TIDMWHR
RNS Number : 5249S
Warehouse REIT PLC
12 March 2019
12 March 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014)
("MAR")
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART DIRECTLY OR INDIRECTLY, BY ANY MEANS OR MEDIA TO US PERSONS OR
IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE
REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH
THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD
BE UNLAWFUL.
This announcement is an advertisement for the purposes of the
Prospectus Rules of the UK Financial Authority ("FCA") and does not
constitute a prospectus. Investors must subscribe for or purchase
any shares referred to in this announcement only on the basis of
information contained in a prospectus expected to be published
later today by Warehouse REIT plc (the "Prospectus") in its final
form and not in reliance on this announcement. A copy of the
Prospectus will, following publication, be available for inspection
from the Company's registered office and on its website
(www.warehousereit.co.uk). This announcement does not constitute,
and may not be construed as, an offer to sell or an invitation or
recommendation to purchase, sell or subscribe for any securities or
investments of any description, or a recommendation regarding the
issue or the provision of investment advice by any party.
Terms not otherwise defined in this announcement have the
meanings that will be given to them in the Prospectus.
The contents of this announcement, which have been prepared by
and are the sole responsibility of Warehouse REIT plc (the
"Company"), have been approved by G10 Capital Limited (part of the
Lawson Conner Group) (the "AIFM"), as a financial promotion solely
for the purposes of section 21(2)(b) of the Financial Services and
Markets Act 2000 ("FSMA").
Warehouse REIT plc
(the "Company" or "Warehouse REIT")
Proposed Placing, Open Offer and Offer for Subscription and
Notice of General Meeting
Further to its announcement on 5 March 2019, the Board of
Directors (the "Board") of Warehouse REIT (ticker: WHR), the UK
REIT that invests in and manages urban and 'last-mile' industrial
warehouse assets in strategic locations in the UK, today announces
the proposed issue of further Ordinary Shares ("New Ordinary
Shares") in the Company to raise gross proceeds of up to GBP100.0
million (the "Issue"), the details of which will be set out in the
Prospectus, expected to be published by the Company later today.
The Issue will comprise a Placing, Open Offer and Offer for
Subscription.
The Company has successfully deployed the GBP150.0 million of
equity capital raised on its IPO in September 2017 and,
consequently, on 5 March 2019, the Company announced that it has
been contemplating an equity raise to fund further investments in
line with its investment policy to drive further value creation for
its Shareholders.
Summary
-- Issue of up to 97,087,378 New Ordinary Shares pursuant to a
Placing, Open Offer and Offer for Subscription, targeting gross
proceeds of approximately GBP100.0 million
-- Qualifying Shareholders are being offered the opportunity to
participate in the Open Offer of up to 66,400,000 New Ordinary
Shares on the basis of 2 New Ordinary Shares for every 5 Existing
Ordinary Shares
-- Qualifying Shareholders are also being offered the
opportunity to subscribe for New Ordinary Shares in addition to
their Open Offer Entitlement under the Excess Application
Facility
-- The Board has reserved the right to increase the size of the
Issue by up to 24,271,844 New Ordinary Shares
-- The Issue Price is 103.0 pence per New Ordinary Share. This
represents a discount of 2.6 per cent. to the Net Asset Value per
Ordinary Share as at 30 September 2018 (unaudited) of 105.7 pence
per Ordinary Share
-- The Issue Price represents a premium of 2.0 per cent. to the
closing price per Ordinary Share on 11 March 2019 of 101.0 pence
per Ordinary Share
-- Tilstone Partners Limited ("TPL"), the Company's investment
advisor, has recently seen an increase in the range of acquisition
opportunities which meet the Company's investment criteria, giving
rise to a near term pipeline of capital deployment opportunities
(including off-market assets identified through TPL's network)
-- TPL has identified a pipeline of investment opportunities
with a target investment yield of 7.0 per cent. amounting to
approximately GBP256.0 million, of which approximately GBP41.3
million are in exclusive or final negotiations or have solicitors
instructed and approximately a further GBP214.7 million are in
detailed negotiations
-- Once fully invested, the Issue is expected to be earnings
accretive with improved income diversification
-- The Company increased its target dividend for the year ending
31 March 2019 to 6.0 pence per share from 5.5 pence per share as
set out in the prospectus issued in connection with the IPO and is
currently targeting a dividend for the year ending 31 March 2020 of
at least 6.0 pence per share
-- The New Ordinary Shares will rank in full for all dividends
and other distributions declared, made or paid on the Ordinary
Shares after Admission including the interim dividend in relation
to the three months to 31 March 2019
This summary should be read in conjunction with the full text of
the announcement and the Prospectus, when available.
Neil Kirton, Chairman of Warehouse REIT, commented:
"The Company has made impressive progress since its AIM listing
18 months ago, having delivered, ahead of target, on its investment
strategy to provide shareholders with a high quality portfolio of
well-located urban warehouse assets. Active management, reflected
in lettings successes, many of which have been achieved ahead of
ERV, is helping to drive portfolio income and has supported us in
achieving our target dividend. With robust and growing income
streams from a focused investment into UK multi-let warehouse
properties, the next phase for the Company is to scale the
portfolio as it continues to both source and attract compelling
deal flow within the asset class. Having carefully considered all
funding options in order to grow, we believe that this potential
share issue would be in the best interests of Shareholders and the
success of the Company as a whole."
Andrew Bird, Managing Director of Tilstone Partners Limited,
added:
"The market remains attractive, characterised by both
constrained supply, as replacement costs remain significantly more
than underlying values, as well as the broader structural shift
towards online which shows no sign of slowing down. As a result we
continue to see substantial and increasingly diverse tenant demand
for good-quality, well-located urban warehouse assets. This share
issue will enable the Company to capitalise on its identified
pipeline of near term opportunities, sourced both on and off
market, where we can apply our proven operating model to capture
future upside and generate value for shareholders."
