CWG ACQUISITION LIMITED ('CWG ACQUISITION')
REVISED OFFER FOR CANARY WHARF GROUP PLC
('CANARY WHARF' OR THE 'COMPANY')
CWG Acquisition announces a revision to the terms of its Offer (as revised, the
'Revised Offer') to acquire the entire issued and to be issued share capital of
Canary Wharf other than those Canary Wharf Shares which CWG Acquisition held or
had contracted to acquire within the meaning of section 428(5) of the Companies
Act as at February 24, 2004, being the date of the Offer.
Loan Note Alternative
The Offer is being revised such that, as an alternative to all or part of the
cash consideration which would otherwise be receivable under the Revised Offer,
Canary Wharf Shareholders (other than shareholders in certain overseas
jurisdictions) who validly accept the Revised Offer will be able to elect to
receive unsecured Loan Notes to be issued by CWG Acquisition on the following
basis:
For every £1 of cash £1 in nominal value of Loan Notes
consideration under the Revised Offer
Further detail in relation to the Loan Note Alternative is set out in the full
text of this announcement.
The Loan Note Alternative will enable certain individual Canary Wharf
Shareholders who elect for Loan Notes, depending on their particular
circumstances, to defer UK capital gains tax liabilities.
The Revised Offer
Accordingly, the Revised Offer will consist of:
• an all-cash offer of 275 pence for each Canary Wharf Share (a value
which the Independent Committee has stated to be fair and reasonable);
• the Class A Share Alternative and Class A Additional Share Election
Facility;
• the Class B Share Alternative and Class B Additional Share Election
Facility; and
• the Loan Note Alternative.
Further detail in relation to the Revised Offer is set out in the full text of
this announcement.
This announcement of the Revised Offer is being made in accordance with the
procedure set out by the Panel Executive on April 7, 2004.
The full text of the conditions and certain further terms of the Revised Offer
are set out in Appendix I to this announcement.
Appendix III contains the definitions of certain expressions used in this
summary and in this announcement.
This summary should be read in conjunction with, and is subject to the full text
of, this announcement.
Enquiries:
Brascan Telephone: +1 (416) 363 9491
Katherine Vyse
Deutsche Bank Telephone: +44 (0) 20 7545 8000
Debbie Robertson-Bond
David Church
James Agnew
Merrill Lynch International Telephone: +44 (0) 20 7628 1000
Kevin J. Smith
Paul Golding
The Maitland Consultancy Telephone: +44 (0) 20 7379 5151
Angus Maitland
Philip Gawith
Martin Leeburn
This announcement does not constitute an offer or invitation to purchase any
securities or a solicitation of an offer to buy any securities, pursuant to the
Revised Offer or otherwise. The full terms and conditions of the Revised Offer,
including details of how the Revised Offer may be accepted, will be set out in
or incorporated into the Revised Offer Document and the Revised Form of
Acceptance. The Revised Offer Document, the Revised Form of Acceptance and the
Supplemental Thames River Document will be made available to those Canary Wharf
Shareholders who are able to receive them, as a result of the laws of the
jurisdictions in which they are resident. Canary Wharf Shareholders are advised
to read the Revised Offer Document, Revised Form of Acceptance and the
Supplemental Thames River Document (if they are able to receive them) when they
are sent to them because they will contain important information.
The availability of the Revised Offer to Canary Wharf Shareholders who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Canary Wharf Shareholders who are not resident in the United
Kingdom should inform themselves about and observe any applicable requirements.
The Revised Offer in the United States is being made solely by CWG Acquisition.
Neither Deutsche Bank nor Merrill Lynch, nor any of their affiliates, is making
the Revised Offer in the United States.
Neither the Thames River Shares nor the Loan Notes have been, nor will they be,
registered under the US Securities Act or the securities laws of any state of
the United States, or under applicable securities laws of Australia or Japan.
Accordingly, neither the Thames River Shares nor the Loan Notes may be offered,
sold or delivered, directly or indirectly, in or into the United States,
Australia or Japan, except pursuant to exemptions from applicable requirements
of such jurisdictions.
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of Canary Wharf, owns or controls, or becomes the owner or
controller, directly or indirectly, of one per cent. or more of any class of
securities of Canary Wharf is generally required under the provisions of Rule 8
of the City Code to notify a Regulatory Information Service and the Panel of
every dealing in such securities during the offer period. Please consult your
financial adviser immediately if you believe this rule may be applicable to you.
In accordance with normal United Kingdom market practice and subject to
applicable regulatory requirements, CWG Acquisition or its nominees or its
brokers (acting as agents) may, subject to the City Code and otherwise in
compliance with the requirements of the Panel, from time to time make certain
purchases of, or arrangements to purchase, Canary Wharf Shares outside the
United States, other than pursuant to the Revised Offer, before or during the
period in which the Revised Offer remains open for acceptance. These purchases
may occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such purchases will be
disclosed as required in the United Kingdom and communicated in the United
States by way of an announcement by or on behalf of CWG Acquisition.
Deutsche Bank and Merrill Lynch, which are regulated by the Financial Services
Authority for the conduct of designated investment business in the United
Kingdom, are acting exclusively for CWG Acquisition and for no-one else in
connection with the Revised Offer and will not be responsible to anyone other
than CWG Acquisition for providing the protections afforded to clients of
Deutsche Bank and Merrill Lynch, respectively, or for providing advice in
relation to the Revised Offer. Deutsche Bank is acting as nominated adviser and
broker to Thames River for the purposes of the proposed listing of the Class A
Ordinary Shares on AIM.
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN OR INTO THE UNITED STATES,
AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO
SO. THIS IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES.
SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION
UNDER THE US SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION
April 14, 2004
CWG ACQUISITION LIMITED ('CWG ACQUISITION')
REVISED OFFER FOR CANARY WHARF GROUP PLC
('CANARY WHARF' OR THE 'COMPANY')
1. Introduction
CWG Acquisition announces a revision to the terms of its Offer (as revised, the
'Revised Offer') to acquire the entire issued and to be issued share capital of
Canary Wharf other than those Canary Wharf Shares which CWG Acquisition held or
had contracted to acquire within the meaning of section 428(5) of the Companies
Act as at February 24, 2004, being the date of the Offer.
Loan Note Alternative
The Offer is being revised such that, as an alternative to all or part of the
cash consideration which would otherwise be receivable under the Revised Offer,
Canary Wharf Shareholders (other than shareholders in certain overseas
jurisdictions) who validly accept the Revised Offer will be able to elect to
receive unsecured Loan Notes to be issued by CWG Acquisition on the following
basis:
For every £1 of cash £1 in nominal value of Loan Notes
consideration under the Revised Offer
Further detail in relation to the Loan Note Alternative is set out below.
The Loan Note Alternative will enable certain individual Canary Wharf
Shareholders who elect for Loan Notes, depending on their particular
circumstances, to avoid crystallising any capital gain in the UK that would
otherwise arise upon the Revised Offer becoming or being declared unconditional
in all respects. A taxable capital gain (or allowable capital loss) will
crystallise when the Loan Notes are sold or redeemed, calculated in each case by
reference to the proceeds of sale or redemption and the original base cost of
the relevant Canary Wharf Shares (subject to indexation and tapering).
The Revised Offer
Accordingly, the Revised Offer will consist of:
• an all-cash offer of 275 pence for each Canary Wharf Share (a value
which the Independent Committee has stated to be fair and reasonable);
• the Class A Share Alternative and Class A Additional Share Election
Facility;
• the Class B Share Alternative and Class B Additional Share Election
Facility; and
• the Loan Note Alternative.
This announcement of the Revised Offer is being made in accordance with the
procedure set out by the Panel Executive on April 7, 2004.
2. Irrevocable Undertakings
On December 17, 2003, Brascan entered into an agreement with Mr Paul Reichmann
and certain Reichmann family interests encompassing various arrangements
regarding their respective ownership of shares in Canary Wharf (the 'Reichmann
Agreement'). Pursuant to the Reichmann Agreement (as amended), RF Holdings
Limited ('RF Holdings') irrevocably agreed to accept, or procure the acceptanceof, the Cash Offer (and not to elect for any Thames River Shares under the Share
Alternatives) in respect of all of the 51,915,085 Canary Wharf Shares in which
RF Holdings is interested, representing approximately 8.9 per cent. of Canary
Wharf's existing issued share capital. Acceptances have been received in
respect of such shares and, pursuant to the terms of the Reichmann Agreement,
may not be withdrawn.
CWG Acquisition has also received an irrevocable undertaking from Brascan's
indirect wholly-owned subsidiary, Trilon, to accept the Cash Offer (and not to
elect for any Thames River Shares under the Share Alternatives) in respect of
53,798,454 Canary Wharf Shares beneficially owned by it, representing
approximately 9.2 per cent. of Canary Wharf's existing issued share capital.
Such acceptance has been received and, in accordance with its terms, may not be
withdrawn.
3. The Revised Offer
The Revised Offer will be made on the terms set out in this announcement and to
be set out in or incorporated into the Revised Offer Document and accompanying
Revised Form of Acceptance and will be subject to a number of conditions,
including valid acceptances having been received in respect of Canary Wharf
Shares which, when aggregated with any Canary Wharf Shares held by CWG
Acquisition and any further Canary Wharf Shares which CWG Acquisition has
contracted to acquire, together amount to more than 50 per cent. of the issued
share capital of Canary Wharf (diluted to include shares potentially issuable
pursuant to rights under the Canary Wharf Share Schemes). Details of the
conditions to the Revised Offer are set out in Appendix I.
The Canary Wharf Shares are to be acquired under the Revised Offer fully paid
and free from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights and/or interests and together with
all rights attaching thereto as at February 5, 2004 and thereafter, including
the right to receive and retain all dividends, interest and other distributions
declared, made, paid or payable after February 5, 2004.
The Revised Offer will be open for acceptance for at least 14 days following the
posting of the Revised Offer Document.
Further information in relation to the alternatives to the Cash Offer is set out
below.
4. The Share Alternatives and Additional Share Election Facilities
The Class A Share Alternative
Under the Class A Share Alternative, Canary Wharf Shareholders who validly
accept the Revised Offer and who validly elect for the Class A Share Alternative
may elect to receive, in respect of each Canary Wharf Share, one Class A
Ordinary Share in lieu of 25 pence in cash to which such Canary Wharf
Shareholder would otherwise be entitled under the Cash Offer (representing an
aggregate of approximately £146 million cash consideration to which Canary Wharf
Shareholders would otherwise be entitled).
The Class A Additional Share Election Facility
Canary Wharf Shareholders who validly accept the Revised Offer and who validly
elect for the Class A Share Alternative may also, subject to availability as
described below, elect to receive additional Class A Ordinary Shares on the
basis of one additional Class A Ordinary Share for every 25 pence of cash
consideration to which they would otherwise be entitled under the Cash Offer.
Fractions of Class A Ordinary Shares will not be allotted. Class A Ordinary
Shares are available to satisfy elections under the Class A Additional Share
Election Facility in a Class A Settlement Pool to the extent that Canary Wharf
Shareholders who validly accept the Revised Offer in the same Class A Settlement
Pool do not make a valid election for the Class A Share Alternative.
If valid elections are made under the Class A Additional Share Election Facility
by Canary Wharf Shareholders for more Class A Ordinary Shares than are
available, elections will be scaled down as nearly as reasonably practicable pro
rata to the size of such elections.
Application will be made to admit the Class A Ordinary Shares to trading on AIM.
The availability of the Class A Share Alternative is conditional, amongst other
things, upon this listing becoming effective, as set out in more detail below.
