RECOMMENDED CASH ACQUISITION
of
Telford Homes Plc
by
CBRE Group, Inc.
to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006
Summary
|
· |
The boards of CBRE Group, Inc. (“CBRE”) and Telford Homes Plc (“Telford Homes”) are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Telford Homes by CBRE (or, at CBRE's election, one or more direct or indirect wholly-owned subsidiaries of CBRE) (the “Acquisition”). |
|
· |
The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act. CBRE reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a Takeover Offer subject to the requirement regarding the terms and conditions of such offer set out in this Announcement. |
|
· |
Under the terms of the Acquisition, Scheme Shareholders shall be entitled to receive: for each Scheme Share: 350 pence in cash |
|
· |
The Acquisition represents an attractive premium of approximately: o 11.1 per cent. to the closing price per Telford Homes Share of 315.0 pence on 2 July 2019 (being the latest practicable date prior to publication of this Announcement). o 14.3 per cent. to the volume weighted average price per Telford Homes Share of 306.2 pence for the one-month period ended 2 July 2019 (being the latest practicable date prior to publication of this Announcement); and o 21.3 per cent. to the volume weighted average price per Telford Homes Share of 288.5 pence for the three-month period ended 2 July 2019 (being the latest practicable date prior to publication of this Announcement). |
|
· |
The Acquisition values the entire issued and to be issued ordinary share capital of Telford Homes at approximately £267.4 million on a fully diluted basis. |
|
· |
The Acquisition Price is final and will not be increased, except that CBRE reserves the right to increase the Acquisition Price if there is an announcement on or after the date of this Announcement of an offer or possible offer for Telford Homes by a third party offeror or potential offeror. |
|
· |
In addition to the consideration payable in connection with the Acquisition, Telford Homes Shareholders on the register as at the close of business on 7 June 2019 will also be entitled to receive the payment of the previously announced final dividend of 8.5 pence per Telford Homes Share to be paid on 19 July 2019 (the “Final Dividend”). |
|
· |
If any dividend and/or other distribution and/or other return of capital is authorised, declared, made or paid in respect of Telford Homes Shares on or after the date of this Announcement, other than the Final Dividend, CBRE reserves the right to reduce the Acquisition Price by the aggregate amount of such dividend and/or other distribution and/or other return of capital as further described in paragraph 15 of this Announcement. |
Information on Telford Homes
|
· |
Established in 2000, AIM quoted Telford Homes has grown to become one of London's largest residential developers and is dedicated to developing the homes and creating the spaces that London needs. Telford Homes has a development in-process portfolio (total project cost) of £1.32 billion. Telford Homes' customers include institutional investors, housing associations and individuals. Telford Homes is a developer of residential-led mixed-use sites in locations across London where there is an undersupply of housing. In recent years Telford Homes has undertaken a strategic shift to focus on the growing build to rent (“BTR”) / multi-family market and is now working with a number of established investors. For more information please visit: www.telfordhomes-ir.london. |
Telford Homes recommendation
|
· |
The Telford Homes Directors, who have been so advised by Rothschild & Co as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Telford Homes Directors, Rothschild & Co has taken into account the commercial assessments of the Telford Homes Directors. |
|
· |
Accordingly, the Telford Homes Directors intend to recommend unanimously that Telford Homes Shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting as the Telford Homes Directors have irrevocably undertaken to do in respect of their own beneficial holdings (and those of their connected persons) amounting to 2,934,242 Telford Homes Shares representing, in aggregate, approximately 3.86 per cent. of the ordinary share capital of Telford Homes in issue on 2 July 2019 (being the latest practicable date prior to publication of this Announcement). |
Irrevocable undertakings
|
· |
CBRE has received irrevocable undertakings from each of the Telford Homes Directors to vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting in respect of their own beneficial holdings (and those of their connected persons) amounting to 2,934,242 Telford Homes Shares, representing approximately 3.86 per cent. of Telford Homes' issued ordinary share capital at close of business on 2 July 2019 (being the latest practicable date prior to publication of this Announcement). |
Information on CBRE
|
|
CBRE is a Fortune 500 corporation (2019 rank: #146) listed on the New York Stock Exchange (NYSE:CBRE). CBRE is the world's largest commercial real estate services and investment firm, based on 2018 revenue, with leading global market positions in its leasing, property sales, occupier outsourcing, property management and valuation businesses. As of 31 December 2018, CBRE operated in more than 480 offices worldwide with over 90,000 employees, excluding independent affiliates. CBRE serves clients in more than 100 countries.
|
|
|
Trammell Crow Company (“TCC”) is an independently operated subsidiary of CBRE and one of the leading developers and investors in commercial real estate in the United States. TCC has developed or acquired 2,700 buildings valued at nearly $65 billion and over 590 million square feet. As of 31 March 2019, TCC had $9.7 billion of projects in process and $2.8 billion in its pipeline.
|
|
|
Upon completion of the Acquisition, it is intended that Telford Homes will operate as a standalone business group within the wider TCC business. |
Timetable and Conditions
|
|
The Acquisition shall be put to Telford Homes Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. In addition, a special resolution implementing the Scheme must be passed by Telford Homes Shareholders representing at least 75 per cent. of votes cast at the General Meeting.
|
|
|
The Acquisition is subject to the further conditions and terms set out in Appendix I to this Announcement, including the receipt of merger control approval from the European Commission. It is expected that, subject to the satisfaction of all such relevant conditions, the Scheme will become effective during the third quarter of 2019.
|
|
|
The Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the General Meeting, together with the Forms of Proxy, shall be published as soon as practicable. The Court Meeting and the General Meeting are expected to be held on or around 6 August 2019. |
Commenting on the Acquisition, Andrew Wiseman, Chairman of Telford Homes, said:
“The Board believes that the offer from CBRE represents fair value for shareholders in light of Telford Homes' market positioning, the current operating environment and the underlying value of Telford Homes' site portfolio and pipeline. The Board remains confident in the long-term prospects of the business, however the Board also recognises the risks posed by the political and macro-economic environment, as well as the already stated impact on the Group's short- and medium-term profitability from the implementation of its new build to rent strategy, which is lower margin in nature. The offer allows Telford Homes Shareholders to obtain liquidity for their full investment at a meaningful premium to the prevailing share price. The Board believes that the offer of 350 pence per share is a good outcome for shareholders and intends to recommend unanimously that they accept this offer.”
Commenting on the Acquisition, Jon Di-Stefano, Chief Executive Officer of Telford Homes, said:
“Being part of Trammell Crow Company will allow Telford Homes to enhance its growth in the build to rent / multifamily market in London. Our management team have found that Trammell Crow Company is aligned with both our culture and our current strategy and its platform will give Telford Homes access to greater resources, improved technology and wide-ranging expertise.”
Commenting on the Acquisition, Bob Sulentic, President and Chief Executive Officer of CBRE, said:
“Telford Homes gives us a compelling opportunity to build on the success of Trammell Crow Company. The UK is in the early stages of a secular shift toward institutionally owned urban rental housing, similar to what we have seen in the US over the last two decades. Telford Homes is well positioned to lead this trend, and their more than 300 talented professionals operating in London are a great addition to our company.”
This summary should be read in conjunction with, and is subject to, the full text of this Announcement including its Appendices.
The Acquisition shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this summary and this Announcement, Appendix III contains a summary of the irrevocable undertakings received in relation to this Acquisition and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.