TIDMHCFT
RNS Number : 6800Y
Highcroft Investments PLC
04 January 2024
4 January 2024
Highcroft Investments PLC
("Highcroft" or the "Company")
Proposed Cancellation of Listing of Ordinary Shares from the
Official List
and
Proposed Admission of the Ordinary Shares to the TISE Official
List
The Company announces the proposed cancellation of listing of
the Ordinary Shares on the premium listing segment of the Official
List (the "Cancellation"), and the proposed admission of the
Ordinary Shares to the TISE Official List (the "Admission",
together the "Proposal").
The Directors have undertaken a review to evaluate the benefits
and drawbacks to the Company and Shareholders of retaining the
listing of the Ordinary Shares on the premium listing segment of
the Official List. In parallel, the Directors have conducted a
review of the proposed admission of the Ordinary Shares to the TISE
Official List. This review has included, among other matters, the
impact on Shareholders, the lack of trading liquidity in the
Ordinary Shares, the requirement, as a REIT, for the Company to be
publicly listed, and the regulatory and financial burden of
maintaining a public listing on the Main Market. Given the matters
referred to above and following careful consideration, the
Directors believe that the Proposal is in the best interests of the
Company and its Shareholders as a whole. A detailed explanation of
the reasons outlined above is set out in the Appendix to this
announcement.
Pursuant to Listing Rule 5.2.5, the Cancellation is subject to
Shareholder approval and accordingly, a circular will be sent to
Shareholders and made available on the Company's website later
today, setting out the background to and reasons for the Proposal
(the "Circular"). The Circular will contain a notice convening a
general meeting (the "General Meeting") at which Shareholders will
be invited to consider and, if thought fit, pass the requisite
shareholder resolution to approve the Proposal (the "Resolution").
Extracts of the Circular can be found in the Appendix to this
announcement.
The Resolution will be proposed as a special resolution to
approve the Cancellation and to authorise the Directors to apply
for TISE Admission and must be approved by: (i) a majority of at
least 75 per cent. of votes cast by Shareholders (in person or by
proxy) at the General Meeting (the "First Voting Threshold"); and
(ii) as a company with a "controlling shareholder" (as defined in
the Listing Rules), more than 50 per cent. of votes cast by
Independent Shareholders (in person or by proxy) at the General
Meeting (the "Second Voting Threshold"). As at today's date, the
Company has received irrevocable undertakings from certain
shareholders representing approximately 50.0 per cent. of the
Company's voting rights and issued share capital, to vote in favour
of the Resolution (with approximately 33.5 per cent. of such votes
counting only towards the First Voting Threshold and remainder
counting both towards the First Voting Threshold and the Second
Voting Threshold).
The General Meeting will be held at held at 2.00 p.m. on Monday
22 January 2024 at the offices of Singer Capital Markets at 1
Bartholomew Lane, London, EC2N 2AX.
A copy of the Circular will be made available later today on the
Company's website at https://www.highcroftplc.com/
Capitalised terms in this announcement (including in the
Appendix to this announcement) shall have the meanings given to
them in the Circular, unless otherwise defined in this announcement
or the context otherwise requires).
Expected timetable of principal events(1)
Event 2024
Publication of the Circular 4 January
Latest time and date for receipt of completed 2.00p.m. on 18 January
proxy appointments
Record time and date for entitlement to 8.00p.m. on 18 January
vote at the General Meeting
Time and date of General Meeting 2.00p.m. on 22 January
Last day of dealings in the Ordinary Shares 19 February
on the Main Market
Admission of, and commencement of dealings 8.00a.m. on 19 February
in, the Ordinary Shares on TISE
Cancellation of the listing of the Ordinary 8.00a.m. on 20 February
Shares from the Official List becomes
effective
(1) All times referred to are London times. Each of the above
dates and times is based on the Company's expectations as at the
date of this announcement. If any of the above times and/or dates
change, the revised times and/or dates will be posted to
Shareholders by an announcement through the Regulatory Information
Service.
For further information, please contact:
Highcroft Investments PLC
Paul Leaf-Wright/Roberta Miles +44 (0)1869 352766
Singer Capital Markets Advisory LLP
Peter Steel / Asha Chotai / Finn Gordon - Corporate +44 (0)20 7496
Finance 3000
Appendix - Extracts from the Circular
1. INFORMATION ON HIGHCROFT
Highcroft is an internally managed UK REIT with a focus on
commercial property in England and Wales. The Company has a diverse
portfolio of 22 properties generating rental income from 28
tenancies spread across the warehouse, retail warehouse, leisure,
office and retail sectors.
