Supermarket Inc REIT - Proposed Issue of Ordinary Shares
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM,
This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon the publication of this Announcement, this inside information is now considered to be in the public domain.
(the "Company", together with its subsidiaries the "Group")
Proposed Issue of Ordinary Shares
Notice of General Meeting
The Board of
· The Issue Price represents a discount of 5.1 per cent. to the closing price of 107.5 pence per existing Ordinary Share on 11 September 2019 (being the last business day prior to this Announcement) and a premium to the Company's last reported NAV per Ordinary Share as at
· The Company has identified three near-term acquisition opportunities, with one asset currently under exclusivity and another two assets in advanced due diligence
The Initial Issue will be conducted in accordance with the terms and conditions to be contained in the Prospectus, which is expected to be published shortly following its approval by the
Both the Initial Issue and Placing Programme are subject to the approval of Shareholders in a General Meeting, further details of which are set out in this Announcement and will be set out in the Prospectus, when published.
"We rapidly deployed the
Background to the Initial Issue
The Company listed on the
The assets benefit from long, upward only, RPI linked leases, with a weighted average unexpired lease term of 19 years, and are let to large
The Company is highly selective in the supermarket assets that it seeks to acquire. As well as targeting assets which operate both as physical supermarkets and online fulfilment centres, the Company also seeks to ensure that its assets benefit from a good trading history for the operators, long unexpired lease terms, contractual, upward only rental uplifts, strong tenant covenants and geographic diversity across the portfolio. The Company has established a strong track record of sourcing high-quality assets in advance of a fundraise and efficiently executing acquisitions afterwards, thereby minimising the potentially negative effect of cash drag on financial returns. Where possible, the Company will also look to use its equity as part consideration in purchases, ensuring maximum cost efficiency and value accretion for Shareholders, whilst allowing potential vendors to benefit from exposure to the Company's diverse portfolio as well as its status as a listed Real Estate Investment Trust. This was demonstrated in
As a REIT, the Company has a focus on delivering high-quality and stable dividends to Shareholders which will grow alongside the Company's inflation linked rental streams. The Company delivered dividends of
Use of Proceeds for the Initial Issue
The Investment Adviser believes that there is currently an attractive opportunity for investors to gain exposure to supermarket property. In contrast to many asset prices, including those in the wider
The Company has identified three assets with an aggregate value of approximately
In addition to the Target Assets, the Company has identified a strong investment pipeline of a further four assets and has started to perform preliminary due diligence on these assets. The Company is not committed to acquiring these assets following the Initial Issue, however such a pipeline allows the Company to benefit from significant price discovery and pricing discipline as well as providing optionality, without materially compromising on the pace of investment, if acceptable terms cannot be reached with its preferred vendors.
The consideration for the purchase of any or all of the Target Assets, if made, will be met from the Net Issue Proceeds and/or the issue of Ordinary Shares as part of the consideration, with any balance to be funded from debt financing.
Benefits of the Initial Issue
The Directors believe that the Initial Issue and the Placing Programme have the following principal benefits for Shareholders:
· the Net Issue Proceeds will be used to invest in key operational properties let to some of the largest
· the flexibility provided by the Placing Programme will allow the Company to tailor future equity issuance to its immediate pipeline, providing operational flexibility and minimising cash drag;
· an increase in the size of the Company should improve liquidity and enhance the marketability of the Company and result in a broader investor base over the longer term; and
· an increase in the size of the Company will spread its fixed operating expenses over a larger issued share capital.
The Directors believe that the Initial Issue, alongside the Placing Programme, will increase the size and scale of the Company, and allow it, among other things, to maximise its in-built economies of scale, including when negotiating asset improvements and lease re-gears across the Portfolio with its tenants.
In light of the attractive pipeline of investment opportunities, the Directors intend to continue to increase progressively the size and scale of the Company in order to allow it, amongst other things, to maximise its in-built economies of scale. In order to move closer to this objective, whilst also minimising the costs associated with equity issues, the Directors intend to implement a Placing Programme, alongside the Initial Issue. The Placing Programme, if approved, would allow the Directors the flexibility to issue over the course of the next 12 months, in aggregate, up to 200 million Ordinary Shares (less the number of New Ordinary Shares issued pursuant to the Initial Issue).
Further information on the Initial Issue
The Company is proposing to raise approximately
The consideration for the purchase of the supermarket assets will be met from the Net Issue Proceeds and/or the issue of Ordinary Shares as part of the consideration, with any balance to be funded from debt financing. If all the Target Assets were acquired, the total expected purchase price, excluding acquisition costs, would be approximately
Following the Initial Issue and Admission of the New Ordinary Shares to the
The Initial Issue is not underwritten. The Placing may be scaled back in order to satisfy valid applications under the Offer for Subscription, and the Offer for Subscription may be scaled back in favour of the Placing. The Initial Issue may be scaled back by the Directors for any reason, including where it is necessary to scale back allocations to ensure the Initial Issue proceeds align with the Company's post fundraise acquisition and leverage targets.
