Regulatory Filings • Apr 19, 2024
Regulatory Filings
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. THIS DOCUMENT CONTAINS A PROPOSAL WHICH, IF IMPLEMENTED, WILL RESULT IN THE CANCELLATION OF THE LISTING OF REDROW SHARES ON THE PREMIUM LISTING SEGMENT OF THE OFFICIAL LIST AND TRADING OF REDROW SHARES ON THE LONDON STOCK EXCHANGE'S MAIN MARKET FOR LISTED SECURITIES. PART II (EXPLANATORY STATEMENT) OF THIS DOCUMENT COMPRISES AN EXPLANATORY STATEMENT IN COMPLIANCE WITH SECTION 897 OF THE COMPANIES ACT 2006.
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If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent professional adviser who, if you are taking advice in the United Kingdom, is authorised pursuant to FSMA or, if you are in a territory outside the United Kingdom, is an appropriately authorised independent financial adviser.
If you sell or have sold or otherwise transferred all of your Redrow Shares, please send this Document together with the accompanying documents (other than documents or forms personal to you) at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. However, such documents should not be forwarded, distributed or transmitted in or into or from any jurisdiction in which such act would constitute a violation of the relevant laws of such jurisdiction. If you sell or have sold or otherwise transferred only part of your holding of Redrow Shares, you should retain these documents and contact the bank, stockbroker or other agent through whom the sale or transfer was effected. If you have recently purchased or otherwise been transferred Redrow Shares in certificated form, notwithstanding receipt of this Document from the transferor, you should contact Computershare through the Shareholder Helpline on the relevant telephone number set out below to obtain personalised Forms of Proxy.
The release, publication or distribution of this Document and any accompanying documents (in whole or in part) in or into or from jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons into whose possession this Document comes should inform themselves about, and observe, any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.
Application will be made by Barratt for the New Barratt Shares to be admitted to the premium listing segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and to trading on the London Stock Exchange's Main Market.
of
and
to be effected by means of a scheme of arrangement of Redrow plc under Part 26 of the Companies Act 2006
This Document (including all information incorporated into this Document by reference) should be read as a whole and in conjunction with the Forms of Proxy. This Document should also be read in conjunction with the Barratt Prospectus and Barratt Circular, which contain further information on Redrow, Barratt and the New Barratt Shares and have been prepared in accordance with the Prospectus Rules made under section 73A of the Financial Services and Markets Act 2000.
Your attention is drawn to Part I (Letter from the Chair of Redrow plc) of this Document, which contains the unanimous recommendation of the Redrow Directors that you vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. A letter from Barclays and Peel Hunt explaining the Scheme appears in Part II (Explanatory Statement) of this Document and constitutes an explanatory statement in compliance with section 897 of the Companies Act.
Notices of the Court Meeting and the General Meeting, both of which will be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY on 15 May 2024, are set out in Part X (Notice of Court Meeting) and Part XI (Notice of General Meeting), respectively, of this Document. The Court Meeting will start at 11.00 a.m. on that date and the General Meeting at 11.15 a.m. or as soon thereafter as the Court Meeting concludes or is adjourned.
Certain terms used in this Document are defined in Part IX (Definitions) of this Document. References to times in this Document are to London, United Kingdom time unless otherwise stated.
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The action to be taken by Redrow Shareholders is set out on pages 45 to 47 and at paragraph 21 of Part II (Explanatory Statement) of this Document.
Redrow Shareholders are asked to complete and return the enclosed BLUE and WHITE Forms of Proxy (or appoint a proxy electronically as referred to in this Document) in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received by Redrow's Registrars, Computershare, not later than 48 hours before the relevant Meeting (or, in the case of any adjournment, not later than 48 hours before the time fixed for the adjourned Meeting, in each case excluding any part of such 48 hour period falling on a day that is not a working day). Redrow Shareholders who hold Redrow Shares in CREST may also appoint a proxy using CREST by following the instructions set out on pages 10 to 12 and 45 to 47 of this Document.
In the case of the Court Meeting, if the BLUE Form of Proxy for the Court Meeting is not lodged by 11.00 a.m. on 13 May 2024, it may be handed to Computershare or to the Chair of the Court Meeting at the Court Meeting at any time before the commencement of the Court Meeting. In the case of the General Meeting, if the WHITE Form of Proxy for the General Meeting is not lodged by 11.15 a.m. on 13 May 2024 (by post or transmission of a proxy appointment or voting instruction online at www.investorcentre.co.uk/eproxy, through CREST or via the Proxymity platform (for institutional investors)), it will be invalid. The completion and return of the Forms of Proxy will not prevent you from attending, asking questions and voting (and/or, in the case of the Court Meeting, raising any objections) at the Court Meeting or the General Meeting, if you are entitled to and wish to do so.
If you have any questions about this Document, the Court Meeting or the General Meeting, or are in any doubt as to how to complete the Forms of Proxy or to submit your proxies electronically or online, please contact the Company's Registrars, Computershare, by calling the Shareholder Helpline on +44 (0)370 707 1257. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales). Calls from outside the UK will be charged at the applicable international rate. Please note that calls may be monitored or recorded and Computershare cannot provide advice on the merits of the Combination or the Scheme or give any financial, legal or tax advice.
Barclays Bank PLC, acting through its Investment Bank ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Redrow and no one else in connection with the subject matter of this Document and will not be responsible to anyone other than Redrow for providing the protections afforded to clients of Barclays nor for providing advice in relation to the subject matter of this Document.
In accordance with the Takeover Code, normal United Kingdom market practice and Rule 14e-5(b) of the US Exchange Act, Barclays and its affiliates will continue to act as exempt principal trader in Redrow securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Takeover Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser and corporate broker to Redrow and for no one else in connection with the matters referred to in this Document and will not be responsible to any person other than Redrow for providing the protections afforded to clients of Peel Hunt, nor for providing advice in relation to the matters referred to herein. Neither Peel Hunt nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with the matters referred to in this Document, or otherwise.
UBS AG London Branch ("UBS") is authorised and regulated by the Financial Market Supervisory Authority in Switzerland. It is authorised by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority in the United Kingdom. UBS is acting exclusively as sole corporate broker, lead financial adviser and sole sponsor to Barratt and no one else in connection with the Combination. In connection with such matters, UBS will not regard any other person as its client, nor will it be responsible to any other person for providing the protections afforded to its clients or for providing advice in relation to the Combination, the contents of this Document or any other matter referred to herein.
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Morgan Stanley & Co. International plc ("Morgan Stanley"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK is acting as financial adviser exclusively for Barratt and no one else in connection with the Combination. In connection with the Combination, Morgan Stanley, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any person other than Barratt for providing the protections afforded to clients of Morgan Stanley or for providing advice in connection with the Combination or any other matter referred to herein.
No person has been authorised to give any information or make any representations other than those contained in this Document and, if given or made, such information or representations must not be relied upon as having been authorised by Redrow, the Redrow Directors, Barratt, the Barratt Directors or by Barclays, Peel Hunt, UBS, Morgan Stanley or any other person involved in the Combination. Neither the delivery of this Document nor holding the Meetings, the Court Sanction Hearing, or filing the Court Order shall, under any circumstances, create any implication that there has been no change in the affairs of the Redrow Group or the Barratt Group since the date of this Document or that the information in, or incorporated into, this Document is correct as at any time subsequent to its date.
This Document and any accompanying documents have been prepared for the purposes of complying with English law and the Takeover Code and information disclosed herein may not be the same as that which would have been disclosed if this Document and any accompanying documents had been prepared in accordance with the laws of any other jurisdiction.
The statements contained in this Document are made as at the date of this Document, unless some other time is specified in relation to them, and service of this Document shall not give rise to any implication that there has been no change in the facts set forth in this Document since such date. Nothing in this Document shall be deemed to be a forecast, projection or estimate of the future financial performance of Redrow or Barratt or the Combined Group except where otherwise stated. Neither Redrow nor Barratt intends, or undertakes any obligation, to update any information contained in this Document, except as required by applicable law, the Takeover Code or any other applicable regulation.
This Document does not constitute a prospectus or prospectus-equivalent document or a prospectus exempted document. In the event of any ambiguity or conflict between this Document and the Barratt Prospectus and/or Barratt Circular in respect of the terms and conditions of the Combination or the Scheme, this Document shall prevail.
Redrow Shareholders should not construe the contents of this Document as legal, taxation or financial advice, and should consult with their own advisers as to the matters described in this Document.
This Document (including information incorporated by reference in this Document), oral statements made regarding the Combination, and other information published by Redrow, Barratt or any member of their respective groups contain statements which are, or may be deemed to be, "forward-looking statements". Such forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and on numerous assumptions regarding the business strategies and the environment in which Barratt, Redrow or the Combined Group will operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. The forward-looking statements contained in this Document relate to Barratt, Redrow or the Combined Group's future prospects, developments and business strategies, the expected timing and scope of the Combination and other statements other than historical facts. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "will look to", "would look to", "plans", "prepares", "anticipates", "expects", "is expected to", "is subject to", "budget", "scheduled", "forecasts", "synergy", "strategy", "goal", "cost-saving", "projects" "intends", "may", "will", "shall" or "should" or their negatives or other variations or comparable terminology. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Barratt's, Redrow's or the Combined Group's operations and potential synergies resulting from the Combination; and (iii) the effects of global economic conditions and governmental regulation on Barratt's, Redrow's or the Combined Group's business. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. These events and circumstances include changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates, future business combinations or disposals, and any epidemic, pandemic or disease outbreak. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Such forward looking statements should therefore be construed in the light of such factors.
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Neither Redrow, Barratt, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Document will actually occur. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.
Specifically, statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature involve, risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Due to the scale of the Combined Group, there may be additional changes to the Combined Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost synergies may be materially greater or less than those estimated.
The forward-looking statements speak only at the date of this Document. All subsequent oral or written forward-looking statements attributable to Barratt or Redrow, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.
Barratt and Redrow expressly disclaim any obligation to update such statements other than as required by law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.
This Document has been prepared for the purposes of complying with English law, the Takeover Code, the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules and the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this Document had been prepared in accordance with the laws of jurisdictions outside England and Wales.
The availability of the Combination to Redrow Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. It is the responsibility of any person outside the United Kingdom into whose possession this Document comes to satisfy themselves as to the full observance of the laws of the relevant jurisdiction in connection with the Combination, including the obtaining of any governmental, exchange control or other consents which may be required and/or compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes or levies due in such jurisdiction.
The release, publication or distribution of this Document in or into or from jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Combination disclaim any responsibility or liability for the violation of such restrictions by any person. Neither this Document nor any of the accompanying documents do or are intended to constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in relation to the Combination or the Scheme or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful.
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Unless otherwise determined by Barratt or required by the Takeover Code and permitted by applicable law and regulation, the Combination will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Combination by any such use, means, instrumentality or form (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) within any Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Document and all documents relating to the Combination are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Document and all documents relating to the Combination (including custodians, nominees and trustees) must observe these restrictions and must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. Doing so may render invalid any purported vote in respect of the Combination.
This Document does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for shares in any jurisdiction in which such offer or solicitation is unlawful.
The Combination relates to shares of an English company and is proposed to be made by means of a scheme of arrangement under English law. US Redrow Shareholders should note that the Scheme relates to the shares of a UK company and will be governed by English law. Neither the US proxy solicitation rules nor the tender offer rules under the US Exchange Act will apply to the Combination and the Scheme. Moreover, the Combination and the Scheme are subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules.
Financial information included in this Document has been prepared in accordance with accounting standards applicable in the UK and may not be comparable to financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Barratt were to exercise its rights to implement the Combination by means of a Takeover Offer and determines to extend the offer into the United States, such Takeover Offer would be made in compliance with all applicable United States laws and regulations. Such a Takeover Offer would be made in the United States by Barratt and no one else.
Neither this Document nor any of the accompanying documents do or are intended to constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in relation to the Combination or the Scheme or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful.
Neither the SEC nor any securities commission of any state of the US nor any other US regulatory authority has approved the Combination, passed upon the fairness of the Combination or the adequacy or accuracy of this Document, the Barratt Prospectus, the Barratt Circular or any accompanying documents. Any representation to the contrary is a criminal offence in the US.
In accordance with the Takeover Code and normal UK practice, and pursuant to Rule 14e-5(b) of the US Exchange Act, in the event that the Combination is implemented by way of a Takeover Offer: (a) Barratt or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, shares or other securities of Redrow outside of the US, other than pursuant to the Combination, until the date on which the Combination and/or Scheme becomes effective, lapses or is otherwise withdrawn; and (b) Barclays and its affiliates will continue to act as exempt principal traders in Redrow securities on the London Stock Exchange. If purchases or arrangements to purchase were to be made as contemplated by clause (a) of this paragraph, they would occur either in the open market at prevailing prices or in private transactions at negotiated prices, and any information about such purchases or arrangements to purchase would be disclosed as required in the UK, would be reported to a Regulatory Information Service and would be available on the London Stock Exchange website at www.londonstockexchange.com. Purchases contemplated by clause (b) of this paragraph that are required to be made public in the United Kingdom pursuant to the Takeover Code would be reported to a Regulatory Information Service and would be available on the London Stock Exchange website at www.londonstockexchange.com.
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The New Barratt Shares have not been, and will not be, registered with the SEC under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the New Barratt Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into or from the United States absent registration under the US Securities Act or an exemption therefrom. The New Barratt Shares are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Redrow Shareholders (whether or not US persons) who are or will be affiliates (within the meaning of the US Securities Act) of Barratt or Redrow prior to, or of Barratt after, the Effective Date will be subject to certain US transfer restrictions to the New Barratt Shares received pursuant to the Scheme.
For the purpose of qualifying for the exemption from the registration requirements of the US Securities Act (as described above), Redrow will advise the Court through counsel that its sanctioning of the Scheme will be relied upon by Barratt as an approval of the Scheme following a hearing on its fairness to Scheme Shareholders, at which hearing all such holders are entitled to attend in person or through representation to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all such holders.
The Combination is not structured in order to achieve any particular United States (or other non-UK) tax treatment for Redrow Shareholders, non-UK tax considerations have not been not taken into account in structuring the Combination, and no analysis has been conducted regarding the United States (or other non-UK) tax treatment of the Combination to Redrow Shareholders or otherwise. Each Redrow Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of the Combination applicable to them, including under applicable United States state and local, as well as overseas and other, tax laws.
Redrow and Barratt are organised under English law. Some or all of the officers and directors of Redrow and Barratt are residents of countries other than the United States. It may not be possible to sue Redrow or Barratt or their respective directors or officers in a non-US court for violations of US securities laws. It may be difficult to compel Redrow, Barratt and/or their respective affiliates, directors and officers to subject themselves to the jurisdiction and judgment of a US court.
Other than the Redrow Profit Forecast set out in Part VI (Redrow Profit Forecast) of this Document, no statement in this Document (including any statement of estimated costs savings or synergies) is intended as a profit forecast or estimate for any period, and no statement in this Document should be interpreted to mean that earnings or earnings per share for Barratt or Redrow, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Barratt or Redrow, as appropriate. Other than the Quantified Financial Benefits Statement set out in Appendix I (Quantified Financial Benefits Statement) of this Document, no statement in this Document (including any statement of estimated costs savings or synergies) is intended as a quantified financial benefits statement for the purposes of the Takeover Code.
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
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Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. on the Business Day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.
Please be aware that addresses, electronic addresses and certain other information provided by Redrow Shareholders, persons with information rights and other relevant persons for the receipt of communications from Redrow may be provided to Barratt, members of the Barratt Group and/or their respective advisers during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code.
In accordance with Rule 26.1 of the Takeover Code, a copy of this Document, together with the Barratt Prospectus and Barratt Circular, and any document incorporated by reference, will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Redrow's website at https://investors.redrowplc.co.uk/offer-for-redrow and Barratt's website at https://www.barrattdevelopments.co.uk/investors/barratt-redrow by no later than 12.00 noon (London time) on the day following the date of publication of this Document. Contents of these websites are not incorporated into, and do not form part of, this Document.
You may request a hard copy of this Document (and any information incorporated by reference in this Document) by contacting Redrow's Registrars, Computershare, between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales) on +44 (0)370 707 1257 or by submitting a request in writing to Computershare, The Pavilions, Bridgwater Road, Bristol BS99 6ZY.
For persons who receive a copy of this Document in electronic form or via a website notification, a hard copy of this Document will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Combination should be sent in hard copy form, again by contacting the Shareholder Helpline using the foregoing details.
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Certain figures included in this Document have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of figures that precede them.
Appendix I (Quantified Financial Benefits Statement) of this Document sets out the Quantified Financial Benefits Statement and contains details of, and bases of calculation of, the anticipated financial benefits of the Combination. On 7 February 2024, PwC, as reporting accountant to Barratt, and UBS and Morgan Stanley, as financial advisers to Barratt, provided the reports relating to the Quantified Financial Benefits Statement required under Rule 28.1(a) of the Takeover Code. Copies of their reports were included in Appendix IV of the 2.7 Announcement. Each of PwC, UBS and Morgan Stanley has confirmed to Barratt that their respective reports produced in connection with the Quantified Financial Benefits Statement continue to apply.
For the purposes of Rule 28 of the Takeover Code, the Quantified Financial Benefits Statement contained in this Document is the responsibility of Barratt and the Barratt Directors, and not of Redrow or the Redrow Directors. Any statement of intention, belief or expectation for the Combined Group following the Effective Date is an intention, belief or expectation of the Barratt Directors and not of the Redrow Directors.
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. No statement in the Quantified Financial Benefits Statement should be construed as a profit forecast or interpreted to mean that the Combined Group's earnings in the first full year following the Effective Date, or in any subsequent period, would necessarily match or be greater than or less than those of Barratt and/or Redrow for the relevant preceding financial period or any other period.
This Document is dated 19 April 2024.
| Action to be Taken | 10 | |
|---|---|---|
| Expected Timetable of Principal Events | 14 | |
| Part I | Letter from the Chair of Redrow plc | 16 |
| Part II | Explanatory Statement | 29 |
| Part III | Conditions to the Implementation of the Scheme and to the Combination | 48 |
| Part IV | The Scheme of Arrangement | 60 |
| Part V | Financial and Ratings Information | 71 |
| Part VI | Redrow Profit Forecast | 72 |
| Part VII | United Kingdom Taxation | 74 |
| Part VIII | Additional Information on Redrow and Barratt | 76 |
| Part IX | Definitions | 97 |
| Part X | Notice of Court Meeting | 108 |
| Part XI | Notice of General Meeting | 110 |
| Appendix I | Quantified Financial Benefits Statement | 115 |
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These pages should be read in conjunction with the rest of this Document, the accompanying Forms of Proxy, any document incorporated by reference, the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible) and the Barratt Circular (for which Barratt and the Barratt Directors are responsible).
Please check that you have received the following:
If you have not received all of these documents, please contact the Company's Registrars, Computershare, on the Shareholder Helpline referred to below.
The Scheme will require approval at a meeting of Scheme Shareholders convened with the permission of the Court to be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY at 11.00 a.m. on 15 May 2024. Implementation of the Scheme will also require approval of the Special Resolution relating to the Combination to be proposed at the General Meeting. The General Meeting will be held at the same place as the Court Meeting at 11.15 a.m. on 15 May 2024 (or as soon thereafter as the Court Meeting concludes or is adjourned). Notices of the Court Meeting and General Meeting are set out at Part X (Notice of Court Meeting) and Part XI (Notice of General Meeting) respectively of this Document.
The Forms of Proxy must be received by the Company's Registrars, Computershare, by no later than the following times and dates:
Alternatively, BLUE Forms of Proxy (but not WHITE Forms of Proxy) may be handed to the Company's Registrars, Computershare, or to the Chair of the Court Meeting at any time before the commencement of the Court Meeting and will still be valid. In the case of the General Meeting, unless the WHITE Form of Proxy is returned by the time and date mentioned above, it will be invalid.
Please see below for further details in respect of proxy appointment, multiple proxy voting instructions, and the process for appointing a proxy if you hold your Redrow Shares through CREST.
Please refer to page 4 and paragraph 5 of Part IV (The Scheme of Arrangement) of this Document if you are an Overseas Shareholder.
A registered shareholder entitled to attend and vote at the Court Meeting and the General Meeting may appoint a proxy pursuant to the Articles of Association to attend and to speak and vote in his/her place. A registered shareholder may appoint more than one proxy in relation to each of the Court Meeting and the General Meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that registered shareholder. A proxy need not be a member of the Company. The appointment of a proxy will not preclude shareholders entitled to attend and vote at the meeting (or at any adjournment(s) thereof) from doing so in person if they wish.
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Please note that the appointment of a proxy or proxies is separate for each of the Court Meeting and the General Meeting.
A person who has been nominated under section 146 of the Companies Act to enjoy information rights (a "Nominated Person") may have a right under an agreement between him/her and the member by whom he/she was nominated to be appointed, or to have someone else appointed, as a proxy for the Court Meeting and the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may have a right under such an agreement to give instructions to the member as to the exercise of voting rights. The statement of the rights of members to appoint proxies above does not apply to Nominated Persons. The rights described above can only be exercised by members.