Highcroft's purpose is to provide its tenants with quality
properties, in good locations, enabling them to succeed, and for
stakeholders to benefit on a long-term, sustainable basis. The
Company aims to deliver sustainable long-term income and capital
growth through accretive asset management initiatives and recycling
of capital in its regionally based property portfolio.
A REIT is exempt from corporation tax on qualifying income and
gains of its property rental business provided that various
conditions are met. A REIT remains subject to corporation tax on
non-exempt income and gains. REITs must distribute at least 90 per
cent. of their income profits from their tax-exempt property
rentals business by way of dividend, known as "Property Income
Distribution".
2. BACKGROUND TO AND REASONS FOR THE DELISTING AND TISE ADMISSION
The Directors have undertaken a review to evaluate the benefits
and drawbacks to the Company and Shareholders of retaining the
listing of the Ordinary Shares on the premium listing segment of
the Official List. In parallel, the Directors have conducted a
review of the proposed admission of the Ordinary Shares to the TISE
Official List. This review has included, among other matters, the
impact on Shareholders, the lack of trading liquidity in the
Ordinary Shares, the requirement, as a REIT, for the Company to be
publicly listed, and the regulatory and financial burden of
maintaining a public listing on the Main Market. Specifically, the
Directors have considered the following points in relation to the
Company's current listing of the Ordinary Shares on the Official
List:
(a) the Company has two separate Concert Parties which, when
combined, account for approximately 65 per cent. of its current
issued share capital. The Kingerlee Concert Party and the Conn
Concert Party hold approximately 41 per cent. and 24 per cent. of
the Company's current issued share capital, respectively. The major
shareholdings of the Concert Parties have contributed to the
limited trading liquidity in the Ordinary Shares for some time. As
a result, the Directors do not believe that the Company's issued
share capital and small market capitalisation provides sufficient
liquidity and opportunity to trade in meaningful volumes or with
sufficient frequency to create an active market in the Ordinary
Shares on the Main Market. The Company does not have any
institutional Shareholders, which the Directors believe further
compounds the limited trading liquidity. The Company believes it is
unlikely to attract new institutional shareholders by remaining on
the Official List and there is no negative impact in this regard of
moving to TISE; and
(b) the Directors believe that the considerable current, and
likely future increased, cost, management time and the legal and
regulatory burden associated with maintaining the Ordinary Shares
admission to listing on the Official List and to trading on the
Main Market significantly outweighs the benefits of continued
admission. Given the lower costs and less onerous regulatory
environment associated with trading on TISE, the Directors believe
that the Delisting and TISE Admission will materially reduce the
Company's recurring administrative and adviser expenses, whilst
allowing an enhanced focus on achieving operational and strategic
goals.
Given the matters referred to above and following careful
consideration, the Directors believe that the Delisting and TISE
Admission are appropriate for the following reasons:
(a) the Company will continue to be a UK-registered and UK-based company;
(b) the Company will continue to be a UK REIT paying Property
Income Distributions in accordance with all applicable laws
relating to REIT Property Income Distributions;
(c) TISE is a global exchange, internationally recognised and a
regulated market which is located conveniently in the British
Isles;
(d) TISE is the second largest market for all listed UK REITs; and
(e) the regulatory environment of TISE is such that it would
allow the Company, if appropriate, to issue new shares to new
investors to raise capital for growth or to implement a share
buyback programme to improve the trading liquidity of the Company's
issued share capital more cost effectively than on the Main Market,
where the costs of such activities outweigh the benefits.
Future strategy
The Board's strategy will remain to:
(a) protect the capital base of the Company by investing in good
quality real estate assets that generate long term income;
(b) increase Property Income Distributions to Shareholders;
(c) keep the Company's cost base to a minimum; and
(d) maintain high standards of ethics and governance.
Summary
For the reasons set out above, the Directors have concluded that
TISE is a more appropriate market for the Company at this point in
time and that the Delisting and TISE Admission is in the best
interests of the Company and its Shareholders.
Accordingly, if the Resolution is passed by Shareholders (on the
date on which the General Meeting is originally convened), TISE
Admission is expected to take place on 19 February 2024 and the
Delisting on 20 February 2024.
The Board has consulted with certain of the Company's largest
Shareholders in connection with the Delisting and TISE Admission
and has received certain irrevocable undertakings to vote in favour
of the Resolution (please see paragraph 5 below for further
details).
Further information on the Delisting and TISE Admission is set
out in Part II of the Circular.
