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CAPITAL & REGIONAL PLC
(Incorporated in the United Kingdom)
(UK company number 01399411)
LSE share code: CAL JSE share code: CRP
LEI: 21380097W74N9OYF5Z25
ISIN: GB00BL6XZ716
(“Capital & Regional” or “the Company”)
POSSIBLE CASH AND SHARE OFFER BY NEWRIVER REIT PLC FOR CAPITAL & REGIONAL
PLC
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS
AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO
CERTAINTY THAT ANY FIRM OFFER WILL BE MADE NOR AS TO THE TERMS ON WHICH ANY
FIRM OFFER MIGHT BE MADE
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS, PROSPECTUS
EQUIVALENT DOCUMENT OR SCHEME DOCUMENT
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
18 September 2024
POSSIBLE CASH AND SHARE OFFER
by
NEWRIVER REIT PLC
for
CAPITAL & REGIONAL PLC
proposed to be effected by means of a Scheme of Arrangement under Part 26 of the
Companies Act 2006
1. INTRODUCTION
Further to the announcement made by NewRiver REIT plc (“NewRiver”) on 23 May 2024 in relation
to a possible offer by NewRiver for Capital & Regional plc (“Capital & Regional”), the boards of
NewRiver and Capital & Regional are pleased to announce the principal terms and conditions of a
possible cash and share offer for Capital & Regional pursuant to which NewRiver would propose to
acquire the entire issued and to be issued share capital of Capital & Regional (the “Possible Offer”).
2. THE POSSIBLE OFFER
Under the terms of the Possible Offer (the “Possible Offer Terms”), Capital & Regional Shareholders
would be entitled to receive:
for each Capital & Regional Share • 31.25 pence in cash; and
• 0.41946 New NewRiver Shares
On the basis of the Closing Price per NewRiver Share of 74.5 pence on 22 May 2024 (being the last
Business Day before the Offer Period commenced (the “Offer Period Last Practicable Date”)), the
Possible Offer Terms imply a value of 62.5 pence per Capital & Regional Share and approximately
£147 million for the entire issued, and to be issued, ordinary share capital of Capital & Regional,
which represents a premium of approximately:
• 21 per cent. to the undisturbed Closing Price of a Capital & Regional Share of 51.5 pence on
the Offer Period Last Practicable Date;
• 21 per cent. to the three-month VWAP of 51.7 pence per Capital & Regional Share on the
Offer Period Last Practicable Date; and
• 18 per cent. to the six-month VWAP of 53.0 pence per Capital & Regional Share on the Offer
Period Last Practicable Date.
Under the Possible Offer Terms, Capital & Regional Shareholders would, in aggregate, receive
approximately 98,527,475 New NewRiver Shares and, immediately following completion of the
Combination, would own approximately 21 per cent. of the issued ordinary share capital of NewRiver
(based on the existing issued ordinary share capital of NewRiver and the issued and to be issued
ordinary share capital of Capital & Regional as at 17 September 2024, being the last Business Day
prior to the date of this announcement (the "Last Practicable Date")).
In addition, pursuant to the Possible Offer Terms:
• Capital & Regional Shareholders would be entitled to receive and retain an interim dividend
declared by Capital & Regional in respect of the six month period to 30 June 2024, which is
expected to be paid to entitled Capital & Regional Shareholders on 27 September 2024, with
such dividend not to exceed an amount of 2.85 pence per Capital & Regional Share (the
“Capital & Regional Interim Dividend”);
• Capital & Regional Shareholders would, once they have become NewRiver Shareholders
following completion of the Combination, be entitled to receive an interim dividend to be
declared by NewRiver in respect of the six month period to 30 September 2024, which is
expected to be declared in November 2024 and paid to NewRiver Shareholders on the register
of members of NewRiver on a record date to be set after the expected record time for the
Scheme to effect any Combination (the “Scheme Record Time”), with such interim dividend
to be in an amount of not less than 3.0 pence per NewRiver Share (the “NewRiver Interim
Dividend”). Therefore, Scheme Shareholders who retain their New NewRiver Shares
following completion of any Combination, and at the record date to be set for the NewRiver
Interim Dividend (assuming such record date falls after the expected Scheme Record Time),
would receive the NewRiver Interim Dividend; and
• if the record date for the NewRiver Interim Dividend is a date prior to the Scheme Record
Time, Capital & Regional would declare and pay, prior to the Scheme Record Time, a further
interim dividend of 1.3 pence per Capital & Regional Share which Capital & Regional
Shareholders would be entitled to receive and retain (the “Capital & Regional Additional
Dividend”).
If, on or after the date of this announcement and on or prior to the date on which any Combination
becomes effective, Capital & Regional announces, declares, makes or pays:
• any dividend, distribution or form of capital return in excess of the Capital & Regional Interim
Dividend;
• in the event that the record date for the NewRiver Interim Dividend is a date prior to the Scheme
Record Time, any dividend, distribution or form of capital return in excess of any Capital &
Regional Additional Dividend; and/or
• any other dividend, distribution or form of capital return,
(each a “Capital & Regional Additional Distribution”), Capital & Regional Shareholders would be
entitled to receive and retain such Capital & Regional Additional Distribution but NewRiver would be
entitled to reduce the consideration payable pursuant to the Possible Offer Terms by an amount
equivalent to all or any part of such Capital & Regional Additional Distribution.
It is proposed that the cash consideration payable by NewRiver pursuant to the Possible Offer Terms
would be funded from NewRiver’s existing cash resources and the net proceeds of the Placing. The
cash consideration payable pursuant to the Possible Offer Terms would be priced in pounds sterling
but Capital & Regional Shareholders on Capital & Regional’s South African Register would, as is
required as a consequence of Capital & Regional’s secondary listing on the JSE, receive any cash
consideration due to them under the Possible Offer Terms (as well as any Capital & Regional
Additional Dividend) in South African Rand. The Scheme Document would include further details in
relation to these currency exchanges. Further details in respect of the proposed treatment of Capital
& Regional Shareholders who hold their Capital & Regional Shares on Capital & Regional’s South
African Register would also be set out in the Scheme Document.
Any firm offer, if made, would constitute a “significant transaction” for NewRiver for the purposes of
the UK Listing Rules.