Warehouse REIT will shortly be publishing a Prospectus in
connection with the Issue which will include a notice convening a
General Meeting to approve certain matters necessary to implement
the Issue (the "Notice of General Meeting"). The Prospectus will,
when published, be available on the Company's website
(www.warehousereit.co.uk), subject to certain access restrictions,
for inspection at the Company's registered office at Beaufort
House, 51 New North Road, Exeter, EX4 4EP, and at the National
Storage Mechanism via www.morningstar.co.uk/uk/NSM.
Enquiries:
Warehouse REIT plc (via FTI Consulting)
+44 (0) 1244 470
Tilstone Partners Limited 090
Andrew Bird, Peter Greenslade, Paul Makin
Peel Hunt (Nominated Adviser, Sole Broker +44 (0) 20 7418
and Bookrunner) 8900
ECM/Sales: Alastair Rae, Mark Thompson
Corporate: Capel Irwin, Carl Gough, Harry
Nicholas
FTI Consulting (Financial PR & IR Adviser +44 (0) 20 3727
to the Company) 1000
Dido Laurimore, Ellie Sweeney, Richard Gotla
Expected timetable of principal events
Event Time and date 2019
Record Time for entitlements under the 5.00 p.m. on 8 March
Open Offer
Ex-Entitlements date for the Open Offer 8.00 a.m. on 12 March
Publication and despatch of Prospectus, 12 March
Subscription Forms and, to Qualifying
non-CREST Shareholders, Open Offer Application
Form
Open Offer Entitlements and Excess Open as soon as 13 March
Offer Entitlements credited to stock possible on
accounts of Qualifying CREST Shareholders
in CREST
Recommended latest time for requesting 4.30 p.m. on 22 March
withdrawal of Open Offer Entitlements
and Excess Open Offer Entitlements from
CREST (i.e. if your Open Offer Entitlements
and Excess Open Offer Entitlements are
in CREST and you wish to convert them
to certificated form)
Latest time and date for depositing Open 3.00 p.m. on 25 March
Offer Entitlements and Excess Open Offer
Entitlements into CREST
Latest time and date for receipt of Forms 11.00 a.m. 26 March
of Proxy and receipt of electronic proxy on
appointments via CREST
Latest time and date for splitting of 3.00 p.m. on 26 March
Open Offer Application Forms (to satisfy
bona fide market claims only)
Latest time and date for receipt of completed 11.00 a.m. 28 March
Open Offer Application Forms and payment on
in full under the Open Offer or settlement
of relevant CREST instruction (as appropriate).
Open Offer Entitlements and Excess Open
Offer Entitlements disabled in CREST
Latest time and date for receipt of Placing 1.00 p.m. on 28 March
commitments
Latest time and date for receipt of completed 1.00 p.m. on 28 March
Subscription Forms in respect of the
Offer for Subscription
General Meeting 11.00 a.m. 28 March
on
Announcement of results of General Meeting by 5.00 p.m. 28 March
on
Results of the Issue announced through by 8.00 a.m. 29 March
a Regulatory Information Service on
Admission and commencement of dealings 8.00 a.m. on 2 April
in New Ordinary Shares
Expected date of despatch of definitive within 5 Business
share certificates for Open Offer Shares Days of Admission
(to Qualifying non-CREST Shareholders)
and, where applicable, Placing Shares
and Offer for Subscription Shares
Each of the times and dates in the timetable above is subject to
change without further notice. References to a time of day are to
London time. Different deadlines and procedures may apply in
certain cases.
If any of the times and/or dates change, the revised time and/or
date will be notified through a Regulatory Information Service. For
example, Shareholders who hold their Existing Ordinary Shares
through a CREST member or other nominee may be set earlier
deadlines by the CREST member or other nominee than the times and
dates noted above.
Background to, and reasons for, the Issue
Overview of the Company, its objectives and investment
characteristics
Since IPO, the Group has built a diversified property portfolio
of UK located warehouse assets. As at 7 March 2019 (the "Latest
Practicable Date"), the Group's investment portfolio was spread
across 91 properties with a total of approximately 629 tenants,
with a combined contracted rent roll of GBP21.5 million per annum
and a weighted average unexpired lease term of 4.4 years (2.8 years
to first break). The portfolio was valued at GBP284.3 million in
aggregate as at 30 September 2018.
The Company has deliberately targeted the warehouse sector for
its investment focus as this part of the UK commercial property
market has historically demonstrated, and continues to demonstrate,
a number of attractive characteristics:
-- increasing occupier demand driven by the rise in internet
shopping and the "last mile" delivery sector;
-- sustainable current rental levels;
-- constrained supply (driven in part by the cost of replacement
being higher than the investment value of the underlying buildings)
of new stock being developed over the last 10 years and very little
development being planned over the next five years, all of which
has reduced occupier choice and resulted in rental growth;
-- the urban warehouse sector offers one of, if not the highest,
initial yields of all UK commercial property sectors;
-- flexibility in building use (subject, where applicable, to
applicable planning permissions) which has already evolved
significantly over time and which provides potential value add
opportunities;
-- low levels of building obsolescence; and
-- prevailing shorter WAULTs providing opportunities to improve income security and add value.
IPF Consensus forecasts anticipate that industrial property will
continue to be the best performing UK commercial real estate sector
over the next few years delivering total returns of 7.4 per cent.
in 2019 and 7.5 per cent. per annum between 2018-22, ahead of an
average of 4.5 per cent. per annum for all property over the same
period.
The Company and TPL will continue to focus on the acquisition of
assets most likely to benefit from rental growth. Rather than being
a passive investor, the Company and TPL believe in acquiring assets
with added value opportunities which are capable of being realised
through pro-active management in accordance with the Company's
investment policy. The Company will remain focused on small and
medium individual unit sizes (less than 50,000 sq ft), and on
buying properties at less than the rebuild cost of replacement.
