TIDMPHP
RNS Number : 2940F
Primary Health Properties PLC
22 May 2013
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND,
THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR INTO ANY OTHER
JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH
OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END
OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT, IS NOT AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND NEITHER THIS
ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT
OR COMMITMENT WHATSOEVER. SECURITIES MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM
REGISTRATION AND THE SECURITIES DESCRIBED HEREIN WILL BE SOLD IN
ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.
THE DEFINED TERMS SET OUT IN THE APPENDIX APPLY IN THIS
ANNOUNCEMENT.
22 May 2013
Primary Health Properties PLC
("PHP" or the "Company")
Proposed Firm Placing and Placing, Open Offer and Offer for
Subscription
and Notice of General Meeting
The Board of PHP announces a share issue to raise gross proceeds
of up to GBP60.0 million (approximately GBP58.0 million net of
expenses) through the issue of up to 19,047,618 new Ordinary Shares
by way of a Firm Placing and Placing, Open Offer and Offer for
Subscription at a price of 315 pence per New Share.
The Issue Price represents a discount of 6.3 per cent. to the
Closing Price of 336.25 pence per Ordinary Share on 21 May
2013.
PHP will shortly be publishing a Prospectus in connection with
the Capital Raising and will convene a General Meeting to approve
certain matters necessary to implement the proposed
fundraising.
Summary
-- Issue of 7,301,587 new Ordinary Shares through a Firm Placing
raising gross proceeds of GBP23.0 million. The Firm Placing is
underwritten by Numis and Peel Hunt
-- Issue of up to 11,746,031 new Ordinary Shares pursuant to a
Placing, Open Offer and Offer for Subscription to raise gross
proceeds of up to GBP37.0 million
-- Qualifying Shareholders are being offered the opportunity to
participate in the Open Offer on the basis of 1 Open Offer Share
for every 10 Existing Ordinary Shares
-- Qualifying Shareholders are also being offered the
opportunity to subscribe for New Shares in addition to their Basic
Entitlements under the Excess Application Facility
-- The Board has the ability to increase the size of the Capital
Raising by up to 25 per cent should there be sufficient demand so
that the gross proceeds would be approximately GBP75.0 million
-- The Capital Raising will enable the Company to continue
delivering its long-term strategy of growing the portfolio through
selected property acquisitions whilst maintaining gearing at an
appropriate level
-- The selective application of the net proceeds alongside
existing and future debt facilities will enable the Group to
enlarge the property portfolio by making property acquisitions
where the rental yield delivers a surplus return over its costs of
borrowing and management, generating a growing return to maintain
its progressive dividend policy
-- PHP has currently identified an acquisition pipeline of 22
properties with a total unaudited value of approximately GBP92.4
million. The Board believes this pipeline is indicative of the
attractive long term investment opportunities that exist for the
Company
-- The Capital Raising is conditional on the passing of the
Resolutions at the General Meeting. If the Resolutions are passed
and the other conditions to the Capital Raising are satisfied, it
is expected that dealings in the New Shares will commence at 8.00
a.m. on 13 June 2013
The Prospectus concerning the Capital Raising will shortly be
sent to Shareholders and will also be made available on the
Company's website www.phpgroup.co.uk. Further details are set out
in this announcement and in the Prospectus. A copy of the
Prospectus will be submitted to the National Storage Mechanism and
will shortly be available for inspection at:
http://www.Hemscott.com/nsm.do.
Harry Hyman, Managing Director of PHP said:
"PHP is benefiting from favourable market conditions which have
enabled us to continue executing our strategy of growing the
portfolio for the benefit of our shareholders. The Company has
successfully diversified its sources of debt finance and has been
able to secure financing at attractive margins. Our purchase of the
AMP portfolio in December, and subsequent refinancing of the
associated debt facilities, demonstrates our ability to identify
and execute earnings enhancing acquisitions which we believe will
enable the business to grow and help support our progressive
dividend policy. This capital raise will enable us to continue
delivering such acquisitions."
Further details of the Firm Placing and Placing, Open Offer and
Offer for Subscription are set out in this announcement. Readers
are referred to the important notice that applies to this
announcement. Unless otherwise stated, references to time contained
in this announcement are to UK time. This announcement has been
issued by and is the sole responsibility of Primary Health
Properties PLC.
For further information contact:
Primary Health Properties PLC +44(0) 20 7451 7050
Harry Hyman, Managing Director
Phil Holland
Pelham Bell Pottinger +44(0) 20 7861 3232
David Rydell / Victoria Geoghegan / Elizabeth
Snow
Numis Securities Limited +44(0) 20 7260 1000
Corporate Finance: Michael Meade / Andrew
Holloway
Corporate Broking: David Poutney / James
Black
Peel Hunt +44(0) 20 7418 8900
Corporate Finance: Capel Irwin / Hugh
Preston
Corporate Sales & Syndications: Andy
Crossley/ Jock Maxwell Macdonald
IMPORTANT NOTICE
This announcement is an advertisement and does not constitute a
prospectus or prospectus equivalent document. Nothing in this
announcement should be interpreted as a term or condition of the
Capital Raising. Investors should not subscribe for or purchase any
New Shares except on the basis of the information contained in the
Prospectus to be published today and incorporated by reference into
the Prospectus. The Prospectus, when published, will be made
available on the Company's website (www.phpgroup.co.uk) and will be
available for inspection at: http://www.Hemscott.com/nsm.do.