If two or more valid but differing appointments of proxy are delivered or received in respect of the same Redrow Shares, the one which is last validly delivered or received (regardless of its date or of the date of its execution) shall be treated as replacing and revoking the other or others as regards that Redrow Share. If Redrow is unable to determine which instrument was last validly delivered or received, none of them shall be treated as valid in respect of that Redrow Share.
As a registered Redrow Shareholder, you are entitled to appoint a proxy in respect of some or all of your Redrow Shares. You are also entitled to appoint more than one proxy. A proxy need not be a Redrow Shareholder. A space has been included on the Forms of Proxy to allow you to specify the number of Redrow Shares in respect of which that proxy is appointed. Redrow Shareholders who return a Form of Proxy duly executed but leave this space blank will be deemed to have appointed a proxy in respect of all of their Redrow Shares.
If you wish to appoint more than one proxy in respect of your shareholding, please photocopy the Forms of Proxy or contact the Company's Registrars, Computershare on +44 (0)370 707 1257. Lines are open 8.30 a.m. to 5.30 p.m. Monday to Friday (excluding public holidays in England and Wales).
As an alternative to completing and returning the printed Forms of Proxy, proxies may be appointed electronically by logging on to the following website:www.investorcentre.co.uk/eproxy and following the instructions therein. For an electronic proxy appointment to be valid, the appointment must be received by Computershare not later than 48 hours (excluding any part of such 48 hour period falling on a non-working day) before the time fixed for the relevant Meeting (paragraph 2(i)–(iii) above) or any adjournment thereof. In the case of the Court Meeting only, if the electronic proxy appointment is not received by this time, the BLUE Form of Proxy may be handed to Computershare or to the Chair of the Court Meeting at the Court Meeting at any time before the commencement of the Court Meeting. In the case of the WHITE Form of Proxy for the General Meeting, if the electronic proxy appointment is not received by the relevant time, it will be invalid.
Redrow Shareholders who hold Redrow Shares through CREST and who wish to appoint a proxy or proxies for the Court Meeting and/or the General Meeting or any adjournment(s) by using the CREST electronic proxy appointment service may do so by following the procedures described in the CREST Manual (available at https://my.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf.
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In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instructions given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by Redrow's Registrars, Computershare (ID-3RA50), not later than 48 hours (excluding any part of such 48 hour period falling on a non-working day) before the time fixed for the relevant Meeting (as set out above) or any adjournment thereof. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Computershare is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers, should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsor or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the CREST Regulations.
If you are an institutional investor, you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by Redrow and approved by Redrow's Registrars, Computershare. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged not later than 48 hours (excluding any part of such 48 hour period falling on a non-working day) before the time fixed for the relevant Meeting (as set out above) or any adjournment thereof in order to be considered valid. Before you can appoint a proxy via this process, you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.
Further information in relation to the appointment of proxies for and voting at the Court Meeting and General Meeting is set out in paragraph 21 of Part II (Explanatory Statement) of this Document, in the Notice of Court Meeting set out in Part X (Notice of Court Meeting) of this Document, in the notes to the Notice of General Meeting set out in Part XI (Notice of General Meeting) of this Document, and in the instructions printed on the Forms of Proxy.
If you hold Redrow Shares indirectly, you must rely on the procedures of the bank, broker, financial institution, share plan administrator or share plan nominee or other securities intermediary through which you hold Redrow Shares. You should contact such intermediary for further instructions on how you can instruct that intermediary to vote on your behalf at the Court Meeting and General Meeting and the date by which you must provide such instructions to the intermediary.
Participants in the Redrow Share Plans will be contacted separately regarding the effect of the Scheme on their rights under the Redrow Share Plans and with details of the arrangements applicable to them. A summary of the effect of the Scheme on outstanding options and awards under the Redrow Share Plans is set out in paragraph 13 of Part II (Explanatory Statement) of this Document.
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If you have any questions about this Document, the Court Meeting or the General Meeting, or are in any doubt as to how to complete the Forms of Proxy or to submit your proxies through CREST or via the electronic means, please contact the Company's Registrars, Computershare, by calling the Shareholder Helpline on +44 (0)370 707 1257. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales). Please use the country code when calling from outside the UK. Calls from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones. Please note that calls may be monitored or recorded and Computershare cannot provide advice on the merits of the Combination or the Scheme or give any financial, legal or tax advice.
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The following indicative timetable is based on Redrow's and Barratt's current expected dates for the implementation of the Scheme and is subject to change. If any of the dates and/or times in this expected timetable change, the revised dates and/or times will be notified to Redrow Shareholders by announcement through the Regulatory Information Service of the London Stock Exchange.
| Event | Time and/or date(1) |
|---|---|
| Publication of this Document, the Barratt Prospectus and the Barratt Circular |
19 April 2024 |
| Latest time for lodging Forms of Proxy for the: | |
| Court Meeting (BLUE form) | 11.00 a.m. on 13 May 2024(2) |
| General Meeting (WHITE form) | 11.15 a.m. on 13 May 2024(3) |
| Voting Record Time | 6.00 p.m. on 13 May 2024(4) |
| Barratt General Meeting | 10.00 a.m. on 15 May 2024 |
| Court Meeting | 11.00 a.m. on 15 May 2024 |
| General Meeting | 11.15 a.m. on 15 May 2024(5) |
The following dates and times associated with the Scheme are indicative only and subject to change and will depend on, among other things, the date on which the Conditions to the Scheme are satisfied or, if capable of waiver, waived, and the date on which the Court sanctions the Scheme. Redrow will give adequate notice of any changes to these dates and times, when known, by issuing an announcement through a Regulatory Information Service, with such announcement being made available on Redrow's website at https://investors.redrowplc.co.uk/offer-for-redrow. See also note (1).
| Court Sanction Hearing | a date expected to be in the second half of 2024, subject to the satisfaction (or, if applicable, waiver) of the relevant Conditions and, in any event, prior to the Long Stop Date ("D") |
|
|---|---|---|
| Last day for dealings in, and for the registration of transfer of, and disablement in CREST of, Redrow Shares |
D+1* | |
| Scheme Record Time | 6.00 p.m. on D+1* | |
| Effective Date | D+1*(6) | |
| Suspension of trading, and dealings, in Redrow Shares | 7.30 a.m. on D+2* | |
| Cancellation of listing of Redrow Shares | by 8.00 a.m. on D+3* | |
| New Barratt Shares to be issued | by 8.00 a.m. on D+3* | |
| Admission of New Barratt Shares and commencement of dealings in New Barratt Shares on the London Stock Exchange |
by 8.00 a.m. on D+3* | |
| CREST accounts of Redrow Shareholders credited with New Barratt Shares |
on or as soon as possible after 8:00 a.m. on D+3* but not later than 14 days after the Effective Date |
|
| CREST accounts of Redrow Shareholders credited with cash due in relation to the sale of fractional entitlements |
within 14 days after the Effective Date* | |
| Latest date for CREST accounts to be credited with New Barratt Shares and despatch of share certificates in respect of New Barratt Shares to be issued Long Stop Date |
within 14 days after the Effective Date* 7 February 2025(7) |
|
(1) The dates and times are indicative only and are based on current expectations and may be subject to change and will depend on, among other things, the date on which the Conditions to the Scheme are satisfied or, if capable of waiver, waived, and the date on which the Court sanctions the Scheme. References to times are to London, United Kingdom time unless otherwise stated. If any of the times and/or dates above change, the revised times and/or dates will be notified to Redrow Shareholders by announcement through a Regulatory Information Service.
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Participants in the Redrow Share Plans will be contacted separately to inform them of the effect of the Scheme on their rights under the Redrow Share Plans, including details of any dates and times relevant to them.
*All dates by reference to "D+1", "D+2" and "D+3" will be to the date falling the number of indicated Business Days immediately after date D, as indicated above.
Directors:
Richard Akers (Non-Executive Chair) Redrow plc Matthew Pratt (Group Chief Executive) Redrow House Barbara Richmond (Group Finance Director) St Davids Park Nicky Dulieu (Senior Independent Director) Flintshire Oliver Tant (Non-Executive Director) CH5 3RX Geeta Nanda (Non-Executive Director) United Kingdom
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19 April 2024
To the holders of Redrow Shares and, for information only, to holders of awards and options under the Redrow Share Plans and persons with information rights.
Dear Shareholder,
On 7 February 2024 the boards of Barratt and Redrow announced that they had reached agreement on the terms of a recommended all-share offer for the Combination of Barratt and Redrow to create the Combined Group. It is intended that the Combination will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
I am writing to you today on behalf of the Redrow Directors to explain the background to and detailed terms of the Combination, to encourage you to vote at the Meetings to be held on 15 May 2024 to consider the Combination and to set out the reasons why the Redrow Directors consider the terms of the Combination to be fair and reasonable. The Redrow Directors are unanimously recommending that you vote in favour of the Scheme at the Court Meeting and in favour of the Special Resolution to be proposed at the General Meeting, as those Redrow Directors who hold Redrow Shares have irrevocably undertaken to do in respect of their own legal and/or beneficial holdings which are under their control representing, in aggregate, approximately 0.06 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
Barratt has also received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from Bridgemere Securities Limited, the family investment vehicle of Steve Morgan, Redrow's founder, and Redrow's largest shareholder, in respect of a total of 52,851,816 Redrow Shares representing approximately 16 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date. Barratt has therefore received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of a total of 53,051,665 Redrow Shares representing, in aggregate, approximately 16 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
I draw your attention to the letter from Barclays and Peel Hunt set out in Part II (Explanatory Statement) of this Document which gives details about the Combination and to the additional information set out in Part VIII (Additional Information on Redrow and Barratt) of this Document. Further information relating to the irrevocable undertakings given by those Redrow Directors and Redrow Shareholders who hold Redrow Shares, including the circumstances in which they cease to be binding, is set out at paragraph 7 of this letter, and in paragraph 5 of Part VIII (Additional Information on Redrow and Barratt) of this Document.
Barratt is also today publishing the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible) which contains further information on Redrow, Barratt and the New Barratt Shares. This Document should be read in conjunction with the Barratt Prospectus. The Barratt Circular (for which Barratt and the Barratt Directors are responsible) seeking the approval of Barratt Shareholders for the Combination and giving notice of the Barratt General Meeting is also being posted today.
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In order to approve the terms of the Combination, the required majority of Scheme Shareholders will need to vote in favour of the Scheme at the Court Meeting and the required majority of Redrow Shareholders will need to vote in favour of the Special Resolution to be proposed at the General Meeting (as set out in paragraph 16 of Part II (Explanatory Statement) of this Document). The Court Meeting and the General Meeting are to be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY on 15 May 2024 at 11.00 a.m. and 11.15 a.m. (or as soon thereafter as the Court Meeting concludes or is adjourned), respectively.
Details of the actions you should take are set out in paragraph 21 of Part II (Explanatory Statement) of this Document. The recommendation of the Redrow Directors is set out in paragraph 15 of this letter.
It is proposed that the Combination will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act between Redrow and Scheme Shareholders, pursuant to which Barratt will acquire all of the issued and to be issued Redrow Shares. The Scheme requires the approval of Scheme Shareholders at the Court Meeting, the approval of the Special Resolution by Redrow Shareholders at the General Meeting, as well as the sanction of the Court at the Court Sanction Hearing.
Under the terms of the Combination, which is subject to the satisfaction (or, where applicable, waiver) of the Conditions and further terms set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document, Scheme Shareholders at the Scheme Record Time will be entitled to receive:
If the Scheme becomes effective, it will result in the allotment and issue of approximately 476,309,153 New Barratt Shares to Scheme Shareholders, which would result in Scheme Shareholders holding approximately 32.8 per cent. and Barratt Shareholders holding approximately 67.2 per cent. of the Combined Group immediately following the Effective Date.
On the basis of the Closing Price per Barratt Share of 530 pence on 6 February 2024 (being the last Business Day prior to the date of the commencement of the Offer Period), the terms of the Combination imply a value for the entire issued and to be issued ordinary share capital of Redrow of approximately £2,524 million, and represent a premium of approximately 27.2 per cent. to the Closing Price per Redrow Share of 600 pence on 6 February 2024 (being the last Business Day prior to the date of the 2.7 Announcement).
On the basis of the Closing Price per Barratt Share of 446 pence on the Latest Practicable Date, the terms of the Combination imply a value for the entire issued and to be issued ordinary share capital of Redrow of approximately £2,124 million, and represent a premium of approximately 7.0 per cent. to the Closing Price per Redrow Share of 600 pence on 6 February 2024 (being the last Business Day prior to the date of the 2.7 Announcement).
The New Barratt Shares will be issued following implementation of the Scheme to Scheme Shareholders on the register at the Scheme Record Time. Fractions of New Barratt Shares will not be allotted or issued to Redrow Shareholders. Entitlements will be rounded down to the nearest whole number of New Barratt Shares and all fractional entitlements to New Barratt Shares will be aggregated, allotted and issued to a person appointed by Barratt and sold in the market. The net proceeds of such sale (after deduction of all expenses and commissions, including VAT thereon, incurred in connection with the sale) will be distributed by Barratt in due proportion to the Scheme Shareholders who would otherwise have been entitled to such fractions. However, individual entitlements to amounts of less than £5 will not be paid to Redrow Shareholders but will be retained for the benefit of the Combined Group. The New Barratt Shares will be issued credited as fully paid and will rank pari passu in all respects with Barratt ordinary shares in issue at the time the Scheme becomes Effective, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling on or after the Effective Date. Applications will be made by Barratt to the FCA and to the London Stock Exchange for the New Barratt Shares to be admitted to the premium segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and to trading on the Main Market.
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The Combination is subject to the Conditions set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document, including the sanction of the Scheme by the Court and Admission of the New Barratt Shares.
Further information about the Combination is provided in Part II (Explanatory Statement) of this Document.
Under the terms of the Co-operation Agreement, Barratt and Redrow have agreed that:
If, on or after the date of the 2.7 Announcement and on or prior to Completion, Redrow announces, declares, makes or pays: (i) the Redrow Interim Dividend, a Redrow Additional Permitted Dividend or a Redrow Equalising Dividend (as defined below), and the quantum of such dividend is in excess of the amount which Redrow is entitled to pay to Redrow Shareholders pursuant to the terms of the Co-operation Agreement; or (ii) any other dividend, distribution or form of capital return, Barratt shall be entitled to either:
In such circumstances, Redrow Shareholders will be entitled to retain the full amount of any such excess or such other dividend, distribution or form of capital return declared, made, or paid.
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If and to the extent that any such excess or other dividend, distribution or form of capital return has been declared or announced, but not paid or made, or is not payable by reference to a record date on or prior to the Effective Date and is or will be (i) transferred pursuant to the Combination on a basis which entitles Barratt to receive the excess or the dividend, distribution or form of capital return and to retain it; or (ii) cancelled, the Exchange Ratio will not be subject to change in accordance with this paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document.
If, on or after the date of the 2.7 Announcement and on or prior to Completion, Barratt announces, declares, makes or pays: (i) the Barratt Interim Dividend, a Barratt Additional Permitted Dividend or a Barratt Equalising Dividend, and the quantum of such dividend is in excess of the amount which Barratt is entitled to pay to Barratt Shareholders pursuant to the terms of the Co-operation Agreement; or (ii) any other dividend, distribution or form of capital return, Redrow shall be entitled to pay an equalising dividend to Redrow Shareholders so as to reflect the value attributable to all or any part of such excess (in the case of the Barratt Interim Dividend, a Barratt Additional Permitted Dividend or any Barratt Equalising Dividend (as relevant)) or by the amount of all or part of any such other dividend, distribution or form of capital return (a "Redrow Equalising Dividend"), without any consequential change to the Exchange Ratio. In such circumstances, Barratt Shareholders will be entitled to retain the full amount of any such excess or such other dividend, distribution or form of capital return, declared, made, or paid.
Under the terms of the Co-operation Agreement, Barratt has undertaken not to declare, make or pay any dividend, distribution, or form of capital return other than the Barratt Interim Dividend, any Barratt Additional Permitted Dividend and any Barratt Equalising Dividend.
Redrow is a leading homebuilder across England and Wales with a reputation for building premium, characterful homes and thriving communities. Headquartered in Wales, Redrow is committed to giving people a better way to live. Redrow offers home buyers an attractive proposition that combines the character of older homes with quality, energy efficiency and modern open plan interiors. This approach also extends to place-making. Supported by eight design principles, Redrow puts people at the centre of its planning, building, sales and aftercare process, allowing communities to thrive.
The country's market for homes has experienced considerable uncertainty in recent years, in particular as a result of the steep rise in mortgage rates. This, combined with the removal of the Help to Buy scheme and an unprecedented cost of living crisis, has had a negative impact on the market for homes.
The Redrow Directors believe the country's planning system is, at present, underfunded and under-resourced, and continues to struggle with an increasing regulatory burden and an uncertain policy direction which has moved away from a presumption in favour of development. The planning system in its current form is unlikely to grant sufficient planning permissions to meet current and future need for homes.
Notwithstanding this context, Redrow has performed strongly in recent years and, against this background, the Redrow Directors remain confident in the ongoing execution of Redrow's strategy as an independent homebuilder and believe Redrow remains well placed to continue to deliver its stated strategy to create long-term value for its stakeholders by developing thriving communities with high-quality homes. This is underpinned by the strength of the leadership team, and is based on Redrow's growth potential and position as a leading homebuilder of high-quality homes.
However, while the Redrow Directors believe in the standalone prospects for Redrow, in considering the Combination, they have carefully considered the significant benefits of scale and other efficiencies provided by the Combination and strong potential to create significant value for Redrow Shareholders over the medium term against alternative strategies, and in the context of the structural features presented by, and recent uncertainty surrounding, the UK market for homes (as described above).
The Redrow Directors believe that the Combination represents a compelling opportunity to create a leading high-quality UK homebuilder with complementary geographic breadth to meet both the current challenges facing the homebuilding sector and the opportunities to offer a broader range of high-quality and energy efficient homes, with three highly respected brands in Barratt Homes, David Wilson Homes and Redrow, and Redrow remaining a symbol of excellence in homebuilding. The Redrow Directors fully recognise the strategic benefits of the Combination as described in paragraph 5 of this letter and believe the proposed new board and executive leadership arrangements (as referred to in paragraph 8 of this letter) for the Combined Group will help ensure such benefits are delivered to the Combined Group.
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In assessing the terms of the Combination, the Redrow Directors have taken into account a range of considerations, in particular:
The Redrow Directors also note the significant support for the Combination from Bridgemere Securities Limited, the family investment vehicle of Steve Morgan and Redrow's largest shareholder. Redrow Shareholders representing approximately 16 per cent. of the issued ordinary share capital of Redrow have provided irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting, further details of which are set out in paragraph 7 below and paragraph 5 of Part VIII (Additional Information on Redrow and Barratt) of this Document.
1 The aggregated net cash position of £874 million reflects the total of the net cash positions of Barratt and Redrow as at 31 December 2023, being £753 million and £121 million, as stated in the 2024 Barratt Interim Results and 2024 Redrow Interim Results, respectively, and calculated in accordance with Barratt and Redrow's respective accounting policies. This figure has been calculated as the sum of those two amounts and therefore on a different basis than the unaudited pro forma financial information of the Combined Group included in Part XI (Unaudited Pro Forma Financial Information of the Combined Group) of the Barratt Prospectus.
Following careful and thorough consideration of all the above factors, the Redrow Directors have concluded that the Combination is in the best interests of Redrow Shareholders and therefore are pleased to be unanimously recommending that Redrow Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution at the General Meeting.
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The Barratt Directors and the Redrow Directors believe that the Combination will build on the excellent reputations for quality, service and sustainability that both Barratt and Redrow have developed, creating an exceptional UK homebuilder in those areas, delivering excellence and driving innovation for customers, employees, sub-contractors and the supply chain. The Combination will bring together two companies with highly complementary geographic footprints and three highly respected brands – Barratt Homes, David Wilson Homes and Redrow – with which to accelerate the delivery of much-needed homes across the UK and provide the opportunity for shareholders to participate in future value creation in the Combined Group.
The Barratt Directors and the Redrow Directors believe the Combination is a uniquely compelling opportunity to:
The Barratt Directors and the Redrow Directors believe that the Combined Group will bring together two organisations with like-minded cultures and a shared commitment to customers, creating an exceptional UK homebuilder in terms of quality, service and sustainability, delivering excellence and driving innovation for customers, employees, sub-contractors and the supply chain.
The Combination brings together Barratt's and Redrow's highly complementary geographic footprints and product offerings to create an attractive portfolio of sites in progress, a strong total land pipeline of 92,345 plots2, and the capacity to accelerate delivery of homes and together build in excess of 22,000 homes per annum in the medium term.
Barratt and Redrow are companies which put the customer firmly at the heart of everything they do:
2 The total land pipeline of 92,345 plots reflects the total of the land pipeline positions of Barratt and Redrow as at 31 December 2023, being 67,780 plots and 24,565 plots, as stated in the 2024 Barratt Interim Results and the 2024 Redrow Interim Results, respectively.
