TIDMSGRO
RNS Number : 0847Z
SEGRO PLC
10 March 2017
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE
RELEASE.
This is not a prospectus but an advertisement. Investors should
not subscribe for the securities referred to in this advertisement
except on the basis of information in the Prospectus (defined
below). The Prospectus will be published today in connection with
the proposed Right Issue (defined below). Copies of the Prospectus
will, following publication, be available at the offices of
Equiniti Limited. A list of defined terms used herein is set out at
Appendix 3 to this announcement (this "Announcement").
PLEASE SEE THE IMPORTANT NOTICE AT THE OF THIS ANNOUNCEMENT.
10 March 2017
SEGRO plc
FULLY UNDERWRITTEN 1 FOR 5 RIGHTS ISSUE AT 345 PENCE PER NEW
ORDINARY SHARE
SEGRO plc ("SEGRO" or the "Company") today announces the launch
of a 1 for 5 rights issue to raise GBP573 million in proceeds
(GBP556 million net of expenses).
Highlights
-- Fully underwritten 1 for 5 rights issue of 166,033,133
ordinary shares of 10 pence each in the capital of the Company at a
price of 345 pence per New Ordinary Share (the "Rights Issue").
-- The issue price of 345 pence per New Ordinary Share
represents a discount of approximately 28.9 per cent. to the
closing price (based on the Dividend Adjusted Closing Price) for an
Ordinary Share of 485 pence on 9 March 2017 (being the last
business day prior to the release of this Announcement) and a 25.3
per cent. discount to the theoretical ex-rights price based on the
Dividend Adjusted Closing Price for an Ordinary Share of 485 pence
on 9 March 2017.
-- The net proceeds of the Rights Issue of GBP556 million will be used:
-- to finance the cash consideration of GBP216 million for the
acquisition of 50 per cent. of the Airport Property Partnership
("APP"), which on completion was funded from the Group's internal
resources;
-- to invest approximately GBP165 million to progress the
development projects within the Current Development Pipeline
(approximately GBP34 million) and Near-Term Development Projects
(approximately GBP131 million), which have been identified since
the time of the Group's GBP325 million placing in September 2016;
and
-- in relation to the balance of approximately GBP175 million,
to fund additional projects associated with the development of the
Group's land bank and/or land held under option.
-- The Directors have previously stated that their aim is to
keep Group leverage below the mid-cycle target loan to value
("LTV") ratio of 40 per cent. The Directors expect that once the
proceeds from the Rights Issue are fully deployed, SEGRO's LTV
ratio will be consistent with this level at approximately 35 per
cent.
-- The Directors expect the Acquisition and capital expenditure
associated with the Current Development Pipeline and Near-Term
Development Projects for which proceeds from the Rights Issue are
expected to be used to be accretive on an Adjusted EPS and EPRA NAV
basis upon completion and leasing of the expanded development
programme and following the adjustment for the New Ordinary Shares
issued pursuant to the Rights Issue(1) . Further benefits are
expected to be generated on deployment of the remaining proceeds of
the Rights Issue on additional development projects.
-- The Rights Issue is to be fully underwritten by BofA Merrill
Lynch, UBS Investment Bank, Barclays, BNP PARIBAS and HSBC, to
provide certainty as to the amount of capital to be raised.
David Sleath, CEO, the Company said:
"The new capital we are seeking to raise will allow us to
further progress the implementation of our development and income
growth strategy, taking advantage of a very favourable occupier
market backdrop. In addition to refinancing the acquisition of the
50 per cent. stake in APP we have announced today, the proceeds
will fund further attractive development projects over and above
those we funded with the proceeds of the placing in September last
year.
"Our Heathrow portfolio is one of the jewels in our crown and by
acquiring full ownership of the assets within APP we are able to
add further scale in this supply-constrained market. We see a
number of opportunities to realise further value from this unique
portfolio in the short and long term and we look forward to
pursuing our development plans, taking advantage of strong occupier
demand for facilities around Heathrow from customers needing rapid
access both to the airport and to Central London. This puts us in a
strong position for the future."
Summary
The Company is proposing to raise approximately GBP556 million
(net proceeds) by way of the Rights Issue, pursuant to which it
proposes to issue 166,033,133 New Ordinary Shares. The Rights Issue
is fully underwritten pursuant to the Underwriting Agreement. The
price at which Qualifying Shareholders will be invited to subscribe
for New Ordinary Shares will be 345 pence which represents a 25.3
per cent. discount to the theoretical ex-rights price based on the
Dividend Adjusted Closing Price for an Ordinary Share of 485 pence
on 9 March 2017. Under the Rights Issue, the New Ordinary Shares
will be offered by way of rights to all Qualifying Shareholders.
Subject to certain exceptions, Shareholders with a registered
address, resident, or otherwise believed to be, in the United
States, South Africa or any other Excluded Territory will not be
entitled to participate in the Rights Issue.
Acquisition of full ownership of the Airport Property
Partnership
Today, SEGRO announced that it had acquired full ownership of
the Airport Property Partnership ("APP") by purchasing the 50 per
cent. stake in APP which it did not already own from the Aviva
Group Entities. APP owns a well-positioned portfolio of warehouse
properties and land at and around London's major airports, of which
87 per cent. by value at 31 December 2016 is situated at, or close
to, Heathrow Airport. SEGRO acquired the Aviva Group Entities'
stake for a total consideration of GBP365 million, which comprised
GBP216 million in cash and a portfolio of five wholly-owned
properties for a consideration totalling GBP149 million, in line
with their book value at 31 December 2016, adjusted for deferred
income and tenant deposits (the "Acquisition"). Following the
Acquisition, APP has become a wholly-owned subsidiary of SEGRO. The
proceeds of the Rights Issue are expected to be used to repay the
GBP215 million drawn under the HSBC, BNP and RBS Facilities to
finance the cash consideration paid for the Acquisition.
Development projects identified since the Placing in September
2016
Since the Placing in September 2016, the Directors have
identified a number of new development projects, in which they plan
to invest the proceeds from the Rights Issue. The gross proceeds of
the Placing, which totalled GBP325 million, are being used
(consistent with their planned use announced in September 2016) to
part fund GBP456 million of capital expenditure associated with
development projects identified at the time of the Placing. At 31
December 2016, the Group had already invested or allocated
approximately GBP342 million (approximately 75 per cent.) of such
capital expenditure and projects comprising the remaining GBP114
million (approximately 25 per cent.) of such capital expenditure
continue to progress as planned. Since the time of the Placing,
occupier demand in the markets in which the Group operates has
continued to be strong and the Directors have already approved, or
believe that they are likely to approve for development in the next
6 to 12 months, a further GBP165 million in respect of development
projects which are additional to those identified at the time of
the Placing for which proceeds from the Rights Issue are to be
allocated.
Additional development projects
The balance of approximately GBP175 million of the net proceeds
from the Rights Issue will be reserved to fund additional projects
associated with the development of the Group's land bank and/or
land held under option.
Should such development projects fail to materialise, the
balance would be used for the Group's general corporate purposes,
which might include potential acquisitions which fulfil the Group's
strategic objectives. In the unlikely event that the Near-Term
Development Projects fail to commence, any net proceeds from the
Rights Issue which would have been used to fund the Near-Term
Development Projects will also be used in this manner.
This summary should be read in conjunction with the full text of
this Announcement (which includes a summary of the expected
timetable of events at Appendix 1). Defined terms used herein have
the meanings given to them in Appendix 3.
The Rights Issue is conditional upon:
(a) Admission (nil paid) having occurred by not later than 8.00
a.m. on 13 March 2017 (or such later time and/or date as the
parties to the Underwriting Agreement may agree, being not later
than 17 March 2017); and
(b) the Underwriting Agreement having become unconditional in
all respects and not having been terminated in accordance with its
terms.
Indicative abridged timetable
All references to times in the timetable below are to UK
time.
