08:34 Tue 19 Jan 2021
Tesco Corp Treasury - Tesco Corporate Treasury Services - Tender Offer
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (EUWA).
NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN
Tesco Corporate Treasury Services PLC announces Tender Offer for its
and
Tesco PLC announces Tender Offers for its
Tesco Corporate Treasury Services PLC (TCTS) announces today an invitation to holders of its outstanding
The Offers are being made on the terms and subject to the conditions contained in the tender offer memorandum dated
Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Information and Tender Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.
Summary of the Offers
Priority Level |
Notes |
Issuer and Offeror |
ISIN / |
Outstanding Nominal Amount |
Relevant Benchmark Security or Interpolated Mid-Swap Rate |
Purchase Spread |
Amount subject to the Offers |
1 |
2047 Notes |
Tesco PLC |
XS0295018070 / 029501807 |
€355,991,000 |
2047 Notes Interpolated Mid-Swap Rate |
215 bps |
Subject as set out in the Tender Offer Memorandum, an aggregate nominal amount of Notes such that the total amount payable1 for such Notes (or, where applicable, its Euro Equivalent) is no greater than (i) the total gross proceeds received by TCTS from the issue of the New Notes (as defined herein) (the New Notes Proceeds Amount) less (ii) the Euro Equivalent of the total amount payable2 by Tesco for all US Notes validly tendered and accepted for purchase pursuant to the US Tender Offer (each term as defined herein) (the US Tender Offer Amount). |
2 |
2024 Notes |
Tesco Corporate Treasury Services PLC |
XS1082971588 / 108297158 |
|
2024 Notes Interpolated Mid-Swap Rate |
30 bps |
|
2 |
2022 Notes |
Tesco PLC |
XS0414345974 / 041434597 |
£416,993,000 |
4 per cent. |
25 bps |
|
2 |
2023 Notes |
Tesco PLC |
XS0248392812 / 024839281 |
£92,974,000 |
0.125 per cent. |
40 bps |
|
2 |
2029 Notes |
Tesco PLC |
XS0105244585 / 010524458 |
£47,849,000 |
0.875 per cent. |
135 bps |
|
2 |
2033 Notes |
Tesco PLC |
XS0159013142 / 015901314 |
£108,621,000 |
4.25 per cent. |
150 bps |
|
2 |
2042 Notes |
Tesco PLC |
XS0248395245 / 024839524 |
£20,275,000 |
4.5 per cent. |
175 bps |
|
2 |
2057 Notes |
Tesco PLC |
XS0289810318 / 028981031 |
|
1.75 per cent. |
190 bps |
|
1. Including for payment of Accrued Interest (as defined below) on the relevant Notes. 2. Including for payment of accrued interest on the relevant US Notes. |
Rationale for the Offers
The Offers and the concurrent US Tender Offer (as defined below) are being made in the context of the Offerors' strategic aim of strengthening the balance sheet by addressing upcoming debt maturities and achieving net annual interest savings.
Each Offeror intends to cancel any Notes purchased by it pursuant to the relevant Offer(s).
Purchase Prices and Accrued Interest
In respect of each Series, TCTS (in the case of the 2024 Notes) or Tesco (in the case of each Series other than the 2024 Notes) will pay for any Notes of the relevant Series validly tendered and accepted for purchase by such Offeror pursuant to the relevant Offer a purchase price for such Notes (each a Purchase Price) to be determined at or around
(a) the relevant Purchase Spread specified in the table above; and
(b) in the case of (i) the 2024 Notes or the 2047 Notes, the relevant Interpolated Mid-Swap Rate, or (ii) each other Series, the relevant Benchmark Security Rate.
Each Purchase Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the Notes of the relevant Series accepted for purchase pursuant to the relevant Offer (rounded to the nearest 0.001 per cent., with 0.0005 per cent. rounded upwards), and is intended to reflect a yield to maturity of the Notes of the relevant Series on the Settlement Date based on the relevant Purchase Yield.
The relevant Offeror will also pay an Accrued Interest Payment in respect of any Notes accepted for purchase pursuant to the relevant Offer(s).
New Financing Condition
On
Whether either or both of the Offerors will purchase any Notes validly tendered in the relevant Offer(s) is conditional, without limitation, on the successful completion (in the sole determination of the Offerors) of the offering of the New Notes (the New Financing Condition).
Even if the New Financing Condition is satisfied, neither Offeror is under any obligation to accept for purchase any Notes validly tendered pursuant to the relevant Offer(s). The acceptance by either Offeror of Notes validly tendered pursuant to the relevant Offer(s) is at the sole discretion of such Offeror and tenders may be rejected by such Offeror for any reason.