Against the backdrop of a significant shortage of homes in the UK, the Combination creates an enhanced platform to accelerate the delivery of high-quality homes through a three-brand strategy. The Combined Group will add the Redrow brand to Barratt's existing brand portfolio (consisting of Barratt Homes and David Wilson Homes) to create a broader offering for customers, across a greater range of home types and price points.
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The Barratt Directors and the Redrow Directors see potential to accelerate land pipeline utilisation by introducing Redrow brands on certain appropriate Barratt sites and vice versa. Multi-branded sites have strategic benefits, diversifying appeal to customers and in Barratt's experience its dual-branded sites have sales volumes that are meaningfully higher than single-branded sites. For example, Barratt successfully dual-branded the Greytowers Village site in the North-East of England in Nunthorpe, near Middlesbrough, meaningfully increasing completions and the reservation rate as a result. Greytowers Village was a David Wilson Homes site when acquired and subsequently Barratt dual-branded Greytowers Village, adding Barratt homes and opening a Barratt sales outlet and show home suite to the site. Completions increased from an average of 24 before the dual-branding to an average of 51 in Barratt's 2022 and 2023 financial years. In addition, the reservation rate increased from an average rate of 0.47 to an average rate of 0.94 in Barratt's 2022 and 2023 financial years. Multi-branding sites will allow the Combined Group to drive increased output through higher outlet numbers, driving reservation rates across its combined pipeline, accelerating the delivery of the new homes the UK needs.
Barratt is committed to preserving and growing the Redrow brand within the broader Barratt brand stable. The Combined Group will be able to target a wider customer base with Barratt Homes continuing to serve first time buyers and families, David Wilson Homes providing beautifully designed, larger homes, and the Redrow brand established as the premium brand in the portfolio. The Combination will also reinforce the Combined Group's ability to meet customers' needs across a wider range of price points, increasing its addressable market and increasing volume delivery.
Barratt has a strong track record of nurturing and investing in brands it acquires – David Wilson Homes, Oregon Timber Frame and Gladman Developments.
The Combination will provide the opportunity to realise the benefits of significant cost savings from procurement savings and a rationalisation of divisional and central functions which are expected to drive a combined lower cost base.
The Barratt Directors, having reviewed and analysed the potential cost synergies of the Combination, and taking into account the factors they can influence, believe that the Combined Group can deliver at least £90 million of pre-tax cost synergies on an annual run-rate basis by the end of the third year following Completion, of which approximately 90 per cent. is expected to be delivered by the end of the second year following Completion.3
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The level of synergies is consistent with precedent public homebuilder transactions in the UK. These synergies are deliverable through:
Barratt management has a strong track record of integrating and delivering synergies from large-scale transactions. The acquisitions of Wilson Bowden plc (the owner of David Wilson Homes), Oregon Timber Frame and Gladman Developments are evidence of this. In the Wilson Bowden plc acquisition in 2007, the business was successfully integrated over a period of 18 months, with original synergy targets exceeded and savings of at least £60 million delivered in that period.
The Combined Group is expected to benefit from a robust balance sheet, enhanced by the Combined Group's increased scale and expertise, building on Barratt and Redrow's aggregated net assets of £7,463 million as at 31 December 2023.4 Based on the 2024 Barratt Interim Results and 2024 Redrow Interim Results, Barratt and Redrow have an aggregated net cash position of £874 million as at 31 December 2023.5
Going forward, the Combined Group intends to maintain a robust balance sheet consistent with Barratt's existing policy, targeting net cash including land creditors. The Combined Group's dividend policy will be consistent with Barratt's existing dividend policy of 1.75x ordinary dividend cover based on adjusted earnings per share. The Barratt Directors recognise the importance of returning surplus capital to shareholders. Excess cash is expected to be returned to the Combined Group's shareholders via a share buyback or special dividend, if appropriate, following investment in the business and the payment of an ordinary dividend.
3 This statement constitutes a quantified financial benefits statement for the purposes of the Takeover Code. Please see Appendix I (Quantified Financial Benefits Statement) of this Document for further details.
4 The aggregated net assets of £7,463 million reflects the total of the net assets of Barratt and Redrow as at 31 December 2023, being £5,440 million and £2,023 million, as stated in the Barratt 2024 Barratt Interim Results and 2024 Redrow Interim Results, respectively, and calculated in accordance with Barratt and Redrow's respective accounting policies.
5 The aggregated net cash position of £874 million reflects the total of the net cash position of Barratt and Redrow as at 31 December 2023, being £753 million and £121 million, as stated in the 2024 Barratt Interim Results and 2024 Redrow Interim Results, respectively, and calculated in accordance with Barratt and Redrow's respective accounting policies. This figure has been calculated as the sum of those two amounts and therefore on a different basis than the unaudited pro forma financial information of the Combined Group included in Part XI (Unaudited Pro Forma Financial Information of the Combined Group) of the Barratt Prospectus.
As well as the benefits for shareholders identified above, significant benefits will accrue to the Combined Group's wider stakeholders.
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The Combined Group's employees will benefit from the additional opportunities the Combined Group will provide for development and from being a part of a homebuilder with an industry leading employee reward programme. The Barratt Directors and the Redrow Directors believe there is a strong cultural fit between both businesses which will enable a smooth integration underpinned by shared values.
The Combined Group's supply chains will benefit from greater visibility and certainty of delivery and the acceleration of development through the deployment of brands on Barratt and Redrow's respective sites and land pipelines. This should give sub-contractors confidence to invest in developing the skilled labour pool and production facilities which are so important to the future of the sector.
Customers and the country as a whole will benefit from the Combined Group's ability to deliver more high-quality homes, across a broader product range, and to accelerate the creation of strong, sustainable communities across the UK. As a Combined Group, the business will be better placed to help tackle the country's current need for homes and drive economic growth across the country.
The Combination is expected to be accretive to Barratt and Redrow's respective adjusted earnings per share in the first year after Completion (excluding one-off costs of delivering synergies). The Barratt Directors, having reviewed and analysed the potential cost synergies of the Combination, and taking into account the factors they can influence, believe that the Combined Group can deliver at least £90 million of pre-tax cost synergies on an annual run-rate basis by the end of the third year following Completion.
The quantified cost synergies, which are expected to originate from the cost bases of both Barratt and Redrow, are expected to be realised primarily from:
expected to contribute approximately 38 per cent. (£34 million) of the full run-rate pre-tax cost synergies;
The Barratt Directors expect that approximately 50 per cent. (£45 million) of the annual run-rate pre-tax cost synergies will be realised by the end of the first year following Completion and approximately 90 per cent. of the annual run-rate pre-tax cost synergies will be realised by the end of the second year following Completion, with the full run-rate achieved by the end of the third year following Completion.
The Barratt Directors estimate that the realisation of the quantified cost synergies will result in one-off costs of approximately £73 million, with approximately 57 per cent. incurred in the first year following Completion, approximately 32 per cent. expected to be incurred in the second year following Completion and the remainder by the end of the third year following Completion.
Potential areas of dis-synergy expected to arise in connection with the Combination have been considered and were determined by the Barratt Directors to be immaterial to the above analysis.
The identified cost synergies will accrue as a direct result of the Combination, and would not be achieved on a standalone basis. The identified pre-tax cost synergies reflect both the beneficial elements and relevant costs.
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These statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to herein may not be achieved, may be achieved later or sooner than estimated, or those actually achieved could be materially different from those estimated. For the purposes of Rule 28 of the Takeover Code, this paragraph 6, Appendix I (Quantified Financial Benefits Statement) of this Document and any other statements of estimated cost savings and synergies contained in this Document are solely the responsibility of Barratt and the Barratt Directors. Any statement of intention, belief or expectation for the Combined Group following the Effective Date is also an intention, belief or expectation of the Barratt Directors and not of the Redrow Directors.
These statements are not intended as a profit forecast and should not be interpreted as such. No part of these statements, or this Document generally, should be construed or interpreted to mean that the Combined Group's earnings in the first year following the Effective Date, or in any subsequent period, would necessarily match or be greater than or be less than those of Barratt and/or Redrow for the relevant preceding financial period or any other period. Appendix I (Quantified Financial Benefits Statement) of this Document includes a copy of these statements of anticipated cost savings and synergies arising out of the Combination and provides underlying information and bases of belief and calculation.
Appendix I (Quantified Financial Benefits Statement) of this Document also includes the anticipated Quantified Financial Benefits Statement, as required pursuant to Rule 28.1(a) of the Takeover Code, and contains details of, and bases of calculation of, the anticipated financial benefits of the Combination. On 7 February 2024, PwC as reporting accountants to Barratt, and UBS and Morgan Stanley, as financial advisers to Barratt, provided the reports relating to the Quantified Financial Benefits Statement required by Rule 28.1(a) of the Takeover Code. Copies of their reports were included in Appendix IV of the 2.7 Announcement. Each of PwC, UBS and Morgan Stanley has confirmed to Barratt that their respective reports produced in connection with the Quantified Financial Benefits Statement continue to apply.
As noted above, each of the Redrow Directors who holds Redrow Shares has irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of their own legal and/or beneficial holdings which are under their control, in respect of a total of 199,849 Redrow Shares representing, in aggregate, approximately 0.06 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
Barratt has also received an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from Bridgemere Securities Limited, Steve Morgan's family investment vehicle and Redrow's largest shareholder, in respect of a total of 52,851,816 Redrow Shares representing approximately 16 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
Barratt has therefore received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of a total of 53,051,665 Redrow Shares representing, in aggregate, approximately 16 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
It is also noted that the Barratt Directors who hold Barratt Shares have irrevocably undertaken to vote in favour of the Barratt Resolution at the Barratt General Meeting which will be convened in connection with the Combination in respect of a total of 1,690,704 Barratt Shares representing, in aggregate, approximately 0.173 per cent. of Barratt's issued ordinary share capital as at the Latest Practicable Date.
Further details of the Redrow and Barratt irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in paragraph 5 of Part VIII (Additional Information on Redrow and Barratt) of this Document. Copies of the irrevocable undertakings are available on Redrow's website at https://investors.redrowplc.co.uk/offer-for-redrow and will remain on display until the end of the Offer Period.
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Your attention is drawn to the statement on Barratt's intentions for Redrow and the Combined Group if the Scheme becomes Effective, which is set out in paragraph 6 of Part II (Explanatory Statement) of this Document.
Participants in the Redrow Share Plans will be contacted separately regarding the effect of the Scheme on their rights under the Redrow Share Plans and with details of the arrangements applicable to them. A summary of the effect of the Scheme on outstanding options and awards under the Redrow Share Plans is set out in paragraph 13 of Part II (Explanatory Statement) of this Document.
On 7 February 2024, the Redrow Group released the 2024 Redrow Interim Results. A copy of the 2024 Redrow Interim Results is available on Redrow's website at https://investors.redrowplc.co.uk/resultscentre.
Redrow's 2024 guidance provides for a revenue of £1.65 – 1.70bn and underlying profit before tax of £180-200m, which constitutes a profit forecast for the purpose of Rule 28 of the Takeover Code. Redrow repeated the Redrow Profit Forecast in the 2024 Redrow Interim Results, noting that as reported in the 2023 AGM Trading Statement, Redrow expects the 2024 results to be towards the lower end of the range set out in the 2024 guidance due to the subdued Autumn housing market. Your attention is drawn to the Redrow Profit Forecast set out in Part VI (Redrow Profit Forecast) of this Document.
On 7 February 2024, the Barratt Group released the 2024 Barratt Interim Results. A copy of the 2024 Barratt Interim Results is available on Barratt's website at https://www.barrattdevelopments.co.uk/investors/results-reports-and-presentations/rp-2024.
In view of the size of the transaction, the Combination constitutes a Class 1 transaction (as defined in the Listing Rules) for Barratt. Accordingly, Barratt is required to seek the approval of Barratt Shareholders for the Combination at the Barratt General Meeting which has been convened for 10.00 a.m. on 15 May 2024 at the Seligman Theatre, Royal College of Physicians, 11 St Andrew's Place, London, NW1 4LE.
The Barratt Directors also do not currently have sufficient authority to issue and allot the New Barratt Shares in accordance with section 551 of the Companies Act and, accordingly, the approval of Barratt Shareholders is required to grant the Barratt Directors this authority.
The Combination is therefore conditional on, amongst other things, the Barratt Resolution being passed by a simple majority of the votes cast by Barratt Shareholders at the Barratt General Meeting.
The Barratt Directors have unanimously recommended that Barratt Shareholders vote in favour of the Barratt Resolution at the Barratt General Meeting, as the Barratt Directors who hold Barratt Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of, in aggregate, 1,690,704 Barratt Shares, representing approximately 0.173 per cent. of Barratt's issued ordinary share capital as at the Latest Practicable Date. Further details of these irrevocable undertakings are set out in paragraph 5 of Part VIII (Additional Information on Redrow and Barratt) of this Document.
Details of the approvals being sought at the Court Meeting and the General Meeting and the action to be taken by Redrow Shareholders in respect of the Scheme are set out in paragraph 21 of Part II (Explanatory Statement) of this Document.
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Details relating to the cancellation of listing of the Redrow Shares are included in paragraph 8 of Part II (Explanatory Statement) of this Document. Details relating to the issuance, listing and dealings in the New Barratt Shares are included in paragraph 9 of Part II (Explanatory Statement) of this Document.
Please refer to page 4 (Overseas Shareholders) and paragraph 5 of Part IV (The Scheme of Arrangement) of this Document if you are an Overseas Shareholder.
Your attention is drawn to Part VII (United Kingdom Taxation) of this Document, which contains a summary of limited aspects of the UK tax treatment of the Scheme. This summary relates only to the position of certain categories of Redrow Shareholders (as explained further in Part VII (United Kingdom Taxation) of this Document), is intended only as a general guide, does not constitute tax advice and does not purport to be a complete analysis of all potential UK tax consequences of the Scheme.
You are strongly advised to contact an appropriate independent professional adviser immediately to discuss the tax consequences of the Scheme on your individual circumstances, in particular if you are in any doubt about your own taxation position or you are subject to taxation in a jurisdiction other than the United Kingdom.
The Redrow Directors, who have been so advised by Barclays and Peel Hunt as to the financial terms of the Combination, consider the terms of the Combination to be fair and reasonable. Peel Hunt is providing independent advice to the Redrow Directors for the purposes of Rule 3 of the Takeover Code. In providing their advice to the Redrow Directors, Barclays and Peel Hunt have taken into account the commercial assessments of the Redrow Directors.
The Redrow Directors consider that the terms of the Combination are in the best interests of Redrow Shareholders as a whole. Accordingly, the Redrow Directors unanimously recommend that Scheme Shareholders vote in favour of the Scheme at the Court Meeting and that Redrow Shareholders vote in favour of the Special Resolution to be proposed at the General Meeting, as the Redrow Directors who hold Redrow Shares have irrevocably undertaken to do in respect of their own legal and/or beneficial holdings which are under their control representing, in aggregate, approximately 0.06 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date.
Your attention is drawn to the further information contained in Part II (Explanatory Statement), Part III (Conditions to the Implementation of the Scheme and to the Combination), Part IV (The Scheme of Arrangement) and Part VIII (Additional Information on Redrow and Barratt) of this Document which provides further details concerning the Scheme. Your attention is further drawn to the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible), which contains further information on Redrow, Barratt and the New Barratt Shares. The Barratt Circular (for which Barratt and the Barratt Directors are responsible) seeking the approval of Barratt Shareholders for the Combination and giving notice of the Barratt General Meeting is also being posted today. The Barratt Prospectus and Barratt Circular have been published and are available on Redrow's website at https://investors.redrowplc.co.uk/offer-for-redrow and Barratt's website at https://www.barrattdevelopments.co.uk/investors/barratt-redrow.
You are advised to read the whole of this Document and the accompanying Forms of Proxy and not just rely on the summary information contained in this letter or the Explanatory Statement.
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Yours faithfully,
Richard Akers Non-Executive Chair Redrow plc
(in compliance with section 897 of the Companies Act)
19 April 2024
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To the holders of Redrow Shares and, for information only, to holders of awards and options under the Redrow Share Plans and persons with information rights.
Dear Shareholder,
On 7 February 2024 the boards of Barratt and Redrow announced that they had reached agreement on the terms of a recommended all-share offer for the combination of Redrow and Barratt to create the Combined Group. It is intended that the Combination will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
Your attention is drawn to the letter set out in Part I (Letter from the Chair of Redrow plc) of this Document, which forms part of this Explanatory Statement. The letter contains, among other things, (i) the Redrow Directors' unanimous recommendation that Scheme Shareholders vote in favour of the Scheme at the Court Meeting and Redrow Shareholders vote in favour of the Special Resolution to be proposed at the General Meeting, and (ii) information on the background to, and reasons for, giving the above recommendation.
Your attention is also drawn to the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible), which contains further information on Redrow and Barratt and the New Barratt Shares. The Barratt Circular (for which Barratt and the Barratt Directors are responsible) seeking the approval of Barratt Shareholders for the Combination and giving notice of the Barratt General Meeting is also being posted today.
The Redrow Directors have been advised by Barclays and Peel Hunt in connection with the financial terms of the Combination. We have been authorised by the Redrow Directors to write to you to explain the terms of the Combination and to provide you with other relevant information.
This Part II (Explanatory Statement) contains a summary of the terms of the Scheme, while the terms of the Scheme are set out in full in Part IV (The Scheme of Arrangement) of this Document.
Statements made or referred to in this letter regarding Barratt's reasons for the Combination, information concerning the business of the Barratt Group, the financial effects of the Combination on Barratt and/or the Combined Group and/or intentions or expectations of or concerning the Barratt Group and/or the Combined Group reflect the views of the Barratt Directors.
Statements made or referred to in this letter regarding the background to and reasons for the recommendation of the Redrow Directors, information concerning the business of the Redrow Group and/or intentions or expectations of or concerning the Redrow Group prior to completion of the Combination reflect the views of the Redrow Directors.
It is proposed that the Combination will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act between Redrow and Scheme Shareholders, pursuant to which Barratt will acquire all of the issued and to be issued Redrow Shares. The Scheme requires the approval of Scheme Shareholders at the Court Meeting, the approval of the Special Resolution by Redrow Shareholders at the General Meeting, as well as the sanction of the Court at the Court Sanction Hearing.
Under the terms of the Combination, which is subject to the satisfaction (or, where applicable, waiver) of the Conditions and further terms set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document, Scheme Shareholders at the Scheme Record Time will be entitled to receive:
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If the Scheme becomes effective, it will result in the allotment and issue of approximately 476,309,153 New Barratt Shares to Scheme Shareholders, which would result in Scheme Shareholders holding approximately 32.8 per cent. and Barratt Shareholders holding approximately 67.2 per cent. of the Combined Group immediately following the Effective Date.
On the basis of the Closing Price per Barratt Share of 530 pence on 6 February 2024 (being the last Business Day prior to the date of the 2.7 Announcement), the terms of the Combination imply a value for the entire issued and to be issued ordinary share capital of Redrow of approximately £2,524 million, and represent a premium of approximately 27.2 per cent. to the Closing Price per Redrow Share of 600 pence on 6 February 2024 (being the last Business Day prior to the date of the 2.7 Announcement).
On the basis of the Closing Price per Barratt Share of 446 pence on the Latest Practicable Date, the terms of the Combination imply a value for the entire issued and to be issued ordinary share capital of Redrow of approximately £2,124 million, and represent a premium of approximately 7.0 per cent. to the Closing Price per Redrow Share of 600 pence on 6 February 2024 (being the last Business Day prior to the date of the 2.7 Announcement).
The New Barratt Shares will be issued following implementation of the Scheme to Scheme Shareholders on the register at the Scheme Record Time. Fractions of New Barratt Shares will not be allotted or issued to Redrow Shareholders. Entitlements will be rounded down to the nearest whole number of New Barratt Shares and all fractional entitlements to New Barratt Shares will be aggregated, allotted and issued to a person appointed by Barratt and sold in the market. The net proceeds of such sale (after deduction of all expenses and commissions, including VAT thereon, incurred in connection with the sale) will be distributed by Barratt in due proportion to the Scheme Shareholders who would otherwise have been entitled to such fractions. However, individual entitlements to amounts of less than £5 will not be paid to Redrow Shareholders but will be retained for the benefit of the Combined Group.
The Combination is subject to the Conditions set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document, including the sanction of the Scheme by the Court and Admission of the New Barratt Shares.
Please refer to paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document for further details on the treatment of any dividends announced, declared, paid or made or which become payable by either Redrow or Barratt before the Effective Date, and the proposed capital allocation policy of the Combined Group.
Information relating to the background to and reasons for the Redrow Directors' recommendation of the Combination is set out in paragraph 4 of Part I (Letter from the Chair of Redrow plc) of this Document.
Information relating to the financial benefits and effects of the Combination and potential synergies is set out in paragraph 6 of Part I (Letter from the Chair of Redrow plc) of this Document.