2017
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Record Date for entitlements under the Rights Issue close of business on Wednesday 8 March
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Date of publication of Prospectus Friday 10 March
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Admission of New Ordinary Shares, nil paid, and start of subscription period 8.00 a.m. on Monday 13 March
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Dealings in New Ordinary Shares, nil paid, commence on the London Stock 8.00 a.m. on Monday 13 March
Exchange
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Existing Ordinary Shares marked "ex-rights" by the London Stock Exchange 8.00 a.m. on Monday 13 March
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Latest time and date in the UK for acceptance and payment in full and 11.00 a.m. on Monday 27 March
registration of renounced
Provisional Allotment Letters
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Dealings in New Ordinary Shares, fully paid, commence on the London Stock 8.00 a.m. on Tuesday 28 March
Exchange
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New Ordinary Shares credited to CREST accounts (uncertificated holders only) by no later than Tuesday 28 March
----------------------------------------------------------------------------- ---------------------------------------
Settlement in respect of rump shares Thursday 30 March
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CONFERENCE CALL FOR INVESTORS AND ANALYSTS
A conference call facility An audio recording of the
will be available at 08:00 conference call will be
(UK time) on the following available until 17 March
number: 2017 on:
+44 20 3059 8125
Participants
should state +44 121 260
Dial-in: they wish to UK & International: 4861
join the SEGRO
Access conference call.
code: No password required. Access code: 5526651#
A copy of the presentation will be available at
www.SEGRO.com/investors.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section of this Announcement.
The person responsible for arranging release of this
Announcement on behalf of SEGRO is Elizabeth Blease.
For further information on this Announcement, please contact
SEGRO plc:
David Sleath, Chief Executive +44 (0) 20 7451 9120
Soumen Das, Chief Financial Officer +44 (0) 20 7451 9110
Harry Stokes, Head of Investor Relations and Research +44 (0) 20 7451 9124
BofA Merrill Lynch: +44 (0) 20 7628 1000
Joint Global Co-ordinator, Joint Sponsor and Joint
Bookrunner
Simon Mackenzie Smith
Edward Peel
Richard Abel
James Fleming
UBS Investment Bank: +44 (0) 20 7567 8000
Joint Global Co-ordinator, Joint Sponsor and Joint
Bookrunner
John Woolland
Fergus Horrobin
Thomas Raynsford
Christopher Smith
Media enquiries:
Richard Sunderland, FTI Consulting +44 (0) 20 3727 1000
Claire Turvey, FTI Consulting +44 (0) 20 3727 1000
Notes to Editors
About SEGRO
SEGRO is a UK Real Estate Investment Trust (REIT), and a leading
owner, manager and developer of modern warehouses and light
industrial property. It owns or manages over six million square
metres of space valued at GBP8 billion serving customers from a
wide range of industry sectors. Its properties are located in and
around major cities and at key transportation hubs in the UK and in
nine other European countries.
See www.SEGRO.com/investors for further information.
IMPORTANT NOTICE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES
OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
This is not a prospectus but an advertisement. Investors should
not subscribe for the securities referred to in this advertisement
except on the basis of information in the Prospectus.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING
IN THIS ANNOUNCEMENT SHALL CONSTITUTE AN OFFER OR INVITATION TO
UNDERWRITE, BUY, SUBSCRIBE, SELL OR ISSUE OR THE SOLICITATION OF AN
OFFER TO BUY, SELL, ACQUIRE, DISPOSE OR SUBSCRIBE FOR THE NEW
ORDINARY SHARES OR ANY OTHER SECURITIES. NOTHING IN THIS
ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE
RIGHTS ISSUE. ANY DECISION TO PURCHASE, OTHERWISE ACQUIRE,
SUBSCRIBE FOR, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES MUST BE
MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND
INCORPORATED BY REFERENCE INTO THE PROSPECTUS. COPIES OF THE
PROSPECTUS WILL BE AVAILABLE ON PUBLICATION FROM SEGRO'S REGISTERED
OFFICE AND THE OFFICES OF EQUINITI LIMITED AND SEGRO'S WEBSITE:
WWW.SEGRO.COM/INVESTORS.
The information contained in this Announcement is for background
purposes only and does not purport to be full or complete. No
reliance may be placed for any purpose on the information contained
in this Announcement or its accuracy or completeness. The
information in this Announcement is subject to change.
This Announcement is not a prospectus but an advertisement. Any
offer to acquire the Company's securities pursuant to the offering
referred to in these materials will be made, and any investor
should make his investment, solely on the basis of information that
will be contained in the Prospectus to be made generally available
in the United Kingdom in connection with such offering. When made
generally available, copies of the Prospectus may be obtained at no
cost from the Company or through the website of the Company at
www.segro.com/investors, provided that the Prospectus will not,
subject to certain exceptions, be available (whether through the
website or otherwise) to Shareholders in the United States, South
Africa and the other Excluded Territories. The Prospectus will give
further details of the New Ordinary Shares, the Nil Paid Rights and
the Fully Paid Rights (the "Securities") being offered pursuant to
the Rights Issue.
The information contained herein is not for distribution or
publication, whether directly or indirectly and whether in whole or
in part, in or into the United States, South Africa or any of the
other Excluded Territories. The distribution of this Announcement
and/or the Prospectus and/or the Provisional Allotment Letter
and/or the transfer of the Securities into jurisdictions other than
the United Kingdom may be restricted by law, and, therefore,
persons into whose possession this Announcement and/or the
Prospectus and/or the Provisional Allotment Letter comes should
inform themselves about and observe any such restrictions. Any
failure to comply with any such restrictions may constitute a
violation of the securities laws of such jurisdiction. In
particular, subject to certain exceptions, the Prospectus and the
Provisional Allotment Letter should not be distributed, forwarded
to or transmitted in or into the United States, South Africa or any
of the other Excluded Territories. There will be no public offer of
Securities in the United States, South Africa or any other
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration, exemption from registration or
qualification under the securities laws of such jurisdiction.
The Securities have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act")
or under the securities laws of any state or other jurisdiction of
the United States, and may not be offered, sold, taken up,
exercised, resold, renounced, transferred or delivered, directly or
indirectly, in or into the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable securities laws of any state or other
jurisdiction of the United States.
The offering of the Securities is only being made in Canada
pursuant to exemptions from the prospectus and registration
requirements that otherwise apply to a distribution of securities
under applicable Canadian securities legislation. Any offer or
solicitation in Canada must be made through a dealer that is
appropriately registered under the laws of the applicable province
or territory of Canada, or pursuant to an exemption from that
requirement. Any resale of the Securities in Canada must be made
under available statutory exemptions.
Merrill Lynch International and UBS Limited are acting as Joint
Global Co-ordinators, Joint Bookrunners and Joint Sponsors for the
Company, and Barclays Bank PLC, BNP Paribas and HSBC Bank plc are
acting as Co-Bookrunners for the Company (collectively the
"Bookrunners"). Each of the Bookrunners is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting exclusively for the Company and no one
else in connection with the Rights Issue, and will not regard any
other person (whether or not a recipient of this Announcement) as
its client in relation to the Rights Issue and will not be
responsible to anyone other than the Company for providing the
protections afforded to their respective clients or for providing
advice in connection with the Rights Issue or any other matters
referred to in this Announcement.
In connection with the Rights Issue, each of the Bookrunners,
and any of their respective affiliates, acting as investor for its
own account, may take up the Securities and/or related instruments
in the Rights Issue and in that capacity may retain, purchase or
sell for its own account such securities and any New Ordinary
Shares or related investments and may offer or sell such New
Ordinary Shares or other investments otherwise than in connection
with the Rights Issue. Accordingly, references in this Announcement
to New Ordinary Shares being offered or placed should be read as
including any offering or placement of New Ordinary Shares to any
of the Bookrunners or any of their respective affiliates acting in
such capacity. None of the Bookrunners intends to disclose the
extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligation to do so. In
addition the Bookrunners or their affiliates may enter into
financing arrangements (including swaps) with investors in
connection with which the Bookrunners (or their affiliates) may
from time to time acquire, hold or dispose of New Ordinary Shares.
The Company also intends to use a portion of the net proceeds of
the Rights Issue to repay facilities provided by certain of the
Bookrunners, as noted below.
