RNS Number : 1792V
Inland ZDP PLC
19 July 2018
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

Inland ZDP PLC

 

Continuation proposals to extend the life of the ZDP Shares

Adoption of New Articles

Tender Offer for ZDP Shares

Placing of ZDP Shares

and

posting of a circular containing

Notices of Class Meetings and General Meeting

 

19 July 2018

 

Following consultations with certain ZDP Shareholders, the Board of Inland ZDP PLC is pleased to announce its intention to seek the approval of Shareholders for Proposals which include (i) the continuation of the life of the ZDP Shares for an additional five years to 10 April 2024, (ii) an increase in the Final Capital Entitlement, (iii) various amendments to the Loan Notes and Contribution Agreement between Inland Homes and the Company, (iv) the adoption of new Articles of Association and (v) the ratification of a previous issue of ZDP Shares.  The foregoing is to be accompanied by a Tender Offer by Panmure Gordon to the holders of ZDP Shares on the register of members at close of business on 18 July 2018 and a placing. 

 

A circular containing full information concerning the Proposals and notices of class meetings and a general meeting to approve the Proposals is being posted to ZDP Shareholders today. 

 

The Proposals are subject to the passing of resolutions at the Class Meetings and the General Meeting. The Company has received substantial indications of support for the Proposals, including written undertakings to vote in favour of them in respect of all the Ordinary Shares and c.6.95 million ZDP Shares, representing approximately 56 per cent. of the ZDP Shares in issue as at the date of this announcement.

 

The Company has also received undertakings not to accept the Tender Offer in respect of c. 6.64 million ZDP Shares, representing approximately 53 per cent. of the ZDP Shares in issue as at the date of this announcement.

 

Words and expressions in this announcement have the meanings set out in Appendix 1.

 

Key points

 

Continuation of ZDP Shares

 

Current ZDP Final Capital Entitlement

 

 

                       155.9 pence on 10 April 2019

Proposed change in yield and term

 

                       5.25 per cent. for 5 years from 10 April 2019

Proposed new ZDP Final Capital Entitlement

                       201.4 pence on 10 April 2024

 

 

Tender Offer by Panmure Gordon:

 

Tender Price per ZDP Share

 

150.8 pence per ZDP Share

Gross Redemption Yield on the Tender Price1

5.25 per cent.

 

ZDP Shares acquired by Panmure Gordon will be transferred to placees, subject to scaling down if the acceptances exceed the number of ZDP Shares subject to Placing Commitments.  The Tender Offer is conditional, inter alia, on the Resolutions being passed at the Meetings.

 

Placing of ZDP Shares

 

Placing price per ZDP Share

150.8 pence

 

ZDP Shares in issue at the date of this announcement

 

12,444,200 ZDP Shares

Number of ZDP Shares placed under the Placing as at the date of this announcement

 

2,320,955 ZDP Shares

 

Panmure Gordon may obtain further Placing Commitments.

Placing Commitments in excess of the number of ZDP Shares in respect of which the Tender Offer is accepted will be satisfied by the issue of up to 2,488,800 new ZDP Shares.

 

Other changes and approvals sought

 

If the Proposals are approved, in addition to the adoption of the New Articles to amend the ZDP Final Payment Date and the Final Capital Entitlement, changes will be made to the underlying Loans and security arrangements between the Company and Inland Homes:

 

·     to extend the protections afforded by the Loan Notes and Contribution Agreement to the 2024 ZDP Repayment Date;

·     to remove the Gearing Ratio contained in the Loan Notes;

·     to incorporate the Cover Ratio covenant contained in the Articles of Association into the Loan Note conditions so that it replaces the Gearing Ratio as a restriction on incurring funding for new sites; and

·     to remove wording in the conditions to the Loan Notes which is redundant, given the existence of the Security Covenant.

 

A second Resolution will be proposed at the General Meeting to ratify the issue of ZDP Shares in September 2016. A third resolution will be proposed at the General Meeting to grant authority to the Directors to allot relevant securities, up to a maximum aggregate nominal amount of £1,747,540.

 

Expected timetable

 

 

2018

 

Record Date for the Tender Offer

 

Publication and posting of the  Circular, Tender Form and Forms of Proxy

 

18 July

 

19 July

Tender Offer opens

 

3.00 p.m. on 19 July

Latest time for receipt of pink form of proxy for the ZDP Class Meeting

 

3.00 p.m. on 11 August

Latest time for receipt of white form of proxy for the General Meeting

 

3.10 p.m. on 11 August

Latest time and date for receipt of Tender Forms or for settlement of TTE Instructions in respect of the Tender Offer (i.e. close of Tender Offer)

 

3.00 p.m. on 11 August

Latest time for securing Placing Commitments

12 noon on 13 August

 

 

ZDP Class Meeting

 

3.00 p.m. on 13 August

Ordinary Class Meeting

 

3.05 p.m.* on 13 August

General Meeting

3.10 p.m.* on 13 August

 

Publication of the results of the Meetings and the results of the Tender Offer and the results of the Placing

 

13 August

Admission of new ZDP Shares (if any) to the standard segment of the Official List and to trading on the London Stock Exchange and commencement of dealings in such new ZDP Shares (if any) 

 

16 August

CREST accounts credited in respect of Tender Offer proceeds for uncertificated ZDP Shares

 

as soon as practicable after 8.00  a.m. on 16 August

 

Placees' CREST accounts credited with the ZDP Shares

 

as soon as practicable after 8.00 a.m. on 16 August

 

Cheques despatched in respect of Tender Offer proceeds for certificated ZDP Shares

 

16 August

Definitive share certificates for the New ZDP Shares to be dispatched (if required)

 

20 August or as soon as possible thereafter

All of the times and dates in the expected timetable may be extended or brought forward without further notice. If any of the above times and/or dates change materially, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service provider.

 

  *or as soon thereafter as the preceding Meeting concludes or is adjourned.

 

1.       Background to the Proposals

The Inland Group has been a brownfield property regeneration specialist since its inception in 2005 and this continues to be a core activity of the Group. Inland is regularly made aware of site purchase opportunities through its established relationships with vendors and public sector bodies. By applying its expertise in resolving planning, environmental and other issues, Inland is able to take advantage of site purchase opportunities which may be less attractive to the larger housebuilding companies who generally prefer to purchase consented land or land which does not present planning and environmental challenges.  The Inland Group has an excellent track record in obtaining planning consents for brownfield sites.  Once the planning and remediation work has been completed, the Group either: (a) sells consented brownfield sites, comprising multiple plots, to house-builders realising significant gains for the Group; or (b) enters into partnership agreements with housing associations to develop such sites; or (c) undertakes the construction work itself.

 

Against the backdrop of hardening credit in 2008/9, an illiquid market for consented land and prices being depressed by forced sellers, RBS, the primary lender to the Inland Group at that time, demanded onerous terms for the continuation of its facilities. Rather than accede to those terms, the Inland Group sold sufficient assets to repay the entirety of its borrowings from RBS. To have achieved this in such adverse market conditions demonstrates the Inland Group's underlying financial strength and the quality of its tangible asset backing.

 

With the credit markets taking time to recover and faced with opportunities to acquire sites with development potential on favourable terms, the Group sought alternative sources of capital.  It raised an initial £8.5 million through the first issue of ZDP Shares on 20 December 2012 and subsequently raised further monies through a series of tap issues of ZDP Shares at increasing prices.

 

At the time of the initial issue of ZDP Shares, the Inland Group's then most recent audited consolidated accounts (to 30 June 2012) showed gross assets of £65.7 million and shareholders' equity of £49.4 million.   The Group's unaudited interim balance sheet as at 31 December 2017 showed gross assets of £270.7 million and shareholders' equity of £134.7 million, demonstrating significant growth of the Group over the intervening period.

 

The book values of property assets held as inventory in the Inland Group's financial statements are based on IFRS which use cost, less any impairment provisions.  As progress is made towards winning planning consents, the increase in the value of the sites is greater than the costs incurred, resulting in the book values understating the Group's asset backing.  As from December 2015, the Group adopted the performance measures of the European Public Real Estate Association (EPRA), which quantify this added value.  The December 2017 interim statement shows an EPRA valuation uplift of £58.2 million, which increases gross assets to £328.9 million.  An illustration of the effect of using EPRA valuations as against IFRS valuations in the context of the Proposals is set out in paragraph 5 below.

 

Inland's business model has evolved since the initial ZDP Share issue in 2012.  While the application of its regeneration expertise to acquire brownfield sites and win planning consents remains an important part of its business, the Group has expanded its greenfield site operations.  It has increased its capacity to control greenfield sites through the use of options, which enable sites to be purchased at a discount to open market value.  Greenfield sites are either sold on after planning consents have been granted or developed by the Group as part of its growing house-building operations.  In the year ended 30 June 2018, the Group built and sold 275 private homes. Increasingly, the Group is working with housing associations on a partnership basis whereby it sells consented land to the association and simultaneously enters into a contract with the association for building homes on that land.

 

Although construction carries its own risks, the overall increase in the number of sites and the greater scale of the Inland Group's operations represents a diversification of risks compared to those to which the Inland Group was subject to in 2012.

 

The financing requirements of the Group have evolved to reflect its more diversified business model.  Its brownfield site acquisitions provide tangible asset backing for the ZDP Shares, and the ZDP Shares represent an important source of term finance which is well aligned with the underlying development activity.  For this reason the Inland Group proposes to extend the life of the ZDP Shares, which are currently due to be redeemed on 10 April 2019, and to issue more ZDP Shares for cash over time.

 

The working capital requirements of the Group's increased house-building activity result in short term fluctuations in borrowings, for which the Inland Group has arranged revolving credit facilities.  Whilst these fluctuations are in the normal course of the business as now operated, they risk putting the Group in breach of the Gearing Ratio contained in the Loan Documentation between the Company and Inland which in turn results in a restriction on the Group acquiring new sites.  The Proposals therefore include the removal of this restriction and its replacement with an enhancement to the protections afforded by the Cover Ratio.  Further details are set out in paragraph 2 below.

 

2.       The Proposals

 

The Proposals comprise the deferral of the Final Repayment Date for the ZDP Shares from 10 April 2019 to 10 April 2024, changes to the Loan Documentation between the Company and Inland Homes, including revised protections for ZDP Shareholders, and the ratification of a previous issue of ZDP Shares in excess of the allotment authority conferred on the Directors under the Existing Articles.

 

2.1        Extension of life of the ZDP Shares

 

The Board considers that it is in the best interests of the Company and the Inland Group to maintain the gearing afforded by the ZDP Shares after 10 April 2019 and to give ZDP Shareholders the opportunity to continue their investment for a longer period.  Accordingly, the Proposals include the extension of the life of the ZDP Shares by a further five years to 10 April 2024.

 

If the Proposals are approved, the Final Capital Entitlement will be increased from 155.9 pence to 201.4 pence, by compounding the 2019 Final Capital Entitlement (being 155.9 pence) at an annual rate of return of 5.25 per cent. for a further five years to the 2024 ZDP Repayment Date. The change in the Final Capital Entitlement and Final Payment Date will be effected by the adoption of the New Articles.