The Thames River Document (which includes risk factors relating to the Thames
River Shares) was sent to Canary Wharf Shareholders (who were able to receive it
under the laws of the jurisdiction in which they are resident) with the Offer
Document. Further information in relation to Thames River and the arrangements
it will enter into are also set out below.
The Class A Share Alternative and the Class A Additional Share Election Facility
will be available for at least 14 days after the conditions to their
availability (described below) have been satisfied and notice to close the Class
A Share Alternative and the Class A Additional Share Election Facility will not
be given prior to the Revised Offer being declared or becoming unconditional in
all respects.
Conditions to the Class A Share Alternative and the Class A Additional Share
Election Facility
The Class A Share Alternative and the Class A Additional Share Election Facility
are conditional upon: (i) valid elections, which are capable of satisfaction in
accordance with the terms of the Class A Share Alternative and the Class A
Additional Share Election Facility, having been received from Canary Wharf
Shareholders for not less than 292,579,004 Class A Ordinary Shares by no later
than 14 days after the Revised Offer becomes or is declared unconditional as to
acceptances; (ii) valid acceptances of the Revised Offer having been received by
no later than 14 days after the Revised Offer becomes or is declared
unconditional as to acceptances in respect of Canary Wharf Shares which, when
aggregated with any Canary Wharf Shares held by CWG Acquisition and any further
Canary Wharf Shares which CWG Acquisition has contracted to acquire, together
amount to at least 75 per cent. of the issued share capital of Canary Wharf
(diluted to include shares potentially issuable pursuant to rights under the
Canary Wharf Share Schemes); (iii) the Revised Offer becoming or being declared
unconditional in all respects; and (iv) the Class A Ordinary Shares being
admitted to trading on AIM. Subject to the requirements of the Panel, CWG
Acquisition reserves the right to waive conditions (i) or (ii) (in whole or in
part).
Accordingly, the Class A Share Alternative and the Class A Additional Share
Election Facility are dependent on certain additional conditions that do not
apply to the Cash Offer. If these additional conditions are not satisfied or, if
applicable, waived, those Canary Wharf Shareholders who have elected for Class A
Ordinary Shares, whether under the Class A Share Alternative or the Class A
Additional Share Election Facility, will be deemed to have accepted the Cash
Offer.
CWG Acquisition reserves the right to close the Class A Share Alternative (and
Class A Additional Share Election Facility) if any of the conditions to it have
not been satisfied or, if applicable, waived: (i) on or prior to 5.00 p.m.
(London time) on the day before the date that CWG Acquisition has announced that
the Revised Offer will close and will not be extended; or (ii) on a date which
any of CWG Acquisition (or any of its directors), Deutsche Bank or Merrill Lynch
determine (in their absolute discretion) to be at a time and date by which there
is no reasonable prospect that any of such outstanding condition(s) will be
satisfied in the immediate future.
The Class B Share Alternative
Under the Class B Share Alternative, Canary Wharf Shareholders who validly
accept the Revised Offer and who validly elect for the Class B Share Alternative
may elect to receive, in respect of every 2.437534 Canary Wharf Shares, one
Class B Restricted Share in lieu of 25 pence in cash to which such Canary Wharf
Shareholder would otherwise be entitled under the Cash Offer (representing an
aggregate of approximately £60 million cash consideration to which Canary Wharf
Shareholders would otherwise be entitled). Fractions of Class B Restricted
Shares will not be allotted.
The Class B Additional Share Election Facility
Canary Wharf Shareholders who validly accept the Revised Offer and who validly
elect for the Class B Share Alternative may also, subject to availability as
described below, elect to receive additional Class B Restricted Shares on the
basis of one additional Class B Restricted Share for every 25 pence of cash
consideration to which they would otherwise be entitled under the Cash Offer.
Fractions of Class B Restricted Shares will not be allotted. Class B Restricted
Shares available under the Class B Share Alternative and Class B Additional
Share Election Facility are in addition to any Class A Ordinary Shares available
under the Class A Share Alternative and Class A Additional Share Election
Facility.
If valid elections are made under the Class B Additional Share Election Facility
by Canary Wharf Shareholders for more Class B Restricted Shares than are
available, such elections will be scaled down as nearly as reasonably
practicable pro rata to the size of such elections.
All Class B Restricted Shares, other than those required to be reserved for the
purposes of the compulsory acquisition procedure set out in sections 428-430F of
the Companies Act, will be available to satisfy elections made under the Class B
Share Alternative and the Class B Additional Share Election Facility on or prior
to the date the Class B Share Alternative and the Class B Additional Share
Election Facility close.
Canary Wharf Shareholders electing for the Class B Additional Share Election
Facility may also elect, in the event that their elections for additional Class
B Restricted Shares are not satisfied through the Class B Additional Share
Election Facility, to defer some or all of their entitlement to receive cash
consideration to which they would otherwise be entitled until the procedures for
the compulsory acquisition of shares (as set out in sections 428-430F of the
Companies Act) have been invoked and complied with or are no longer capable of
being invoked. To the extent that any of the approximately 240 million available
Class B Restricted Shares remain unallocated at such time, such Class B
Restricted Shares will be allocated to such Canary Wharf Shareholders pro rata
to the size of the relevant unsatisfied elections, in each case in lieu of 25
pence in cash to which they would otherwise be entitled under the Cash Offer.
The Class B Share Alternative and the Class B Additional Share Election Facility
will be available for at least 14 days after the date on which the Revised Offer
becomes or is declared unconditional as to acceptances, subject always to the
requirements of the Panel.
Conditions to the Class B Share Alternative and the Class B Additional Share
Election Facility
The Class B Share Alternative and the Class B Additional Share Election Facility
are conditional upon: (i) valid acceptances of the Revised Offer having been
received in respect of Canary Wharf Shares which, when aggregated with any
Canary Wharf Shares held by CWG Acquisition and any further Canary Wharf Shares
which CWG Acquisition has contracted to acquire, together amount to at least 75
per cent. of the issued share capital of Canary Wharf (diluted to include shares
potentially issuable pursuant to rights under the Canary Wharf Share Schemes) by
no later than 14 days after the date on which the Revised Offer becomes or is
declared unconditional as to acceptances (CWG Acquisition reserves the right to
waive this condition (i) in whole or in part, subject to the requirements of the
Panel); and (ii) the Revised Offer becoming or being declared unconditional in
all respects.
Accordingly, the Class B Share Alternative and the Class B Additional Share
Election Facility are dependent on an additional condition that does not apply
to the Cash Offer. If this additional condition is not satisfied or waived,
those Canary Wharf Shareholders who have elected for Class B Restricted Shares,
whether under the Class B Share Alternative or the Class B Additional Share
Election Facility, will be deemed to have accepted the Cash Offer.
Effect of the Share Alternatives and the Additional Share Election Facilities
Assuming: (i) 100 per cent. acceptances of the Revised Offer; (ii) that valid
elections are made pursuant to both the Share Alternatives and both the
Additional Share Election Facilities for the full amount of Class A Ordinary
Shares and Class B Restricted Shares available in respect of the 585,008,225
Canary Wharf Shares in issue; and (iii) that no such elections are made in
respect of any further Canary Wharf Shares that may be issued, 585,008,225 Class
A Ordinary Shares and approximately 240 million Class B Restricted Shares will
be issued, representing an aggregate value of approximately £206.3 million of
cash consideration to which the relevant Canary Wharf Shareholders would
otherwise be entitled and resulting in approximately a 22.5 per cent.
shareholding of Thames River in CWG Acquisition. CWG Acquisition Holdings will,
following completion of the Revised Offer, own the remainder of the issued share
capital of CWG Acquisition. The maximum number of Class A Ordinary Shares
available under the Class A Share Alternative and the Class A Additional Share
Election Facility will be reduced to the extent that valid elections are not
made for all available Class A Ordinary Shares in any settlement pool.
Class A Ordinary Shares and Class B Restricted Shares
For clarification, in respect of each Canary Wharf Share, a Canary Wharf
Shareholder may elect either for the Class A Share Alternative or the Class B
Share Alternative, but not both.
The Class A Ordinary Shares and the Class B Restricted Shares will rank pari
passu in all respects with respect to voting rights and income and capital
entitlements. The Class B Restricted Shares will not be listed on AIM (or any
other investment exchange). In addition, the Class B Restricted Shares will be
non-transferable for 3 years after the Revised Offer becomes or is declared
unconditional in all respects and, thereafter, will only be transferable to
Qualifying Persons (as defined in the summary of the Relationship Agreement
arrangements set out in the Thames River Document) or as permitted by CWG
Acquisition Holdings. On or after the fifth anniversary of the date on which
the Revised Offer becomes or is declared unconditional in all respects, the
Class B Restricted Shares can be converted (at the option of the holder) into
Class A Ordinary Shares on a one for one basis subject to adjustment in the case
of consolidations, share splits and other share reorganisations. Thames River
has agreed to use its reasonable endeavours to procure that the new Class A
Ordinary Shares arising on conversion of the Class B Restricted Shares at that
time are admitted to trading on AIM but there can be no guarantee that any Class
B Restricted Shares converted into Class A Ordinary Shares will be admitted to
trading on AIM.
Canary Wharf Shareholders should note that the Class B Restricted Shares will
not be listed on any stock exchange. The Offer Document and the Thames River
Document contain, and the Revised Offer Document and Supplemental Thames River
Document will contain, certain risk factors in relation to both the Class A
Ordinary Shares and the Class B Restricted Shares. The Revised Offer Document
will be posted to Canary Wharf Shareholders in due course in accordance with the
Auction Procedure, or otherwise in accordance with the requirements of the
Panel.
The availability of the Share Alternatives and the Additional Share Election
Facilities to Canary Wharf Shareholders who are not resident in the United
Kingdom may be affected by the laws of the jurisdictions in which such Canary
Wharf Shareholders are resident.
Canary Wharf Shareholders should consider whether Class A Ordinary Shares or
Class B Restricted Shares are a suitable investment for their own personal
circumstances and are, therefore, strongly advised to take their own independent
professional advice before deciding which elections, if any, to make under the
Revised Offer.
5. The Loan Note Alternative
As an alternative to all or part of the cash consideration which would otherwise
be receivable under the Revised Offer, Canary Wharf Shareholders (other than
shareholders in certain overseas jurisdictions) who validly accept the Revised
Offer will be able to elect to receive unsecured Loan Notes to be issued by CWG
Acquisition on the following basis:
For every £1 of cash £1 in nominal value of Loan Notes
consideration under the Revised Offer
The Loan Notes, which will be governed by English law, will be unsecured
obligations of CWG Acquisition. The Loan Notes will bear interest payable every
six months in arrears (less any tax required by law to be deducted or withheld
therefrom), at a rate equivalent to LIBOR less 0.75 per cent. (the 'Interest
Rate'). Interest on the Loan Notes will be payable on April 30 and October 31
in each year (or, if not a business day, on the first business day thereafter).
The first interest payment will fall due on November 1, 2004 and will be in
respect of the period from (and including) the date of issue of the relevant
Loan Note to (but excluding) November 1, 2004 at the Interest Rate.
The Loan Notes will be redeemable at par (together with accrued interest) at the
option of the holders, in whole or in part, on interest payment dates commencing
on October 31, 2005 or, at the option of CWG Acquisition, on any interest
payment date falling on or after October 31, 2005, if the aggregate nominal
value of the Loan Notes then outstanding is 10 per cent. or less of the total
nominal amount of Loan Notes originally issued under the Revised Offer or the
aggregate nominal amount of all the Loan Notes outstanding is less than £10
million. Any Loan Notes outstanding on October 31, 2009 will be redeemed at par
(together with any accrued interest) on that date. No application will be made
for the Loan Notes to be listed or dealt on any investment exchange.