The announcement of any firm intention to make an offer for Capital & Regional by NewRiver under
Rule 2.7 of the Code is subject to the satisfaction or waiver of a number of customary pre-conditions,
including, amongst other things, finalisation of binding transaction documentation and the Placing,
waivable at NewRiver’s discretion. There can be no certainty that any firm offer will be made, even
if the pre-conditions are satisfied or waived. A further announcement will be made in due course.
For the purposes of Rule 2.5(a) of the Code, NewRiver reserves the right to make a firm offer for
Capital & Regional on less favourable terms than the Possible Offer Terms:
• with the agreement or recommendation of the Capital & Regional Board; or
• if a third party announces (after the date of this announcement) a firm intention to make an
offer under Rule 2.7 of the Code or a possible offer under Rule 2.4 of the Code for Capital &
Regional which, at that date, is of a value less than the value implied by the Possible Offer
Terms; or
• following the announcement of a whitewash transaction pursuant to the Code.
In addition, NewRiver reserves the right to introduce other forms of consideration and/or vary the
mix or composition of consideration of any firm offer, if made.
In accordance with Rule 2.6(a) of the Code, NewRiver is required, by not later than 5.00 p.m. (UK
time) / 6.00 p.m. (SA time) on 26 September 2024, either to announce a firm intention to make an
offer for Capital & Regional in accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer for Capital & Regional, in which case the announcement will be treated as a
statement to which Rule 2.8 of the Code applies.
In accordance with Rule 2.6(c) of the Code, the above deadline may be extended further at the
request of the Capital & Regional Board and with the consent of the Panel.
In accordance with Rule 2.6(d), this deadline will cease to apply if any third party has announced a
firm intention to make an offer for Capital & Regional.
There can be no certainty that any firm offer will be made for Capital & Regional, nor as to the terms
on which any offer, if made, will be made.
Any firm offer, if made, would be subject to the approval of Capital & Regional Shareholders and
NewRiver Shareholders would also be required to approve certain resolutions connected with the
allotment and issue of the New NewRiver Shares to Capital & Regional Shareholders pursuant to the
Possible Offer Terms at a general meeting of NewRiver Shareholders.
3. RATIONALE FOR THE POSSIBLE OFFER
NewRiver is a leading real estate investment trust specialising in buying, managing and developing
retail assets throughout the UK. Its community shopping centres and conveniently located retail
parks are occupied by tenants predominantly focused on providing essential goods and services.
Alongside its balance sheet assets, and in order to leverage its high-quality retail asset management
platform, NewRiver also has a Capital Partnership business, which generates recurring fee income
by providing asset management services to a high quality roster of institutional, private equity and
public sector partners. NewRiver’s objective is to own and manage the most resilient retail portfolio
in the UK, focused on core shopping centres, retail parks, and regeneration opportunities in order to
deliver long term attractive recurring income returns and capital growth for its shareholders.
Capital & Regional is a UK-focused retail property REIT specialising in shopping centres serving the
non-discretionary and value-orientated needs of their local communities. It has a track record of
delivering value enhancing retail and leisure asset management opportunities across a portfolio of
tailored in-town community shopping centres. Capital & Regional is listed on the Main Market of the
London Stock Exchange and has a secondary listing on the Main Board of the Johannesburg Stock
Exchange, with gross assets of £350 million at 30 June 2024 (based on the property valuation report
on Capital & Regional’s portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this
announcement) and a market capitalisation of approximately £144 million as at the Last Practicable
Date.
The NewRiver Board believes that there is a strong strategic, operational and financial rationale for
the Combination and that the Combined Group would benefit from enhanced scale, material cost
savings, mid- to high-teens accretion to UFFO per share, better access to acquisition and asset
management opportunities, improved debt optionality, expected cost of capital benefits and the
potential for increased share liquidity.
Following a challenging period for the UK retail real estate sector, in which capital values have
materially rebased, with the MSCI UK Shopping Centres Index declining by 53 per cent. between
June 2019 and June 2024, the NewRiver Board believes the Combination represents a unique
opportunity to create a significantly enlarged portfolio at an attractive point in the market cycle.
In particular, the NewRiver Board believes that the Combination would have the following benefits
for the Combined Group:
• Combination of high-quality, complementary assets – Capital & Regional's portfolio
comprises six community shopping centres predominantly located in London and South East
England and principally let to low-risk, essential and value-oriented retailers that are highly
complementary to NewRiver's existing portfolio. Both portfolios comprise retail assets that
are well-located to satisfy convenience-led shopping by an attractive customer base, with
over 70 per cent. of shoppers in both NewRiver’s and Capital & Regional’s assets travelling
less than five miles and over 55 per cent. of shoppers having above average post-tax net
incomes. NewRiver believes that the disposal of non-core assets in recent years and the
acquisition of The Gyle in Edinburgh in September 2023 have enhanced the quality and
complementary nature of Capital & Regional's remaining portfolio;
• Creation of a c. £0.9 billion retail portfolio - the Combined Group would have a portfolio
focused on community shopping centres and retail parks, generating annualised rent of
approximately £90 million, valued in aggregate at c. £889 million (based on the property
valuation reports for NewRiver prepared by Knight Frank and Colliers, as set out in Parts A
and B of Appendix 2 to this announcement and the property valuation report on Capital &
Regional’s portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this
announcement) (comprising 47 assets) and with assets under management of c. £2.4 billion
(comprising 84 assets);
• Low-risk tenant profile with an attractive income profile and opportunities to add
value - the Combined Group’s portfolio would benefit from complementary low-risk tenant
bases with low levels of tenant concentration. Approximately 87 per cent. of Capital &
Regional’s retail tenant base by rent is comprised of retail tenants focused on value and
essential goods and services, comparable to approximately 80 per cent. of NewRiver’s retail
tenant base. The Combined Group’s portfolio risk profile would be aligned with UK retail
and industrial sector averages, by reference to the projected cumulative tenant probability
of failure, with the benefit of a material yield premium and with an equivalent yield of
approximately 8.5 per cent. compared to the UK retail and industrial sector averages of 6.8
per cent. and 6.1 per cent., respectively. With an affordable occupational cost ratio of c.