Reasons for the Issue and Use of Proceeds
The Group continues to see opportunities to purchase assets at
prices below replacement value, with the potential to secure robust
and growing income streams which can be distributed to Shareholders
through the Company's quarterly dividend programme. The Group's
portfolio also offers continued potential for capital growth, and
the possibility to supplement the income returns generated from the
Group's assets.
The Company has seen a recent increase in the range of
acquisition opportunities which meet the Group's investment
criteria, giving rise to a near term pipeline of capital deployment
opportunities.
Accordingly, the Company is seeking to capitalise on this
pipeline of opportunities by raising additional finance through the
Issue which it will seek to deploy, together with debt finance
where appropriate, in line with its investment strategy.
The Directors intend to use the Net Issue Proceeds to acquire a
diversified portfolio of additional properties in accordance with
the Company's investment policy. Pending the acquisition of the
pipeline of investment opportunities, the Net Issue Proceeds will
be used to pay down sums drawn on the Group's revolving credit
facility, thereby creating immediate finance cost savings.
TPL has identified a pipeline of investment opportunities with a
target investment yield of 7.0 per cent. amounting to approximately
GBP256.0 million, of which approximately GBP41.3 million are in
exclusive or final negotiations or have solicitors instructed and
approximately a further GBP214.7 million are in detailed
negotiations.
The Company believes that the pipeline stock selection will
further diversify the Group's income, in addition to continuing to
strengthen the portfolio's sustainability, quality and prospects
for growth. Location remains a key criteria when reviewing the
pipeline as the Company continues to focus on economically-active
geographical areas that will respond (in particular, in respect of
rental growth) to active asset management initiatives and the circa
GBP256.0 million of investment opportunities are spread across all
regions of the UK and include approximately GBP9.0 million in
Scotland.
Whilst the Company is in exclusive negotiations with the vendors
of a number of these assets (and such assets have been taken off
the market), neither the Company nor any member of its Group
currently has any legally binding contractual obligation to
purchase any of the assets. There is therefore no certainty that
any of the potential investments in the pipeline as at the date of
the Prospectus will be completed or will be invested in by the
Company. However, TPL is continually screening further
opportunities, with more expected to be identified in the near
term, and is confident that suitable assets will be identified,
assessed and acquired to substantially invest the Net Issue
Proceeds within six months of Admission.
Benefits of the Issue
The Directors believe that growing the Property Portfolio via
the Issue will:
-- allow the Company to further capitalise on opportunities in an attractive market;
-- be accretive to earnings once the proceeds are fully invested;
-- represent opportunities to grow income and create value through active asset management;
-- enhance the quality of the portfolio and further improve
income diversification and growth prospects;
-- increase debt funding options and lower overall financing costs;
-- improve operational efficiency and cost ratios; and
-- potentially broaden the investor base and increase liquidity in the Ordinary Shares.
Current trading trends and prospects
At the Company's half year ended 30 September 2018, the
portfolio was valued at GBP284.3 million, which reflected GBP15.0
million of disposals during the period representing an increase of
6.5 per cent. on the aggregate purchase price and a 1.6 per cent.
like-for-like increase on the valuation at 31 March 2018, or a 2.9
per cent. capital return taking into account the disposed assets.
In the six months to 30 September 2018, the Company completed 37
new lettings, generating an additional annual rent of GBP1.2
million, 6.9 per cent. ahead of 31 March 2018 ERVs and 12 lease
renewals securing additional income of GBP500,000 and reflecting a
7.8 per cent. increase in headline rents. Portfolio occupancy at 30
September 2018 was 92.1 per cent. with a WAULT of 4.2 years (31
March 2018: 4.1 years) with 2.8 years to first break. During the
same period, the Company acquired Burntbroom Court, Queenslie,
Glasgow for GBP2.4 million reflecting an initial yield of 8.0 per
cent..
During the period from 30 September 2018 to the date of this
announcement, the Company completed 15 new lettings and 11 lease
renewals across 210,200 sq ft of space, achieved at 14.4 per cent.
ahead of 30 September 2018 ERVs, generating GBP691,000 per annum of
additional contracted rent. In October 2018, the Company let 60,000
sq ft at Deeside Industrial Estate, Chester to A&D Recycling
Ltd on a new 15 year lease, with a tenant only break at 10 years.
The average rent over the initial five year lease term represents a
16.2 per cent. premium to the 30 September 2018 ERV.
In October 2018, the Company acquired an urban warehouse unit in
Widnes, Cheshire, for GBP2.8 million reflecting a net initial yield
of 7.3 per cent., which is let to a global internet retailer on a
new five year lease. In the same month, planning permission was
obtained for a major mixed-use development at Queenslie Business
Park, Glasgow for an additional 250,000 sq ft of warehouse and
ancillary uses, with a gross development value of GBP25 million. In
addition, in February 2019 the Company acquired the multi let Air
Cargo Centre at Glasgow Airport for GBP11.1 million, reflecting a
net initial yield of 6.7 per cent..
The Company had bank debt of GBP109.5 million as at 30 September
2018, having reduced the loan to value ratio to 37.1 per cent. from
40.5 per cent. at 31 March 2018, and the Company paid or declared
dividends, totalling 4.5 pence per share in the period from 1 April
2018 to 31 December 2018, on track for its target of 6.0 pence per
share for the full year.
On 8 February 2019, the Company declared its interim dividend in
respect of the third quarter of the financial year ending 31 March
2019 of 1.5 pence per ordinary share, payable on 29 March 2019 to
shareholders on the register on 1 March 2019. The ex-dividend date
was 28 February 2019.