This Announcement is being issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability whatsoever is or will be
accepted by the Bookrunners nor any of their respective affiliates
or agents (or any of their respective directors, officers,
employees or advisers) for the contents of the information
contained in this Announcement, including its accuracy,
completeness, fairness or verification or regarding the legality of
any investment in the Securities or any other written or oral
information made available to or publicly available to any
interested party or its advisers, or any other statement made or
purported to be made by or on behalf of any Bookrunner or any of
their respective affiliates in connection with the Company, the New
Ordinary Shares or the Rights Issue and nothing in this
Announcement is or shall be relied upon as, a promise or
representation in this respect, whether as to the past or the
future and any responsibility therefor is expressly disclaimed. The
Bookrunners and each of their respective affiliates accordingly
disclaim all and any responsibility or liability, whether arising
in tort, contract or otherwise in respect of this Announcement or
any such statement and no representation or warranty, express or
implied, is made by any Bookrunner or any of their respective
affiliates as to the accuracy, completeness or sufficiency of the
information contained in this Announcement.
This Announcement does not identify or suggest, or purport to
identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the Securities. Any investment
decision to buy Securities in the Rights Issue must be made solely
on the basis of publicly available information, which has not been
independently verified by the Bookrunners. The contents of this
Announcement are not to be construed as legal, business, financial
or tax advice. None of the Company, the Bookrunners, or any of
their respective representatives, is making any representation to
any offeree or purchaser of the Securities regarding the legality
of an investment in the Securities by such offeree or purchaser
under the laws applicable to such offeree or purchaser. Each
prospective investor should consult his, her or its own legal
adviser, business adviser, financial adviser or tax adviser for
legal, financial, business or tax advice in connection with the
purchase of the Securities. In making an investment decision, each
investor must rely on their own examination, analysis and enquiry
of the Company and the terms of the Rights Issue, including the
merits and risks involved.
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future performance,
anticipated events or trends and other matters that are not
historical facts. These forward-looking statements, which sometimes
use words such as "aim", "anticipate", "believe", "intend", "plan"
"estimate", "expect" and words of similar meaning, include all
matters that are not historical facts and reflect the directors'
beliefs and expectations and involve a number of risks,
uncertainties and assumptions that could cause actual results and
performance to differ materially from any expected future results
or performance expressed or implied by the forward-looking
statement. These statements are subject to unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. Statements contained in this
Announcement regarding past trends or activities should not be
taken as a representation that such trends or activities will
continue in the future. The information contained in this
Announcement is subject to change without notice and, except as
required by applicable law, neither the Company nor the Bookrunners
assume any responsibility or obligation to update publicly or
review any of the forward-looking statements contained herein. You
should not place undue reliance on forward-looking statements,
which speak only as of the date of this Announcement. Any
indication in this Announcement of the price at which New Ordinary
Shares have been bought or sold in the past cannot be relied upon
as a guide to future performance. No statement in this Announcement
is or is intended to be a profit forecast or profit estimate or to
imply that the earnings of the Company for the current or future
financial years will necessarily match or exceed the historical or
published earnings of the Company. The price of shares and the
income from them may go down as well as up and investors may not
get back the full amount invested on disposal of the shares. Past
performance is no guide for future performance.
The New Ordinary Shares to be issued pursuant to the Rights
Issue will not be admitted to trading on any stock exchange other
than the London Stock Exchange.
The most recent Annual and Interim Reports and other information
are available on the SEGRO website at www.segro.com/investors.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
This Announcement does not constitute a recommendation
concerning the Rights Issue.
1 FOR 5 RIGHTS ISSUE AT 345 PENCE PER NEW ORDINARY SHARE
1. Introduction
Today, SEGRO announced that it had acquired full ownership of
APP by purchasing the 50 per cent. stake in APP which it did not
already own from the Aviva Group Entities. APP owns a
well-positioned portfolio of warehouse properties and land at and
around London's major airports, of which 87 per cent. by value at
31 December 2016 is situated at, or close to, Heathrow Airport.
SEGRO acquired the Aviva Group Entities' stake for a total
consideration of GBP365 million, which comprised GBP216 million in
cash and a portfolio of five wholly-owned properties for a
consideration totalling GBP149 million, in line with their book
value at 31 December 2016, adjusted for deferred income and tenant
deposits (the "Acquisition"). Following the Acquisition, APP has
become a wholly-owned subsidiary of SEGRO.
Since the Placing in September 2016, the Directors have
identified a number of new development projects, in which they plan
to invest the proceeds from the Rights Issue. The gross proceeds of
the Placing, which totalled GBP325 million, are being used
(consistent with their planned use announced in September 2016) to
part fund GBP456 million of capital expenditure associated with
development projects identified at the time of the Placing. At 31
December 2016, the Group had already invested or allocated
approximately GBP342 million (approximately 75 per cent.) of such
capital expenditure and projects comprising the remaining GBP114
million (approximately 25 per cent.) of such capital expenditure
continue to progress as planned. Since the time of the Placing,
occupier demand in the markets in which the Group operates has
continued to be strong and the Directors have already approved, or
believe that they are likely to approve for development in the next
6 to 12 months, a further GBP165 million in respect of development
projects which are additional to those identified at the time of
the Placing for which proceeds from the Rights Issue are to be
allocated.
In light of the Acquisition and additional opportunities within
the Company's development pipeline which have arisen since the time
of the Placing, on 10 March 2017, SEGRO announced that it intends
to raise GBP556 million (net of estimated expenses) by way of a
fully underwritten Rights Issue of 166,033,133 New Ordinary Shares
at 345 pence per share on the basis of 1 New Ordinary Share for
every 5 Existing Ordinary Shares.
2. Information on SEGRO
SEGRO is a real estate investment trust whose Ordinary Shares
are admitted to the premium segment of the Official List and
trading on the London Stock Exchange's main market for listed
securities and is a leading owner, manager and developer of modern
warehouses and light industrial property. The Group owns or manages
a property portfolio totalling over six million square metres of
space, which was valued at GBP8.0 billion (GBP6.3 billion based on
SEGRO's wholly-owned assets and its share of assets held within
joint ventures) at 31 December 2016. Its portfolio comprises mainly
modern big box and urban warehouses which the Directors consider to
be well specified and located, with good sustainability
credentials, and which should benefit from a low structural void
rate and relatively low-intensity asset management requirements.
Its assets are concentrated in strong sub-markets across the UK and
nine Continental European countries which, the Directors believe,
have attractive property market characteristics, including good
growth prospects and limited supply availability and where the
Group already has, or can achieve, critical mass.
SEGRO's strategy is to create a portfolio which generates
attractive, low-risk, income-led returns with above-average rental
and capital growth when market conditions are positive, and which
is resilient in a downturn. It seeks to enhance returns through
development, while ensuring that the short-term income 'drag'
associated with holding land does not outweigh the long-term
potential benefits.
3. Update on the use of the proceeds from the Placing
On 2 September 2016, the Directors launched the Placing which
raised approximately GBP325 million of gross proceeds for the Group
to part-fund GBP456 million of capital expenditure on: (i)
development projects which were already approved and underway at
the time of the Placing; (ii) development projects which had been
approved by the Directors at the time of the Placing, but which
were subject to final pre-let agreements from customers or were
conditional on being granted planning permission; and (iii)
speculative developments which the Directors had identified at the
time of the Placing and which they believed may be approved within
6 to 12 months of the Placing subject to market conditions.
At 31 December 2016, GBP342 million (approximately 75 per cent.)
of the expected capital expenditure of GBP456 million to develop
projects in the Group's pipeline identified at the time of the
Placing had been invested or allocated to such projects.
The following provides an update at 31 December 2016 as to the
development programme identified at the time of the Placing:
-- Projects forming part of current pipeline at time of Placing:
out of the GBP199 million of investment which was identified by the
Directors as required to be used to complete projects approved and
underway at the time of the Placing, GBP75 million was invested in
projects which had been completed by 31 December 2016, GBP86
million had been invested in projects still underway at 31 December
2016, and a further GBP38 million of funds had been allocated by
the Group to complete projects.
-- Near-term pre-let development projects at time of Placing:
out of the GBP140 million of investment identified at the time of
the Placing to be used for development projects associated with
pre-let agreements with potential customers which were subject to
planning or were in the advanced stages of negotiation at the time
of the Placing, GBP63 million (or 45 per cent.) had been allocated
by the Group to projects; and
-- Near-term potential speculative development projects: out of
GBP117 million of investment identified at the time of the Placing
to be used for speculative urban warehouse development projects,
GBP80 million (or 68 per cent.) had been invested or allocated by
the Group to projects. This figure includes GBP28 million which had
been invested by the Group in relation to land acquisitions
associated with speculative urban warehouse projects.
