Stmnt re Tender Offer

RNS Number:1193L
Warner Estate Holdings PLC
4 October 2001

                          Warner Estate Holdings PLC

                           RESPONSE TO TENDER OFFER

Warner Estate Holdings PLC has today written to shareholders urging them to
take no action with regard to the tender offer announced to the London Stock
Exchange on 1 October 2001 by Trefick Limited.

Key points:

    * The offer is an opportunistic attempt to take advantage of recent stock
      market turmoil


    * The offer represents a 21 per cent. discount to historic NAV


    * The offer is a mere 0.8 per cent. premium to the highest share price in
      September




Commenting, Philip Warner, Chairman of Warner Estate, said:

" The strategy adopted by Warner Estate in 1998 has been delivering results.
The disposal of our interests in residential property and other listed
companies has been achieved successfully. I expect that my statement in
December accompanying the interim results to 30 September 2001 will give
details of the continuing progress of Warner Estate's successful development."

" Warner Estate has #100 million available to take advantage of current market
conditions. We regard the current economic uncertainty as an opportunity, and
we have both the management skills and the financial resources to invest."

" We believe Warner Estate has a strong future. Trefick is interested in
making a profit for itself. The directors of Warner Estate are committed to
generating value for all shareholders."

" We urge shareholders to take no action."

                                   - ends -

Date: 4 October 2001

For further information, contact:
Warner Estate Holdings PLC              Credit Lyonnais Securities
020-7487-3312                           020-7588-4000

Philip Warner - Chairman                Christopher Yates

Peter Collins - Finance Director
Hawkpoint Partners Limited              City Profile 020-7448-3244
020-7665-4500
                                        Jonathan Gillen
Paul Baines
                                        Simon Courtenay

The following is the main written text of the letter sent to shareholders.

                 "Ignore the tender offer and take no action

As this letter makes clear, your Company is in an excellent position to
achieve value for shareholders. Within this document we explain why your
Board, which has been advised by Credit Lyonnais Securities and Hawkpoint
Partners Limited, considers the tender offer by Trefick to be opportunistic
and should be ignored.

On 1 October 2001, Trefick announced to the London Stock Exchange that it had
made a tender offer for approximately 13.3 per cent. of Warner Estate's issued
share capital. Trefick already owns approximately 16.6 per cent. of Warner
Estate's issued share capital. The tender offer is being made to the maximum
level of shares which Trefick may hold before it is obliged to make a takeover
offer for the Company.

The letter from Trefick gives no reason for you to tender your shares. The
Board of Warner Estate believes that Trefick is seeking to take advantage of
recent turmoil in the stock market to acquire your shares in Warner Estate at
a level significantly below their net asset value. The tender offer price
represents:

  * a 21 per cent. discount even to Warner Estate's historic net asset value
    as at 31 March 2001

  * a 0.8 per cent. premium to the highest closing price for Warner Estate's
    shares in September 2001.

Objective and strategy

The Company's primary objective is to maximise the total return for all its
shareholders. This is being achieved by increasing net asset value per share
and growing our dividend payments sustainably.

Three years ago the Board adopted a strategy of focused commercial property
investment. In successfully implementing this strategy the Group has realised
both its small commercial properties and its residential property interests.
It has also realised most of its listed investment portfolio.

From 30 September 1998 to 31 March 2001:

  * gross commercial rental income has more than doubled to #25.7 million

  * the value of commercial property investments has increased from #121
    million to #290 million

  * average lot size has increased from #2.0 million to #3.2 million.

Recent highlights

  * Realisation of residential and listed investments

Walthamstow                           Net asset value gain per share: 28 pence

In March 2001, the Group disposed of its residual direct interest in
residential property through the sale of Benchlevel Limited for #56.9 million.
The profit of #14.6 million on this disposal was reported in the Group's last
accounts.

BPT plc                               Net asset value gain per share: 26 pence

In May 2001, the Group sold Warner Estate, Limited (which held the Group's
13.1 per cent. interest in BPT plc) for net proceeds of #60.8 million. The
gain on this disposal was included in the Group's last accounts.