Future Prospects
The UK warehouse sector continues to perform strongly and the
Board believes the growth drivers are structural rather than
cyclical with demand from a diverse range of occupiers. Market
expectations are for rental growth of 2.5 per cent. per annum, for
all industrial assets between 2018 and 2022, according to IPF
Consensus Forecasts, but the Board's expectation is that rental
growth will be stronger for smaller multi-let estates, the part of
the market the Company is focused on, rather than large
distribution warehouses driven by a favourable supply/demand
imbalance. There are also good prospects to outperform wider market
expectations through active asset management to increase rental
income and lease durations. The Board sees no sign of any change in
these positive dynamics, but remains alert to the potential for
geopolitical or financial events to affect both occupier and
investor sentiment.
Principal Terms of the Capital Raising
The Company is proposing to raise gross proceeds of up to
GBP100.0 million (approximately GBP98.0 million net of expenses) by
the issue of 97,087,378 New Ordinary Shares at 103.0 pence per New
Ordinary Share, although the Directors have the ability to increase
the size of the Issue by up to 25.0 per cent. such that the gross
proceeds would be approximately GBP125.0 million. The actual number
of New Ordinary Shares to be issued pursuant to the Issue, and
therefore the Gross Issue Proceeds are not known as at the date of
this announcement but will be notified by the Company via a
Regulatory Information Service prior to Admission. The Board
considers the Placing, Open Offer and Offer for Subscription to be
a suitable fundraising structure as it will allow access to a wide
variety of new investors to broaden the Company's shareholder base,
whilst providing existing Shareholders with the opportunity to
participate in the fundraising through the Open Offer and the Offer
for Subscription.
The Issue Price represents a premium of 2.0 per cent. to the
Closing Price of 101.0 pence per Ordinary Share on 11 March 2019
and a discount of 2.6 per cent. to the EPRA NAV per share of 105.7
pence at 30 September 2018. The Issue Price has been set by the
Directors following their assessment of market conditions and
following discussion with a number of institutional investors. The
Directors are in agreement that the level of discount and method of
issue are appropriate to secure the investment sought.
The New Ordinary Shares will rank in full for all dividends and
other distributions declared, made or paid on Ordinary Shares after
Admission including the interim dividend in relation to the three
months to 31 March 2019.
The Issue is not underwritten. The Directors have the discretion
to scale back the Placing and/or the Offer for Subscription in
favour of the Open Offer by reallocating New Ordinary Shares that
would otherwise be available under the Placing and/or the Offer for
Subscription to Qualifying Shareholders under the Open Offer
(including, where applicable, to Qualifying Shareholders under the
Excess Application Facility). Any New Ordinary Shares that are
available under the Open Offer and are not taken up by Qualifying
Shareholders pursuant to their Open Offer Entitlements or under the
Excess Application Facility will be reallocated to the Placing
and/or the Offer for Subscription and be available thereunder.
The Placing
Peel Hunt, as placing agent of the Company, will use reasonable
endeavours to place the Placing Shares with institutional investors
at the Issue Price. The Placing Shares represent up to 100.0 per
cent. of the New Ordinary Shares and up to 37.0 per cent. of the
Enlarged Share Capital. The Placing may be scaled back to satisfy
valid applications by Qualifying Shareholders under the Open Offer
by allocating New Ordinary Shares that could otherwise be available
under the Placing to such Qualifying Shareholders. The Placing may
also be scaled back at the Directors' discretion (in consultation
with Peel Hunt and TPL) in order to satisfy valid applications
under the Offer of Subscription.
The Open Offer
Qualifying Shareholders have the opportunity under the Open
Offer to subscribe for New Ordinary Shares at the Issue Price,
payable in full on application and free of expenses, pro rata to
their existing shareholdings, on the basis of:
2 New Ordinary Shares for every 5 Existing Ordinary Shares
held by them and registered in their names at the Record Time.
Fractions of Ordinary Shares will not be allotted and each
Qualifying Shareholder's entitlement under the Open Offer
Entitlement will be rounded down to the nearest whole New Ordinary
Share. Fractional entitlements to New Ordinary Shares will be
aggregated and will ultimately accrue for the benefit of the
Company.
The Directors fully recognise the importance of pre-emption
rights to Shareholders and consequently up to 66,400,000 New
Ordinary Shares are being offered to existing Shareholders by way
of the Open Offer. The Directors consider this appropriate and in
the best interests of Shareholders.
The Excess Application Facility
Qualifying Shareholders may apply to subscribe for Excess Shares
using the Excess Application Facility. Qualifying Non-CREST
Shareholders wishing to apply to subscribe for Excess Shares may do
so by completing the relevant sections on the Open Offer
Application Form. Qualifying CREST Shareholders who wish to apply
to subscribe for more than their Open Offer Entitlements will have
Excess Open Offer Entitlements credited to their stock account in
CREST and should refer to the Prospectus for information on how to
apply for Excess Shares pursuant to the Excess Application
Facility.
The Excess Application Facility will comprise Open Offer Shares
that are not taken up by Qualifying Shareholders under the Open
Offer pursuant to their Open Offer Entitlements. Applications by
Qualifying Shareholders for Excess Shares will, therefore, only be
satisfied to the extent that other Qualifying Shareholders do not
take up their Open Offer Entitlements in full and shall in any
event be at the discretion of the Board (in consultation with Peel
Hunt and TPL). If there is an over-subscription resulting from
excess applications, allocations in respect of such excess
applications will be scaled-back at the absolute discretion of the
Board in consultation with Peel Hunt and TPL, who will have regard
to the pro rata number of Excess Shares applied for by Qualifying
Shareholders under the Excess Application Facility in addition to
the number of Placing Shares and Offer for Subscription Shares
applied for by such Qualifying Shareholders. No assurances can
therefore be given that applications by Qualifying Shareholders
under the Excess Application Facility will be met in full, in part
or at all.