 

2.2        Amendments to Loan Documentation

 

All proceeds of issues of ZDP Shares have been (and will be) loaned by the Company to Inland Homes on a secured basis.  Additional protection for ZDP Shareholders is provided by a Contribution Agreement under which Inland Homes is required to contribute assets to the Company to the extent required to ensure that the Company is capable of satisfying its payment obligations to ZDP Shareholders on the 2019 ZDP Repayment Date.  If the Proposals are approved, the Contribution Agreement will be amended to reflect the extension of the repayment date to 10 April 2024.

 

Additionally, the Loan Documentation and Articles contain covenants for the benefit of ZDP Shareholders including the Gearing Ratio (being Financial Indebtedness plus accrued ZDP Liability : Assets), set at 40 per cent. and the Cover Ratio (being Assets : Financial Indebtedness plus ZDP Liability as at the Final ZDP Payment Date), set at 1.8, as well as a requirement that (as at each relevant testing date) the value of the assets pledged to the Company as security for the repayment of the monies loaned by the Company to the Group and for Inland's obligations under the Contribution Agreement should not be less than 120 per cent. of the accrued ZDP Liability less any pledged cash.

 

It is proposed that these covenants are amended to better reflect the evolution of the Inland Group's business since 2012 and, in particular, the more flexible funding requirements associated with the housebuilding activities which it carries on alongside its continuing brownfield property development business, each as described more fully in paragraph 1 above.

 

The Gearing Ratio covenant described above is triggered in broadly the same circumstances as the Cover Ratio covenant, but is calculated using accrued ZDP Share values, not the Final Capital Entitlement.  It is more restrictive than the Cover Ratio covenant.

 

As explained in more detail in paragraph 3.1 of this announcement below, the Company has the benefit of first legal charges granted by members of the Group under or pursuant to the Master Security Agreement over certain specific tangible assets and cash.  Under the Security Covenant, the value of that security should be equal to at least 120 per cent. of the accrued liability to ZDP Shareholders, tested quarterly.  If there is a shortfall, Inland Homes is obliged to pledge or procure the pledging by members of its Group of additional tangible assets as security within 90 days of the relevant quarterly testing date.  This affords a degree of protection to ZDP Shareholders as it results in the value of first charged assets being topped up in the event of a fall in asset values.

 

Breach of the Gearing Ratio, which is also tested quarterly, triggers a prohibition on the financing of new site purchases, but does not prevent the Inland Group from taking on additional debt to complete and market existing developments.  As explained above, the Gearing Ratio covenant could be breached due to normal short term fluctuations in the level of revolving credit facilities drawn-down to fund the Group's ordinary course housebuilding activities.  The covenant may therefore have the unintended effect of limiting the site purchases on which the Inland Group relies for its longer term growth and which will, in due course, enhance the cover for the ZDP Shares.

 

Accordingly, if the Proposals are approved, the Gearing Ratio test will no longer apply and the restriction on taking on funding for new site purchases will instead be triggered if the Cover Ratio is less than 1.8 times on any covenant testing date, subject to a carve out for smaller site purchases (up to £10 million in aggregate until the Cover Ratio of 1.8 times, or more, is restored).  This amendment is intended to strike a balance between providing reasonable protections to the holders of ZDP Shares on the one hand whilst not creating impediments to the future growth of the Group's business on the other.

 

In addition to the amendments to the Loan Documentation referred to above, the financial covenants incorporated into the conditions to the Loan Note will be further amended by the deletion of a requirement for Group companies to grant first-ranking security over any properties which are acquired on deferred payment terms using ZDP Share monies as soon as any prior security granted to the sellers of such properties in respect of future consideration payments is released.  This provision overlaps with the Security Covenant and appears to the Board to be largely redundant going forward.

 

2.3        Authorities to allot ZDP Shares

 

The Resolutions include an ordinary resolution (numbered 3) to grant authority to the Directors under section 551 of the Companies Act to allot relevant securities, up to a maximum aggregate nominal amount of £1,747,540 so as to accommodate the Placing and allow flexibility for further issues in the future.

 

At the time of their adoption, the Existing Articles incorporated an authority for the Directors to allot ZDP Shares having an aggregate nominal value of £1,200,000 (equivalent to 12,000,000 ZDP Shares) during the period expiring on 21 November 2017.

 

This limit of the allotment authority to 12,000,000 ZDP Shares was inadvertently breached by the issue of new ZDP Shares in September 2016, which increased the number of ZDP Shares in issue to 12,444,200. Accordingly, a Resolution (numbered 2) will be proposed at the General Meeting to ratify the issue of ZDP Shares beyond the limit then in place

 

In addition to the changes described at paragraphs 2.1 and 2.2 above, the New Articles will provide for a shorter notice period to apply for general meetings (14 clear days as opposed to 21 clear days) to provide greater flexibility for the Board to convene general meetings at short notice.  The existing 21 clear day period will continue to apply to annual general meetings.

 

2.4        The Tender Offer and Placing

 

In connection with the Proposals, Panmure Gordon is making the Tender Offer to acquire ZDP Shares, as set out in greater detail paragraph 6 below and in Appendix 2, and, as at the date of this announcement, has procured placees under the Placing with Placing Commitments to purchase up to 2,320,955 ZDP Shares at 150.8 pence per ZDP Share, being an amount equal to the Tender Price.  The extent to which ZDP Shareholders participate in the Tender Offer is a matter for each ZDP Shareholder to decide, and will be influenced by his or her own individual financial and tax circumstances, investment objectives and view of the Company's prospects. 

 

If the Placing Commitments exceed the acceptances under the Tender Offer, the Company will allot up to 2,488,800 new ZDP Shares in respect of the difference, and the excess Placing Commitments will be satisfied by the issue at the Tender Price of additional ZDP Shares (up to that maximum amount).  If Tender Offer acceptances exceed the Placing Commitments, the numbers of ZDP Shares tendered by each ZDP Shareholder will be scaled back on a pro rata basis in order that they should equate to the number of ZDP Shares actually placed pursuant to the Placing.

 

2.5        General

 

Having taken market soundings from major ZDP Shareholders, the Board has received substantial support for the Proposals including written undertakings to vote in favour of them in respect of all the Ordinary Shares and c.6.95 million ZDP Shares, representing approximately 56 per cent. of the ZDP Shares in issue as at the date of this announcement.  

 

Undertakings not to accept the Tender Offer have been received in respect of c. 6.64 million ZDP Shares, representing approximately 53 per cent. of the ZDP Shares in issue as at the date of this announcement.

 

2.6        Use of Proceeds from Proposals

 

Panmure Gordon has, at the date of this announcement, procured Placing Commitments in respect of 2,320,955 ZDP Shares under the Placing. Panmure Gordon may obtain further Placing Commitments

The Placing Commitments are likely to exceed the Tender Offer acceptances and any excess Placing Commitments will be satisfied by the issue of new ZDP Shares, thereby raising cash for the Inland Group's ongoing business operations and the cost of implementing the Proposals.

 

3.       Protections for ZDP Shareholders which are not proposed to be changed

 

The Proposals need to be considered in the context of the overall protections afforded to the Company, the Inland Group and the ZDP Shareholders.

 

3.1     Security over Pledged Cash and Pledged Assets

 

          Payment by the Company to ZDP Shareholders of the Final Capital Entitlement is guaranteed by Inland under the Contribution Agreement.  As described earlier in this announcement, the Company lends the proceeds of ZDP Share issues to Inland and secures that loan (and Inland's obligations under the Contribution Agreement) by way of a charge over cash ("Pledged Cash") and first legal charges over tangible assets, mainly development properties, investments in property joint ventures and amounts receivable for the sale of properties ("Pledged Assets").  The Company also has recourse to Inland's other assets (ranking behind other creditors, banks and other lenders in relation to assets held by subsidiaries) to support the amounts due to ZDP Shareholders. There are no prior or pari passu charges over the Pledged Cash or Pledged Assets.

 

          The Pledged Assets must have a book value in excess 120 per cent. of the accrued value of the ZDP Shares (net of the Pledged Cash), tested at quarterly intervals.  If there is a shortfall, the Inland Group will be obliged to grant first legal charges over additional tangible assets within three months to ensure that the value of the first-charged assets is restored.  The ZDP Shares will become repayable if any shortfall in the value of the Pledged Assets is not remedied within three months, unless ZDP Shareholders approve alternative arrangements.

 

3.2     Restrictions on dividends and payments to holders of Ordinary Shares

 

          The Cover Ratio requirements prevent dividends, share buybacks or any other payments to external shareholders of any company in the Inland Group unless the Cover Ratio after such issuance or payment is a minimum of 1.8 times.  The Cover Ratio is calculated using IFRS accounting values, not EPRA values.

 

          For the purposes of the Cover Ratio covenant, deferred consideration (where the vendor has no recourse to the Inland Group's other assets) is deducted from Assets and not treated as Financial Indebtedness, as is other deferred consideration up to 60 per cent. of the initial purchase price.  Any Excess Deferred Consideration over 60 per cent. of the initial purchase price (where the vendor has recourse to other Inland Group assets) is treated as an increase in Financial Indebtedness. The Financial Indebtedness figure used to calculate the Cover Ratio excludes borrowings repayable more than six months after the Final Redemption Date.

 

4.       Risk factors

 

Inland's ability to pay the Final Capital Entitlement is subject to the Inland Group having sufficient assets to do so on 10 April 2024.  While the security arrangements, described in paragraph 3 above, reduce the risk of ZDP Shareholders not receiving their Final Capital Entitlement on the due date, they do not eliminate it.

 

The Directors believe that the risk of nothing being available to ZDP Shareholders on the Final Repayment Date is not material because, in the event of a shortfall, any Pledged Cash and the proceeds of sale of the Pledged Assets (net of realisation and other costs) will be paid to ZDP Shareholders.  The risk of the Inland Group being unable to pay the Final Capital Entitlement on 10 April 2024 is greater than the risk of it being unable to do so on 10 April 2019 because of the longer period during which ZDP Shareholders may be exposed to the risk of a material adverse change to the Group's business or financial position.

 

ZDP Shareholders should refer to the risk factors set out in the prospectus issued by the Company dated 14 December 2012, which was published when the ZDP Shares were first admitted to the to the Official List and which remain applicable in all material respects to any assessment of the risks associated with the ZDP Shares.  The prospectus is available at www.inlandhomesplc.com/investors/inland-zdp/zdp-reports-and-presentations/.

 

 

5.       Illustrative Cover Ratios and Hurdle Rates 

 

The tables below show the financial effect of the Proposals being approved, the Placing Commitments being satisfied in full and an illustrative £2 million cash being raised for the Company pursuant to the Placing which is invested in inventories by reference to Inland's financial position as at 31 December 2017 as set out in the unaudited interim financial statements (using IFRS principles to calculate the book value of assets) followed by the same financial illustration using EPRA values for property assets. Each table is as adjusted by: (i) a provision for the costs of implementing the Proposals, which are estimated to amount to approximately £300,000; and (ii) the increase in the Final Capital Entitlement pursuant to the Proposals from 155.9 pence to 201.4 pence, which amounts in aggregate to approximately £25.063 million.  This is further increased to £27.734 million if the illustrative additional ZDP Shares are issued to raise £2 million for the Inland Group.

