TIDMDRIP TIDMCREI
RNS Number : 4783H
Drum Income Plus REIT PLC
04 August 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE
ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF
THE CODE AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE
MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
4 August 2021
For immediate release
Drum Income Plus REIT plc ("DRIP" or the "Company")
Possible Offer for the Company
The Board of DRIP announces it is in discussions regarding a
possible securities exchange offer by Custodian REIT plc
("Custodian") for the entire issued and to be issued share capital
of the Company (the "Possible Offer"). There can be no certainty
that any firm offer will be made.
The Possible Offer under consideration and evaluation by
Custodian is a securities exchange offer at a ratio of 0.535
Custodian ordinary shares for each DRIP ordinary share (the
"Exchange Ratio") (subject to the reservations set out below). The
Exchange Ratio would give an implied value for the entire issued
and to be issued share capital of DRIP of approximately GBP21.6
million (based on a closing price of 105.80 pence per Custodian
share on 3 August 2021, being the latest practicable date prior to
this announcement).
At the value implied by the Exchange Ratio, the Possible Offer
represents a premium of approximately:
-- 8.8 per cent. to the bid market closing price of 52.00 pence
per DRIP share on 3 August 2021; and,
-- 11.2 per cent. to the volume weighted average price for DRIP
shares of 50.85 pence over the 12 month period ended on and
including 3 August 2021.
Custodian will adjust the Exchange Ratio in the event that: (a)
either Custodian or DRIP announces, declares, makes or pays any one
or more dividends or other distributions on or after the date of
this Announcement and prior to completion of the Possible Offer
(save in relation to the making or payment of any dividend or
distribution that was announced or declared prior to the date of
this Announcement) that is in aggregate in excess of 1.25 pence per
Custodian share or 0.75 pence per DRIP share respectively (the
amount of such excess in each case being the "Excess"), in which
event the adjustment to the Exchange Ratio shall be to take account
of the Excess; and/or (b) at the time of completion of the Possible
Offer, either Custodian or DRIP has announced, declared, made or
paid its regular quarterly dividend of 1.25 pence per Custodian
share and 0.75 pence per DRIP share as applicable, but the other
has not announced, declared, made or paid such dividend (a
"Dividend Discrepancy"), in which case the adjustment to the
Exchange Ratio shall be to take account of the Dividend
Discrepancy.
The Board of DRIP has confirmed to Custodian that the Possible
Offer is at a value the Board of DRIP would be minded to recommend,
should a firm intention to make an offer pursuant to Rule 2.7 of
the Code be announced on the terms contained in the Possible Offer,
and has therefore agreed that Custodian should be provided with
access to due diligence materials.
Custodian has received an irrevocable undertaking from DRIP's
largest shareholder, Seven Investment Management LLP ("7IM") to
support the Possible Offer, should a formal offer be made. The
irrevocable undertaking is in respect of 26,266,690 ordinary
shares, representing approximately 68.76 per cent. of DRIP's issued
ordinary share capital, in respect of which 7IM has investment
management discretion and can procure the exercise of the voting
rights attaching to such shares in favour of a scheme or to accept
an offer. Further details regarding the irrevocable undertaking are
set out in the Appendix.
Custodian believes that on successful completion of the Possible
Offer, if made, DRIP shareholders would benefit from, inter alia,
gaining exposure to a larger portfolio with more diversity by
sector and geography with a property strategy consistent with that
of DRIP, and a holding in a significantly larger company offering
accessible liquidity and lower ongoing charges as a percentage of
net asset value. In addition, DRIP shareholders would hold shares
in a company that has predominantly traded on a premium to net
asset value since IPO and has managed to grow through the issuance
of new shares, whilst current Custodian shareholders would benefit
from exposure to DRIP's portfolio with low purchaser's costs.
In accordance with Rule 2.6(a) of the Code, Custodian is
required, by not later than 5.00 pm on 1 September 2021, either to
announce a firm intention to make an offer for the Company in
accordance with Rule 2.7 of the Code or to announce that it does
not intend to make an offer for the Company, in which case the
announcement will be treated as a statement to which Rule 2.8 of
the Code applies. This deadline can be extended only with the
consent of the Panel on Takeovers and Mergers ("Takeover Panel") in
accordance with Rule 2.6(c) of the Code.
As a consequence of this announcement, an offer period has now
commenced in respect of DRIP in accordance with the rules of the
Code and the attention of shareholders is drawn to the disclosure
requirements of Rule 8 of the Code, which are summarised below.
This announcement has been made with the consent of Custodian
and 7IM.