Prior to the 2.7 Announcement, consistent with market practice, Barratt was granted due diligence access to targeted information and to Redrow's senior management for the purposes of confirmatory due diligence and conducting its synergy assessment. This process has informed Barratt's view on the prospects of the Combined Group, the synergies described in paragraph 4 of Part VI of the Barratt Prospectus and paragraph 6 of Part I (Letter of the Chair of Redrow plc) of this Document and Barratt's initial plans for the integration of Redrow.
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In connection with the work described above, Barratt's management, following discussions with the senior leadership of Redrow and having considered Redrow's priorities as set out in paragraph 5 of Part I (Letter from the Chair of Redrow plc) of this Document, has undertaken a preliminary operational review of the Combined Group and developed an integration plan for the Combined Group.
Barratt is confident, based on the information available and work conducted to date, that the integration plan is robust and will equip the Combined Group to conduct an efficient integration whilst ensuring continuity in the delivery of the Combined Group's operations. Barratt will continue to review Redrow's business in the period prior to Completion and Barratt expects that the operational review and more detailed integration planning work will be substantially concluded during the period prior to Completion. Following Completion, Barratt will be well placed to refine and implement this plan. Key areas of focus in the operational review and development of the integration plan include:
In further refining, and in implementing, the integration plan, there will be a clear focus on maintaining operational excellence, build quality and customer service. A key objective of integration will be the careful delivery of the cost synergies and other benefits of the Combination. Based on the work conducted to date, Barratt believes that both integration planning and execution will be assisted by:
Barratt intends to substantially complete the implementation of an integration plan within 18 months of Completion, with synergies expected to be realised fully within three years following Completion.
Immediately following Completion, Caroline Silver, Barratt's Non-Executive Chair, will lead the Combined Group as Non-Executive Chair. Barratt's Chief Executive, David Thomas will be Group Chief Executive of the Combined Group. Mike Scott, Chief Financial Officer of Barratt, will be Chief Financial Officer of the Combined Group, and Steven Boyes, Chief Operating Officer and Deputy Chief Executive of Barratt, will be Chief Operating Officer and Deputy Chief Executive of the Combined Group.
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Immediately following Completion, the board of directors of the Combined Group will be a combined board comprising the existing executive and non-executive directors of Barratt, with the addition of (i) Matthew Pratt, currently Group Chief Executive of Redrow, who will join the Combined Group and assume the role of Chief Executive Officer, Redrow, and Group Executive Director, and (ii) Nicky Dulieu, currently Senior Independent Director of Redrow, and Geeta Nanda, currently Non-Executive Director of Redrow, who will both join as Non-Executive Directors.
Barbara Richmond, Group Finance Director of Redrow has agreed to join the Combined Group in the role of Redrow Chief Financial Officer and Group Integration and Synergies Director to support the integration for a period of not less than 12 months to ensure continuity and with a view to realising the benefits of the Combination for both sets of shareholders.
Additional members of Redrow's senior management may, subject to further review, join the Barratt Executive Committee following Completion as part of the integration process referred to below.
Any executive or non-executive directors of Redrow not appointed to the board of the Combined Group will step down from the Redrow Board upon Completion.
Barratt has great respect for Redrow's management and employees and attaches huge importance to their active participation in and commitment to the Combined Group. Barratt recognises that they, together with Barratt's management and employees, will be key to the success of the Combined Group and Barratt is excited for the employees and management of Redrow to join the Combined Group.
Following Completion, Barratt intends to retain the best talent of Barratt and Redrow to support its customers, clients and partners to utilise the knowledge and expertise across Barratt and Redrow and maintain operational momentum and a focus on growth.
Barratt expects that, in order to achieve the expected benefits of the Combination, operational and administrative restructuring will be required following Completion. While no decisions have been taken or proposals formulated at this stage, the synergy work carried out to date has confirmed Barratt's intention to reduce the duplication of roles between Barratt and Redrow.
This could lead, subject to a review of the requirements of the Combined Group after Completion and any applicable informing and consulting requirements, to a reduction in the total number of employees by circa 10 per cent. of the Combined Group's total number of employees (on a full-time equivalent basis). This reduction is intended to come from employees and management, overlapping central and support functions and divisions affected by the rationalisation programme as a result of the Combination, some of which is expected to take place via natural attrition. Please see Appendix I (Quantified Financial Benefits Statement) of this Document for further details of the estimated cost savings and synergies referred to in this Document.
As part of the preservation of and commitment to grow the Redrow brand, the employees and management of the Combined Group will be a combination from both businesses based on a "best in class" philosophy. Barratt intends to look to reallocate employees from any discontinued roles arising from the integration to other appropriate new roles, growth-related new opportunities or existing vacancies, where possible. Barratt and Redrow each currently engage some members of staff on a temporary or contractor basis whilst vacancies in permanent positions in each business are filled. Barratt intends to first retain employees in permanent positions, including to fulfil such vacancies, in relation to any reduction of roles.
Barratt does not intend that there will be any material reduction of building site-based employees or sales office-based employees as existing sites will continue to operate in a similar way.
Barratt intends that any restructuring referred to above would be phased over 12 months following Completion. The detailed steps for such restructuring are subject to further review and would be subject to comprehensive and detailed planning, appropriate engagement with representatives and wider stakeholders, including affected employees and any appropriate employee representative bodies in accordance with the legal obligations of the Combined Group. Barratt intends to start this engagement process long enough before any final decisions are taken so as to ensure that relevant legal obligations are complied with. Other than as described above, Barratt does not intend that there will be any material change to the balance of skills and functions of the employees and management in the Combined Group.
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Following Completion and as part of integration planning, Barratt may review the alignment of the remuneration and incentivisation arrangements as between employees and management of Barratt and the Combined Group, as well as redundancy and other policies operated within the Combined Group, with a view to harmonising the position for employees and management across the Combined Group (in particular, those in equivalent positions) over time as is appropriate. However, save as described in paragraph 7 below, Barratt does not have any detailed plans or intentions in this regard and does not intend to discuss details of remuneration and incentivisation arrangements with employees and management prior to Completion.
Barratt intends to safeguard the existing contractual and statutory employment rights of the employees of Barratt and Redrow in accordance with applicable law upon Completion. Other than as described above, Barratt does not intend to make any material change in the employment of, or in the conditions of employment of, Redrow employees, unless otherwise agreed with the relevant employee.
For a period of 12 months after Completion, Redrow employees will be entitled to applicable redundancy and severance payments, benefits and arrangements that are no less favourable than those under any policy or established Redrow practice in existence at local or Group wide level as at (and notified to Barratt or Barratt's legal advisers prior to) the date of the Co-operation Agreement and/or any policy or arrangement agreed between Barratt and Redrow from time to time.
Barratt does not intend to make any changes to the agreed employer contributions into Redrow's existing defined benefit and defined contribution pension schemes (including with regard to current arrangements for the funding of any scheme deficit in the defined benefit pension scheme), the accrual of benefits for existing members or the admission of new members to such pension schemes following Completion, unless such changes are more favourable to the scheme member.
The Combination also provides the opportunity to consolidate and combine some of Barratt's offices with Redrow's offices. After Completion, Barratt will review the expanded office footprint with a set of objective criteria, which will include: considering where the Combined Group has offices in similar locations, accounting for new regional boundaries to be drawn, assessing whether there is scope for consolidation in order to optimise rental and lease expenses, ensuring minimisation of impact on employees and understanding how the Combined Group can best utilise its employees' talents to enable colleagues to work more closely together within and across their functions and enhance the corporate culture. This review will include all Barratt and Redrow offices, and it is intended that a combination of existing Barratt and Redrow offices would be retained rather than only retaining Barratt offices.
Barratt currently has 29 divisional offices and Redrow has 12 offices across the country. Preliminary analysis indicates that optimisation of the current footprint would involve the closure of around 9 offices. Barratt intends that the Combined Group will maintain Barratt's current Group Support Centre in Coalville, Leicestershire, United Kingdom as its headquarters from where it will run the majority of its corporate and support operations. Redrow's current headquarters in Ewloe, Flintshire, United Kingdom, will be retained as one of the Combined Group's main offices.
Barratt does not intend any material change to its operations in Scotland, as Redrow does not operate in Scotland, or its operations in London, as Redrow only operates one large site in London.
Barratt does not intend any other changes to the redeployment of Barratt's or Redrow's existing material fixed assets, which are minimal. Owing to the nature of the respective businesses of Redrow and Barratt, neither business has specific research and development functions, instead having innovation and development embedded into their processes across the businesses. No changes are intended to Barratt's and Redrow's respective research and development capabilities as part of the Combined Group.
From Completion, the Combined Group name will be changed to "Barratt Redrow plc". In addition, following Completion, Barratt intends to maintain Redrow's strong brand position as the premium and distinct component of the Combined Group's brand portfolio, alongside Barratt Homes and David Wilson Homes. Barratt is committed to the long-term future of the Redrow brand.
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The Redrow Shares are currently admitted to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange and, as set out in paragraph 9 below, before the Effective Date, an application shall be made to the London Stock Exchange to cancel such admission to trading to take effect on the Business Day following the Effective Date and to the FCA to cancel such admission to listing to take effect two Business Days following the Effective Date. Redrow is also expected to be re-registered as a private company after Completion.
No statements in this paragraph 6 constitute "post-offer undertakings" for the purposes of Rule 19.5 of the Takeover Code.
In order to promote the retention of certain Redrow employees (including the Redrow Executive Directors) following Completion, as detailed in the Co-operation Agreement, Barratt has agreed that:
Matthew Pratt, currently Group Chief Executive of Redrow, has agreed to join the Combined Group and assume the role of Chief Executive Officer, Redrow, and Group Executive Director.
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It has been agreed that Matthew Pratt's current remuneration arrangements will continue with effect from Completion, save that:
Barbara Richmond, currently Group Finance Director of Redrow, has agreed to join the Combined Group in the role of Redrow Chief Financial Officer and Group Integration and Synergies Director to support the integration for a period of not less than 12 months from Completion to ensure continuity and with a view to realising the benefits of the Combination for both sets of shareholders.
It has been agreed that Barbara Richmond's remuneration arrangements in respect of her post-Completion integration role with the Combined Group will be as follows:
• she will receive a Transition Award equal in value to the value of her 2023 LTIP Award which is lost due to the application of time pro-rating in connection with the Combination.
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As required by, and solely for the purposes of, Rule 16.2 of the Takeover Code, Barclays and Peel Hunt have reviewed the financial terms under which it has been agreed that Matthew Pratt and Barbara Richmond will take up their proposed roles from Completion, together with other information deemed relevant, and advised Redrow that the financial terms are fair and reasonable so far as Redrow Shareholders are concerned. In providing their advice, Barclays and Peel Hunt have taken into account the commercial assessments of the Redrow Directors. Peel Hunt is acting as the independent financial adviser to Redrow for the purposes of Rule 3 of the Takeover Code.
Nicky Dulieu, currently Senior Independent Director of Redrow, and Geeta Nanda, currently Non-Executive Director of Redrow, will both join the Combined Group as Non-Executive Directors.
The last day of dealings in Redrow Shares on the Main Market of the London Stock Exchange is expected to be on the first Business Day following the Court Sanction Hearing, such that no transfers of Redrow Shares will be registered after 6.00 p.m. on that date (other than the registration of the transfer of the Redrow Shares to Barratt pursuant to the Scheme). Following this, all of the Redrow Shares will be suspended from the Official List and from trading on the London Stock Exchange's Main Market for listed securities, and Redrow Shares will be disabled in CREST.
Prior to the Scheme becoming effective in accordance with its terms, Redrow will make an application for the suspension of trading of the Redrow Shares on the London Stock Exchange's Main Market for listed securities to take effect on the Business Day following the Effective Date and for the cancellation of the listing of Redrow Shares on the Official List to take effect two Business Days following the Effective Date (and subject to the Scheme becoming effective).
On Completion, Redrow will become a wholly-owned subsidiary of Barratt and share certificates in respect of Redrow Shares will cease to be valid. In addition, entitlements to the Redrow Shares held within the CREST system will be disabled from the Scheme Record Time and expired and removed soon thereafter.
It is also proposed that, following Completion and after its shares are delisted, Redrow will be re-registered as a private limited company.
The New Barratt Shares to be issued under the Scheme will be issued credited as fully paid and will rank pari passu in all respects with the issued ordinary shares in Barratt, including the right to receive and retain in full all dividends and other distributions (if any) announced, declared, made or paid, or any other form of capital return (whether by reduction of share capital or share premium account or otherwise) made, in each case by reference to a record date falling on or after the Effective Date.
Prior to Completion, applications will be made to the London Stock Exchange for the New Barratt Shares to be admitted to trading on its Main Market for listed securities and to the FCA for the New Barratt Shares to be admitted to the premium listing segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on).
It is expected that Admission will become effective and dealings for normal settlement in the New Barratt Shares will commence at or shortly after 8.00 a.m. on the third Business Day following the Court Sanction Hearing. The existing Barratt Shares are admitted to CREST. It is expected that all of the New Barratt Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST.
No application has been made, or is currently intended to be made, by Barratt for the New Barratt Shares to be admitted to listing or trading on any other exchange.
It is intended that the Combined Group will maintain Barratt's existing dividend policy of 1.75x ordinary dividend cover based on adjusted earnings per share.
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The Barratt Directors believe that this would result in a significant uplift in dividend payments to Redrow Shareholders, with the scale and balance sheet strength of the Combined Group further underpinning its ability to maintain increased future dividend payments.
The Barratt Directors recognise the importance of returning surplus capital to shareholders. Excess cash is expected to be returned to the Combined Group's shareholders via a share buyback or special dividend, if appropriate, following investment in the business and the payment of an ordinary dividend.
Across nearly 50 years and over 120,000 homes, Redrow has earned a reputation for delivering high-quality, award-winning homes that are built in well-chosen locations with excellent place-making. Redrow prides itself on being a responsible developer, delivering sustainable developments and sustainable returns. Redrow's purpose is to create a better way to live. It has a robust strategy in place to deliver on this aim, which is based on three core pillars: Thriving Communities, Building Responsibly and Valuing People.
Redrow is headquartered in Wales and operates in 12 regional divisions across England and Wales. In its last financial year, Redrow delivered 5,436 completions across both private and affordable homes.
In 2022, Redrow became one of the first homebuilders to implement the New Homes Quality Board's new code of practice, an independent not-for-profit organisation that has been set up to offer better protection and increased transparency for customers and has received an HBF 5-Star customer rating for 6 consecutive years. This is in addition to the business' ongoing 'excellent' rating on Trustpilot.
Redrow was included in the Financial Times' annual listings of both Europe's Climate Leaders 2022 and Diversity Leaders 2023 for achieving significant reductions in its greenhouse gas emissions and leading in workplace diversity and inclusion respectively. It holds an AA MSCI ESG rating for its commitment to ESG investment standards and remains a constituent of the FTSE4Good Index Series for its continued demonstration of strong ESG practices.
The Redrow Shares are admitted to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange. Redrow's market capitalisation was £2,082 million as at the Latest Practicable Date.
Barratt is a leading UK homebuilder that has built more than 500,000 homes since it was founded in 1958, creating great new places to live throughout the country. Barratt's vision is to lead the future of homebuilding by putting customers at the heart of everything it does and is an industry-leading player in terms of quality, service and sustainability. In 2023 Barratt won more NHBC Pride in the Job Awards than any other homebuilder for the 19th year in a row and was one of fewer than 300 companies globally to be awarded membership of CDP's Climate Change A List for Leadership. In 2024 Barratt became the only major homebuilder to have received an HBF 5 Star customer rating for 15 consecutive years.
Through its 29 business divisions located across the UK, Barratt builds in the private, affordable and private rented sectors and in its last financial year delivered 17,206 new homes. Barratt targets a regionally balanced portfolio, with its geographic reach and record of delivery enabling it to maximise development opportunities right across the country, both independently and in partnership with institutional investors, affordable home providers and public sector bodies.
The Barratt Shares are admitted to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange. Barratt's current market capitalisation is £4,347 million as at the Latest Practicable Date.
Participants in the Redrow Share Plans will be contacted separately regarding the effect of the Scheme on their rights under the Redrow Share Plans and with details of the arrangements applicable to them.
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A summary of the effect of the Scheme on outstanding options and awards under the Redrow Share Plans is set out below. In the event of any conflict between the summary set out below and the rules of the relevant Redrow Share Plan, the Redrow Directors' remuneration policy (where applicable) and/or the communications to participants in the Redrow Share Plans regarding the effect of the Scheme on their rights under the Redrow Share Plans and details of the arrangements applicable to them (the "Redrow Share Plan Notices"), the rules of the relevant Redrow Share Plan, the Redrow Directors' remuneration policy (where applicable) and the terms of the Redrow Share Plan Notices (as the case may be) will prevail.
The Scheme will apply to any Redrow Shares which are unconditionally allotted, issued or transferred to satisfy the vesting of awards or exercise of options under the Redrow Share Plans before the Scheme Record Time. As the Scheme will not extend to Redrow Shares issued or transferred on or after the Scheme Record Time, it is proposed to amend the Articles of Association at the General Meeting to provide that, subject to the Scheme becoming Effective and the proposed amendments to the Articles of Association being approved at the General Meeting, any Redrow Shares issued or transferred to any person on or after the Scheme Record Time (including in satisfaction of an option exercised under one of the Redrow Share Plans) will be automatically transferred to, or to the order of, Barratt in consideration for the issue or transfer by Barratt to such persons of New Barratt Shares for each Redrow Share so transferred on the same basis as under the Scheme.
Further information in respect of the proposed amendments to the Articles of Association is contained in the Notice of General Meeting at Part XI (Notice of General Meeting) of this Document.
Outstanding Awards granted under the Redrow LTIP which would not otherwise vest prior to the Court Sanction Date will (in consequence of the Combination and in accordance with participants' contractual rights under the Redrow LTIP) vest and become exercisable from the Court Sanction Date until the date one month after the Court Sanction Date (unless they lapse earlier in accordance with the rules of the Redrow LTIP), subject to the Redrow Remuneration Committee's decisions regarding performance assessment and time pro-rating, on which:
Any Awards granted under the Redrow LTIP which are not exercised within one month after the Court Sanction Date will lapse (unless they lapse earlier in accordance with the rules of the Redrow LTIP).
As soon as reasonably practicable after Completion, Barratt will grant transition awards over Barratt Shares to all individuals who: (i) held outstanding 2023 LTIP Awards immediately prior to the Court Sanction Date (the "Relevant Awards"); and (ii) were employed by any member of the Redrow Group on Completion (or immediately before Completion and who became employees of the Barratt Group on or around Completion) (the "Transition Awards").
Each eligible participant's Transition Award will be granted under (or on equivalent terms to) the Barratt PSP and will be equal in value to the value of the Relevant Awards held by the relevant individual which was lost due to the application of time pro-rating. Each Transition Award will be payable in full on the original vesting date of the participant's Relevant Award that it replaces or on the date the participant leaves employment in certain limited circumstances (including redundancy) which are described in the Co-operation Agreement, subject to the relevant individual remaining in employment with a member of the Barratt Group (or leaving employment in certain limited circumstances, as applicable) and with no further assessment of performance conditions on that date. If an individual leaves employment in certain limited circumstances (including redundancy) which are described in the Co-operation Agreement after Completion but before their Transition Award is granted, the Transition Award will instead be paid in cash as soon as practicable after the individual's employment is terminated.
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Unless Completion has occurred, Redrow may grant Awards under the Redrow LTIP in the ordinary course of business and in accordance with its usual practice on or around September 2024 (the "2024 LTIP Awards"). 2024 LTIP Awards will not vest early on the Court Sanction Date and will automatically lapse on Completion if Completion occurs prior to the normal vesting date. Following the lapse of the 2024 LTIP Awards on Completion, Barratt will grant replacement awards under the Barratt PSP as soon as reasonably practicable after Completion to all individuals who: (i) are employed by any member of the Redrow Group on Completion (or immediately prior to Completion and who became employees of the Barratt Group on or around Completion); and (ii) held outstanding 2024 LTIP Awards immediately prior to Completion ("Replacement Awards").
Such Replacement Awards will be equal in value to the value of, and subject to the same performance conditions as, awards under the Barratt PSP for the relevant financial year granted to Barratt employees with equivalent seniority to the Redrow 2024 LTIP participant. The Replacement Awards will be subject to the same vesting/payment dates, post-vesting holding periods and good leaver provisions as awards granted under the Barratt PSP in the relevant financial year. The Replacement Awards will be subject to time pro-rating applying from the start of the performance period in accordance with the rules of the Barratt PSP. If any individual who was eligible to receive a Replacement Award leaves employment in certain limited circumstances (including redundancy) which are described in the Co-operation Agreement after Completion but before the Replacement Award is granted, the Replacement Award will instead be paid in cash at the time that the Replacement Award would have vested under the rules of the Barratt PSP (taking into account the application of time pro-rating applying from the start of the performance period in accordance with the rules of the Barratt PSP and performance assessment).
