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Rights issue
Citycon Oyj (“Citycon” or the “Company”) announced on 25 May 2015 that it had entered into an agreement to acquire all the shares in the Norwegian shopping centre company Sektor Gruppen AS ("Sektor") and convened an extraordinary general meeting of shareholders to resolve on an authorization for the Board of Directors to decide on a rights issue as part of the financing arrangements relating to the acquisition. The extraordinary general meeting of Citycon held on 15 June 2015 ("EGM") passed the necessary resolutions and the Board of Directors of Citycon has today decided on a rights issue of approximately EUR 600 million based on the authorization granted by the EGM (the "Rights Issue").
Citycon will offer a maximum of 296,664,209 new shares (“New Shares”) in the Rights Issue in accordance with the shareholders' pre-emptive subscription right. The New Shares to be issued in the Rights Issue represent a maximum of approximately 50.0 percent of the total shares and voting rights in the Company prior to the Rights Issue and approximately 33.3 percent of the total shares and voting rights after the Rights Issue, assuming that the Rights Issue is subscribed in full.
The subscription price for the New Shares is EUR 2.05 per New Share ("Subscription Price"). The Subscription Price will be recorded in its entirety in the invested unrestricted equity fund of the Company. The subscription period will commence on 23 June 2015 at 9:30 a.m. Finnish time and expire on 7 July 2015 at 4:30 p.m. Finnish time.
The net proceeds to Citycon from the Rights Issue, after the deduction of the estimated fees and expenses payable by Citycon, will be approximately EUR 604 million, provided that the Rights Issue is subscribed in full. The proceeds from the Rights Issue will be used for the financing of the Sektor acquisition and the premature redemption by Sektor of all of its outstanding bonds upon closing of the acquisition. Citycon will also use bridge financing arrangements up to an aggregate amount of EUR 400 million and, if needed, its existing bank financing facilities to finance the acquisition. In addition, waivers have been obtained for approximately EUR 671 million of the existing bank financing facilities of Sektor to remain in place post-closing. The debt-free acquisition price of Sektor payable by Citycon is approximately EUR 1,467 million (NOK 12,320 million, based on the exchange rate 8.4), subject to certain customary balance sheet and post-closing adjustments.
The Company's two largest shareholders Gazit-Globe Ltd. and CPP Investment Board Europe S.à r.l. ("CPPIBE"), a wholly owned subsidiary of Canada Pension Plan Investment Board, have undertaken, subject to certain conditions, to subscribe for their pro rata allocation in the Rights Issue as follows: Gazit-Globe Ltd. 127,068,487 New Shares and CPPIBE 44,499,631 New Shares. The aforementioned subscription undertakings represent in aggregate approximately 57.8 percent of the maximum number of New Shares to be issued in the Rights Issue.
In addition, Gazit-Globe Ltd. and CPPIBE have each provided an additional undertaking according to which they commit, subject to certain conditions, to subscribe for further shares in the Rights Issue, Gazit-Globe Ltd. up to a maximum subscription amount of EUR 50 million and CPPIBE up to a maximum subscription amount of EUR 30 million, in the event that the maximum number of New Shares to be issued in the Rights Issue will not be subscribed for during the subscription period of the Rights Issue (the "Additional Undertakings"). The additional undertaking by Gazit-Globe Ltd. is also subject to Gazit-Globe Ltd.'s ownership not exceeding 50 percent of the shares and votes in Citycon through such subscription, in which case the number of shares to be subscribed for by Gazit-Globe Ltd. pursuant to the additional undertaking would be reduced as necessary. Any such reduction would reduce CPPIBE's additional subscription undertaking accordingly on a pro rata basis.
A shareholder who is registered in the Company’s shareholder register maintained by Euroclear Finland Ltd on the record date of 17 June 2015 of the Rights Issue will automatically receive one (1) freely transferable subscription right (the “Subscription Right”) as a book-entry for every one (1) share owned on the record date. Each two (2) Subscription Rights will entitle holders to subscribe for one (1) New Share ("Primary Subscription Right"). The Subscription Rights are subject to public trading on NASDAQ OMX Helsinki Ltd. between 23 June 2015 and 1 July 2015.
Further, a shareholder or other investor who has subscribed for New Shares based on the Primary Subscription Right is entitled to subscribe for New Shares not subscribed for by virtue of the Primary Subscription Right (the “Secondary Subscription").