Shareholders should be aware that the Open Offer is not a rights
issue. As such, Qualifying Non- CREST Shareholders should note that
their Open Offer Application Forms are not negotiable documents and
cannot be traded. Qualifying CREST Shareholders should note that,
although the Open Offer Entitlements and Excess Open Offer
Entitlements will be admitted to CREST and be enabled for
settlement, the Open Offer Entitlements and Excess Open Offer
Entitlements will not be tradeable or listed and applications in
respect of the Open Offer may only be made by the Qualifying
Shareholder originally entitled or by a person entitled by virtue
of a bona fide market claim. New Ordinary Shares for which
application has not been made under the Open Offer will not be sold
in the market for the benefit of those who do not apply under the
Open Offer and Qualifying Shareholders who do not apply to take up
their entitlements will have no rights nor receive any benefit
under the Open Offer. Any Open Offer Shares which are not applied
for under the Open Offer (whether pursuant to a Qualifying
Shareholder's Open Offer Entitlements or Excess Open Offer
Entitlements) may be allocated to Placees under the Placing or
anyone subscribing for Offer for Subscription Shares under the
Offer for Subscription.
Offer for Subscription
New Ordinary Shares are also available at the Issue Price under
the Offer for Subscription. Further information on the Offer for
Subscription and the terms and conditions of the Offer for
Subscription, including the procedure for application and payment,
are set out in the Prospectus.
The number of Offer for Subscription Shares issued may be scaled
back to satisfy valid applications by Qualifying Shareholders under
the Open Offer including, where applicable, under the Excess
Application Facility. The Offer for Subscription may also be scaled
back at the Directors' discretion (in consultation with Peel Hunt
and TPL) to satisfy applications under the Placing by allocating
New Ordinary Shares that could otherwise be available under the
Offer for Subscription to Placees under the Placing.
Dilution
Following the issue of New Ordinary Shares to be allotted
pursuant to the Issue, Qualifying Shareholders who take up their
full Open Offer Entitlements will suffer a dilution of 12.0 per
cent. to their interests in the Company (assuming Gross Issue
Proceeds of GBP100.0 million).
Qualifying Shareholders who do not take up any of their Open
Offer Entitlements will suffer a dilution of 37.0 per cent. to
their interests in the Company (assuming Gross Issue Proceeds of
GBP100.0 million).
Basis of Allocation
The Placing may be scaled back in favour of the Open Offer
and/or the Offer for Subscription and the Offer for Subscription
may be scaled back in favour of the Placing and/or the Open Offer.
The Open Offer is being made on a pre-emptive basis to Qualifying
Shareholders and is not subject to scaling back in favour of either
the Placing or the Offer for Subscription. The Directors have the
discretion to scale back the Placing and/or the Offer for
Subscription in favour of the Open Offer by reallocating New
Ordinary Shares that would otherwise be available under the Placing
and/or the Offer for Subscription to Qualifying Shareholders
through the Excess Application Facility under the Open Offer. Any
New Ordinary Shares that are available under the Open Offer and are
not taken up by Qualifying Shareholders pursuant to their Basic
Entitlements and under the Excess Application Facility will be
reallocated to the Placing and/or the Offer for Subscription and be
available thereunder.
The Directors have the discretion to determine the basis of
allotment between Qualifying Shareholders under the Excess
Application Facility and any scaling back of or reallocation of
Open Offer Shares to the Placing and/or the Offer for Subscription.
In exercising this discretion, the Directors generally intend to
give priority to existing Shareholders over prospective new
Shareholders, although the Directors will seek to balance the
benefits to the Company of allowing existing Shareholders to
maintain or increase the size of their relative shareholdings with
expanding the Shareholder base of the Company.
Conditionality
The Issue is conditional upon, among other things:
-- Resolutions 1 and 2 being passed by Shareholders at the
General Meeting (without material amendment);
-- the Placing and Open Offer Agreement becoming unconditional
in all respects (save for the condition relating to Admission) and
not having been terminated in accordance with its terms before
Admission; and
-- Admission becoming effective by not later than 8.00 a.m. on 2
April 2019 or such later time and/or date as Peel Hunt may at its
sole discretion determine (being not later than 8.00 a.m. on 16
April 2019).
Accordingly, if any of the conditions are not satisfied, or, if
applicable, waived, the Issue will not proceed and any Open Offer
Entitlements and Excess Open Offer Entitlements admitted to CREST
will thereafter be disabled and application monies will be returned
(at the applicant's risk) without interest as soon as possible.
Resolution 1 grants the Directors authority to allot equity
securities under the Act to effect the Issue. Accordingly, this
resolution will be proposed as an Ordinary Resolution to ensure
that the Directors have authority under section 551 of the Act to
issue the New Ordinary Shares. This authority will expire at the
earlier of the Company's next AGM and the date falling 15 months
following the passing of this resolution.
The Company currently does not have sufficient authority to
allot shares under the Act to effect the Issue on a non pre-emptive
basis. Accordingly, Resolution 2 is a Special Resolution
conditional upon the passing of Resolution 1 to empower the
Directors, pursuant to section 570 of the Act, to allot New
Ordinary Shares up to a maximum aggregate nominal amount of
GBP1,213,593 (or such lower amount as reflects the New Ordinary
Shares to be issued pursuant to the Issue) on a non-pre-emptive
basis pursuant to the Issue. This authority will expire at the
earlier of the Company's next AGM and the date falling 15 months
following the passing of this resolution.
Directors' and TPL Participation
The Directors, their immediate family members and persons
connected with them, are interested in an aggregate of 13,727,528
Existing Ordinary Shares (representing approximately 8.0 per cent.
of the Existing Ordinary Shares). Each of the Directors, their
immediate family members and persons connected with them intend to
participate in the Issue and will in aggregate subscribe for
977,426 New Ordinary Shares.