The Loan Notes will be issued in integral multiples of £1.00 nominal value.
Fractional entitlements to Loan Notes will be disregarded and will not be issued
to persons accepting the Revised Offer. CWG Acquisition reserves the right not
to issue the Loan Notes where valid elections are received for an aggregate of
less than £10 million in nominal value of Loan Notes by the date the Revised
Offer becomes or is declared unconditional in all respects. If insufficient
elections are received, Canary Wharf Shareholders who elected to receive Loan
Notes will instead receive cash consideration in accordance with the terms of
the Revised Offer.
The Loan Note Alternative will enable certain individual Canary Wharf
Shareholders who elect for Loan Notes, depending on their particular
circumstances, to avoid crystallising any capital gain in the UK that would
otherwise arise upon the Revised Offer becoming or being declared unconditional
in all respects. A taxable capital gain (or allowable capital loss) will
crystallise when the Loan Notes are sold or redeemed, calculated in each case by
reference to the proceeds of sale or redemption and the original base cost of
the relevant Canary Wharf Shares (subject to indexation and tapering).
The availability of the Loan Notes to Canary Wharf Shareholders who are not
resident in the United Kingdom may be affected by the laws of the jurisdiction
in which such Canary Wharf Shareholders are resident.
The Loan Note Alternative will be conditional on the Revised Offer becoming or
being declared unconditional in all respects and will remain open for so long as
the Revised Offer remains open for acceptance. Full details of the Loan Note
Alternative will be contained in the Revised Offer Document.
Deutsche Bank and Merrill Lynch have advised that, based on market conditions on
April 13, 2004 (the business day prior to this announcement), in their opinion,
if the Loan Notes had then been in issue, the value of the Loan Notes would have
been approximately 96 pence per £1.00 nominal value.
6. Information on CWG Acquisition, CWG Acquisition Holdings, CWG Holdings
and investors in CWG Acquisition Holdings
CWG Acquisition Limited
CWG Acquisition is a company formed for the purpose of making the Offer and is a
direct wholly-owned subsidiary of CWG Acquisition Holdings. CWG Acquisition
Holdings has been formed at the direction of CWG Holdings (2004) Inc. ('CWGHoldings') (a company recently formed at the direction of Brascan, British
Columbia Investment Management Corporation ('bcIMC') and Ontario Teachers'Pension Plan Board ('Teachers'') for the purpose of investing in CWG AcquisitionHoldings) and Hermes Pensions Management Limited (on behalf of The Trustees of
the BT Pension Scheme and Royal Mail Pensions Trustees Limited, as trustee of
the Royal Mail Pension Plan) ('Hermes').CWG Acquisition is a private limited company incorporated in England and Wales
on October 27, 2003. CWG Acquisition has not traded since its date of
incorporation, nor has it entered into any obligations other than in connection
with the Revised Offer and the financing of the Revised Offer.
The directors of CWG Acquisition are J. Bruce Flatt (President and Chief
Executive Officer, Brascan), Jeffrey Blidner (Managing Partner, Asset
Management, Brascan), Sam Pollock (Managing Partner, Business Development,
Brascan) and Joseph Freedman (General Counsel, Brascan).
CWG Acquisition Holdings Limited
CWG Acquisition Holdings is a private limited company incorporated in England
and Wales on December 4, 2003 and has been formed at the direction of CWG
Holdings and Hermes. CWG Acquisition Holdings' parent company is CWG Holdings.
CWG Acquisition Holdings has not traded since its date of incorporation, nor has
it entered into any obligations other than in connection with the Revised Offer
and the financing of the Revised Offer.
CWG Holdings (2004) Inc.
CWG Holdings is a company recently formed under the laws of the Province of
Ontario at the direction of Brascan, bcIMC and Teachers' to acquire an interest
in CWG Acquisition Holdings.
Brascan Corporation
Brascan is an asset management company. With US$16 billion (£8.9 billion) of
direct investments and US$5 billion (£2.8 billion) under management (as at
December 31, 2003), Brascan is focused on real estate and power generation.
Brascan's shares are listed on the New York and Toronto Stock Exchanges
(symbols: BNN/BNN.a). Brascan owns and operates a broad array of real estate and
real estate related operations, including major office property operations,
property brokerage, real estate investment banking, home building, land
development, real estate business services and bridge and mezzanine lending,
both for Brascan and institutional and other partners.
Brascan owns one of the highest quality office property portfolios in North
America, distinguished by the size, quality and prime locations of its
properties. Located primarily in downtown business districts in major North
American cities, Brascan's portfolio of 55 office properties features primarily
large Class A office towers and represents approximately 48 million square feet
in total. In addition to Brascan's current portfolio of properties, Brascan owns
over 10 million square feet of development land.
As at September 30, 2003, Brascan had net assets of approximately US$5.8 billion
(£3.5 billion). Cash flow from operations for the year ended December 31, 2003
was approximately US$624 million (£348.6 million) with net income of
approximately US$408 million (£228 million).
Hermes Pensions Management Limited
Hermes, through its subsidiaries, is an investment manager for, amongst others,
major UK pension schemes, including that of British Telecommunications plc ('BTPension Scheme') and that of Royal Mail Group plc and associated employers ('Royal Mail Pension Plan'). Hermes, also through its subsidiaries, provides a
full range of pension fund management services, incorporating asset allocation
advice, asset research and discretionary portfolio management, property
investment, revenue collection and investment accounting. Hermes is acting on
behalf of The Trustees of the BT Pension Scheme and Royal Mail Pensions Trustees
Limited as trustee of the Royal Mail Pension Plan in connection with their
investments in CWG Acquisition.
BT Pension Scheme
Hermes is wholly-owned by Britel Fund Trustees Limited, the custodian trustee
for the BT Pension Scheme, an occupational pension scheme established for the
benefit of employees of British Telecommunications plc.
As at December 31, 2003, BT Pension Scheme had net assets with a market value of
approximately £26.2 billion, including property investments in the UK and
overseas with a market value of approximately £3.3 billion.
Royal Mail Pension Plan
Royal Mail Pension Plan is an occupational pension scheme established for the
benefit of employees of Royal Mail Group plc and associated employers.
As at December 31, 2003, Hermes, through its subsidiaries, managed Royal Mail
Pension Plan net assets with a market value of approximately £14.9 billion,
including property investments in the UK and overseas with a market value of
approximately £1.3 billion.
British Columbia Investment Management Corporation
bcIMC is a statutory corporation of the Government of British Columbia that
provides professional fund management services to public bodies, public sector
pension funds and publicly administered trust funds. As at December 31, 2003,
bcIMC had assets under management of approximately CAN$61 billion (£26.4
billion).
Public sector pension funds constitute bcIMC's largest client group and account
for more than 70 per cent. of the assets under bcIMC's management.
bcIMC manages more than 40 pooled investment funds in eight major asset classes
including real estate, mortgages, private placements, equity and fixed income.
Ontario Teachers' Pension Plan Board
Teachers' was created in 1990 as a non-share capital corporation by the
Teachers' Pension Act (Ontario). Teachers' is one of Canada's largest financial
institutions with net assets as at June 30, 2003 of £30.4 billion (CAN$68.2
billion). With a solid track record of investment in Canada and worldwide,
Teachers' has achieved a 10.6 per cent. average annual rate of return since its
investment program began in 1990.
Teachers' actively manages over 50 per cent. of its portfolio through a number
of strategies, including private equity, infrastructure, real estate, hedge
funds, relative value strategies and tactical asset allocation programs. The
current asset-mix policy is 50 per cent. equities, 20 per cent. fixed income and
30 per cent. inflation-sensitive investments. Through its wholly-owned
subsidiary, The Cadillac Fairview Corporation Limited, Teachers' owns and
manages in excess of CAN$10 billion of real estate across Canada and the United
States.
Teachers' is the administrator of the pension plan and invests the plan's assets
to secure the retirement income of approximately 250,000 active and retired
teachers and their families. The pension plan is co-sponsored by the Ontario
government and the Ontario Teachers' Federation, which represents the plan
members. The plan's co-sponsors are responsible for benefit and contribution
levels.
Canary Investments
Canary Investments is a company formed at the direction of RF Holdings.
7. Information on the financing of CWG Acquisition
CWG Acquisition will be financed by a combination of equity and debt.
Brascan, bcIMC (and/or entities controlled by it), Teachers' and Hermes have
committed to provide (directly or indirectly) equity and loans to CWG
Acquisition Holdings as follows: £150 million by Teachers'; £150 million by
bcIMC (and/or entities controlled by it); and £70 million by Hermes (£50 million
by the BT Pension Scheme; and £20 million by the Royal Mail Pension Plan).
These amounts are subject to change. In addition, Canary Investments (a
wholly-owned subsidiary of RF Holdings) has committed to invest £53.8 million.
The Brascan Group has committed to fund the balance of the equity and loan
amounts. In the event that Brascan's commitment exceeds a specified amount, it
has the ability to syndicate the excess over such amount to other qualified
investors. CWG Acquisition Holdings has committed to provide the same amount to
CWG Acquisition as CWG Acquisition Holdings has received from these sources.
Such commitment will provide funds to CWG Acquisition sufficient to finance the
consideration payable under the Cash Offer to accepting shareholders in respect
of acceptances representing up to 75 per cent. in nominal value of the issued
share capital of Canary Wharf (diluted to include shares potentially issuable
pursuant to rights under the Canary Wharf Share Schemes).
In addition, CWG Acquisition has agreed up to £800 million in debt facilities
arranged and underwritten by Deutsche Bank and Royal Bank of Canada. These debt
facilities are conditional, inter alia, on the Revised Offer becoming or being
declared unconditional in all respects and upon CWG Acquisition receiving valid
acceptances of the Revised Offer in respect of Canary Wharf Shares which, when
aggregated with Canary Wharf Shares held by CWG Acquisition and any further
Canary Wharf Shares which CWG Acquisition has contracted to acquire, represent
75 per cent. (or such lower level as those lenders whose aggregate commitments
exceed two thirds of the total loan commitments under the debt facilities may
agree) in nominal value of the issued share capital of Canary Wharf (diluted to
include shares potentially issuable pursuant to rights under the Canary Wharf
Share Schemes).
CWG Acquisition has agreed not to waive or amend any of the conditions of the
Revised Offer set out in Appendix I (other than condition 1 (a)) which the Panel
confirms that CWG Acquisition may invoke in the context of the Revised Offer)
without the consent of Deutsche Bank and Royal Bank of Canada.
8. Information on Thames River
Thames River is a public limited company incorporated in England and Wales on
December 4, 2003. Thames River was established for the purpose of enabling
existing Canary Wharf Shareholders to maintain an ongoing interest in Canary
Wharf. Thames River has not traded since its date of incorporation, nor has it
entered into any obligations other than in connection with the Offer.
Subject to the satisfaction or, if applicable, waiver of the various conditions
to which each of the Share Alternatives are subject, Thames River will,
following the Revised Offer, be a minority shareholder in CWG Acquisition, the
company formed by CWG Acquisition Holdings for the purposes of the Offer. The
remainder of the issued share capital of CWG Acquisition will be held by CWG
Acquisition Holdings.
The share capital of Thames River will consist of the Class A Ordinary Shares
and the Class B Restricted Shares. Application will be made to admit the Class
A Ordinary Shares to trading on AIM. It is intended that the Class A Ordinary
Shares will be admitted to AIM upon or shortly after the Revised Offer becoming
or being declared unconditional in all respects. The Class B Restricted Shares
will not be listed on AIM or any other investment exchange.