In the event New Shares are not fully subscribed for by virtue of the Primary Subscription Right or the Secondary Subscription during the subscription period of the Rights Issue, the Board of Directors of the Company may, following consultation with the Joint Global Coordinators and Joint Bookrunners (as defined below), offer for subscription and allocate the remaining unsubscribed New Shares at the Subscription Price, in the first instance, to Gazit-Globe Ltd. and CPPIBE in proportion to and in accordance with their Additional Undertakings and, in the second instance, where the number of the New Shares not fully subscribed for by virtue of the Primary Subscription Right and the Secondary Subscription exceeds the Additional Undertakings, to any other investors procured by the Joint Global Coordinators and Joint Bookrunners in a private placement. The Additional Undertakings do not prevent Gazit-Globe Ltd. and CPPIBE from participating in the Secondary Subscription.
The ex-rights date for the Rights Issue is 16 June 2015. The prospectus for the Rights Issue is expected to be published on or about 18 June 2015.
Citycon will announce the final result of the Rights Issue through a stock exchange release on or about 13 July 2015. Public trading in the New Shares subscribed for in the Rights Issue based on the Primary Subscription Right as interim shares is expected to commence on or about 8 July 2015. The interim shares will be combined with the existing shares of the Company on or about 14 July 2015 and public trading in the New Shares is expected to commence on or about 14 July 2015. The full terms and conditions of the Rights Issue are set out in the appendix to this release.
Danske Bank A/S, Helsinki Branch, Kempen & Co N.V., Pohjola Bank plc and Skandinaviska Enskilda Banken AB (publ) Helsinki Branch are acting as joint global coordinators and joint bookrunners in the Rights Issue (together "Joint Global Coordinators and Joint Bookrunners").
Citycon has entered into a lock-up agreement with the Joint Global Coordinators and Joint Bookrunners under which it has, subject to certain exceptions, agreed not to issue or sell any shares in Citycon for a period ending 180 days after the closing of the Rights Issue on or about 14 July 2015. In addition, Gazit-Globe Ltd. and CPPIBE have in connection with their subscription undertakings, subject to certain exceptions, agreed not to sell or transfer any shares in Citycon prior to the listing of the New Shares on NASDAQ OMX Helsinki Ltd. on or about 14 July 2015.
Adjustment to the EPRA EPS (basic) outlook based on the Rights Issue
According to the outlook announced by Citycon on 30 April 2015, the Company forecasted, based on the existing number of shares, that its EPRA EPS (basic) will in 2015 be EUR 0.175–0.195. As the EPRA EPS (basic) forecast is based on the number of shares in the Company, Citycon adjusts the EPRA EPS (basic) forecast to reflect the increased number of shares as a result of the Rights Issue. Assuming that the Rights Issue is subscribed in full, Citycon forecasts that its EPRA EPS (basic) will be EUR 0.155–0.175 based on the combined property portfolio of Citycon and Sektor and the increased number of shares after the completion of the Rights Issue.
Adjustment of the terms and conditions of the 2011 stock options
In order to ensure the equal treatment of shareholders and the holders of the Company’s 2011 stock options, the Board of Directors of the Company has on 15 June 2015, due to the Rights Issue, adjusted the subscription ratio and the subscription price of the 2011 stock options in accordance with the terms and conditions of the 2011 stock options. Provided that the Rights Issue is subscribed in full as described in the terms and conditions of the Rights Issue, the subscription price for stock options 2011A—D(I) shall be adjusted to EUR 2.5380 per share and the subscription ratio to 2.0169. As regards stock options 2011A—D(II), the subscription price shall be adjusted to EUR 2.6075 per share and the subscription ratio shall be adjusted to 2.0169. As regards stock options 2011A—D(III), the subscription price shall be adjusted to EUR 2.2703 per share and the subscription ratio shall be adjusted to 2.0169.
The total number of shares is rounded down to full shares in connection with the subscription of the shares and the total subscription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above adjustments, the adjusted maximum total number of shares to be subscribed for based on the 2011 stock options shall be 12,474,526.
The foregoing adjustment to the terms and conditions of the 2011 stock options due to the Rights Issue will be effective as of its registration in the Trade Register on or about 14 July 2015, provided that the Rights Issue is subscribed in full as described in the terms and conditions of the Rights Issue. The 2011 stock options do not entitle their holders to participate in the Rights Issue.
