REG - Palace Capital PLC - Tender Offer

Palace CapitalAnnouncement

13/06/2024 07:00

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RNS Number : 2142S  Palace Capital PLC  13 June 2024

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

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF THE MARKET ABUSE REGULATION (EU 596/ 2014) AS IT FORMS PART
OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED

 

13 June 2024

 

Palace Capital plc

("Palace" or the "Company" or the "Group")

 

Proposed Return of Capital to Shareholders by way of a Tender Offer

 

-Notice of General Meeting-

 

On 6 June 2024, alongside its preliminary results, the Company announced that,
in addition to the share buyback authority granted by shareholders on 4
December 2023, it intended to return capital to Shareholders by way of a
Tender Offer pursuant to which Qualifying Shareholders are invited to tender
some or all of their Ordinary Shares.

 

It is proposed that up to 8,667,760 Ordinary Shares may be purchased under the
Tender Offer for a maximum aggregate cash consideration of up to £21.67
million. Qualifying Shareholders who participate in the Tender Offer will have
a Guaranteed Entitlement to tender three Ordinary Shares for every thirteen
Ordinary Shares held, representing approximately 23% of the Ordinary Shares
held by them, at the Record Date, rounded down to the nearest whole number, at
a price of 250 pence per Ordinary Share.

 

A Circular is expected to be published shortly (and will be made available on
the Company's website at  www.palacecapitalplc.com) which includes the
background to, and reasons for, the Tender Offer and why the Board considers
that the Tender Offer is in the best interests of Shareholders as a whole and
why the Board of Palace unanimously recommends that Shareholders vote in
favour of the Tender Offer Resolution which will be proposed at a Shareholder
General Meeting. The Tender Offer is conditional on the passing of the Tender
Offer Resolution.

 

Key terms of the Tender Offer:

 

 * The Tender Offer will be conducted at a price of 250 pence per Ordinary Share
(the "Tender Price").

 * The Tender Price represents an 11.1% premium to the Company's share price as
at 11 June 2024 (the "Last Practicable Date").

 * The Tender Offer will be open to all Qualifying Shareholders, being
Shareholders on the Register on the Record Date (being 6pm on 9 July 2024).

 * Each Qualifying Shareholder will be able to tender approximately 23% of their
Ordinary Shares held on the Record Date (the "Guaranteed Entitlement"), which
equates to 3 Ordinary Shares for every 13 Ordinary Shares held.

 * Qualifying Shareholders are able to submit tenders in excess of their
Guaranteed Entitlement ("Excess Tenders"). Excess Tenders will only be
accepted to the extent that other Qualifying Shareholders tender less than
their Guaranteed Entitlement or do not tender any Ordinary Shares.

 * The Tender Offer will open on 14 June 2024 and will close at 1:00 p.m. on 9
July 2024 or such other date as may be determined in accordance with the
Circular.

 * Implementation of the Tender Offer is conditional upon, amongst other things,
the approval of Shareholders for the Tender Offer Resolution.

 * It is intended that Ordinary Shares successfully tendered will be cancelled by
the Company.

 * Assuming that the maximum number of Ordinary Shares are purchased under the
Tender Offer and cancelled, the Company's issued share capital will be reduced
by 8,667,760 Ordinary Shares to 28,892,535 Ordinary Shares following
completion of the Tender Offer.

 

Steven Owen, Executive Chairman, commented:

 

"The Tender Offer announced today represents a further milestone in the
Board's strategy of returning cash to shareholders following the £21.9
million cash returned through buybacks since July 2022.

 

"The format of the Tender Offer provides good flexibility, enabling those
Qualifying Shareholders who wish to reduce their holdings an opportunity to do
so at a market-driven price with a premium, whilst permitting those who wish
to retain their current investment in the Company to do so.

 

"With further property sales due to complete later in the year, we anticipate
making further capital returns through an additional tender offer as we
continue to deliver on our strategy for shareholders."