Projects comprising the remaining GBP114 million of funding
identified at the time of the Placing, which had not been invested
or allocated at 31 December 2016 continue to progress as planned
and the Directors continue to expect that such projects will
commence development within the timetable set out in the Placing
Announcement, subject to outstanding conditions being met. The
Directors intend that these projects will be funded using
borrowings under the Group's existing debt facilities and operating
cash flow.
4. Use of proceeds of the Rights Issue
The Rights Issue is expected to raise GBP556 million (net of
expenses). The Directors propose to use the proceeds of the Rights
Issue as follows:
(i) to finance the cash consideration of GBP216 million for the
Acquisition, which on completion was funded from the Group's
internal resources;
(ii) to invest approximately GBP165 million to progress the
development projects within the Current Development Pipeline
(approximately GBP34 million) and Near-Term Development Projects
(approximately GBP131 million), which have been identified since
the time of the Placing; and
(iii) to reserve the balance of approximately GBP175 million to
fund additional projects associated with the development of the
Group's land bank and/or land held under option. Should such
development projects fail to materialise, the balance would be used
for the Group's general corporate purposes, which might include
potential acquisitions which fulfil the Group's strategic
objectives.
In the event that one or more of the development projects
referenced in point (ii) above fail to commence, any proceeds from
the Rights Issue which would have been used to fund such relevant
development projects would be expected to be used in the manner
described in point (iii) above.
The Directors have previously stated that their aim is to keep
Group leverage below the mid-cycle target LTV ratio of 40 per cent.
The Directors expect that once the proceeds from the Rights Issue
are fully deployed, SEGRO's LTV ratio will be consistent with this
level at approximately 35 per cent.
(i) The Acquisition
SEGRO acquired a 50 per cent. stake in APP from the Aviva Group
Entities pursuant to an agreement signed with such entities on 9
March 2017. Prior to the Acquisition, SEGRO owned a 50 per cent.
stake in APP meaning that, as a result of the Acquisition, SEGRO
now owns 100 per cent. of the share capital in APP.
SEGRO acquired the Aviva Group Entities' 50 per cent. stake in
APP for consideration totalling GBP365 million, which comprised of:
(i) GBP216 million in cash; and (ii) a portfolio of five mature or
recently completed properties for a consideration totalling GBP149
million (in line with book value at 31 December 2016, adjusted for
deferred income and tenant deposits), consisting of four light
industrial estates in London and a manufacturing facility in
Portsmouth, all of which were wholly-owned by the Group (the
"Disposal Assets"). The total consideration for the Acquisition was
broadly in line with 50 per cent. of the net asset value ("NAV") of
APP at 31 December 2016.
SEGRO intends to use a portion of the net proceeds from the
Rights Issue to repay GBP215 million drawn under the HSBC, BNP and
RBS Facilities to finance the cash consideration for the
Acquisition.
(ii) Current Development Pipeline and Near-Term Development Projects
In addition to, and distinct from, the projects associated with
capital expenditure of GBP456 million which were identified in
connection with the Placing, the Directors have identified a number
of new development projects which form part of the Current
Development Pipeline and the Near-Term Development Projects.
From the proceeds of the Rights Issue, the Directors propose to
invest:
(a) approximately GBP34 million to progress development projects
within the Current Development Pipeline, which, in each case, are
distinct from projects and opportunities identified at the time of
the Placing; and
(b) approximately GBP131 million to finance projects which form
part of the Near-Term Development Projects (comprising GBP110
million for development projects which have been approved by the
Directors, but which are subject to final pre-let agreements from
customers or conditional on being granted planning permission and
GBP21 million for speculative developments which the Directors have
identified and which they believe may be approved in the next 6 to
12 months), which, in each case, are distinct from projects and
opportunities identified at the time of the Placing.
(iii) Additional development projects
At 31 December 2016, the Group owned a land bank of undeveloped
land which the Directors believe is capable of supporting 2.15
million square metres of warehouse development, which is in
addition to undeveloped land associated with the Near-Term
Development Projects (being 520,000 square metres), and controlled
land through option agreements which the Directors believe is
capable of supporting 0.7 million square metres of additional
warehouse space in Italy and in the Midlands and South East regions
of the UK, including in London. The Directors believe that the land
bank is capable of generating headline rent of GBP101 million per
annum at current market rent levels following its development,
based on currently estimated capital expenditure of GBP0.9
billion.
Accordingly, the balance of approximately GBP175 million from
the net proceeds from the Rights Issue will be reserved to fund
additional projects associated with the development of the Group's
land bank and/or land held under option.
Should such development projects fail to materialise, the
balance would be used for the Group's general corporate purposes,
which might include potential acquisitions which fulfil the Group's
strategic objectives. In the unlikely event that the Near-Term
Development Projects fail to commence, any net proceeds from the
Rights Issue which would have been used to fund the Near-Term
Development Projects will also be used in this manner.
5. Information on the Rights Issue
The Company is proposing to offer 166,033,133 New Ordinary
Shares by way of a Rights Issue. The New Ordinary Shares will be
offered to all Qualifying Shareholders other than to Shareholders
with a registered address, or resident in, subject to certain
exceptions, the United States, South Africa or any of the other
Excluded Territories. The Rights Issue will be made on the
following basis:
1 New Ordinary Share at 345 pence each for every 5 Existing
Ordinary Shares
held and registered in the name of Qualifying Shareholders at
the close of business on the Record Date. Holdings of Ordinary
Shares in certificated and uncertificated form will be treated as
separate holdings for the purpose of calculating entitlements under
the Rights Issue, as will holdings under different designations, in
different accounts and on different registers. Entitlements to New
Ordinary Shares will be rounded down to the nearest whole number
and resulting fractions of New Ordinary Shares will not be allotted
to any Qualifying Shareholders, but will instead be aggregated and
sold in the market ultimately for the benefit of the Company.
The New Ordinary Shares will, when issued and fully paid, rank
pari passu with the Existing Ordinary Shares and will rank in full
for all dividends and distributions thereafter declared, made or
paid on the share capital of the Company, save in respect of any
dividend or distribution with a record date falling before the date
of the issue of the New Ordinary Shares, including the recommended
final dividend for the year ended 31 December 2016.
Application has been made to the UK Listing Authority for the
New Ordinary Shares (nil and fully paid) to be admitted to the
premium segment of the Official List and to the London Stock
Exchange for the New Ordinary Shares (nil and fully paid) to be
admitted to trading on the London Stock Exchange's main market for
listed securities. It is expected that Admission will become
effective and that dealings in the New Ordinary Shares, nil paid,
will commence on the London Stock Exchange at 8.00 a.m. on 13 March
2017 with dealings in the New Ordinary Shares, fully paid, expected
to commence at 8.00 a.m. on 28 March 2017.
The Issue Price of 345 pence per New Ordinary Share represents a
discount of approximately:
(i) 28.9 per cent. to the Dividend Adjusted Closing Price for an
Ordinary Share of 485 pence on 9 March 2017, the last business day
prior to the date of this Announcement; and
(ii) a 25.3 per cent. discount to the theoretical ex-rights
price based on that Dividend Adjusted Closing Price.
If a Qualifying Shareholder does not take up the offer of New
Ordinary Shares in any way, his/her/its proportionate shareholding
will be diluted by 16.7 per cent. The Rights Issue is expected to
raise GBP556 million (net of expenses).
The Company has arranged for the Rights Issue to be fully
underwritten by the Underwriters to provide certainty as to the
amount of capital to be raised. The Underwriting Agreement is not
subject to any right of termination after Admission (including in
respect of any statutory withdrawal rights).
The terms of the Underwriting Agreement are summarised in
Section 11.1 of Part XX (Additional Information) of the Prospectus.
The Rights Issue is conditional, inter alia, upon:
(a) the Underwriting Agreement having become unconditional in
all respects and not having been terminated in accordance with its
terms; and
(b) Admission (nil paid) having occurred by not later than 8.00
a.m. on 13 March 2017 (or such later time and/or date as the
parties to the Underwriting Agreement may agree, being not later
than 17 March 2017).
6. Financial position, current trading and prospects
On 17 February 2017, the Group announced its results for the
year ended 31 December 2016.