The Board of Thames River currently comprises three directors, Jeffrey Blidner
(Managing Partner, Asset Management, Brascan), Sam Pollock (Managing Partner,
Business Development, Brascan) and Joseph Freedman (General Counsel, Brascan),
each senior employees of Brascan. As soon as reasonably practicable following
Admission, it is expected that directors who are independent of CWG Acquisition
(as independence is defined for the purposes of the UK Combined Code on
Corporate Governance) will be appointed to the board of Thames River in place of
all or a majority of the current directors. Going forward, the directors will
be subject to re-election annually by Thames River Shareholders.
Brascan has agreed that, during the first year following Admission, Thames River
shall be entitled to call upon Brascan to subscribe for, or procure the
subscription of, Class A Ordinary Shares in an aggregate amount of £1,000,000 at
a price of 25 pence per share in order to provide working capital to Thames
River. The amount and timing of calls under this commitment shall be decided by
the independent directors of Thames River, having regard to their assessment of
the working capital needs of Thames River. Brascan has further agreed that
Thames River shall, in each of the two subsequent years following the first
anniversary of Admission, be entitled to call upon Brascan to subscribe for, or
procure the subscription of, up to 2,000,000 Class A Ordinary Shares at a price
of 25 pence per share for the purposes of its ongoing working capital
requirements.
The Thames River Document sets out further information in relation to Thames
River and its interest in CWG Acquisition. It also includes key factors
(including risk factors) that may be relevant to the decision of Canary Wharf
Shareholders as to whether to elect for either of the Share Alternatives and/or
to make elections pursuant to the Additional Share Election Facilities. A
Supplemental Thames River Document will be posted to Canary Wharf Shareholders
(other than shareholders in certain overseas jurisdictions) and will set out
further information that may be relevant to the decision of Canary Wharf
Shareholders as to whether to elect for either of the Share Alternatives and/or
to make elections pursuant to the Additional Share Election Facilities.
Deutsche Bank has been appointed as nominated adviser to Thames River in
connection with the admission of the Class A Ordinary Shares to trading on AIM.
9. Arrangements between Thames River, CWG Acquisition, CWG Acquisition
Holdings and Brascan
A Relationship Agreement has been entered into between Thames River, CWG
Acquisition Holdings, CWG Acquisition and Brascan, governing the contemplated
arrangements between the parties following completion of the Revised Offer. The
terms of the Relationship Agreement are as summarised in Part 3 of the Thames
River Document.
The Thames River Document also contains details regarding an advisory services
agreement to be entered into between Brascan and Canary Wharf pursuant to which
Brascan will provide certain advisory services including advice on the
development of properties, leasing strategies, tenant negotiations, acquisition
and disposal of properties, and financial and refinancing activities.
10. Management and employees of Canary Wharf
In the event of the Revised Offer becoming or being declared unconditional in
all respects, the existing employment rights, including pension rights, of all
the employees of the Canary Wharf Group will be fully safeguarded.
11. Canary Wharf Share Schemes
The Revised Offer will extend to any Canary Wharf Shares which are
unconditionally allotted or issued pursuant to the exercise of options or the
vesting of awards under the Canary Wharf Share Schemes or otherwise prior to the
date on which the Revised Offer closes (or such earlier date(s) as CWG
Acquisition decides (subject to the requirements of the Panel, the City Code and
the Exchange Act), not being earlier than the date on which the Revised Offer
becomes or is declared unconditional as to acceptances).
CWG Acquisition will make appropriate proposals to holders of options under the
Canary Wharf Share Schemes in due course if the Revised Offer becomes or is
declared unconditional in all respects, but only to those holders of options
with an exercise price which is less than the Offer price at that time.
12. Arrangements with Mr Paul Reichmann and certain Reichmann family interests
and proposals for the Canary Wharf Warrants
Pursuant to the Reichmann Agreement, Canary Investments (a company owned by a
trust established for the benefit of the Reichmann family) has agreed to invest
£53.8 million in CWG Acquisition Holdings. The proposed investment and certain
management and consultancy arrangements have been approved by independent Canary
Wharf Shareholders.
Under the City Code, CWG Acquisition will be required to make an appropriate
proposal to the Canary Wharf Warrant Holder in respect of the Canary Wharf 1997
Warrant and the Canary Wharf 1999 Warrants. The Canary Wharf Warrant Holder has
agreed to accept proposals for the cancellation of the Canary Wharf 1997 Warrant
and the Canary Wharf 1999 Warrants in return for amounts payable of £9.3 million
and £15.5 million, respectively.
13. Interests in Canary Wharf
Brascan's indirect wholly-owned subsidiary, Trilon, is currently the beneficial
owner of 53,798,454 Canary Wharf Shares representing approximately 9.2 per cent.
of Canary Wharf's existing issued share capital. Trilon has given an
irrevocable undertaking to accept the Cash Offer in respect of this shareholding
(see paragraph 2 above).
The Hermes Tracker Funds have a combined legal and beneficial shareholding in
Canary Wharf (as at April 13, 2004) of 6,334,865 Canary Wharf Shares
representing approximately 1.08 per cent. of Canary Wharf's existing issued
share capital. The Hermes Tracker Funds' individual shareholdings in Canary
Wharf are broken down as follows: the BTPS UK index tracking portfolios
1,614,644 Canary Wharf Shares, the Royal Mail UK index tracking portfolios
2,343,258 Canary Wharf Shares, the Hermes Assured UK index tracker fund
2,269,941 Canary Wharf Shares and the Croydon UK passive portfolio 107,022
Canary Wharf Shares. The Panel has agreed that any shareholding held by the
Hermes Tracker Funds will not be considered to be a concert party holding for
the purposes of the Revised Offer.
bcIMC legally owns 129,799 Canary Wharf Shares (representing approximately 0.02
per cent. of Canary Wharf's existing issued share capital).
Brascan has, under the Reichmann Agreement, undertaken not to dispose of any
Canary Wharf Shares prior to (i) such date as is required in order to complete
the Offer; and (ii) December 31, 2004 if such disposal is made with a view that
those shares would be voted in favour of any offer, proposed scheme of
arrangement, financing or other transaction for Canary Wharf or its assets
proposed by the MSREF consortium.
Each of Brascan, Hermes Investment Management Limited, bcIMC and Teachers'
signed an agreement on or around December 12, 2003 agreeing that, until such
time as they are no longer treated by the Panel as acting in concert with each
other, they will not nor, to the extent within their power, will they permit or
require their subsidiaries or persons acting in concert with them to, acquire or
agree to acquire any Canary Wharf Shares or any direct or indirect interest in
any Canary Wharf Shares (including any securities convertible into Canary Wharf
Shares). This agreement excluded holdings or dealings of certain FTSE 100
tracker funds managed by Hermes Investment Management Limited (being the BTPS UK
index tracking portfolios, the Hermes Assured UK index tracker fund, the Royal
Mail UK index tracking portfolios and the Croydon UK passive portfolio),
provided that those funds do not deviate from their normal parameters as regards
weighting of their holdings or timings of dealings and provided that the
relevant shares are not assented to the Revised Offer until it becomes or is
declared unconditional as to acceptances. Each of Brascan, the Royal Mail
Pension Plan, the BT Pension Scheme, bcIMC and Teachers' signed an agreement on
or around February 12, 2004 agreeing that, inter alia, Brascan or any one or
more of its affiliates shall be entitled to purchase Canary Wharf Shares at a
purchase price of 275 pence per Canary Wharf Share or less, provided that any
such acquisition would not trigger a mandatory offer to be made for Canary Wharf
in accordance with the provisions of Rule 9 of the City Code and any Canary
Wharf Shares purchased would be sold to CWG Acquisition on the same terms if the
Offer becomes or is declared unconditional in all respects.
Other than as set out in this announcement or pursuant to the Reichmann
Agreement (on the basis as previously disclosed), neither CWG Acquisition nor
any of the directors of CWG Acquisition nor, so far as CWG Acquisition is aware,
any party deemed to be acting in concert with CWG Acquisition, owns or controls
any Canary Wharf Shares or holds any options to purchase Canary Wharf Shares or
has any arrangement in relation to Canary Wharf Shares or any securities
convertible or exchangeable into Canary Wharf Shares or options in respect of
Canary Wharf Shares or has entered into any derivative referenced to securities
of Canary Wharf which is outstanding. For these purposes, 'arrangement' includes
any indemnity or option arrangement, any agreement or understanding, formal or
informal, of whatever nature, relating to Canary Wharf Shares, which may be an
inducement to deal or refrain from dealing in such shares.
14. Cancellation of listing, compulsory acquisition, re-registration and
financial assistance
If the Revised Offer becomes or is declared unconditional in all respects, CWG
Acquisition will procure the making of an application by Canary Wharf to delist
the Canary Wharf Shares from the Official List and to cancel trading on the
London Stock Exchange's market for listed securities. It is anticipated that
cancellation of listing and trading will take place no earlier than 20 business
days after the Revised Offer becomes or is declared unconditional in all
respects. Delisting would significantly reduce the liquidity and marketability
of any Canary Wharf Shares not assented to the Revised Offer.
If the Revised Offer becomes or is declared unconditional in all respects and
sufficient acceptances are received, CWG Acquisition intends to apply the
provisions of sections 428 to 430F (inclusive) of the Companies Act to acquire
compulsorily any outstanding Canary Wharf Shares not acquired or agreed to be
acquired pursuant to the Revised Offer or otherwise.
Subject to sufficient Canary Wharf Shares having been acquired by CWG
Acquisition, pursuant to acceptances of the Revised Offer or otherwise, it is
also proposed that, following the Revised Offer becoming or being declared
unconditional in all respects and after the Canary Wharf Shares are delisted,
Canary Wharf will be re-registered as a private company under the relevant
provisions of the Companies Act. Following such re-registration as a private
limited company, it is contemplated that Canary Wharf and certain of its
subsidiaries shall give certain financial assistance pursuant to CWG
Acquisition's debt facilities using the procedures set out in sections 155 to
158 (inclusive) of the Companies Act.
Following the Revised Offer having become or being declared unconditional in all
respects, arrangements will be made to replace the current non-executive
directors of Canary Wharf with directors nominated by CWG Acquisition.
15. General
Canary Wharf Shareholders who have already properly accepted the Offer will
automatically be treated as if they have accepted the Revised Offer when made
and need take no action unless they wish to elect for consideration in some
other manner.
The making of the Revised Offer will be subject to the conditions and further
terms, in each case set out in Appendix I to this announcement and to be set out
in or incorporated into the Revised Offer Document and the accompanying Revised
Form of Acceptance and such other terms as may be required to comply with the
rules and regulations of the City Code, the Financial Services Authority, the UK
Listing Authority, the London Stock Exchange and US federal securities laws
(except to the extent of any exemptive relief granted by the SEC). Save as
described below, the Revised Offer Document containing or incorporating the full
terms and conditions of the Revised Offer and the accompanying Revised Form of
Acceptance will be despatched to Canary Wharf Shareholders and, for information
only, to participants in the Canary Wharf Share Schemes in due course in
accordance with the Auction Procedure, or otherwise in accordance with the
requirements of the Panel.