 

Expected timetable of principal events

 

Announcement of the Tender Offer, publication of the Circular and the Notice
of General Meeting:

13 June 2024

 

Tender Offer opens: 14 June 2024

 

Latest time and date for receipt of Voting Instructions: 9.30 a.m. on 5 July
2024

 

General Meeting: 9.30 a.m. on 9 July 2024

 

Announcement of results of the General Meeting: 9 July 2024

 

Latest time and date for receipt of Tender Forms and share certificates in
relation to the Tender Offer (i.e. close of Tender Offer): 1.00 p.m. on 9 July
2024

 

Latest time and date for receipt of TTE Instructions in relation to the Tender
Offer (i.e. close of Tender Offer): 1.00 p.m. on 9 July 2024

 

Tender Offer Record Date: 6.00 p.m. on 9 July 2024

 

Announcement of results of the Tender Offer: 15 July 2024

 

CREST accounts credited with unsuccessfully tendered uncertificated holdings
of Ordinary Shares: not later than 16 July 2024

 

Purchase of Ordinary Shares under the Tender Offer: 17 July 2024

 

CREST accounts credited in respect of Tender Offer proceeds for uncertificated
Ordinary Shares: by 19 July 2024

 

Cheques despatched in respect of Tender Offer proceeds for certificated
Ordinary Shares: by 30 July 2024

 

Return of share certificates in respect of unsuccessful tenders of
certificated Ordinary Shares: by 30 July 2024

 

Despatch of balancing share certificates (in respect of certificated Ordinary
Shares) for revised, certificated holdings in the case of partially successful
tenders: by 30 July 2024

 

All times are references to London (UK) times. Other than the date of the
announcement of the Tender Offer, each of the above times and dates are
indicative only and 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 notified to Shareholders by an announcement through a
Regulatory Information Service.

 

Enquiries:

 

 Palace Capital
 Steven Owen, Executive Chairman  info@placecapitalplc.com

 FTI Consulting                   Tel: 0203 727 1000

 Financial PR

 Dido Laurimore, Giles Barrie

 Deutsche Numis                   Tel: 0207 260 1200

 Broker

 Oliver Hardy

 Heraclis Economides

Posting of Circular and Notice of General Meeting:

 

Full details of the Tender Offer will be included in a circular which is
expected to be published and available on the Group's website later today
(www.palacecapital.com (http://www.palacecapital.com) ).

 

There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on, among other things, the approval of the Tender Offer
Resolution by Shareholders and will not proceed if any of the Tender
Conditions are not satisfied or waived by Deutsche Numis or the Company (as
the case may be) or if it is withdrawn by Deutsche Numis or the Company at any
point prior to the announcement of the results of the Tender Offer.

 

Notice in relation to overseas persons:

 

The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
person who is subject to the laws of any jurisdiction other than the UK should
inform themselves about and observe any of those restrictions. Any failure to
comply with any of those restrictions might constitute a violation of the
relevant laws or regulations of such jurisdiction.

 

Forward-looking statements:

 

This announcement includes "forward-looking statements" which include all
statements other than statements of historical fact, including, without
limitation, those regarding the Group's financial position, business strategy,
plans and objectives of management for future operations, or any statements
preceded by, followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "would, "could" or
similar expressions or negatives thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors
beyond the Group's control that could cause the actual results, performance or
achievements of the Group to be materially different from the future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and the
environment in which the Group will operate in the future. These
forward-looking statements speak only as at the date of this announcement.
Whilst the Directors consider these statements to be reasonable based upon
information currently available, they may prove to be incorrect. However, the
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law.

 

No profit forecast or estimates:

 

Unless otherwise stated, no statement in this announcement is intended as a
profit forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings, earnings per share
or income, cash flow from operations or free cash flow for the Group, for the
current or future financial years would necessarily match or exceed the
historical published earnings, earnings per share or income, cash flow from
operations or free cash flow from the Group.

 

Numis Securities Limited (trading as Deutsche Numis) ("Deutsche Numis"), which
is authorised and regulated in the United Kingdom by the FCA, is acting
exclusively for Palace and no one else in connection with the proposed Tender
Offer and will not be responsible to anyone other than Palace for providing
the protections afforded to clients of Deutsche Numis nor for providing advice
in relation to the proposed Tender Offer or any other matter referred to
herein. Neither Deutsche Numis nor any of its group undertakings or affiliates
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Deutsche Numis in connection with the
proposed Tender Offer or any matter referred to herein.