The financial highlights of the year ended 31 December 2016 are
set out below:
(a) Adjusted EPS up 7.1 per cent. to 19.7 pence (2015: 18.4
pence), underpinned by a 4.0 per cent. increase in like-for-like
net rental income (including 6.0 per cent. growth in the UK and a
0.7 per cent. decrease in Continental Europe), a continued low
vacancy rate of 5.7 per cent. and a strong contribution from
development completions;
(b) Reported (IFRS) EPS of 53.9 pence (2015: 91.7 pence), which
includes the impact of unrealised capital gains on the portfolio
and reflects continued capital growth, but at a slower rate than in
2015;
(c) EPRA NAV per share up 8.0 per cent. to 500 pence, driven by
a 4.8 per cent., like-for-like increase in the value of the
portfolio (2015: 11.1 per cent.), reflecting UK rental growth and
asset management activities, development gains and an uplift in the
value of two industrial sites to be sold for residential
development;
(d) At 31 December 2016, IFRS net assets attributable to
Shareholders were GBP4,182.1 million (31 December 2015: GBP3,489.9
million), reflecting 502 pence per share (31 December 2015: 468
pence) on a diluted basis; and
(e) GBP45 million of new rent contracted (14 per cent. ahead of
prior year) including GBP23 million from new development pre-let
agreements and lettings of speculatively developed space prior to
completion.
Future prospects
The Directors believe that occupier demand is holding up well
and that there is little evidence of over-supply in any of the
Group's markets, meaning that the prospects are good for further
rental growth in the UK and stable or improving rents in
Continental Europe. The Directors consider that the persistent low
interest rate environment continues to cast warehouse yields in a
favourable light and believe that they see evidence of a healthy
appetite for modern, well located assets among investors. While the
Directors believe that scope for further yield compression is
limited, they expect that both rental growth and development
profits should provide support for the value of the Group's
portfolio in 2017.
The Directors welcome the UK government's decision to support a
third runway at Heathrow Airport, which will enhance the Group's
business case for the long-term re-development plans for the
airport's cargo centres which are owned by APP, which is now a
wholly-owned subsidiary of the Group.
The Directors acknowledge that the UK's decision to leave the
European Union has undoubtedly caused uncertainty for the property
industry generally. The Directors believe that it is likely to take
months, if not years, for occupier demand to adjust to the new
situation and are not complacent about the impact the "Brexit" vote
could have on the Group's business. Indeed, the work done to
reposition the Group's portfolio over the past five years was
designed to ensure it would be resilient in times of market
uncertainty or weakness. The Directors believe that the early signs
are encouraging and have seen little, if any, impact on occupier
and investor demand for the Group's warehouse properties since the
referendum result.
While the Directors are aware that there are a number of broader
economic and geopolitical uncertainties, they remain confident that
the Group's portfolio is well positioned to be able to outperform
the wider property market.
The Directors reported an active start to 2017 and that they
continue to see opportunities to grow the business and intend to do
so through further disciplined investment, matched by a prudent
approach to financing.
7. Dividend and dividend policy
The Directors target a payout ratio of 85 to 95 per cent. of
Adjusted Profit After Tax and aim to deliver a progressive and
sustainable dividend.
Under the UK REIT rules, SEGRO is required to distribute 90 per
cent. of UK-sourced, tax-exempt rental profits as a property income
distribution ("PID"). Given that SEGRO also receives income from
its properties in Continental Europe, the total dividend has
historically exceeded this minimum level.
The Directors have recommended a final dividend of 11.2 pence
per Existing Ordinary Share, bringing the total aggregate amount
paid and payable by way of dividend in respect of the year ended 31
December 2016 to 16.4 pence per Existing Ordinary Share. New
Ordinary Shares issued pursuant to the Rights Issue will not be
entitled to this final dividend because such dividend was declared
before the date of allotment and issue of the New Ordinary
Shares.
The Company also currently operates a scrip dividend scheme,
which provides Shareholders with an opportunity to receive new
Ordinary Shares instead of cash in respect of any dividend and PID
for which the Directors choose to offer the scrip dividend
alternative. The UK tax implications of the Company's scrip
dividend scheme are considered in the scrip dividend scheme booklet
available in the "Investors // Dividend Information" section of the
Company's website and are not further addressed in this
Announcement.
Applying the indicative bonus factor element of the Rights Issue
to the total aggregate amount paid and payable by way of dividend
in respect of the year ended 31 December 2016 shows that, following
the Rights Issue, the dividend of 16.4 pence per share would equate
to approximately 15.6 pence per Existing Ordinary Share. Subject to
performance and available resources, the Directors would seek to
increase that level of dividend over the medium term.
8. Financial impact of the Acquisition and the Rights Issue
The Directors expect the Acquisition and capital expenditure
associated with the Current Development Pipeline and Near-Term
Development Projects for which proceeds from the Rights Issue are
expected to be used to be accretive on an Adjusted EPS and EPRA NAV
basis upon completion and leasing of the expanded development
programme and following the adjustment for the New Ordinary Shares
issued pursuant to the Rights Issue(2) . Further benefits are
expected to be generated on deployment of the remaining proceeds of
the Rights Issue on additional development projects.
9. SEGRO Share Plans
In accordance with the rules of the SEGRO Share Plans (save in
respect of the SIP, for which, see below), the Directors propose to
make adjustments to the terms of outstanding options and awards to
take account of the Rights Issue, subject to any necessary
approvals. Where options and awards are subject to performance
conditions, adjustments will, if appropriate, be made subject to
those conditions. Participants in the SEGRO Share Plans will be
contacted separately in due course with detailed information on how
their options and awards will be affected by the Rights Issue.
Participants in the tax-advantaged SIP beneficially own their
Ordinary Shares which are held on their behalf by the trustees of
the plan. The participants will be able to instruct the trustees
how to act or vote in relation to the Rights Issue on their
behalf.
10. Action to be taken
On the basis that dealings in New Ordinary Shares (nil paid)
commence on 13 March 2017, the latest time for acceptance by
Qualifying Shareholders under the Rights Issue will be 11.00 a.m.
on 27 March 2017. The procedure for acceptance and payment is set
out in Part IX (Terms and Conditions of the Rights Issue) of the
Prospectus. Further details will also be sent to all Qualifying
Non-CREST Shareholders (other than, subject to certain exceptions,
Qualifying Non-CREST Shareholders with a registered address in an
Excluded Territory).
New Ordinary Shares will be provisionally allotted (nil paid) to
all Shareholders on the register at the Record Date, including
Overseas Shareholders. However, Provisional Allotment Letters will
not be sent to Qualifying Non-CREST Shareholders with registered
addresses in, or who are resident or located (as applicable) in,
subject to certain exceptions, the United States, South Africa or
any of the other Excluded Territories, nor will the CREST stock
accounts of Qualifying CREST Shareholders with registered addresses
in, or who are resident or located (as applicable) in, subject to
certain exceptions, the United States, South Africa or any of the
other Excluded Territories, be credited.
If you are in any doubt as to the action you should take, you
are recommended to seek your own personal financial advice
immediately from your stockbroker, bank manager, solicitor,
accountant, fund manager or other independent financial adviser
authorised under FSMA if you are in the United Kingdom or, if not,
from another appropriately authorised independent financial
adviser.
11. Directors' intentions
The Directors currently beneficially own, in aggregate, 997,852
Ordinary Shares, representing approximately 0.12 per cent. of the
Company's share capital at 9 March 2017, being the latest
practicable date prior to the publication of this document. Each of
the Directors intends, to the extent that he or she is able, either
to take up his or her rights to subscribe for the New Ordinary
Shares under the Rights Issue or to sell sufficient of his or her
Nil Paid Rights during the nil paid dealing period to meet the cost
of taking up the balance of his or her entitlements to New Ordinary
Shares.
Appendix 1
Expected timetable of principal events
Each of the times and dates in the table below is indicative
only and may be subject to change. Please read the notes to this
timetable set out below.
All references to times in the timetable below are to UK
time.
