TIDMDGRE
RNS Number : 2802P
Delek Global Real Estate PLC
23 March 2009
Not for release, publication or distribution in whole or in part in, into or
from any jurisdiction (including the United States) where to do so would
constitute a violation of the relevant laws or regulations of such jurisdiction.
FOR IMMEDIATE RELEASE
23 March 2009
PROPOSAL FOR THE CASH ACQUISITION OF DELEK GLOBAL REAL ESTATE PLC BY DELEK
BELRON INTERNATIONAL LIMITED TO BE IMPLEMENTED BY WAY OF A SCHEME OF ARRANGEMENT
Summary
· The board of directors of DBI and the Independent Directors of DGRE
announce the terms of a proposal whereby DBI intends to acquire, for cash, the
entire issued share capital of DGRE (which it and DRE do not, taken together,
already own), to be effected by way of a scheme of arrangement between DGRE and
the Scheme Shareholders under Article 125 of the Jersey Law. The Scheme requires
the approval of the Scheme Shareholders and the sanction of the Court.
· Under the terms of the Scheme it is proposed that the Scheme Shares
will be transferred to DBI (or its nominee(s)) and Scheme Shareholders on the
register of members of DGRE at the Scheme Record Time will receive 50 pence in
cash for each Scheme Share.
· The Cash Consideration represents:
¦ a premium of approximately 86.9 per cent. to the average Closing
Price of 26.8 pence per DGRE Share during the three months prior to 29 January
2009 (the last Business Day prior to the announcement made on 30 January 2009 of
a possible offer);
¦ a premium of 25.0 per cent. to the Closing Price of 40.0 pence per
DGRE Share on 29 January 2009, the last Business Day prior to the announcement
by DGRE of a possible offer; and
¦ a discount of approximately 73.4 per cent. to the net asset value
of 188 pence per DGRE Share as at 31 December 2008.
· The terms of the Proposal value the entire issued share capital of
DGRE at approximately GBP132.6 million and the Scheme Shares at approximately
GBP19.8 million in aggregate.
· As a Shareholder controlling more than 75 per cent. of the voting
rights of the Company, DBI has significant power and DBI has informed the
Company that the board of DBI has resolved to cancel the admission of the DGRE
Shares to trading on AIM irrespective of whether the Scheme becomes effective.
In addition, the Company announced on 20 March 2009 that it was not proposing a
final dividend in relation to the year ended 31 December 2008 as a direct result
of DBI indicating to the Board of DGRE that it would vote against any such
proposed dividend.
· The Independent Directors do not consider the Proposal to offer
compelling value to Independent Shareholders, although the level of borrowing
within the DGRE Group and the future repayment dates of certain of its debt
facilities could pose some risk to Shareholder value in the short-term, given
current conditions in the real estate and financing markets. However, the
Independent Directors consider that the Proposal is worthy of consideration by
the Independent Shareholders, as the Proposal represents an opportunity for
Independent Shareholders to realise a cash sum for their holding now, which may
not otherwise be available, especially given the illiquidity of the Company's
shares.
· Under these circumstances, the Independent Directors, having been so
advised by Panmure Gordon, do not believe that it is appropriate to provide
Scheme Shareholders with a definitive recommendation at this time although they
consider that Independent Shareholders should have regard to the matters set out
in paragraph 5 of this announcement when considering whether to vote in favour
of, or against, the Proposal.
· The Independent Directors, who are beneficially interested in 31,200
DGRE Shares, representing 0.01 per cent. of DGRE's issued share capital, each
intend to vote in favour of the Proposal at the Court Meeting in respect of such
Shares.
· DBI is a 100 per cent. owned subsidiary of DRE. DRE is listed on the
Tel Aviv Stock Exchange and as at the date of this announcement, controls 85.0
per cent. of the DGRE Shares through a direct holding of 9,363,500 DGRE Shares,
representing 3.5 per cent. of DGRE's issued share capital, and through DBI's
holding of 216,070,613 DGRE Shares, representing 81.5 per cent. of DGRE's issued
share capital. In addition, the Interested Directors are beneficially interested
in 24,500 DGRE Shares and Eran Meytal and Izhak Gidron, directors of DBI, are
beneficially interested in 23,000 and 20,000 DGRE Shares respectively.
· It is expected that the Scheme Document containing further details of
the Proposal will be posted to Shareholders shortly. The Scheme will be subject,
inter alia, to the satisfaction or waiver of the Conditions set out in Appendix
1 to this announcement.
Enquiries
+-------------------------------------------------------------+-----------------------------+
| Independent Directors of Delek Global Real Estate plc | |
+-------------------------------------------------------------+-----------------------------+
| Howard Stanton, Chairman | +44 (0) 7785 282 150 |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Panmure Gordon (Lead Financial Adviser to the Independent | +44 (0) 20 7459 3600 |
| Directors) | |
+-------------------------------------------------------------+-----------------------------+
| Hugh Morgan | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Rothschild (Financial Adviser to the Independent Directors) | +44 (0) 20 7280 5000 |
+-------------------------------------------------------------+-----------------------------+
| Alex Midgen | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Delek Belron International Limited | +972 (0) 3 61 12282 |
+-------------------------------------------------------------+-----------------------------+
| Eran Meytal, Chairman | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Deloitte Corporate Finance (Financial Adviser to DBI) | +44 (0) 20 7936 3000 |
+-------------------------------------------------------------+-----------------------------+
| Jonathan Hinton | |
+-------------------------------------------------------------+-----------------------------+
| Leonie Grimes | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Pelham PR | +44 (0) 20 7337 1500 |
+-------------------------------------------------------------+-----------------------------+
| Alex Walters | |
+-------------------------------------------------------------+-----------------------------+
This summary should be read in conjunction with the full text of the attached
announcement.
The full text of the conditions and principal further terms of the Scheme and
the bases and sources of assumptions and calculations are set out in Appendices
1 and 2 respectively, each of which forms part of, and should be read with, this
announcement. Defined terms have the meanings set out in Appendix 3, which also
forms part of and should be read in conjunction with this announcement.
This announcement does not constitute an offer to sell or subscribe for or an
invitation to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction, nor shall there be any sale, issuance
or transfer of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law or regulation. The Proposal will
be made solely by means of the Scheme Document which will contain the full terms
and conditions of the Scheme.
The Scheme Document will be posted to Scheme Shareholders shortly and thereafter
will be available for public inspection.
Panmure Gordon, which is authorised and regulated in the United Kingdom by the
Financial Services Authority is acting exclusively as financial adviser to DGRE
and no one else in connection with the Proposal and will not be responsible to
anyone other than DGRE for providing the protections afforded to the clients of
Panmure Gordon nor for advice in connection with the Proposal or any other
matter referred to in this announcement.
Rothschild, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively as financial adviser to DGRE
and no one else in connection with the Proposal and will not be responsible to
anyone other than DGRE for providing the protections afforded to the clients of
Rothschild nor for advice in connection with the Proposal or any other matter
referred to in this announcement.
Deloitte Corporate Finance is acting exclusively as financial adviser to DBI and
no-one else in connection with the Proposal and will not regard any other person
as its client nor be responsible to anyone other than DBI for providing the
protections afforded to clients of Deloitte Corporate Finance nor for providing
advice in relation to the Proposal or any matter referred to in this
announcement. Deloitte Corporate Finance is a division of Deloitte LLP, which is
authorised and regulated by the Financial Services Authority in respect of
regulated activities.