 

Proposed Return of Capital to Shareholders by way of a Tender Offer for 3
Ordinary Shares for every 13 Ordinary Shares held at 250 pence per Ordinary
Share and Notice of General Meeting

 

Introduction

 

On 6 June 2024, alongside its preliminary results, the Company announced that,
in addition to the share buyback authority provided by shareholders on 4
December 2023, it intended to return capital to Shareholders by way of a
Tender Offer pursuant to which Qualifying Shareholders are invited to tender
some or all of their Ordinary Shares.

 

It is proposed that up to 8,667,760 Ordinary Shares may be purchased under the
Tender Offer for a maximum aggregate cash consideration of up to £21.67
million and Qualifying Shareholders who participate in the Tender Offer will
have a Guaranteed Entitlement to tender three Ordinary Shares for every
thirteen Ordinary Shares held, representing approximately 23% (assuming full
take-up under of the Tender Offer) of the Ordinary Shares held by them, at the
Record Date, rounded down to the nearest whole number, at a price of 250 pence
per Ordinary Share.

 

To the extent that Qualifying Shareholders tender for less than the total
overall amount that may be returned to Shareholders pursuant to the Tender
Offer, or where the Board decides not to proceed with the Tender Offer in
accordance with terms of the Circular, the Board will consider alternative
options regarding how best to deploy any cash or capital surplus or to return
value to Shareholders, including by way of a further tender offer, a share
buy-back programme or by way of a distribution of dividends, taking into
consideration the then prevailing market and economic conditions and other
relevant factors at the relevant time.

 

 

Tender Offer

 

Background and reasons for the Tender Offer

Subject to certain conditions including the passing of the Tender Offer
Resolution by Shareholders at the General Meeting as a special resolution, the
Tender Offer will be implemented by Deutsche Numis (acting as principal and
not as agent, nominee or trustee) at the Tender Price giving Qualifying
Shareholders the opportunity to tender Ordinary Shares through the Tender
Offer for cash. The Tender Offer Resolution will give the Directors authority
to buy back up to 8,667,760 Ordinary Shares, at the Tender Price of 250 pence
per Ordinary Share, for a maximum aggregate cash consideration of up to
£21.67 million.

 

Update on delivery of strategic objectives

Notwithstanding challenging property and financial markets, the past year was
again transformational for the Group as it continued to successfully deliver
on its disposal and debt reduction strategy resulting in a significantly
de-leveraged balance sheet which has put the Company into a substantial net
cash position. Since 1 April 2023 to date, the Company has exchanged or
completed on the sale of 24 investment properties for £112.9 million and
exchanged or completed on £4.4 million of sales of unencumbered residential
units at Hudson Quarter, York. During FY24, the Company completed the sale of
21 investment properties for £93.7 million, which is 4.4% ahead of the 31
March 2023 valuation and completed the sales of seven residential units at
Hudson Quarter, York, for £3.2 million, 5.3% ahead of the 31 March 2023
valuation.

 

During FY24, the Company proactively reduced gross debt by £56.0 million to
£8.3 million and the significant de-leveraging of the Group's balance sheet
resulted in a net cash position of £11.5 million as at the year end which has
increased to £19.7 million as at 5 June 2024. Proforma net cash, assuming
that all exchanged properties complete, is approximately £30.1 million as at
the Latest Practicable Date.

 

As mentioned above, disposal activity has continued since the year end and we
have exchanged or completed on the sale of three investment properties for
£18.5 million and also conditionally exchanged on an office unit at St James'
Gate, Newcastle for £0.7 million. These sales were in aggregate 1.5% ahead of
the 31 March 2024 book value.

 

Total investment properties sold since the change of strategy in July 2022
amount to £124.0 million or £135.9 million including residential apartments.
Since July 2022, cash returned to shareholders from share buyback programmes
totals £21.9 million of which £15.2 million was returned during FY24.

 

Assuming that the properties currently under offer are sold, the Company will
have six investment properties remaining, each of which have their own asset
management initiatives that are required to be completed in order to be ready
for sale. Additionally, conditions in the investment market for certain types
of assets, particularly leisure assets, are such that, in the Board's view,
the sale of these assets should be deferred until market demand and pricing
improve, particularly given the high income yield and long unexpired lease
terms. Market conditions are continually assessed in order to determine the
optimum time to sell a property assuming all appropriate asset management
initiatives have been completed in relation to such properties.