Any investment decision to purchase any New Notes should be made solely on the basis of the information contained in: (i) the offering circular dated
Advertisement. The Programme Offering Circular is available at https://www.tescoplc.com/media/756813/tesco-2020-update-offering-circular-final.pdf
The New Notes and the guarantee thereof are not being, and will not be, offered or sold in
The target market for the New Notes is (i) eligible counterparties and professional clients only, each as defined in Directive 2014/65/EU (as amended, MiFID II); and (ii) only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (COBS), and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the EUWA). All channels for distribution of the New Notes to eligible counterparties and professional clients are appropriate.
The New Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the EEA) or the
No action has been or will be taken in any jurisdiction in relation to the New Notes to permit a public offering of securities.
Allocation of the New Notes
A factor in the allocation of the New Notes will be whether Noteholders have validly tendered or indicated their firm intention to the relevant Offeror(s) or the Dealer Managers to tender their Notes for purchase pursuant to the relevant Offer(s). When considering allocation of the New Notes, TCTS may give preference to those Noteholders who, prior to such allocation, have validly tendered or indicated their firm intention to the relevant Offeror(s) or any of the Dealer Managers to tender the Notes and subscribe for New Notes. However, TCTS is not obliged to allocate the New Notes to a Noteholder who has validly tendered or indicated a firm intention to tender the Notes pursuant to the relevant Offer(s). Any allocation of the New Notes, while being considered by the relevant Offeror(s) as set out above, will be made in accordance with customary new issue allocation processes and procedures.
US Tender Offer, Aggregate Consideration Amount and Priority of Acceptance
Tesco has launched, contemporaneously with the launch of the Offers, an offer to purchase for cash (the US Tender Offer) its
If the Offerors (or one of the Offerors, as the case may be) decide to accept any validly tendered Notes for purchase pursuant to the relevant Offer(s), they propose to accept for purchase an aggregate nominal amount of such Notes such that the total amount payable by the Offerors (or one of the Offerors, as the case may be) for all such Notes accepted for purchase pursuant to the relevant Offer(s) (including all Accrued Interest Payments in respect of such Notes accepted for purchase), converted (where applicable) into the Euro Equivalent at the Applicable Sterling/Euro Exchange Rate, is no greater than (a) the total gross proceeds received by TCTS from the issue of the New Notes (the New Notes Proceeds Amount), less (b) the US Tender Offer Amount (although the Offerors reserve the right, in their sole discretion, to allocate a significantly lower or a significantly higher amount for the purchase of Notes pursuant to the relevant Offer(s), the final amount so allocated for the purchase of Notes being the Aggregate Consideration Amount).
As a result of the foregoing, the Aggregate Consideration Amount will be directly affected by the aggregate nominal amount of US Notes accepted for purchase pursuant to the US Tender Offer.
If the Offerors decide to accept any Notes for purchase pursuant to the relevant Offer(s), they propose to accept Notes validly tendered for purchase pursuant to the relevant Offer(s) in the order of the related Priority Level set out in the table above (each a Priority Level), beginning with the Notes with Priority Level 1. The Offerors do not intend to accept any valid tenders of Notes shown in the table above with a Priority Level of 2 unless the relevant Offeror has accepted all valid tenders of Notes shown in the table above with a Priority Level of 1 (being the 2047 Notes) in full, with no pro rata scaling. The final aggregate amount payable for all Notes accepted for purchase in respect of each Priority Level (including all Accrued Interest Payments in respect of such Notes accepted for purchase), converted (where applicable) into the Euro Equivalent at the Applicable Sterling/Euro Exchange Rate, is referred to as a Priority Level Consideration Amount.
The Offerors will determine the allocation of a Priority Level Consideration Amount between each Series with the relevant Priority Level in their sole discretion, and reserve the right to accept significantly more or significantly less (or none) of any Series as compared to any other Series with the same Priority Level (the final aggregate nominal amount of each Series (if any) accepted for purchase pursuant to the relevant Offer being a Series Acceptance Amount).
Scaling
In respect of each Series, if the relevant Offeror decides to accept any validly tendered Notes of such Series for purchase pursuant to the relevant Offer and the aggregate nominal amount of the relevant Series validly tendered for purchase is greater than the relevant Series Acceptance Amount, the relevant Offeror intends to accept such Notes for purchase on a pro rata basis such that the aggregate nominal amount of such Series accepted for purchase pursuant to the relevant Offer is no greater than such Series Acceptance Amount, as further set out in the Tender Offer Memorandum.
Tender Instructions
In order to participate in, and be eligible to receive the relevant Purchase Price and Accrued Interest Payment pursuant to the relevant Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Information and Tender Agent by
Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.
Tender Instructions must be submitted in respect of a minimum nominal amount of Notes of the relevant Series of no less than the minimum denomination for such Series, as set out in the table below, and may thereafter be submitted in integral multiples of the relevant permitted integral multiple amount set out below. A separate Tender Instruction must be completed on behalf of each beneficial owner and in respect of each Series.