This announcement does not constitute or form part of any offer
or invitation to purchase, or otherwise acquire, subscribe for,
sell, otherwise dispose of or issue, or any solicitation of any
offer to sell, otherwise dispose of, issue, purchase, otherwise
acquire or subscribe for, any security in the capital of the
Company in any jurisdiction.
The information contained in this announcement is not for
release, publication or distribution to persons in the United
States, Canada, Australia, Japan, New Zealand or The Republic of
South Africa or in any jurisdiction where to do so would breach any
applicable law. The New Shares have not been and will not be
registered under the securities laws of such jurisdictions and may
not be offered, sold, taken up, exercised, resold, renounced,
transferred or delivered, directly or indirectly, within such
jurisdictions except pursuant to an exemption from and in
compliance with any applicable securities laws. No public offer of
the New Shares is being made by virtue of this announcement into
Australia, Canada, Japan, New Zealand, the Republic of South Africa
or the United States or any other jurisdiction outside the United
Kingdom in which such offer would be lawful. No action has been or
will be taken by the Company, Numis, Peel Hunt or any other person
to permit a public offering or distribution of this announcement or
any other offering or publicity materials or the New Shares in any
jurisdiction where action for that purpose may be required, other
than in the United Kingdom.
The New Shares and any entitlements pursuant to the open offer
and offer for subscription will not be, registered under the US
Securities Act of 1933, as amended (the "US Securities Act"), or
the relevant laws of any state, province or territory of the United
States. Unless so registered, the New Shares and any entitlements
pursuant to the open offer and offer for subscription may not be
offered, sold, taken up or exercised, within the United States
except in a transaction that is exempt from, or not subject to, the
registration requirements of the US Securities Act. There will be
no public offer in the United States. Outside the United States,
the New Shares are being offered in reliance on Regulation S under
the US Securities Act.
This announcement has been issued by and is the sole
responsibility of the Company.
Numis Securities Limited, which is authorised and regulated in
the United Kingdom by the Financial Conduct Authority, is acting
for Primary Health Properties PLC and for no-one else in connection
with the contents of this and will not be responsible to anyone
other than Primary Health Properties PLC for providing the
protections afforded to clients of Numis Securities Limited, or for
providing advice in relation to the contents of this announcement
or any matters referred to herein. Numis Securities Limited is not
responsible for the contents of this announcement. Numis Securities
Limited has given and not withdrawn its written consent to the
issue of this announcement with the inclusion of the reference to
its name in the form and context in which it is included.
Peel Hunt LLP, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting for Primary
Health Properties PLC and for no-one else in connection with the
contents of this announcement and will not be responsible to anyone
other than Primary Health Properties PLC for providing the
protections afforded to clients of Peel Hunt LLP, or for providing
advice in relation to the contents of this announcement or any
matters referred to herein. Peel Hunt LLP is not responsible for
the contents of this announcement. Peel Hunt LLP has given and not
withdrawn its written consent to the issue of this announcement
with the inclusion of the reference to its name in the form and
context in which it is included.
This announcement has been prepared for the purposes of
complying with the applicable law and regulation of the United
Kingdom and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been
prepared in accordance with the laws and regulations of any
jurisdiction outside of the United Kingdom.
Note regarding forward-looking statements:
This announcement includes statements that are, or may be deemed
to be, forward-looking statements. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the terms anticipates, believes, estimates, expects,
intends, may, plans, projects, should or will, 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. They appear in a number of places
throughout this announcement and include, but are not limited to,
statements regarding the Company's and/or Directors' intentions,
beliefs or current expectations concerning, amongst other things,
the Group's results of operations, financial position, prospects,
growth, strategies and expectations for the primary healthcare
market.
Any forward-looking statements in this announcement 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 Group's operations,
results of operations and growth strategy. Investors should
specifically consider the factors identified in this announcement
which could cause actual results to differ before making an
investment decision. Subject to the requirements of the Prospectus
Rules, the Disclosure and Transparency Rules and the Listing Rules,
none of the Company, the Directors, Numis and Peel Hunt undertake
any obligation publicly to release the result of any revisions to
any forward-looking statements in this announcement that may occur
due to any change in the Company's expectations or to reflect
events or circumstances after the date of this announcement. Past
performance of the Company is not necessarily indicative of future
performance.
You are advised to read this announcement and, once available
the Prospectus and the information incorporated by reference
therein, in their entirety for a further discussion of the factors
that could affect the Company's or the Group's future performance
and the industries in which they operate. In light of these risks,
uncertainties and assumptions, the events described in the
forward-looking statements in this announcement may not occur.
Neither the content of the Company's website (or any other
website) nor any website accessible by hyperlinks on the Company's
website (or any other website) is incorporated in, or forms part
of, this announcement.
Any person receiving this announcement is advised to exercise
caution in relation to the Capital Raising. If in any doubt about
any of the contents of this announcement, independent professional
advice should be obtained.
This summary should be read in conjunction with the full text of
the announcement which follows.