 

Operationally, the business remains robust. The team has been proactive in
implementing asset management plans to increase income, reduce void costs and
improve our ESG performance, including EPCs. Rent collection remains high and
current occupancy levels remain resilient.

 

The Company continues to reduce its level of administrative expenses in line
with its strategy, with measures implemented in FY24 saving £0.9 million.
This includes reducing headcount and relocating its head office to a smaller
office in Victoria, London in December 2023. Annual occupancy costs of the
Company's premises are £0.25 million lower than those of its former offices
in Bury Street, SW1.

 

Annualised cost savings are now over £2.3 million compared to 2022. These
cost savings represent 51% of FY22 administrative expenses and 31% of FY22
EPRA earnings. We now have a Board of two members and an executive team of
six, including myself, focused on executing the Company's strategy.

 

The Directors believe that it is now appropriate to return further capital to
Shareholders. This reflects the Directors' belief that share buy backs
(including by way of tender offer) are an appropriate means of returning
capital to Shareholders.

 

The Board regularly reviews capital allocation to optimise long-term returns
for Shareholders and has

explored various options for returning capital to Shareholders. The Board has
determined that the proposed Tender Offer, to be made at an appropriate
premium to the price per Ordinary Share on the Latest Practicable Date, would
be the most suitable way of returning capital to Shareholders in a quick and
efficient manner, taking account of the relative costs, complexity and
timeframes of the possible methods available, as well as the likely tax
treatment for and equality of treatment of Shareholders.

 

The Board of Directors of the Company considers the Tender Offer to be
beneficial to the

Shareholders as a whole, including, among other reasons, in that:

 * the Tender Offer is available to all Qualifying Shareholders regardless of the
size of their holding;

 * the Tender Price represents a premium of 11.1% to the Company's Ordinary
Shares closing price of 225 pence on 11 June 2024 (being the Latest
Practicable Date);

 * the Tender Offer provides Qualifying Shareholders who wish to reduce their
holdings of Ordinary Shares with an opportunity to do so at a market-driven
price with a premium;

 * the Tender Offer enables Ordinary Shares to be sold free of commissions or
charges that would otherwise be payable if Qualifying Shareholders were to
sell their Ordinary Shares through their broker; and

 * the Tender Offer permits Shareholders who wish to retain their current
investment in the Company and their Ordinary Shares to do so, as no
Shareholder is required to participate in the Tender Offer, providing
Shareholders with flexibility.

 

The Tender Offer is separate, and in addition, to the share buy-back programme
approved by Shareholders on 4 December 2023 (the "Buy-Back Programme").
Pursuant to the Buy-Back Programme, the Company was entitled to repurchase up
to a maximum of 5,634,044 representing 15% of the then issued share capital
(excluding shares held in treasury) of Ordinary Shares. In addition, the
Company intends to renew this share buy-back authority at its next
annual general meeting, which is currently scheduled to take place at 10.00
a.m. on 24 July 2024 (the "2024 AGM").

 

Therefore, the Tender Offer is being proposed in addition to the Buy-Back
Programme and any share buy-back programme which may be announced by the
Company following the 2024 AGM, assuming that the share buy-back authority is
passed by Shareholders at the 2024 AGM.  In addition, the Directors expect
that an additional tender offer is likely to take place later in the year as
further sales are completed.

 

Principal Terms of the Tender Offer

 

Subject to certain conditions (including the Tender Offer Resolution being
passed at the General

Meeting), Deutsche Numis will implement the Tender Offer by acquiring, as
principal (and not as

agent, nominee or trustee), the successfully tendered Ordinary Shares at the
Tender Price. Ordinary Shares purchased by Deutsche Numis pursuant to the
Tender Offer will be purchased by Deutsche Numis as principal (and not as
agent, nominee or trustee) and such purchases will be on-market purchases in
accordance with the provisions of the Act and the rules of the London Stock
Exchange and the FCA.