8.8 per cent. and strong in-store sales growth, the combined portfolio would be well-
positioned for future rental growth, supported by ongoing asset management opportunities
within Capital & Regional’s portfolio, such as increasing occupancy and improving gross-to-
net ratios;
• Material cost savings and significant earnings accretion – the Combination would be
expected to unlock approximately £6.2 million of net pre-tax run-rate recurring annual cost
synergies, the majority of which would be expected to be effective shortly following
completion of the Combination with the full benefit of the synergies from the Combination
expected to be unlocked within 12 months of completion of the Combination on an
annualised basis. These cost savings would be expected to arise from the removal of
duplicative functions and the rationalisation of listing and other administrative and
operational expenses, as outlined in the Quantified Financial Benefits Statement set out in
this announcement. The Combination would be expected to generate a strong income return
and mid- to high-teens accretion to UFFO per share, enhancing the Combined Group’s
ability to pay a materially higher, covered dividend;
• Balance sheet strength maintained and debt maturity profile diversified - the
Combined Group would seek to preserve a robust and conservatively leveraged balance
sheet in line with NewRiver’s existing LTV guidance. On completion of the Combination, the
Combined Group would benefit from a weighted average cost of 3.5 per cent. across drawn
debt of £444 million with no maturity on drawn debt until January 2027 as well as continuing
to benefit from substantial available liquidity, improved debt optionality and expected cost
of capital benefits resulting from the increased scale of the Combined Group; and
• Increased share liquidity with expanded shareholder base – the Combination would
create an enlarged REIT with enhanced equity market profile and a broader shareholder
base, with shareholders benefitting from the potential for increased share liquidity and
larger weightings in key indices.
Portfolio valuations
NewRiver and its advisers have carried out extensive due diligence on Capital & Regional’s real estate
portfolio and operations. This has included, but is not limited to, a detailed review of corporate, real
estate and other information provided by Capital & Regional, site visits, sessions with Capital &
Regional’s senior management, rigorous internal valuation work and the commissioning of Knight
Frank, which values the majority of NewRiver’s existing portfolio, to conduct an external valuation of
the Capital & Regional portfolio in accordance with the latest version of the RICS Valuation – Global
Standards (the “Red Book”). Knight Frank’s external valuation report on Capital & Regional’s
portfolio, which is unqualified and has been prepared in accordance with the requirements of Rule
29 of the Code by a valuer who has had access to sufficient information to prepare such report, is
disclosed in Part C of Appendix 2 to this announcement.
In particular, the NewRiver Board has focused on understanding the impact of any Combination and,
in particular, the potential acquisition of Capital & Regional’s property portfolio, on the Combined
Group’s balance sheet and related financial metrics. Taking into account the Knight Frank valuation,
the NewRiver Board has determined that a valuation for NewRiver’s financial reporting purposes
would be £350 million. The NewRiver Board recognises that this is different to the Red Book valuation
provided by CBRE, as set out in Part D of Appendix 2 to this announcement. It is recognised that real
estate valuations, and the assumptions underlying them, are in some cases subjective and that
differences of opinion can and do occur between valuers. NewRiver does not contest the factual
accuracy of CBRE’s and Knight Frank’s valuations or the reasonableness of the assumptions adopted
by either valuer.
However, given that, in the event that a transaction were to be concluded, it would be the intention
that Knight Frank would conduct independent valuations of the Capital & Regional assets on behalf
of NewRiver for future financial reporting purposes, the NewRiver Board believes it appropriate to
incorporate the Knight Frank valuation when analysing the Combined Group’s balance sheet and
related financial metrics.
4. QUANTIFIED FINANCIAL BENEFITS STATEMENT
The NewRiver Directors, having undertaken a review and analysis of the potential cost savings of the
Combined Group, as well as taking into account factors they can influence, believe the Combined
Group could deliver shareholder value through the expected realisation of approximately £7.3 million
of gross pre-tax run-rate recurring annual cost synergies. These would be expected to be realised
primarily from consolidation of:
• board, senior management, central and support functions and savings related to Capital &
Regional’s status as a publicly traded company (which would no longer be required on a
standalone basis), together with third party support, including professional advisory fees,
which would be expected to contribute approximately 85 per cent. (approximately £6.2
million) of the gross pre-tax run-rate recurring annual cost synergies; and
• head office and other operating infrastructure such as technology and IT, which would be
expected to contribute approximately 15 per cent. (approximately £1.1 million) of the gross
pre-tax run-rate recurring annual cost synergies.
Potential areas of dis-synergy have been considered by the NewRiver Directors, with the principal
area of dis-synergy being income generated from property management services (equating to
approximately £1.1 million per annum), which is assumed to cease on completion of any Combination
because Capital & Regional provides these services to tenants but NewRiver would intend to align
this approach with its existing portfolio whereby these services are provided by a third party
specialist. Potential cost savings associated with the outsourcing of these services have been
reflected in the expected recurring cost synergy figure.
Accordingly, the NewRiver Directors believe that the Combined Group could deliver approximately
£6.2 million of net pre-tax run-rate recurring annual cost synergies.
The majority of the above cost synergies would be expected to be effective shortly following
completion of the Combination and it is expected that the full benefit of the synergies would be
unlocked within 12 months of completion of the Combination on an annualised basis.
The identified cost savings would be contingent on the completion of the Combination and would not
be achieved by either NewRiver or Capital & Regional independently. The estimated cost synergies
referred to above reflect both the beneficial elements and the relevant costs.
The NewRiver Directors have considered one-off costs in connection with realising the expected cost
synergies and estimated these to be approximately £2.9 million, which would predominantly be
incurred in the first 12 months following completion. For the avoidance of doubt, this approximate
£2.9 million is not factored into the £6.2 million of net pre-tax run-rate recurring annual cost
synergies referred to above.
These statements of estimated cost savings and synergies relate to future actions or circumstances
which, by their nature, involve risks, uncertainties and contingencies. As a consequence, in the event
that any firm offer were to be made and any Combination effected, the identified synergies and
estimated savings referred to may not be achieved, may be achieved later or sooner than estimated,
or those achieved could be materially different from those estimated. For the purposes of Rule 28 of
the Code, the statements of estimated cost savings and synergies contained in this announcement
are solely the responsibility of NewRiver and the NewRiver Directors. Any statement of intention,
belief or expectation for the Combined Group following any Combination becoming effective is also
an intention, belief or expectation of the NewRiver Directors and not of the Capital & Regional
Directors.