Expected timetable
Record Date for entitlements under the Open close of business
Offer on 16 May 2013
Announcement of the Capital Raising, publication 22 May 2013
and posting of the Prospectus, Form of Proxy
and Application Form
Ex-entitlement date for the Open Offer 23 May 2013
Basic Entitlements and Excess CREST Open Offer as soon as possible
Entitlements credited to stock accounts of after 8.00 a.m. on
Qualifying CREST Shareholders into CREST 23 May 2013
Recommended latest time for requesting withdrawal 4.30 p.m. on 5 June
of Basic Entitlements and Excess CREST Open 2013
Offer Entitlements into CREST
Latest time for depositing Basic Entitlements 3.00 p.m. on 6 June
and Excess CREST Open Offer Entitlements into 2013
CREST
Latest time and date for splitting of Application 3.00 p.m. on 7 June
Forms (to satisfy bona fide market claims only) 2013
Latest time and date for receipt of Forms of 10.00 a.m. on 10
Proxy and receipt of electronic proxy appointments June 2013
via the CREST system
Latest time and date for receipt of completed 11.00 a.m. on 11
Application Form and payment in full under June 2013
the Open Offer or settlement of relevant CREST
Instruction
Latest time and date for receipt of completed 11.00 a.m. on 11
Subscription Form and payment in full under June 2013
the Offer for Subscription or settlement of
relevant CREST Instruction
Latest time and date for receipt of Placing 11.00 a.m. on 11
commitments June 2013
General Meeting 10.00 a.m. on 12
June 2013
Expected date of announcement of results of 12 June 2013
the General Meeting and the Capital Raising
through a Regulatory Information Service
Expected date of Admission and commencement by 8.00 a.m. on 13
of dealings in New Shares and CREST Members' June 2013
accounts credited in respect of New Shares
in uncertificated form
Expected date of despatch of definitive share No later than 18
certificates for New Shares in certificated June 2013
form
The times set out in the expected timetable of principal events
above and mentioned throughout this announcement are times in
London unless otherwise stated, and may be adjusted by the Company
in consultation with or, if required, with the agreement of Numis
and Peel Hunt, in which event details of the new times and dates
will be notified to the Financial Conduct Authority, the London
Stock Exchange and, where appropriate, Shareholders.
Introduction
The Board announces that the Company intends to raise up to
GBP60.0 million (approximately GBP58.0 million net of all Capital
Raising costs and expenses) in a Capital Raising by way of a Firm
Placing and a Placing, Open Offer and Offer for Subscription
consisting of the issue of up to 19,047,618 New Shares at an Issue
Price of 315 pence per New Share. The Board has the ability to
increase the size of the Issue by up to 25 per cent should there be
sufficient demand. It is the Board's opinion that the Capital
Raising will enable the Company to continue delivering its
long-term strategy of growing the portfolio through selected
property acquisitions in line with its prudent acquisition
policies, whilst maintaining gearing at a conservative level. The
Board believes that investing the proceeds in primary care
properties in the current environment, will generate a favourable
return, thus facilitating a return to full dividend cover whilst
enabling the Company to maintain a progressive dividend policy.
Shareholders will be asked to approve the Resolutions to approve
the Capital Raising, details of which are set out within this
announcement and in the Prospectus. The General Meeting has been
convened for 10.00 a.m. on 12 June 2013 at the Company's offices at
Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB.
Background to and reasons for the Capital Raising
Overview of the Company, its objectives and investment
characteristics
The principal activity of PHP is the generation of rental income
and capital growth through investments in primary healthcare
property in the United Kingdom, leased principally to GPs, NHS
bodies and other associated healthcare users.
The Directors believe that PHP has little development risk and a
low risk portfolio due to its:
-- strong tenant covenants relative to the UK property market,
given that 90 per cent. of the Group's rent roll is paid directly
or indirectly by the Government;
-- long leases and effectively upward only rent reviews; and
-- minimal vacancies.
Accordingly, the Directors believe that PHP offers strong and
visible cash flows to Shareholders. Historically, the increase in
rents receivable achieved through the rent review process has
broadly matched increases in the RPI. If this trend continues, the
Directors believe that an investment in PHP will provide an
effective hedge against inflation.
The current quantum of the Group's property assets enables it to
spread its fixed costs over a relatively large portfolio and the
Company expects further benefits from economies of scale as PHP
grows in size.
The Board believes that the Joint Managers have considerable
expertise in sourcing deals, the Company's cost structure is
well-defined, the pipeline of acquisition opportunities remains
significant, and the current positive gap between yields and
financing costs is providing opportunities for PHP to make
immediately earnings enhancing and cash generating property
investments.
On 18 May 2012, the Company raised a net sum of GBP18.4 million
from an equity issue which was then followed on 23 July 2012 by the
Company becoming the first REIT to issue a retail bond, raising
GBP75 million on a seven year, unsecured basis. The Company has
acted swiftly to invest these funds, completing the acquisition of
a further 22 investment properties for a total consideration of
over GBP109 million since the most recent equity issue in May
2012.
The Directors consider that the attractive investment
characteristics of the Company and the stability of its underlying
income and shareholder returns have contributed to PHP
outperforming the FTSE All Share Real Estate Investment Trust Index
by 67.5 per cent. over the five years ended 30 April 2013. The
Directors believe that long leases, strong tenant covenants and
little or no oversupply in the primary healthcare property market
are the principal reasons why yields on the Group's portfolio have
remained resilient in comparison to other sectors of the property
industry.