 

Conditional upon the Tender Offer becoming unconditional and subject to the
terms thereof, Deutsche

Numis has the right to require the Company to purchase from it (and the
Company has the right to

require Deutsche Numis to sell to it) any Ordinary Shares acquired by Deutsche
Numis under the

Tender Offer pursuant to the Repurchase Agreement at the Tender Price.  If
either the put option or call option under the Option Agreement is exercised,
Deutsche Numis shall sell such Ordinary Shares to the Company, at a price per
Ordinary Share equal to the Tender Price, pursuant to the Repurchase
Agreement. Purchases of Ordinary Shares by the Company pursuant to the
Repurchase Agreement will also be on-market purchases in accordance with the
provisions of the Act and the rules of the London Stock Exchange and the FCA.
The Company intends that all of the Ordinary Shares purchased by the Company
pursuant to the Repurchase Agreement in connection with the Tender Offer will
be cancelled.

 

Qualifying Shareholders must consider carefully all of the information
contained in the Circular as

well as their personal circumstances when deciding whether to participate in
the Tender Offer.

 

The maximum number of Ordinary Shares that may be purchased under the Tender
Offer, being up to

8,667,760 Ordinary Shares, will equate to approximately 23% of the Issued
Ordinary Share Capital

at the Tender Offer Record Date, for a maximum aggregate cash consideration of
up to £21.67 million ("Maximum Tendered Shares"). As at 11 June 2024, being
the Latest Practicable Date, there were 37,560,295 Ordinary Shares in issue.
No shares were held in treasury.

 

If the Maximum Tendered Shares are acquired by Deutsche Numis pursuant to the
Tender Offer and subsequently repurchased by the Company for cancellation
pursuant to the Repurchase Agreement, the total number of Ordinary Shares of
the Company in issue following such cancellation will be 28,892,535 Ordinary
Shares. It is intended that successfully tendered Ordinary Shares which are
subsequently purchased by the Company pursuant to the Repurchase Agreement
will be cancelled and will not rank for any future dividends.

 

How to Participate in the Tender Offer

 

Qualifying Shareholders are not obliged to tender any Ordinary Shares if they
do not wish to do so. If

no action is taken by Qualifying Shareholders, there will be no change to the
number of Ordinary

Shares that they hold and they will receive no cash as a result of the Tender
Offer.

 

Each Qualifying Shareholder who wishes to participate in the Tender Offer is
entitled to submit a

tender to sell some or all of their Ordinary Shares.

 

The total number of Ordinary Shares tendered by any Qualifying Shareholder
should not exceed the

total number of Ordinary Shares registered in the name of that Qualifying
Shareholder at the Record

Date. For example, a Qualifying Shareholder may decide to tender fifty per
cent. (50%) of their

Ordinary Shares, but if a Qualifying Shareholder returned a tender purporting
to offer for sale more

than one hundred per cent. (100%) of their Ordinary Shares, they would be
deemed to have tendered

only the number of Ordinary Shares actually owned by that Shareholder on the
Record Date, with the

tender in respect of any additional shares being deemed invalid.

 

The Tender Offer will open on 14 June 2024 (unless such date is altered by
Deutsche Numis in consultation with the Company in accordance with the terms
and conditions of the Tender Offer). The Tender Offer will close at 1.00 p.m.
on 9 July 2024 and tenders received after that time will not be accepted
(unless the Closing Date is extended by Deutsche Numis, in consultation with
the Company, in accordance with the terms and conditions of the Tender
Offer).

 

Purchase of Ordinary Shares

 

Successfully tendered Ordinary Shares will be purchased from Qualifying
Shareholders by Deutsche Numis (acting as principal and not as agent nominee
or trustee), free of commission and dealing charges. Conditional upon the
Tender Offer becoming unconditional and subject to the terms thereof, Deutsche
Numis has the right to require the Company to purchase from it (and the
Company has the right to require Deutsche Numis to sell to it) any Ordinary
Shares acquired by Deutsche Numis under the Tender Offer pursuant to the
Repurchase Agreement at the Tender Price. If either the put option or call
option under the Repurchase Agreement is exercised, such Ordinary Shares will
be repurchased by the Company from Deutsche Numis pursuant to the terms of the
Repurchase Agreement and subsequently will be cancelled by the Company. Any
rights of Qualifying Shareholders who do not participate in the Tender Offer
will be unaffected by the Tender Offer.

 

All Shareholders who tender Ordinary Shares will receive the Tender Price,
subject, where applicable,

to the scaling-down arrangements as set out in the Circular to be published
later today.