The availability of the Proposal to Scheme Shareholders who are not resident in
Jersey or the United Kingdom may be affected by the laws or regulations of the
relevant jurisdictions in which they are located. Persons who are not resident
in Jersey or the United Kingdom should inform themselves about, and observe,
applicable legal or regulatory requirements of their jurisdiction.
The Proposal relates to the shares of a Jersey company whose shares are admitted
to trading on AIM and is being made by means of a scheme of arrangement provided
for under Jersey company law. A transaction effected by means of a scheme of
arrangement is not subject to either the proxy solicitation or the tender offer
rules under the US Securities Exchange Act of 1934, as amended. Accordingly, the
Proposal is subject to the disclosure requirements of the Takeover Code and the
separate disclosure requirements and practices applicable in Jersey to schemes
of arrangement, which each differ from the disclosure requirements of the US
tender offer rules. Financial information included in the documentation has been
prepared in accordance with IFRS, which may not be comparable to the financial
statements of US companies.
The receipt of cash pursuant to the Proposal by a US holder of DGRE Shares may
be a taxable transaction for US federal income tax purposes and under applicable
US state and local, as well as foreign and other tax laws. Each holder of DGRE
Shares is urged to consult an appropriate independent professional adviser
immediately to discuss the taxation consequences of the Proposal.
The DGRE Directors accept responsibility for the information, views and opinions
contained in this announcement, save for the information, views and opinions for
which the Independent Directors alone or the DBI Directors, as the case may be,
accept responsibility. To the best of the knowledge and belief of the DGRE
Directors (who have taken all reasonable care to ensure that such is the case)
the information contained in this announcement for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
The Independent Directors accept responsibility for their opinions in respect of
the Proposal contained in this announcement. To the best of the knowledge and
belief of the Independent Directors (who have taken all reasonable care to
ensure that such is the case) the information contained in this announcement for
which they accept responsibility is in accordance with the facts and does not
omit anything likely to affect the import of such information.
The DBI Directors accept responsibility for all information contained in this
announcement relating to the DBI Group, the opinions of DBI, the DBI Directors,
members of their immediate families, related trusts and person connected with
them within the meaning of sections 252 to 255 of the Companies Act 2006. To the
best of the knowledge and belief of the DBI Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
Forward-Looking Statements
This announcement may contain certain "forward-looking statements" with respect
to the expected timing of the Proposal, the expected effects on DGRE and DBI of
the Proposal, the financial condition, results of operations and business of
DGRE, certain plans and objectives of DBI in respect of that business and all
other statements in this announcement other than statements of historical fact.
In some cases, these forward-looking statements can be identified by the use of
forward-looking terminology, including, without limitation, the terms
"believes", "estimates", "plans", "continue", "aims", "projects", "prepares",
"anticipates", "expects", "intends", "may", "will" or "should" or, in each case,
their negative or other variations or comparable terminology. Recipients of this
announcement should specifically consider the factors identified in this
announcement which could cause actual results to differ before making any
decision. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results, performance
or achievements of DGRE, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
assumptions and assessments made by DGRE or DBI, as the case may be, in light of
their experience and their perception of historical trends, current conditions,
future business strategies and other factors they believe appropriate. Such
forward-looking statements speak only as at the date of this announcement. DGRE
and DBI expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in DGRE's or DBI's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based, except as required by applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is or
becomes, "interested" (directly or indirectly) in one per cent. (1%) or more of
any class of "relevant securities" of DGRE, all "dealings" in any "relevant
securities" of DGRE (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30p.m. (London time) on the London Business Day
following the date of the relevant transaction. This requirement will continue
until the Effective Date or until the date on which the Scheme lapses or is
otherwise withdrawn or on which the "offer period" for the purposes of the
Takeover Code otherwise ends. If two or more persons act together pursuant to an
agreement or understanding, whether formal or informal, to acquire an "interest"
in "relevant securities" of DGRE, they will be deemed to be a single person for
the purpose of Rule 8.3 of the Takeover Code.
Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in
"relevant securities" of DGRE by DBI, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the Panel.
Not for release, publication or distribution in whole or in part in, into
or from any jurisdiction (including the United States) where to do so would
constitute a violation of the relevant laws or regulations of such jurisdiction.
FOR IMMEDIATE RELEASE
23 March 2009
PROPOSAL FOR THE ACQUISITION OF DELEK GLOBAL REAL ESTATE PLC BY DELEK BELRON
INTERNATIONAL LIMITED TO BE IMPLEMENTED BY WAY OF A SCHEME OF ARRANGEMENT
1. Introduction
The board of directors of DBI and the Independent Directors of DGRE announce the
terms of a proposal whereby DBI intends to acquire, for cash, the entire issued
share capital of DGRE (which it and DRE do not, taken together, already own), to
be effected by way of a scheme of arrangement between DGRE and the Scheme
Shareholders under Article 125 of the Jersey Law. The Scheme requires the
approval of the Scheme Shareholders and the sanction of the Court. The Proposal
values the entire issued share capital of DGRE at approximately GBP132.6
million.
DBI is a 100 per cent. owned subsidiary of DRE. DRE is listed on the Tel Aviv
Stock Exchange and, as at the date of this announcement, controls 85.0 per cent.
of the DGRE Shares through a direct holding of 9,363,500 DGRE Shares,
representing 3.5 per cent. of DGRE's issued share capital, and through DBI's
holding of 216,070,613 DGRE Shares, representing 81.5 per cent. of DGRE's issued
share capital. In addition, the Interested Directors are beneficially interested
in 24,500 DGRE Shares and Eran Meytal and Izhak Gidron, directors of DBI, are
beneficially interested in 23,000 and 20,000 DGRE Shares respectively.
2. The Proposal
Under the terms of the Scheme, which are subject to the Conditions set out in
Appendix 1, it is proposed that the Scheme Shares will be transferred to DBI (or
its nominee(s)) and Scheme Shareholders on the register of members of DGRE at
the Scheme Record Time will receive:
+---------------------------------------------------------------+------------------------------+
| for each Scheme Share | 50 pence in cash |
+---------------------------------------------------------------+------------------------------+
The Cash Consideration represents:
¦ a premium of approximately 86.9 per cent. to the average Closing
Price of 26.8 pence per DGRE Share during the three months prior to 29 January
2009 (the last Business Day prior to the announcement made on 30 January 2009 of
a possible offer);
¦ a premium of 25.0 per cent. to the Closing Price of 40.0 pence per
DGRE Share on 29 January 2009, the last Business Day prior to the announcement
by DGRE of a possible offer; and
¦ a discount of approximately 73.4 per cent. to the net asset value
of 188 pence per DGRE Share as at 31 December 2008.
The terms of the Proposal value the entire issued share capital of DGRE at
approximately GBP132.6 million and the Scheme Shares at approximately GBP19.8
million in aggregate.