These statements are not intended as a profit forecast and should not be interpreted as such. No
part of these statements, or this announcement generally, should be construed or interpreted to
mean that the Combined Group’s earnings in the first year following any Combination becoming
effective, or in any subsequent period, would necessarily match or be greater than or be less than
those of NewRiver and/or Capital & Regional for the relevant preceding financial period or any other
period.
Appendix 3 to this announcement includes a copy of these statements of anticipated cost savings
and synergies arising from a Combination and provides underlying information and bases of belief
and calculation.
Appendix 3 to this announcement also includes reports from NewRiver’s reporting accountant, BDO,
and its lead financial adviser, Jefferies, in connection with the anticipated Quantified Financial
Benefits Statement, as required pursuant to Rule 28.1(a) of the Code, and provides underlying
information and bases of belief. Jefferies, as lead financial adviser to NewRiver, has provided such
report for the purposes of the Code stating that, in its opinion and subject to the terms of its report,
the Quantified Financial Benefits Statement, for which the NewRiver Directors are responsible, has
been prepared with due care and consideration.
Further information on the bases of belief supporting the Quantified Financial Benefits Statement,
including the principal assumptions and sources of information, is set out in Appendix 3 to this
announcement.
Each of BDO and Jefferies has given and not withdrawn its consent to the inclusion of its report on
the Quantified Financial Benefits Statement in Parts B and C, respectively, of Appendix 3 to this
announcement.
5. THE INDEPENDENT CAPITAL & REGIONAL DIRECTORS’ VIEWS ON THE POSSIBLE
OFFER
Norbert Sasse and Panico Theocharides, non-executive directors of Capital & Regional, are
Growthpoint’s nominated representatives on the Capital & Regional Board. As noted below,
Growthpoint, in its capacity as Capital & Regional’s largest shareholder, would be fully supportive of
a firm offer made for Capital & Regional by NewRiver in line with the Possible Offer Terms, if made,
and, accordingly, has irrevocably undertaken to vote, or procure the vote, in favour of the Scheme
at the Court Meeting and of the Capital & Regional Resolution(s) to be proposed at the Capital &
Regional General Meeting (or, in the event that any Combination would be implemented by way of a
Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer). As a result of this,
and of Growthpoint’s interest in Capital & Regional, Norbert Sasse and Panico Theocharides have not
participated in the Capital & Regional Directors’ deliberations in relation to the proposal put to them
in relation to the Possible Offer by NewRiver.
The Independent Capital & Regional Directors believe that a Combination would bring together two
high-quality, complementary portfolios of community-focused shopping centres and retail parks
capable of achieving significant strategic, operational and financial benefits as follows:
• by establishing a c. £0.9 billion (based on the property valuation reports for NewRiver
prepared by Knight Frank and Colliers, as set out in Parts A and B of Appendix 2 to this
announcement and the property valuation report on Capital & Regional’s portfolio prepared
by Knight Frank, as set out in Part C of Appendix 2 to this announcement) retail portfolio of
29 shopping centres, and 13 retail parks, with Capital & Regional Shareholders benefiting
from increased geographic and tenant diversification from the NewRiver portfolio;
• providing Capital & Regional Shareholders with exposure to retail parks, where vacancy rates
and rental growth are being driven by robust occupational demand;
• providing Capital & Regional Shareholders with significantly enhanced scale which should
have the following benefits:
o improved share liquidity, with a significantly improved free float and diversified
shareholder base;
o access to cheaper and more flexible sources of capital through an enlarged security
pool and greater income diversification; and
o larger weightings in key indices;
• providing material cost synergies of approximately £6.2 million on a net pre-tax run-rate
recurring annual cost basis, the majority of which would be expected to be effective shortly
following completion of any Combination; and
• giving Capital & Regional Shareholders the opportunity to share in the upside from the
Combined Group, with Capital & Regional Shareholders holding, in aggregate, approximately
21 per cent. of the issued share capital of NewRiver immediately following completion of the
Combination. Capital & Regional Shareholders would also benefit from partial liquidity from
the cash component of any firm offer, if made. On the basis of the Closing Price per NewRiver
Share of 74.5 pence on the Offer Period Last Practicable Date, the implied value of 62.5
pence per Capital & Regional Share under the Possible Offer Terms represents an attractive
premium of approximately:
o 21 per cent. to the undisturbed Closing Price of a Capital & Regional Share of 51.5
pence on the Offer Period Last Practicable Date;
o 21 per cent. to the three-month VWAP of 51.7 pence per Capital & Regional Share
on the Offer Period Last Practicable Date; and
o 18 per cent. to the six-month VWAP of 53.0 pence per Capital & Regional Share on
the Offer Period Last Practicable Date.
In addition, under the Possible Offer Terms, Capital & Regional Shareholders would also be entitled
to receive and retain (i) the Capital & Regional Interim Dividend of 2.85 pence per Capital & Regional
Share for the six months ended 30 June 2024 which is expected to be paid on 27 September 2024
as well as (ii) the NewRiver Interim Dividend (in the event that the record date for the NewRiver
Interim Dividend is a date falling after the expected Scheme Record Time). If the record date for the
NewRiver Interim Dividend is a date prior to the Scheme Record Time, Capital & Regional would
declare and pay, prior to the Scheme Record Time, the Capital & Regional Additional Dividend which
is economically equivalent to the NewRiver Interim Dividend, and Capital & Regional Shareholders
would be entitled to receive and retain such Capital & Regional Additional Dividend. The NewRiver
Interim Dividend or the Capital & Regional Additional Dividend (as the case may be) would therefore
represent an additional 1.3 pence per Capital & Regional Share of value uplift for Capital & Regional
Shareholders as a result of any Combination.
The Independent Capital & Regional Directors believe that Capital & Regional has a proven strategy,
high quality assets, a highly regarded internalised management team and strong prospects. While
the Independent Capital & Regional Directors consider that Capital & Regional can execute its
strategy on a standalone basis, the Independent Capital & Regional Directors accept that the business
continues to be impacted by scale and liquidity challenges and that developments in the UK REIT
sector are typically favouring larger REITs with greater liquidity, lower costs and better availability
of capital.