 

If more than the overall limit of Ordinary Shares that may be repurchased
pursuant to the Tender

Offer are validly tendered by Qualifying Shareholders and the Tender Offer is
therefore oversubscribed, acceptances of validly tendered Ordinary Shares will
be scaled-down to determine the extent to which individual tenders are
accepted. Accordingly, where scaling-down applies, beyond a Qualifying
Shareholder's Guaranteed Entitlement, there is no guarantee that all of the
Ordinary Shares which are tendered by Qualifying Shareholders will be accepted
for purchase.

 

Guaranteed Entitlement

 

The Guaranteed Entitlement is only relevant if the Tender Offer is
oversubscribed.  Tenders in respect of approximately 23% of each holding of
Ordinary Shares of every Qualifying Shareholder on the Record Date will be
accepted in full at the Tender Price and will not be scaled down.  This
percentage is known as the "Guaranteed Entitlement".  Qualifying Shareholders
may tender Ordinary Shares in excess of their Guaranteed Entitlement.
 However, if the Tender Offer is oversubscribed, the tender of such excess
Ordinary Shares will only be successful to the extent that other Qualifying
Shareholders have tendered less than their Guaranteed Entitlement.

 

Circumstances in which the Tender Offer may not proceed

 

There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on the

passing of the Tender Offer Resolution as set out in the Notice of General
Meeting and on the

satisfaction of the other Tender Conditions specified in the Circular. In
particular, the Tender

Offer is conditional on the receipt by 1.00 p.m. on the Closing Date of valid
tenders in respect of at

least 375,603 Ordinary Shares (representing approximately 1% of the Company's
issued share capital as at the Latest Practicable Date).

 

Deutsche Numis has reserved the right at any time prior to the announcement of
the results of the

Tender Offer, in consultation with the Company, to extend the period during
which the Tender Offer is open and/or vary the aggregate value of the Tender
Offer, based on economic or market conditions and/or other factors, subject to
compliance with applicable legal and regulatory requirements. Deutsche Numis
has also reserved the right, in certain circumstances, to not proceed with the
Tender Offer. Any such decision will be announced by the Company through a
Regulatory Information Service as soon as practicable thereafter.

 

To the extent that Qualifying Shareholders tender for significantly less than
the total amount that may

be returned to Shareholders pursuant to the Tender Offer, or where Deutsche
Numis decides not to

proceed with the Tender Offer, the Company will consider alternative options
regarding how best to

deploy any such cash or capital surplus or to return cash to Shareholders,
including by way of a

share buy-back programme or by way of distribution of dividends, taking into
consideration the then

prevailing market conditions and other relevant factors at the relevant time.

 

Full terms and conditions of the Tender Offer

 

Full details of the Tender Offer, including the terms and conditions on which
it is made, are set out in

the Circular expected to be published later today.

 

General Meeting to approve the Tender Offer Resolution

 

The Tender Offer requires the approval by Shareholders of the Tender Offer
Resolution at a General

Meeting of the Company. For this purpose, the Company is convening the General
Meeting for 9.30 a.m. on 9 July 2024 to consider and, if thought fit, pass the
Tender Offer Resolution to authorise and to approve the terms under which the
Tender Offer will be effected.

 

The Tender Offer Resolution must be passed on a poll by at least seventy-five
per cent. (75%) of the votes validly cast by those Shareholders present in
person or by proxy and entitled to vote at the General Meeting. Deutsche Numis
will not purchase Ordinary Shares pursuant to the Tender Offer unless the
Tender Offer Resolution is duly passed.

 

A summary of action to be taken by Shareholders is set out in the Circular.

 

Recommendation by the Board

 

The Directors consider that the Tender Offer is in the best interests of the
Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour
of the Tender Offer Resolution. The Board makes no recommendation to
Qualifying Shareholders in relation to participation in the Tender Offer
itself. Whether or not Qualifying Shareholders decide to tender all, or any,
of their Ordinary Shares will depend on, among other things, their view of the
Company's prospects and their own individual circumstances, including their
own financial and tax position. Shareholders are required to take their own
decision and are recommended to consult with their duly authorised independent
financial or professional adviser.

