Not for release, publication or distribution, directly or
indirectly, in whole or in part in, into, or from, any jurisdiction
where to do the same would constitute a violation of the relevant
laws of such jurisdiction.
Minerva announces a doubling of its NAV(1) per Share to 95p and
posts its response circular to Shareholders rejecting the wholly
inadequate KiFin Offer of 50p per Share
The Board of Minerva plc (“Minerva” or the “Company”) has today
written to Minerva Shareholders advising them why the Board
considers that the Offer of 50 pence per Minerva Share made by
KiFin Limited (“KiFin”) significantly undervalues the Company and
its future prospects, and why it continues to recommend strongly
that Minerva Shareholders reject the KiFin Offer.
Commenting on the KiFin Offer, Oliver Whitehead, Chairman of
Minerva, said:
“Minerva has high quality developments in excellent locations.
With recent improvements in market conditions, Minerva’s Pro Forma
NAV(1) per Share has increased to 95p. In a recovering market, this
will increase further.
KiFin's Offer of only 50p per Minerva Share significantly
undervalues the Company, and your Board has no hesitation in
rejecting this highly opportunistic bid.”
The response circular posted today to Minerva Shareholders sets
out the Board’s reasons for rejecting the KiFin Offer, and in
particular highlights the following:
An external and independent valuation, prepared by CBRE as at 30
November 2009, values Minerva’s portfolio at approximately £1
billion(2).
- This is a net revaluation surplus of £93 million since 30 June
2009, representing an increase of 10 per cent. in five months.
- Minerva’s financial gearing and the improvement in the value of
Minerva's property portfolio gives rise to an increase in the
Company’s NAV per Share of 101 per cent. from 47 pence as at 30
June 2009 to 95 pence as at 30 November 2009.
- Minerva's Pro Forma NAV(1) of 95 pence per Share is 89 per
cent. above KiFin's Offer of only 50 pence per Share.
It is the Directors’ belief that the Pro Forma NAV(1) of 95 pence
per Share as at 30 November 2009 does not fully reflect the true
upside potential inherent within the Company’s portfolio.
Shareholders accepting the KiFin Offer will be surrendering the
upside potential. Our confidence in this business is based
on:
- the significant potential of our prime City of London
developments;
- the additional value of our high-end residential developments
opportunities;
- our strong pipeline or other commercial development
opportunities;
- our excellent funding platform; and
- the improving market background.
Minerva has high quality developments in excellent locations, in
particular:
- Minerva's two landmark City of London office developments, The
Walbrook and St Botolphs, are close to completion in a supply
constrained market. Together, these developments represent two of
only four new buildings in the City of London offering in excess of
200,000 square feet of accommodation through to the end of
2010.
- Minerva is developing an ultra-prime residential scheme at
Lancaster Gate which is being released into a supply constrained
environment, with pent-up demand and a scarcity of developments of
a similar quality and location.
- Minerva also has an established pipeline of development
opportunities providing further potential value upside, including:
Ram Brewery (London SW18), Odeon Kensington (London W8), Leinster
House Hotel (London W2) and Croydon Estate (London Borough of
Croydon).
In recent months, several key market indicators have shown signs of
improvement:
- The IPD index has registered an improvement in yields and a
rise in capital values across all UK property sectors.
- Take-up of the City of London space increased by approximately
89 per cent. from Q2 to Q3 of 2009, with supply falling over the
same period.
As announced on 22 September 2009, Minerva has successfully put in
place an excellent funding platform.
- The Company has in excess of £1 billion of committed bank
facilities, which are sufficient to enable the completion of
Minerva's three key developments currently under construction.
- Minerva’s financial leverage will magnify the effects of any
increase in property values on Minerva’s NAV.
The Board continues to assess a wide range of possible alternatives
for realising shareholder value, including actively considering
divesting non-core assets to enhance the Company's financial
flexibility. The Company will also consider other sources of
funding to support further development activities as it seeks to
generate value from its existing projects and its pipeline of new
development opportunities.
- The Company is currently in advanced discussions to sell its
Wigmore Street, London W1 property.
The Minerva Board, which has been so advised by Greenhill, firmly
believes that KiFin's Offer significantly undervalues Minerva and
unanimously recommends that Shareholders should take no action in
relation to the Offer.