Series |
Minimum Denomination |
Permitted Integral Multiples |
2022 Notes |
|
|
2023 Notes |
|
|
2024 Notes |
|
|
2029 Notes |
|
|
2033 Notes |
|
|
2042 Notes |
|
|
2047 Notes |
|
|
2057 Notes |
|
|
Indicative Timetable for the Offers
Events |
Times and Dates (All times are |
Commencement of the Offers Offers announced. Tender Offer Memorandum available from the Information and Tender Agent. |
|
Expiration Deadline Final deadline for receipt of valid Tender Instructions by the Information and Tender Agent in order for Noteholders to be able to participate in the Offers. |
|
Announcement of Indicative Results |
|
Announcement by each of the Offerors of a non-binding indication of the level at which they expect to set each Series Acceptance Amount, and indicative details of any Scaling Factor applicable to valid tenders of Notes of each relevant Series that will be applied in the event that each of the Offerors or one of the Offerors, as the case may be, decides to accept valid tenders of Notes of such Series pursuant to the relevant Offers and the New Financing Condition is satisfied (or waived) on or prior to the Settlement Date. |
Prior to the Pricing Time on |
Pricing Time |
|
Determination of each Benchmark Security Rate, each Interpolated Mid-Swap Rate, each Purchase Yield and each Purchase Price. |
At or around |
Announcement of Results and Pricing Announcement of whether either or both of the Offerors will accept (subject to the satisfaction (or waiver) of the New Financing Condition on or prior to the Settlement Date) valid tenders of Notes pursuant to all or any of the applicable Offers and, if so accepted, each Series Acceptance Amount, each Purchase Yield, each Benchmark Security Rate, each Interpolated Mid-Swap Rate, each Purchase Price, the Applicable USD/Euro Exchange Rate, the Applicable Sterling/Euro Exchange Rate and any Scaling Factors that will be applied to Notes of any Series. |
|
Settlement Date Subject to the satisfaction (or waiver) of the New Financing Condition, expected Settlement Date for the Offers. |
|
Each Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate any Offer made by it at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of each Offeror to so extend, re-open, amend and/or terminate any such Offer.
Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, an Offer before the deadlines set out above. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) withdrawal of Tender Instructions will be earlier than the relevant deadlines set out above and in the Tender Offer Memorandum.
Unless stated otherwise, announcements in connection with the Offers will be made (i) by publication through RNS and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be found on the relevant Reuters Insider Screen and be made by the issue of a press release to a Notifying News Service. Copies of all such announcements, press releases and notices can also be obtained upon request from the Information and Tender Agent, the contact details for which are below. Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Information and Tender Agent for the relevant announcements during the course of the Offers. In addition, Noteholders may contact the Dealer Managers for information using the contact details below.
Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for, participating in the Offers.
Questions and requests for assistance in connection with (i) the Offers may be directed to the Dealer Managers, and (ii) the delivery of Tender Instructions may be directed to the Information and Tender Agent, the contact details for each of which are set out below.
BNP Paribas (Telephone: +33 1 55 77 78 9; Attention: Liability Management Group; Email: liability.management@bnpparibas.com), Citigroup Global Markets Limited (Telephone: +44 20 7986 8969; Attention: Liability Management Group; Email: liabilitymanagement.europe@citi.com), MUFG Securities EMEA plc (Tel: +44 20 207 577 4218; Attention: Liability Management Group; Email: liability.management@mufgsecurities.com) and RBC Europe Limited (Telephone: +44 20 7029 7063; Attention: Liability Management; Email: liability.management@rbccm.com) are acting as Dealer Managers for the Offers.
Lucid Issuer Services Limited (Telephone: + 44 20 7704 0880; Attention:
This announcement is released by Tesco PLC and Tesco Corporate Treasury Services PLC and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the EUWA (
LEI Number: 21380018AJDKNF3A6712
DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. If any Noteholder is in any doubt as to the contents of the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offers. None of TCTS, Tesco, the Dealer Managers or the Information and Tender Agent or any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender Notes pursuant to the Offers.
OFFER AND DISTRIBUTION RESTRICTIONS
The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum come(s) are required by each of the Offerors, the Dealer Managers and the Information and Tender Agent to inform themselves about, and to observe, any such restrictions. Nothing in this announcement nor the Tender Offer Memorandum constitutes (i) an offer to buy or a solicitation of an offer to sell the Notes (and tenders of Notes in the Offers will not be accepted from any Noteholders) in any circumstances in which such offer or solicitation is unlawful or (ii) an offer to sell or a solicitation of an offer to buy the New Notes. In those jurisdictions where the securities, blue sky or other laws require an Offer to be made by a licensed broker or dealer and any Dealer Manager or any of the Dealer Managers' respective affiliates is such a licensed broker or dealer in any such jurisdiction, such Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the relevant Offeror in such jurisdiction.
No action has been or will be taken in any jurisdiction in relation to the New Notes or the guarantee thereof that would permit a public offering of securities and the minimum denomination of the New Notes will be
Neither this announcement nor the Tender Offer Memorandum is an offer of securities for sale in
Each Noteholder participating in an Offer will represent that it is not located in
Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes and/or the Offers.
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