Outstanding Awards granted under the Redrow DBP that have not vested or become exercisable in the ordinary course prior to the Court Sanction Date will (in consequence of the Combination and in accordance with participants' contractual rights under the Redrow DBP) vest in full and become exercisable for a period of six months from the Court Sanction Date (unless they lapse earlier in accordance with the rules of the Redrow DBP).
Any Awards granted under the Redrow DBP which are not exercised within six months after the Court Sanction Date will lapse (unless they lapse earlier in accordance with the rules of the Redrow DBP).
Outstanding Awards granted under the Redrow Sharesave which would not otherwise become exercisable prior to the Court Sanction Date will (in consequence of the Combination and in accordance with participants' contractual rights under the Redrow Sharesave) become exercisable for a period of six months following the Court Sanction Date (unless they lapse earlier in accordance with the rules of the Sharesave) to the extent of the participants' savings at the time of exercise.
However, as an alternative to the exercise of outstanding Awards granted under the Redrow Sharesave, Barratt will offer participants in the Redrow Sharesave the opportunity to exchange or "rollover" their options granted under the Redrow Sharesave for equivalent options over Barratt Shares.
Options granted under the Redrow Sharesave which are not exercised or exchanged for equivalent options over Barratt Shares as explained above will lapse six months after the Court Sanction Date (unless they lapse earlier in accordance with the rules of the Redrow Sharesave).
In view of the size of the transaction, the Combination constitutes a Class 1 transaction (as defined in the Listing Rules) for Barratt. Accordingly, Barratt is required to seek the approval of Barratt Shareholders for the Combination at the Barratt General Meeting which has been convened for 10.00 a.m. on 15 May 2024 at the Seligman Theatre, Royal College of Physicians, 11 St Andrew's Place, London NW1 4LE. The Barratt Directors also do not currently have sufficient authority to issue and allot the New Barratt Shares in accordance with section 551 of the Companies Act and, accordingly, the approval of Barratt Shareholders is required to grant the Barratt Directors this authority.
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Barratt has sent to Barratt Shareholders the Barratt Circular summarising the background to and reasons for the Combination, which includes a notice convening the Barratt General Meeting. The Combination is conditional on, amongst other things, the Barratt Resolution being passed by Barratt Shareholders at the Barratt General Meeting. The Barratt Directors have unanimously recommended that Barratt Shareholders vote in favour of the Barratt Resolution at the Barratt General Meeting. Barratt has also produced the Barratt Prospectus in connection with the Admission of the New Barratt Shares. A copy of the Barratt Prospectus is available on Redrow's website, https://investors.redrowplc.co.uk/offer-for-redrow and on Barratt's website, https://www.barrattdevelopments.co.uk/investors/barratt-redrow. A hard copy, subject to applicable securities laws, can be requested by contacting Equiniti Group on +44 371 384 2657. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales).
Details of the interests of the Redrow Directors in the share capital of Redrow, and Awards in respect of such share capital, are set out in Part VIII (Additional Information on Redrow and Barratt) of this Document. Scheme Shares held by the Redrow Directors at the Scheme Record Time will be subject to the Scheme.
Details about the irrevocable undertakings given to Barratt by the Redrow Directors who hold Redrow Shares, including the circumstances in which they cease to be binding, are set out in paragraph 5 of in Part VIII (Additional Information on Redrow and Barratt) of this Document.
Particulars of the service agreements (including termination provisions) and letters of appointment of the Redrow Directors are set out in paragraph 7 of Part VIII (Additional Information on Redrow and Barratt) of this Document.
Matthew Pratt will join the executive leadership team of the Combined Group as a Group Executive Director and will assume the role of Chief Executive Officer, Redrow. Nicky Dulieu and Geeta Nanda will both join the Combined Group as Non-Executive Directors. Barbara Richmond has agreed to join the Combined Group in the role of Redrow Chief Financial Officer and Group Integration and Synergies Director to support the integration for a period of not less than 12 months following Completion. Further details of these arrangements are set out in paragraph 6 and paragraph 7 of this Part II (Explanatory Statement) of this Document. Please refer to paragraph 7.1 of Part VIII (Additional Information on Redrow and Barratt) of this Document for Matthew Pratt's and Barbara Richmond's current employment terms and paragraph 7.2 of Part VIII (Additional Information on Redrow and Barratt) for Nicky Dulieu's and Geeta Nanda's current employment terms.
Save as set out above, the effect of the Scheme on the interests of Redrow Directors does not differ from its effect on the like interests of any other Redrow Shareholder.
The Combination is to be implemented by means of a Court-sanctioned scheme of arrangement between Redrow and the Scheme Shareholders who are on the register of members of Redrow at the Scheme Record Time, under Part 26 of the Companies Act. This procedure requires approval by Scheme Shareholders at the Court Meeting and Redrow Shareholders at the General Meeting, and sanction of the Scheme by the Court. The Scheme is set out in full in Part IV (The Scheme of Arrangement) of this Document.
The purpose of the Scheme is to provide for Barratt to become the holder of the entire issued and to be issued share capital of Redrow. In order to achieve this, the Scheme Shares held by Scheme Shareholders as at the Scheme Record Time will be transferred to Barratt. In consideration for this transfer, Barratt will allot and issue New Barratt Shares to Scheme Shareholders (at the Scheme Record Time) on the basis set out in paragraph 2 of this Part II (Explanatory Statement) of this Document.
The Scheme will require the approval of Scheme Shareholders at the Court Meeting and Redrow Shareholders at the separate General Meeting, both of which will be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY on 15 May 2024 at 11.00 a.m. and 11.15 a.m., respectively (or, in the case of the General Meeting, if later, as soon thereafter as the Court Meeting has been concluded or adjourned).
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The Court Meeting is being held with the permission of the Court to seek the approval of Scheme Shareholders for the Scheme. The approval required at the Court Meeting is a majority in number of the Scheme Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the Scheme Shares voted by those Scheme Shareholders.
It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of opinion of Scheme Shareholders. Whether or not you intend to attend and/or vote at the Meetings, you are therefore strongly encouraged to return your Proxy Forms as soon as possible.
The General Meeting is being convened to seek the approval of Redrow Shareholders to enable the Redrow Directors to implement the Scheme and to amend the Articles of Association as described below. Voting at the General Meeting will be by poll and each Redrow Shareholder present in person or by proxy will be entitled to one vote for each Redrow Share held as at the Voting Record Time. The approval required for the Special Resolution to be passed is at least 75 per cent. of the votes cast on such resolution (in person or by proxy). In respect of the Special Resolution, each Redrow Shareholder will be entitled to cast one vote for each Redrow Share held.
The Barratt Resolution must also be approved by a simple majority of the votes cast by Barratt Shareholders at the Barratt General Meeting (described in more detail in paragraph 14 of this Part II (Explanatory Statement) of this Document).
Following the Redrow Meetings and the Barratt General Meeting, the Scheme must be sanctioned by the Court and will only become Effective upon delivery of the Scheme Court Order to the Registrar of Companies. The Scheme is subject to a number of Conditions which are set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document. Subject to the satisfaction or, where applicable, waiver of the relevant Conditions, it is expected that the Scheme will become effective during the second half of 2024 and, in any event, prior to the Long Stop Date, with New Barratt Shares admitted to listing on the premium segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and to trading on the Main Market by 8.00 a.m. on the second Business Day after the Effective Date.
Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders holding Scheme Shares at the Scheme Record Time, irrespective of whether or not they attended or voted in favour of, or against, the Scheme at the Court Meeting or in favour of, or against, or abstained from voting on the Special Resolution at the General Meeting.
If the Scheme does not become Effective by the Long Stop Date or such later date, if any, as may be agreed in writing by Redrow and Barratt (with the Panel's consent and as the Court may approve (if such approval(s) is/are required)), the Scheme will never become Effective.
The Special Resolution to be proposed at the General Meeting contains provisions to amend the Articles of Association to ensure that any Redrow Shares issued (other than to Barratt or its nominees): (i) between the General Meeting and the Scheme Record Time will be subject to the Scheme; and (ii) after the Scheme Record Time will automatically be acquired by Barratt on the same terms as under the Scheme. These provisions will avoid any person (other than Barratt or its nominees) holding Redrow Shares after dealings in such shares have ceased on the London Stock Exchange.
The Special Resolution is set out in the notice of General Meeting in Part XI (Notice of General Meeting) of this Document and seeks the approval of Redrow Shareholders for such amendments.
Each Scheme Shareholder (in respect of the Court Meeting) and Redrow Shareholder (in respect of the General Meeting) who is entered in Redrow's register of members at the Voting Record Time (expected to be 6.00 p.m. on 13 May 2024) will be entitled to attend and vote (in person or by proxy) on all resolutions to be put to the Court Meeting and General Meeting respectively. If either Meeting is adjourned, only those Redrow Shareholders on the register of members at 6.00 p.m. on the day which is two Business Days before the relevant adjourned Meeting will be entitled to attend (in person or by proxy). Each eligible Redrow Shareholder is entitled to appoint a proxy or proxies to attend and, on a poll, to vote instead of him or her. A proxy need not be a Redrow Shareholder.
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The completion and return of the Forms of Proxy will not prevent you from attending and voting at the Court Meeting or the General Meeting if you are entitled to and wish to do so.
If you are in any doubt as to whether or not you are permitted to vote at the Meetings (in person or by proxy), please contact the Company's Registrars, Computershare, by calling the Shareholder Helpline on +44 (0)370 707 1257. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales). Please note that calls may be monitored or recorded and Computershare cannot provide advice on the merits of the Combination or the Scheme or give any financial, legal or tax advice. Further information on the actions to be taken is set out in paragraph 21 of this Part II (Explanatory Statement) of this Document.
The Scheme contains a provision for Redrow and Barratt jointly to consent (on behalf of all persons concerned) to any modification of, or addition to, the Scheme or to any condition which the Court may approve or impose. The Court would be unlikely to approve or impose any modification of, or addition or condition to, the Scheme which might be material to the interests of Scheme Shareholders unless Scheme Shareholders were informed of any such modification, addition or condition. It would be for the Court to decide, in its discretion, whether or not a further meeting of Scheme Shareholders should be held in those circumstances for the purpose of approving any such modification, addition or condition.
The Combination and, accordingly, the Scheme is subject to a number of conditions set out in full in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document, including (among others):
The Scheme will lapse if:
(A) the Court Meeting and the General Meeting are not held by 6 June 2024, or if later, the date of the Barratt General Meeting (or such later date as may be agreed between Redrow and Barratt);
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provided, however, that the deadlines for the timing of the Court Meeting, the General Meeting and the Court Sanction Hearing, as set out above, may be waived by Barratt, and the deadline for the Scheme to become Effective may be extended by agreement between Redrow and Barratt.
Subject to satisfaction (or waiver, where applicable) of the relevant Conditions, the Scheme is expected to become Effective during the second half of 2024 and, in any event, prior to the Long Stop Date.
Barratt reserves the right to elect (subject to the consent of the Panel, and subject to the terms of the Co-operation Agreement) to implement the acquisition of the Redrow Shares by way of a Takeover Offer for the Redrow Shares as an alternative to the Scheme. In such event, the Combination will be implemented on substantially the same terms as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 90 per cent. of the shares to which such offer relates or 75 per cent. of the Redrow Shares to which the Takeover Offer relates if Redrow so consents (such consent not to be unreasonably withheld, conditioned or delayed) or such lesser percentage, being more than 50 per cent., as Barratt may, subject to the rules of the Takeover Code and the terms of the Co-operation Agreement and with the consent of the Panel, decide). Further, if sufficient acceptances of such Takeover Offer are received and/or sufficient Redrow Shares are otherwise acquired, it is the intention of Barratt to apply the provisions of the Companies Act to acquire compulsorily any outstanding Redrow Shares to which such Takeover Offer relates.
Subject to the Combination becoming Effective, settlement of the New Barratt Shares to which any Redrow Shareholder is entitled under the Scheme will be effected in the following manner:
Where, at the Scheme Record Time, a Scheme Shareholder holds Redrow Shares in uncertificated form, the New Barratt Shares to which such Scheme Shareholder is entitled will be issued to such person in uncertificated form through CREST. Barratt shall instruct Euroclear, or procure that Euroclear is instructed, to credit the appropriate CREST account through which the Scheme Shareholder holds such uncertificated Redrow Shares with such person's entitlement to New Barratt Shares at the commencement of dealings in New Barratt Shares and no later than 14 days after the Effective Date.
As from the Effective Date, Redrow Shares held in uncertificated form will be disabled.
Subject to the terms of the Scheme, Barratt reserves the right to issue the New Barratt Shares referred to above to all or any Scheme Shareholder(s) who hold Redrow Shares in uncertificated form in the manner referred to in the section titled 'Redrow Shares held in certificated form' if, for reasons outside its reasonable control, it is not able to effect settlement within the CREST system in accordance with this section.
Where, at the Scheme Record Time, a Scheme Shareholder holds Redrow Shares in certificated form, the New Barratt Shares to which such Scheme Shareholder is entitled will be issued in certificated form on the Effective Date.
Definitive certificates for New Barratt Shares will be despatched by first class post to the address appearing in Redrow's register of members at the Scheme Record Time or, in the case of joint holders, to the holder whose name stands first in that register in respect of the joint holding concerned. Definitive certificates will be despatched not later than the 14th day following the Effective Date.
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In the case of Scheme Shares issued or transferred pursuant to the Redrow Share Plans on or after the Court Sanction Date and prior to the Scheme Record Time, the New Barratt Shares to which the relevant Scheme Shareholders are entitled shall be issued in accordance with such method as may be agreed with the Company (whether in certificated or uncertificated form) as soon as practicable.
Fractions of New Barratt Shares will not be allotted or issued to Redrow Shareholders. Entitlements will be rounded down to the nearest whole number of New Barratt Shares and all fractional entitlements to New Barratt Shares will be aggregated, allotted and issued to a person appointed by Barratt and sold in the market. The net proceeds of such sale (after deduction of all expenses and commissions, including VAT thereon, incurred in connection with the sale) will be distributed by Barratt in due proportion to the Scheme Shareholders who would otherwise have been entitled to such fractions. However, individual entitlements to amounts of less than £5 will not be paid to Redrow Shareholders but will be retained for the benefit of the Combined Group.
All documents and remittances sent to Redrow Shareholders will be sent at their own risk.
On the Effective Date, each certificate representing a holding of Scheme Shares will cease to be a valid document of title and should be destroyed or, at the request of Redrow, delivered up to Redrow, or to any person appointed by Redrow to receive the same.
In relation to New Barratt Shares issued in certificated form, temporary documents of title will not be issued pending the despatch by post of definitive certificates for such New Barratt Shares as referred to in the section titled 'Redrow Shares held in certificated form' above. Pending the issue of definitive certificates for such New Barratt Shares, former Redrow Shareholders wishing to register transfers of such New Barratt Shares may certify their share transfer forms against the register of members of Barratt by contacting the Barratt registrar, Equiniti Group at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, between 8.30 a.m. and 5.30 p.m. (UK time), Monday to Friday (except public holidays in England and Wales), on +44 371 384 2657. On the registration of any such transfers, the transferee will receive a Barratt share certificate.
All mandates relating to the payment of dividends and other instructions given to Redrow by Scheme Shareholders in force at the Scheme Record Time relating to holdings of Scheme Shares will, unless and until amended or revoked, be deemed, as from the Effective Date, to be an effective mandate or instruction in respect of the corresponding New Barratt Shares to which that Scheme Shareholder is entitled, except to the extent that a Scheme Shareholder already holds Barratt Shares at the Scheme Record Time (and the registrars of Barratt are able to match such holdings), in which case any mandates and instructions in relation to those existing Barratt Shares will also apply to the New Barratt Shares issued to the Scheme Shareholder and any mandate held in respect of the Scheme Shares will therefore be disregarded.
Except with the consent of the Panel, settlement of the Consideration to which any Scheme Shareholder is entitled under the Scheme will be implemented in full in accordance with the terms of the Scheme free of any lien, right of set-off, counterclaim or other analogous right to which Barratt might otherwise be, or claim to be, entitled against such Redrow Shareholder.
Please refer to paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document for further information on dividends.
Your attention is drawn to Part VII (United Kingdom Taxation) of this Document, which contains a summary of limited aspects of the UK tax treatment of the Scheme. This summary relates only to the position of certain categories of Redrow Shareholders (as explained further in Part VII (United Kingdom Taxation) of this Document), is intended only as a general guide, does not constitute tax advice and does not purport to be a complete analysis of all potential UK tax consequences of the Scheme.
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You are strongly advised to contact an appropriate independent professional adviser immediately to discuss the tax consequences of the Scheme on your individual circumstances, in particular if you are in any doubt about your own taxation position or you are subject to taxation in a jurisdiction other than the United Kingdom.
The terms of the Scheme are set out in full in Part IV (The Scheme of Arrangement) of this Document. Further information regarding Redrow and Barratt is set out in Part VIII (Additional Information on Redrow and Barratt) of this Document and in the Barratt Prospectus. Documents published and available for inspection are listed in paragraph 16 of Part VIII (Additional Information on Redrow and Barratt) of this Document.
Redrow Shareholders will receive a BLUE Form of Proxy for the Court Meeting and a WHITE Form of Proxy for the General Meeting. Whether or not you intend to attend these Meetings, please complete and sign the Forms of Proxy in accordance with the instructions printed on them and return them to Computershare, the Company's Registrars, by post to Computershare, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, United Kingdom, so as to be received as soon as possible and in any event not later than the relevant times set out below:
or, if in either case the Meeting is adjourned, the relevant Form of Proxy should be received not later than 48 hours (excluding any part of such 48 hour period falling on a day that is not a working day) before the time fixed for the adjourned Meeting.
As an alternative to completing and returning the printed Forms of Proxy, proxies may be appointed electronically by logging on to the following website:www.investorcentre.co.uk/eproxy and following the instructions therein. For an electronic proxy appointment to be valid, the appointment must be received by Computershare not later than 11.00 a.m. on 13 May 2024 in the case of the Court Meeting and 11.15 a.m. on 13 May 2024 in the case of the General Meeting (or, in the case of an adjourned meeting, not less than 48 hours prior to the time and date set for such adjourned meeting (excluding any part of such 48 hour period falling on a day that is not a working day)).
In the case of the Court Meeting only, if the electronic proxy appointment is not received by the time set out above, the BLUE Form of Proxy may be handed to Computershare or to the Chair of the Court Meeting at the Court Meeting at any time before the commencement of the Court Meeting. In the case of the WHITE Form of Proxy for the General Meeting, if the electronic proxy appointment is not received by the relevant time, it will be invalid.
If you hold Redrow Shares in uncertificated form through CREST and wish to appoint a proxy or proxies for the Court Meeting or the General Meeting (or any adjourned Meeting) using the CREST electronic proxy appointment service, you may do so by using the procedures described in the CREST Manual. Please also refer to the accompanying notes to the notices of the Meetings set out in Part X (Notice of Court Meeting) and Part XI (Notice of General Meeting) of this Document. CREST personal members or other CREST sponsored members, and those CREST members who have appointed any voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
177042 Proof 3 Friday, April 19, 2024 04:14
In order for a proxy appointment or instruction made using the CREST service to be valid, the CREST Proxy Instruction must be properly authenticated in accordance with the specifications of Euroclear and must contain the information required for such instructions as described in the CREST Manual. The message (regardless of whether it constitutes the appointment of a proxy or an amendment to the instructions given to a previously appointed proxy) must, in order to be valid, be transmitted so as to be received by Computershare (ID: RA19) not later than 48 hours (excluding any part of such 48 hour period falling on a non-working day) before the time fixed for the relevant Meeting or any adjournment thereof. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Computershare are able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed any voting service provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. For further information on the logistics of submitting messages in CREST, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
Redrow may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the CREST Regulations.
If you are an institutional investor, you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by Redrow and approved by Redrow's Registrars, Computershare. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged not later than 48 hours (excluding any part of such 48 hour period falling on a non-working day) before the time fixed for the relevant Meeting or any adjournment thereof in order to be considered valid. Before you can appoint a proxy via this process, you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.
It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of opinion of Scheme Shareholders. Whether or not you intend to attend and/or vote at the Meetings (in person or by proxy), you are therefore strongly encouraged to: (i) sign and return your Forms of Proxy by
177042 Proof 3 Friday, April 19, 2024 04:14
The completion and return of the Forms of Proxy by post (or transmission of a proxy appointment or voting instruction online or through CREST) will not prevent you from attending, asking questions and voting (and/or, in the case of the Court Meeting, raising any objections) at the Court Meeting or the General Meeting, if you are entitled to and wish to do so.
If you have any questions about this Document, the Court Meeting or the General Meeting, or are in any doubt as to how to complete the Forms of Proxy or to submit your proxies electronically, please contact the Company's Registrars, Computershare, by calling the Shareholder Helpline on +44 (0)370 707 1257. Lines are open between 8.30 a.m. and 5.30 p.m. Monday to Friday (except public holidays in England and Wales). Please use the country code when calling from outside the UK. Calls from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones. Please note that calls may be monitored or recorded and Computershare cannot provide advice on the merits of the Combination or the Scheme or give any financial, legal or tax advice.