This announcement does not constitute an offer or invitation to purchase any
securities or a solicitation of an offer to buy any securities, pursuant to the
Revised Offer or otherwise. The full terms and conditions of the Revised Offer,
including details of how the Revised Offer may be accepted, will be set out in
or incorporated into the Revised Offer Document and the Revised Form of
Acceptance. The Revised Offer Document, the Revised Form of Acceptance and the
Supplemental Thames River Document will be made available to those Canary Wharf
Shareholders who are able to receive them, as a result of the laws of the
jurisdictions in which they are resident. Canary Wharf Shareholders are advised
to read the Revised Offer Document, Revised Form of Acceptance and the
Supplemental Thames River Document (if they are able to receive them) when they
are sent to them because they will contain important information.
The availability of the Revised Offer to Canary Wharf Shareholders who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Canary Wharf Shareholders who are not resident in the United
Kingdom should inform themselves about and observe any applicable requirements.
The Revised Offer in the United States is being made solely by CWG Acquisition.
Neither Deutsche Bank nor Merrill Lynch, nor any of their affiliates, is making
the Revised Offer in the United States.
Neither the Thames River Shares nor the Loan Notes have been, nor will they be
registered under the US Securities Act or the securities laws of any state of
the United States, or under applicable securities laws of Australia or Japan.
Accordingly, neither the Thames River Shares nor the Loan Notes may be offered,
sold or delivered, directly or indirectly, in or into the United States,
Australia or Japan, except pursuant to exemptions from applicable requirements
of such jurisdictions.
Any person who, alone or acting together with any other person(s) pursuant to an
agreement or understanding (whether formal or informal) to acquire or control
securities of Canary Wharf, owns or controls, or becomes the owner or
controller, directly or indirectly, of one per cent. or more of any class of
securities of Canary Wharf is generally required under the provisions of Rule 8
of the City Code to notify a Regulatory Information Service and the Panel of
every dealing in such securities during the offer period. Please consult your
financial adviser immediately if you believe this rule may be applicable to you.
In accordance with normal United Kingdom market practice and subject to
applicable regulatory requirements, CWG Acquisition or its nominees or its
brokers (acting as agents) may, subject to the City Code and otherwise in
compliance with the requirements of the Panel, from time to time make certain
purchases of, or arrangements to purchase, Canary Wharf Shares outside the
United States, other than pursuant to the Revised Offer, before or during the
period in which the Revised Offer remains open for acceptance. These purchases
may occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such purchases will be
disclosed as required in the United Kingdom and communicated in the United
States by way of an announcement by or on behalf of CWG Acquisition.
Deutsche Bank and Merrill Lynch, which are regulated by the Financial Services
Authority for the conduct of designated investment business in the United
Kingdom, are acting exclusively for CWG Acquisition and for no-one else in
connection with the Revised Offer and will not be responsible to anyone other
than CWG Acquisition for providing the protections afforded to clients of
Deutsche Bank and Merrill Lynch, respectively, or for providing advice in
relation to the Revised Offer. Deutsche Bank is acting as nominated adviser and
broker to Thames River for the purposes of the proposed listing of the Class A
Ordinary Shares on AIM.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE REVISED OFFER
1. Conditions of the Revised Offer
The Revised Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. (London time)/10.00 a.m. (New York time)
on a date to be specified in or determined in accordance with the Revised Offer
Document (or such later date as CWG Acquisition may determine, in accordance
with the City Code and the Exchange Act or otherwise with the consent of the
Panel) in respect of Canary Wharf Shares to which the Revised Offer relates
which, when aggregated with any Canary Wharf Shares held by CWG Acquisition and
any further Canary Wharf Shares which CWG Acquisition has contracted to acquire,
together amount to more than 50 per cent. (or such lesser percentage as CWG
Acquisition may decide) in nominal value of the aggregate of the total number of
Canary Wharf Shares and the maximum number of further ordinary shares of one
pence each in the capital of Canary Wharf capable of being allotted and/or
issued pursuant to the Canary Wharf Share Schemes, PROVIDED THAT this condition
will not be satisfied unless CWG Acquisition shall have acquired or agreed to
acquire (whether pursuant to the Revised Offer or otherwise) Canary Wharf Shares
carrying in aggregate more than 50 per cent. of the voting rights then normally
exercisable at a general meeting of Canary Wharf, including for this purpose
(except to the extent otherwise agreed by the Panel) any such voting rights
attaching to any Canary Wharf Shares that are unconditionally allotted or issued
before the Revised Offer becomes or is declared unconditional as to acceptances,
whether pursuant to the exercise of any outstanding subscription or conversion
rights or otherwise and for this purpose:
(i) Canary Wharf Shares which have been
unconditionally allotted shall be deemed to carry the voting rights which they
will carry upon issue;
(ii) the expression 'Canary Wharf Shares
to which the Revised Offer relates' shall be construed in accordance with
Sections 428 to 430F of the Companies Act; and
(iii) valid acceptances shall be deemed to
have been received in respect of Canary Wharf Shares which are treated for the
purposes of Section 429(8) of the Companies Act as having been acquired or
contracted to be acquired by CWG Acquisition by virtue of acceptances of the
Revised Offer,
(b) no Third Party having decided to take institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
having enacted, made or proposed any statute, regulation, decision, order or
change to published practice or otherwise having taken any other steps to
intervene which would or might be expected to:
(i) make the Revised Offer, its
implementation or the acquisition or proposed acquisition by CWG Acquisition or
any member of the Wider CWG Acquisition Group of any shares or other securities
in, or control or management of, Canary Wharf or any member of the Wider Canary
Wharf Group void, illegal or unenforceable or its funding illegal, in any
jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit,
restrict or delay the same or impose additional conditions or obligations with
respect to the Revised Offer or such acquisition which are material, or
otherwise materially impede, challenge or interfere with the Revised Offer or
such acquisition, or require amendment to the terms of the Revised Offer or the
acquisition or proposed acquisition of any Canary Wharf Shares or the
acquisition of control or management of Canary Wharf or the Wider Canary Wharf
Group by CWG Acquisition;
(ii) limit or, to an extent which is
material, delay the ability of any member of the Wider CWG Acquisition Group or
any member of the Wider Canary Wharf Group to acquire or to hold or to exercise
effectively, directly or indirectly, all or any rights of ownership in respect
of shares or other securities in, or to exercise voting or management control
over, any member of the Wider Canary Wharf Group or any member of the Wider CWG
Acquisition Group;
(iii) require, prevent or, to an extent
which is material, delay the divestiture or alter the terms envisaged for any
proposed divestiture by any member of the Wider CWG Acquisition Group of any
shares or other securities in Canary Wharf;
(iv) require, prevent or, to an extent
which is material, delay the divestiture or alter the terms envisaged for any
proposed divestiture by any member of the Wider CWG Acquisition Group or by any
member of the Wider Canary Wharf Group of all or any material portion of their
respective businesses, assets or properties or limit (to an extent which is
material) the ability of any of them to conduct any of their respective
businesses or to own or control any of their respective assets or properties or
any part thereof;
(v) except pursuant to Part XIIIA of the
Companies Act, require any member of the Wider CWG Acquisition Group or of the
Wider Canary Wharf Group to acquire, or to offer to acquire, any shares or other
securities (or the equivalent) in any member of either group owned by any third
party;
(vi) limit (to an extent which is material)
the ability of any member of the Wider CWG Acquisition Group or of the Wider
Canary Wharf Group to conduct its business;
(vii) result in any member of the Wider
Canary Wharf Group or the Wider CWG Acquisition Group ceasing to be able to
carry on business under any name under which it presently does so; or
(viii) otherwise adversely affect the
business, assets, profits, financial or trading position or prospects of any
member of the Wider Canary Wharf Group or of the Wider CWG Acquisition Group,
which in each case is material in the context of the Canary Wharf Group taken as
a whole or to the obligations of the Wider CWG Acquisition Group in connection
with the financing of the Revised Offer,
and all applicable waiting and other time periods during which any Third Party
could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or otherwise intervene under the laws of any
relevant jurisdiction having expired, lapsed or been terminated;
(c) without limitation to condition (b) above, the Office of Fair
Trading having indicated, in terms satisfactory to CWG Acquisition, that it is
not the intention of the Office of Fair Trading to refer the proposed
acquisition of Canary Wharf by CWG Acquisition, or any matters arising from that
proposed acquisition, to the Competition Commission;
(d) all notifications, applications and filings which are
necessary or are reasonably considered necessary by CWG Acquisition having been
made, all appropriate waiting and other time periods (including any extensions
of such waiting and other time periods) 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 each case in connection with
the Revised Offer or the acquisition or proposed acquisition of any shares or
other securities in, or control or management of, Canary Wharf or any other
member of the Wider Canary Wharf Group by any member of the Wider CWG
Acquisition Group;
(e) all Authorisations which are necessary or are reasonably
considered necessary by CWG Acquisition in any relevant jurisdiction for or in
respect of the Revised Offer or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, Canary Wharf or any
other member of the Wider Canary Wharf Group by any member of the Wider CWG
Acquisition Group or the carrying on by any member of the Wider Canary Wharf
Group of its business having been obtained, in terms and in a form satisfactory
to CWG Acquisition, from all appropriate Third Parties or from any persons or
bodies with whom any member of the Wider Canary Wharf Group has entered into
contractual arrangements and all such Authorisations remaining in full force and
effect and all filings necessary for such purpose having been made and there
being no notice or intimation of any intention to revoke, suspend, restrict,
modify or not to renew any of the same;
(f) except as publicly announced by Canary Wharf (by the
delivery of an announcement to a Regulatory Information Service) prior to
February 4, 2004 or as fairly disclosed in writing to CWG Acquisition by or on
behalf of Canary Wharf prior to that date, there being no provision of any
arrangement, agreement, licence, permit, lease, franchise or other instrument to
which any member of the Wider Canary Wharf Group is a party, or by or to which
any such member or any of its assets is or are or may be bound, entitled or
subject or any circumstance, which, in each case as a consequence of the Revised
Offer or the acquisition or proposed acquisition of any shares or other
securities in, or control or management of, Canary Wharf or any other member of
the Wider Canary Wharf Group by any member of the Wider CWG Acquisition Group or
otherwise, could or might result in:
(i) any monies borrowed by or any other
indebtedness or liabilities (actual or contingent) of, or any grant available
to, any member of the Wider Canary Wharf Group being or becoming repayable or
capable of being declared repayable immediately or prior to its stated maturity
or repayment date or the ability of any member of the Wider Canary Wharf Group
to borrow monies or incur any indebtedness being withdrawn or inhibited or
becoming capable of being withdrawn or inhibited;
(ii) the creation or enforcement of any
mortgage, charge or other security interest over the whole or any part of the
business, property, assets or interests of any member of the Wider Canary Wharf
Group or any such mortgage, charge or other security interest (wherever created,
arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement,
licence, permit, lease, franchise or instrument, or the rights, liabilities,
obligations or interests of any member of the Wider Canary Wharf Group
thereunder, being, or becoming capable of being, terminated, withdrawn or
adversely modified or affected or any adverse action being taken or any
obligation or liability arising thereunder;
(iv) any asset, property or interest of, or
any asset the use of which is enjoyed by, any member of the Wider Canary Wharf
Group being or falling to be disposed of or charged in any manner whatsoever or
ceasing to be available to any member of the Wider Canary Wharf Group or any
right arising under which any such asset or interest could be required to be
disposed of or charged or could cease to be available to any member of the Wider