Growthpoint has recently indicated to the Independent Capital & Regional Directors that it has
undertaken a detailed, group-wide strategic and capital allocation review with the aim of simplifying
its business, identifying assets that are deemed to be non-core and directing its focus to its core
assets. Whilst Growthpoint maintains its belief that Capital & Regional is an attractive platform with
a high quality portfolio of assets and strong prospects, Capital & Regional has been identified by
Growthpoint as a non-core asset. The Independent Capital & Regional Directors note that this change
in Growthpoint’s position has an impact on Capital & Regional’s prospects. Further to this change in
Growthpoint’s position, Growthpoint and Capital & Regional received certain unsolicited expressions
of interest in exploring a possible offer for Capital & Regional. As at the date of this announcement,
NewRiver is the only interested party to have presented a comprehensive proposal to the
Independent Capital & Regional Directors and completed due diligence. Growthpoint has advised the
Independent Capital & Regional Directors that it believes a Combination would represent an attractive
opportunity to realise value for its investment in Capital & Regional. Given that Growthpoint has
agreed to support a firm offer made by NewRiver in line with the Possible Offer Terms, if made, by
way of an irrevocable undertaking over its c. 69 per cent. shareholding, the Independent Capital &
Regional Directors believe that a firm offer, if made by NewRiver, would be highly likely to succeed.
As there would be a share consideration component to any Combination under the Possible Offer
Terms, which would result in Capital & Regional Shareholders holding NewRiver Shares representing
21 per cent. of the enlarged issued share capital of NewRiver following completion of any firm offer,
if made, the Independent Capital & Regional Directors and their advisers have conducted due
diligence on NewRiver. This diligence included a review of corporate and legal matters and the use
of external independent real estate valuers and advisers to review NewRiver’s portfolio of assets.
This analysis was not, however, conducted in accordance with the latest version of the Red Book.
The Independent Capital & Regional Directors carefully considered the output from the reverse due
diligence in coming to their conclusions on the Possible Offer Terms.
The Independent Capital & Regional Directors have taken all of the above factors into consideration
when assessing the value and deliverability of any firm offer, if made by NewRiver, and have
concluded that the significant strategic, operational and financial benefits of a potential Combination
would be superior to the medium-term standalone prospects of the Capital & Regional business.
In addition to their consideration of the Possible Offer Terms, in their evaluation of NewRiver as a
suitable owner of Capital & Regional from the perspective of all stakeholders, the Capital & Regional
Directors have taken into account NewRiver’s intentions for the business in the event that it were to
make a firm offer for Capital & Regional. The Capital & Regional Directors note that NewRiver has
confirmed that the existing contractual and statutory employment rights, including in relation to
pensions, of all Capital & Regional's management and employees would be fully safeguarded in
accordance with applicable law in the event that NewRiver was to make a firm offer for Capital &
Regional.
Accordingly, following careful consideration of the above factors, including the intentions of
Growthpoint, the Independent Capital & Regional Directors would be prepared to recommend
unanimously to Capital & Regional Shareholders a firm offer to be made by NewRiver to acquire the
entire issued, and to be issued, share capital of Capital & Regional in the event that NewRiver was
to make such a firm offer on the Possible Offer Terms and otherwise on the terms and subject to the
conditions set out in this announcement and in the Rule 2.7 Announcement (as defined below).
Capital & Regional Board’s views on valuation of Capital & Regional portfolio
The Board of Capital & Regional notes the difference between the valuation carried out by CBRE as
at 30 June 2024 of £375 million and that commissioned by NewRiver’s Board by Knight Frank of £350
million.
The Board of Capital & Regional supports the CBRE valuation of the Capital & Regional portfolio but
acknowledges that real estate valuation by its nature is subjective and it is not unusual for
independent and highly regarded valuation firms to use differing sets of assumptions and opinions
to arrive at estimated market value.
6. SHAREHOLDER SUPPORT FOR THE POSSIBLE OFFER
Capital & Regional’s largest shareholder, Growthpoint Properties Limited (“Growthpoint”), would be
fully supportive of a firm offer made in line with the Possible Offer Terms, if made, and, accordingly,
has irrevocably undertaken to vote, or procure the vote, in favour of the Scheme at the Court Meeting
and of the Capital & Regional Resolution(s) to be proposed at the Capital & Regional General Meeting
(or, in the event that any Combination would be implemented by way of a Takeover Offer, to accept,
or procure the acceptance of, such Takeover Offer), in respect of 160,648,081 Capital & Regional
Shares, in aggregate, representing approximately 69 per cent. of the issued ordinary share capital
of Capital & Regional on the Last Practicable Date. Following completion of any Combination,
Growthpoint would be expected to hold NewRiver Shares equivalent to approximately 14 per cent.
of the enlarged issued ordinary share capital of NewRiver (based on the existing issued ordinary
share capital of NewRiver and the issued and to be issued ordinary share capital of Capital & Regional
as at the Last Practicable Date).
The obligations of Growthpoint under its irrevocable undertaking shall lapse and cease to have effect
on and from the following occurrences:
• a firm intention to make an offer announcement under Rule 2.7 of the Code is not released
by 5.00 p.m. (UK time) on 2 October 2024 (or such later time or date as Capital & Regional
and NewRiver may agree);
• NewRiver announces, with the consent of the Panel, that it does not intend to proceed with
the Combination and no new, revised or replacement Scheme or Takeover Offer (as
applicable) is announced by NewRiver in accordance with Rule 2.7 of the Code at the same
time;
• the Combination does not become effective, is withdrawn or lapses in accordance with its
terms, unless:
o the Combination is withdrawn or lapses solely as a result of NewRiver exercising its
right to implement the Combination by way of a Takeover Offer rather than a Scheme
or vice versa; or
o if the lapse or withdrawal either is not confirmed by NewRiver or is followed within
10 Business Days by an announcement under Rule 2.7 of the Code by NewRiver (or
a person acting in concert with it) to implement the Combination either by a new,
revised or replacement Scheme or Takeover Offer;
o any competing offer for Capital & Regional is made which becomes, or is declared,
unconditional or otherwise becomes effective; or
o an announcement is made in accordance with Rule 2.7 of the Code of a competing
offer (whether by means of a takeover offer within the meaning of section 974 of the
Companies Act 2006 or by way of a scheme of arrangement under section 895 of the
Companies Act 2006) for the ordinary shares in Capital & Regional, the value of the
consideration per Capital & Regional Share available under which at the time it is
made exceeds 68.75 pence per Capital & Regional Share and NewRiver does not
match that competing offer with a revised offer that is at least equivalent to the value
of such competing offer (in the reasonable opinion of the Capital & Regional Board,
having taken advice from its financial adviser(s)) within 10 days of such competing
offer being made.