 

Financial effect of the Proposals using book values (IFRS)

 

 

Book values

31-Dec-17

Adjustments

ZDP Cover conservative

 

ZDP Cover alternative

 

£'000

 

 

 

 

 

 

Property

       190,683

2,000

       192,683

 

      190,683

 

Property JVs

         20,457

 

         20,457

 

        20,457

 

Other tangible (exc cash)

         34,816

 

        34,816

 

        34,816

 

Total assets

      245,956

 

        247,956

 

 247,956

 

Less trade creditors

  (41,376)

 

(41,376)

 

    (41,376)

 

Assets

         204,580

 

          206,580

 A

 

 

 

 

 

 

 

 

 

Loans net of cash

(51,989)

(300)

(52,289)

 

(52,289)

 

 

 

 

 

 

      154,291

C

Final Capital Entitlement

(17,864)

(9,870)

(27,734)

 

(27,734)

D

Financial indebtedness

(69,853)

 

(80,023)

 B

 

 

 

 

 

 

 

 

 

Equity

     134,727

 

 

 

 

 

 

 

 

 

 

 

 

Cover Ratio - conservative basis

 

 

                2.6

 A/B

 

 

Cover ratio - other basis

 

 

 

 

             5.6

C/D

Hurdle Rate per annum to pay Final Capital Entitlement

 

-15.5%

 

 

 

 

The Cover Ratio for the purposes of the Articles is calculated on the conservative basis shown above.  The alternative basis is used by some investment analysts (including certain published financial statistics).

 

Financial effect of Proposal using EPRA valuation

 

The table below sets out the financial effect of the Proposals using EPRA valuations for the property assets.

 

EPRA values

31-Dec-17

ZDP Cover conservative

 

ZDP Cover alternative

 

£'000

 

 

 

 

 

 

Property

      249,596

2,000                        

  251,596

 

  251,596

 

Property JVs

       20,457

 

         20,457

 

    20,457

 

Other tangible (exc cash)

           34,816

 

        34,816

 

     34,816

 

Total assets

         304,869

 

       306,869

 

   306,869

 

Less trade creditors

  (41,376)

 

(41,376)

 

(41,376)

 

Assets

         263,493

 

       265,493

 A

 

 

 

 

 

 

 

 

 

Loans net of cash

(51,989)

(300)

(52,289)

 

(52,289)

 

 

 

 

 

 

  213,204

C

Final Capital Entitlement

(17,864)

(9,870)

(27,734)

 

(27,734)

D

Financial indebtedness

(69,853)

 

(80,023)

 B

 

 

 

 

 

 

 

 

 

Equity

         193,640

 

 

 

 

 

 

 

 

 

 

 

 

Cover Ratio - conservative basis

 

 

                3.3

 A/B

 

 

Cover ratio - other basis

 

 

 

 

          7.7

C/D

Hurdle Rate per annum to pay Final Capital Entitlement

 

-19.1%

 

 

 

 

 

The EPRA uplift in asset values as at 31 December 2017 is £58.193 million.  The EPRA basis also includes an adjustment to add back deferred tax, however, no tax adjustment has been made to the amounts shown above.

 

 

6.       The Tender Offer

 

The Directors recognise that some ZDP Shareholders may prefer to receive cash instead of holding ZDP Shares with a later maturity date.  Accordingly, Panmure Gordon is making the Tender Offer as principal on the terms set out in this paragraph and Appendix 2. 

 

In order to facilitate the sale of existing ZDP Shares for cash at the Tender Price, Inland has agreed to pay the transaction costs of the Tender Offer.

 

As at the date of this announcement, Panmure Gordon has procured Placing Commitments from investors in respect of 2,320.955 ZDP Shares at the Tender Price, which is also the Placing Price, of 150.8 pence per ZDP Share.  ZDP Shares tendered by ZDP Shareholders up to the amount of Placing Commitments obtained by Panmure Gordon will be sold to placees.

However, if the aggregate number of ZDP Shares tendered under the Tender Offer exceeds the number of ZDP Shares placed by Panmure Gordon pursuant to the Placing, the numbers of ZDP Shares tendered by each ZDP Shareholder will be scaled down on a pro rata basis to equate to the number of ZDP Shares actually placed pursuant to the Placing.

 

The Tender Price of 150.8 pence represents a premium of 1.26 per cent. to the accrued value of a ZDP Share as at 16 August 2018, being the settlement date of the Tender Offer.    The annual gross redemption yield of the ZDP Shares as at the Settlement Date is 5.25 per cent. on 150.8 pence, being the Tender Price, and 5.48 per cent. on 148.9 pence, being the accrued value of a ZDP Share on the Settlement Date.

 

The Tender Offer is subject, inter alia, to the Proposals being approved at the Meetings and will lapse if the Resolutions are not passed. The Tender Offer is not conditional upon Admission.

Further information relating to the Tender Offer is set out in Appendix 2.

ZDP Shareholders are not obliged to tender any ZDP Shares. Participation in the Tender Offer is a matter for each ZDP Shareholder to decide, and will be influenced by his or her own individual financial and tax circumstances, investment objectives and view of the Company's prospects.  ZDP Shareholders who do not wish to participate in the Tender Offer need take no action.

If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA immediately or, if you are in a jurisdiction outside the United Kingdom, another appropriately authorised independent financial adviser.

7. Share certificates

 

Existing certificates in respect of ZDP Shares will not be affected by the Proposals and will remain valid.

 

 

8. UK taxation

 

The following comments are intended only as a general guide to certain aspects of current UK law and HM Revenue & Customs ("HMRC") published practice, which is subject to change possibly with retrospective effect, and do not constitute tax advice. Shareholders should consult their own professional advisers regarding their own tax position and before taking any action in respect of the Circular. The comments below only apply to ZDP Shareholders who hold their ZDP Shares beneficially as an investment and do not address the position of certain classes of ZDP Shareholders such as dealers in securities, insurance companies, investment trust companies, pension funds and collective investment schemes or Shareholders who may hold their ZDP Shares in an Individual Savings Account "ISA".

 

The comments apply only to ZDP Shareholders who are resident in the UK. Shareholders who are subject to tax in a jurisdiction other than the UK are recommended to consult their own professional advisers.

 

The ZDP Shares constitute chargeable assets for the purposes of UK capital gains tax (or, in the case of corporate ZDP Shareholders, corporation tax on chargeable gains). A sale of ZDP Shares by a Shareholder to Panmure Gordon pursuant to the Tender Offer should be treated as a disposal of those shares for the purposes of UK taxation. Accordingly, and subject to the comments below, any such Shareholder who is UK resident for tax purposes may, depending on that ZDP Shareholder's personal circumstances, be subject to capital gains tax (or, in the case of corporate ZDP Shareholders, corporation tax on chargeable gains) in respect of any gain arising on such a sale.

 

ZDP Shareholders who continue their investment in the ZDP Shares following the approval of the Proposals and do not participate in the Tender Offer will not be treated as making a disposal for the purposes of UK taxation of chargeable gains (or, in the case of a corporate ZDP Shareholder, corporation tax on chargeable gains) as a result of doing so.  Altering the rights attached to the ZDP Shares that are already in issue is expected to be treated as a reorganisation of the share capital of the Company.  The amended ZDP Shares will therefore be treated as the same asset as the original ZDP shares acquired by the existing ZDP Shareholders.

 

Transactions in securities

 

No application has been made to HMRC for clearance under section 748 of the Corporation Tax Act 2010 ("CTA") or section 701 of the Income Tax Act 2007 ("ITA") that the anti-avoidance provisions of Part 15 of the CTA or Part 13 of the ITA should not apply in respect of the Tender Offer. Part 15 of the CTA and Part 13 of the ITA permit HMRC to counteract tax advantages arising from certain transactions in securities.

 

However, these sections will not apply where it can be shown:

 

•    in the case of any corporation tax advantage, that the transactions in question were entered into for genuine commercial reasons and that enabling corporation tax advantages to be obtained was not their main object or one of the main objects; and

•    in the case of any income tax advantage, that obtaining an income tax advantage was not the main purpose or one of the main purposes of the transactions.

 

These sections are not expected to apply generally in the context of the Tender Offer. However, ZDP Shareholders are advised to take independent advice as to the potential application of Part 15 of the CTA and Part 13 of the ITA in the light of their own particular motives and circumstances. More generally, the choice of whether to accept the Tender Offer will be a matter for each ZDP Shareholder to decide and will be influenced by their own individual circumstances and investment objectives.

 

Disguised interest

 

The "disguised interest" income tax provisions contained in Chapter 2A of Part 4 to the Income Tax (Trading and Other Income) Act 2005 seek to tax returns that are economically equivalent to interest as income. These provisions are, in principle, capable of applying to zero dividend preference shares. There is an exception for shares that are admitted to trading on a regulated market if they were issued before 6 April 2013 or, if issued on or after 6 April 2013, at the time of issue no arrangements involving only the shares would produce an amount which is economically equivalent to interest. The Directors have been advised that this exception should apply to the ZDP Shares on the basis of HMRC guidance and practice and that extending the life of the ZDP Shares already in issue by five years does not increase the risk that the disguised interest income tax provisions will apply to those ZDP shares. However, no assurances can be given that HMRC or the courts will agree with this interpretation or that there will be no change in the law.

 

The exception referred to above will not apply if a "relevant arrangement" is made by any person in relation to any ZDP Shares where the main purpose or one of the main purposes of that arrangement is to secure the production of a return that is economically equivalent to interest. The Directors do not intend that the Company will make any such an arrangement and ZDP Shareholders should consider their position very carefully before making any arrangements with respect to their own holdings of ZDP Shares and should take appropriate professional advice.

 

Similar disguised interest rules exist for the purposes of UK corporation tax (see Chapter 2A of Part 6 to the Corporation Tax Act 2009). The "Shares Accounted for as Liabilities" provisions in Chapter 6A of Part 6 to the Corporation Tax Act 2009 could also be relevant to a ZDP Shareholder within the charge to UK corporation tax. However, the rules in both Chapters 2A and 6A of Part 6 to the Corporation Tax Act 2009 are subject to an exclusion for arrangements that do not have a main purpose of obtaining a tax advantage.

 

9. The Meetings

 

The implementation of the Proposals requires the following Shareholder approvals:

 

·     the passing by ZDP Shareholders of the special resolution to be proposed at the ZDP Class Meeting;

·     the passing by Ordinary Shareholder(s) of the special resolution to be proposed at the Ordinary Class Meeting; and

·     the passing by the Ordinary Shareholder and the ZDP Shareholders (voting together) of the New Articles Resolution (numbered 1) and by the Ordinary Shareholder of the remaining Resolutions (numbered 2 and 3) at the General Meeting.

 

The ZDP Class Meeting, Ordinary Class Meeting and the General Meeting will take place at the offices of Inland Homes, Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire HP6 5FG on 13 August 2018.

