the portfolio is located in Greater |
| | London (including approximately 31 per cent. in Central London) and |
| | approximately 18 per cent. in the South East of England, with the remainder |
| | spread throughout the UK; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | REIT's largest four properties account for approximately 56 per cent. of the |
| | portfolio by value and comprise two well let, prime retail assets (Stanford |
| | House in Covent Garden, London, WC2 and Briggate in Leeds) and two high |
| | quality industrial assets based in the South East of England (Datapoint, Cody |
| | Road, London, E16 and 25 units in the Nonsuch Industrial Estate in Epsom); |
| | and |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | the remainder of the portfolio (29 properties) is based across the UK and |
| | includes a broad mix of retail, industrial and office properties mainly |
| | valued at less than GBP2 million each. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| THE VALUATIONS OF MANY OF REIT'S ASSETS HAVE INCREASED SUBSTANTIALLY SINCE JUNE |
| 2009 |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| In recent months market activity has demonstrated: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | improving investor sentiment; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | an increase in valuations, primarily driven by growing investment volumes and |
| | liquidity; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | significant demand for prime retail properties and strategically located |
| | industrial assets similar to those owned by the Group; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | an increase in cash buyers of smaller lot sizes, typically up to GBP2 million |
| | (where debt finance is less of a constraint); and |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | strong results being achieved across the commercial auction houses for |
| | properties comparable to many of those within REIT's portfolio. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| In addition, since 30 June 2009, the overall value of REIT's portfolio has been |
| enhanced through the completion of eight new leases (either lettings or lease |
| renewals), the documentation of four completed rent reviews and the disposal of |
| two assets at, in aggregate, more than 60 per cent. above the last year end |
| valuation. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| CBRE VALUATION AS AT 31 OCTOBER 2009 INDICATES PRO FORMA NAV PER REIT SHARE OF |
| 72P |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board has commissioned an external valuation of the Company's property |
| portfolio by CBRE, which is set out in Appendix II of this document. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| This values REIT's portfolio at GBP63.5 million as at 31 October 2009, which |
| represents a 12.6 per cent. increase (on a like-for-like basis) compared to the |
| valuation reported as at 30 June 2009 (CBRE had as at 30 June 2009 valued REIT's |
| portfolio at GBP57.1 million, representing a net asset value of 60p per share). |
| The Board has applied the revised valuation as at 31 October 2009 to the balance |
| sheet as at 30 June 2009 and adjusted for property disposal proceeds of GBP0.7 |
| million in the period to 31 October 2009 to determine a revised, pro-forma net |
| asset value. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The improvement in the value of REIT's property portfolio gives rise to an |
| increase in the Company's NAV per REIT Share of 20.1 per cent. from 60p as at 30 |
| June 2009 to 72p (on a pro forma basis as set out in Appendix I of this |
| document). |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Pro forma NAV of 72p per share is 75.7 per cent. above the value of Terra's Offer |
| of only 41p per share. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| IT IS CLEAR THAT TERRA'S OFFER FAILS TO REFLECT THE UNDERLYING VALUE OF YOUR |
| COMPANY |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Laxey Partners, the company behind Terra's Offer, describes itself as a business |
| that conducts investments in companies which it feels are undervalued. It is no |
| surprise therefore that Terra wants to acquire your company at 41p per REIT |
| Share; its Offer at this level represents: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | a discount of 43.1 per cent. to the pro forma NAV per share of 72p based on |
| | the valuation as at 31 October 2009; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | a discount of 31.6 per cent. to the NAV per share of 60p as at 30 June 2009; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | a discount of 7.9 per cent. to the closing mid-market price of 44.5p per REIT |
| | Share on 12 November 2009, being the last practicable date prior to the |
| | publication of this document; and |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | a discount of 0.6 per cent. to the closing mid-market price of 41.25p per |
| | REIT Share on 12 October 2009, being the latest practicable date prior to the |
| | announcement of Terra's Offer. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| TERRA'S OFFER ALSO FAILS TO RECOGNISE REIT'S SUBSTANTIAL GROWTH POTENTIAL |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The existing contracted rental income for REIT's portfolio is currently GBP4.5 |
| million per annum. CBRE's external valuation has indicated an estimated rental |
| value for the portfolio of GBP5.2 million per annum, representing a reversionary |
| potential of 16.1 per cent. Terra's Offer does not recognise the inherent growth |
| potential that the Directors believe the portfolio will deliver over the medium |
| term. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| REIT HAS A WELL MANAGED PORTFOLIO THAT HAS DELIVERED STRONG RELATIVE PERFORMANCE |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The portfolio built up by Rugby Asset Management since the Company's flotation is |