 

 

The following definitions apply throughout the Circular and this announcement:

Act the Companies Act of England and Wales 2006, as amended from time to time

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

time

Board or Board of Directors or Directors the directors of the Company as at
the date of the Circular, whose names are set out in the Circular

Business Day any day other than a Saturday, Sunday or public holiday on which
banks are open in the City of London for the transaction of general commercial
business

certificated form or certificated in relation to a share, a share, title to
which is recorded in the relevant register of the share concerned as being
held in certificated form (that is, not in CREST)

Circular the document to be published by the Company and sent to Shareholders
relating to the proposed Tender Offer and Notice of General Meeting

Closing Date 9 July 2024 or such other date as may be determined in accordance
with the Circular in relation to the Tender Offer

Company or Palace Capital Palace Capital plc, a public limited company
incorporated in England and Wales with registered number 05332938 and
registered office at Thomas House, 84 Eccleston Square, London SW1V 1PX United
Kingdom

CREST the paperless settlement procedure operated by Euroclear enabling system
securities to be evidenced otherwise than by certificates and transferred
otherwise than by written instrument

CREST Manual the rules governing the operation of CREST as published by
Euroclear

CREST Member a person who has been admitted by Euroclear as a system member
(as defined in the CREST Regulations)

CREST Participant a person who is, in relation to CREST, a system participant
(as defined in the CREST Regulations)

CREST Proxy Instruction a proxy appointment or instruction made via CREST
authenticated in accordance with Euroclear's specifications and containing the
information set out in the CREST Manual CREST Regulations the Uncertificated
Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time

CREST Sponsor a CREST Participant admitted to CREST as a CREST sponsor, being
a sponsoring system participant (as defined in the CREST Regulations)

CREST Sponsored Member a CREST Member admitted to CREST as a sponsored member

CTA 2010 the UK Corporation Tax Act 2010 (as amended from time to time)

Deutsche Numis Numis Securities Limited

Disclosure and Transparency Rules the Disclosure Guidance and Transparency
Rules of the FCA made under Part VI of FSMA, as amended from time to time

Distribution any dividend or other distribution on or in respect of the shares
of the Company and references to a Distribution being paid include a
distribution not involving a cash payment being made

Electronic Tender the inputting and settlement of a TTE Instruction in
accordance with the procedures set out in the Circular which constitutes or is
deemed to constitute a tender of Ordinary Shares pursuant to and on the terms
of the Tender Offer as set out in the Circular

Euroclear Euroclear UK & International Limited, the operator of CREST

FCA the Financial Conduct Authority of the United Kingdom

Form of Proxy the paper proxy form available from the Registrar upon request;
or the electronic proxy form to appoint a proxy electronically using the
Equiniti Shareview website or (for institutional investors only) by using the
Proxymity platform on www.proxymity.io (http://www.proxymity.io) , as the case
may be, in each case, to be used in connection with the General Meeting and to
be completed and submitted in accordance with the instructions thereof and the
terms and conditions of this Circular (including the notes to the Notice of
the General Meeting set out in Part IX of this Circular)

FSMA Financial Services and Markets Act 2000, as amended from time to time

General Meeting the general meeting of the Company to be held at the offices
of CMS Cameron McKenna Nabarro Olswang LLP at Cannon Place, 78 Cannon Street,
London EC4N 6AF at 9.30 a.m. on 9 July 2024, or any adjournment thereof,
notice of which is set out in the Circular

Group the Company and its subsidiaries and subsidiary undertakings

Guaranteed Entitlement has the meaning given to that term in the Circular (as
calculated in accordance with the terms of the Circular)

HMRC H.M. Revenue & Customs

Issued Ordinary Share Capital the issued Ordinary Shares in the capital of the
Company at the Tender Offer Record Date

Latest Practicable Date 11 June 2024, being the latest practicable date prior
to the publication of the Circular

Equiniti Equiniti Limited, Corporate Actions, Aspect House, Spencer Road,
Lancing, West Sussex, BN99 6DA as Registrar and Receiving Agent

Listing Rules the listing rules made by the FCA under Part VI of FSMA, as
amended from time to time and contained in the FCA's publication of the same
name

London Stock Exchange London Stock Exchange PLC

MAR the Market Abuse Regulation (EU) 5964/2014, which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018)

member account ID the identification code or number attached to any member
account in CREST

Notice of General Meeting the notice of the General Meeting which appears in
the Circular

Official List the list maintained by the FCA in accordance with section 74(1)
of FSMA for the purposes of Part VI of FSMA