2017
---------------------------------------------------------- ----------------------------------------------------------
Record Date for entitlements under the Rights Issue close of business on Wednesday 8 March
---------------------------------------------------------- ----------------------------------------------------------
Announcement of the Rights Issue Friday 10 March
---------------------------------------------------------- ----------------------------------------------------------
Date of publication of Prospectus Friday 10 March
---------------------------------------------------------- ----------------------------------------------------------
Despatch of Provisional Allotment Letters (to Qualifying Friday 10 March
non- CREST Shareholders only) (1)
---------------------------------------------------------- ----------------------------------------------------------
Admission of New Ordinary Shares, nil paid, and start of Monday 13 March
subscription period
---------------------------------------------------------- ----------------------------------------------------------
Dealings in New Ordinary Shares, nil paid, commence 8.00 a.m. on Monday 13 March
on the London Stock Exchange
---------------------------------------------------------- ----------------------------------------------------------
Existing Ordinary Shares marked "ex-rights" by the London 8.00 a.m. on Monday 13 March
Stock Exchange
---------------------------------------------------------- ----------------------------------------------------------
Nil Paid Rights credited to stock accounts in CREST As soon as practicable after 8.00 a.m. on Monday 13 March
(Qualifying CREST Shareholders only)(1)
---------------------------------------------------------- ----------------------------------------------------------
Nil Paid Rights and Fully Paid Rights enabled in CREST As soon as practicable after 8.00 a.m. on Monday 13 March
---------------------------------------------------------- ----------------------------------------------------------
Recommended latest time for requesting withdrawal of 4.30 p.m. on Tuesday 21 March
Nil Paid Rights or Fully Paid Rights from CREST (i.e. if
your Nil Paid Rights or Fully Paid
Rights are in CREST and you wish to convert them into
certificated form)
---------------------------------------------------------- ----------------------------------------------------------
Recommended latest time and date for depositing renounced 3.00 p.m. on Wednesday 22 March
Provisional Allotment Letters, nil
paid or fully paid, into CREST or for dematerialising Nil
Paid Rights or Fully Paid Rights
into a CREST stock account (i.e. if your Nil Paid Rights
or Fully Paid Rights are represented
by a Provisional Allotment Letter and you wish to convert
them into uncertificated form)
---------------------------------------------------------- ----------------------------------------------------------
Latest time and date for splitting Provisional Allotment 3.00 p.m. on Thursday 23 March
Letters, nil paid or fully paid,
for rights traded on the London Stock Exchange
---------------------------------------------------------- ----------------------------------------------------------
Latest time and date in the UK for acceptance and payment 11.00 a.m. on Monday 27 March
in full and registration of renounced
Provisional Allotment Letters
---------------------------------------------------------- ----------------------------------------------------------
Dealings in New Ordinary Shares, fully paid, commence on 8.00 a.m. on Tuesday 28 March
the London Stock Exchange
---------------------------------------------------------- ----------------------------------------------------------
Announcement of results of Rights Issue (including rump Tuesday 28 March
placement, if any)
---------------------------------------------------------- ----------------------------------------------------------
New Ordinary Shares credited to CREST accounts by no later than Tuesday 28 March
(uncertificated holders only)
---------------------------------------------------------- ----------------------------------------------------------
Settlement in respect of rump shares Thursday 30 March
---------------------------------------------------------- ----------------------------------------------------------
Expected date of despatch of definitive share by no later than Thursday 6 April
certificates for New Ordinary Shares in certificated
form
Notes:
(1) Subject to certain restrictions relating to Shareholders
with registered addresses outside the UK, details of which are set
out in Part IX (Terms and Conditions of the Rights Issue) of the
Prospectus.
(2) Each of the times and dates set out in the above timetables
and mentioned in this document, the Provisional Allotment Letter
and in any other document issued in connection with the Rights
Issue is subject to change and may be adjusted by SEGRO in
consultation with the Banks, in which event details of the new
times and dates will be notified to the UK Listing Authority, the
London Stock Exchange, and, where appropriate, Qualifying
Shareholders.
(3) If you have any questions relating to the Rights Issue or
completion and return of your Provisional Allotment Letter, please
contact the Shareholder Helpline on 0333 207 6530 (from inside the
UK) or +44 121 415 0915 (if calling from outside the UK). The
Shareholder Helpline is open from 8.30 a.m. to 5.30 p.m. (UK time)
Monday to Friday (excluding English and Welsh public holidays).
Calls to the Shareholder Helpline from outside the UK will be
charged at the applicable international rate. Please note that
calls may be recorded and randomly monitored for security and
training purposes. Please note that for legal reasons, the
Shareholder Helpline cannot provide advice on the merits of the
Rights Issue nor give financial, tax, investment or legal
advice.
Appendix 2
Rights Issue indicative statistics
Number of Existing Ordinary Shares
as at the Record Date 830,165,669
Number of New Ordinary Shares available
under the Rights Issue 166,033,133
Number of Ordinary Shares in the
Enlarged Share Capital 996,198,802
Issue Price per New Ordinary Share 345 pence
New Ordinary Shares as a percentage 16.7 per
of the Enlarged Share Capital cent.
Estimated gross proceeds of the Rights GBP572,814,309
Issue
Estimated net proceeds of the Rights GBP555,814,309
Issue
Appendix 3
Definitions and glossary technical terms
"Acquisition" the acquisition by SEGRO of the Aviva Group Entities' 50 per cent.
stake in APP for a total
consideration of GBP365 million, which comprised GBP216 million in
cash and a portfolio of
five wholly-owned properties for a consideration totalling GBP149
million, in line with their
book value at 31 December 2016, adjusted for deferred income and
tenant deposits;
"Adjusted EPS" the reflection of adjusted profit after tax on a per share basis.
Adjusted profit after tax,
which is a non-IFRS measure, represents profit after tax in accordance
with IFRS as adjusted
in accordance with the Best Practices Recommendations Guidelines of
EPRA and to exclude non-recurring
items;
"Admission" the admission of the New Ordinary Shares, nil paid, to the premium
segment of the Official
List becoming effective in accordance with the Listing Rules and the
admission of the New
Ordinary Shares, nil paid, to trading on the London Stock Exchange's
main market for listed
securities, becoming effective in accordance with the Admission and
Disclosure Standards;
"APP" the Airport Property Partnership, a limited partnership established
"Aviva" under the laws of England
and Wales;
Aviva Life & Pensions UK Limited, a company incorporated in England
and Wales with registered
number 03253947 whose registered office is Wellington Row, York, North
Yorkshire, England,
YO90 1WR;
"Aviva Group Entities" Aviva, acting on its own behalf, as nominee of A/C A214, and for and
on behalf of Aviva Linked
Property Fund; Quarryvale; and NUGP
"BofA Merrill Lynch" Merrill Lynch International, a company incorporated in England and
Wales with registered number
02312079 whose registered office is 2 King Edward Street, London EC1A
1HQ, United Kingdom;
"Banks" or "Bookrunners" BofA Merrill Lynch, UBS, Barclays, BNP Paribas and HSBC;
"Barclays" Barclays Bank PLC, a company incorporated in England and Wales with
registered number 01026167,
whose registered office is at 1 Churchill Place, London, E14 5HP;
"BNP PARIBAS" BNP Paribas, a company incorporated under the laws of France with
registered number 662042449
and whose registered office is at 16 Boulevard des Italiens, 75009
Paris, France;
"Board" the board of directors of the Company;
"Business Day" any day on which banks are generally open in London for the
transaction of business other
than a Saturday or Sunday or public holiday in England and Wales;
"capital expenditure" expenditure for additions to properties and acquisitions of investment
and trading properties
but does not include tenant incentives, letting fees and rental
guarantees;
"certificated" or "in certificated form" where a share or other security is not in uncertificated form (that
is, not in CREST);
"Co-Bookrunners" Barclays, BNP PARIBAS and HSBC;
"Continental Europe" the continuous continent of Europe, excluding surrounding islands;
"CREST" the system for the paperless settlement of trades in securities and
the holding of uncertificated
securities in accordance with the Uncertificated Securities
Regulations 2001 (SI 2001 No.