Canary Wharf Group otherwise than in the ordinary course of business;
(v) any member of the Wider Canary Wharf
Group ceasing to be able to carry on business under any name under which it
presently does so;
(vi) the creation or assumption of
liabilities (actual or contingent) by any member of the Wider Canary Wharf
Group;
(vii) the rights, liabilities, obligations
or interests of any member of the Wider Canary Wharf Group under any such
arrangement, agreement, licence, permit, lease, franchise or other instrument or
the interests or business of any such member in or with any other person, firm,
company or body (or any arrangement or arrangements relating to any such
interests or business) being terminated, adversely modified or affected; or
(viii) the financial or trading position or
the prospects or the value of any member of the Wider Canary Wharf Group being
prejudiced or adversely affected,
and no event having occurred which, under any provision of any such arrangement,
agreement, licence, permit, lease, franchise or other instrument, could result
in any of the events or circumstances which are referred to in paragraphs (i) to
(viii) of this condition(f);
(g) since June 30, 2003 and except as disclosed in Canary Wharf's
annual report and accounts for the year then ended or as otherwise publicly
announced by Canary Wharf (by the delivery of an announcement to a Regulatory
Information Service) prior to February 4, 2004 or (other than in relation to
paragraphs (i) to (iv) of this condition (g)) as otherwise fairly disclosed in
writing to CWG Acquisition by or on behalf of Canary Wharf prior to that date no
member of the Wider Canary Wharf Group having:
(i) issued or agreed to issue, or
authorised the issue of, additional shares of any class, or securities
convertible into or exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible or exchangeable
securities other than as between Canary Wharf and wholly-owned subsidiaries of
Canary Wharf and any shares issued upon the exercise of any options granted
prior to February 4, 2004 under any of the Canary Wharf Share Schemes which have
been disclosed to CWG Acquisition;
(ii) purchased or redeemed or repaid any
of its own shares or other securities or reduced or made any other change to any
part of its share capital;
(iii) recommended, declared, paid or made
any bonus, dividend or other distribution whether payable in cash or otherwise
(other than to Canary Wharf or a wholly-owned subsidiary of Canary Wharf);
(iv) made or authorised any change in its
loan capital;
(v) merged with, demerged or acquired any
body corporate, partnership or business or acquired or disposed of or
transferred, mortgaged or charged or created any security interest over any
assets or any right, title or interest in any assets (including shares in any
undertaking and trade investments) or authorised the same;
(vi) issued or authorised the issue of, or
made any change in or to, any debentures or incurred or increased any
indebtedness or liability (actual or contingent);
(vii) entered into, varied, or authorised
any agreement, transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which:
(A) is of a long term, onerous or unusual nature or magnitude or
which involves an obligation of such nature or magnitude;
(B) could restrict the business of any member of the Wider Canary
Wharf Group or any member of the Wider CWG Acquisition Group; or
(C) is other than in the ordinary course of business;
(viii) entered into, implemented, effected or
authorised any merger, demerger, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement in respect of itself or another
member of the Wider Canary Wharf Group;
(ix) entered into or varied the terms of,
any contract, agreement or arrangement with any of the directors or senior
executives of any member of the Wider Canary Wharf Group;
(x) taken any corporate action or had any
legal proceedings instituted or threatened in writing against it or petition
presented or order made for its winding-up (voluntarily or otherwise),
dissolution or reorganisation or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of all or any
part of its assets and revenues or any analogous proceedings in any jurisdiction
or appointed any analogous person in any jurisdiction;
(xi) been unable, or admitted in writing
that it is unable, to pay its debts or having stopped or suspended (or
threatened to stop or suspend) payment of its debts generally or ceased carrying
on all or a substantial part of its business;
(xii) waived or compromised any claim;
(xiii) made any alteration to its memorandum
or articles of association; or
(xiv) announced an intention or entered into
any agreement, commitment or arrangement or passed any resolution or made any
offer (which remains open for acceptance) with respect to any of the
transactions, matters or events referred to in this condition(g);
(h) since June 30, 2003 and except as disclosed in Canary Wharf's
annual report and accounts for the year then ended or as otherwise publicly
announced by Canary Wharf (by the delivery of an announcement to a Regulatory
Information Service) prior to February 4, 2004 or as otherwise fairly disclosed
in writing to CWG Acquisition by or on behalf of Canary Wharf prior to that
date:
(i) there having been no adverse change
or deterioration in the business, assets, financial or trading positions or
profit or prospects of any member of the Wider Canary Wharf Group;
(ii) no contingent or other liability of
any member of the Wider Canary Wharf Group having arisen or become apparent or
increased;
(iii) no litigation, arbitration
proceedings, prosecution or other legal proceedings to which any member of the
Wider Canary Wharf Group is a party or may become a party (whether as plaintiff,
defendant or otherwise) having been publicly announced, implemented or
instituted by or against or remaining outstanding against or in respect of any
member of the Wider Canary Wharf Group; and
(iv) (other than as a result of the Revised
Offer) no enquiry or investigation by, or complaint or reference to, any Third
Party having been publicly announced, implemented, instituted by or against or
remaining outstanding against or in respect of any member of the Wider Canary
Wharf Group;
(i) CWG Acquisition not having discovered:
(i) that any financial or business or
other information concerning the Wider Canary Wharf Group disclosed at any time
by or on behalf of any member of the Wider Canary Wharf Group, whether publicly
or otherwise, to any member of the Wider CWG Acquisition Group, is misleading or
contains any misrepresentation of fact or omits to state a fact necessary to
make any information contained therein not misleading and which was not
subsequently corrected before February 4, 2004 by disclosure either publicly or
otherwise to CWG Acquisition; or
(ii) that any past or present member of
the Wider Canary Wharf Group is subject to any liability (actual or contingent)
which is not disclosed in Canary Wharf's annual report and accounts for the
financial year ended June 30, 2003;
(j) CWG Acquisition not having discovered:
(i) that save as fairly disclosed in
writing to CWG Acquisition by or on behalf of Canary Wharf prior to February 4,
2004 any past or present member of the Wider Canary Wharf Group has not complied
with any applicable legislation or regulations of any jurisdiction with regard
to the use, treatment, handling, storage, transport, release, disposal,
discharge, spillage, leak or emission of any waste or hazardous substance or any
substance likely to impair the environment or harm human health, or otherwise
relating to environmental matters or the health and safety of any person, or
that there has otherwise been any such use, treatment, handling, storage,
transport, release, disposal, discharge, spillage, leak or emission (whether or
not this constituted a non-compliance by any person with any legislation or
regulations and wherever the same may have taken place) which, in any case,
would be likely to give rise to any liability (whether actual or contingent) or
cost on the part of any member of the Wider Canary Wharf Group or otherwise is
or may be harmful to the Environment in or adjacent to any part of the Canary
Wharf Estate;
(ii) that save as fairly disclosed in
writing to CWG Acquisition by or on behalf of Canary Wharf prior to February 4,
2004 there is, or is likely to be, any liability, whether actual or contingent,
to make good, repair, reinstate or clean up any property now or previously
owned, occupied or made use of by any past or present member of the Wider Canary
Wharf Group or any other property or any controlled waters under any
environmental legislation, regulation, notice, circular, order or other lawful
requirement of any relevant authority or third party or otherwise; or
(iii) that any event has taken place
(whether as a result of an act or omission of any member of the Wider Canary
Wharf Group or otherwise) which would, or which might reasonably be likely to,
prejudice the ability of any relevant member of the Wider Canary Wharf Group or
a purchaser from the Wider Canary Wharf Group to claim (or continue to claim)
any enterprise zone allowances in respect of qualifying construction expenditure
originally incurred in respect of the Properties before the Canary Wharf
enterprise zone expired, or which was originally incurred under a contract
entered into before the Canary Wharf enterprise zone expired;
(k) CWG Acquisition not having discovered that a member of the
Wider Canary Wharf Group does not have good and marketable title to the
Properties or any of them, or that there is any defect in title to the
Properties or any of them, or that there is an inaccuracy or omission in the
latest drafts of the Certificates of Title to the Properties (including all
reports referred to therein) provided to CWG Acquisition as at February 3, 2004,
or that an event has occurred or circumstances have changed which would require
a change in their form and content or further adverse disclosures to be made in
order for the drafts to be accurate and not misleading, in each case to an
extent which is material in the context of the Wider Canary Wharf Group or to
the obligations of the Wider CWG Acquisition Group in connection with the
financing of the Revised Offer;
(l) no insurance cover taken out by or on behalf of any member
of the Wider Canary Wharf Group which covers (in any respect) loss arising from
or as a result of acts of terrorism having (in whole or in part) been lapsed,
voided or not renewed and no event having occurred as a result of which such
insurance cover is not expected to be renewable (in whole or in part) at any
time in the future (with the existing provider(s) or otherwise) for any reason
whatsoever, including any inability to obtain such insurance or insurance of
such type in the market either at all or on commercially acceptable terms;
(m) since February 4, 2004 there having been no damage to, or
destruction of, any of the buildings or other structures on the Canary Wharf
Estate which is or might reasonably be expected to be material in the context of
the Canary Wharf Group taken as a whole or to the obligations of the Wider CWG
Acquisition Group in connection with the financing of the Revised Offer and, for
this purpose, any destruction or damage which renders premises on the Canary
Wharf Estate representing in excess of 10 per cent. of the square footage of all
premises on the Canary Wharf Estate unoccupiable as commercial office space for
a time period which can reasonably be expected to exceed 6 months (whether or
not a member of the Canary Wharf Group is insured against such destruction or
damage) shall be deemed to be material in the context of the Canary Wharf Group
taken as a whole or to the obligations of the Wider CWG Acquisition Group in
connection with the financing of the Revised Offer;
(n) in the event Canary Wharf's independent adviser has publicly
stated prior to the Deadline that, in its opinion, the proposed investment by
Canary Investments (or another entity nominated by RF Holdings) in CWG
Acquisition Holdings and the management and consultancy arrangements relating to
Mr Paul Reichmann, in each case as described in paragraph 14 of Part 1 of the
Offer Document, are fair and reasonable, the independent Canary Wharf
Shareholders approving the proposed investment and such arrangements at the Rule
16 EGM; and
(o) neither the MSREF Proposal (as amended, revised or otherwise
varied) nor any substitution, replacement or other proposal that supersedes or
is supplementary to the MSREF Proposal being approved by Canary Wharf
Shareholders.
For the purpose of these conditions:
(a) 'Third Party' means any government, government department or
governmental, quasi-governmental, supranational, statutory, regulatory,
administrative, fiscal or investigative body, authority (including any national
anti-trust or merger control authority), court, trade agency, association,
institution or professional or environmental body or any other person or body
whatsoever in any relevant jurisdiction;
(b) a Third Party shall be regarded as having 'intervened' if it
has taken, instituted, implemented or has decided to take, institute, implement
or threaten in writing any action, proceeding, suit, investigation, enquiry or
reference or made or enacted any statute, regulation, decision or order or taken
any measures or other steps or required any action to be taken and 'intervene'
shall be construed accordingly; and
(c) 'Authorisations' means authorisations, orders, grants,
recognitions, determinations, certificates, confirmations, clearances, consents,
licences, clearances, permissions, exemptions and approvals.
Subject to the requirements of the Panel, CWG Acquisition reserves the right to
waive all or any of the above conditions, in whole or in part, except condition
(a). Unless the Panel otherwise consents, for the purposes of the Auction
Procedure CWG Acquisition has agreed not to waive condition (o) to its Revised
Offer for so long as Silvestor's offer for Canary Wharf is by way of a scheme of
arrangement.
Condition (n) to the Offer has been satisfied.