The senior managers of TPL, their immediate family members and
persons connected with them, are interested in an aggregate of
11,209,438 (1) Existing Ordinary Shares (representing approximately
7.0 per cent. of the Existing Ordinary Shares). The senior managers
of TPL, their immediate family members and persons connected with
them, intend to participate in the Issue and will in aggregate
subscribe for 476,455 (1) New Ordinary Shares.
(1) - Includes Ordinary Shares held and intended to be
subscribed for by Simon Hope, a Director, his immediate family
members and persons connected with him,
Admission
Application will be made for the New Ordinary Shares to be
admitted to trading on AIM. It is expected that Admission will
become effective and dealings in the New Ordinary Shares will
commence by 8.00 a.m. on 2 April 2019 (whereupon an announcement
will be made by the Company to a Regulatory Information
Service).
General Meeting
The Issue is subject to a number of conditions, including
approval of Resolutions 1 and 2 to be proposed at the General
Meeting. The General Meeting will be held at 11.00 a.m. on 28 March
2019.
All Shareholders are entitled to attend and vote at the General
Meeting. In accordance with the Articles, all Shareholders present
in person or by proxy shall upon a show of hands have one vote and
upon a poll shall have one vote in respect of each Ordinary Share
held.
A Form of Proxy for use at the General Meeting is not
automatically being provided to Shareholders and will not
accompany the Prospectus. Shareholders wishing to submit a proxy vote can do so online at www.signalshares.com. To register, Shareholders will need their Investor Code, which can be found on the letter or email sent to them announcing the General Meeting. Once logged on, Shareholders can click on the 'Vote Online Now' button to vote. The Form of Proxy should be submitted as early as possible and, in any event, no later than 48 hours before the start of the meeting (excluding weekends and public holidays), or, if the General Meeting is adjourned, 48 hours before the time fixed for the adjourned meeting (excluding any part of a day that is not a working day). Shareholders may request a hard copy Form of Proxy directly from the Company's Registrars, Link Asset Services on 0871 664 0321. Calls cost 12p per minute plus your operator's network access charge. If you are outside the United Kingdom, please call +44 371 664 0321. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 a.m. to 5.30 p.m., Monday to Friday, excluding public holidays in England and Wales.
Shareholders who hold your Existing Ordinary Shares in
uncertificated form in CREST may vote using the CREST Proxy Voting
service in accordance with the procedures set out in the CREST
Manual. Further details are also set out in the notes accompanying
the Notice of General Meeting at the end of this Prospectus.
Proxies submitted via CREST must be received by the Company's agent
(ID: RA10) by no later than 11.00 a.m. on 26 March 2019.
The completion and return of a Form of Proxy or the use of the
CREST Proxy Voting service will not prevent Shareholders from
attending and voting at the General Meeting in person should they
wish to.The Notice of General Meeting will be set out in the
Prospectus.
Appendix 1: DEFINITIONS
In this announcement, the following expressions have the
following meanings unless the context requires otherwise:
Act the Companies Act 2006, as amended
from time to time;
Admission admission of the New Ordinary Shares
to trading on AIM pursuant to the
AIM Rules for Companies and such
admission becoming effective in
accordance with the AIM Rules for
Companies;
AGM annual general meeting;
AIM AIM, a market operated by the London
Stock Exchange;
AIM Rules for Companies the AIM Rules for Companies issued
by the London Stock Exchange and
those of its other rules which govern
the admission to trading, and the
operation of companies, on AIM;
Articles the articles of association of the
Company from time to time;
Board the board of Directors;
Business Day any day (other than a Saturday or
Sunday or any public holiday in
England and Wales) on which banks
generally are open for the transaction
of normal banking business in the
City of London;
certificated or certificated in relation to a share or other
form security, a share or other security,
title to which is recorded in the
relevant register of the share or
other security concerned as being
held in certificated form (that
is, not in CREST);
Closing Price 101.0 pence per Ordinary Share as
of 5.00 p.m. on 11 March 2019;
CREST the computerised settlement system
operated by Euroclear to facilitate
the transfer of title to shares
in uncertificated form;
CREST member a person who has been admitted by
Euroclear as a system-member (as
defined in the CREST Regulations);
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755);
Directors the non--executive directors of
the Company from time to time;
Enlarged Share Capital the Ordinary Share capital of the
Company on Admission comprising
the Existing Ordinary Shares and
the New Ordinary Shares;
Euroclear Euroclear UK & Ireland Limited,
the operator of CREST;
Excess Application Facility the facility for Qualifying Shareholders
to apply for Excess Shares;
Excess Open Offer Entitlements in respect of each Qualifying CREST
Shareholder who has taken up his
Open Offer Entitlement in full,
the entitlement (in addition to
the Open Offer Entitlement) to apply
for Excess Shares, credited to his
stock account in CREST pursuant
to the Excess Application Facility,
which may be subject to scaling-back
in accordance with the terms of
the Prospectus;
Excess Shares Open Offer Shares which may be applied
for by Qualifying Shareholders in
addition to their Open Offer Entitlement
pursuant to the Excess Application
Facility;
Existing Ordinary Share the Ordinary Shares in issue at
the date of the Prospectus;
Financial Conduct Authority the UK Financial Conduct Authority;
or FCA
Form of Proxy the form of proxy for use at the
General Meeting;
General Meeting the general meeting of the Company
to be convened pursuant to the Notice
of General Meeting and held at 11.00
a.m. on 28 March 2019 in order to
consider the Resolutions;
Gross Issue Proceeds up to GBP100.0 million;
Group the Company and its Subsidiary Undertakings;
G10 G10 Capital Limited of 134 Buckingham
Palace Road, London SW1W 9SA, the
Company's AIFM;
IPO the admission of the entire issued
share capital of the Company to
trading on AIM on 20 September 2017;