3755), as amended, operated by Euroclear;
"Current Development Pipeline" development projects which have been approved by the Directors and
which were underway at
31 December 2016;
"Directors" the directors of the Company at the date of this Announcement, and
"Director" means any one
of them;
"Disposal Assets" a portfolio of five mature or recently completed properties which have
a disposal value of
GBP149 million (in line with their book value at 31 December 2016,
adjusted for deferred income
and tenant deposits), consisting of four light industrial estates in
London (Uxbridge, Merton,
Heathrow and Southall) and a manufacturing facility in Portsmouth,
which are wholly-owned
by the Group and which will be transferred to Aviva in part
consideration for the Acquisition;
"Dividend Adjusted Closing Price" the closing, middle market quotation in Pounds Sterling of an Existing
Ordinary Share as published
in the daily official list of the London Stock Exchange, less the 2016
final dividend of 11.2
pence per Existing Ordinary Share which will not be payable on the New
Ordinary Shares;
"Enlarged Share Capital" the issued ordinary share capital of the Company following the issue
of the New Ordinary Shares
pursuant to the Rights Issue;
"EPRA" European Public Real Estate Association, the publisher of Best
Practice Recommendations intended
to make financial statements of public real estate companies in Europe
clearer, more transparent
and comparable;
"EPS" or "earnings per share" earnings per Ordinary Share adjusted to exclude valuation movements,
exceptional items and
related tax;
"Euroclear" Euroclear UK & Ireland Limited, the operator of CREST;
"Excluded Territories" the United States, Canada, South Africa, the People's Republic of
China (excluding Hong Kong),
South Korea, Taiwan, Thailand, New Zealand, Bahrain, the Bahamas,
Bermuda, Brazil, Djibouti,
Malaysia, Monaco, Oman, Pakistan, Israel, India, Jordan, Turkey, the
United Arab Emirates,
the West Indies and any other jurisdiction outside the United Kingdom
where the Company is
advised that the allotment or issue of New Ordinary Shares pursuant to
the Rights Issue would
or may infringe the relevant laws and regulations for such
jurisdiction or would or may require
the Company to obtain any governmental or other consent or to effect
any registration, filing
or other formality which, in the opinion of the Company, it would be
unable to comply with
or is unduly onerous, and "Excluded Territory" means any one of them;
"Existing Ordinary Shares" the Ordinary Shares at the Record Date;
"Ex-Rights Date" 13 March 2017;
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority of the United Kingdom and, where
applicable, includes any
successor body or bodies carrying out the functions currently carried
out by the Financial
Conduct Authority;
"FSMA" the Financial Services and Markets Act 2000, as amended;
"Fully Paid Rights" rights to acquire the New Ordinary Shares, fully paid;
"Group"
the Company and, where appropriate, its subsidiaries from time to
time;
"headline rent" annualised cash rental income receivable on a property after expiry of
rent free periods;
"HSBC" HSBC Bank plc, a company incorporated in England and Wales with
registered number 00014259,
whose registered office is at 8 Canada Square, London E14 5HQ;
"HSBC, BNP and RBS Facilities" the (i) EUR610 million syndicated revolving credit facility dated 10
May 2016 with HSBC as
agent; (ii) EUR100 million bilateral revolving credit facility dated
10 May 2016 with BNP
Paribas; and (iii) EUR70 million bilateral revolving credit facility
dated 9 May 2016 with
Royal Bank of Scotland PLC, each with the Company as borrower;
"IFRS" International Financial Reporting Standards as adopted for use in the
EU;
"Issue Price" 345 pence per New Ordinary Share;
"Joint Bookrunners" BofA Merrill Lynch and UBS;
"Listing Rules" the listing rules made under Part VI of FSMA (as set out in the FCA
Handbook), as amended
from time to time;
"London Stock Exchange" London Stock Exchange plc or its successor(s);
"LTV" loan to value;
"Near-Term Development Projects" both (i) development projects which at 31 December 2016 had been
approved by the Directors,
but which are subject to final pre-let agreements from customers or
conditional on being granted
planning permission; and (ii) speculative developments which the
Directors have identified
and which they believe may be approved in the 6 to 12 months following
31 December 2016, subject
to market conditions;
"New Ordinary Shares" the Ordinary Shares to be allotted and issued by the Company pursuant
to the Rights Issue;
"Nil Paid Rights" New Ordinary Shares in nil paid form provisionally allotted to
Qualifying Shareholders pursuant
to the Rights Issue;
"NUGP" Norwich Union (Shareholder GP) Limited, a company incorporated in
England and Wales with registered
number 03783750 whose registered office is St Helen's, 1 Undershaft,
London, United Kingdom,
EC3P 3DQ;
"Official List" the official list of the UK Listing Authority;
"Ordinary Shares" ordinary shares of 10 pence each in the capital of the Company;
"Overseas Shareholders" Qualifying Shareholders who have registered addresses outside the
United Kingdom or who are
citizens, residents or nationals of, or located in, jurisdictions
outside the United Kingdom;
"PID" property income distribution;
"Placing" the placing of 74,770,950 Ordinary Shares of SEGRO on 2 September 2016
pursuant to the terms
of the placing agreement entered into between SEGRO, Merrill Lynch
International and UBS Limited
on 2 September 2016;
"Prospectus" the prospectus dated 10 March 2017;
"Provisional Allotment Letter" the renounceable provisional allotment letter to be sent to certain
Qualifying Non-CREST Shareholders
in respect of the New Ordinary Shares to be provisionally allotted to
them pursuant to the
Rights Issue;
"Qualifying CREST Shareholders" Qualifying Shareholders holding Ordinary Shares on the register of
members of the Company
in uncertificated form (that is, through CREST);
"Qualifying Non-CREST Shareholders" Qualifying Shareholders holding Ordinary Shares on the register of
members of the Company
in certificated form (that is, not through CREST);
"Qualifying Shareholders" holders of Existing Ordinary Shares on the register of members of the
Company on the Record
Date;
"Quarryvale" Quarryvale One Limited, a company incorporated in England and Wales
with registered number
03118888 whose registered office is at St Helen's, 1 Undershaft,
London, United Kingdom, EC3P
3DQ;
"RBS" Royal Bank of Scotland PLC, a company incorporated in Scotland with
registered number SC090312,
whose registered office is at 36 St Andrew Square, Edinburgh, EH2 2YB;
"Record Date" close of business on 8 March 2017;
"Rights Issue" the issue by way of rights of New Ordinary Shares to Qualifying
Shareholders, on the terms
and conditions set out in the Prospectus and, in the case of
Qualifying Non-CREST Shareholders
only, the Provisional Allotment Letter;
"Securities" the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares
"SEGRO Share Plans" the LTIP; the DSBP; the SAYE; the SIP; and the GSIP;
"Shareholder(s)" shareholders whose Ordinary Shares are registered on the register of
members of the Company;
"SIP" the SEGRO plc Share Incentive Plan;
"Sponsors" BofA Merrill Lynch and UBS;
"stock account" an account within a member account in CREST to which a holding of a
particular share or other
security in CREST is credited;
"UBS" UBS Limited, a company incorporated in England and Wales with
registered number 02035362 whose
registered office is at 5 Broadgate, London EC2M 2QS;
"UK Listing Authority" the Financial Conduct Authority acting in its capacity as the
competent authority for the
purposes of FSMA;
"uncertificated" or "in uncertificated form" a share or other security recorded in the relevant register of the
share or security concerned
as being held in uncertificated form in CREST and title to which by
virtue of the CREST Regulations,
may be transferred by means of CREST;
"Underwriters" each of BofA Merrill Lynch, UBS, Barclays, BNP Paribas and HSBC; and
"Underwriting Agreement" the underwriting agreement dated 10 March 2017 between the Company and
the Underwriters, as
amended from time to time.
IMPORTANT NOTICE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES
OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
This is not a prospectus but an advertisement. Investors should
not subscribe for the securities referred to in this advertisement
except on the basis of information in the Prospectus. A prospectus
will be published today in connection with the proposed Rights
Issue.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING
IN THIS ANNOUNCEMENT SHALL CONSTITUTE AN OFFER OR INVITATION TO
UNDERWRITE, BUY, SUBSCRIBE, SELL OR ISSUE OR THE SOLICITATION OF AN
OFFER TO BUY, SELL, ACQUIRE, DISPOSE OR SUBSCRIBE FOR THE NEW
ORDINARY SHARES OR ANY OTHER SECURITIES. NOTHING IN THIS
ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE
RIGHTS ISSUE. ANY DECISION TO PURCHASE, OTHERWISE ACQUIRE,
SUBSCRIBE FOR, SELL OR OTHERWISE DISPOSE OF ANY SECURITIES MUST BE
MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND
INCORPORATED BY REFERENCE INTO THE PROSPECTUS. COPIES OF THE
PROSPECTUS WILL BE AVAILABLE ON PUBLICATION FROM SEGRO'S REGISTERED
OFFICE AND THE OFFICES OF EQUINITI LIMITED AND SEGRO'S WEBSITE:
WWW.SEGRO.COM/INVESTORS.