3. Background to the Proposal
The Company was incorporated in Jersey in 1999 and the Shares were admitted to
trading on AIM in April 2007 in conjunction with a placing of 50,000,000 Shares
at a price of 200 pence each. Since Admission the Company has pursued the
investment strategy described in its admission document. The commercial property
markets in which DGRE operates have deteriorated significantly since the
Company's admission to AIM in April 2007. These declines reflect the turmoil in
global capital markets and the spreading of the financial crisis into the real
economy, leading to concerns over possible tenant defaults and rental levels.
The Independent Directors believe the outlook for the commercial and retail
property sector remains uncertain and that the availability of debt finance is
likely to remain severely restricted for the foreseeable future.
Since Admission, the price of the Shares has fallen significantly and the Shares
have only briefly traded above their price on Admission. In the three months
prior to the announcement of a possible offer, on 30 January 2009, the Closing
Price of the DGRE Shares averaged 26.8 pence, 86.6 per cent. below their price
on Admission. From the date of the Company's admission to AIM to 29 January 2009
the FTSE Real Estate All Share Index fell by 75.3 per cent.
Only a small proportion of the DGRE Shares are in public hands, impairing
liquidity for Independent Shareholders. The adverse macro-economic factors
summarised above and limited liquidity in the DGRE Shares have, in the view of
the Independent Directors, contributed to the DGRE Shares trading at a
significant discount to appraised net asset value. Since 30 June 2007 the share
price of the Company has not fully reflected the announced underlying value of
its net assets and as at 29 January 2009 (the last Business Day prior to the
announcement made on 30 January 2009 of a possible offer) the Company's Share
price reflected a discount of 88.1 per cent. to its net asset value of 224 pence
per Share as at 30 September 2008, which was the last announced net asset value
prior to the announcement of a possible offer.
In addition to the concerns outlined above, DBI has also informed the
Independent Directors that it believes that the advantages of retaining the
admission of DGRE's shares to trading on AIM may be outweighed by the costs of
doing so and that DGRE would benefit in this regard from returning to private
ownership. As a consequence, DBI wishes to provide the minority DGRE
Shareholders with an opportunity to realise for cash their investment in DGRE at
this time.
In addition, on 12 March 2009, DBI wrote to the Senior Independent Non-Executive
Director and Non-Executive Chairman of the Company confirming that it wished to
effect the Proposal by way of a scheme of arrangement and stating that in the
event that the Independent Directors did not put the Proposal before the Court
in Jersey or, in any event, if the Proposal were not successful, it would take
the actions available to it to cancel the admission of DGRE's Shares to trading
on AIM as set out in Rule 41 of the AIM Rules.
4. Possible extension to repayment date of the loan made to DBI
The Independent Directors have not yet been, but expect to be, approached by DBI
prior to 31 March 2009 (the date for repayment of the GBP6,000,000 term loan
made by the Company to DBI) regarding an extension to the repayment date of such
loan pending the approval, or otherwise, of the Scheme. The Independent
Directors will consider any such proposal and make their determination at the
time of any such approach.
5. Arguments for voting in favour of and against the Proposal
The Scheme offers Scheme Shareholders the opportunity to vote in favour of, or
against, the Proposal at the Court Meeting. The Independent Directors believe,
having been so advised by Panmure Gordon, that Scheme Shareholders might wish to
consider the matters set out in this paragraph 5 when considering whether to
vote in favour of, or against, the Proposal at the Court Meeting.
(a) Arguments for voting in favour of the Proposal
The Independent Directors would like to draw Independent Shareholders' attention
to the matters below which may make the Proposal attractive to certain of them.
As a Shareholder controlling more than 75 per cent. of the voting rights of the
Company, DBI has significant power. DBI has informed the Company that the board
of DBI has resolved to cancel the admission of the DGRE Shares to trading on AIM
irrespective of whether the Scheme becomes effective. The Independent Directors
believe that if the Proposal does not proceed and such cancellation occurred,
the liquidity, marketability and value of the Shares would be substantially
reduced to the significant detriment of the Independent Shareholders.
In addition, it is possible that DBI might propose and vote in favour of
measures including a change in the Company's future dividend policy or a change
in the composition of the Company's board of directors. Indeed, the Directors
announced on 20 March 2009 that the Company would not be proposing a final
dividend in relation to the year ended 31 December 2008, as DBI had indicated
that it would vote against any such proposed dividend. While the Company's
shares continue to be admitted to trading on AIM, actions such as procuring
changes in the composition of the Company's board of directors and inhibiting
DGRE from carrying on its business independently of the DBI Group, may be
restricted by provisions contained within the Relationship Agreement, details of
which are set out in the Scheme Document. However, this agreement and its
protections for Independent Shareholders would fall away if the admission of
DGRE Shares to trading on AIM were to be cancelled as described in the paragraph
above.
The Proposal represents a premium of 25.0 per cent. to the Closing Price as at
29 January 2009 and a premium of 86.9 per cent. to the average Closing Price
over the three months prior to 29 January 2009. The Independent Directors
believe that, if the Proposal is not accepted, DGRE's share price may not remain
at its current level, especially given the uncertainty they believe exists
concerning the short- to medium-term prospects for the real estate investment
markets in which the Company operates.
The DGRE Shares are relatively illiquid, which in the view of the Independent
Directors, is due in part to the fact that 85.0 per cent. of the Shares are
controlled by DBI and DRE. If the Proposal is not accepted, the Independent
Directors believe that Independent Shareholders may be unable to sell their
Shares at a price equivalent to that available under the Proposal for some time,
if ever.
Whilst the Proposal represents a discount of approximately 73.4 per cent. to the
Company's net asset value of 188 pence per Share as at 31 December 2008, the
average decline from peak valuation of the Company's properties has only been
8.4 per cent., compared to a decline in the UK Investment Property Databank All
Property Capital Growth Index of 35.6 per cent. from its peak to 31 December
2008. The Independent Directors believe Independent Shareholders should consider
the fact that the DGRE Group has a relatively high level of borrowing secured
against a number of its property investments, and therefore any further falls in
the value of the Company's property investments could have a significant
negative impact on the net asset value of the Company.
In addition to magnifying the negative impact of the declines in property
valuations on the net asset value of the Company, the fact that relatively high
levels of borrowing are secured against the DGRE Group's property investments
could, if valuation declines hit certain levels and unless the Company injects
further equity into these investments, lead to the DGRE Group defaulting on the
financing terms of a number of its investment properties and the lending banks
enforcing security over the assets on which such debt is secured.
Whilst the Company currently benefits from stable rental income generated by its
portfolio, the Independent Directors believe that there is a strong likelihood
that, even aside from the Company's decision not to propose a final dividend for
the year ended 31 December 2008, referred to above, the Company would not be
able to continue to pay dividends at historical levels due to the likely
requirement for significant cash to be used to facilitate the refinancing of
some of the DGRE Group's shorter term debt due over the course of this year,
2010, 2011, and 2013. If the Company were to elect not to fund such
refinancings, there is a risk that the DGRE Group's lending banks might enforce
security over the particular assets securing such facilities, thereby reducing
the ability of the Company to continue generating rental income at current
levels. The combination of a reduced dividend and potential share price decline
could lead to it taking a considerable period of time for Independent
Shareholders to be able to realise a cash value of 50 pence per Share if the
Proposal does not proceed.
Should any member of the DBI Group choose to, or be forced to, sell its shares
in DGRE, this may have a significant negative effect on DGRE's share price in
the short- to medium-term.