The Offer for Subscription is only being made in the
The Initial Issue is conditional, inter alia, upon the following:
· Admission becoming effective by not later than
· the Resolutions being passed by Shareholders at the General Meeting (without material amendment); and
· the Placing Agreement becoming unconditional in all respects (save for the condition therein relating to Admission) and not having been terminated in accordance with its terms prior to Admission.
Accordingly, if any of the conditions are not satisfied, or, if applicable, waived, or if the Placing Agreement is terminated in accordance with its terms prior to Admission, the Initial Issue will not proceed and application monies will be returned to investors without interest as soon as possible. If the Initial Issue does not proceed, the Placing Programme may still be implemented assuming the Resolutions are passed.
The results of the Initial Issue are expected to be announced on
Applications will be made to the
The Existing Ordinary Shares are already admitted to trading on the Specialist Fund Segment and to CREST. It is expected that all of the New Ordinary Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST. The New Ordinary Shares will trade under ISIN GB00BF345X11.
Latest time and date for receipt of forms of proxy in respect of the General Meeting
Latest time and date for receipt of application forms under the Offer for Subscription
Latest time and date for receipt of commitments under the Placing
Results of the Initial Issue announced
by close of business on
Admission and dealings in New Ordinary Shares commence
The dates set out in the expected timetable above may be adjusted by the Company. In such circumstances details of the new dates will be notified to the
Notice of General Meeting
The Notice of General Meeting will be set out in the Appendix to the Prospectus which is expected to be published shortly (and which will set out details of the Initial Issue and the Placing Programme), and will be posted to Shareholders to convene a General Meeting to approve, the Initial Issue and the Placing Programme. The General Meeting is expected to be held at the offices of
The Board believes that the Initial Issue and the Resolutions are in the best interests of the Company and Shareholders as a whole. Accordingly, the Board unanimously recommends that you vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings.
ISIN for the New Ordinary Shares: GB00BF345X11
SEDOL for the New Ordinary Shares: BF345X1
The Company's legal entity identifier: 2138007FOINJKAM7L537
For further information, please contact:
+44 (0)20 3790 8087
Stifel - Bookrunner, Financial Adviser and Placing Agent
+44 (0)20 7710 7600
Goodbody - Placing Agent
+44 (0)20 3841 6228
+44 (0)20 7920 3150
(1) As at
(2) Total shareholder return measured between IPO and
Terms used and not defined in this Announcement bear the meaning given to them in the Prospectus proposed to be published by the Company in due course.
The target dividend is a target only and not a profit forecast. There can be no assurance that the target will be met and it should not be taken as an indication of the Company's expected or actual future results.
This Announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or an invitation to purchase investments of any description, or any solicitation of any offer to subscribe for, any securities in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Copies of the prospectus to be published by the Company will shortly be available from www.supermarketincomereit.com.
Recipients of this Announcement who are considering acquiring New Ordinary Shares are reminded that any such acquisition must be made only on the basis of the information to be contained in the Prospectus (or any supplementary prospectus) which may be different from the information contained in this Announcement and must not be made in reliance on this Announcement. The subscription for New Ordinary Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. Persons distributing this Announcement must satisfy themselves that it is lawful to do so. The Company assumes no responsibility in the event that there is a violation by any person of such restrictions.
This Announcement does not constitute and may not constitute and may not be construed as a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this Announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase securities. Potential investors should consult a professional advisor as to the suitability of an investment in the securities for the person concerned.
The value of Ordinary Shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations. Capital is at risk and investors need to understand the risks of investing. Please refer to the Prospectus for further information, in particular the "Risk Factors" section.
This Announcement may not be published, distributed, released or transmitted by any means or media, directly or indirectly, in whole or in part, in or into
Neither this Announcement nor any copy of it may be: (i) taken or transmitted into or distributed in
This Announcement may include "forward-looking statements". All statements other than statements of historical facts included in this Announcement, including, without limitation, those regarding the Company's investment strategy, plans, objectives and target returns are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the formal prospectus. These forward-looking statements speak only as at the date of this Announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Regulation Rules or other applicable laws, regulations or rules.
Stifel is acting only for the Company as financial adviser, sole bookrunner and placing agent in connection with the matters described in this Announcement and is not acting for or advising any other person, or treating any other person as its client in relation thereto and will not be responsible for providing the regulatory protection afforded to the duties of Stifel or advice to any other person in relation to the matters contained herein. Such persons should seek their own independent legal, investment and tax advice as they see fit.
Goodbody is acting as placing agent for the Company, and is acting exclusively for the Company.
Neither Stifel or Goodbody nor any of their respective directors, officers, employees, advisers, affiliates or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied as to 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 or its subsidiaries, 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.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II 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 to retail investors through advised sales only and to professional clients and eligible counterparties through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the 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 Initial Issue and the Placing Programme.
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 the New Ordinary Shares.
Each distributor is responsible for undertaking its own Target Market Assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.