Reasons for the Capital Raising
It is the Board's opinion that the Capital Raising will enable
the Company to continue delivering its long-term strategy of
growing the portfolio through selected property acquisitions whilst
maintaining gearing at an appropriate level and supporting its
progressive dividend policy.
The table below sets out a summary of the current pipeline of
acquisition opportunities where the Company has agreed acquisition
terms with the vendors. All are subject to contract and currently
in the hands of solicitors for documenting and completion. The
Company is under no contractual obligation and there can be no
guarantee that the Group will complete the acquisition of any of
these investment opportunities. The Directors consider that this
pipeline of medical properties, if substantially completed, would
significantly benefit the Company:
Geographical region No. of indicative Acquisition Rent roll
pipeline opportunities* cost (GBPm)* (GBPm)*
North 3 30.7 1.8
Midlands 3 7.6 0.5
South East 7 22.7 1.4
South West 2 5.5 03
Wales 4 14.2 0.9
Scotland 3 11.7 0.7
--------------------- ------------------------- -------------- ----------
Total 22 92.4 5.6
--------------------- ------------------------- -------------- ----------
*Unaudited
The Board believes that this pipeline is indicative of the
attractive and suitable investment opportunities that currently
exist and are expected to arise. This is evidenced by a number of
additional acquisition opportunities that are actively being
negotiated with vendors and has led the Board to conclude that now
is an appropriate time to seek to raise sufficient additional
capital to exploit these opportunities.
Fulfilment of some or all of these pipeline opportunities would
significantly increase the size and rent roll of the Group's
portfolio and help to enable PHP to gain further critical mass,
regarded by the Directors as necessary to compete effectively with
other property companies, as well as enabling it to benefit from
some additional economies of scale and increase financing
flexibility. In addition, the Board anticipates that the earnings
enhancement derived from the successful completion of some or all
of these investment opportunities would expedite the Group's
ability to pay a fully covered dividend whilst supporting a
progressive dividend policy. The Board also expects that the
increased market capitalisation of the Company following the
Capital Raising will improve the liquidity of the Ordinary Shares,
to the benefit of all Shareholders.
The Board has consistently believed that, despite the secure
nature of the Company's tenants and the long lease expiry profile,
a conservative consolidated level of gearing of below 65 per cent.
is appropriate for the Company. The effect of the Capital Raising
will be to allow PHP to continue to pursue its growth strategy and
maintain maximum funding flexibility on an ongoing basis. The
proceeds will be used alongside existing and future banking
facilities to acquire further assets in line with its acquisition
policy, whilst maintaining a conservative LTV ratio and, in due
course, facilitating the return to full dividend cover.
PHP's LTV ratio as at 31 December 2012 was approximately 60.9
per cent. The Group now has no consolidated LTV covenants within
its range of debt facilities. Specific individual loan facility
maximum LTV limits range from 60 per cent. to 70 per cent. and are
calculated with reference to dedicated property pools that form the
security for an individual facility. A proportion of the Group's
property portfolio is currently unfettered with debt and the Group
has the ability to transfer such properties into the security pools
of its debt facilities if required.
Current trading trends and prospects
The key priority for the Board is to return the Company to full
dividend cover at the earliest opportunity, and the Directors
believe that a combination of continuing to purchase assets that
yield a satisfactory surplus over PHP's marginal cost of debt,
managing the existing portfolio to create added value and income,
and agreeing rental increases at review will serve to facilitate
this primary objective.
The Board believes that the operating and financial environment
remains very positive and that the Group is ideally placed to
provide the new modern specialist premises demanded by the
healthcare professionals who are PHP'#s tenants. As such, the Board
remains confident in the prospects for the Group.
Principal Terms of the Capital Raising
PHP is proposing to raise gross proceeds of up to approximately
GBP60.0 million (approximately GBP58.0 million net of expenses) by
the issue of up to 19,047,618 new Ordinary Shares through the
Capital Raising at 315 pence per New Share, although the Directors
have the ability to increase the size of the Issue by up to 25 per
cent. such that the gross proceeds would be approximately GBP75.0
million (approximately GBP72.7 million net of expenses). The Firm
Placing is underwritten by Numis and Peel Hunt. The Board considers
the Firm Placing and 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 to an extent through the Open
Offer.
Assuming that the size of the Issue is approximately GBP60.0
million, 7,301,587 of the New Shares will be issued through the
Firm Placing and 11,746,031 of the New Shares will be issued
through the Placing, Open Offer and Offer for Subscription (the
actual number of New Shares to be issued pursuant to the Issue will
be notified by the Company via a Regulatory Information Service
announcement prior to Admission). Qualifying Shareholders are being
offered the right to subscribe for Open Offer Shares in accordance
with the terms of the Open Offer. Qualifying Shareholders are not
being offered the right to subscribe for the Firm Placed Shares.
Qualifying Shareholders applying for their Basic Entitlements may
also apply, under the Excess Application Facility, for Excess
Shares in excess of their Basic Entitlements as described below.