3. CONSEQUENCES AND RISKS ASSOCIATED WITH DELISTING FROM THE OFFICIAL LIST AND TISE ADMISSION
Following TISE Admission, the Company will be subject to the
TISE Listing Rules. Shareholders should note that the protections
afforded to investors in TISE companies are in some respects less
rigorous than those afforded to investors in companies whose shares
are listed on the premium segment of the Official List. The
regulatory and financial reporting regime applicable to companies
whose shares are listed on the Official List will no longer apply
and the levels of disclosure and corporate governance within the
Company may not be as stringent as for a company listed on the
Official List. This paragraph sets out further detailed information
on the consequences and risks associated with the Delisting.
While for the most part the obligations of a company whose
shares are traded on TISE are similar to those of companies whose
shares are listed on the premium segment of the Official List,
there are certain exceptions. Examples of these areas of similarity
and difference are provided below:
-- Under the Listing Rules, a company is required to appoint a
'sponsor' for the purposes of certain corporate transactions. The
responsibilities of the sponsor include providing assurance to the
FCA, when required, that the responsibilities of the listed company
have been met. The TISE Listing Rules require that a company
retains a TISE sponsor at all times. The TISE sponsor is
responsible to TISEA for advising and guiding a TISE company on its
responsibilities under the TISE Listing Rules, must be approved by
TISEA to act in that capacity and has ongoing responsibilities to
both the Company and TISEA. The TISE Listing Rules require a TISE
listed company to seek advice from its TISE sponsor regarding its
compliance with the TISE Listing Rules and to take that advice into
account. Conditional on TISE Admission, the Company has appointed
Appleby as its TISE sponsor.
-- Under the TISE Listing Rules (and similar to the Listing
Rules), prior shareholder approval is required for: (i) reverse
takeovers (being an acquisition or acquisitions in a 12 month
period which would exceed 100 per cent. in various class tests;
(ii) acquisitions, which would exceed 15 per cent. in various class
tests, that are not already approved in advance by all shareholders
in accordance with the issuer's constitutional documents; (iii)
disposals which, when aggregated with any other disposals over the
previous 12 months, would result in a material change of business
(being disposals that exceed 75 per cent. in various class tests);
or (iv) transactions with a related party, which would exceed five
per cent. in various class tests, that are not already approved in
advance by all shareholders in accordance with the issuer's
constitutional documents. The TISE Listing Rules require a circular
to be sent to shareholders in relation to the transactions
described in (i) to (iv) above, albeit the content requirements for
such circulars under the TISE Listing Rules are less detailed than
under the Listing Rules and do not require the approval of TISEA
prior to publication (certain circulars published under the Listing
Rules require prior approval by the FCA).
-- There is no requirement under the TISE Listing Rules for a
prospectus or a listing document to be published for further issues
of a class of listed securities, except when seeking admission for
a new class of securities, or in connection with a reverse takeover
(as defined above), or as otherwise required by law.
-- Unlike the Listing Rules, the TISE Listing Rules do not
specify any required structures or discount limits in relation to
further issues of securities.
-- The Company has a controlling shareholder (as defined in the
Listing Rules and under the TISE Listing Rules) but will no longer
be required to enter into: (i) a relationship agreement with the
Kingerlee Concert Party as a controlling shareholder (or, for that
matter, any other such shareholder); or (ii) comply with the
independence provisions required by the Listing Rules. The Company
and the Kingerlee Concert Party have agreed to maintain the
existing relationship agreement in place from admission to
TISE.
-- In common with a company whose shares are admitted to trading
on the premium segment of the Official List, a company listed on
TISE has to maintain a minimum of 25 per cent. of its issued
ordinary share capital in public hands (except in certain limited
circumstances).
-- The regime in relation to dealing in own securities and
treasury shares on TISE has similarities to the Listing Rules,
including restrictions on the timing of dealings and requirements
relating to notification, price, shareholder approval or tender
offers. It is highlighted that the levels of disclosure may not be
as stringent under the TISE Listing Rules as for a company whose
shares are admitted to trading on the premium segment of the
Official List.
-- Companies with a listing on the premium segment of the
Official List may only cancel their listing with the approval of 75
per cent. of the voted shares and, if the company has a controlling
shareholder, must also secure the approval of a majority of the
voting independent shareholders (other than in certain limited
circumstances). Under the TISE Listing Rules, a TISE company does
not require shareholder consent to cancel admission of its
securities to TISE.
-- The Company is currently required to comply with the UK
Corporate Governance Code or explain areas of non-compliance. It is
not mandatory for companies whose shares are admitted to trading on
TISE to comply with this code. The Board recognises, however, the
importance of high standards of corporate governance and, if TISE
Admission becomes effective, intends to comply, insofar as possible
for a company of its size and nature, with the provisions of the
QCA Code as described in paragraph 8 of this document.