Yours faithfully,
Osman Akkaya For and on behalf of Barclays Bank PLC
Charles Batten For and on behalf of Peel Hunt LLP
177042 Proof 3 Friday, April 19, 2024 04:15
(a) the passing by a simple majority of the votes cast by Barratt Shareholders at the Barratt General Meeting (whether in person or by proxy) of the Barratt Resolution;
admitted to trading on the London Stock Exchange's Main Market for listed securities;
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Competition and Markets Authority clearance
(together, the "Regulatory Condition");
any shares or other securities in, or control or management of, Redrow or any other member of the Wider Redrow Group by any member of the Wider Barratt Group having been obtained in terms and in a form reasonably satisfactory to Barratt from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Redrow Group has entered into contractual arrangements and all such Authorisations having been obtained and remaining in full force and effect at the time at which the Combination becomes otherwise unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
acquisition or proposed acquisition of any shares or other securities in, or control or management of, Redrow by any member of the Wider Barratt Group;
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and all applicable waiting and other time periods (including any extensions thereof) during which such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Combination or the acquisition or proposed acquisition of any Redrow Shares or otherwise intervene having expired, lapsed or been terminated;
(vi) any member of the Wider Redrow Group ceasing to be able to carry on business under any name under which it presently carries on business;
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and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Redrow Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions (i) to (viii);
(vi) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) except in the ordinary course of business which is of a long-term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of a nature or magnitude which is likely to be restrictive on the business of any member of the Wider Redrow Group in a manner which is material in the context of the Wider Redrow Group taken as a whole;
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to an extent which is in any such case material in the context of the Wider Redrow Group taken as a whole;
(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;
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(iv) no contingent or other liability having arisen or become apparent to Barratt (in respect of the Wider Redrow Group) or Redrow (in the case of the Wider Barratt Group) which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider Redrow Group or any member of the Wider Barratt Group to an extent which is material in the context of the Wider Redrow Group taken as a whole or the Wider Barratt Group taken as a whole, as applicable; and
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(v) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Redrow Group or any member of the Wider Barratt Group which is necessary for the proper carrying on of its business, and the withdrawal, cancellation, termination or modification of which has had, or would reasonably be expected to have, a material adverse effect on the Wider Redrow Group taken as a whole or the Wider Barratt Group taken as a whole, as applicable; and
any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto to an extent which is material in the context of the Wider Redrow Group taken as a whole; or
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(vi) circumstances exist (whether as a result of making the Combination or otherwise) which would be reasonably likely to lead to any Third Party instituting (or whereby any member of the Wider Redrow Group would be likely to be required to institute) an environment audit or take any steps which would in any such case be reasonably likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or any asset now or previously owned, occupied or made use of by any past or present member of the Wider Redrow Group (or on its behalf) or by any person for which a member of the Wider Redrow Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest to an extent which is material in the context of the Wider Redrow Group taken as a whole;
(k) any asset of any member of the Wider Redrow Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).
Subject to the requirements of the Panel, Barratt reserves the right, in its sole discretion, to waive, in whole or in part, all or any of the Conditions set out in Part A above (in respect of Condition 3(i), so far as they relate to Redrow, the Wider Redrow Group or any part thereof), except Conditions 2.1(i), 2.2(i), 2.3(i), 3(a) and 3(b), which cannot be waived. If any of Conditions 2.1(ii), 2.2(ii) and 2.3(ii) is not satisfied by the relevant deadline specified in the relevant Condition, Barratt will make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked the relevant Condition, waived the relevant deadlines, or agreed with Redrow to extend the relevant deadline.
(b) declare and pay a Barratt Equalising Dividend to Barratt Shareholders, without any consequential change to the Exchange Ratio.
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In such circumstances, Redrow Shareholders will be entitled to retain the full amount of any such excess or such other dividend, distribution or form of capital return declared, made or paid.
If on or after the date of the 2.7 Announcement, and to the extent that any such excess or such other dividend, distribution, or form of capital return has been declared, paid, or made or becomes payable by Redrow prior to or on the Effective Date and Barratt exercises its rights under this paragraph 9 to reduce the consideration payable under the terms of the Combination, any reference in this Document to the consideration payable under the terms of the Combination will be deemed to be a reference to the consideration as so reduced.
If and to the extent that any such excess or such other dividend, distribution or form of capital return has been declared or announced, but not paid or made, or is not payable by reference to a record date on or prior to the Effective Date and is or will be (i) transferred pursuant to the Combination on a basis which entitles Barratt to receive the excess or the dividend, distribution or form of capital return and to retain it; or (ii) cancelled, the Exchange Ratio will not be subject to change in accordance with this paragraph 9.
Barratt also reserves the right to reduce the Exchange Ratio in such circumstances as are, and by such amount as is, permitted by the Panel.
Any exercise by Barratt of its rights referred to in this paragraph 9 will be the subject of an announcement and, for the avoidance of doubt, will not be regarded as constituting any revision or variation of the Combination.
of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.
CR-2024-001056
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and
SCHEME OF ARRANGEMENT
(under Part 26 of the Companies Act 2006)
between
and
(as hereinafter defined)
(A) In this Scheme, unless inconsistent with the subject or context, the following expressions bear the following meanings:
| "2.7 Announcement" | the joint announcement dated 7 February 2024 made by Redrow and Barratt which confirmed that they had reached an agreement on the terms of a recommended all-share offer for the combination of Barratt and Redrow pursuant to which Barratt will acquire the entire issued and to be issued ordinary share capital of Redrow; |
|---|---|
| "2024 Barratt Interim Results" | the half yearly results announcement of the Barratt Group for the six-month period to 31 December 2023; |
| "2024 Redrow Interim Results" | the half yearly results announcement of the Redrow Group for the 26-week period to 31 December 2023; |
| "Barratt" | Barratt Developments plc, a company incorporated in England and Wales with registered number 00604574 and with its registered office at Barratt House Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1UF; |
| "Barratt Additional Permitted Dividend" |
to the extent the Effective Date occurs after the record date in respect of any Barratt dividend in respect of each of the successive six-month periods ending 30 June 2024, 31 December 2024 or 30 June 2025 (as relevant), any dividend, provided in each case that it is in accordance with Barratt's existing dividend policy, consistent with past practice in relation to the payment of dividends and Redrow and Barratt have agreed the record date for such dividend; |
| "Barratt Equalising Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of the Document; |
| "Barratt Group" | Barratt and its subsidiary undertakings; |
|---|---|
| "Barratt Interim Dividend" | the dividend of 4.4 pence per Barratt Share in respect of the six-month period ended 31 December 2023 as set out in the 2024 Barratt Interim Results, scheduled to be paid on 17 May 2024; |
| "Business Day" | any day (other than a Saturday, Sunday, public or bank holiday) on which banks are generally open for normal business in London; |
| "Barratt Shares" | the allotted and issued ordinary shares of 10 pence each in the capital of Barratt; |
| "Barratt Shareholders" | holders of Barratt Shares; |
| "certificated form" or "in certificated form" |
a share or other security which is not in uncertificated form (that is, not in CREST); |
| "Competition and Markets Authority" or "CMA" |
a UK statutory body established under the Enterprise and Regulatory Reform Act 2013; |
| "Combination" | the proposed all-share offer for the combination of Barratt and Redrow to be effected by means of the Scheme on the terms and subject to the conditions set out in the Document; |
| "Combined Group" | the combined Redrow Group and Barratt Group following the Effective Date; |
| "Companies Act" | the Companies Act 2006, as amended from time to time; |
| "Conditions" | the conditions to the Combination and to the implementation of the Scheme set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of the Document; |
| "Co-operation Agreement" | the co-operation agreement entered into between Barratt and Redrow dated 7 February 2024, as described in paragraph 10 of Part VIII (Additional Information on Redrow and Barratt) of the Document; |
| "Consideration" | the consideration payable to Scheme Shareholders under the terms of the Scheme, comprising 1.44 New Barratt Shares per Scheme Share and any subsequent adjustments thereof; |
| "Court" | the High Court of Justice in England and Wales; |
| "Court Meeting" | the meeting of Scheme Shareholders convened pursuant to an order of the Court under section 896 of the Companies Act, notice of which is set out in Part X (Notice of Court Meeting) of the Document, for the purpose of considering and, if thought fit, approving (with or without amendment) the Scheme, including any adjournment thereof; |
| "Court Order" | the order of the Court sanctioning the Scheme under Part 26 of the Companies Act; |
| "Court Sanction Date" | the date on which the Scheme is sanctioned by the Court; |
| "Court Sanction Hearing" | the hearing of the Court of the application to sanction the Scheme under Part 26 of the Companies Act; |
| "CREST" | the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755), including as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018) in respect of which Euroclear UK & International Ltd is the Operator (as defined in said Regulations); |
|---|---|
| "CREST Manual" | the CREST Manual published by Euroclear, as amended from time to time; |
| "CREST Regulations" | the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018), as amended from time to time (including by means of the Uncertificated Securities (amendment and EU Exit) Regulations 2019 (SI 2019/679)); |
| "Document" | the document, of which the Scheme forms part, dated 19 April 2024 addressed to Redrow Shareholders; |
| "Effective Date" | the date on which the Scheme becomes effective; |
| "Euroclear" | Euroclear UK & International Limited; |
| "Exchange Ratio" | 1.44 New Barratt Shares for every 1 Redrow Share and, where the terms of the Combination allow, any subsequent adjustment thereof; |
| "Excluded Shares" | any Redrow Shares which are: |
| (i) registered in the name of or beneficially owned by Barratt and/or any member of the Barratt Group (and/or any nominee of the foregoing); or |
|
| (ii) held in treasury, |
|
| in each case, at any relevant date or time as the context permits; |
|
| "holder" | a registered holder and includes any person(s) entitled by transmission; |
| "Latest Practicable Date" | close of business on 17 April 2024, being the latest practicable date before publication of the Document; |
| "New Barratt Shares" | the new Barratt Shares proposed to be issued to Scheme Shareholders under the Scheme; |
| "Panel" or "Takeover Panel" | the Panel on Takeovers and Mergers of the United Kingdom, or any successor to it; |
| "Phase 2 CMA Reference" | a reference of the Combination under section 33 of the Enterprise Act 2002 to the Chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013; |
| "Redrow" or "Company" | Redrow plc, a company incorporated in England and Wales with registered number 02877315; |
| "Redrow Additional Permitted Dividend" |
has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc); |
| "Redrow DBP" | the Redrow Deferred Bonus Plan 2022, as amended from time to time; |
||
|---|---|---|---|
| "Redrow Group" | Redrow and its subsidiary undertakings; | ||
| "Redrow Interim Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of the Document; |
||
| "Redrow Equalising Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of the Document; |
||
| "Redrow Shareholders" | the registered holders of Redrow Shares from time to time; |
||
| "Redrow Share Plans" | the Redrow LTIP, the Redrow DBP and the Redrow Sharesave, each as amended from time to time; |
||
| "Redrow Shares" | the existing unconditionally allotted or issued and fully paid shares of 10.5 pence each in the capital of Redrow and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes effective; |
||
| "Redrow Sharesave" | Redrow Sharesave Plan 2014, as amended from time to time; |
||
| "Redrow LTIP" | the Redrow 2014 Long-Term Incentive Plan, as amended from time to time; |
||
| "Registrar of Companies" | the Registrar of Companies in England and Wales; | ||
| "Scheme" or "Scheme of Arrangement" |
this scheme of arrangement in its present form or with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Redrow and Barratt; |
||
| "Scheme Record Time" | 6.00 p.m. on the Business Day immediately after the Court Sanction Hearing; |
||
| "Scheme Shareholders" | holders of Scheme Shares and a "Scheme Shareholder" shall mean any one of those Scheme Shareholders; |
||
| "Scheme Shares" | the Redrow Shares: | ||
| (i) | in issue at the date of this Scheme; | ||
| (ii) | (if any) issued after the date of this Scheme and prior to the Voting Record Time; and |
||
| (iii) | (if any) issued at or after the Voting Record Time but before the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by this Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by this Scheme, |
||
| in each case (where the context requires), which remain in issue at the Scheme Record Time but excluding any Excluded Shares at any relevant date or time; |
|||
| "subsidiary undertaking" | has the meaning given in section 1162 of the Companies Act; |
||
| "Takeover Code" | the City Code on Takeovers and Mergers, as amended from time to time; |
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland; |
|---|---|
| "uncertificated form" or "in uncertificated form" |
a share or other security recorded on the relevant register as being held in uncertificated form in CREST, and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST; and |
| "Voting Record Time" | 6.00 p.m. on the day which is two Business Days prior to the date of the Court Meeting or, if the Court Meeting is adjourned, 6.00 p.m. on the day which is two Business Days before the date of such adjourned meeting. |
6 This figure is calculated using the treasury stock method.
transfer (whether as a deed or otherwise) of, or give any instruction to transfer by means of CREST, such Scheme Shares and every form, instrument or instruction of transfer so executed or instruction given shall be as effective as if it had been executed or given by the holder or holders of the Scheme Shares thereby transferred.
177042 Proof 3 Friday, April 19, 2024 04:16
such that from the Effective Date, no Scheme Shareholder shall be entitled to exercise any voting rights attached to the Scheme Shares or any other rights or privileges attaching to the Scheme Shares otherwise than in accordance with the directions of Barratt.
(A) In consideration for the transfer of the Scheme Shares to Barratt pursuant to clause 1 of this Scheme, Barratt shall, subject as hereinafter provided, allot and issue or procure the allotment and issuance to or for the account of each Scheme Shareholder (as appearing on the register of members of Redrow at the Scheme Record Time):
(D) Notwithstanding the provisions of sub-clause 2(E) below, Redrow Shareholders shall be entitled to receive and retain, without any consequential change to the Exchange Ratio:
(ii) to the extent the Effective Date occurs after the record date in respect of any Redrow dividend in respect of each of the successive six-month periods ending 30 June 2024, 31 December 2024 or 30 June 2025 (as relevant), any such dividend, provided in each case that it is in accordance with Redrow's existing dividend policy, consistent with past practice in relation to the payment of dividends and Redrow and Barratt have agreed the record date for such dividend (each such dividend a "Redrow Additional Permitted Dividend"); and
and in such circumstances, Redrow Shareholders shall be entitled to retain the full amount of any such excess or such other dividend, distribution or form of capital return declared, made or paid.
If and to the extent that any such excess or other dividend, distribution or form of capital return has been declared or announced, but not paid or made, or is not payable by reference to a record date on or prior to the Effective Date and is or will be (i) transferred pursuant to the Combination on a basis which entitles Barratt to receive the excess or the dividend, distribution or form of capital return and to retain it; or (ii) cancelled, the Exchange Ratio will not be subject to change in accordance with this sub-clause 2(E) of this Scheme.
With effect from, or as soon as reasonably practicable after, the Effective Date:
(A) Scheme Shareholders shall, in accordance with this Scheme, cease to have any rights with respect to the Scheme Shares, except the right to receive the Consideration determined as set out in clauses 2, 4 and 5 of this Scheme;
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Settlement will take place, by means of issuance of New Barratt Shares, issuance of share certificates and/or crediting of CREST accounts, as soon as practicable on or after the Effective Date, and in any event not more than 14 days after the Effective Date.
(B) With effect from the Scheme Record Time, each holding of Scheme Shares credited to any stock account in CREST shall be disabled and all Scheme Shares will be removed from CREST in due course.
(C) Prior to the issue of new share certificates in respect of New Barratt Shares to Scheme Shareholders pursuant to sub-clause 4(A)(i) and/or sub-clause 4(A)(iii), as relevant, the New Barratt Shares issued to them pursuant to this Scheme shall be certified against the register of members of Barratt.
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holder by sending a cheque or creating an assured payment obligation in accordance with the provisions of sub-clauses 5(B) or 5(C) of this Scheme (as applicable).
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To give effect to any sale under this sub-clause 5(A), the person appointed will be authorised to execute and deliver a form of transfer or other instrument or instruction of transfer (whether as a deed or otherwise) and to give such instructions and to do all other things which such person may consider necessary or expedient in connection with such sale.
In the absence of bad faith or wilful default, none of Redrow, Barratt or the person so appointed shall have any liability for any loss or damage arising as a result of the timing or terms of such sale.
All mandates relating to the payment of dividends and other instructions (or deemed instructions), including communication preferences, given to Redrow by Scheme Shareholders and in force at the Scheme Record Time relating to holdings of Scheme Shares shall, unless and until amended or revoked, be deemed, as from the Effective Date, to be an effective mandate or instruction in respect of the corresponding New Barratt Shares to which that Scheme Shareholder is entitled, except to the extent that a Scheme Shareholder already holds Barratt Shares at the Scheme Record Time (and the registrars of Barratt are able to match such holdings), in which case any mandates and instructions in relation to those existing Barratt Shares shall also apply to the New Barratt Shares issued to the Scheme Shareholder and any mandate held in respect of the Scheme Shares will therefore be disregarded.
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Redrow and Barratt may jointly consent on behalf of all persons concerned to any modification of, or addition to, this Scheme or to any condition which the Court may approve or impose. Any such modification or addition shall require the consent of the Panel where such consent is required under the Takeover Code. For the avoidance of doubt, no modification may be made to this Scheme once it has become effective.
This Scheme is governed by English law and is subject to the exclusive jurisdiction of the courts of England and Wales. The rules of the Takeover Code apply to this Scheme.
Dated 19 April 2024
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The following sets out financial information in respect of Redrow as required by Rule 24.3 of the Takeover Code. The specified sections of the documents referred to below, the contents of which have previously been announced through a Regulatory Information Service, are incorporated into this Document by reference in accordance with Rule 24.15 of the Takeover Code:
There are no current ratings or outlooks publicly accorded to Redrow by any ratings agencies.
The following sets out financial information in respect of Barratt as required by Rule 24.3 of the Takeover Code. The specified sections of the documents referred to below, the contents of which have previously been announced through a Regulatory Information Service, are incorporated into this Document by reference in accordance with Rule 24.15 of the Takeover Code:
There are no current ratings or outlooks publicly accorded to Barratt by any ratings agencies.
Save as expressly referred to herein, neither the content of Redrow or Barratt's websites, nor the content of any website accessible from hyperlinks on Redrow or Barratt's websites is incorporated into, or forms part of, this Document.
The 2023 Redrow AGM Trading Statement included the following statement:
"We continue to expect our results to be in the guidance range we gave in September 2023 of revenue between £1.65bn and £1.7bn and profit before tax of between £180m and £200m.
However, with the lower than anticipated sales rate due to the more subdued Autumn housing market they are more likely to be towards the lower end of the range."
This statement constitutes a profit forecast for the purpose of Rule 28 of the Takeover Code (the "Redrow Profit Forecast"). The Redrow Profit Forecast was repeated in the 2024 Redrow Interim Results as follows:
"Revenue (£bn) 1.65-1.70 Underlying Profit Before Tax (£m) 180-200
177042 Proof 3 Friday, April 19, 2024 04:17
As we reported at the time of the AGM in November 2023, due to the subdued Autumn housing market we expect the 2024 results to be towards the lower end of the above range."
The Redrow Profit Forecast was also repeated in the 2.7 Announcement. The Redrow Directors confirm that the Redrow Profit Forecast continues to be valid as at the date of this Document.
Set out below is the basis of preparation of the Redrow Profit Forecast and the assumptions on which it is based.
The Redrow Profit Forecast has been prepared on a basis consistent with Redrow's accounting policies which are in accordance with IFRS. These policies are consistent with those applied in the preparation of Redrow's annual results for the 52 weeks ended 2 July 2023.
For the avoidance of doubt, costs arising in respect of the Combination, and any exceptional items, including material additional exceptional legacy fire safety remediation costs, are not included in "Underlying Profit Before Tax" and are not taken into account for the purposes of the Redrow Profit Forecast.
The Redrow Profit Forecast is based on the assumptions listed below.
availability of mortgage financing for Redrow's private home customers, home prices, interest rates or legislative or regulatory requirements;
177042 Proof 3 Friday, April 19, 2024 04:17
The Redrow Directors have considered the Redrow Profit Forecast and confirm that it remains valid as at the date of this Document, has been properly compiled on the basis of the assumptions set out above and the basis of accounting used is consistent with Redrow's accounting policies.
177042 Proof 3 Friday, April 19, 2024 04:18
The comments set out below summarise certain limited aspects of the UK tax treatment of certain Redrow Shareholders under the Scheme and do not purport to be a complete analysis of all tax considerations relating to the Scheme. They are based on current UK legislation and current published HMRC practice (which may not be binding on HMRC), in each case as at the Latest Practicable Date, both of which are subject to change, possibly with retrospective effect. They are not, and should not be taken as being, advice.