The Company is also making the Offer for Subscription as described
below in the UK only.
All elements of the Capital Raising have the same Issue Price.
The Issue Price was set having regard to the prevailing market
conditions and the size of the Issue, and represents a discount of
approximately 6.3 per cent. to the Closing Price of 336.25 pence
per Ordinary Share on 21 May 2013 (being the last Business Day
before the announcement of the Capital Raising). The Board believes
that both the Issue Price and the discount are appropriate.
The New Shares, when issued and fully paid, will rank in full
for all dividends or distributions made, paid or declared after the
date of the Prospectus or otherwise pari passu in all respects with
the Existing Ordinary Shares.
On the basis that the Issue size is GBP60.0 million, the Capital
Raising is expected to result in 19,047,618 new Ordinary Shares
being issued (representing approximately 25.0 per cent. of the
existing issued share capital). On the basis that the Issue size is
increased to a maximum of GBP75.0 million, the Capital Raising is
expected to result in 23,809,522 new Ordinary Shares being issued
(representing approximately 31.3 per cent. of the existing issued
share capital).
The Capital Raising has been structured in a way that is
expected to have the effect of creating distributable reserves
equal to the net proceeds of the Capital Raising less the par value
of the New Shares issued by the Company. It should be possible for
the Company to declare dividends from the aggregate distributable
reserves created by the Capital Raising (together with any other
distributable reserves of the Company) provided that the Company
has sufficient cash resources to fund such dividends, the
distributable reserves have not otherwise been reduced and the
Directors consider it appropriate to declare such dividends.
Some questions and answers in relation to the Open Offer,
together with details of further terms and conditions of the Open
Offer, including the procedure for application and payment and the
procedure in respect of entitlements not taken up, are set out in
the Prospectus and, where relevant, are set out in the Application
Form.
Details of further terms and conditions of the Offer for
Subscription, including the procedure for application and payment
and the procedure in respect of Subscription Entitlements, are set
out in the Prosecptus and, where relevant, are set out in the
Subscription Form. The Subscription form is contained in the
Prospectus and will be available at the Company's website.
Firm Placing
The Firm Placees have conditionally agreed to subscribe for
7,301,587 of the New Shares at the Issue Price (representing gross
proceeds of approximately GBP23.0 million). The Firm Placed Shares
are not subject to clawback to satisfy the valid applications by
Qualifying Shareholders under the Open Offer and are not part of
the Placing, Open Offer and Offer for Subscription. The Firm
Placing is underwritten by Numis and Peel Hunt. The terms and
conditions of the Firm Placing and the Placing will be contained in
the Prospectus.
Open Offer
The Directors recognise the importance of pre-emption rights to
Shareholders and consequently 7,609,824 of the New Shares are being
offered to existing Shareholders by way of the Open Offer. The Open
Offer provides an opportunity for Qualifying Shareholders to
participate in the fundraising by both subscribing for their
respective Basic Entitlements and by subscribing for Excess Shares
under the Excess Application Facility, subject to availability. The
Placing and the Offer for Subscription may be scaled back at the
Directors' discretion to increase the size of the Open Offer by
allocating New Shares that could otherwise be available under the
Placing and/or the Offer for Subscription to be available to
Qualifying Shareholders through the Excess Application
Facility.
To the extent that valid applications are not received in
respect of any of the Open Offer Shares under the Open Offer, such
Open Offer Shares may be allocated to Qualifying Shareholders to
meet any valid applications under the Excess Application
Facility.
Basic Entitlements
Qualifying Shareholders are being offered the opportunity to
subscribe at the Issue Price for Open Offer Shares on the following
basis:
1 Open Offer Share for every 10 Existing Ordinary Shares
registered in their name at the close of business on the Record
Date.
Basic Entitlements under the Open Offer will be rounded down to
the nearest whole number and any fractional entitlements to Open
Offer Shares will not be allocated but will be aggregated and sold
for the benefit of the Company under the Excess Application
Facility and/or the Placing and/or the Offer for Subscription.
If you have sold or otherwise transferred all of your Existing
Ordinary Shares before the ex--entitlement date, you are not
entitled to participate in the Open Offer.
Qualifying Shareholders are also being offered the opportunity
to subscribe for Excess Shares in excess of their Basic
Entitlements as described below.
Excess Application Facility
Qualifying Shareholders may apply to acquire Excess Shares using
the Excess Application Facility, should they wish. Qualifying
Non-CREST Shareholders wishing to apply for Excess Shares, may do
so by completing the relevant sections on the Application Form.
Qualifying CREST Shareholders who wish to apply to subscribe for
more than their Basic Entitlements will have Excess CREST 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 maximum amount of New Shares to be issued under the Excess
Application Facility (the "Maximum Excess Application Number") will
be limited to: (a) the maximum size of Issue (as may be increased
by the Directors by up to 25 per cent. to approximately GBP75.0
million); less (b) the aggregate of the Firm Placed Shares, the New
Shares issued under the Open Offer pursuant to Qualifying
Shareholders' Basic Entitlements and any New Shares that the
Directors determine to issue under the Placing and Offer for
Subscription. Excess Applications will therefore only be satisfied
to the extent that: (a) other Qualifying Shareholders do not apply
for their Basic Entitlements in full; (b) where fractional
entitlements have been aggregated and made available under the
Excess Application Facility; and (c) if the Directors exercise
their discretion to reallocate New Shares that would otherwise have
been available under the Placing or Offer for Subscription to the
Excess Application Facility. Qualifying Shareholders can apply for
up to the Maximum Excess Application Number of New Shares under the
Excess Application Facility, although applications under the Excess
Application Facility shall be allocated in such manner as the
Directors may determine, in their absolute discretion, and no
assurance can be given that the applications by Qualifying
Shareholders will be met in full or in part or at all. Excess
monies in respect of applications which are not met in full will be
returned to the applicant (at the applicant's risk) without
interest as soon as practicable thereafter by way of cheque or
CREST payment, as appropriate.