Conditions (b) to (o) (inclusive) must be fulfilled, be determined by CWG
Acquisition to be, or remain, satisfied or (if capable of waiver) be waived by
midnight on the 21st day after the date on which condition (a) is satisfied (or
in each case such later date as CWG Acquisition may, with the consent of the
Panel, decide). CWG Acquisition shall be under no obligation to waive or treat
as fulfilled any of conditions (b) to (o) (inclusive) by a date earlier than the
latest date for the fulfilment thereof notwithstanding that the other conditions
of the Revised Offer may at such earlier date have been waived or fulfilled and
that there are at such earlier date no circumstances indicating that any of such
conditions may not be capable of fulfilment.
CWG Acquisition shall not be entitled to rely on the non-fulfilment or
non-satisfaction of any of conditions (f), (g)(v) - (xiv) inclusive, (h) - (j)
inclusive and (l) above unless the effect of the non-fulfilment or
non-satisfaction is or would be material in the context of the Canary Wharf
Group taken as a whole or to the obligations of the Wider CWG Acquisition Group
in connection with the financing of the Revised Offer. In this regard, the
combined effect of a number of related or unrelated events, occurrences or
circumstances, which individually might not be material in the context of the
Canary Wharf Group taken as a whole or to the obligations of the Wider CWG
Acquisition Group in connection with the financing of the Revised Offer, shall
be aggregated to determine if the combined effect is material in the context of
the Canary Wharf Group taken as a whole or to the obligations of the Wider CWG
Acquisition Group in connection with the financing of the Revised Offer.
If the Panel requires CWG Acquisition to make an offer for Canary Wharf Shares
under the provisions of Rule 9 of the City Code, CWG Acquisition may make such
alterations to the conditions of the Revised Offer, including to condition (a),
as are necessary to comply with the provisions of that Rule.
The Revised Offer will lapse (unless otherwise agreed by the Panel) if the
acquisition of Canary Wharf by CWG Acquisition is referred to the Competition
Commission before the later of March 23, 2004 and the date when the Revised
Offer becomes unconditional as to acceptances (or such other date as determined
by the Panel).
It may only be possible to determine whether the requisite majority of Canary
Wharf Shareholders has approved the MSREF Proposal described in condition (o)
(as amended, revised or otherwise varied) or any substitution, replacement or
other proposal that supersedes such proposal after the Court has decided whether
to sanction such proposal.
If the Revised Offer lapses it will cease to be capable of further acceptance.
Canary Wharf Shareholders who have accepted the Revised Offer and CWG
Acquisition shall then cease to be bound by acceptances delivered on or before
the date on which the Revised Offer lapses.
2. Conditions of the Class A Share Alternative and the Class A
Additional Share Election Facility
The Class A Share Alternative and the Class A Additional Share Election Facility
are subject to the following further conditions:
(a) valid elections which are capable of satisfaction in accordance with the
terms of the Class A Share Alternative and the Class A Additional Share Election
Facility having been received from Canary Wharf Shareholders in respect of not
less than 292,579,004 Class A Ordinary Shares by no later than 14 days after the
date on which the Revised Offer is declared or becomes unconditional as to
acceptances;
(b) valid acceptances of the Revised Offer having been received in respect
of Canary Wharf Shares which, when aggregated with any Canary Wharf Shares held
by CWG Acquisition and any further Canary Wharf Shares which CWG Acquisition has
contracted to acquire, together amount to at least 75 per cent. of the issued
share capital of Canary Wharf (diluted to include shares potentially issuable
pursuant to rights under the Canary Wharf Share Schemes) by no later than 14
days after the date on which the Revised Offer is declared or becomes
unconditional as to acceptances;
(c) the Revised Offer becoming or being declared unconditional in all
respects; and
(d) the Class A Ordinary Shares being admitted to trading on AIM.
Subject to the requirements of the Panel, CWG Acquisition reserves the right to
waive condition (a) and/or (b) above (in whole or in part).
3. Conditions of the Class B Share Alternative and the Class B
Additional Share Election Facility
The Class B Share Alternative and the Class B Additional Share Election Facility
are subject to the following further conditions:
(a) valid acceptances of the Revised Offer having been received
in respect of Canary Wharf Shares which, when aggregated with any Canary Wharf
Shares held by CWG Acquisition and any further Canary Wharf Shares which CWG
Acquisition has contracted to acquire, together amount to at least 75 per cent.
of the issued share capital of Canary Wharf (diluted to include shares
potentially issuable pursuant to rights under the Canary Wharf Share Schemes) by
no later than 14 days after the date on which the Revised Offer is declared or
becomes unconditional as to acceptances; and
(b) the Revised Offer becoming or being declared unconditional in
all respects.
Subject to the requirements of the Panel, CWG Acquisition reserves the right to
waive condition (a) above (in whole or in part).
4. Condition to the Loan Note Alternative
The issue of the Loan Notes pursuant to the Loan Note Alternative is subject to
valid elections being received for an aggregate of at least £10 million in
nominal value of Loan Notes by the date on which the Revised Offer becomes or is
declared unconditional in all respects.
Certain Further Terms of the Revised Offer
Canary Wharf Shares will be acquired by CWG Acquisition fully paid up and free
from all liens, equitable interests, charges, encumbrances, rights of
pre-emption and other third party rights and/or interests and together with all
rights attaching thereto as at February 5, 2004 or thereafter, including the
right to receive and retain all dividends, interest and other distributions
declared, made or payable after February 5, 2004.
This means that the Revised Offer is made for the Canary Wharf Shares 'cum
dividend'. Accordingly, insofar as a dividend and/or other distribution is
proposed, declared, made, paid or payable by Canary Wharf in respect of a Canary
Wharf Share as at February 5, 2004 or has been or will become so proposed,
declared, made or payable after such date, the price payable under the Revised
Offer in respect of Canary Wharf Shares will be reduced by the amount of the
dividend and/or distribution except insofar as the Canary Wharf Share is or will
be transferred pursuant to the Revised Offer on a basis which entitles CWG
Acquisition alone to receive the dividend or distribution directly from Canary
Wharf and to retain it. The amount of any dividend or distribution which CWG
Acquisition is entitled to recover from a Canary Wharf Shareholder in respect of
a Canary Wharf Share pursuant to the Revised Offer will be reduced by the amount
of any such reduction of the price payable pursuant to the Revised Offer in
respect of that Canary Wharf Share. To the extent that such a reduction in the
price payable pursuant to the Revised Offer in respect of a Canary Wharf Share
is permitted in respect of a dividend or distribution but not made, the person
to whom the Revised Offer price is paid in respect of that Canary Wharf Share
will be obliged to account to CWG Acquisition for the amount of such dividend or
distribution.
The Revised Offer is on the terms and is subject, inter alia, to the conditions
which are set out in this announcement and those terms which will be set out in
the Revised Offer Document and Revised Form of Acceptance and such further terms
as may be required to comply with the rules and regulations of the City Code,
the Financial Services Authority, the UK Listing Authority and US federal
securities laws (except to the extent of any exemptive relief granted by the SEC
or the London Stock Exchange). The Revised Offer and any acceptances thereunder
are and will be governed by English law.
The availability of the Cash Offer, the Loan Note Alternative and/or of the
Share Alternatives and the Additional Share Election Facilities to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
APPENDIX II
BASES AND SOURCES
(a) Statements made by reference to the existing issued share capital of
Canary Wharf are based on 585,008,225 Canary Wharf Shares in issue, being the
number of shares in issue on April 5, 2004 as stated in the second supplemental
Canary Wharf circular posted to Canary Wharf Shareholders on April 7, 2004 in
relation to the MSREF Proposal.
(b) Unless otherwise stated, information relating to CWG Acquisition has
been provided by the directors of CWG Acquisition.
(c) A Canadian Dollar/Sterling exchange rate of CAN$2.242: £1 (as at June
30, 2003) and CAN$2.313: £1 (as at December 31, 2003) have been used in this
announcement.
(d) A United States Dollar/Sterling exchange rate of US$1.661: £1 (as at
September 30, 2003) and US$1.790: £1 (as at December 31, 2003) have been used in
this announcement.
(e) The maximum percentage interest of Canary Wharf Shareholders
in CWG Acquisition of approximately 22.5 per cent. is based upon: (i) CWG
Acquisition acquiring the 585,008,225 Canary Wharf Shares in issue; (ii) full
take up of the Thames River Shares available under the Share Alternatives and
the Additional Share Election Facilities (assuming that no elections for Thames
River Shares are made in respect of any Canary Wharf Shares that may be issued
following the date hereof); and (iii) a final equity investment in CWG
Acquisition of £915,000,000, being CWG Acquisition's current assessment of the
final equity investment in CWG Acquisition (inclusive of the costs of the
Revised Offer) in such circumstances. Depending on the final costs for the
Revised Offer, this final equity investment amount may vary up or down with the
consequence that the maximum percentage would be adjusted accordingly.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
'Additional Share Election the Class A Additional Share Election Facility and/or the Class B
Facilities' Additional Share Election Facility;
'Admission' the admission of the Class A Ordinary Shares to trading on AIM;
'AIM' the Alternative Investment Market of the London Stock Exchange;
'Auction Procedure' the procedure for the conduct of revisions to the Offer and revisions to
the MSREF Proposal published by the Panel on 7 April 2004;
'bcIMC' British Columbia Investment Management Corporation;
'Brascan' Brascan Corporation;
'Brascan Group' Brascan and its subsidiary undertakings;
'BT Pension Scheme' the Trustees of the BT Pension Scheme;
'Canary Investments' Canary Investments Sarl, a company formed at the direction of RF Holdings;
'Canary Wharf' or the 'Company' Canary Wharf Group plc;
'Canary Wharf Estate' or 'Estate the mixed office and retail development on or adjacent to the two wharves
' formerly known as Canary Wharf and the majority of Heron Quays, London E14,
comprising the land and buildings in the districts known as Canada Square,
Jubilee Park, Heron Quays, Cabot Square, Columbus Courtyard, Westferry
Circus and Churchill Place;
'Canary Wharf Group' Canary Wharf and its subsidiary undertakings;
'Canary Wharf Share' or 'Canary includes: (i) the existing unconditionally allotted or issued and fully
Wharf Shares' paid ordinary shares of one pence each in the capital of Canary Wharf and
(ii) any further such shares which are unconditionally allotted or issued
and fully paid (including pursuant to the exercise of options or the
vesting of awards granted prior to the date hereof under the Canary Wharf
Share Schemes) before the date on which the Revised Offer closes or such
earlier date (not being earlier than the date on which the Revised Offer
becomes or is declared unconditional as to acceptances) as CWG Acquisition
may, subject to the City Code and the Exchange Act or otherwise with the
consent of the Panel, decide, but excludes any shares held as treasury
shares on such date as CWG Acquisition may determine before the Revised
Offer closes (which may be a different date to the date referred to in
(ii));
'Canary Wharf Shareholders' holders of Canary Wharf Shares;
'Canary Wharf Share Schemes' the Canary Wharf Company Share Option Plan, the Canary Wharf 1997 Executive
Share Option Plan, the Canary Wharf Long Term Incentive Plan, the Canary
Wharf All Employee Share Plan adopted on November 8, 2000, the Canary Wharf
All Employee Share Plan adopted on October 16, 2001 and any other share
option scheme or arrangement operated by Canary Wharf Group before the date
on which the Revised Offer closes, lapses or is withdrawn;
'Canary Wharf 1997 Warrant' a warrant to subscribe for 10,710,279 Canary Wharf Shares as certified by a