The Independent Directors do not believe that there is likely to be any
alternative competing offer for the Company within a reasonable period of time.
Since the announcement on 30 January 2009 that DGRE had received a preliminary
approach regarding a potential offer for the Company, neither the Independent
Directors nor Panmure Gordon has been approached by any person on behalf of any
other bona fide potential offeror wishing to instigate discussions with a view
to making a competing offer for DGRE.
(b) Arguments for voting against the Proposal and retaining DGRE Shares
Whilst the Proposal represents a premium to the Company's recent share price,
the Proposal represents a significant discount of approximately 73.4 per cent.
to the Company's net asset value of 188 pence per Share as at 31 December 2008.
If the Scheme is approved, Independent Shareholders will be prevented from
benefiting from any future recovery of DGRE's share price which may occur if
property investment markets recover and the discount to net asset value at which
the Shares trade is reduced, although, in the context of an imminent
cancellation of the Shares from admission to trading on AIM in the absence of
the implementation of the Scheme, such a recovery is unlikely.
The DGRE Group from time to time receives proposals from third parties in
respect of its assets which, if effected, could generate cash receipts for the
DGRE Group. If the Scheme is approved, Independent Shareholders will not benefit
from any realisations of value from the DGRE Group's portfolio of assets should
any such proposals come to fruition and allow cash to be realised into the
Company.
In particular, one of the companies in which the DGRE Group is a shareholder is
currently in receipt of an approach with regard to a potential transaction that
could, if effected, realise cash proceeds for that company. The approach has a
number of conditions (which are outside the control of the DGRE Group to
satisfy), discussions with the party which has proposed the transaction are at a
very early stage and there can be no assurance that any transaction will result
from the approach. It is unclear whether or not such a transaction would
generate any profit or whether, following such a transaction, any cash would
flow to DGRE. Any net cash proceeds to DGRE resulting from any such transaction
would be substantially smaller than any gross receipt of the company which is
party to the transaction.
6. Conclusion
The Independent Directors do not consider the Proposal to offer compelling value
to Independent Shareholders, although the level of borrowing within the DGRE
Group and the future repayment dates of certain of its debt facilities could
pose some risk to Shareholder value in the short-term, given current conditions
in the real estate and financing markets. However, the Independent Directors
consider that the Proposal is worthy of consideration by the Independent
Shareholders, as the Proposal represents an opportunity for Independent
Shareholders to realise a cash sum for their holding now, which may not
otherwise be available, especially given the illiquidity of the Company's
shares. As a Shareholder controlling more than 75 per cent. of the voting rights
of the Company, DBI has significant power and DBI has informed the Company that
the board of DBI has resolved to cancel the admission of the DGRE Shares to
trading on AIM irrespective of whether the Scheme becomes effective. In
addition, the Company announced on 20 March 2009 that it was not proposing a
final dividend in relation to the year ended 31 December 2008 as a direct result
of DBI indicating to the Board of DGRE that it would vote against any such
proposed dividend. Under these circumstances, the Independent Directors, having
been so advised by Panmure Gordon, do not believe that it is appropriate to
provide Scheme Shareholders with a definitive recommendation at this time,
although they consider that Independent Shareholders should have regard to the
matters set out in paragraph 5 above when considering whether to vote in favour
of, or against, the Proposal. In providing advice to the Independent Directors,
Panmure Gordon has taken into account the commercial assessments of the
Independent Directors. The Independent Directors are beneficially interested in
31,200 DGRE Shares, representing 0.01 per cent. of DGRE's issued share capital
and each intends to vote in favour of the Proposal at the Court Meeting in
respect of such Shares.
The Independent Directors have also received advice from Rothschild in relation
to the Proposal.
7. Information on DBI
DBI is an established real estate company with a diverse portfolio of property
investments in Europe and Canada, as well as a large portfolio of motorway
service stations in the United Kingdom, holdings in a fund investing in European
hotels and holdings in certain loan assets in the real estate sector. Among the
most significant holdings of DBI is its interest in DGRE, in which it holds 81.5
per cent. of the issued share capital.
DBI is a 100 per cent. subsidiary of DRE, an Israeli company listed on the
Tel-Aviv Stock Exchange. Within the DRE group, DBI is the main international arm
through which most of the group's non-Israeli real estate assets are held and
operated.
For the financial year ended 31 December 2007, DBI reported revenues of
approximately GBP686 million (2006: GBP228 million), and profit before tax of
approximately GBP104 million (2006: GBP182 million). DBI's net assets as at 31
December 2007 were approximately GBP607 million.
During 2007 and 2008 DBI made, either directly or through its subsidiaries, a
number of substantial acquisitions, including of holdings in the RoadChef
motorway service station portfolio, of holdings in a fund with investments in
European hotels and of various other properties. Throughout 2008 and to date in
2009, however, a slowdown in the acquisitions strategy of DBI has occurred due
to the prevailing market conditions and the global financial crisis.
In view of the above, DBI has adopted a more cautious policy, focusing on
betterment of its assets and examining, from time to time, possible disposals of
holdings and assets.
8. Information on DGRE
DGRE is a property holding company incorporated in Jersey in 1999. DGRE's Shares
were admitted to trading on AIM in April 2007, in conjunction with a placing of
50,000,000 Shares at 200 pence each. As at 31 December 2008, the DGRE Group had
holdings in a portfolio of 350 investment properties valued in total at GBP4,605
million with the value attributable to the Company's holding being GBP2,403
million in aggregate, comprising assets in Canada, Finland, Germany, Sweden,
Switzerland and the UK. The sole property in Sweden was disposed of in January
2009. The portfolio is diversified across a range of sectors including the
office, retail, car park, hotel and residential sectors. The average unexpired
lease length as at 31 December 2008 was 12.9 years.
The Company's investments in the UK, which, as at 31 December 2008, made up
approximately 43.3 per cent. of DGRE's portfolio by value, consist of office
buildings, car parks and hotels. DGRE's UK office portfolio, which as at 31
December 2008 was valued at GBP475.8 million (DGRE's attributable value being
GBP221.3 million), consists principally of high-quality office buildings, let to
a range of blue chip tenants. The current occupancy rate of these assets as at
31 December 2008 was 95.9 per cent. DGRE's car park portfolio is made up of 127
mainly freehold sites and buildings, which are leased until at least May 2037 to
NCP. DGRE has a 17 per cent. interest in the owners of a portfolio of Marriott
hotels and a portfolio of Hilton hotels. These properties are operated, as
Marriott Hotels and Hilton Hotels respectively, under management agreements of a
30-year term (to 2037 in the case of the Marriott Hotels and to 2035 in the case
of the Hilton Hotels) on behalf of the owners, providing all the reservation and
marketing systems of the Marriott and Hilton brands.
The proportion of the Company's non-UK investments by value as at 31 December
2008 was as follows: Canada (11.7 per cent.), Germany (24.2 per cent.),
Switzerland, (12.0 per cent.) and Scandinavia (8.8 per cent.).
As at 31 December 2008 the DGRE Group's share of total borrowings was GBP1,772
million, equating to a loan-to-value ratio of 73.8 per cent. The average
maturity period of the DGRE Group's secured debt is 6.6 years and each loan is
in currency local to the asset and is held at subsidiary level. 29.3 per cent.
of the DGRE Group's attributable debt falls due before 31 December 2011.