 

9.1        ZDP Class Meeting

 

The ZDP Class Meeting has been convened for 13 August 2018 at 3.00 p.m. at which a special resolution will be proposed consenting to the passing of the New Articles Resolution to be proposed at the General Meeting and any variation of their class rights which might arise under or as a result of the passing and carrying into effect of such Resolution and/or the implementation of the Proposals.  

 

Only ZDP Shareholders are entitled to attend and vote at the ZDP Class Meeting.

 

The majority required for the passing of the Resolution to be proposed at the ZDP Class Meeting is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the ZDP Class Meeting.

 

9.2        Ordinary Class Meeting

 

The Ordinary Class Meeting has been convened for 13 August 2018 at 3.05 p.m. at which a special resolution will be proposed consenting to the passing of the New Articles Resolution to be proposed at the General Meeting and any variation of their class rights which might arise under or as a result of the passing and carrying into effect of such Resolution and/or the implementation of the Proposals.

 

Only Ordinary Shareholder(s) are entitled to attend and vote at the Ordinary Class Meeting.

 

The majority required for the passing of the Resolution to be proposed at the Ordinary Class Meeting is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the Ordinary Class Meeting.

 

9.3        General Meeting

 

The General Meeting has been convened for 13 August 2018 at 3.10 p.m. Ordinary Shareholders and ZDP Shareholders are entitled to vote (together) in respect of the New Articles Resolution to be proposed at the General Meeting.  Only Ordinary Shareholders are entitled to vote in respect of the remaining Resolution (numbered 2) to be proposed at the General Meeting and/or the implementation of the Proposals.

 

At the General Meeting, Shareholders will be asked to consider and, if thought fit, pass the following Resolutions:

 

1.   a special resolution to approve the adoption of the New Articles in substitution for the Existing Articles (the "New Articles Resolution"). ZDP Shareholders are entitled to vote on this Resolution;

 

2.   a special resolution to ratify the issue of ZDP Shares in excess of the limit then applicable under the Existing Articles.  This Resolution can only be voted on by the Ordinary Shareholder; and

 

3.   an ordinary resolution to grant authority to the Directors under section 551 of the Companies Act to allot relevant securities, up to a maximum aggregate nominal amount of £1,747,540, such authority expiring at the earlier of the Company's next annual general meeting and 31 December 2019. This Resolution can only be voted on by the Ordinary Shareholder.

 

The majority required for the passing of a special resolution is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the General Meeting. The majority required for the passing of an ordinary resolution is not less than 50 per cent. of the votes cast (in person or by proxy) on that Resolution at the General Meeting.

 

 

10.        Recommendation

 

The Board, which has been so advised by EGR Broking Limited, considers that the terms of the Proposals are in the best interests of ZDP Shareholders, Ordinary Shareholders and ZDPCo as a whole.

 

The Board unanimously recommends that ZDP Shareholders vote in favour of the Resolutions to be proposed at the ZDP Class Meeting and the New Articles Resolution to be proposed at the General Meeting. 

 

The Board unanimously recommends that the Ordinary Shareholder vote in favour of the Resolutions to be proposed at the Ordinary Class Meeting and the General Meeting. 

 

The Directors make no recommendation to ZDP Shareholders as to whether they should tender their ZDP Shares under the Tender Offer.

 

The impact of the Proposals and the Tender Offer on ZDP Shareholders will depend on their own personal, financial and tax circumstances and their investment objectives. Accordingly, Shareholders are recommended to read carefully all the information in the Circular before making any decision.

 

ZDP Shareholders who are in any doubt as to the action they should take should consult an appropriately qualified independent adviser, authorised under the Financial Services and Markets Act 2000, without delay.

 

11.        The Placing

Information relating to the Placing, including its terms and conditions, is set out in Appendix 3.

 

Publication on websites and National Storage Mechanism

 

The Circular and other documents will shortly be available on the Company's website at www.inlandhomesplc.com/investors/inland-zdp/zdp-reports-and-presentations/, subject to certain restrictions relating to persons resident in Restricted Jurisdictions. The contents of this website are not incorporated into, and do not form part of, this announcement.

 

A copy of the Circular has been filed with UKLA by submission to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM 

 

Enquiries: 

Inland Homes plc and Inland ZDP PLC

Tel: 44 (0) 1494 762 450

Stephen Wicks, CEO/Chairman

Nishith Malde, Finance Director

 

 

 

EGR Broking Limited     

Financial adviser to Inland ZDP PLC

David Floyd

Jonathan Hall

 

 Tel: 44 (0)203 697 9496

Panmure Gordon (UK) Limited

Nominated Adviser and Broker to Inland Homes plc

 and broker to Inland ZDP PLC 

Tel: 44 (0) 20 7886 2500

Dominic Morley (Corporate Finance)

 

 

 

FTI Consulting

Financial PR and investor relations

Tel: 44 (0) 20 3727 1000

Dido Laurimore

Claire Turvey

Richard Gotla

Methuselah Tanyanyiwa

 

 

Important notices relating to financial advisers and corporate brokers

EGR Broking Limited, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting for the ZDPCo and Inland Homes in connection with the Proposals and for no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, for the content of the Circular, or for providing advice in relation to the Proposals.

 

EGR Broking Limited has given and has not withdrawn its written consent to the publication of this document containing references to its name in the form and context in which they appear.

 

Panmure Gordon, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting as principal in relation to the Tender Offer and for ZDPCo and Inland Homes in connection with the other aspects of  the Proposals, including the Placing insofar as it relates to new ZDP Shares being issued by the Company, and for no one else and will not be responsible to anyone other than ZDPCo and Inland Homes for providing the protections afforded to its clients, for the content of the Circular, or for providing advice in relation to the Proposals.

 

Panmure Gordon has given and has not withdrawn its written consent to the publication of the Circular containing references to its name in the form and context in which they appear.

This announcement is for information purposes only and is not an invitation, inducement or the solicitation of an offer to purchase, or otherwise acquire, subscribe for or sell or otherwise dispose of or exercise rights in respect of any securities. 

Further information

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or 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 pursuant to the Proposals (including the Tender Offer) or otherwise. The Proposals (including the Tender Offer) will be implemented solely pursuant to the terms set out in the Circular and Tender Form. Any decision in respect of, or other response to, the Proposals (including the Tender Offer) should be made only on the basis of the information contained in the Circular. ZDP Shareholders are advised to read the Circular carefully.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the ability of ZDP Shareholders who are not resident in the United Kingdom to vote on the Proposals or participate in the Tender Offer may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or Z|DP Shareholders who are not resident in the United Kingdom will need to inform themselves about, and observe, any applicable legal or regulatory requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.

The Tender Offer is not being, and will not be, made available, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality of interstate or foreign commerce of, or any facility of a national state or other securities exchange of, any Restricted Jurisdiction unless conducted pursuant to an exemption from the applicable securities laws of such Restricted Jurisdiction.

Accordingly, copies of this announcement and all documents relating to the Tender Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction except pursuant to an exemption from the applicable  securities laws of such Restricted Jurisdiction and persons receiving this announcement (including, without limitation, agents, nominees, custodians and trustees) must not distribute, send or mail it in, into or from such jurisdiction. Any person (including, without limitation, any agent, nominee, custodian or trustee) who has a contractual or legal obligation, or may otherwise intend, to forward this announcement and/or the Circular and/or any other related document to a jurisdiction outside the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.

 

Appendix 1

DEFINITIONS

 

The following definitions apply throughout this announcement, other than Appendix 3 which contains its own definitions, unless the context otherwise requires:

 

2019 Final Capital Entitlement

155.9 pence

2019 ZDP Repayment Date

10 April 2019

2024 Final Capital Entitlement

201.4 pence

2024 ZDP Repayment Date

10 April 2024

Articles or Articles of Association

the articles of association of the Company, as amended from time to time

Assets

in the context of the Cover Ratio, Assets means the net sum of (i) consolidated gross assets of the Inland Group; (ii) less intangible assets; (iii) less cash; (iv) less trade creditors payable before six months following the ZDP Final Payment Date; and (v) less deferred consideration payable for sites purchased by Inland Group companies other than (a) any Excess Deferred Consideration and (b) any deferred consideration payable after six months following the ZDP Final Payment Date  

Board or Directors

the board of directors of the Company from time to time

Business Day

any day other than a Saturday, Sunday or public holiday in the UK on which clearing banks in the UK are open for general banking business

Circular

the circular containing information concerning the Proposals and notices of the Meetings dated

Class Meeting

the ZDP Class Meeting or the Ordinary Class Meeting as the context may require

Closing Date

3.00 p.m. on 11 August 2018

Contribution Agreement

as the context requires, the contribution agreement entered into between Inland and ZDPCo on 20 December 2012 as it may be amended or restated from time to time

Cover Ratio or Cover

the ratio of (i) Assets to (ii) the sum of the Financial Indebtedness and the ZDP Liability as at the Final ZDP Payment Date

CREST

the system for the paperless settlement of trades in securities and the holding of uncertificated securities, operated by Euroclear UK & Ireland Limited

Directors or Board

the board of directors of the Company

EPRA

the European Public Real Estate Association

Excess Deferred Consideration

the deferred consideration due to a vendor by the Inland Group in respect of a site which represents more than 60 per cent. of the initial purchase price, excluding amounts payable after six months following the ZDP Final Payment Date and excluding amounts in respect of which the vendor has no recourse to the assets of the Inland Group other than the asset sold by such vendor

Existing Articles

the Articles in force as at the date of this announcement

Final Capital Entitlement

the amount per ZDP Share to which a ZDP Shareholder will be entitled on the relevant repayment date of the ZDP Shares, being either 155.9 pence in respect of the 2019 Final Capital Entitlement or 201.4 pence in respect of the 2024 Final Capital Entitlement

 

Financial Indebtedness

the net sum of (i) bank and other borrowings less any cash of the Inland Group and (ii) any Excess Deferred Consideration; other than any indebtedness which is repayable after six months following the ZDP Final Payment Date

Form(s) of Proxy

the forms of proxy for use by Shareholders in relation to the Meetings

FSMA

the Financial Services and Markets Act 2000 (as amended)

Gearing Ratio

in relation to the existing Loan Notes only, the gearing ratio of: (i) the sum of the Financial Indebtedness and the accrued ZDP Liability to (ii) Assets

General Meeting

 

the general meeting of the Company convened for 13 August  2018, commencing at 3.10 p.m. (or as soon thereafter as the ZDP Class Meeting concludes or is adjourned), or any adjournment thereof

Gross Redemption Yield

the maximum annualised return that can be achieved, before taxation, in terms of capital from continuing to hold a ZDP Share and holding it until the ZDP Final Payment Date

HMRC

HM Revenue & Customs

Hurdle Rate

the minimum rate of return per annum on Assets at which the Final Capital Entitlement is paid in full

IFRS

International Financial Reporting Standards

Inland Group or Group

Inland Homes plc and its subsidiaries

Inland or Inland Homes

Inland Homes plc

Loan

the outstanding nominal value from time to time represented by the Loan Note(s)

Loan Documentation

the Loan Note(s), Contribution Agreement, Master Security Agreement and any deeds of charges and other ancillary documents relating thereto