-- The Disclosure Guidance and Transparency Rules will no longer
apply to the Company following TISE Admission. This is because TISE
is not a regulated market for the purposes of the EU's securities
directives. The Company will, however, be required to notify TISEA
and publish an announcement on the website of TISE relating to
changes to the person(s) who, directly or indirectly, hold or
control three per cent. or more of the Ordinary Shares (excluding
treasury shares) or of the votes to be cast on all matters at
general meetings of the Company.
-- Investor guidelines (such as those issued by the Investment
Association, the Pensions and Lifetime Savings Association and the
Pre-Emption Group), which provide guidance on issues such as
executive compensation and share-based remuneration, corporate
governance, share capital management and the issue and allotment of
shares on a pre-emptive or non-pre-emptive basis, do not directly
apply to companies whose shares are admitted to trading on
TISE.
-- The requirement under section 439A of the Companies Act to
submit a remuneration policy for a binding vote by shareholders is
only applicable to quoted companies listed on the Main Market. A
company whose shares are traded on TISE is not subject to the same
obligation to submit its remuneration policy to a binding vote of
shareholders.
-- There can be no assurance that an active or liquid trading
market for the Ordinary Shares will develop or, if developed, will
be maintained following TISE Admission. Additionally, the future
success of TISE and liquidity in the market for the Company's
shares cannot be guaranteed. Potential investors and Shareholders
should be aware that the value and any income from the Ordinary
Shares can go down as well as up and that investment in securities
which are traded on TISE might be less realisable and might carry a
higher risk than a security listed on the Official List.
-- Singer Capital Markets will cease to be financial adviser and
broker to the Company at the point the Company of Delisting.
It is emphasised that the Delisting and TISE Admission will have
no impact on the assets and liabilities of the Company (save in
respect of the fees for the production of this document and TISE
Admission) and it will continue to have the same business and
operations following TISE Admission.
4. IRREVOCABLE UNDERTAKINGS TO VOTE
The Company has received irrevocable undertakings to vote (or
procure a vote) in favour of the Resolution from:
(a) Shareholders who are beneficially interested, in aggregate,
1,744,390 Ordinary Shares (representing approximately 33.5 per
cent. of the Ordinary Shares as at 29 December 2023, being the
latest practicable date prior to the publication of this document)
to vote in favour of the Resolution. All such Shareholders' votes
will count only towards the First Voting Threshold; and
(b) Shareholders (in addition to those under paragraph (a)) who
are beneficially interested, in aggregate, 859,426 Ordinary Shares
(representing approximately 16.5 per cent. of the Ordinary Shares
as at 29 December 2023, being the latest practicable date prior to
the publication of this document) to vote in favour of the
Resolution. All such Shareholders' votes will count both towards
the First Voting Threshold and the Second Voting Threshold.
5. DELISTING AND TISE ADMISSION
Conditional on the Resolution being approved by the requisite
majorities of Shareholders at the General Meeting, the Company will
apply to cancel the listing of the Ordinary Shares on the Official
List and their admission to trading on the Main Market and give 20
Business Days' notice to the London Stock Exchange of its intention
to delist. It is currently anticipated that, subject to the passing
of the Resolution by the requisite majorities:
(a) TISE Admission will take place at 8.00 a.m. on 19 February 2024;
(b) the last day of dealings in the Ordinary Shares on the Main
Market will be 19 February 2024; and
(c) the Delisting will take effect at 8.00 a.m. on 20 February
2024, being not less than 20 Business Days from the date of the
General Meeting.
Although TISE Admission is planned to take place at 8.00 a.m. on
19 February 2024, TISE Admission is subject to final approval of
TISEA, and there is no guarantee that TISEA will approve TISE
Admission on the intended date, and there is no assurance that TISE
Admission will occur or that such TISE listing will be
maintained.
6. APPLICATION OF THE TAKEOVER CODE
The Takeover Code applies to all companies which have registered
offices in the United Kingdom, the Channel Islands, or the Isle of
Man, if any of their equity share capital or other transferable
securities carrying voting rights are admitted to trading on a
regulated market or multilateral trading facility in the United
Kingdom or on any exchange in the Channel Islands or the Isle of
Man.
If the Delisting and TISE Admission is approved by Shareholders
at the General Meeting, the Company will remain subject to the
Takeover Code as it will remain a public company incorporated and
registered in England and Wales with its registered offices in the
UK and, its securities admitted to and trading on an exchange in
the Channel Islands. As a result, the protections that are afforded
to Shareholders under the Takeover Code will remain applicable to
the Company.