| diverse and of a high quality. Under RAM's stewardship, the portfolio has proven |
| its resilience during the current downturn. In terms of both capital and rental |
| value, the REIT portfolio has considerably outperformed both the IPD and CBRE |
| Monthly Indices. From 31 December 2007 (when the last private company acquisition |
| occurred) to 30 September 2009, in the case of the IPD Monthly Index, and to 31 |
| October 2009, in the case of the REIT portfolio and the CBRE Monthly Index: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | the capital value of the REIT portfolio has decreased by 20.8 per cent. |
| | compared with a fall of 36.0 per cent. reported by the IPD Monthly Index and |
| | 33.9 per cent. reported by the CBRE Monthly Index; and |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | the rental value of the REIT portfolio has decreased by just 3.4 per cent. |
| | compared with a fall of 8.6 per cent. reported by the IPD Monthly Index and |
| | 10.4 per cent. reported by the CBRE Monthly Index. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| In addition, the Board and RAM have managed the Company conservatively through |
| the downturn, keeping costs down and the Company's financial gearing at a low |
| level relative to many other UK based quoted property groups. The Company's |
| financial gearing as at 30 June 2009 was 56.2 per cent. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| THE BOARD CONTINUES TO EXPLORE ALL STRATEGIC OPTIONS WITH THE AIM OF MAXIMISING |
| VALUE FOR ALL SHAREHOLDERS |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board continues to evaluate all strategic options available to the Company in |
| order to maximise value over the short to medium term, a process that was already |
| underway before the announcement of Terra's Offer. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| These strategic options, include: |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | maintaining the independence of REIT and seeking to narrow the discount to |
| | NAV per REIT Share. In the event that the discount to NAV narrows, REIT would |
| | seek to resume the previously stated strategy of offering a tax-efficient and |
| | ready-made exit to shareholders in private property companies; |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | exploring an orderly disposal of the Company's property portfolio over a 12 |
| | to 24 month period; and |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| - | exploring a possible sale of the whole Company or a combination with another |
| | property company at a fair and reasonable price. |
+---+-------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board firmly believes that REIT's assets are of a nature and quality that |
| would mean they are readily realisable and as such, that REIT could return cash |
| to shareholders in the short to medium term from conducting an orderly disposal |
| of its portfolio. The Directors believe that such a strategy would, after wind-up |
| costs, present a significantly more attractive option to Shareholders when |
| compared to the current Terra Offer. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board has always been and remains happy to discuss its strategy with any |
| Shareholder, including Terra, but does not feel it appropriate to conduct any |
| strategic review "in conjunction" with any single Shareholder. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The outcome of the Board's strategic review will aim to maximise value for ALL |
| Shareholders not any single Shareholder. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| CAPITAL REDUCTION SCHEME TO BE IMPLEMENTED - SEEKING TO PAY A DIVIDEND BY JUNE |
| 2010 |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Further to its previously stated intention, the Board is seeking to carry out a |
| capital reduction which, if successful, would enable the Board to pay a dividend |
| to REIT Shareholders by the end of the first half of 2010. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| REJECT THE OFFER. TAKE NO ACTION |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The external valuation undertaken by CBRE and REIT's demonstrable further growth |
| potential clearly support the Board's firmly held view that Terra's Offer falls |
| substantially short of the intrinsic value and prospects of the Group. As such |
| the Directors believe that Terra's Offer should be resoundingly rejected. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| The Board, which has been advised by Hawkpoint, continues to unanimously |
| recommend that you reject Terra's Offer. To reject the Offer, you should take no |
| action and not sign any documents that Terra or its advisers will have sent to |
| you. In providing advice to the Board, Hawkpoint has taken into account the |
| Board's commercial assessments. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| No member of the Board will be accepting the Offer in respect of their own |
| beneficial holdings. |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| In addition, Rugby Estates Plc, the parent company of RAM, whose views are |
| aligned with those of the Board, has indicated that it will not be accepting the |
| Offer in respect of the 8.5 per cent. holding in REIT Shares it controls (which |
| have been held since the Company's flotation). |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Yours sincerely |
+-----------------------------------------------------------------------------------+
| |
+-----------------------------------------------------------------------------------+
| Philip Kendall |
| Non-Executive Chairman |
+---+---+------------------------+------------------------+-------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
STRUUARRKSRAAUA
Rugby Est It (LSE:RUGB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rugby Est It (LSE:RUGB)
Historical Stock Chart
From Jul 2023 to Jul 2024