Loan Note(s)

the Loan Note(s) issued by Inland to ZDPCo when ZDP Shares are issued and as the context requires, the Loan Note(s) as amended pursuant to the Proposals

London Stock Exchange

London Stock Exchange Plc

Master Security Agreement

the security agreement entered into between Inland and ZDPCo on 20 December 2012

Meetings

the ZDP Class Meeting, Ordinary Class Meeting and the General Meeting (or any combination of them as the context may require)

New Articles

the new Articles proposed to be adopted pursuant to the Resolutions in connection with the Proposals

New Articles Resolution

the Resolution to adopt the New Articles,

Official List

the Official List of the UK Listing Authority

Ordinary Class Meeting

the class meeting of Ordinary Shareholder(s) convened for 13 August 2018, commencing at 3.05 p.m., or any adjournment thereof

Ordinary Shares

the ordinary shares of £1 each in the capital of the Company

Ordinary Shareholder

Inland Homes 2013 Limited, being the holder of ordinary share(s) in the capital of the Company

Overseas Shareholders

ZDP Shareholders who are resident in or citizens of, territories outside the UK and not resident in, or citizens of, any of the Restricted Territories

Panmure Gordon

Panmure Gordon (UK) Limited

Placing

the placing of ZDP Shares by Panmure Gordon as referred to in this announcement

Placing Agreement

the agreement between Panmure Gordon and the Company relating to the Placing

Placing Commitments

the legally-binding placing commitments for ZDP Shares obtained by Panmure Gordon pursuant to the Placing

Placing Price

150.8 pence per ZDP Share

Proposals

the proposals as described in paragraph 2 of this announcement

Pledged Assets

all interests in assets of the Inland Group which are the subject of first charges in favour of ZDPCo pursuant to the Master Security Agreement

Pledged Cash

cash held in a bank account opened by Inland holding cash which Is subject to a first legal charge in favour of ZDPCo

Register

the register of holders of ZDP Shares

Record Date

the record time and date for ZDP Shareholders' entitlements under the Tender Offer which is close of business on 18 July 2018

Regulatory Information Service

a service approved by the London Stock Exchange for the distribution to the public of announcements

Resolutions

the resolutions to be proposed for approval by Shareholders at the Meetings, or any of them as the context requires, to approve the Proposals

Redemption Yield

In respect of a ZDP Share the annually compounded rate of return at which the discounted value of the Final Capital Entitlement equates to its actual, accrued or assumed value as at the date of calculation

Restricted Shareholders

ZDP Shareholders who are resident in, or citizens of, one of the Restricted Territories

Restricted Territories

any of the following territories: Australia, Canada, Republic of

South Africa, Japan or the United States or any other jurisdiction where the extension or acceptance of the Tender Offer would violate relevant laws and/or regulations of that jurisdiction

Security Covenant

the requirement, contained in the Loan Note(s), that (as at each relevant testing date) the value of the assets pledged to the Company as security under the Master Security Agreement should not be less than 120 per cent. of the accrued ZDP Liability less any pledged cash

Shares

ZDP Shares and/or Ordinary Shares as the context may require

Shareholder

a holder of ZDP Share(s) and/or Ordinary Share(s) in the Company as the context may require

Settlement Date

the settlement date of the Tender Offer which is expected to be 16 August 2018

Tender Form

the tender form for use by ZDP Shareholders who hold their ZDP Shares in certificated form in connection with the Tender Offer

Tender Offer

an invitation by Panmure Gordon to ZDP Shareholders on the Register on the Record Date (other than Restricted Shareholders) to tender their ZDP Shares on the terms and subject to the conditions set out in this announcement

Tender Price

150.8 pence per ZDP Share

TFE Instruction

a transfer from escrow instruction

TTE Instruction

a transfer to escrow instruction

UK

the United Kingdom of Great Britain and Northern Ireland

ZDP Class Meeting

the class meeting of ZDP Shareholders convened for 13 August 2018, commencing at 3.00 p.m., or any adjournment thereof

ZDPCo or the Company

Inland ZDP PLC

ZDP Final Payment Date

the date the ZDP Shares are due to be redeemed being either the 2019 ZDP Repayment Date or the 2024 ZDP Repayment Date as the context requires

ZDP Liability

for the purposes of the Cover Ratio means the total amount due to ZDP Shareholders on the ZDP Final Payment Date

 

 

ZDP Shareholder

a holder of ZDP Shares

ZDP Shares

the redeemable zero dividend preference shares of 10 pence each in the capital of the Company

 

 

 

Appendix 2

FURTHER INFORMATION ON THE TENDER OFFER

 

1          Tenders

 

1.1        Tender Offer is open to ZDP Shareholders on the Register on the Record Date. All such ZDP Shareholders (other than Restricted Shareholders) may tender ZDP Shares for purchase by Panmure Gordon as principal, subject to the terms and conditions set out in the Circular and, in respect of ZDP Shareholders holding their ZDP Shares in certificated form, in the Tender Form (which together with the Circular constitute the Tender Offer). ZDP Shareholders are not obliged to tender any ZDP Shares. 

 

1.2        Upon the Tender Offer becoming unconditional and unless the Tender Offer has been (and remains) suspended or has lapsed or has been terminated in accordance with the provisions of paragraph 2 of this Appendix 1, Panmure Gordon will accept offers of ZDP Shareholders validly made. Each ZDP Shareholder (other than Restricted Shareholders) will be entitled to have accepted in the Tender Offer valid tenders to Panmure Gordon in respect of some or all of its holding of ZDP Shares, but such entitlement is subject to scaling down as follows:  if the aggregate number of ZDP Shares tendered under the Tender Offer exceeds the number of ZDP Shares placed by Panmure Gordon pursuant to the Placing, the numbers of ZDP Shares tendered by each ZDP Shareholder will be scaled down on a pro rata basis in order that they should equate to the number of ZDP Shares actually placed pursuant to the Placing.

 

2          Conditions, Suspension and Termination

 

2.1        The Tender Offer is conditional on the following (together the "Conditions").

 

2.1.1     the passing of each of the Resolutions as set out in the notices of ZDP Class Meeting, Ordinary Class Meeting and General Meeting as set out at the end of the Circular, by not later than close of business 13 August 2018 or such later date (being not later than close of business on 31 August 2018 (the "Long Stop Date")) as the Company and Panmure Gordon may determine; 

 

2.1.2     the satisfaction of all of the conditions under clause 2 of the Placing Agreement (other than those that are defined as the "Additional Conditions" in paragraph 10.5 of Appendix 3 to this announcement) by the Long Stop Date; and

 

2.1.2     the Tender Offer not having been terminated in accordance with this paragraph 2 prior to the fulfilment of the condition referred to in sub-paragraph 2.1.1 above. 

 

2.2        Panmure Gordon will not purchase ZDP Shares pursuant to the Tender Offer unless the Conditions have been satisfied in full. If the Conditions are not satisfied prior to close of business on the Long Stop Date, Panmure Gordon may postpone the Tender Offer for up to 30 Business Days, after which time the Tender Offer, if not then completed, will lapse.

 

3          Tender Price

 

The Tender Price is 150.8 pence per ZDP Share.

 

5          Closing date

 

            Unless previously terminated in accordance with its provisions,  the Tender Offer will close for ZDP Shareholders at 3.00 p.m. on 11 August 2018 and it is expected that on 13 August 2018 the Company will make a public announcement of the total number of ZDP Shares tendered.

 

6          Additional provisions

 

6.1        ZDP Shares acquired by Panmure Gordon in the Tender Offer will be "On Exchange" in accordance with the rules of the London Stock Exchange.

 

6.2        ZDP Shares sold by ZDP Shareholders pursuant to the Tender Offer will be acquired by Panmure Gordon, as principal, with full title guarantee and free from all liens, charges, encumbrances, equitable interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching thereto on or after the Closing Date, including the right to receive any distributions declared, paid or made after that date.

 

6.3        Except as contained in this announcement, no person has been authorised to give any information or make any representations with respect to the Company or the Tender Offer and, if given or made, such other information or representations should not be relied on as having been authorised by Panmure Gordon or the Company. Under no circumstances should the delivery of this announcement or the delivery of any consideration pursuant to the Tender Offer create any implication that there has been no change in the assets, properties, business or affairs of the Company since the date of this announcement.

 

6.4        The provisions of the UK Contracts (Rights of Third Parties) Act 1999 do not apply to the Tender Offer.

 

7.         Restricted Shareholders and other Overseas Shareholders

 

7.1        The provisions of this paragraph and any other terms of the Tender Offer relating to Restricted Shareholders may be waived, varied or modified as regards specific ZDP Shareholders or on a general basis by Panmure Gordon in consultation with the Company but only if Panmure Gordon and the Company are satisfied that such waiver, variance or modification will not constitute or give rise to a breach of applicable securities or other law.

 

7.2        Overseas Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any such Overseas Shareholder wishing to tender ZDP Shares to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection herewith, the compliance with other necessary formalities and the payment of any transfer or other taxes or other requisite payments due in such jurisdiction. Any such Overseas Shareholder will be responsible for the payment of any such transfer or other taxes or other requisite payments due by whomsoever payable and Panmure Gordon and the Company and any person acting on their behalf shall be fully indemnified and held harmless by such Overseas Shareholder for any such transfer or other taxes or other requisite payments such person may be required to pay. No steps have been taken to qualify the Tender Offer or to authorise the extending of the Tender Offer or the distribution of the Tender Forms in any territory outside the United Kingdom.

 

7.3        The Tender Offer is not being made to Restricted Shareholders. Restricted Shareholders are being excluded from the Tender Offer to avoid offending applicable local laws relating to the implementation of the Tender Offer. Accordingly, copies of this announcement, the Circular, the Tender Form and any related documents are not being and must not be mailed or otherwise distributed into any Restricted Territory, including to ZDP Shareholders with registered addresses in Restricted Territories, or to persons who Panmure Gordon knows to be custodians, nominees or trustees holding ZDP Shares for persons in Restricted Territories. Persons receiving such documents (including, without limitation, custodians, nominees and trustees) should not distribute or send them in or into a Restricted Territory or use such mails or any such means, instrumentality or facility in connection with the Tender Offer, as so doing will render invalid any related purported acceptance of the Tender Offer. Persons wishing to accept the Tender Offer should not use such mails or any such means, instrumentality or facility for any purpose directly or indirectly relating to acceptance of the Tender Offer. Envelopes containing Tender Forms postmarked from a Restricted Territory or otherwise despatched from a Restricted Territory or Tender Forms which provide Restricted Territory addresses for the remittance of cash or return of Tender Forms will be rendered void.

 

7.4        Overseas Shareholders (who are not Restricted Shareholders) should inform themselves about and observe any applicable legal or regulatory requirements. If you are in any doubt about your position, you should consult your professional adviser in the relevant territory.

 

8.         Modifications

 

The terms of the Tender Offer shall have effect subject to such non-material modifications or additions as the Company and Panmure Gordon may from time to time approve in writing. The times and dates referred to in this announcement may be amended by agreement between the Company and Panmure Gordon.