Under the Takeover Code, if an acquisition of an interest in
Ordinary Shares were to increase the aggregate interests of the
acquirer and its concert parties to 30 per cent. or more of the
voting rights in the Company, the acquirer and its concert parties
would be required to make a cash offer for the outstanding Ordinary
Shares at a price not less than the highest price paid for
interests in Ordinary Shares by the acquirer or its concert parties
during the previous 12 months. This requirement would also be
triggered when, except with the consent of the Panel, any person
(together with persons acting in concert with that person) who is
interested in Ordinary Shares which carry not less than 30 per
cent. of the voting rights of the Company but does not hold
Ordinary Shares carrying more than 50 per cent. of such voting
rights, and such person (or person acting in concert with that
person) acquires any other Ordinary Shares which increases the
percentage of Ordinary Shares carrying voting rights in which he is
interested.
The Kingerlee Concert Party has an interest in approximately 41
per cent. of the Company's current issued share capital. If members
of the Kingerlee Concert Party acquire any further interest in
Ordinary Shares, such acquisition will, subject to Panel consent,
result in an obligation under Rule 9 of the Takeover Code upon the
Kingerlee Concert Party to make a general offer for the remaining
Ordinary Shares not already held by the Kingerlee Concert Party, at
a price not less than the highest price paid by any member of the
Kingerlee Concert Party for any Ordinary Shares in the previous 12
months.
7. CORPORATE GOVERNANCE
The Board recognises the value of good corporate governance and
envisages no significant alteration in the standards of governance
which the Group has always achieved. It will maintain its existing
governance framework which includes the key mechanisms through
which the Company sets strategy, plans its objectives and monitors
performance and risk management. As the Company will no longer be
listed on the premium listing segment of the Official List, it will
no longer need to comply with the UK Corporate Governance Code.
The TISE Listing Rules require issuers to adhere to certain
principles, including being responsible for following any
applicable recognised code of corporate governance. Following TISE
Admission, the Company intends to comply, insofar as possible for a
company of its size and nature, with the provisions of the QCA
Code. The Board believes the QCA Code offers a flexible, yet
rigorous approach to support the Company as the business
evolves.
8. TAXATION
The Company has taken tax advice to confirm the proposed
Delisting and TISE Admission would not affect the Company's REIT
status and has disclosed the proposed Delisting and TISE Admission
to HMRC.
The Company will therefore remain a UK REIT for tax purposes and
will continue to comply with all applicable laws. As such,
distributions to shareholders will be made, as in the past, as
Property Income Distributions.
Shareholders are urged to consult their own independent
professional adviser regarding the tax consequences of Delisting
and TISE Admission.
9. GENERAL MEETING
The Delisting is conditional on the passing of the Resolution at
the General Meeting by the requisite majorities. A notice convening
a general meeting of the Company to be held at 2.00 p.m. on Monday
22 January 2024 at the offices of Singer Capital Markets at 1
Bartholomew Lane, London EC2N 2AX is set out at the end of this
document.
The Resolution will be proposed as a special resolution to
approve the Delisting and to authorise the Directors to apply for
TISE Admission.
The Resolution will be voted on by way of a poll (and not on a
show of hands). The Board believes a poll is more representative of
Shareholders' voting intentions because Shareholders' votes are
counted according to the number of Ordinary Shares held and all
votes tendered are taken into account. This will also assist in
ensuring that only those votes cast (in person or by proxy) by
Independent Shareholders are counted towards the Second Voting
Threshold. The results of the poll vote held at the General Meeting
will be published on the Company's website and will be released via
a Regulatory Information Service as soon as practicable following
the close of the General Meeting.
Shareholders are encouraged to take the recommended action
before the General Meeting (as set out below), which includes
appointing a proxy whether online, via a CREST Proxy Instruction or
by a hard copy form of proxy in accordance with the instructions in
this document.
The Board strongly urges all Shareholders to vote by proxy on
the Resolution as early as possible and recommends that
Shareholders appoint the chair of the General Meeting as their
proxy.
10. RECOMMENDATION
The Board considers that cancelling the listing of the Ordinary
Shares on the Official List and trading on the Main Market and
applying for admission to listing on the TISE Official List and
trading on TISE is, in the Board's opinion, in the best interests
of the Shareholders as a whole.
Accordingly, the Board unanimously recommends that you vote in
favour of the Resolution to be proposed at the General Meeting.
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