Ordinary Shares the ordinary shares of £0.10 each in the capital of the
Company

Overseas Shareholders a Shareholder who is a resident in, or a national or
citizen of, a jurisdiction outside the United Kingdom

Participant ID the identification code or membership number used in CREST to
identify a particular CREST Member or other CREST Participant

Person Closely Associated or PCA shall have the same meaning as given in
Chapter 1, Article 3 of MAR

Qualifying Property Rental Business the property-rental business of a REIT as
defined in section 519 of the CTA 2010

Qualifying Shareholder Shareholders who are entitled to participate in the
Tender Offer, being those who are on the Register on the Tender Offer Record
Date and excluding those with a registered address in a Restricted
Jurisdiction

REIT UK Real Estate Investment Trust

Repurchase Agreement the Repurchase Agreement, dated 13 June 2024, between
Deutsche Numis and the Company, the terms of which are summarised in the
Circular

Register the Company's register of members

Registrar and Receiving Agent Equiniti, Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA

Regulatory Information Service a service approved by the FCA for the
distribution to the public of regulatory announcements and included within the
list maintained on the FCA's website

Restricted Jurisdiction means: (i) the United States, Brazil and the Republic
of South Africa and any other jurisdiction where the mailing of the Circular
or the accompanying documents, or the extension of the Tender Offer, in the
manner contemplated by the Circular into or inside such jurisdiction would
constitute a violation of the laws of such jurisdiction; or (ii) any country,
region or territory which is the subject of Sanctions (including, without
limitation, Cuba, Iran, North Korea, Syria, Russia, the Crimea Region of
Ukraine, the so-called Donetsk People's Republic and the so-called Luhansk
People's Republic)

Sanctions means any sanctions administered or enforced by the US Government
(including, without limitation, the Office of Foreign Assets Control of the
U.S. Department of Treasury of the U.S. Department of State, and including,
without limitation, the designation of a "specially designated national" or
"blocked person"), the United Nations Security Council, the European Union,
His Majesty's Treasury, or other relevant competent governmental or regulatory
authority, institution or agency which administers economic, financial and/or
trade sanctions

Shareholder Helpline the helpline operated by Equiniti available to
Shareholders in connection with the Tender Offer

Shareholders holders of Ordinary Shares from time to time

Subsidiary a subsidiary as that term is defined in section 1159 of the Act

Substantial Shareholder any person whose interest in the Company, whether
legal or beneficial, direct or indirect, may cause any member of the Group to
be liable to pay tax under Regulation 10 of the Real Estate Investment Trusts
(Breach of Conditions) Regulations 2006 (as such regulations may be modified,
supplemented or replaced from time to time) on or in connection with the
making of a Distribution to or in respect of such person, and the term
"Substantial Shareholding" shall be construed accordingly

Takeover Code the City Code on Takeovers and Mergers

Tender Conditions shall have the meaning given in the Circular

Tender Form the form enclosed with the Circular for use by Shareholders who
hold Ordinary Shares in certificated form in connection with the Tender Offer

Tender Offer the invitation to Shareholders to tender Ordinary Shares on the
terms and conditions set out in the Circular and also, in the case of
certificated Ordinary Shares only, the Tender Form (and, where the context so
requires, the associated repurchase of such Ordinary Shares by the Company
from Deutsche Numis pursuant to the Repurchase Agreement)

Tender Offer Record Date or Record Date close of business (6.00 p.m., UK time)
on 9 July 2024 or such other time and date as may be determined by the Company
in its sole discretion in the event that the Closing Date is altered in
accordance with the Circular

Tender Offer Resolution the special resolution to be proposed at the General
Meeting, as set out in the Notice of General Meeting

Tender Price 250 pence being the price per Ordinary Share at which Ordinary
Shares will be purchased pursuant to the Tender Offer

TFE Instruction a transfer from escrow instruction (as defined by the CREST
Manual)

TTE Instruction a transfer to escrow instruction (as defined by the CREST
Manual)

uncertificated form recorded on the register as being held in uncertificated
form in CREST and title to which, by virtue of the Uncertified Securities
Regulations, may be transferred by means of CREST

United Kingdom or UK United Kingdom of Great Britain and Northern Ireland

United States or USA the United States of America, its territories and
possessions, any state of the

United States, and the District of Columbia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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