Marketing disclosures pursuant to AIFMD (as defined below)
The Company is an externally managed alternative investment fund and has appointed the AIFM as its alternative investment fund manager
Pursuant to Article 23 of AIFMD and the Alternative Investment Fund Managers Regulations 2013 (No. 1173/2013) and the Investment Funds Sourcebook of the
PRIIPS (as defined below)
In accordance with the Regulation (EU) No 1286/2014 of the
If you are distributing Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients".
The Company is the only manufacturer of the Ordinary Shares for the purposes of the PRIIPs Regulation and none of Stifel, Goodbody or the AIFM are manufacturers for these purposes. None of Stifel, Goodbody or the AIFM makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the KID prepared by the Company nor accepts any responsibility to update the contents of the KID in accordance with the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of Shares. Each of Stifel, Goodbody the AIFM and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information documents prepared by the Company. Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed.
In addition to the terms previously defined, the following definitions apply throughout this Announcement unless the context otherwise requires:
"Admission" means the admission of the New Ordinary Shares to trading on the Specialist Fund Segment and such admission becoming effective in accordance with the Admission and Disclosure Standards;
"Admission and Disclosure Standards" means the requirements contained in the publication "Admission and Disclosure Standards" issued by the
"AIFM" when used in a general context, an alternative investment fund manager within the meaning of the AIFM Directive; or when used in respect of the Company, its alternative investment fund manager,
"Announcement" means this announcement relating to the Initial Issue and Placing Programme;
"Board" means the board of Directors;
"CREST" means 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" means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time;
"Directors" means the directors of the Company as at the date of this Announcement;
"EPRA" means the
"Existing Ordinary Shares" means the number of existing Ordinary Shares in issue at the date of this Announcement;
"Goodbody" means Goodbody Stockbrokers UC; registered in
"General Meeting" means the general meeting of the Company proposed to be held at
"Gross Issue Proceeds" means the gross proceeds of the Initial Issue and the Placing Programme;
"Investment Adviser" means
"Initial Issue" means the Placing and the Offer for Subscription;
"Issue Price" means
"ISIN" means the International Securities Identification Number;
"KID" means a key information document for the purposes of the PRIIPs Regulation relating to the Company's shares;
"Listing Rules" means the rules and regulations made by the
"MiFID II" means the Markets in Financial Instruments Directive 2014/65/EU of the
"Net Asset Value" or "NAV" means the aggregate value of the assets of the Company after deduction of all liabilities, determined in accordance with the accounting polices of the Company from time to time;
"Net Asset Value per Share" or "NAV per Share" means at any time, the Net Asset Value attributable to the Ordinary Shares divided by the number of Ordinary Shares in issue (other than any Ordinary Shares held in treasury) at the date of calculation;
"Net Issue Proceeds" means the Gross Issue Proceeds less applicable fees and expenses of the Initial Issue and the Placing Programme;
"Notice of General Meeting" means the Notice of General Meeting to be set out in the Appendix to the Prospectus;
"New Ordinary Shares" means new Ordinary Shares proposed to be issued pursuant to the Initial Issue;
"Offer for Subscription" means the the offer for subscription of New Ordinary Shares at the Issue Price on the terms to be set out in the Prospectus;
"Ordinary Shares" means ordinary shares of
"Placing" means the conditional placing of Ordinary Shares by Stifel at the Issue Price pursuant to the Placing Agreement as described in, and on the terms set out in the Prospectus;
"Placing Agreement" means the placing agreement between the Company, the Investment Adviser and Stifel, a summary of which is to be set out in the Prospectus;
"Placing Programme" means the programme under which the Company intends to issue Ordinary Shares in Tranches on the terms to be set out in the Prospectus (and any supplementary prospectus);
"Portfolio" means the eight supermarket real estate assets acquired by the Company since its IPO;
"Prospectus Regulation Rules" means the prospectus regulation rules made by the
"PRIIPs Regulation" means the Regulation (EU) No. 1286/2014 of the
"Prospectus" means the document, comprising a prospectus relating to the Company, prepared by the Company in accordance with the Prospectus Regulation Rules and proposed to be published on or around the date of this Announcement;
"REIT" means a company or group to which Part 12 CTA 2010 applies;
"Resolutions" means the resolutions to be proposed at the General Meeting (and set out in the Notice of General Meeting) to approve the allotment of (i) New Ordinary Shares pursuant to the Initial Issue and (ii) Ordinary Shares pursuant to the Placing Programme;
"RPI" means the
"SEDOL" means the stock exchange daily official list;
"Shareholder" means a holder of an Ordinary Share (together "Shareholders");
"SFS" or "Specialist Fund Segment" means the Specialist Fund Segment of the
"Target Assets" means three acquisition opportunities, with one asset under exclusivity and another two assets in advanced due diligence, valued at approximately
"Tranche" means a tranche of Placing Programme Shares issued under the Placing Programme (together "Tranches"); and
"Valuation Report" means the valuation report set out in the Prospectus.
This information is provided by RNS, the news service of the
Quick facts: Supermarket Income REIT PLC
Market Cap: £511.51 m
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...FOR OUR FULL DISCLAIMER CLICK HERE