Growthpoint has also undertaken not to sell any New NewRiver Shares which may be issued to it
under the Possible Offer Terms (i) for a period of five months following any Combination becoming
effective without the prior written consent of NewRiver and other than through NewRiver’s financial
adviser; and (ii) for a further period of four months thereafter, without first giving NewRiver
reasonable written notice of any such sale, in both cases subject to certain customary exceptions.
7. INFORMATION ON NEWRIVER
NewRiver is an established UK real estate investor, asset manager and developer which is listed on
the Equity Shares (Commercial Companies) category of the Official List of the FCA, has its ordinary
shares admitted to trading on the Main Market of the London Stock Exchange (ticker: NRR) and is a
constituent member of the FTSE All-Share and the FTSE EPRA Indices.
NewRiver’s community shopping centres and conveniently located retail parks are occupied by
tenants predominantly focused on providing essential goods and services. Alongside its balance sheet
assets, and in order to leverage its high-quality retail asset management platform, NewRiver also
has a Capital Partnership business, which generates recurring fee income by providing asset
management services to a high quality roster of institutional, private equity and public sector
partners. NewRiver’s objective is to own and manage the most resilient retail portfolio in the UK,
focused on core shopping centres, retail parks, and regeneration opportunities in order to deliver
long term attractive recurring income returns and capital growth for its shareholders. NewRiver is
one of the largest owners and managers of retail real estate assets in the UK with gross assets of
approximately £539 million as at 30 June 2024 and a market capitalisation of approximately £252
million as at the Last Practicable Date.
The NewRiver Group’s purpose and strategy is to deliver a reliable and recurring income led 10 per
cent. total accounting return by leveraging its significant knowledge and experience of the consumer,
retail and capital markets and is underpinned by its business model:
• Disciplined capital allocation – NewRiver assesses the long-term resilience of its assets,
with capital allocation decisions made by comparing risk-adjusted returns on its assets to
those available from other uses of capital. Capital allocation options include investing into
its existing portfolio, acquiring assets in the direct real estate market and share buybacks.
Assets can be acquired either on its balance sheet or in capital partnerships.
• Leveraging its platform – NewRiver leverages its market leading platform to enhance and
protect income returns through active asset management across its assets and on behalf
of its capital partnerships. The latter also provide enhanced returns through asset
management fee income and the opportunity to receive promote fees.
• Flexible balance sheet – NewRiver’s operating platform is underpinned by a conservative,
unsecured balance sheet. NewRiver is focused on maintaining its prudent covenant
headroom position and has access to significant cash reserves which provide it with the
flexibility to pursue opportunities which support its strategy for growth.
The NewRiver Group owns and/or manages a portfolio of approximately £2.0 billion, of which
approximately 74 per cent. is owned by its capital partners, and collects almost £190 million per
annum of rent from over 3,000 tenants across 43 shopping centres and 30 retail parks (including
Ellandi) (as at 30 June 2024).
The NewRiver Group’s portfolio totals approximately 5.9 million sq. ft. and an occupancy rate of
approximately 97 per cent. (as at 30 June 2024).
8. INFORMATION ON CAPITAL & REGIONAL
Capital & Regional is a UK-focused retail property REIT specialising in community shopping centres
listed on the Equity Shares (Commercial Companies) category of the Official List of the FCA. Its
ordinary shares are admitted to trading on the Main Market of the London Stock Exchange (ticker:
CAL) and it is a constituent member of the FTSE All-Share and the FTSE EPRA Indices. Capital &
Regional also has a secondary listing on the Main Board of the Johannesburg Stock Exchange (ticker:
CRP).
Capital & Regional has demonstrated a track record of delivering value-enhancing retail and leisure
asset management opportunities across its portfolio of tailored and centrally located community
shopping centres in Edinburgh, Hemel Hempstead, Ilford, Maidstone, Walthamstow and Wood Green.
Capital & Regional also owns and manages the UK’s largest indoor ski slope operator, Snozone, which
has centres in Milton Keynes, Yorkshire and Madrid (Spain), delivering £8.3 million of revenue for
the six months ended 30 June 2024. Capital & Regional focuses on shopping centres providing a
strong retail offering consisting of services and non-discretionary retail in locations with strong
transport links. Since the launch of Capital & Regional’s community shopping centre strategy in 2017,
Capital & Regional has seen a change in merchandising mix with ‘Value Fashion’ (24.0 per cent.),
Health and Beauty (18.9 per cent.) and ‘Food & Grocery’ (18.2 per cent.) presently representing the
largest segments across its portfolio. Capital & Regional had gross assets of £350 million as at 30
June 2024 (based on the property valuation report on Capital & Regional’s portfolio prepared by
Knight Frank, as set out in Part C of Appendix 2 to this announcement) and a market capitalisation
of approximately £144 million as at the Last Practicable Date.
Capital & Regional’s aim of driving sustainable growth, ultimately leading to sustained shareholder
returns through dividend payments, is the product of its long-term strategy to:
• define and own the community shopping centre category in the UK, guided by consumer
insight and consistent with global best practice;
• hold assets that sit at the heart of local communities, typically located adjacent to local
transport hubs enabling easy access via public transport as well as available car parking;
• focus around repositioning and re-purposing spaces to incorporate new stores and uses
that reflect the demands of the communities they serve; and
• ensure that Capital & Regional shopping centres provide the right offering to drive footfall
and dwell time, boosting retailer sales and thus increasing demand, improving rental
income, property values and consequently revenue and shareholder returns.
The Capital & Regional Group owns a portfolio of approximately £350 million (based on the property
valuation report on Capital & Regional’s portfolio prepared by Knight Frank, as set out in Part C of
Appendix 3 to this announcement) and collected £38.2 million of rent from over 399 occupiers across
six shopping centres for the six months ended 30 June 2024.
The Capital & Regional portfolio totals over 2.5 million sq. ft. of lettable space with 632 lettable units
and an occupancy rate of 94 per cent. (as at 30 June 2024).
9. CERTAIN RISKS ASSOCIATED WITH A FIRM OFFER
There would be certain risks associated with any firm offer, if made. These are summarised below:
Any firm offer, if made, would be subject to certain conditions which may not be satisfied
or waived
Completion of any firm offer, if made, would be subject to certain conditions (including, but not
limited to, those referred to at paragraph 13 below) (the “Conditions”) being satisfied (or, if
permitted, waived).