The comments are intended as a general guide and do not deal with certain types of Redrow Shareholder, including, but not limited to, persons who are: (i) brokers, dealers, intermediaries, insurance companies, trustees of certain trusts; (ii) subject to specific tax regimes or benefit from specific reliefs or exemptions; (iii) are treated as holding their Scheme Shares as carried interest; (iv) Scheme Shareholders who hold Scheme Shares as part of hedging or commercial transactions; and (v) Scheme Shareholders who hold Scheme Shares in connection with a trade, profession or vocation carried out in the UK (whether through a branch or agency or otherwise) or who have or could be treated for tax purposes has having acquired their Redrow Shares by reason of their employment. Nothing in these paragraphs should be taken as providing personal tax advice. In particular, the following paragraphs do not refer to UK inheritance tax.
References below to "UK Holders" are to Redrow Shareholders who are resident (and, in the case of individuals, domiciled or deemed domiciled) for tax purposes in, and only in, the United Kingdom (and to whom split-year treatment does not apply), who hold their Redrow Shares as an investment (other than under a self-invested personal pension plan or individual savings account) and who are the absolute beneficial owners of their Redrow Shares.
The tax treatment of each UK Holder under the Scheme for the purposes of the UK taxation of chargeable gains will depend on the individual circumstances of that UK Holder and on the form of consideration received.
UK Holders will receive 1.44 New Barratt Shares in respect of each Scheme Share. Subject to the following paragraphs, the exchange of Scheme Shares for New Barratt Shares should be treated as a reorganisation for the purposes of UK taxation of chargeable gains. This means that to the extent that a UK Holder receives New Barratt Shares in exchange for their Redrow Shares and that UK Holder does not hold (either alone or together with persons connected with them) more than 5 per cent. of Redrow Shares, that UK Holder will not be treated as having made a disposal of their Redrow Shares for the purposes of UK taxation of chargeable gains. Instead, the New Barratt Shares should be treated as the same asset as those Redrow Shares, and as acquired at the same time and for the same consideration as the relevant Redrow Shares. The New Barratt Shares should therefore have the same base cost for the purposes of UK taxation of chargeable gains as the Redrow Shares they replace.
UK Holders who, alone or together with connected persons, hold more than 5 per cent. of Redrow Shares may be eligible for the treatment described in the preceding paragraph only if the transaction is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is the avoidance of liability to UK taxation of chargeable gains, pursuant to section 137 of the Taxation of Chargeable Gains Act 1992 ("TCGA"). Such UK Holders are advised that a clearance has been obtained from HMRC under section 138 of the TCGA that section 137 will not apply to prevent the treatment described in the preceding paragraph. As a result, any such UK Holder will be treated in the same manner described in the preceding paragraph.
If a UK Holder receives cash in respect of the sale of fractional entitlements to New Barratt Shares, that UK Holder may, except to the extent referred to in the next paragraph, be treated as making a part disposal of their Redrow Shares for the purposes of UK taxation of chargeable gains which may, depending on the UK Holder's individual circumstances (including the UK Holder's base cost in their Redrow Shares and the availability of exemptions, reliefs and/or allowable losses), give rise to a liability to UK taxation on chargeable gains or, alternatively, an allowable capital loss.
177042 Proof 3 Friday, April 19, 2024 04:18
Where a UK Holder receives cash in respect of fractional entitlements to New Barratt Shares under the Scheme, the expectation is that such cash will be "small" (under current HMRC practice). Accordingly, the UK Holder should not generally be treated as having made a disposal or part disposal of the Redrow Shares in respect of which the cash was received, so that no immediate liability to UK taxation of chargeable gains will arise. Instead, an amount equal to the amount of such cash will be deducted from the base cost otherwise attributable to the New Barratt Shares for the purposes of UK taxation of chargeable gains.
Under current HMRC practice, any cash payment of £3,000 or less, or which is 5 per cent. or less of the market value of a UK Holder's holding of Redrow Shares immediately prior to the disposal should generally be treated as small for these purposes.
In all other cases where a UK Holder receives cash in addition to New Barratt Shares, the UK Holder will be treated as having made a part disposal of their Redrow Shares which may, depending on the UK Holder's individual circumstances (including the availability of exemptions, reliefs and/or allowable losses), give rise to a liability to UK taxation on chargeable gains. Any chargeable gain will be computed on the basis of an apportionment of the allowable cost of the holding between the two components of the consideration received by that UK Holder by reference to the market value of the holding at the time of the disposal.
No UK stamp duty or SDRT should generally be payable by Redrow Shareholders on the exchange of their Redrow Shares for New Barratt Shares under the Scheme.
A subsequent disposal of New Barratt Shares may, depending on individual circumstances (including the availability of exemptions, reliefs and allowable losses), give rise to a liability to UK taxation on chargeable gains. UK Holders who are issued New Barratt Shares pursuant to the Scheme are referred to the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible) for a description in respect of disposals of those shares.
In addition, stamp duty or SDRT will generally be payable on subsequent transfers of, or on agreements to transfer, the New Barratt Shares. Stamp duty and SDRT are normally liabilities borne by the purchaser.
UK Holders who are issued New Barratt Shares pursuant to the Scheme are referred to the Barratt Prospectus (for which Barratt, the Barratt Directors and the Proposed Barratt Directors are responsible) for a description of the UK taxation position in respect of dividends on those shares.
177042 Proof 3 Friday, April 19, 2024 04:19
2.1 The Redrow Directors and their respective positions are:
| Richard Akers | Non-Executive Chair |
|---|---|
| Matthew Pratt | Group Chief Executive |
| Barbara Richmond | Group Finance Director |
| Nicky Dulieu | Senior Independent Director |
| Oliver Tant | Non-Executive Director |
| Geeta Nanda | Non-Executive Director |
The business address of Redrow and each of the Redrow Directors is Redrow House, St Davids Park, Flintshire, CH5 3RX, United Kingdom.
The Company Secretary of Redrow is Beth Ford.
2.2 The Barratt Directors and their respective positions are as follows:
| Caroline Silver | Chair |
|---|---|
| David Thomas | Group Chief Executive |
| Steven Boyes | Chief Operating Officer & Deputy Chief Executive |
| Mike Scott | Chief Financial Officer |
| Jock Lennox | Senior Independent Director |
| Katie Bickerstaffe | Non-Executive Director |
| Jasi Halai | Non-Executive Director |
| Nigel Webb | Non-Executive Director |
| Chris Weston | Non-Executive Director |
The business address of Barratt and each of the Barratt Directors is Barratt House, Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1UF, United Kingdom.
The Company Secretary of Barratt is Tina Bains.
For the purposes of this paragraph 3, and paragraphs 3.2, 3.3 and 4 of this Part VIII (Additional Information on Redrow and Barratt) of this Document:
respect of, relevant Redrow securities (in addition to those described below in relation to the Redrow Share Plans):
177042 Proof 3 Friday, April 19, 2024 04:19
| Holder | Number of Redrow Shares |
% of Redrow's total issued share capital |
Nature of interest |
|---|---|---|---|
| Matthew Pratt | 143,067 | 0.043 | Ordinary shares of 10.5 pence each |
| Barbara Richmond 594,685 | 0.180 | Ordinary shares of 10.5 pence each | |
| Richard Akers | 70,000 | 0.021 | Ordinary shares of 10.5 pence each |
| Nicky Dulieu | 6,500 | 0.002 | Ordinary shares of 10.5 pence each |
| Oliver Tant | 11,303 | 0.003 | Ordinary shares of 10.5 pence each |
As at the Latest Practicable Date, the Redrow Directors (and their close relatives, related trusts and connected persons) held the following outstanding awards and options over relevant Redrow securities under the Redrow Share Plans set out below:
| Redrow Director | Share Plan | Number of ordinary shares under option/award |
Normal Vesting Date |
Exercise price (per share) |
|---|---|---|---|---|
| Matthew Pratt | Deferred bonus scheme (2023) |
35,091 | 50% on 19 September 2024 and 50% on 19 September 2025 |
NIL |
| Deferred bonus scheme (2022) |
39,322 | 21 September 2024 | NIL | |
| LTIP 2023 LTIP 2022 LTIP 2021 LTIP 2020 LTIP 2019 Savings-related option scheme (2023) |
201,172 165,086 131,192 199,852 25,034 4,708 |
19 September 2026 21 September 2025 21 September 2024 23 September 2023 11 September 2022 1 January 2027 |
NIL NIL NIL NIL NIL 3.94 |
|
| Barbara Richmond | Deferred bonus scheme (2023) |
21,418 | 50% on 19 September 2024 and 50% on 19 September 2025 |
NIL |
| Deferred bonus scheme (2022) |
24,001 | 21 September 2024 | NIL | |
| LTIP 2023 LTIP 2022 LTIP 2021 LTIP 2020 LTIP 2019 Savings-related option scheme (2023) Savings-related |
122,786 100,761 80,080 136,936 22,592 2,354 2,868 |
19 September 2026 21 September 2025 21 September 2024 23 September 2023 11 September 2022 1 January 2027 1 January 2026 |
NIL NIL NIL NIL NIL 3.94 3.137 |
|
| option scheme (2022) |
(B) Interests held by Barratt and persons acting in concert with Barratt
As at the Latest Practicable Date, Barratt and persons acting in concert with Barratt held the following interests in, or rights to subscribe in respect of, relevant Redrow securities:
| Holder | Number of Redrow Shares |
% of Redrow's total issued share capital |
Nature of interest |
|---|---|---|---|
| Barratt | 23 | 0.000 | Ordinary shares of 10.5 pence each |
As at the Latest Practicable Date, the following dealings in relevant securities in Redrow by Redrow Directors and persons acting in concert with Redrow have taken place during the disclosure period:
177042 Proof 3 Friday, April 19, 2024 04:19
| Redrow Director | Date | Transaction | Number of Redrow Shares |
Price per unit (£) |
|---|---|---|---|---|
| Matthew Pratt | 9 February 2024 | Exercise of options under Redrow Sharesave Plan 2014 |
4,768 | 3.775 |
| Matthew Pratt | 26 February 2024 | Exercise of options under the deferred bonus scheme (2021) |
18,892 | NIL |
| Matthew Pratt | 26 February 2024 | Exercise of options under the deferred bonus scheme (2022) |
39,322 | NIL |
| Matthew Pratt | 26 February 2024 | Sale of shares to cover tax and national insurance arising on exercise of options under the deferred bonus schemes |
27,430 | 6.355 |
| Barbara Richmond 9 February 2024 | Exercise of options under Redrow Sharesave Plan 2014 |
2,384 | 3.775 |
As at the Latest Practicable Date, the Barratt Directors (and their close relatives, related trusts and connected persons) held the following interests in, or rights to subscribe in respect of, relevant Barratt securities (in addition to those described below in relation to the Barratt Share Plans):
| Barratt Director | Number of Barratt Shares |
% of Barratt's total issued share capital |
Nature of interest |
|---|---|---|---|
| Caroline Silver | 10,000 | 0.00 | Ordinary shares of 10 pence each |
| David Thomas | 1,326,830 | 0.14 | Ordinary shares of 10 pence each |
| Mike Scott | 69,620 | 0.01 | Ordinary shares of 10 pence each |
| Steven Boyes | 728,582 | 0.07 | Ordinary shares of 10 pence each |
| Nigel Webb | 12,660 | 0.00 | Ordinary shares of 10 pence each |
| Jock Lennox | 10,000 | 0.00 | Ordinary shares of 10 pence each |
| Katie Bickerstaffe | 8,489 | 0.00 | Ordinary shares of 10 pence each |
| Jasi Halai | 12,581 | 0.00 | Ordinary shares of 10 pence each |
As at the Latest Practicable Date, the Barratt Directors (and their close relatives, related trusts and connected persons) held the following outstanding awards and options over relevant Barratt securities under the Barratt Share Plans set out below:
| Barratt Director Share Plan | Number of ordinary shares Date/Exercise under option/award |
Normal Vesting Period |
Exercise price (per share) |
|
|---|---|---|---|---|
| David Thomas | Long-Term Performance Plan 2023 |
390,914 | 19 October 2026 | NIL |
| Long-Term Performance Plan 2022 |
307,746 | 12 October 2025 | NIL | |
| Long-Term Performance Plan 2021 |
224,370 | 14 October 2024 | NIL | |
| Deferred Bonus Plan 2022 |
88,632 | 12 October 2025 | NIL | |
| Deferred Bonus Plan 2021 |
52,138 | 24 September 2024 NIL |
| Barratt Director Share Plan | Number of ordinary shares Date/Exercise under option/award |
Normal Vesting Period |
Exercise price (per share) |
|
|---|---|---|---|---|
| SAYE 3YR 2024 | 4,868 | 1 July 2027 to 31 December 2027 |
3.81 | |
| SAYE 5YR 2021 | 2,483 | 1 July 2026 to 31 December 2026 1 July 2024 to 31 December 2024 |
6.04 | |
| SAYE 5YR 2019 | 2,890 | 5.19 | ||
| Employee Long Term Incentive Plan 2023 |
304 | 1 July 2025 | NIL | |
| Mike Scott | Long-Term Performance Plan 2023 |
240,563 | 19 October 2026 | NIL |
| Long-Term Performance Plan 2022 |
189,382 | 12 October 2025 | NIL | |
| Long-Term Performance Plan 2021 |
117,716 | 14 October 2024 | NIL | |
| SAYE 3YR 2022 | 4,128 | 1 July 2025 to 31 December 2025 |
4.36 | |
| Steven Boyes | Long-Term Performance Plan 2023 |
315,329 | 19 October 2026 | NIL |
| Long-Term Performance Plan 2022 |
248,243 | 12 October 2025 | NIL | |
| Long-Term Performance Plan 2021 |
180,987 | 14 October 2024 | NIL | |
| Deferred Bonus Plan 2022 |
71,495 | 12 October 2025 | NIL | |
| Deferred Bonus Plan 2021 |
41,263 | 24 September 2024 NIL | ||
| SAYE 3YR 2024 | 2,434 | 1 July 2027 to 31 December 2027 |
3.81 | |
| SAYE 3YR 2023 | 5,186 | 1 July 2026 to 31 December 2026 |
3.47 | |
| SAYE 3YR 2021 | 1,490 | 1 July 2024 to 31 December 2024 |
6.04 | |
| Employee Long Term Incentive Plan 2023 |
304 | 1 July 2025 | NIL | |
| Employee Long Term Incentive Plan 2022 |
271 | 1 July 2024 | NIL |
(B) Interests held persons acting in concert with Barratt
As at the Latest Practicable Date, persons acting in concert with Barratt held the following interests in, or rights to subscribe in respect of, relevant Barratt securities:
| Holder | Number of Barratt Shares Barratt's total |
% of issued share capital |
Nature of interest |
|---|---|---|---|
| Calvert Research and Management |
64,328 | 0.01 | Ordinary shares of 10 pence each |
| UBS AG Australia Branch 1,406 | 0.00 | Ordinary shares of 10 pence each |
As at the Latest Practicable Date, the following dealings in relevant securities in Barratt by Barratt Directors (and their close relatives, related trusts and connected persons) and persons acting in concert with Barratt have taken place during the disclosure period:
177042 Proof 3 Friday, April 19, 2024 04:19
| Concert party | Date | Transaction | Number of Price relevant securities |
per unit (£) |
|
|---|---|---|---|---|---|
| David Thomas | 3 April 2024 | Grant of options under SAYE 3YR 2024 |
4,868 | 3.81 | |
| 21 December 2023 | Grant of awards under Long-Term Performance Plan 2023 |
390,914 | NIL | ||
| 19 October 2023 | Vesting of awards under Long-Term Performance Plan 2020 |
55,272 | NIL | ||
| 19 October 2023 | Sale of Barratt Shares awarded under Long-Term Performance Plan 2020 |
26,018 | 3.94 | ||
| Mike Scott | 21 December 2023 | Grant of awards under Long-Term Performance Plan 2023 |
240,563 | NIL | |
| 19 October 2023 | Vesting of awards under Long-Term Performance Plan 2020 |
13,265 | NIL | ||
| 19 October 2023 | Sale of Barratt Shares awarded under Long-Term Performance Plan 2020 |
6,245 | 3.94 | ||
| 22 September 2023 | Purchase of Barratt Shares | 10,550 | 4.74 | ||
| Steven Boyes | 3 April 2024 | Grant of options under SAYE 3YR 2024 |
2,434 | 3.81 | |
| 31 December 2023 | Exercise of options under SAYE 3YR 2020 |
3,946 | 4.56 | ||
| 21 December 2023 | Grant of awards under Long-Term Performance Plan 2023 |
315,329 | NIL | ||
| 19 October 2023 | Vesting awards under Long-Term Performance Plan 2020 |
23,152 | NIL | ||
| Katie Bickerstaffe 20 October 2023 | Purchase of Barratt Shares | 981 | 4.038 | ||
| Nigel Webb | 19 October 2023 | Purchase of Barratt Shares | 12,660 | 3.961 |
(D) no person who has an arrangement with Barratt or any person acting in concert with Barratt had any interest in, right to subscribe in respect of or any short position in relation to any relevant Redrow securities or any relevant Barratt securities, nor has any such person dealt in any relevant Redrow securities or any relevant Barratt securities during the disclosure period; and
177042 Proof 3 Friday, April 19, 2024 04:19
5.1 Taking into account the irrevocable undertakings from each of the Redrow Directors who hold Redrow Shares and Bridgemere Securities Limited, Steve Morgan's family investment vehicle, Barratt has received irrevocable undertakings in respect of a total of 53,051,665 Redrow Shares representing, in aggregate, approximately 16 per cent. of Redrow's issued ordinary share capital as at the Latest Practicable Date, as set out below.
177042 Proof 3 Friday, April 19, 2024 06:16
5.2 Copies of the irrevocable undertakings are available on Redrow's website at https://investors.redrowplc.co.uk/offerforredrow and will remain on display until the end of the Offer Period.
5.3 The Redrow Directors have given irrevocable undertakings to vote, or procure votes, in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed to implement the Scheme at the General Meeting (and, if the Combination is subsequently structured as a Takeover Offer, to accept any Takeover Offer made by Barratt in accordance with the terms of the irrevocable undertakings) in respect of those Redrow Shares that they legally and/or beneficially hold and the voting rights of which they control:
| Name of Redrow Director | Number of Redrow Shares in respect of which undertaking is given |
% of Redrow's issued ordinary share capital (excluding shares under option) |
|---|---|---|
| Richard Akers | 70,000 | 0.021 |
| Matthew Pratt | 55,948 | 0.017 |
| Barbara Richmond | 56,098 | 0.017 |
| Nicky Dulieu | 6,500 | 0.002 |
| Oliver Tant | 11,303 | 0.003 |
| Total | ––––––––––––––––––––––– 199,849 |
––––––––––––––––––– 0.060 |
| ––––––––––––––––––––––– | ––––––––––––––––––– |
5.8 The following Redrow Shareholder has given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Redrow Special Resolution to be proposed at the General Meeting in relation to the following Redrow Shares.
| Name | Number of Redrow Shares in respect of which undertaking is given |
% of Redrow's issued ordinary share capital |
|---|---|---|
| Bridgemere Securities Limited | 52,851,816 | 16.0 |
5.9 Bridgemere Securities Limited has also undertaken not to sell any New Barratt Shares, which may be issued to it under the terms of the Combination for a period of six months following the Effective Date.
177042 Proof 3 Friday, April 19, 2024 04:19
Pounds Sterling in respect of the Barratt Shares and the New Barratt Shares.
6.3 Number of shares in issue
As at the Latest Practicable Date, Barratt had 974,592,261 fully paid Barratt Shares in issue.
6.4 Description of the rights attaching to the securities
The New Barratt Shares to be issued under the Scheme will, when issued, be ordinary shares in the capital of Barratt with a nominal value of 10 pence each, and be issued credited as fully paid and will rank pari passu in all respects with the Barratt Shares, including the right to receive and retain in full all dividends and other distributions, (if any) announced, declared, made or paid, or any form of capital return (whether by reduction of share capital or share premium account or otherwise) made, in each case, with reference to a record date falling on or after the Effective Date.
6.5 Restrictions on the free transferability of the securities
The New Barratt Shares are freely transferable and there are no restrictions on transfer. However, the making of the proposed offer of New Barratt Shares to persons located or resident in, or who are citizens of, or who have a registered address in countries other than the UK may be affected by the law or regulatory requirements of the relevant jurisdiction, which may include restrictions on the free transferability of such New Barratt Shares.
6.6 Admission
The existing Barratt Shares are listed on the premium listing segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and are traded on the Main Market.
It is intended that applications will be made to the FCA and the London Stock Exchange, respectively, for the New Barratt Shares to be admitted to the premium listing segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and to trading on the Main Market.
177042 Proof 3 Friday, April 19, 2024 04:19
On the basis of the Expected Timetable of Principal Events (as set out at pages 14 to 15 above), it is expected that Admission will become effective and unconditional dealing in the New Barratt Shares on the London Stock Exchange's Main Market for listed securities will commence at or shortly after 8.00 a.m. on the third Business Day following the Court Sanction Hearing.