Barlows PLC                            Net asset value gain per share: 3 pence

In June 2001, the Group realised its 23.8 per cent. interest in Barlows PLC
for #8.8 million. This achieved a capital profit of #1.8 million before
taxation.



  * Share buy back

In June 2001, the Group purchased 1,382,000 ordinary shares for cancellation
at a price of 299 pence per share. This produced an uplift in net asset value
for shareholders of 3 pence per share. The Group recently increased its
authority to buy back its own shares to 14.9 per cent., all of which is
currently unused.

  * Disposal of non-core properties

Waterfields Retail Park

In April 2001, the Group agreed to dispose of its Waterfields Retail Park in
Watford (which did not match the desired focus for the Group's retail
properties) to The Hercules Unit Trust for #19 million with a completion date
of 11 December 2001.

Small properties portfolio

In March 2001, the Group disposed of a portfolio of 20 properties, mainly
small retail units, to Threadneedle Scudder, for #19.3 million.

  * Commercial portfolio expansion

Industrial and office property acquisition

In February 2001, the Group acquired a portfolio of industrial and office
properties for investment and trading from the CGNU Plc group for #41.0
million. The portfolio consisted of 20 commercial properties with a rent roll
of #3.5 million and an initial yield of 8.1 per cent.

Danmerc portfolio

In April 2001, the Group purchased an office portfolio for #14.4 million from
a Danish pension fund. The portfolio comprised a cluster of five modern
buildings on Severally Business Park, Colchester, along with modern offices in
Tunbridge Wells, Bradford and a multi-let office investment in Harrow. The
purchase represented an initial yield of 8.4 per cent.

West Gate, Bristol

In September 2001, the Group agreed to buy this prominent and central property
which is let to Royal & Sun Alliance Insurance Group PLC until at least 2010.
It was purchased for #16.3 million at an initial yield of over 9 per cent.

  * Asset management

Ellesmere Port and Sale

In July 2001, outline planning consent was obtained for Ellesmere Port (Marina
Walk) to increase the floor area by over 10 per cent. This should increase
rents by #600,000 per annum as a result of a #5 million investment. At the
Sale shopping centre, detailed planning consent was also granted in July 2001
to increase the floor area by approximately 20 per cent. which should increase
rents by #500,000 per annum as a result of a #5 million investment.

Prospects and current trading

The strategy adopted in 1998 has been delivering results as our net asset
value growth demonstrates. The disposal of our interests in residential
property and other listed companies has been achieved successfully. Within the
commercial property portfolio we have continued to dispose of our smaller
properties and to reinvest in larger blocks.

As shareholders will have seen, our balance sheet is strong. In addition, the
spread of the properties geographically, by type and by tenant, gives our rent
roll robust, defensive characteristics. With net debt of only some #125
million at 30 September 2001, and with cash and borrowing facilities of over #
100 million available, the Group is well placed to take advantage of current
market conditions.

We regard the current economic uncertainty as an opportunity and we have both
the management skills and financial resources to invest.

I expect that my statement in December accompanying the interim results to 30
September 2001 will give details of the continuing progress of Warner Estate's
successful development.

Recommendation

The Board unanimously believes that Trefick is seeking, opportunistically, to
capitalise on the recent weakness in the stock market. As recently as 3
September 2001, Warner Estate's shares traded at 315 pence. The Board believes
that Warner Estate has a strong future. Trefick is interested in making a
profit for itself. The Board of Warner Estate is committed to generating value
for all shareholders.

Your Board, which has been advised by Credit Lyonnais Securities and Hawkpoint
Partners Limited who have taken into account the Board's commercial
assessments, urges shareholders to IGNORE THE TENDER OFFER AND TO TAKE NO
ACTION. WE RECOMMEND YOU NOT TO COMPLETE ANY FORM OF TENDER.

Your Directors will not be accepting the tender offer."
Wt Wner Usd (LSE:WNER)
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