9. Reasons for the Proposal
Since Admission, with the exception of certain short periods, usually coinciding
with the dates of dividend distributions, there has been a consistent decline in
the Company's share price. This has in part been due to illiquidity in trading
of the Company's shares and as a result of the well-publicised downturn in the
global capital markets, especially in the case of publicly traded real estate
companies.
DBI believes that the downturn in the global real estate markets that has been
in evidence for over a year is likely to continue through 2009 and possibly
beyond. As a consequence, DGRE's share price may well be subject to further
decline. In addition, since Admission, the Company has incurred significant
costs associated with the admission of the Shares to trading on AIM; however, to
date neither DGRE Shareholders nor the Company have received significant
benefits from being a publicly traded company, such as increased liquidity and
ability to raise equity funds.
Against this background, DBI, as the controlling shareholder of the Company, is
giving Scheme Shareholders the opportunity of a full cash exit at a value
representing a premium over the prevailing market price, that, given the current
climate, Scheme Shareholders may find difficult to achieve by other means for a
considerable time, if at all. DBI has informed the Company that the board of DBI
has resolved to cancel the admission of the DGRE Shares to trading on AIM
irrespective of whether the Scheme becomes effective.
In light of all the above, DBI believes that the Proposal represents the best
outcome for the Company and allows Scheme Shareholders to exit in cash prior to
the cancellation of the admission to trading of the Shares on AIM.
Following the Scheme becoming effective, and subsequent to the cancellation of
the Shares to trading on AIM, DBI has no immediate plans to alter the strategic
focus or operations of DGRE's business.
10. Financing of the Proposal
The Cash Consideration payable under the Proposal to Scheme Shareholders will be
financed using a new debt facility provided by Israel Discount Bank Ltd.
Deloitte Corporate Finance, as financial adviser to DBI, is satisfied that the
necessary financial resources are available to DBI to enable it to satisfy in
full the consideration in cash due under the terms of the Proposal, amounting to
GBP19,840,528.
11. Directors, management and employees
The board of directors of DBI has given assurances to the Independent Directors
that, following the Scheme becoming effective, the employment rights, including
pension rights, of all employees of the DGRE Group will be fully safeguarded.
DBI's plans for the DGRE Group's business do not involve any material change in
the conditions of employment of the employees of the DGRE Group, nor are there
any plans to change the principal location of the DGRE Group's business.
If the Scheme becomes effective, the Independent Directors will continue to
serve as directors of the Company until at least 31 December 2009.
12. Structure of the Scheme
The Proposal will be effected by means of a scheme of arrangement between DGRE
and the Scheme Shareholders under Article 125 of the Jersey Law.
The purpose of the Scheme is to provide for DBI (and/or its nominee(s)),
together with DRE, to become the owners of the entire share capital of DGRE in
issue immediately prior to the Effective Date. This is to be achieved by the
Court ordering that all of the Scheme Shares be transferred from Scheme
Shareholders to DBI in consideration for Scheme Shareholders receiving 50 pence
in cash from DBI for each Scheme Share that they hold.
Implementation of the Scheme requires the passing of a resolution by a majority
in number representing 75 per cent. or more of the voting rights of Scheme
Shareholders voting at the Court Meeting. The Interested Directors as well as
Eran Meytal and Izhak Gidron, have undertaken not to vote at the Court Meeting.
Following the Court Meeting, the Scheme must be sanctioned by the Court. The
Scheme will only become effective if the Court sanctions the Scheme and on the
resulting Court Order being delivered to the Registrar of Companies.
Upon the Scheme becoming effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted, and if they
have voted, whether they have voted for or against the resolution, at the Court
Meeting. Upon the Scheme becoming effective, the Scheme Shares will be
transferred, without further action being required on the part of Scheme
Shareholders, to DBI (or its nominee(s)).
Further details of the Scheme will be contained in the Scheme Document which is
expected to be posted to DGRE Shareholders shortly.
13. Cancellation of admission to trading on AIM of the DGRE Shares
Prior to the Scheme becoming effective, DBI intends to procure the making of an
application to the London Stock Exchange by DGRE for the cancellation of the
admission of the DGRE Shares to trading on AIM on the Effective Date. The last
day of dealings in DGRE Shares on AIM is expected to be on the London Business
Day immediately prior to the date of the Court Hearing (it is anticipated that
such last dealing day will be 22 April 2009) and no transfers of DGRE Shares
will be registered after 6.00 p.m. on that date.
14. Disclosure of interests in DGRE
Save as disclosed in Appendix 2 of this announcement, as at 20 March 2009, the
last practicable business day prior to this announcement, neither DBI nor, so
far as DBI is aware, any person acting in concert with DBI, had an interest in
or right to subscribe for relevant securities of DGRE or had any short position
in relation to relevant securities of DGRE (whether conditional or absolute and
whether in the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or right to require
another person to purchase or take delivery of any relevant securities of DGRE
nor has any such person borrowed or lent therein.
As at 20 March 2009, the last practicable business day prior to this
announcement, neither DBI nor, so far as DBI is aware, any person acting in
concert with DBI, has borrowed or lent any relevant securities of DGRE.
15. General
The Proposal will be made on the terms and subject to the Conditions and further
terms set out in Appendix 1 and those terms which will be set out in the Scheme
Document and such further terms as may be required to comply with the provisions
of the Takeover Code. The Scheme Document will include full details of the
Scheme, together with the notice of the Court Meeting and expected timetable of
the Proposal. The Scheme Document and the Form of Proxy will be despatched to
DGRE Shareholders shortly. The Proposal will be subject to the applicable
requirements of the Takeover Code and the Panel.
Appendix 2 contains details of the sources of information and bases of
calculations set out in this announcement. Appendix 3 contains definitions of
certain expressions used in this announcement.
Enquiries
+-------------------------------------------------------------+-----------------------------+
| Independent Directors of Delek Global Real Estate plc | |
+-------------------------------------------------------------+-----------------------------+
| Howard Stanton, Chairman | +44 (0) 7785 282 150 |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Panmure Gordon (Lead Financial Adviser to the Independent | +44 (0) 20 7459 3600 |
| Directors) | |
+-------------------------------------------------------------+-----------------------------+
| Hugh Morgan | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Rothschild (Financial Adviser to the Independent Directors) | +44 (0) 20 7280 5000 |
+-------------------------------------------------------------+-----------------------------+
| Alex Midgen | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Delek Belron International Limited | +972 (0) 3 61 12282 |
+-------------------------------------------------------------+-----------------------------+
| Eran Meytal, Chairman | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Deloitte Corporate Finance (Financial Adviser to DBI) | +44 (0) 20 7936 3000 |
+-------------------------------------------------------------+-----------------------------+
| Jonathan Hinton | |
+-------------------------------------------------------------+-----------------------------+
| Leonie Grimes | |
+-------------------------------------------------------------+-----------------------------+
| | |
+-------------------------------------------------------------+-----------------------------+
| Pelham PR | +44 (0) 20 7337 1500 |
+-------------------------------------------------------------+-----------------------------+
| Alex Walters | |
+-------------------------------------------------------------+-----------------------------+
The full text of the conditions and principal further terms of the Scheme and
the bases and sources of assumptions and calculations are set out in Appendices
1 and 2 respectively, each of which forms part of, and should be read with, this
announcement. Defined terms have the meanings set out in Appendix 3, which also
forms part of and should be read in conjunction with this announcement.