The Excess Application Facility will be comprised of New Shares
that are not taken up by Qualifying Shareholders under the Open
Offer pursuant to their Basic Entitlements and any New Shares that
the Directors determine should be reallocated from the Placing
and/or the Offer for Subscription to satisfy demand from Qualifying
Shareholders in preference to prospective new investors. Excess
applications may be allocated in such manner as the Directors
determine, in their absolute discretion, and no assurance can be
given that applications by Qualifying Shareholders under the Excess
Application Facility will be met in full or in part or at all.
Placing
To the extent that any New Shares remain unallocated via the
Excess Application Facility and are not allocated to the Offer for
Subscription, New Shares will be made available under the Placing.
New Shares are being allocated to Placees pursuant to the Placing
Agreement. The Placing will not be underwritten by Numis and Peel
Hunt and may be scaled back in favour of the Open Offer and/or the
Offer for Subscription. The terms and conditions of the Placing and
the Firm Placing will be contained in the Prospectus.
Offer for Subscription
To the extent that any New Shares remain unallocated via the
Excess Application Facility and are not allocated to the Placing,
New Shares will be made available under the Offer for Subscription.
The Offer for Subscription may be scaled back in favour of the Open
Offer and/or the Placing,
The Offer for Subscription is only being made in the UK but,
subject to applicable law, the Company may allot New Shares on a
private placement basis to applicants in other jurisdictions. The
terms and conditions of application under the Offer for
Subscription will be set out in the Prospectus and, where relevant,
in the Subscription Form. These terms and conditions should be read
carefully before an application is made. Investors should consult
their stockbroker, bank manager, solicitor, accountant or other
financial adviser if they are in doubt.
Dilution
Assuming that the size of the Issue is approximately GBP60.0
million, if a Qualifying Shareholder does not take up his Basic
Entitlements in full, such Qualifying Shareholder's holding will be
diluted by up to approximately 20.0 per cent. as a result of the
Firm Placing and the Placing, Open Offer and Offer for
Subscription. Furthermore, a Qualifying Shareholder who takes up
his Basic Entitlements in full in respect of the Open Offer (and
does not receive any other New Shares pursuant to the Capital
Raising) will suffer dilution of approximately 12.0 per cent. to
his shareholding in the Company as a result of the Firm
Placing.
If the Directors increase the Issue by 25 per cent, the size of
the Issue will be approximately GBP75.0 million and if a Qualifying
Shareholder does not take up his Basic Entitlements in full, such
Qualifying Shareholder's holding will be diluted by up to
approximately 23.8 per cent. as a result of the Firm Placing and
the Placing, Open Offer and Offer for Subscription. Furthermore, a
Qualifying Shareholder who takes up his Basic Entitlements in full
in respect of the Open Offer (and does not receive any other New
Shares pursuant to the Capital Raising) will suffer dilution of
approximately 16.2 per cent. to his shareholding in the Company as
a result of the Firm Placing and the increase in size of the
Issue.
Fractions
Fractions of Open Offer Shares will not be allocated to
Qualifying Shareholders in the Open Offer and fractional
entitlements under the Open Offer will be aggregated and sold in
the market place for the benefit of the Company under the Excess
Application Facility and/or the Placing and/or the Offer for
Subscription.
Basis of allocation under the Capital Raising
The Placing may be scaled back in favour of the Open Offer or
the Offer for Subscription and the Offer for Subscription may be
scaled back in favour of the Placing 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 Shares
that would otherwise be available under the Placing and/or the
Offer for Subscription to be available to Qualifying Shareholders
through the Excess Application Facility under the Open Offer. Any
New 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
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 Capital Raising is conditional, inter alia, upon:
-- the passing of the Resolutions without amendment to be
proposed at the General Meeting to be held on 12 June 2013;
-- the Placing Agreement having become unconditional in all
respects save for the condition relating to Admission and not being
terminated in accordance with its terms before Admission occurs;
and
-- Admission occurring by not later than 8.00 a.m. on 13 June
2013 (or such later time and date as the Company, Numis and Peel
Hunt may agree, not being later than 8.00 a.m. on 30 June
2013).
Prior to Admission, Numis and Peel Hunt may terminate the
Placing Agreement in certain defined circumstances. Following
Admission, the Placing Agreement cannot be terminated.
If the conditions of the Placing Agreement are not fulfilled on
or before 8.00 a.m. on 30 June 2013, application monies will be
returned to applicants (at the applicant's risk) without interest
as soon as possible thereafter.