 

 

Appendix 3

Terms and conditions of the Placing

1          INTRODUCTION

 

1.1        Redeemable zero dividend preference shares of 10 pence each in the capital of Inland ZDP plc (the "Company") (the "ZDP Shares") are available under the Placing (defined below) at a price of 150.8 pence per ZDP Share (free of commission and stamp duty/stamp duty reserve tax, whether existing or new ZDP Shares, but may be subject to Panel of Takeovers & Mergers (PTM) levy) (the "Placing Price"). "Placing" means the conditional placing of existing and/or new ZDP Shares by Panmure Gordon (UK) Limited ("Panmure Gordon") on the terms and subject to the conditions set out herein.

 

1.2        Each person who has agreed to purchase and/or subscribe for ZDP Shares pursuant to the Placing subject to scaling back (a "Placee") which confirms its agreement (whether orally or in writing) to Panmure Gordon to purchase and/or subscribe for ZDP Shares under the Placing will be bound by these terms and conditions and will be deemed to have accepted them.

 

1.3        Panmure Gordon may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as Panmure Gordon (in its absolute discretion) sees fit and may require any such Placee to execute a separate placing letter (a "Placing Letter"). The terms herein will, where applicable, be deemed to be incorporated into such Placing Letters.

 

1.4        Subject to paragraph 1.3 above, the commitment to acquire ZDP Shares under the Placing will be agreed orally with Panmure Gordon (as principal insofar as Placing commitments are required to satisfy acceptances of the Tender Offer and otherwise as agent for the Company) and further evidenced in a contract note ("Contract Note") or placing confirmation ("Placing Confirmation"). 

 

1.5        By way of background, the Company was incorporated in England and Wales on 22 November 2012. The Company proposes, inter alia, to extend the life of the ZDP Shares by deferring their final redemption date from 10 April 2019 to 10 April 2024. The Company agreed with Panmure Gordon that Panmure Gordon will make, as principal, a conditional tender offer to acquire up to 100 per cent. of the existing ZDP Shares (in issue as at close of business on 18 July 2018) (the "Existing ZDP Shares") at 150.8 pence per ZDP Share (the "Tender Price") by way of market purchase ("Tender Offer"). Panmure Gordon has, subject to the terms and conditions of the Placing Agreement (defined below), agreed to use its reasonable endeavours to procure:

 

1.5.1     purchasers to acquire those Existing ZDP Shares whose holders validly accept the tender offer to acquire them (the "Tender Accepted Shares") at the Tender Price (this being the same as at the Placing Price); and

 

1.5.2     (if Placing Commitments (defined below) exceed the number of Tender Accepted Shares) subscribers for up to a maximum of 2,488,800 new Shares (the "Issue Maximum") to be issued pursuant to the Issue (defined below) at the Placing Price.

 

To the extent that Placing Commitments exceed the number of Tender Accepted Shares, the Company shall allot and issue new ZDP Shares in respect of the difference (up to the Issue Maximum), but subject to the Additional Conditions (defined in paragraph 10 below) being fulfilled (the "Issue"). 

 

2          AGREEMENT TO APPLY FOR ZDP SHARES AND CONDITIONS

 

2.1        A Placee agrees to purchase and/or subscribe for those ZDP Shares allocated to it by Panmure Gordon at the Placing Price, subject to and conditional on, amongst other things:

 

2.1.1     the terms and conditions herein, and the terms and conditions set out in the Placing Letter and the accompanying form of confirmation;

 

2.1.2     the placing agreement entered into between the Company, Inland Homes plc ("Inland Homes") and Panmure Gordon dated 18 July 2018 (the "Placing Agreement") becoming wholly unconditional (where relevant, save in relation to the Additional Conditions (defined in paragraph 10 below) and not having been terminated in accordance with its terms on or before the Effective Date ("Settlement Date";

 

2.1.3     in the event that new ZDP Shares are to be issued where the legally binding commitments to subscribe for/acquire ZDP shares obtained by Panmure Gordon from Placees pursuant to the Placing ("Placing Commitments") exceed the number of ZDP Shares validly accepted under the Tender Offer, the Additional Conditions (defined in paragraph 10 below) being fulfilled, which include, inter alia, the condition for the admission of those new ZDP Shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market ("Admission") becoming effective by no later than the Settlement  Date or such later date as the Company and Panmure Gordon may agree in any event not later than 31 August 2018 (the "Longstop Date"). If the Additional Conditions are not fulfilled but the remaining conditions relating to the Placing are fulfilled, Placing Commitments for ZDP Shares will be scaled back in such a manner as determined by Panmure Gordon at its discretion in order that the total number of ZDP Shares allocated to Placees shall equate to the number of ZDP Shares validly accepted under the Tender Offer only

 

2.1.4     scaling back in the event that Placing Commitments exceed a maximum number, this being the total number of ZDP Shares validly accepted under the Tender Offer plus up to 2,488,800 ZDP Shares, provided that this maximum number may be reduced in the event that the Additional Conditions (defined in paragraph 10 below) fail to be fulfilled, in which case, Placing Commitments will be subject to a further scaling back in order that the total number of ZDP Shares to be allocated to Placees shall equate to the number of ZDP Shares validly accepted under the Tender Offer only; and

 

2.1.5     Panmure Gordon confirming to Placees their allocation of ZDP Shares.

 

2.2        To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

 

3          PAYMENT FOR ZDP SHARES

 

3.1        Each Placee must pay the Placing Price for the ZDP Shares issued or transferred to the Placee in the manner and by the time directed by Panmure Gordon. If any Placee fails to pay the Placing Price as so directed and/or by the time required, the relevant Placee's application for ZDP Shares may, at the discretion of Panmure Gordon, either be rejected or accepted and, in the latter case, paragraph 3.2 of these terms and conditions shall apply. 

 

3.2        Each Placee is deemed to agree that if it does not comply with its obligation to pay the Placing Price for the ZDP Shares allocated to it in accordance with paragraph 3.1 of these terms and conditions and Panmure Gordon elects to accept that Placee's application, the relevant Placee shall be deemed hereby to have appointed Panmure Gordon or any nominee of Panmure Gordon as its agent to use its reasonable endeavours to sell (in one or more transactions) any or all of the ZDP Shares allocated to the Placee in respect of which payment shall not have been made as directed, and to indemnify Panmure Gordon and its affiliates on demand in respect of any liability for any costs or stamp duty reserve tax or any other liability whatsoever arising in respect of any such sale or sales. A sale of all or any of such ZDP Shares shall not release the relevant Placee from the obligation to make such payment for relevant ZDP Shares to the extent that Panmure Gordon or its nominee has failed to sell such ZDP Shares at a consideration which, after deduction of the expenses of such sale and payment of stamp duty and/or stamp duty reserve tax as aforementioned, exceeds the Placing Price.   

 

4          REPRESENTATIONS AND WARRANTIES

 

4.1        By agreeing to purchase and/or subscribe for ZDP Shares under the Placing, each Placee which enters into a Placing Commitment to subscribe for or purchase ZDP Shares will (for itself and any person(s) procured by it to subscribe for or purchase ZDP Shares and any nominee(s) for any such person(s)) be deemed to represent, warrant and acknowledge to each of the Company, Inland Homes, Neville Registrars Limited and Link Asset Services (the "Registrars") and Panmure Gordon that:

 

4.1.1     in agreeing to purchase and/or subscribe for ZDP Shares under the Placing, it is relying solely on this announcement and the Placing Letter and not on any other information given, or representation or statement made at any time, by any person concerning the Company, Inland Homes or the Placing. It agrees that none of the Company, Inland Homes, Panmure Gordon or the Registrars, nor any of their respective officers, agents, or employees, will have any liability for any other information or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;  

 

4.1.2     if the laws of any territory or jurisdiction outside England and Wales are applicable to its agreement to purchase and/or subscribe for ZDP Shares under the Placing, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company, Inland Homes, Panmure Gordon or the Registrars or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Placing;

 

4.1.3     it has carefully read and understands this announcement in its entirety and acknowledges that it is acquiring ZDP Shares on the terms and subject to the conditions set out herein and the articles of association of the Company in force as at the Settlement Date (the "Articles") and agrees that in accepting a participation in the Placing it has had access to all information it believes necessary or appropriate in connection with its decision to purchase and/or subscribe for the ZDP Shares;

 

4.1.4     it has not relied and will not rely on Panmure Gordon or any person affiliated with Panmure Gordon in connection with any investigation of the accuracy of any information contained in this announcement (or any other document/announcement) issued by the Company (or Inland Homes) prior to the Settlement Date;

           

4.1.5     the content of this announcement and any other document/announcement published by the Company (or Inland Homes) prior to the Settlement Date is exclusively the responsibility of the Company (or where applicable, Inland Homes) and its or their respective directors, and neither Panmure Gordon nor any person acting on its behalf nor any of its affiliates are responsible for or shall have any liability for any information, representation or statement contained herein or elsewhere issued or published by the Company (or Inland Homes) prior to the Settlement Date or any information published or issued by or on behalf of the Company or Inland Homes, and will not be liable for any decision by a Placee to participate in the Placing based on any information, representation or statement contained herein or in any other document/announcement;

 

4.1.6     it acknowledges that no person is authorised in connection with the Placing to give any information or make any representation other than as contained herein prior to the Settlement Date and, if given or made, any information or representation must not be relied upon as having been authorised by the Company, Inland Homes, Panmure Gordon or the Registrars; 

 

4.1.7     it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services);

 

4.1.8     if it is within the United Kingdom, it is a person who falls within Articles 19(5) or 49(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or it is a person to whom the ZDP Shares may lawfully be offered and is a person who is a professional client or an eligible counterparty within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook or, if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, it is a person to whom the ZDP Shares may be lawfully offered under that other jurisdiction's laws and regulations;

 

4.1.9     if it is a resident in the European Economic Area ("EEA") (other than the United Kingdom): (a) it is a "qualified investor" within the meaning of the law in the relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive 2003/71/EC (as amended by the updated Prospectus Directive 2010/73/EU) (the "Prospectus Directive"); and (b) if that relevant Member State has implemented the Prospectus Directive, that it is a person to whom the ZDP Shares may lawfully be marketed under the Prospectus Directive or under the applicable implementing legislation (if any) of that relevant Member State;

 

4.1.10   in the case of any ZDP Shares acquired by a Placee as a financial intermediary within the EEA (other than the United Kingdom) as that term is used in Article 3(2) of the Prospectus Directive:

 

(a)        the ZDP Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of Panmure Gordon has been given to the offer or resale; or

 

(b)        where ZDP Shares have been acquired by it on behalf of persons in any relevant Member State (other than the United Kingdom) other than qualified investors, the offer of those ZDP Shares to it is not treated under the Prospectus Directive as having been made to such persons;

 

4.1.11   it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the ZDP Shares and it is not acting on a non-discretionary basis for any such person;

 

4.1.12   if it is outside the United Kingdom, neither this announcement nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to purchase and/or subscribe for ZDP Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or material could lawfully be provided to it or such person and ZDP Shares could lawfully be distributed to and subscribed or purchased and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements;