This announcement does not constitute an offer to sell or subscribe for or an
invitation to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction, nor shall there be any sale, issuance
or transfer of the securities referred to in this announcement in any
jurisdiction in contravention of applicable law or regulation. The Proposal will
be made solely by means of the Scheme Document which will contain the full terms
and conditions of the Scheme.
The Scheme Document will be posted to Scheme Shareholders shortly and thereafter
will be available for public inspection.
Panmure Gordon, which is authorised and regulated in the United Kingdom by the
Financial Services Authority is acting exclusively as financial adviser to DGRE
and no one else in connection with the Proposal and will not be responsible to
anyone other than DGRE for providing the protections afforded to the clients of
Panmure Gordon nor for advice in connection with the Proposal or any other
matter referred to in this announcement.
Rothschild, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively as financial adviser to DGRE
and no one else in connection with the Proposal and will not be responsible to
anyone other than DGRE for providing the protections afforded to the clients of
Rothschild nor for advice in connection with the Proposal or any other matter
referred to in this announcement.
Deloitte Corporate Finance is acting exclusively as financial adviser to DBI and
no-one else in connection with the Proposal and will not regard any other person
as its client nor be responsible to anyone other than DBI for providing the
protections afforded to clients of Deloitte Corporate Finance nor for providing
advice in relation to the Proposal or any matter referred to in this
announcement. Deloitte Corporate Finance is a division of Deloitte LLP, which is
authorised and regulated by the Financial Services Authority in respect of
regulated activities.
The availability of the Proposal to Scheme Shareholders who are not resident in
Jersey or the United Kingdom may be affected by the laws or regulations of the
relevant jurisdictions in which they are located. Persons who are not resident
in Jersey or the United Kingdom should inform themselves about, and observe,
applicable legal or regulatory requirements of their jurisdiction.
The Proposal relates to the shares of a Jersey company whose shares are admitted
to trading on AIM and is being made by means of a scheme of arrangement provided
for under Jersey company law. A transaction effected by means of a scheme of
arrangement is not subject to either the proxy solicitation or the tender offer
rules under the US Securities Exchange Act of 1934, as amended. Accordingly, the
Proposal is subject to the disclosure requirements of the Takeover Code and the
separate disclosure requirements and practices applicable in Jersey to schemes
of arrangement, which each differ from the disclosure requirements of the US
tender offer rules. Financial information included in the documentation has been
prepared in accordance with IFRS, which may not be comparable to the financial
statements of US companies.
The receipt of cash pursuant to the Proposal by a US holder of DGRE Shares may
be a taxable transaction for US federal income tax purposes and under applicable
US state and local, as well as foreign and other tax laws. Each holder of DGRE
Shares is urged to consult an appropriate independent professional adviser
immediately to discuss the taxation consequences of the Proposal.
The DGRE Directors accept responsibility for the information, views and opinions
contained in this announcement, save for the information, views and opinions for
which the Independent Directors alone or the DBI Directors, as the case may be,
accept responsibility. To the best of the knowledge and belief of the DGRE
Directors (who have taken all reasonable care to ensure that such is the case)
the information contained in this announcement for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
The Independent Directors accept responsibility for their opinions in respect of
the Proposal contained in this announcement. To the best of the knowledge and
belief of the Independent Directors (who have taken all reasonable care to
ensure that such is the case) the information contained in this announcement for
which they accept responsibility is in accordance with the facts and does not
omit anything likely to affect the import of such information.
The DBI Directors accept responsibility for all information contained in this
announcement relating to the DBI Group, the opinions of DBI, the DBI Directors,
members of their immediate families, related trusts and person connected with
them within the meaning of sections 252 to 255 of the Companies Act 2006. To the
best of the knowledge and belief of the DBI Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement for which they accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
Forward-Looking Statements
This announcement may contain certain "forward-looking statements" with respect
to the expected timing of the Proposal, the expected effects on DGRE and DBI of
the Proposal, the financial condition, results of operations and business of
DGRE, certain plans and objectives of DBI in respect of that business and all
other statements in this announcement other than statements of historical fact.
In some cases, these forward-looking statements can be identified by the use of
forward-looking terminology, including, without limitation, the terms
"believes", "estimates", "plans", "continue", "aims", "projects", "prepares",
"anticipates", "expects", "intends", "may", "will" or "should" or, in each case,
their negative or other variations or comparable terminology. Recipients of this
announcement should specifically consider the factors identified in this
announcement which could cause actual results to differ before making any
decision. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results, performance
or achievements of DGRE, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
assumptions and assessments made by DGRE or DBI, as the case may be, in light of
their experience and their perception of historical trends, current conditions,
future business strategies and other factors they believe appropriate. Such
forward-looking statements speak only as at the date of this announcement. DGRE
and DBI expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in DGRE's or DBI's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based, except as required by applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is or
becomes, "interested" (directly or indirectly) in one per cent. (1%) or more of
any class of "relevant securities" of DGRE, all "dealings" in any "relevant
securities" of DGRE (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30p.m. (London time) on the London Business Day
following the date of the relevant transaction. This requirement will continue
until the Effective Date or until the date on which the Scheme lapses or is
otherwise withdrawn or on which the "offer period" for the purposes of the
Takeover Code otherwise ends. If two or more persons act together pursuant to an
agreement or understanding, whether formal or informal, to acquire an "interest"
in "relevant securities" of DGRE, they will be deemed to be a single person for
the purpose of Rule 8.3 of the Takeover Code.
Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in
"relevant securities" of DGRE by DBI, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the Panel.