Admission
Applications will be made to the FCA and to the London Stock
Exchange, respectively, for the New Shares to be admitted to the
listing on the premium segment of the Official List and to trading
on the London Stock Exchange's main market for listed
securities.
Subject to the conditions to the Capital Raising having been
satisfied (or, if applicable, waived) it is expected that Admission
will occur at 8.00 a.m. on or around 13 June 2013.
General meeting
A General Meeting is to be held on 12 June 2013 at 10.00 a.m. at
the Company's offices at Ground Floor, Ryder Court, 14 Ryder
Street, London, SW1Y 6QB. The full text of the Notice of General
Meeting is set out in the Prospectus.
At the General Meeting, the Resolutions will be proposed to:
-- approve the Capital Raising;
-- grant the Directors authority pursuant to section 551 of the
Companies Act to allot Ordinary Shares generally and in connection
with the Firm Placing, Placing and Open Offer; and
-- disapply where relevant statutory pre-emption rights set out
in section 561 of the Companies Act.
Recommendation
The Board considers the Capital Raising and the passing of the
Resolutions to be in the best interests of Shareholders as a
whole.
Accordingly, the Board recommends unanimously that Shareholders
vote in favour of the Resolutions, as each of the Directors has
irrevocably undertaken to do in respect of their own beneficial
holding, to the extent that they have any such holding, which
together amount to 4,687,146 Ordinary Shares, representing
approximately 6.2 per cent. of the Ordinary Shares in issue as at
21 May 2013.
Shareholders should also be aware that if the Resolutions to be
proposed at the General Meeting are not passed, the Capital Raising
will lapse.
It is anticipated that a Prospectus providing further details of
the Firm Placing and Placing, Open Offer and Offer for Subscription
and convening the General Meeting will be published today and
posted to Shareholders. Copies of the Prospectus will be available
from the registered office of PHP at Ground Floor, Ryder Court, 14
Ryder Street, London SW1Y 6QB. The Prospectus will also be
available free of charge during normal business hours on any
weekday (except Saturdays, Sundays and public holidays) from the
date of its publication until Admission at the offices of Nabarro
LLP, Lacon House, 84 Theobald's Road, London WC1X 8RW.
APPENDIX
In this announcement, the following expressions have the
following meanings unless the context requires otherwise:
Admission On Admission or more admissions of the
New Shares to the Official List becoming
effective in accordance with the Listing
Rules and the admission of such shares
to trading on the premium segment of the
London Stock Exchange's main market for
listed securities becoming effective in
accordance with the Admission and Disclosure
Standards
Admission and Disclosure the "Admission and Disclosure Standards"
Standards of the London Stock Exchange containing,
among other things, the admission requirements
to be observed by companies seeking admission
to trading on the London Stock Exchange's
main market for listed securities
Application Form the application form accompanying the
Prospectus on which Qualifying Non-CREST
Shareholders may apply for Open Offer
Shares under the Open Offer (including
under the Excess Application Facility)
Basic Entitlements the pro rata entitlement of Qualifying
Shareholders to subscribe for 1 Open Offer
Share for every 10 Existing Ordinary Shares
registered in their name as at the Record
Date
Board the Directors of PHP
Business Day a day (other than a Saturday, Sunday or
public holiday) on which banks are generally
open for business in the City of London
for the transaction of normal banking
business
Capital Raising the Firm Placing and the Placing, Open
Offer and the Offer for Subscription
Capital Raising Shares all New Shares to be issued pursuant to
the Capital Raising
certificated or in certificated in relation to a share or other security,
form a share or other security which is not
in uncertificated form
Closing Price the closing middle market quotation as
derived from the Daily Official List of
the London Stock Exchange on a particular
day
Companies Act the Companies Act 2006 as amended
Company Primary Health Properties PLC
Corporate Governance the UK Corporate Governance Code published
Code in June 2010 by the Financial Reporting
Council
CREST the relevant system, as defined in the
CREST Regulations (in respect of which
Euroclear is the operator as defined in
the CREST Regulations)
CREST Regulations or the Uncertificated Securities Regulations
Regulations 2001 (SI 2001 No. 01/378), as amended
Daily Official List the daily record setting out the prices
of all trades in shares and other securities
conducted on the London Stock Exchange
Directors the executive director and non-executive
directors of the Company
Disclosure and Transparency the rules relating to the disclosure of
Rules information made in accordance with section
73A(3) of the FSMA
EU or European Union the European Union
Euroclear Euroclear & Ireland Limited, the operator
of CREST
Excess Application Facility the arrangement pursuant to which Qualifying
Shareholders may apply for additional
Open Offer Shares in excess of their Basic
Entitlements in accordance with the terms
and conditions of the Open Offer
Excess CREST Open Offer in respect of each Qualifying CREST Shareholder,
Entitlements the entitlement (in addition to their
basic entitlement) to apply for Existing
Ordinary Shares pursuant to the Excess
Application Facility
Excess Shares Open Offer Shares applied for by Qualifying
Shareholders under the Excess Application
Facility
Excluded Territories Australia, Canada, Japan, South Africa
and New Zealand and any other jurisdiction
where the extension or availability of