 

4.1.13   if the Placee is a natural person, such Placee is not under the age of majority (18 years of age in the United Kingdom) on the date of such Placee's agreement to purchase and/or subscribe for ZDP Shares under the Placing and will not be any such person on the date any such agreement to purchase and/or subscribe under the Placing is accepted;

 

4.1.14   it has complied and will comply with all applicable provisions of the Criminal Justice Act 1993 and the regulation (EU) No. 596/2016 of the European Parliament and of the Council of 16 April 2014 on market abuse with respect to anything done by it in relation to the Placing and/or the ZDP Shares;

 

4.1.15   it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted any presentation or offering materials concerning the Placing or the ZDP Shares to any persons within the United States or to any US Persons, nor will it do any of the foregoing ("US Person" as defined in Regulation S under the the United States Securities Act of 1933 (as amended) (the "US Securities Act"); and "United States" or "US" means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia);

 

4.1.16   it represents, acknowledges and agrees to the representations, warranties and agreements as set out under the heading "United States Purchase and Transfer Restrictions" in paragraph 7 below;

 

4.1.17   it acknowledges that neither Panmure Gordon nor any of its affiliates, nor any person acting on its or their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing or providing any advice in relation to the Placing and participation in the Placing is on the basis that it is not and will not be a client of Panmure Gordon and that Panmure Gordon do not have any duties or responsibilities to it for providing the protections afforded to their clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities otherwise required to be given by it in connection with its application under the Placing;

 

4.1.18   it acknowledges that where it is purchasing and/or subscribing for ZDP Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account:

 

(a)        to purchase and/or subscribe for the ZDP Shares for each such account;

 

(b)        to make on each such account's behalf the representations, warranties and agreements set out in this announcement; and

 

(c)        to receive on behalf of each such account any documentation relating to the Placing in the form provided by the Company and Panmure Gordon;

 

and it agrees that the provisions of this paragraph shall survive any resale of the ZDP Shares by or on behalf of any such account;

 

4.1.19   if it is acting as a "distributor" (for the purposes of the MiFID II Product Governance Requirements):

 

(a)        it acknowledges that the target market assessment undertaken by Panmure Gordon does not constitute: (i) an assessment of suitability or appropriateness for the purposes of MiFID II; or (ii) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the ZDP Shares and each distributor is responsible for undertaking its own target market assessment in respect of the ZDP Shares and determining appropriate distribution channels;

 

(b)        notwithstanding any target market assessment undertaken by Panmure Gordon, it confirms that it has satisfied itself as to the appropriate knowledge, experience, financial situation, risk tolerance and objectives and needs of the investors to whom it plans to distribute the ZDP Shares and that it has considered the compatibility of the risk/reward profile of such ZDP Shares with the end target market; and

 

(c)        it acknowledges that the price of the ZDP Shares may decline and investors could lose all or part of their investment; capital protection cannot be guaranteed on the ZDP Shares; and an investment in the ZDP Shares is compatible only with investors who do not need a guaranteed 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,

 

and for the purposes of this paragraph, "MiFID II Product Governance Requirements" means the product governance requirements contained within: (i) the Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (ii) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; and (iii) local implementing measures; and "MiFID II" means the Directive 2014/65/EU and amending Directive 2002/92/EC and Directive 2011/61/EU, together with Regulation (EU) No 600/2014 of the European Parliament and the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012;

           

4.1.20   it irrevocably appoints any director of the Company and any director and/or authorised signatory of Panmure Gordon to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the ZDP Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

 

4.1.21   it accepts that if the Placing does not proceed or the conditions to the Placing Agreement are not satisfied or (in the event where new ZDP Shares are to be issued since Placing Commitments exceed the number of Tender Accepted Shares) the new ZDP Shares for which valid applications are received and accepted are not admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange plc's main market for listed securities for any reason whatsoever then neither of Panmure Gordon nor the Company, nor Inland Homes, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

 

4.1.22   in connection with its participation in the Placing it has observed all relevant legislation and regulations;

 

4.1.23   it acknowledges that Panmure Gordon, Inland Homes and the Company are entitled to exercise any of their rights under the Placing Agreement or any other right in their absolute discretion without any liability whatsoever to it;

 

4.1.24   the representations, undertakings and warranties contained herein given by it are irrevocable. It acknowledges that Panmure Gordon, Inland Homes and the Company and their respective affiliates will rely upon the truth and accuracy of the foregoing representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the ZDP Shares are no longer accurate, it shall promptly notify Panmure Gordon, Inland Homes and the Company;    

 

4.1.25   where it or any person acting on behalf of it is dealing with Panmure Gordon, any money held in an account with Panmure Gordon on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the FCA which therefore will not require Panmure Gordon to segregate such money, as that money will be held by Panmure Gordon under a banking relationship and not as trustee;

 

4.1.26   any of its clients, whether or not identified to Panmure Gordon, will remain its sole responsibility and will not become clients of Panmure Gordon for the purposes of the rules of the FCA or for the purposes of any other statutory or regulatory provision;

 

4.1.27   it accepts that the allocation of ZDP Shares shall be determined by Panmure Gordon at its discretion having consulted with the Company and its advisers, and that Panmure Gordon may scale down any commitments for this purpose on such basis as it may determine;

 

4.1.28   time shall be of the essence as regards its obligations to settle payment for the ZDP Shares and to comply with its other obligations under the Placing;

 

4.1.29   its commitment to acquire ZDP Shares will be agreed orally with Panmure Gordon (as principal insofar as Placing commitments are required to satisfy acceptances of the Tender Offer and otherwise as agent for the Company) and that a Contract Note or Placing Confirmation will be issued by Panmure Gordon as soon as possible thereafter. That oral confirmation will constitute an irrevocable, legally binding Placing Commitment upon that person (who at that point will become a Placee) in favour of the Company and Panmure Gordon to purchase and/or subscribe for the number of ZDP Shares allocated to it at the Placing Price on the terms and conditions set out in herein and, as applicable, in the Contract Note or Placing Confirmation. Except with the consent of Panmure Gordon, such oral Placing Commitment will not be capable of variation or revocation after the time at which it is made; and

 

4.1.30   its allocation of ZDP Shares under the Placing will be evidenced by the Contract Note or Placing Confirmation, as applicable, confirming:

 

(a)        the number of ZDP Shares that such Placee has agreed to purchase and/or subscribe for;

 

(b)        the aggregate amount that such Placee will be required to pay for such ZDP Shares; and

 

(c)        settlement instructions to pay Panmure Gordon as agents for the Company.

 

4.1.31   The terms herein will be deemed to be incorporated into that Contract Note or Placing Confirmation.

 

4.2        The Company and/or Panmure Gordon reserve the right to reject all or part of any offer to purchase ZDP Shares for any reason. The Company also reserves the right to sell/issue fewer than all of the ZDP Shares offered herein or to sell/issue to any purchaser/subscriber fewer than all of the ZDP Shares a purchaser/subscriber has offered to purchase/subscribe.

 

5          MONEY LAUNDERING

 

5.1        Each Placee acknowledges and agrees that:

 

5.1.1     its application is only made on the basis that it accepts full responsibility for any requirement to verify the identity of its clients and other persons in respect of whom it has applied. In addition, it represents and warrants that it is a person:

 

(a)        subject to the Money Laundering Regulations 2017 in force in the United Kingdom; or

 

(b)        subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing) (the "Money Laundering Directive"); or

 

(c)        acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a country in which there are in force provisions at least equivalent to those required by the Money Laundering Directive; and

 

5.1.2     due to anti-money laundering and the countering of terrorist financing requirements, Panmure Gordon and/or the Company and/or their agents may require proof of identity and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the applicant to produce any information required for verification purposes, Panmure Gordon, the Company and/or their agents may refuse to accept the application and the subscription moneys relating thereto. It holds harmless and will indemnify Panmure Gordon, the Company and their agents against any liability, loss or cost ensuing due to the failure to process such application, if such information as has been required has not been provided by it.

 

6          DATA PROTECTION

 

6.1        Each Placee acknowledges that it has been informed that, pursuant to the General Data Protection Regulation 2016/679 (the "DP Legislation") the Company and/or the Registrars may hold personal data (as defined in the DP Legislation) relating to past and present shareholders.

 

Personal data may be retained on record for a period exceeding six years after it is no longer used (subject to any limitations on retention periods set out in applicable law). The Registrars will process such personal data at all times in compliance with DP Legislation and shall only process for the purposes set out in the Company's privacy notice, which is available for review on the Company's website http://www.inlandhomesplc.com/site-essentials/privacy-policy/ (the "Privacy Notice"), including for the purposes set out below (collectively, the "Purposes"), being to:

 

6.1.1     process the personal data to the extent and in such manner as is necessary for the performance of its obligations under its service contract, including as required by or in connection with the Placee's holding of ZDP Shares, including processing personal data in connection with credit and money laundering checks on the Placee;

 

6.1.2     communicate with the Placee as necessary in connection with its affairs and generally in connection with its holding of ZDP Shares;

 

6.1.3     to comply with the legal and regulatory obligations of the Company, and/or the Registrars; and

 

6.1.4     process the personal data for the Registrars' internal administration.

 

6.2        In order to meet the Purposes, it may be necessary for the Company, Panmure Gordon and the Registrars to provide personal data to:

 

6.2.1     third parties located either within, or outside of the EEA, if necessary for the Registrars to perform its functions, or when it is necessary for its legitimate interests, and in particular in connection with the holding of ZDP Shares; or

 

6.2.2     its affiliates, the Company (in the case of the Registrars) and their respective associates, some of which may be located outside of the EEA.

 

6.3        Any sharing of personal data by the Company, Panmure Gordon or the Registrars with other parties will be carried out in accordance with the DP Legislation and as set out in the Company's Privacy Notice.

 

6.4        By becoming registered as a holder of ZDP Shares a person becomes a data subject (as defined in the DP Legislation). In providing the Registrars with information, each Placee hereby represents and warrants to the Registrars that it has (i) notified any data subject of the Purposes for which personal data will be used and by which parties it will be used and it has provided a copy of the Company's Privacy Notice and any other data protection notice which has been provided by the Company, Panmure Gordon and/or the Registrars; and (ii) where consent is legally required under applicable DP legislation, it has obtained the consent of any data subject to the Registrars and their respective associates holding and using their personal data for the Purposes (including the explicit consent of the data subjects for the processing of any sensitive personal data for the Purposes set out above in this paragraph 6).

 

6.5        Each Placee acknowledges that by submitting personal data to Panmure Gordon and the Registrars (acting for and on behalf of the Company) where the Placee is a natural person he or she has read and understood the terms of the Company's Privacy Notice.

 

6.6        Each Placee acknowledges that by submitting personal data to Panmure Gordon and the Registrars (acting for and on behalf of the Company) where the Placee is not a natural person it represents and warrants that:

 

6.6.1     it has brought the Company's Privacy Notice to the attention of any underlying data subjects on whose behalf or account the Placee may act or whose personal data will be disclosed to the Company as a result of the Placee agreeing to acquire or subscribe for ZDP Shares; and

 

6.6.2     the Placee has complied in all other respects with all applicable data protection legislation in respect of disclosure and provision of personal data to the Company.