Appendix 1
CONDITIONS to the implementation of the proposal
1. The Scheme will be subject to the following Conditions:
(a) approval of the Scheme by a majority in number, representing at least
three-fourths (3/4) of the voting rights of the Scheme Shareholders present and
voting, either in person or by proxy, at the Court Meeting or at any adjournment
of that meeting;
(b) the sanction of the Scheme by the Court (with or without modification,
on terms acceptable to DBI and the Company) and the delivery for registration of
the Court Order to the Registrar of Companies;
(c) no governmentor governmental, quasi governmental, supranational,
statutory, regulatory, environmental, administrative, fiscal or investigative
body, court, trade agency, association, institution or any other similar body or
person whatsoever in any jurisdiction (each a "Third Party") having decided to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having required any action to be taken
or having enacted, made or proposed any statute, regulation, decision or order
and there not continuing to be outstanding any statute, regulation, decision or
order which would or would be reasonably likely to make the Scheme, its
implementation or the Proposal or proposed acquisition of any shares or other
securities in, or control of, DGRE by any member of the DBI Group void, illegal
and/or unenforceable under the laws of any relevant jurisdiction, or otherwise
directly or indirectly prohibit, or materially restrain, restrict, delay or
otherwise materially interfere with or limit the implementation of, or impose
additional conditions or obligations with respect to the Scheme or the
acquisition of any such shares or securities by any member of the DBI Group, and
all applicable mandatory time periods during which any such Third Party could
intervene under the laws of any relevant jurisdiction having expired, lapsed, or
been terminated;
(d) all mandatory notifications, filings or applications having been made in
connection with the Scheme and all mandatory waiting periods (including any
mandatory extensions thereof) under any applicable legislation or regulation of
any relevant jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory or regulatory obligations in any relevant
jurisdiction having been complied with in respect of the Proposal or the
acquisition or the proposed acquisition of any shares or other securities in, or
control of, DGRE by any member of the DBI Group or the carrying on by the DGRE
Group of its business, in each case where the consequence of a failure to make
such notification or filing or to wait for the expiry, termination or lapsing of
any such waiting period would be unlawful in any relevant jurisdiction or would
have a material adverse effect on the DGRE Group taken as a whole;
(e) all mandatory authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals
("Authorisations") in any relevant jurisdiction for or in respect of the
Proposal or the acquisition or the proposed acquisition of any shares or other
securities in, or control of, DGRE by any member of the DBI Group or to carry on
the business of any member of the DGRE Group having been obtained from all
appropriate Third Parties and all such Authorisations remaining in full force
and effect and there being no notice or intimation of any intention to revoke,
suspend, restrict, adversely modify or not to renew such Authorisations, in each
case where making the Proposal effective absent such Authorisations would be
unlawful in any relevant jurisdiction or would have a material adverse effect on
the DGRE Group taken as a whole;
(f) since 20 March 2009 and except as publicly announced to a Regulatory
Information Service by or on behalf of DGRE before the date of the Announcement
or as disclosed in the Scheme Document:
(i) there having been no adverse change in the business, assets, financial or
trading position or profits or prospects of any member of the DGRE Group to an
extent which is material to the DGRE Group taken as a whole; and
(ii) no contingent or other liability having arisen or become known to DBI
which is reasonably likely adversely to affect the business, assets, financial
or trading position or profits or prospects of any member of the DGRE Group to
an extent which is material to the DGRE Group taken as a whole.
Subject to the requirements of the Panel and the approval of the Court, where
required, DBI reserves the right to waive in whole or in part all or any of the
above Conditions (other than Conditions 1(a) and 1(b)), to the extent such
Condition is capable of being waived.
The Conditions set out in paragraphs 1(c)-(f) above must be satisfied, be
determined by DBI to be or remain satisfied, or be waived by DBI prior to the
Court Hearing to sanction the Scheme, failing which the Proposal will lapse. DBI
shall be under no obligation to waive (if capable of waiver), to determine to be
or remain satisfied, or treat as fulfilled, any Conditions set out under
paragraphs 1(c)-(f) above by the date specified above, notwithstanding that any
other Condition of the Proposal may at an earlier date have been waived or
fulfilled and that there are, at such earlier date, no circumstances indicating
that any Condition may not be capable of fulfilment.
The Proposal and the Scheme are governed by Jersey law and will be subject to
the jurisdiction of the Courts of Jersey. The Scheme is subject to the
applicable requirements of the Takeover Code, the Panel and AIM.
2. Certain further terms of the Proposal
Save with the consent of the Panel, the Proposal will lapse and the Scheme will
not proceed if, before the date of the Court Meeting, the Proposal is referred
to the UK Competition Commission.
DBI reserves the right to elect to implement the acquisition of the Scheme
Shares by way of a takeover offer as an alternative to the Scheme. Any such
election may require the consent of the Panel. In such event, the takeover offer
will be implemented on the same terms (subject to amendments to be approved by
the Panel), so far as applicable, as those which would apply to the Scheme and
in compliance with applicable laws and regulations.
Unless the Scheme becomes effective on or before 7 May 2009, or such later date,
if any, as the Company and DBI may agree and the Court may allow, the Scheme
shall never become effective.
Appendix 2
Bases and Sources
(a) The value attributed to the fully diluted share capital of DGRE is based
upon the 265,115,168 DGRE Shares in issue as at the close of business on 20
March 2009 (being the latest practicable date before the date of this
announcement).
(b) Unless otherwise stated, the financial information on DGRE has been
extracted from DGRE's Annual Report and Accounts for the period ended 31
December 2008.
(c) Unless otherwise stated, all prices for DGRE Shares are Closing Prices.
(d) DGRE's average Closing Price of 26.8 pence over the three months to 29
January 2009 has been taken from Thomson Datastream.
(e) The financial information relating to DBI in paragraph 7 of this
announcement, is based upon an exchange rate of 5.8 NIS to GBP1, being the
prevailing mid-point exchange rate as at 5.00 p.m. London time on 19 March 2009.
(f) The interests of DBI (including members of the DBI Group), and those
persons deemed to be acting in concert with it, in DGRE relevant securities as
at 20 March 2009 (the last practicable business day prior to this announcement),
were as follows:
+--------------------------------------------+---------------------+-----------------------+
| Name | Number of DGRE | Percentage of |
| | Shares | existing issued share |
| | | capital |
| | | |
+--------------------------------------------+---------------------+-----------------------+
| DBI | 216,070,613 | 81.50* |
+--------------------------------------------+---------------------+-----------------------+
| DRE | 9,363,500 | 3.53 |
+--------------------------------------------+---------------------+-----------------------+
| Eran Meytal | 23,000 | <0.01 |
+--------------------------------------------+---------------------+-----------------------+
| Izhak Gidron | 20,000 | <0.01 |
+--------------------------------------------+---------------------+-----------------------+
| Yossi Friedman | 19,500 | <0.01 |
+--------------------------------------------+---------------------+-----------------------+
| Ilik Rozanski | 5,000 | <0.01 |
+--------------------------------------------+---------------------+-----------------------+
* Of which DBI holds 13.12 per cent. on trust for several of its wholly owned
subsidiaries, which are not members of the DGRE Group.