the Capital Raising (and any other transaction
contemplated thereby) would breach any
applicable law or regulation
ex-entitlement date the date on which the Ordinary Shares
trade ex-entitlement to participate in
the Open Offer, expected to be 23 May
2013
Existing Ordinary Shares the 76,098,244 Ordinary Shares in issue
as at the date of this announcement
Financial Conduct Authority the Financial Conduct Authority of the
or FCA United Kingdom
Firm Placees any persons who have agreed to subscribe
for Firm Placed Shares pursuant to the
Firm Placing
Firm Placed Shares the 7,301,587 new Ordinary Shares which
are to be allocated pursuant to the Firm
Placing
Firm Placing the conditional placing by Numis and Peel
Hunt on behalf of the Company of the Firm
Placed Shares pursuant to the Placing
Agreement
Form of Proxy the form of proxy for use at the General
Meeting
FSMA the Financial Services and Markets Act
2000, as amended
General Meeting the general meeting of PHP to be held
at 10.00 a.m. on 12 June 2013, notice
of which is set out in Part 10 of the
Prospectus
GP General Practitioner
Group the Company and its subsidiaries at the
date of this announcement
Issue the issue of New Shares pursuant to the
Capital Raising
Issue Price 315 pence per New Share
JOHCML J O Hambro Capital Management Limited
of Ground Floor, Ryder Court, 14 Ryder
Street, London SW1Y 6QB (a wholly-owned
subsidiary of J O Hambro Capital Management
Group Limited)
Joint Managers Nexus and JOHCML
Listing Rules the Listing Rules made by the FCA under
Part VI of FSMA
London Stock Exchange London Stock Exchange plc
New Shares the Ordinary Shares to be issued under
the terms set out in the Prospectus
Nexus Nexus Tradeco Limited of Greener House,
66-68 Haymarket, London SW1Y 4RF
NHS the National Health Service
Notice of General Meeting the notice of the General Meeting contained
in Part 13 of the Prospectus
Numis Numis Securities Limited
Offer for Subscription the offer for subscription to the public
in the UK of the New Shares on the terms
set out in the Prospectus and (where applicable)
the Subscription Form
Official List the Official List of the Financial Conduct
Authority pursuant to Part VI of FSMA
Open Offer the conditional invitation to Qualifying
Shareholders to subscribe for the Open
Offer Shares at the Issue Price on the
terms and subject to the conditions set
out in the Prospectus and in the case
of Qualifying Non-CREST Shareholders only,
the Application Form
Open Offer Shares means the New Shares being offered in
aggregate pursuant to the Open Offer together,
where the context requires, with the Excess
Application Facility
Ordinary Shares or Shares ordinary shares of 50 pence each in the
share capital of the Company
PHP or the Company Primary Health Properties PLC, a public
limited company incorporated in England
and Wales with registered number 03033634
PHP Group or Group the Company and each of its subsidiaries
and subsidiary undertakings from time
to time
Overseas Shareholders Shareholders with registered addresses
outside the United Kingdom or who are
citizens or residents of countries outside
the United Kingdom
Peel Hunt Peel Hunt LLP
Placed Shares the New Shares to be allotted and issued
by the Company pursuant to the Placing
Placees any persons who have agreed to subscribe
for Placed Shares
Placing the conditional placing by Numis and Peel
Hunt on behalf of the Company of the Placed
Shares pursuant to the Placing Agreement
Placing Agreement the placing agreement dated 22 May 2013
between the Company, Numis and Peel Hunt
relating to the Capital Raising
Pounds Sterling or GBP the lawful currency of the United Kingdom
Prospectus document dated 22 May 2013 comprising
a combined prospectus and notice of general
meeting
Prospectus Rules the Prospectus Rules published by the
FCA under Section 73A of FSMA
Qualifying CREST Shareholders Qualifying Shareholders holding Ordinary
Shares in uncertificated form in CREST
at close of business on the Record Date
Qualifying Non-CREST Qualifying Shareholders holding Ordinary
Shareholders Shares in certificated form at close of
business on the Record Date
Qualifying Shareholders holders of Ordinary Shares on the register
of members of the Company at the Record
Date with the exclusion (subject to certain
exemptions) of Overseas Shareholders
Record Date 5.00 p.m. on 16 May 2013
Regulatory Information one of the regulatory information services
Service authorised by the Financial Conduct Authority
to receive, process and disseminate regulatory
information in respect of listed companies
REIT Real Estate Investment Trust
Resolutions the resolutions to be proposed at the
General Meeting set out in the Notice
of General Meeting
RPI retail price index
Shareholder a holder of Ordinary Shares from time
to time
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
Subscription Entitlement in respect of each Selected Subscription
Applicant (as defined in the Prospectus)
the entitlement to apply for New Shares
pursuant to the Offer for Subscription
Subscription Form the application form to be included in
Appendix 4 of the Prospectus for use in
connection with the Offer for Subscription
uncertificated or in recorded on the relevant register of the
uncertificated form 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
United Kingdom or UK the United Kingdom of Great Britain and
Northern Ireland
US Securities Act the United States Securities Act 1933,
as amended
United States the United States of America, its territories
and possessions, any state of the United
States and the District of Columbia.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEASSAAFSDEEF
Primary Health Properties (LSE:PHP)
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Primary Health Properties (LSE:PHP)
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