There is no guarantee that the Conditions would be satisfied in the necessary time frame (or waived,
if applicable) and any firm offer, if made, could, therefore, be delayed or not complete. Delay in
completing any firm offer would prolong the period of uncertainty for the NewRiver Group and the
Capital & Regional Group and both delay and failure to complete could result in the accrual of
additional costs to their businesses without any of the potential benefits of any Combination having
been achieved.
Therefore, the aggregate consequences of a material delay in completing, or failure to complete, any
firm offer, if made, could have a material adverse effect on the business, results of operations and
financial condition of the NewRiver Group and the Capital & Regional Group.
NewRiver’s ability to invoke certain conditions to any firm offer, if made, to either lapse such firm
offer or to delay completion of such firm offer would be subject to the Panel’s consent. The Panel
would need to be satisfied that the underlying circumstances were of “material significance” to
NewRiver in the context of any Combination and this is a high threshold to fulfil. Consequently, there
is a significant risk that NewRiver could be required to complete any firm offer, if made, even where
certain conditions have not been satisfied or where a material adverse change has occurred to the
Capital & Regional Group. If any of the events described above were to occur, they could result in
additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits
and synergies relating to any Combination identified by the parties or could otherwise impact
NewRiver’s strategy and operations.
If any firm offer, if made, completes, the integration of the Capital & Regional Group with
the NewRiver Group could result in operating difficulties and other adverse consequences
If any firm offer, if made, were to complete, the process of integrating Capital & Regional and its
subsidiaries into the NewRiver Group could create unforeseen operating difficulties and expenditures
and pose management, administrative and financial challenges. Specifically, integrating operations
and personnel and pre-completion or post-completion costs could prove more difficult and/or more
expensive than anticipated, thereby rendering the value of the Capital & Regional Group less than
the value paid. The integration of the Capital & Regional Group could require significant time and
effort on the part of NewRiver’s management. The challenges of integrating the Capital & Regional
Group could also be exacerbated by differences between the NewRiver Group’s and the Capital &
Regional Group’s operational and business culture, the need to implement cost-cutting measures,
difficulties in maintaining internal controls and difficulties in establishing control over cash flows and
expenditures. Such difficulties in successfully integrating Capital & Regional could have an adverse
effect on the Company’s financial condition and results of operations.
The NewRiver Group could fail to realise the business growth opportunities, revenue
benefits, cost savings, operational efficiencies and other benefits anticipated from any firm
offer, if made
As stated at paragraph 3 above, the NewRiver Board believes that there is a strong strategic,
operational and financial rationale for a Combination and that the Combined Group would benefit
from enhanced scale, material cost savings, mid- to high-teens accretion to earnings per share,
better access to acquisition and asset management opportunities, improved debt optionality,
expected cost of capital benefits and the potential for increased share liquidity. However, these
benefits may not be realised, for various reasons, including because the assumptions upon which the
NewRiver Board determined the process of integration and the proposed cost savings could prove to
be incorrect.
Under any of these circumstances, the cost savings, accretion to earnings per share, better access
to acquisition and asset management opportunities, improved debt optionality, expected cost of
capital benefits and the potential for increased share liquidity anticipated by the NewRiver Board to
result from any firm offer, if made, may not be achieved as expected, or at all, or may be delayed,
or may involve additional costs. To the extent that the NewRiver Group incurs higher integration
costs or achieves lower revenue benefits or fewer cost savings than expected, the NewRiver Group’s
operating results, and prospects and the price of NewRiver Shares could suffer.
10. CURRENT TRADING AND OUTLOOK
NewRiver
For details of NewRiver’s current trading and prospects, please refer to NewRiver’s First Quarter
Company Update for the period from 1 April 2024 to 30 June 2024, released on 5 August 2024. A
copy of the update is available on NewRiver's website at https://www.nrr.co.uk/investors/regulatory-
news.
Capital & Regional
For details of Capital & Regional’s current trading and prospects, please refer to Capital & Regional’s
Half Year Results to 30 June 2024, released on 1 August 2024. A copy of the announcement is
available on Capital & Regional's website at https://capreg.com/wp-content/uploads/2024/09/cr-
interim-press-release-hy24-final-aug-24.pdf.
11. INTENTIONS FOR THE COMBINED GROUP
Listing and registered office
Following any Combination becoming effective, NewRiver would remain listed on the Equity Shares
(Commercial Companies) category of the Official List and admitted to trading on the Main Market of
the London Stock Exchange. The registered office of NewRiver would remain in London.
REIT status
Both the NewRiver Group and the Capital & Regional Group fall within the UK REIT regime and benefit
from the tax efficiencies provided by that regime. The Combined Group would be expected to fall
within the UK REIT regime and the relevant tax measures would continue to apply to the Combined
Group.
Board and governance arrangements
Applications would be made to: (i) the FCA to cancel the listing and trading of the Capital & Regional
Shares on the Equity Shares (Commercial Companies) category of the Official List and Main Market
of the London Stock Exchange; and (ii) the JSE for the cancellation of the listing and trading of the
Capital & Regional Shares on the Main Board of the JSE. Consequently, while NewRiver recognises
the skills and experience of the Capital & Regional Board, Capital & Regional would no longer require
listed company governance structures following any Combination and, accordingly, it is intended that
the chair and other non-executive Capital & Regional Directors would step down from the Capital &
Regional Board and the boards of Capital & Regional’s subsidiaries (as applicable) with effect from
any Combination becoming effective.
In addition, as announced by Capital & Regional on 8 May 2024, Lawrence Hutchings has resigned
from his role as Chief Executive of Capital & Regional to take up a new role at Workspace Group PLC
and it is intended that he would also step down from the Capital & Regional Board and the boards of
Capital & Regional’s subsidiaries (as applicable). It is also intended that Stuart Wetherly (Capital &
Regional Group Finance Director) would step down from the Capital & Regional Board and the boards
of Capital & Regional’s subsidiaries (as applicable) on completion of a period of handover. It is
anticipated that the current board and management structure of NewRiver would become the board
and management structure of the Combined Group on completion of any Combination.