The information contained in this Announcement is for background
purposes only and does not purport to be full or complete. No
reliance may be placed for any purpose on the information contained
in this Announcement or its accuracy or completeness. The
information in this Announcement is subject to change.
This Announcement is not a prospectus but an advertisement. Any
offer to acquire the Company's securities pursuant to the offering
referred to in these materials will be made, and any investor
should make his investment, solely on the basis of information that
will be contained in the Prospectus to be made generally available
in the United Kingdom in connection with such offering. When made
generally available, copies of the Prospectus may be obtained at no
cost from the Company or through the website of the Company at
www.SEGRO.com/investors, provided that the Prospectus will not,
subject to certain exceptions, be available (whether through the
website or otherwise) to Shareholders in the United States, South
Africa and the other Excluded Territories. The Prospectus will give
further details of the Securities being offered pursuant to the
Rights Issue.
The information contained herein is not for distribution or
publication, whether directly or indirectly and whether in whole or
in part, in or into the United States, South Africa or any of the
other Excluded Territories. The distribution of this Announcement
and/or the Prospectus and/or the Provisional Allotment Letter
and/or the transfer of the Securities into jurisdictions other than
the United Kingdom may be restricted by law, and, therefore,
persons into whose possession this Announcement and/or the
Prospectus and/or the Provisional Allotment Letter comes should
inform themselves about and observe any such restrictions. Any
failure to comply with any such restrictions may constitute a
violation of the securities laws of such jurisdiction. In
particular, subject to certain exceptions, the Prospectus and the
Provisional Allotment Letter should not be distributed, forwarded
to or transmitted in or into the United States, South Africa or any
of the other Excluded Territories. There will be no public offer of
Securities in the United States, South Africa or any other
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration, exemption from registration or
qualification under the securities laws of such jurisdiction.
The Securities have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act")
or under the securities laws of any state or other jurisdiction of
the United States, and may not be offered, sold, taken up,
exercised, resold, renounced, transferred or delivered, directly or
indirectly, in or into the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance
with any applicable securities laws of any state or other
jurisdiction of the United States.
The offering of the Securities is only being made in Canada
pursuant to exemptions from the prospectus and registration
requirements that otherwise apply to a distribution of securities
under applicable Canadian securities legislation. Any offer or
solicitation in Canada must be made through a dealer that is
appropriately registered under the laws of the applicable province
or territory of Canada, or pursuant to an exemption from that
requirement. Any resale of the Securities in Canada must be made
under available statutory exemptions.
Merrill Lynch International and UBS Limited are acting as Joint
Global Co-ordinators, Joint Bookrunners and Joint Sponsors for the
Company, and Barclays Bank PLC, BNP Paribas and HSBC Bank plc are
acting as Co-Bookrunners for the Company (collectively the
"Bookrunners"). Each of the Bookrunners is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting exclusively for the Company and no one
else in connection with the Rights Issue, and will not regard any
other person (whether or not a recipient of this Announcement) as
its client in relation to the Rights Issue and will not be
responsible to anyone other than the Company for providing the
protections afforded to their respective clients or for providing
advice in connection with the Rights Issue or any other matters
referred to in this Announcement.
In connection with the Rights Issue, each of the Bookrunners,
and any of their respective affiliates, acting as investor for its
own account, may take up the Securities and/or related instruments
in the Rights Issue and in that capacity may retain, purchase or
sell for its own account such securities and any New Ordinary
Shares or related investments and may offer or sell such New
Ordinary Shares or other investments otherwise than in connection
with the Rights Issue. Accordingly, references in this Announcement
to New Ordinary Shares being offered or placed should be read as
including any offering or placement of New Ordinary Shares to any
of the Bookrunners or any of their respective affiliates acting in
such capacity. None of the Bookrunners intends to disclose the
extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligation to do so. In
addition the Bookrunners or their affiliates may enter into
financing arrangements (including swaps) with investors in
connection with which the Bookrunners (or their affiliates) may
from time to time acquire, hold or dispose of New Ordinary Shares.
The Company also intends to use a portion of the net proceeds of
the Rights Issue to repay facilities
provided by certain of the Bookrunners, as noted below.
This Announcement is being issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability whatsoever is or will be
accepted by the Bookrunners nor any of their respective affiliates
or agents (or any of their respective directors, officers,
employees or advisers) for the contents of the information
contained in this Announcement, including its accuracy,
completeness, fairness or verification or regarding the legality of
any investment in the Securities or any other written or oral
information made available to or publicly available to any
interested party or its advisers, or any other statement made or
purported to be made by or on behalf of any Bookrunner or any of
their respective affiliates in connection with the Company, the New
Ordinary Shares or the Rights Issue and nothing in this
Announcement is or shall be relied upon as, a promise or
representation in this respect, whether as to the past or the
future and any responsibility therefor is expressly disclaimed. The
Bookrunners and each of their respective affiliates accordingly
disclaim all and any responsibility or liability, whether arising
in tort, contract or otherwise in respect of this Announcement or
any such statement and no representation or warranty, express or
implied, is made by any Bookrunner or any of their respective
affiliates as to the accuracy, completeness or sufficiency of the
information contained in this Announcement.
This Announcement does not identify or suggest, or purport to
identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the Securities. Any investment
decision to buy Securities in the Rights Issue must be made solely
on the basis of publicly available information, which has not been
independently verified by the Bookrunners. The contents of this
Announcement are not to be construed as legal, business, financial
or tax advice. None of the Company, the Bookrunners, or any of
their respective representatives, is making any representation to
any offeree or purchaser of the Securities regarding the legality
of an investment in the Securities by such offeree or purchaser
under the laws applicable to such offeree or purchaser. Each
prospective investor should consult his, her or its own legal
adviser, business adviser, financial adviser or tax adviser for
legal, financial, business or tax advice in connection with the
purchase of the Securities. In making an investment decision, each
investor must rely on their own examination, analysis and enquiry
of the Company and the terms of the Rights Issue, including the
merits and risks involved.
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future performance,
anticipated events or trends and other matters that are not
historical facts. These forward-looking statements, which sometimes
use words such as "aim", "anticipate", "believe", "intend", "plan"
"estimate", "expect" and words of similar meaning, include all
matters that are not historical facts and reflect the directors'
beliefs and expectations and involve a number of risks,
uncertainties and assumptions that could cause actual results and
performance to differ materially from any expected future results
or performance expressed or implied by the forward-looking
statement. These statements are subject to unknown risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. Statements contained in this
Announcement regarding past trends or activities should not be
taken as a representation that such trends or activities will
continue in the future. The information contained in this
Announcement is subject to change without notice and, except as
required by applicable law, neither the Company nor the Bookrunners
assume any responsibility or obligation to update publicly or
review any of the forward-looking statements contained herein. You
should not place undue reliance on forward-looking statements,
which speak only as of the date of this Announcement. Any
indication in this Announcement of the price at which New Ordinary
Shares have been bought or sold in the past cannot be relied upon
as a guide to future performance. No statement in this Announcement
is or is intended to be a profit forecast or profit estimate or to
imply that the earnings of the Company for the current or future
financial years will necessarily match or exceed the historical or
published earnings of the Company. The price of shares and the
income from them may go down as well as up and investors may not
get back the full amount invested on disposal of the shares. Past
performance is no guide for future performance.
The New Ordinary Shares to be issued pursuant to the Rights
Issue will not be admitted to trading on any stock exchange other
than the London Stock Exchange.
The most recent Annual and Interim Reports and other information
are available on the SEGRO website at www.segro.com/investors.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
This Announcement does not constitute a recommendation
concerning the Rights Issue.
(1) This statement does not constitute, and should not be
construed as, a profit forecast.
(2) This statement does not constitute, and should not be
construed as, a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEUKUARBUAORUR
(END) Dow Jones Newswires
March 10, 2017 02:01 ET (07:01 GMT)
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