For the purposes of Rule 2.5(a) of the Code, Custodian has
reserved the right to make an offer on less favourable terms than
those set out in this announcement:
a) with the agreement or recommendation of the Board of DRIP; and/or
b) if a third party announces a possible or firm intention to
make an offer for DRIP on terms less favourable than the value
implied by the Exchange Ratio; and/or
c) following an announcement by DRIP of a whitewash transaction pursuant to the Code.
A further announcement regarding the Possible Offer will be made
in due course as appropriate.
Enquires:
DRIP
Hugh Little, Chairman
DRIP.REIT@jtcgroup.com
Dickson Minto W.S. (Sponsor and Rule 3 Adviser
to DRIP) +44 (0) 20 7649
Douglas Armstrong 6823
Custodian +44 (0) 116 240
Richard Shepherd-Cross / Ed Moore 8740
Numis Securities Ltd (Financial Adviser and
Broker to Custodian) +44 (0) 20 7260
Hugh Jonathan / Stuart Ord 1000
Camarco (Communications adviser to Custodian) +44 (0) 20 3757
Ed Gascoigne-Pees 4984
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No.596/2014 as it forms part of
the domestic law of the United Kingdom by virtue of the European
Union (Withdrawal) Act 2018. Upon the publication of this
announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
Disclaimer
Dickson Minto W.S., which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively for DRIP and for no one else in connection with the
Possible Offer and will not be responsible to anyone other than
DRIP for providing the protections afforded to its clients or for
providing advice in connection with the Possible Offer referred to
in this announcement.
Numis Securities Ltd, which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting
exclusively for Custodian and for no one else in connection with
the Possible Offer and will not be responsible to anyone other than
Custodian for providing the protections afforded to its clients or
for providing advice in connection with the Possible Offer referred
to in this announcement.
The release, publication or distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by laws
of the relevant jurisdictions and therefore persons into whose
possession this announcement comes should inform themselves about,
and observe, any such restrictions. Any failure to comply with such
restrictions may constitute a violation of the securities law of
any such jurisdiction.
This announcement is for information purposes only, and is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of any
securities, or the solicitation of any vote or approval in any
jurisdiction.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a
securities exchange offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, DRIP confirms that as
at the close of business on 3 August 2021 its issued share capital
consisted of 38,201,990 ordinary shares of 10 pence each (excluding
shares held in treasury). The International Securities
Identification Number for DRIP's ordinary shares is
GB00BW4NWS02.
LEI number DRIP's LEI number is 213800FG3PJGQ3KQH756.
In accordance with Rule 2.9 of the Code, Custodian confirms that
as at the close of business on 3 August 2021 its issued share
capital consisted of 420,603,344 ordinary shares of one pence each
(excluding shares held in treasury). The International Securities
Identification Number for Custodian's ordinary shares is
GB00BJFLFT45 .
LEI number Custodian's LEI number is 2138001BOD1J5XK1CX76 .
Publication of this announcement
A copy of this announcement will be made available subject to
certain restrictions relating to persons resident in restricted
jurisdictions on the Company's website no later than 12 noon on 4
August 2021 (www.dripreit.co.uk ).
The content of the website referred to in this announcement is
not incorporated into and does not form part of this
announcement.
Appendix
The irrevocable undertaking received by Custodian from 7IM is in
respect of 26,266,690 DRIP shares, representing approximately 68.76
per cent. of DRIP's entire issued share capital, in respect of
which 7IM has investment management discretion and can procure the
exercise of the voting rights attaching to such shares in favour of
a scheme or to accept an offer. The irrevocable undertaking will
lapse and cease to have any effect if (a) the terms on which the
Offer is made are less favourable than those set out in this
announcement, save where the terms of the Offer are adjusted solely
to take account of an Excess or Dividend Discrepancy; (b) Custodian
has not released a binding offer announcement under Rule 2.7 of the
Code for DRIP by 5.00 p.m. on 20 September 2021; (c) the offer or
scheme document is not posted within 28 days of the release of the
Rule 2.7 announcement; (d) the Court convened shareholder meeting
of the shareholders of DRIP in respect of the offer (if the offer
is undertaken by way of scheme of arrangement) is not scheduled to
take place within 28 days of the date of the scheme document; (e)
the offer is withdrawn or does not become unconditional or
effective by 31 December 2021 (or a date no more than two months
later if required to satisfy outstanding regulatory clearances); or
(f) 7IM is required to withdraw any of the undertakings given in
the irrevocable undertaking by any court of competent jurisdiction
or a competent regulator.
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END
OFDGZGGRMFNGMZZ
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August 04, 2021 02:00 ET (06:00 GMT)
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