Portfolio
The NewRiver Directors believe that Capital & Regional’s portfolio of community shopping centres
would be complementary to NewRiver’s existing portfolio and therefore would intend to implement
individual business plans in respect of each asset and hold them within NewRiver’s Core Shopping
Centre portfolio. NewRiver has a track record of disciplined capital recycling based on risk-adjusted
forward-looking returns and would intend to monitor the performance of Capital & Regional’s assets
in the 12 months post-completion of any Combination and, subject to market conditions, may
consider the disposal of Capital & Regional’s smaller shopping centres on a selective basis which
would reduce the Combined Group’s leverage.
Snozone operates three indoor snow sports centres in the UK and Spain and is a separate operating
segment of Capital & Regional with its own management team. While Snozone would be expected to
continue operating immediately post-completion of any Combination broadly as it does as at the date
of this announcement, NewRiver is a specialist owner and manager of retail real estate and therefore
it would be NewRiver’s intention to undertake a strategic review of the Snozone business within the
first 12 months post-completion of any Combination to establish whether it is a core hold for
NewRiver or whether it would be more appropriate to recycle capital through its disposal. As at the
date of this announcement, no decisions have been taken in relation to the Snozone business.
Management, employees, pensions, locations of business and research and development
Across the Combined Group, there would be duplicated costs and functions following completion of
any Combination. NewRiver would therefore intend to seek operating cost and synergy benefits from
the rationalisation of the board (as outlined above), and overlapping group functions including certain
senior management.
In order to achieve the full potential benefits of any Combination, including the expected cost
synergies, the NewRiver Directors would continue to undertake a detailed business, operational and
administrative review of the Combined Group to assess how it can work most effectively and
efficiently following completion of any Combination. This evaluation would include an assessment of
the overlapping group functions of Capital & Regional and NewRiver, together with consolidating
support and asset and property management functions (including the employment of certain Capital
& Regional employees currently in asset and property management roles potentially being
transferred by operation of law to one of NewRiver’s current outsourced service providers), as well
as removing duplicated costs in respect of certain corporate functions related to Capital & Regional's
status as a listed and publicly traded company, which would no longer be required by the Combined
Group. Any Combination would be likely to lead to a significant reduction in duplicative senior,
corporate and operational Capital & Regional Group headcount, impacting a minority of total Capital
& Regional Group employee headcount. Capital & Regional Group headcount would be further
reduced by the proposed transfer of asset and property management staff by operation of law to one
of NewRiver’s current outsourced service providers (as referred to above).
NewRiver would intend to consolidate the head office functions of NewRiver and Capital & Regional
so that the Combined Group could operate from a single location. It is anticipated that the Combined
Group would operate from NewRiver’s existing head office at 89 Whitfield Street, London, and that
Capital & Regional’s head office at Strand Bridge House, Strand, London, would, in due course, be
sub-let. It is not envisaged that material changes would arise in relation to NewRiver’s existing
employees and headcount as a result of any Combination.
The proposals referred to above would remain subject to a fair and transparent process in accordance
with applicable legal requirements (including, but not limited to, where required, any applicable prior
information and consultation obligations).
The Combined Group would intend to safeguard existing statutory and contractual employment rights
following completion of any Combination and NewRiver would not intend to make any material
changes in the conditions of employment of existing Capital & Regional employees, including with
respect to pension contributions.
Save as set out above, NewRiver would not otherwise intend any redeployment of Capital &
Regional's fixed asset base. Owing to the nature of its business, Capital & Regional has no research
and development function.
Neither Capital & Regional nor NewRiver have an existing defined benefit pension scheme.
Dividends
Following the completion of any Combination, the Combined Group would continue to pursue
NewRiver's dividend policy of paying dividends equivalent to 80 per cent. of UFFO, with any top-up,
including where required to ensure compliance with the REIT regime, to be confirmed at the
Combined Group’s full year results.
12. PRE-CONDITIONS TO THE MAKING OF ANY FIRM OFFER
The making of any firm offer for the entire issued, and to be issued, ordinary share capital of Capital
& Regional by NewRiver is subject to and conditional upon the following:
• the satisfactory completion of the Placing (in accordance with the terms, and subject to the
conditions, set out in the Placing Launch Announcement) (the “Placing Condition”); and
• the receipt by NewRiver of confirmation from the Independent Capital & Regional Directors
of their:
o intention, in the event that a firm offer is made by NewRiver on the Possible Offer
Terms and otherwise on the terms and subject to the conditions set out this
announcement and in the Rule 2.7 Announcement (as defined below), to provide
their unanimous, unqualified and unconditional recommendation to Capital &
Regional Shareholders to vote, or procure the vote, in favour of the Scheme at the
Court Meeting and of the Capital & Regional Resolution(s) to be proposed at the
Capital & Regional General Meeting (or, in the event that any Combination would be
implemented by way of a Takeover Offer, to accept, or procure the acceptance of,
such Takeover Offer) (having been advised by Capital & Regional’s financial advisers
that the financial terms of such firm offer are fair and reasonable); and
o agreement that an announcement of a firm offer by NewRiver under Rule 2.7 of the
Code in substantially agreed form as at the date of this announcement (a “Rule 2.7
Announcement”) on the Possible Offer Terms and otherwise on the terms and
subject to the conditions set out in this announcement containing such
recommendation may be released.
If either of the above pre-conditions is not satisfied or, if applicable, waived, NewRiver will be under
no obligation to make a firm offer for Capital & Regional and to release a Rule 2.7 Announcement.
However, there can be no certainty that a firm offer will ultimately be made, even if the above pre-
conditions are satisfied or, if applicable, waived.
The Independent Capital & Regional Directors are not obliged to recommend any firm offer by
NewRiver on the Possible Offer Terms. It is therefore possible that the Independent Capital & Regional
Directors could decide against making such a recommendation, notwithstanding that the Placing
Condition is satisfied or, if applicable, waived, in which case NewRiver would not be required to make
a firm offer for Capital & Regional and release a Rule 2.7 Announcement.
13. CONDITIONS
It is intended that any firm offer, if made, would be implemented by means of a Court-sanctioned
scheme of arrangement under Part 26 of the Companies Act. NewRiver would reserve the right to
effect any firm offer, if made, by way of a Takeover Offer, subject to the consent of the Panel.
Any firm offer, if made, would be subject to the following conditions:
• the receipt of approval from the FCA to the proposed change of control of a regulated entity
within the Capital & Regional Group;
• a resolution to approve the Scheme being passed by the requisite majority of Capital &
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