Issue Price 103.0 pence per New Ordinary Share;
last mile a term used to describe the final
stage or process involved in connecting
the end customer with the relevant
retailer or manufacturer in the
context of an on-line internet based
transaction;
London Stock Exchange or London Stock Exchange plc;
LSE
NAV net asset value;
Net Issue Proceeds the Gross Issue Proceeds less applicable
fees and expenses of the Issue;
Offer for Subscription the offer for subscription of New
Ordinary Shares at the Issue Price
on the terms and subject to the
conditions set out in the Prospectus;
Offer for Subscription Shares up to 97,087,378 New Ordinary Shares
to be issued by the Company pursuant
to the Offer for Subscription;
Open Offer the invitation by the Company to
Qualifying Shareholders to apply
for Open Offer Shares, on the term
and conditions set out in this announcement
and, in the case of Qualifying non-CREST
Shareholders, in the Open Offer
Application Form;
Open Offer Application Form the personalised application form
through which Qualifying Non-CREST
Shareholders may apply for New Ordinary
Shares under the Open Offer;
Open Offer Entitlements the entitlement of a Qualifying
Shareholder to apply for 2 Open
Offer Shares for every 5 Existing
Ordinary Shares held as at the Record
Time;
Open Offer Shares up to 66,400,000 New Ordinary Shares
being offered to Qualifying Shareholders
pursuant to the Open Offer;
Ordinary Resolution a resolution passed by more than
a 50 per cent. majority in accordance
with the Act;
Ordinary Shares ordinary shares of GBP0.01 each
in the capital of the Company;
Peel Hunt Peel Hunt LLP of Moor House, 120
London Wall, London, EC2Y 5ET, the
Company's nominated adviser;
Placee those Persons who have agreed to
subscribe for the Placing Shares;
Placing the conditional placing by Peel
Hunt of Placing Shares at the Issue
Price on the terms and subject to
the conditions set out in the Prospectus
and in the Placing and Open Offer
Agreement;
Placing and Open Offer Agreement the Placing and Open Offer Agreement
dated 12 March 2019 between the
Company, Peel Hunt and TPL;
Placing Shares up to 97,087,378 New Ordinary Shares
to be issued by the Company pursuant
to the Placing;
Property Portfolio the freehold and leasehold properties
owned directly or indirectly by
the Company as at the Latest Practicable
Date;
Qualifying CREST Shareholders Qualifying Shareholders holding
Ordinary Shares in uncertificated
form;
Qualifying Non-CREST Shareholders Qualifying Shareholders holding
Ordinary Shares in certificated
form;
Qualifying Shareholder holders of Ordinary Shares on the
register of members of the Company
at the Record Date other than Restricted
Shareholders;
Record Date 8 March 2019;
Record Time 5.00 p.m. on the Record Date;
Regulatory Information Service a Regulatory Information Service
or RIS that is approved by the FCA and
that is on the list of Regulatory
Information Service providers maintained
by the FCA;
Resolutions the resolutions to be proposed at
the General Meeting to, inter alia,
approve the Issue;
Restricted Shareholders subject to certain exceptions, Shareholders
who have registered addresses in,
who are incorporated in, registered
Shareholders in or otherwise resident or located
in, the United States or any other
restricted jurisdiction
holders of Ordinary Shares from
time to time;
Special Resolution a resolution passed by not less
than a 75 per cent. majority in
accordance with the Act;
Sterling or GBP Pounds Sterling, the currency of
the United Kingdom;
sq ft square foot or square feet, as the
context may require;
Subscription Form the application form for use in
connection with the Offer for Subscription;
Subsidiary Undertaking shall be construed in accordance
with section 1162 and Schedule 7
of the Act, save that an undertaking
shall also be treated, for the purposes
only of the membership requirement
contained in subsections 1162(2)(b)
and (d), as a member of another
undertaking if any shares in that
other undertaking are held by a
person (or its nominee) by way of
security or in connection with the
taking of security granted by the
undertaking or any of its subsidiary
undertakings;
uncertificated or in uncertificated Ordinary Shares held in uncertificated
form form in CREST and title to which,
by virtue of the CREST Regulations,
may be transferred by means of CREST;
and
WAULT weighted average unexpired lease
term.
Important notice
Disclaimer
The information 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.
This announcement is an advertisement and not a prospectus and
investors should not purchase any shares referred to in this
announcement except on the basis of information in the
Prospectus.
This announcement has been issued by and is the sole
responsibility of the Company.
The material in this announcement is for informational purposes
only and does not constitute an offer of securities for sale or a
solicitation of any offer to buy securities in the United States,
Australia, Canada, Japan, New Zealand, the Republic of South Africa
or any other jurisdiction in which such an offer or solicitation is
unlawful. The securities referred to herein have not been and will
not be registered under the United States Securities Act of 1933,
as amended (the Securities Act), or with any securities regulatory
authority of any state or other jurisdiction of the United States,
and may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and any
applicable securities laws of any state or other jurisdiction of
the United States. No public offering of securities will be made in
the United States. The securities have not been approved or
disapproved by the United States Securities Exchange Commission,
the securities commission of any state of the United States, or any
other regulatory authority of the United States.
Any purchase of Ordinary Shares in the proposed Issue should be
made solely on the basis of the information contained in the final
Prospectus to be issued by the Company in connection with the Issue
and Admission. No reliance may or should be placed by any person
for any purposes whatsoever on the information contained in this
announcement or on its completeness, accuracy or fairness. The
information contained in this announcement is given at the date of
its publication (unless otherwise marked) and is subject to
updating, revision and amendment when the definitive Prospectus is
published. In particular, the proposals referred to herein are
tentative and are subject to verification, material updating,
revision and amendment.