Adjustment of the terms and conditions of the performance share plan 2015
On 11 February 2015 Citycon announced that the Board of Directors had approved a performance share plan 2015 for the Group key employees. The Board of Directors of the Company has on 15 June 2015, due to the Rights Issue, decided to adjust the amount of the maximum reward and the performance criterion under the performance share plan 2015 in accordance with the terms and conditions of the plan. The final impact of such adjustments on the maximum total number of shares that can be paid under the performance share plan 2015 can be determined only after the ex-rights date of the Rights Issue and will be confirmed in connection with the closing of the Rights Issue.
Helsinki, 15 June 2015
CITYCON OYJ
Board of Directors
APPENDIX: Terms and conditions of the Rights Issue
Media enquiries:
Geelmuyden Kiese (advisor to Citycon)
Tel. +47 482 00 570
helge.lunde@gknordic.com
Investor enquiries:
Henrica Ginström
Tel. +358 50 554 4296
henrica.ginstrom@citycon.com
About Citycon
Citycon is a leading owner, manager and developer of urban grocery-anchored shopping centres in the Nordic and Baltic region, managing assets that total approximately EUR 3.4 billion and with market capitalisation of EUR 1.8 billion. Citycon is the No. 1 shopping centre owner in Finland and Estonia and among the market leaders in Sweden. Citycon has also established a foothold in Denmark. www.citycon.com
About Sektor
Sektor Gruppen AS is the second largest company in managing, developing and marketing of shopping centres in Norway. Sektor’s portfolio consists of 20 fully and majority-owned shopping centres, 4 minority-owned centres, 2 rented shopping centres and 8 managed shopping centres. With these 34 shopping centres, Sektor creates excellent shopping experiences for its customers in partnership with tenants. Sektor’s total portfolio under management has a gross leasable area of more than 600,000 sq.m. www.sektor.no
DISCLAIMER
This announcement is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Citycon does not intend to register any portion of the Rights Issue in the United States or to conduct a public offering of securities in the United States. The Joint Global Coordinators and Joint Bookrunners will not engage in any actions or assume any responsibility with regard to the Rights Issue within the United States. The offering of the Subscription Rights and the New Shares to the eligible shareholders in the United States will be the sole responsibility of the Company.
The Company has not authorized any offer to the public of securities in any Member State of the European Economic Area other than Finland. With respect to each Member State of the European Economic Area other than Finland and which has implemented the Prospectus Directive (each, a “Relevant Member State”), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purposes of this paragraph, the expression an “offer of securities to the public” means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to exercise, purchase or subscribe the securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.
No public offer or invitation to acquire securities of Citycon is being made by or in connection with this release. Any such offer will be made solely by means of a prospectus once it has been approved by the Finnish Financial Supervisory Authority and published in accordance with the law, and any supplement thereto. This document is being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as “relevant persons”). Any invitation, offer or agreement to subscribe, purchase or otherwise acquire securities will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
This announcement is not for publication, distribution or release, directly or indirectly, in or into the United States, Canada, South Africa, Australia, Hong Kong or Japan or to any other jurisdiction where such announcement or publication would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
Each of the Joint Global Coordinators and Joint Bookrunners and their respective affiliates are acting exclusively for the Company and no one else in connection with the Rights Issue. They will not regard any other person (whether or not a recipient of this release) as their respective clients in relation to the Rights Issue and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for giving advice in relation to the Rights Issue or any transaction or arrangement referred to herein. No representation or warranty, express or implied, is made by the Joint Global Coordinators and Joint Bookrunners as to the accuracy, completeness or verification of the information set forth in this release, and nothing contained in this release is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. The Joint Global Coordinators and Joint Bookrunners assume no responsibility for its accuracy, completeness or verification and, accordingly, disclaim, to the fullest extent permitted by applicable law, any and all liability which they may otherwise be found to have in respect of this release.
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. Any subscription for shares in the proposed Rights Issue should be made solely on the basis of the information contained in the prospectus to be issued by Citycon in due course.
This announcement contains certain forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to these uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement. Citycon disclaims any obligation to update any forward-looking statements contained in this announcement, except as required pursuant to applicable law.