Minerva Shareholders are strongly advised to ignore any documents
that may be issued by KiFin or its advisers.
A copy of the response circular is available at the website of the
Company at
http://www.minervaplc.co.uk/investors/kifin.
There will be a conference call for analysts and investors at
8.30am today hosted by Salmaan Hasan (Chief Executive Officer) and
Ivan Ezekiel (Chief Financial Officer). Dial in details for this
call are as follows:
UK Standard International: +44 (0) 1452 561 371
CONF ID: 44617632
No unauthorised recording of this conference call is permitted. By
participating in or listening to this conference call you agree to
be bound by the foregoing and accept that you cannot make any
unauthorised recording of this conference call
Notes:
(1) Net Asset Value ("NAV") on a pro forma basis is based on the
Company’s audited net asset value as at 30 June 2009 adjusted for:
(i) the valuation of the Company’s properties as at 30 November
2009 as certified by CBRE; and (ii) the valuation of the derivative
financial instruments as at 26 November 2009, being the last
practicable date prior to publication of the response circular,
prepared by JC Rathbone Associates Limited.
(2) Including the owner occupied element of the Wigmore Street,
London W1 property.
Enquiries:
Minerva plc 020 7535 1000
Oliver Whitehead, Chairman
Salmaan Hasan, Chief Executive
Ivan Ezekiel, Finance Director
Greenhill & Co. International LLP 020 7198 7400
James Lupton
Brian Cassin
Citigroup Global Markets Limited 020 7986 4000
Andrew Forrester
Brunswick Group 020 7404 5959
Simon Sporborg
Tom Williams
Further information for Minerva Shareholders, including the bases
of calculation and sources for the information set out in this
announcement and the definitions of certain terms used in this
announcement, is contained in the response circular being posted
today, a copy of which, together with a copy of this announcement,
is available at the website of the Company at
http://www.minervaplc.co.uk/ and available for inspection at the
offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY.
The Directors of the Company accept responsibility for the
information contained in this announcement. To the best of the
knowledge and belief of the Directors of the Company (who have
taken all reasonable care to ensure such is the case) the
information contained in this announcement is in accordance with
the facts and does not omit anything likely to affect the import of
such information.
Greenhill & Co. International LLP and Citigroup Global Markets
Limited (each of which is authorised and regulated by the United
Kingdom Financial Services Authority) are acting exclusively for
Minerva and no one else in connection with the matters referred to
herein and will not be responsible to anyone other than Minerva for
providing the protections afforded to Minerva, or for providing
advice in relation to the matters referred to herein.
Forward Looking Statements
This document contains statements that are or may be
forward-looking with respect to the financial condition, results of
operations and businesses of Minerva and the Minerva Group. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual
results, valuation, performance or achievements of Minerva and the
Minerva Group, or the industry in which it operates, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'),
if any person is, or becomes, 'interested' (directly or indirectly)
in 1% or more of any class of 'relevant securities' of Minerva, all
'dealings' in any 'relevant securities' of that company (including
by means of an option in respect of, or a derivative referenced to,
any such 'relevant securities') must be publicly disclosed by no
later than 3.30pm (London time) on the London business day
following the date of the relevant transaction. This requirement
will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise
withdrawn or on which the 'offer period' otherwise ends. If two or
more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an 'interest'
in 'relevant securities' of Minerva, they will be deemed to be a
single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in
'relevant securities' of Minerva by KiFin or Minerva or by any of
their respective 'associates', must be disclosed by no later than
12.00 noon (London time) on the London business day following the
date of the relevant transaction.
A disclosure table, giving details of the companies in whose
‘relevant securities’ ‘dealings’ should be disclosed, and the
number of such securities in issue, can be found on the Takeover
Panel’s website at www.thetakeoverpanel.org.uk.
‘Interests in securities’ arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of securities. In particular, a person will be treated
as having an ‘interest’ by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative
referenced to, securities.
Terms in quotation marks are defined in the Code, which can also
be found on the Panel’s website. If you are in any doubt as to
whether or not you are required to disclose a ‘dealing’ under Rule
8, you should consult the Panel.