The timetable for the Issue, including the date of Admission,
may be influenced by a range of circumstances such as market
conditions. There is no guarantee that the Issue and the Admission
will occur and you should not base your financial decisions on the
Company's intentions in relation to the Issue and Admission at this
stage. Acquiring Ordinary Shares to which this announcement relates
may expose an investor to a significant risk of losing all of the
amount invested. Persons considering making such an investment
should consult an authorised person specialising in advising on
such investments. This announcement does not constitute a
recommendation concerning the Issue. The value of Ordinary Shares
can decrease as well as increase. Potential investors should
consult a professional advisor as to the suitability of the Issue
for the person concerned. Past performance or information in this
announcement or any of the documents relating to the Issue cannot
be relied upon as a guide to future performance.
G10 is authorised and regulated by the Financial Conduct
Authority. TPL is an appointed representative of G10 which is
authorised and regulated by the FCA. Each of G10 and Peel Hunt is
authorised and regulated in the United Kingdom by the FCA and is
acting exclusively for the Company and no-one else in connection
with the Issue and Admission. They will not regard any other person
as their respective clients in relation to the Issue and Admission
and will not be responsible to anyone other than the Company for
providing the protections afforded to their respective clients, nor
for providing advice in relation to the Issue and Admission, the
contents of this announcement or any transaction, arrangement or
other matter referred to herein.
In connection with the Issue and Admission, Peel Hunt and any of
its respective affiliates, acting as investors for their own
accounts, may purchase Ordinary Shares and in that capacity may
retain, purchase, sell, offer to sell or otherwise deal for their
own accounts in such Ordinary Shares and other securities of the
Company or related investments in connection with the Issue and the
Admission or otherwise. Accordingly, references in the Prospectus,
once published, to the Ordinary Shares being issued, offered,
subscribed, acquired, placed or otherwise dealt in should be read
as including any issue or offer to, or subscription, acquisition,
placing or dealing by Peel Hunt and any of their affiliates acting
as investors for their own accounts. Peel Hunt does not intend to
disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory
obligations to do so.
Peel Hunt, which is authorised and regulated by the FCA in the
United Kingdom, is acting as nominated adviser and broker for the
Company in connection with the Issue and no one else and will not
be responsible to anyone other than the Company for providing the
protections afforded to clients of Peel Hunt nor for providing
advice in relation to the Issue and/or any other matter referred to
in this Announcement.
None of the Company, TPL, G10 or Peel Hunt nor any of their
respective affiliates or agents accepts any responsibility or
liability whatsoever for, or makes any representation or warranty,
express or implied, as to this announcement, including the truth,
accuracy or completeness of the information in this announcement
(or whether any information has been omitted from the announcement)
or any other information relating to the Company, whether written,
oral or in a visual or electronic form, and howsoever transmitted
or made available or for any loss howsoever arising from any use of
the announcement or its contents or otherwise arising in connection
therewith. The Company, TPL, G10 and Peel Hunt and their respective
affiliates accordingly disclaim all and any liability whether
arising in tort, contract or otherwise which they might otherwise
have in respect of this announcement or its contents or otherwise
arising in connection therewith.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements involve known and unknown risks and uncertainties, many
of which are beyond the Company's control and all of which are
based on the Company's board of directors' current beliefs and
expectations about future events. These forward-looking statements
may be identified by the use of forward-looking terminology,
including the terms "believes", "estimates", "plans", "projects",
"anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives,
goals, future events or intentions. These forward-looking
statements include all matters that are not historical facts.
Forward-looking statements may and often do differ materially from
actual results. Any forward-looking statements reflect the
Company's current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's business,
the results of operations, financial condition prospects, growth
and dividend policy of the Company and the industry in which it
operates. Forward-looking statements speak only as of the date they
are made and cannot be relied upon as a guide to future
performance.
These forward-looking statements and other statements contained
in this announcement regarding matters that are not historical
facts involve predictions. No assurance can be given that such
future results will be achieved; actual events or results may
differ materially as a result of risks and uncertainties facing the
Company. Such risks and uncertainties could cause actual results to
vary materially from the future results indicated, expressed or
implied in such forward-looking statements. Forward looking
statements speak only as of the date of this announcement.
Certain figures contained in this announcement, including
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum or percentage change of
the numbers contained in this announcement may not conform exactly
with the total figure given.
Each of the Company, TPL, G10 and Peel Hunt and their respective
affiliates expressly disclaim any responsibility, obligation or
undertaking to update, review or revise any forward-looking
statement contained in this announcement whether as a result of new
information, future developments or otherwise.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) MiFID II; (b) Articles 9 and 10 of Commission
Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c)
local implementing measures (together, the "Product Governance
Requirements"), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the Product Governance Requirements) may
otherwise have with respect thereto, the New Ordinary Shares have
been subject to a product approval process, which has determined
that the New Ordinary Shares are: (i) compatible with an end target
market of retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment").
Notwithstanding the Target Market Assessment, it should be noted
that: (i) the price of the New Ordinary Shares may decline and
investors could lose all or part of their investment; (ii) New
Ordinary Shares offer no guaranteed income and no capital
protection; and (iii) an investment in New Ordinary Shares is
compatible only with investors who do not need a guaranteed income
or capital protection, who (either alone or in conjunction with an
appropriate financial or other adviser) are capable of evaluating
the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result
therefrom.
The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Issue. Furthermore, it is noted
that, notwithstanding the Target Market Assessment, Peel Hunt will
only procure investors who meet the criteria of professional
clients and eligible counterparties. For the avoidance of doubt,
the Target Market Assessment does not constitute: (a) an assessment
of suitability or appropriateness for the purposes of MiFID II; or
(b) a recommendation to any investor or group of investors to
invest in, or purchase, or take any other action whatsoever with
respect to New Ordinary Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the New Ordinary Shares and for
determining appropriate distribution channels.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCCKDDKNBKBPND
(END) Dow Jones Newswires
March 12, 2019 03:01 ET (07:01 GMT)
Warehouse Reit (LSE:WHR)
Historical Stock Chart
From Apr 2024 to May 2024
Warehouse Reit (LSE:WHR)
Historical Stock Chart
From May 2023 to May 2024