 

6.7        Where the Placee acts for or on account of an underlying data subject or otherwise discloses the personal data of an underlying data subject, he/she/it shall, in respect of the personal data it processes in relation to or arising in relation to the Placing:

 

6.7.1     comply with all applicable data protection legislation;

 

6.7.2     take appropriate technical and organisational measures against unauthorised or unlawful processing of the personal data and against accidental loss or destruction of, or damage to the personal data;

 

6.7.3     if required, agree with the Company, Panmure Gordon and the Registrars, the responsibilities of each such entity as regards relevant data subjects' rights and notice requirements; and

 

6.7.4     it shall immediately on demand, fully indemnify each of the Company, Panmure Gordon and the Registrars and keep them fully and effectively indemnified against all costs, demands, claims, expenses (including legal costs and disbursements on a full indemnity basis), losses (including indirect losses and loss of profits, business and reputation), actions, proceedings and liabilities of whatsoever nature arising from or incurred by the Company, Panmure Gordon and/or the Registrars in connection with any failure by the Placee to comply with the provisions set out above.

 

7          UNITED STATES PURCHASE AND TRANSFER RESTRICTIONS

 

7.1        By participating in the Placing, each Placee acknowledges and agrees that it will (for itself and any person(s) procured by it to purchase and/or subscribe for ZDP Shares and any nominee(s) for any such person(s)) be further deemed to represent and warrant to each of the Company, Inland Homes, the Registrars and Panmure Gordon that:

 

7.1.1     it is either:

 

(a)        not a US Person, is not located within the United States, is acquiring the ZDP Shares in an offshore transaction meeting the requirements of Regulation S and is not acquiring the ZDP Shares for the account or benefit or a US Person; or

 

(b)        a US Person to whom ZDP Shares may be offered pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States;

 

7.1.2     it acknowledges that the ZDP Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and in compliance with all applicable state securities laws and under circumstances that would not require the Company to register under the United States Investment Company Act of 1940, as amended (the "US Investment Company Act");

 

7.1.3     it acknowledges that the Company has not and will not be registered under the US Investment Company Act and that the Company has put in place restrictions for transactions not involving any public offering in the United States, and to ensure that the Company is not and will not be required to register under the US Investment Company Act;

 

7.1.4     unless the Company expressly consents otherwise in writing, no portion of the assets used to purchase, and no portion of the assets used to hold, the ZDP Shares or any beneficial interest therein constitutes or will constitute the assets of:

 

(a)        an employee benefit plan as defined in Section 3(3) of ERISA that is subject to Title I of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA");

 

(b)        a plan as defined in Section 4975 of the US Internal Revenue Code of 1986, as amended (the "US Code"), including an individual retirement account or other arrangement that is subject to Section 4975 of the US Code; or   

 

(c)        an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the US Code. In addition, if a Placee is a governmental, church, non-US or other employee benefit plan that is subject to any federal, state, local or non-US law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the US Code, its purchase, holding, and disposition of the ZDP Shares must not constitute or result in a non-exempt violation of any such substantially similar law;

 

7.1.5     if any ZDP Shares are issued to it in certificated form, then such certificates evidencing ownership will contain a legend substantially to the following effect, unless otherwise determined by the Company in accordance with applicable law: INLAND ZDP PLC (THE COMPANY) HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US INVESTMENT COMPANY ACT OF 1940, AS AMENDED. IN ADDITION, THE SECURITIES OF THE COMPANY REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED, OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ACCORDINGLY, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS EXCEPT IN ACCORDANCE WITH THE US SECURITIES ACT OR AN EXEMPTION THEREFROM AND UNDER CIRCUMSTANCES WHICH DO NOT REQUIRE THE COMPANY TO REGISTER UNDER THE US INVESTMENT COMPANY ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS. IN ADDITION, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON USING THE ASSETS OF (I) (A) AN ''EMPLOYEE BENEFIT PLAN'' AS DEFINED IN SECTION 3(3) OF ERISA THAT IS SUBJECT TO TITLE I OF ERISA; (B) A ''PLAN'' AS DEFINED IN SECTION 4975 OF THE US CODE, INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE US CODE; OR (C) AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY OF THE FOREGOING TYPES OF PLANS, ACCOUNTS OR ARRANGEMENTS THAT IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE US CODE OR (II) A GOVERNMENTAL, CHURCH, NON-US OR OTHER EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-US LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE US CODE UNLESS THE PURCHASE, HOLDING OR DISPOSITION OF THE SECURITIES WILL NOT RESULT IN A VIOLATION OF APPLICABLE LAW AND/OR CONSTITUTE A NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 503 OF THE US CODE OR ANY SUBSTANTIALLY SIMILAR LAW.

 

7.1.6     if in the future the Placee decides to offer, sell, transfer, assign or otherwise dispose of its ZDP Shares, it will do so only in compliance with an exemption from the registration requirements of the US Securities Act and under circumstances which will not require the Company to register under the US Investment Company Act. It acknowledges that any sale, transfer, assignment, pledge or other disposal made other than in compliance with such laws and the above stated restrictions will be subject to the compulsory transfer provisions as provided in the Articles;

 

7.1.7     it is purchasing the ZDP Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with any distribution of the ZDP Shares in any manner that would violate the US Securities Act, the US Investment Company Act or any other applicable securities laws;

 

7.1.8     it acknowledges that the Company reserves the right to make inquiries of any holder of the ZDP Shares or interests therein at any time as to such person's status under US federal securities laws and to require any such person that has not satisfied the Company that holding by such person will not violate or require registration under US securities laws to transfer such ZDP Shares or interests in accordance with the Articles;

 

7.1.9     it acknowledges and understands that the Company is required to comply with the United States Foreign Account Tax Compliance Act ("FATCA") and agrees to furnish any information and documents the Company may from time to time request, including but not limited to information required under FATCA;

 

7.1.10   it is entitled to acquire the ZDP Shares under the laws of all relevant jurisdictions which apply to it, it has fully observed all such laws and obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and it has paid all issue, transfer or other taxes due in connection with its acceptance in any jurisdiction of the ZDP Shares and that it has not taken any action, or omitted to take any action, which may result in the Company, the Registrars, Panmure Gordon or their respective members directors, officers, agents, employees and advisers being in breach of the laws of any jurisdiction in connection with the Placing or its acceptance of participation in the Placing;

 

7.1.11   it has received, carefully read and understands this announcement, and has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted any presentation or offering materials concerning the ZDP Shares to within the United States or to any US Persons, nor will it do any of the foregoing; and

 

7.1.12   if it is acquiring any ZDP Shares as a fiduciary or agent for one or more accounts, the Placee has sole investment discretion with respect to each such account and full power and authority to make such foregoing representations, warranties, acknowledgements and agreements on behalf of each such account.

 

7.2        The Company, the Registrars, Panmure Gordon and their respective members directors, officers, agents, employees, advisers and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgments and agreements.

 

7.3        If any of the representations, warranties, acknowledgments or agreements made by the Placee are no longer accurate or have not been complied with, the Placee will immediately notify the Company, Panmure Gordon and the Registrars.

 

8          SUPPLY AND DISCLOSURE OF INFORMATION

 

If Panmure Gordon, the Registrars or the Company or any of their agents request any information about a Placee's agreement to purchase and/or subscribe for ZDP Shares under the Placing, such Placee must promptly disclose it to them.

 

9          NON UNITED KINGDOM INVESTORS

 

9.1        If the Placee is outside the United Kingdom, neither this announcement nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to purchase and/or subscribe for ZDP Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and ZDP Shares could lawfully be distributed to and subscribed or purchased and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements.

 

9.2        None of the ZDP Shares has been or will be registered under the laws of the United States, Canada, Australia, the Republic of South Africa or Japan. Accordingly, the ZDP Shares may not be offered, sold, issued or delivered, directly or indirectly, within any of the United States, Canada, Australia, the Republic of South Africa or Japan or to any US Person or to any national, resident or citizen of Canada, Australia, the Republic of South Africa or Japan unless an exemption from any registration requirement is available.

 

10         MISCELLANEOUS

 

10.1      The rights and remedies of the Company, Panmure Gordon, the Registrars and Inland Homes under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

 

10.2      On application, if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

 

10.3      Each Placee agrees to be bound by the Articles once the ZDP Shares, which the Placee has agreed to purchase and/or subscribe for pursuant to the Placing, have been acquired by the Placee. The contract to purchase and/or subscribe for ZDP Shares under the Placing and the appointments and authorities mentioned herein and all disputes and claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Company, Inland Homes, Panmure Gordon and the Registrars, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against the Placee in any other jurisdiction.

 

10.4      In the case of a joint agreement to purchase and/or subscribe for ZDP Shares under the Placing, references to a Placee in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several.

 

10.5      Panmure Gordon and the Company expressly reserve the right to modify the Placing (including, without limitation, the timetable and settlement) at any time before allocations are determined. The Placing is subject to the satisfaction of the conditions contained in the Placing Agreement and the Placing Agreement not having been terminated. The conditions contained in the Placing Agreement include, inter alia, the following:

 

10.5.1     the passing of all of the resolutions (the "Resolutions") as set out in the notices of the class meetings and general meeting to be convened by the Company pursuant to a circular published by the Company on 19 July 2018 (the "Circular") relating to the proposals which include the adoption of new articles of association (to, inter alia, extend the life of the ZDP Shares), the entering into of amendment agreements to amend certain Loan Documentation (as defined in the Circular) and the Tender Offer, by no later than the Longstop Date; 

 

10.5.2     the entering into of amendment agreements to amend certain Loan Documentation;

 

10.5.3     the Tender Offer not having been terminated in accordance with the terms and conditions of the Tender Offer;

 

10.5.4     each of the Company and Inland Homes complying with its respective obligations under the Placing Agreement to the extent that the same fall to be performed prior to the Settlement Date;

 

and, in the event that new ZDP Shares are to be issued where Placing Commitments exceed the number of Tender Accepted Shares, also the following additional conditions (the "Additional Conditions"):

 

10.5.5     Admission occurring not later than 8.00 a.m. on the Settlement Date; 

 

10.5.6     the Company allotting, subject only to Admission, the new ZDP Shares to be issued pursuant to the Issue; and   

 

10.5.7     each condition to enable the new ZDP Shares to be issued pursuant to the Issue to be admitted as a participating security in CREST (other than Admission) being satisfied on or before 8.00 a.m. on the date of Admission as may be agreed by Panmure Gordon and the Company; and

 

10.5.8     all necessary permits, authorisations and consents to the Issue having been received on or before Admission.

 

If the Additional Conditions set out above are not fulfilled (but the other conditions set out in the Placing Agreement are otherwise fulfilled (or waived in respect of those which are capable of being waived)), the Placing Commitments for ZDP Shares shall be scaled back in such manner as determined by Panmure Gordon at its absolute discretion, in order that the total number of ZDP Shares allocated to Placees pursuant to the Placing shall equate to the total number of Tender Accepted Shares only.

 

 

 


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