Appendix 3
Definitions
The following definitions apply throughout this announcement unless the context
requires otherwise:
+---------------------------------------------------------+---------------------------------------------------------+
| "Admission" | the admission of the DGRE Shares to trading on AIM; |
+---------------------------------------------------------+---------------------------------------------------------+
| "AIM" | the market of that name which is operated by the London |
| | Stock Exchange; |
+---------------------------------------------------------+---------------------------------------------------------+
| "AIM Rules" | the rules applicable to companies whose shares are |
| | traded on AIM published by the London Stock Exchange, |
| | as amended from time to time; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Business Day" | a day (excluding Saturdays, Sundays and Jersey public |
| | holidays) on which banks are generally open in Jersey |
| | for the transaction of business; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Capita Registrars" | the trading name of Capita Registrars Limited; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Cash Consideration" | the cash consideration due to Scheme Shareholders under |
| | the Proposal; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Closing Price" | the closing middle-market price of a DGRE Share derived |
| | from the AIM appendix to the Daily Official List on any |
| | particular day; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Companies Act 2006" | the Companies Act 2006 of the United Kingdom; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Conditions" | the conditions to the implementation of the Proposal |
| | (including the Scheme) set out in Appendix 1 to this |
| | announcement, and "Condition" means any one of them; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Court" | the Royal Court of Jersey; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Court Hearing" | the hearing by the Court of the application to sanction |
| | the Scheme; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Court Meeting" | the meeting of Scheme Shareholders as convened by order |
| | of the Court under Article 125 of the Jersey Law to |
| | consider and if thought fit, to approve the Scheme; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Court Order" or "Order" | the order of the Court sanctioning the Scheme under |
| | Article 125 of the Jersey Law; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Daily Official List" | the daily official list of the London Stock Exchange; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DBI" | Delek Belron International Limited, a company |
| | incorporated in Israel with registered number |
| | 520038209, whose registered address is at Gibor Sport |
| | House, 7 Menachem Begin St., P.O.B. 1707, Ramat Gan |
| | 52117, Israel; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DBI Directors" | the directors of DBI; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DBI Group" | DBI, its subsidiaries, any holding company of DBI |
| | (intermediate or otherwise) and their subsidiary |
| | undertakings from time to time, or any of them, as the |
| | context requires, other than any member of the DGRE |
| | Group; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Deloitte Corporate Finance" | a division of Deloitte LLP, whose registered office is |
| | 2 New Street Square, London, EC4A 3BZ, United Kingdom; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DGRE" or "Company" | DGRE plc, a public limited company incorporated in |
| | Jersey with registered company number 73490 whose |
| | registered office is at 2nd Floor, Mielles House, La |
| | Rue des Mielles, St Helier, Jersey, JE2 3QD; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DGRE Directors" or "Directors" | the directors of DGRE; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DGRE Group" | DGRE and its subsidiaries from time to time, or any of |
| | them, as the context requires; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DGRE Shares" or "Shares" | the unconditionally allotted or issued and fully paid |
| | ordinary shares of 50 pence each in the capital of the |
| | Company; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DGRE Shareholder" or "Shareholder" | a Holder of DGRE Shares, or a person entitled to DGRE |
| | Shares by ordinary transmission as the context shall |
| | require; |
+---------------------------------------------------------+---------------------------------------------------------+
| "DRE" | Delek Real Estate Ltd, a company incorporated in Israel |
| | with registration number 510313778 whose registered |
| | address is at Gibor Sport House, 7 Menachem Begin St, |
| | P.O.B. 1707, Ramat Gan 52117, Israel; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Effective Date" | the date (if any) on which the Scheme becomes effective |
| | in accordance with its terms; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Excluded Shareholders" | Holders of Excluded Shares; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Excluded Shares" | DGRE Shares beneficially owned by DBI or DRE or their |
| | wholly-owned subsidiaries which are not members of the |
| | DGRE Group; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Financial Services Authority" | the United Kingdom Financial Services Authority; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Form of Proxy" | the Form of Proxy in connection with the Court Meeting; |
+---------------------------------------------------------+---------------------------------------------------------+
| "FSMA" | the UK Financial Services and Markets Act 2000, as |
| | amended; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Holder" | a registered holder of DGRE Shares; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Independent Directors" | Howard Stanton, Elisha Flax, Armin Zucker, Jonathan |
| | Scott Warren and Paul Harvey; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Independent Shareholders" | Holders other than the Excluded Shareholders, the |
| | Interested Directors, Eran Meytal and Izhak Gidon; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Interested Directors" | Ilik Rozanski, Asaf Bartfeld and Yossi Friedman; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Jersey" | the Bailiwick of Jersey, Channel Islands; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Jersey Law" | the Companies (Jersey) Law 1991, as amended; |
+---------------------------------------------------------+---------------------------------------------------------+
| "London Business Day" | a day (excluding Saturdays, Sundays and UK public |
| | holidays) on which banks are generally open in the |
| | United Kingdom for the transaction of business; |
+---------------------------------------------------------+---------------------------------------------------------+
| "London Stock Exchange" | London Stock Exchange plc; |
+---------------------------------------------------------+---------------------------------------------------------+
| "NIS" | New Israeli Shekel; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Panel" | the Panel on Takeovers and Mergers; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Panmure Gordon " | Panmure Gordon (UK) Limited; |
+---------------------------------------------------------+---------------------------------------------------------+
| "pounds", "GBP", "pence" or "Sterling" | the lawful currency of the United Kingdom and Jersey; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Proposal" | the proposed acquisition by DBI of the entire issued |
| | and to be issued share capital of DGRE (other than any |
| | Excluded Shares) by means of the Scheme (and other |
| | matters to be considered at the Court Meeting ), or |
| | should DBI so elect, by means of a takeover offer made |
| | by or on behalf of DBI for the entire issued and to be |
| | issued share capital of DGRE not already owned by it |
| | and DRE, taken together; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Registrar of Companies" | the Registrar of Companies in Jersey; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Regulations" | the Companies (Uncertificated Securities) (Jersey) |
| | Order 1999; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Regulatory Information Service" | any information service authorised from time to time by |
| | the Financial Services Authority for the purpose of |
| | disseminating regulatory announcements; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Rothschild" | N M Rothschild & Sons Limited; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme" | the proposed scheme of arrangement under Article 125 of |
| | the Jersey Law between DGRE and the Scheme Shareholders |
| | set out in the Scheme Document, with or subject to any |
| | modification thereof or addition thereto or condition |
| | approved or imposed by the Court and agreed by the |
| | Company and DBI; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme Document" or "Circular" | the document of the Company to be dated on or around 24 |
| | March 2009, in which full details of the Scheme are set |
| | out; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme Record Time" | 6.00p.m. (London time) on the Business Day immediately |
| | before the Effective Date; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme Shareholders" | the Holders of Scheme Shares; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme Shares" | DGRE Shares: |
| | (a) unconditionally allotted or issued and fully |
| | paid on the date of the Scheme Document; |
+ +---------------------------------------------------------+
| | (b) (if any) which are unconditionally allotted |
| | or issued and fully paid after the date of this the |
| | Scheme Document and prior to the Scheme Voting Record |
| | Time; and |
+ +---------------------------------------------------------+
| | (c) (if any) issued at or after the Scheme Voting |
| | Record Time and prior to the Scheme Record Time either |
| | on terms that the original or any subsequent Holder |
| | thereof shall be bound by the Scheme or in respect of |
| | which the Holder thereof shall have agreed in writing |
| | to be bound by the Scheme, |
+ +---------------------------------------------------------+
| | but excluding the Excluded Shares; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Scheme Voting Record Time" | 6.00p.m. (London time) on the day which is two days |
| | before the date of the Court Meeting, or if such Court |
| | Meeting is adjourned, 6.00p.m. (London time) on the |
| | second day before the day of such adjourned meeting; |
+---------------------------------------------------------+---------------------------------------------------------+
| "Takeover Code" | the City Code on Takeovers and Mergers, issued by the |
| | Panel; |
+---------------------------------------------------------+---------------------------------------------------------+
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern |
| | Ireland; |
+---------------------------------------------------------+---------------------------------------------------------+
| "uncertificated" or "in uncertificated form" | in respect of a share or other security, where that |
| | share or security is recorded on the relevant register |
| | of the share or security concerned as being in |
| | uncertificated form, in CREST, and title to which may |
| | be transferred by means of CREST; and |
+---------------------------------------------------------+---------------------------------------------------------+
| "US" | the United States of America its territories and |
| | possessions, any State of the United States and the |
| | District of Columbia. |
+---------------------------------------------------------+---------------------------------------------------------+
.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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