warrant certificate dated August 6, 2003, the registered holder of which is
IPC Advisors Limited, a company owned by a trust for the benefit of
(amongst others) Mr Paul Reichmann and his family;
'Canary Wharf 1999 Warrants' 32,240,400 warrants to subscribe for one Canary Wharf Share per warrant as
certified by a warrant certificate dated August 6, 2003, the registered
holder of which is IPC Advisors Limited, a company owned by a trust for the
benefit of (amongst others) Mr Paul Reichmann and his family;
'Canary Wharf Warrant Holder' IPC Advisors Limited;
'Canary Wharf Warrants' the Canary Wharf 1997 Warrant and the Canary Wharf 1999 Warrants;
'Cash Offer' the all-cash offer by CWG Acquisition of 275 pence in cash for each Canary
Wharf Share;
'City Code' or 'Code' The City Code on Takeovers and Mergers;
'Class A Additional Share the additional share election facility whereby holders of Canary Wharf
Election Facility' Shares who validly accept the Revised Offer and make an election under the
Class A Share Alternative may, to the extent that other holders of Canary
Wharf Shares who have validly accepted the Revised Offer in the same Class
A Settlement Pool have not made valid elections under the Class A Share
Alternative, elect to receive additional Class A Ordinary Shares instead of
cash which they would otherwise be able to receive under the Cash Offer;
'Class A Ordinary Shares' class A ordinary shares of 5 pence nominal value in the capital of Thames
River;
'Class A Settlement Pool' a pool of Canary Wharf Shareholders validly accepting the Revised Offer
whose consideration is to be settled on the same date (the first such pool
comprising valid acceptances of Canary Wharf Shareholders in the period
from the date of the Offer Document up to the date on which the Revised
Offer becomes or is declared unconditional in all respects and subsequent
pools comprising valid acceptances of Canary Wharf Shareholders in rolling
seven day periods, the first of which shall commence on the date following
the date on which the first pool ends);
'Class A Share Alternative' the share alternative whereby holders of Canary Wharf Shares who validly
accept the Revised Offer may elect in respect of each Canary Wharf Share,
subject to the terms of such share alternative, to receive one Class A
Ordinary Shares in lieu of 25 pence in cash which they would otherwise be
entitled to receive under the Cash Offer;
'Class B Additional Share the additional share election facility whereby holders of Canary Wharf
Election Facility' Shares who validly accept the Revised Offer and make an election under the
Class B Share Alternative may elect to receive additional Class B
Restricted Shares instead of cash which they would otherwise be able to
receive under the Cash Offer;
'Class B Restricted Shares' class B ordinary shares of 5 pence nominal value in the capital of Thames
River;
'Class B Share Alternative' the revised share alternative whereby holders of Canary Wharf Shares who
validly accept the Revised Offer may elect, in respect of every 2.437534
Canary Wharf Shares, subject to the terms of such share alternative, to
receive one Class B Restricted Share in lieu of 25 pence in cash which they
would otherwise be entitled to receive under the Cash Offer;
'Companies Act' the Companies Act 1985, as amended;
'Competition Commission' the United Kingdom Competition Commission;
'CWG Acquisition' CWG Acquisition Limited, a private limited company formed for the purposes
of making the Offer and a direct wholly-owned subsidiary of CWG Acquisition
Holdings, as further described in paragraph 6 of this announcement;
'CWG Acquisition Holdings' CWG Acquisition Holdings Limited, a private limited company formed at the
direction of CWG Holdings and Hermes, as further described in paragraph 6
of this announcement;
'CWG Holdings' CWG Holdings (2004) Inc., a recently formed company under the laws of the
Province of Ontario, Canada incorporated at the direction of Brascan, bcIMC
and Teachers', as further described in paragraph 6 of this announcement;
'Deadline' the later of (i) the date notice is given to Canary Wharf Shareholders
convening the Rule 16 EGM; and (ii) March 12, 2004, unless the Rule 16 EGM
is convened as a result of a requisition of a meeting by a member of the
Brascan Group or by Mr Paul Reichmann and/or his family (and/or their
associates and any trusts the beneficiaries of which are any of the
foregoing) in which case it shall mean the date that notice of the meeting
is given to Canary Wharf Shareholders;
'Deutsche Bank' Deutsche Bank AG London;
'Environment' consists of all, or any, of the following media, namely, the air, water,
land; and the medium of air includes the air within buildings and the air
within other natural or man-made structures above and below ground;
'Exchange Act' the United States Securities Exchange Act of 1934 (as amended);
'Hermes' Hermes Pensions Management Limited (on behalf of the BT Pension Scheme and
Royal Mail Pension Plan);
'Hermes Tracker Funds' the BTPS UK index tracking portfolios, the Royal Mail UK index tracking
portfolios, the Hermes Assured UK index tracker fund and the Croydon UK
passive portfolio;
'Independent Committee' the committee of the directors of Canary Wharf, comprising Sir John Carter,
Sir Martin Jacomb, Christopher Jonas, Michael Price, Gerald Rothman, Robert
Speirs and Andrew Tisch as directors who are independent in relation to the
scheme of arrangement set out in or incorporated into the MSREF Proposal;
'LIBOR' London InterBank Offer Rate is the lending rate for sterling deposits among
international banks offered by leading banks in the London interbank market
for the relevant interest period as at 11:00 a.m. on the first day of the
relevant interest period or, if such day is not a business day, on the next
business day;
'Loan Note Alternative' the alternative whereby Canary Wharf Shareholders (other than shareholders
in certain overseas jurisdictions) may elect to receive Loan Notes instead
of some or all of the cash consideration to which they would otherwise be
entitled under the Revised Offer;
'Loan Notes' the floating rate unsecured redeemable loan notes of £1 each of CWG
Acquisition to be issued pursuant to the Loan Note Alternative;
'London Stock Exchange' London Stock Exchange plc or its successor;
'Merrill Lynch' Merrill Lynch International;
'MSREF' the real estate private equity funds managed by MSREF IV
International-G.P., L.L.C., consisting of MSREF IV TE Holding, L.P., Morgan
Stanley Real Estate Fund IV International-T, L.P., Morgan Stanley Real
Estate Investors IV International, L.P. and Morgan Stanley Real Estate Fund
IV Special International, L.P.;
'MSREF Proposal' the scheme of arrangement proposed by Canary Wharf in its second
supplemental circular to Canary Wharf Shareholders dated April 7, 2004 to
effect an acquisition of Canary Wharf by Silvestor (owned by MSREF and
others);
'Offer' the offer made pursuant to the Offer Document by Deutsche Bank and Merrill
Lynch on behalf of CWG Acquisition (and in the United States by CWG
Acquisition), on the terms and subject to the conditions set out in the
Offer Document to acquire the entire issued and to be issued share capital
of Canary Wharf other than those Canary Wharf Shares which CWG Acquisition
held or had contracted to acquire within the meaning of Section 428(5) of
the Companies Act at the date of the Offer;
'Offer Document' the document dated February 24, 2004 despatched on behalf of CWG
Acquisition and (in the United States) by CWG Acquisition containing the
terms and conditions of the Offer and, where appropriate, any other
document(s) containing terms and conditions of the Offer constituting the
full terms and conditions of the Offer;
'Official List' the Official List of the UK Listing Authority;
'Panel' the Panel on Takeovers and Mergers;
'Panel Executive' the Executive of the Panel on Takeovers and Mergers;
'Properties' any interest in land owned by the Wider Canary Wharf Group (other than in
premises not at the Canary Wharf Estate 'taken back' by any member of the
Wider Canary Wharf Group as a condition of a third party agreeing to accept
a lease at the Canary Wharf Estate);
'Regulatory Information Service' any of the services set out in schedule 12 of the listing rules of the UK
Listing Authority, being the competent authority for the purposes of Part
VI of the Financial Services and Markets Act 2000;
'Reichmann Agreement' an agreement dated December 17, 2003 (as amended) between Brascan, Trilon,
CWG Acquisition, RF Holdings, IPC Advisors Corporation, IPC Advisors
Limited and Mr Paul Reichmann;
'Relationship Agreement' the relationship agreement dated February 24, 2004 between CWG Acquisition,
CWG Acquisition Holdings, Brascan and Thames River, setting out the
contemplated arrangements between the parties following completion of the
Revised Offer;
'Revised Form of Acceptance' the revised form of acceptance and authority which will accompany the
Revised Offer Document;
'Revised Offer' the Offer as revised in accordance with the terms of this announcement
(comprising the Cash Offer, with, subject to certain conditions being
satisfied, the Loan Note Alternative, the Share Alternatives and the
Additional Share Election Facilities);
'Revised Offer Document' the revised offer document to be despatched on behalf of CWG Acquisition
and (in the United States) by CWG Acquisition containing the terms and
conditions of the Revised Offer and, where appropriate, any other document
(s) containing terms and conditions of the Revised Offer;
'RF Holdings' RF Holdings Limited;
'Royal Mail Pension Plan' Royal Mail Pensions Trustees Limited, as trustee of the Royal Mail Pension
Plan;
'Rule 16 EGM' a general meeting convened (or any adjournment thereof) for the independent
Canary Wharf Shareholders to consider and vote on the proposed investment
by Canary Investments in CWG Acquisition Holdings and the management and
consultancy arrangements relating to Mr Paul Reichmann, as described in the
Offer Document;
'SEC' the United States Securities and Exchange Commission;
'Share Alternatives' the Class A Share Alternative and/or the Class B Share Alternative;
'Silvestor' Silvestor UK Properties Limited, a company registered in England and Wales
with registered number 04872110;
'Substantial Interest' a direct or indirect interest in 20 per cent. or more of the equity share
capital (as defined in the Companies Act) of an undertaking;
'Supplemental Thames River the supplemental document relating to the application for the admission of
Document' the Class A Ordinary Shares to AIM and to the Thames River Shares, a copy
of which is to be sent to Canary Wharf Shareholders (other than in certain
overseas jurisdictions);
'Teachers'' Ontario Teachers' Pension Plan Board;
'Thames River' Thames River Office Properties PLC, a public limited company shares in
which, in accordance with the terms and conditions of the Revised Offer,
Canary Wharf Shareholders making valid elections under the Share
Alternatives and/or the Additional Share Election Facilities will receive
Thames River Shares;
'Thames River Document' the document dated February 24, 2004 relating to the application for the
admission of the Class A Ordinary Shares to AIM and to the Thames River
Shares, a copy of which was sent to Canary Wharf Shareholders (other than
in certain overseas jurisdictions) with the Offer Document;
'Thames River Shares' Class A Ordinary Shares and/or Class B Restricted Shares (as applicable);
'Trilon' Trilon International, Inc.;
'UK Listing Authority' the Financial Services Authority in its capacity as a competent authority
under the Financial Services and Markets Act 2000;
'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland and its dependent
territories;
'United States' or 'US' The United States of America, its territories and possessions, any State of
the United States of America and the District of Columbia and all other
areas subject to its jurisdiction;
'US Securities Act' the US Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder;
'Wider Canary Wharf Group' Canary Wharf and the subsidiaries and subsidiary undertakings of Canary
Wharf and associated undertakings (including any joint venture,
partnership, firm or company in which any member of the Canary Wharf Group
is interested or any undertaking in which Canary Wharf and such
undertakings (aggregating their interests) have a Substantial Interest; and
'Wider CWG Acquisition Group' Brascan Corporation, bcIMC, Teachers', The Trustees of the BT Pension
Scheme, Royal Mail Pensions Trustees Limited as trustee of the Royal Mail
Pension Plan, CWG Acquisition, CWG Acquisition Holdings, CWG Holdings,
Thames River and each of their parent undertakings, subsidiary
undertakings, associated undertakings and any other body corporate,
partnership, joint venture, firm or person in which any such undertakings
(aggregating their interests) have a Substantial Interest.