7.1 Executive Directors' service contracts
Set out below are details of the service contracts of the Executive Directors:
| Name of Executive Director | Date of service contract |
Effective date of appointment |
Notice period |
|---|---|---|---|
| Matthew Pratt | 1 July 2020 | 1 July 2020 | 12 months' notice by either party(1) |
| Barbara Richmond | 15 January 2010 | 18 January 2010 | 12 months' by employer, six months' by employee(2) |
(E) Under their respective service contracts, Matthew Pratt may be invited to participate in Redrow's long term incentive plan, and Barbara Richmond is entitled to participate in Redrow's long term incentive plan at Redrow's discretion. The maximum potential award for each of the Redrow Executive Directors is normally 150 per cent. of base salary in respect of a financial year (or 200 per cent. of base salary in exceptional circumstances).
177042 Proof 3 Friday, April 19, 2024 04:19
Subject to the terms of Barbara Richmond's service contract which provides for its automatic termination on Barbara Richmond reaching the retirement age as defined in the rules of the Redrow Staff Pension Scheme (which, as stated above, Redrow does not intend to seek to enforce), each Redrow Executive Director's service contract can be terminated on notice (or, in specified circumstances summarily) and their service contracts have no fixed expiry date. The appointment of the Redrow Executive Directors is terminable: (i) in the case of Matthew Pratt, on 12 months' notice by him; (ii) in the case of Barbara Richmond, on six months' notice by her; (iii) on 12 months' notice by Redrow (where their employment is terminated without cause); or (iv) with immediate effect in specified circumstances, including in the event of the Redrow Executive Directors' gross misconduct or persistent breach of their service contract, acts of dishonesty or conviction of certain criminal offences, in which case they will not be entitled to any payment other than the amounts accrued but unpaid as at termination. Should notice be served, the Redrow Executive Directors will continue to receive basic salary, benefits and pension for the duration of their notice period. Redrow may require the individual to continue to fulfil their current duties or may assign a period of garden leave. In addition, at any point after notice in (iii) is given, Redrow may terminate the Redrow Executive Directors' appointment with immediate effect and make a payment in lieu of base salary, benefits and pension to which the Redrow Executive Director would have been entitled during the unexpired period of notice which could be paid in monthly instalments until the date on which the 12-month notice period would have expired, subject to mitigation, such that payments will either reduce, or stop completely, if the Redrow Executive Director obtains alternative employment, or as a lump sum.
(F) Each Redrow Executive Director is subject to some limited post-termination restrictions for a period of 12 months after termination. Matthew Pratt's service contract provides explicitly that the period of post-termination restrictions will be reduced by any period of garden leave and it would be the Redrow Remuneration Committee's intention to operate the equivalent provisions in Barbara Richmond's service contract on the same basis, in accordance with current legal standards and best practice. As part of the transaction, Barbara Richmond has agreed to move onto more comprehensive post-termination restrictions, which align with the restrictions that Barratt Executive Directors are subject to following termination.
The non-executive Redrow Directors have entered into letters of appointment. The appointment of each non-executive Redrow Director is subject to their continued satisfactory performance and re-election at annual general meetings of Redrow.
Each non-executive Redrow Director's letter of appointment is terminable by either party on three months' written notice. They may also cease to hold office as a director in accordance with the Articles of Association. In the event that a non-executive Redrow Director retires or is not re-elected, their appointment will terminate automatically, with immediate effect and without compensation. Each non-executive Redrow Director's letter of appointment is also terminable by Redrow with immediate effect without payment of compensation if the non-executive Redrow Director: (i) commits a material breach of their obligations under the letter of appointment; (ii) commits a serious or repeated breach or non-observance of their obligations to Redrow; (iii) is guilty of any fraud or dishonesty or has acted in a manner which, in the opinion of Redrow, brings or is likely to bring the non-executive Redrow Director or Redrow into disrepute or is materially adverse to Redrow's interests; (iv) is convicted of certain arrestable criminal offences; (v) is declared bankrupt; (vi) is disqualified from acting as a director; or (vii) has not complied with Redrow's anti-corruption and bribery policy and procedures.
Under the letters of appointment, the non-executive Redrow Directors are typically appointed for an initial three-year term and are typically expected to serve two three-year terms, which may be extended for an additional period (subject to Redrow Board review and re-election at the Redrow annual general meeting).
177042 Proof 3 Friday, April 19, 2024 04:19
| Name of Director | Date appointed Director |
Original letter of appointment date |
Date of current appointment |
Fees (per annum)7 |
|---|---|---|---|---|
| Richard Akers (Chair) | 1 June 2021 | 12 May 2021 | 1 June 2021 | £270,375 |
| Nicky Dulieu | 6 November 2019 | 6 November 2019 | 6 November 2022 | £85,695 |
| Oliver Tant | 1 February 2022 | 24 January 2022 | 1 February 2022 | £73,335 |
| Geeta Nanda | 1 May 2023 | 12 December 2022 | 1 May 2023 | £60,975 |
Redrow also maintains directors' and officers' insurance for the benefit of each non-executive Redrow Director.
Save as disclosed above, there are no service contracts or letters of appointment, between any Redrow Director or proposed director of Redrow and any member of the Redrow Group and no such contract or letter of appointment has been entered into or amended within the six months preceding the date of this Document.
It has been agreed that certain of the terms and conditions of Matthew Pratt and Barbara Richmond will be amended on and from the Effective Date. Details of these amendments are set out in paragraph 7 of Part II (Explanatory Statement) of this Document.
Save as set out in paragraph 15 of Part II (Explanatory Statement) of this Document, the effect of the Scheme on the interests of the Redrow Directors does not differ from its effect on the like interests of any other holder of Scheme Shares.
The emoluments of the Barratt Directors will not be affected by the acquisition of Redrow or by any other associated transaction.
Save as disclosed above, there are no other contracts of service between the Redrow Directors and Redrow or any of its subsidiaries.
Save as disclosed in this paragraph 7.4:
7 Fees as at 1 July 2023, including base fees and Committee/SID fees.
The following table shows the Closing Price for Redrow Shares and Barratt Shares respectively as derived from the Official List for the first Business Day of each of the six months before the date of this Document and 6 February 2024, being the last Business Day prior to the date of the commencement of the Offer Period and as derived from Bloomberg for the Latest Practicable Date:
177042 Proof 3 Friday, April 19, 2024 04:19
| Redrow | ||
|---|---|---|
| Date | Share price (p) | Barratt Share price (p) |
| 17 April 2024 | 629.5 | 446.0 |
| 2 April 2024 | 651.5 | 464.0 |
| 1 March 2024 | 663.5 | 479.0 |
| 6 February 2024 | 600.0 | 530.0 |
| 1 February 2024 | 592.0 | 534.8 |
| 2 January 2024 | 597.0 | 554.4 |
| 1 December 2023 | 546.5 | 519.8 |
| 1 November 2023 | 489.0 | 417.5 |
9.1 Redrow material contracts
Save as disclosed below, no member of the Redrow Group has, during the period beginning 7 February 2022 (being two years prior to the commencement of the Offer Period) and ending on the Latest Practicable Date, entered into any material contract otherwise than in the ordinary course of business.
The following contracts, not being contracts entered into in the ordinary course of business, and which are or may be material, have been entered into by members of the Redrow Group during the period beginning 7 February 2022 (being two years prior to the commencement of the Offer Period) and ending on the Latest Practicable Date.
See paragraph 10 below of this Part VIII (Additional Information on Redrow and Barratt) of this Document.
On 25 March 2021, Redrow as the borrower and Redrow Homes Limited as the original guarantor entered into an amended and restated £350 million revolving credit facility agreement with (among others) Barclays Bank PLC, Lloyds Bank PLC National Westminster Bank plc, Santander UK plc, Handelsbanken plc, acting through its Manchester Barbirolli Branch and HSBC UK Bank plc as original lenders, Barclays Bank plc, Lloyds Bank plc and National Westminster Bank plc as mandated lead arrangers and Lloyds Bank PLC as agent (the "Redrow RCF Agreement").
Under the Redrow RCF Agreement, the £350 million revolving credit facility (the "Redrow RCF") is available for drawing by Redrow by way of loans and includes an option to request up to £100 million by way of letters of credit.
The Redrow RCF is unsecured, but is otherwise guaranteed by the original guarantor referenced above and other additional guarantors which may accede from time to time. The Redrow RCF contains a negative pledge, which restricts the ability of the Redrow Group to create or permit security to exist, but this is subject to several carve-outs, including security permitted in the ordinary course of business.
The Redrow RCF is to be applied towards the general corporate purposes of the Redrow Group. It is expected that, immediately following the Combination, the Redrow RCF will be cancelled in full.
The Redrow RCF Agreement terminates on 30 September 2025, and is available for drawing in Pounds Sterling from the date of the Redrow RCF Agreement to the termination date.
The Redrow RCF Agreement contains customary representations, undertakings, covenants, indemnities and events of default with appropriate carve-outs and materiality thresholds, where relevant. Under the Redrow RCF, Redrow undertakes to ensure compliance with certain financial covenants, measured at the end of each 12-month period ending on the expiry of each financial year or half-year of Redrow, in relation to: (a) the consolidated tangible net worth of the Redrow Group; (b) the gearing ratio of consolidated adjusted total net borrowings to consolidated tangible net worth; (c) the ratio of consolidated land and work in progress value to consolidated adjusted total net borrowings; (d) the ratio of consolidated EBIT to consolidated net interest payable; and (e) the aggregate gross assets of the guarantors as referenced above, as a proportion of total gross assets of the Redrow Group.
177042 Proof 3 Friday, April 19, 2024 04:19
The Redrow RCF may be prepaid or cancelled by Redrow without premium or penalty, but subject to a limit of no more than five voluntary prepayments in aggregate in any 12-month period.
The Redrow RCF Agreement is governed by English law.
Barratt intends to procure a cancellation of the Redrow RCF upon or shortly following Completion.
9.2 Barratt material contracts
Save as disclosed below, no member of the Barratt Group has, during the period beginning 7 February 2022 (being two years prior to the commencement of the Offer Period) and ending on the Latest Practicable Date, entered into any material contract otherwise than in the ordinary course of business.
The following contracts, not being contracts entered into in the ordinary course of business, and which are or may be material, have been entered into by members of the Barratt Group during the disclosure period.
See paragraph 10 below of this Part VIII (Additional Information on Redrow and Barratt) of this Document.
On 19 April 2024, Barratt and UBS entered into a sponsor's agreement in connection with UBS's role as Barratt's sponsor in relation to the Combination and Admission (the "Sponsor's Agreement"). Pursuant to the Sponsor's Agreement, Barratt has agreed to provide UBS with certain customary representations, warranties, undertakings and indemnities. UBS may terminate the Sponsor's Agreement and its role as Sponsor in certain customary circumstances.
On 18 November 2022, Barratt as an original borrower and an original guarantor and BDW Trading Limited as an original borrower and an original guarantor entered into an amended and restated £700 million revolving credit facility agreement with (among others) Barclays Bank PLC, Lloyds Bank PLC, The Royal Bank of Scotland plc and Banco Santander S.A., London Branch as mandated lead arrangers and Lloyds Bank plc as agent (the "Barratt RCF Agreement"). In connection with the Combination, of the lenders under the Barratt RCF Agreement have provided their consent to the Combination and the Barratt RCF Agreement has accordingly been amended to permit and reflect the Combination and other related matters and consequences of the Combination (including the insertion of a customary 'clean-up' provision in relation to Redrow following Completion).
Under the Barratt RCF Agreement, the £700 million revolving credit facility (the "Barratt RCF") is available for drawing by Barratt and BDW Trading Limited (and any future additional borrower that may accede, subject, where applicable, to lender approval).
The Barratt RCF is unsecured, but is otherwise guaranteed by the original guarantors referenced above and other additional guarantors required to accede in accordance with the Barratt RCF Agreement's guarantor coverage provisions, which provide that the guarantors of the Barratt RCF must together hold directly at least 85 per cent. of the consolidated net assets of the Barratt Group, have a turnover representing not less than 85 per cent. of the consolidated turnover of the Barratt Group and have profit before tax and interest representing not less than 85 per cent. of the consolidated profit before tax and interest of the Barratt Group.
177042 Proof 3 Friday, April 19, 2024 04:19
The Barratt RCF is to be applied towards the general corporate purposes of the Barratt Group.
The Barratt RCF Agreement is currently set to terminate on 18 November 2028, subject to an extension option of one year (at each lender's discretion), and is available for drawing in Pounds Sterling up to the date falling one month prior to the applicable termination date.
The Barratt RCF Agreement contains customary representations, undertakings, covenants, indemnities and events of default with appropriate carve-outs and materiality thresholds, where relevant. The financial covenants comprise: (i) a gearing ratio test (where the ratio of total borrowings to consolidated tangible net worth must be equal to or less than 80 per cent. at the end of each 12-month period ending on the expiry of each financial year and half-year of Barratt (in this paragraph, a "Measurement Period")); (ii) an adjusted consolidated tangible net worth test (which must be at least £1.8 billion at the end of each Measurement Period); and (iii) an interest cover test (where the ratio of operating profit to interest payable must be at least 3:1 for each Measurement Period, subject to Barratt having the option, prior to the date falling one year prior to the then applicable termination date, to disapply the interest cover test for up to 6 consecutive Measurement Periods, provided that Barratt may only elect to commence a disapplication of the interest cover if the interest cover ratio was not disapplied for the previous Measurement Period. During any disapplication of the interest cover test, a cash cover test (where the ratio of cashflow to interest payable must be at least 2:1 at the end of each financial quarter of Barratt) will apply).
The Barratt RCF Agreement is governed by the laws of England and Wales.
On 22 August 2017, Barratt entered into a note purchase agreement (the "Barratt Note Purchase Agreement") and issued £200 million 2.77 per cent. senior notes due 22 August 2027 (the "Barratt Notes") thereunder to a group of institutional investors in, among others, the United States of America, the United Kingdom, Switzerland and Japan (such investors, as may become or cease to be holders of Barratt Notes from time to time in accordance with the Barratt Note Purchase Agreement (the "Barratt Note Purchasers")).
The Barratt Notes are unsecured obligations of Barratt. All payments in respect of the Barratt Notes and the performance by Barratt of its obligations under the Barratt Note Purchase Agreement are guaranteed by certain members of the Barratt Group (each being a "Barratt Note Subsidiary Guarantor") pursuant to separate subsidiary guarantee deeds. The only Barratt Note Subsidiary Guarantor as at the Latest Practicable Date is BDW Trading Limited.
The proceeds of the Barratt Notes are to be applied towards refinancing existing indebtedness and for general corporate purposes of the Company.
The Barratt Notes are fixed rate instruments with an interest rate of 2.77 per cent. per annum payable semi-annually.
The final maturity date of the Barratt Notes is 22 August 2027. Barratt may elect to voluntarily prepay the Barratt Notes in an amount not less than £2,500,000, at 100 per cent. of the principal amount so prepaid (together with accrued but unpaid interest) plus a make-whole amount calculated in accordance with the provisions of the Barratt Note Purchase Agreement. In addition, the Barratt Note Purchase Agreement contains customary swap breakage provisions pursuant to which Barratt is required to pay in US dollars the amount of any loss suffered by any applicable Barratt Note Purchaser following an early repayment or prepayment of the Barratt Notes or other permitted early termination of an applicable cross-currency swap. If a Barratt Note Purchaser makes a swap gain in equivalent circumstances, the applicable make-whole amount payable by Barratt to such Barratt Note Purchaser is reduced by the amount of such swap gain.
The Barratt Note Purchase Agreement contains customary representations, undertakings, covenants, indemnities and events of default with appropriate carve-outs and materiality thresholds, where relevant. The Barratt Note Purchase Agreement contains, among other covenants, restrictions on disposals, the incurrence of indebtedness by any subsidiary of Barratt (other than any subsidiary whose principal business is towards a development or construction of any asset or any Barratt Note Subsidiary Guarantor), and a negative pledge, in each case subject to customary carve-outs and materiality thresholds. The financial covenants comprise: (i) an interest coverage ratio of operating profit to interest payable for each 12-month period ending on the last financial year or half-year of Barratt (in this paragraph, a "Measurement Period") of not less than 3.00 to 1.00; (ii) a gearing ratio such that Barratt must ensure that total borrowings of the Barratt Group do not exceed 80 per cent. of the aggregate paid up share capital of the Barratt Group and amounts standing to the credit of the consolidated share premium account and other reserves (in this paragraph, the "Consolidated Tangible Net Worth"); and (iii) a net worth test, such that Barratt must ensure that the Consolidated Tangible Net Worth of the Barratt Group as at the end of each Measurement Period is not less than £1,800,000,000 (in this instance, adjusted to exclude (a) any unrealised gains or losses on any hedging agreement and (b) any surplus or deficit attributable to retirement benefit obligations).
177042 Proof 3 Friday, April 19, 2024 04:19
The Barratt Note Purchase Agreement also contains a right for Barratt Note Purchasers to demand prepayment following a change of control (formulated in a way customary for a company in the nature of Barratt). Such prepayment is without any make-whole amount.
A make-whole amount calculated in accordance with the provisions of the Barratt Note Purchase Agreement would be payable by Barratt in the case of any acceleration of the Barratt Notes by the Barratt Note Purchasers following the occurrence of any event of default set out in the Barratt Note Purchase Agreement.
The Barratt Note Purchase Agreement is governed by the laws of England.
Barratt and Redrow have entered into a Co-operation Agreement dated 7 February 2024, pursuant to which:
The Co-operation Agreement records the intention of Barratt and Redrow to implement the Combination by way of the Scheme, subject to Barratt's right to switch to a Takeover Offer in certain circumstances. Barratt and Redrow have agreed to certain customary provisions if the Scheme should switch to a Takeover Offer.
The Co-operation Agreement also contains provisions that shall apply in respect of Barratt Shareholders' and Redrow Shareholders' dividend entitlements, directors' and officers' insurance and the Redrow Share Plans, other incentive arrangements and other employee-related matters.
The Co-operation Agreement shall be terminated with immediate effect:
• if Barratt and Redrow so agree in writing;
• upon service of notice by Barratt to Redrow if the Redrow Directors change their recommendation in respect of the Combination;
177042 Proof 3 Friday, April 19, 2024 04:19
Barratt and Redrow have entered into the Confidentiality Agreement dated 8 January 2024 pursuant to which each party has undertaken to: (i) subject to certain exceptions, keep confidential information relating to, inter alia, the Combination and the other party, and not to disclose such information to certain third parties (other than to certain permitted parties) unless required by law or regulation; and (ii) use the confidential information only in connection with the Combination.
These confidentiality obligations shall remain in force until Completion, or, in the event that the Combination terminates, for a period of 24 months from the date of the Confidentiality Agreement. Barratt and Redrow also agreed to certain standstill undertakings, all of which ceased to apply upon the release of the 2.7 Announcement.
This agreement also includes customary non-solicitation obligations on the Barratt Group and Redrow Group.
Barratt and Redrow have put in place a Clean Team Agreement dated 28 December 2023 (as amended by a side letter dated 18 January 2024) which sets out how confidential information that is competitively sensitive can be disclosed, used or shared between Barratt's clean team individuals and/or external advisers retained by Barratt and Redrow's clean team individuals and/or external advisers retained by Redrow.
Barratt, Redrow and their respective external legal counsels have entered into a Confidentiality and Joint Defence Agreement dated 28 December 2023, the purpose of which is to ensure that the exchange and/or disclosure of certain materials relating to the parties only takes place between their respective external legal counsels and external experts, and does not diminish in any way the confidentiality of such materials and does not result in a waiver of privilege, right or immunity that might otherwise be available.
11.1 Fees and Expenses of Barratt
The aggregate fees and expenses expected to be incurred by Barratt in connection with the Combination (excluding any applicable VAT and other taxes) are expected to be approximately £42.6 million. This aggregate number consists of the following categories (in each case excluding any applicable VAT and other taxes):
177042 Proof 3 Friday, April 19, 2024 04:19
| Category | Amount (£) |
|---|---|
| Financing arrangements | 2.5m |
| Financial and corporate broking advice(1)(2) | 25.7m |
| Legal advice | 9.7m |
| Accounting advice | 2.3m |
| Public relations advice | 1.2m |
| Other professional services | 0.3m |
| Other costs and expenses | 0.9m –––––––––– |
| Total | 42.6m |
| –––––––––– |
In addition, stamp duty of 0.5 per cent. on the purchase price of the Redrow Shares acquired pursuant to the Combination will be payable by Barratt.
The aggregate fees and expenses expected to be incurred by Redrow in connection with the Combination (excluding any applicable VAT and other taxes) are expected to be approximately £28.2 million. This aggregate number consists of the following categories (in each case excluding any applicable VAT and other taxes):
| Category | Amount (£) |
|---|---|
| Financial and corporate broking advice(1) | 19.5m |
| Legal advice | 7.83m |
| Accounting advice(2) | 0.59m |
| Public relations advice | 0.06m |
| Other professional services | 0.07m |
| Other costs and expenses | 0.15m –––––––––– |
| Total | 28.2m |
(1) The total amount payable in respect of the aggregate fees and expenses for these services depends on whether the Combination becomes Effective.
––––––––––
(2) These services are provided, at least in part, by reference to hourly or daily rates. Amounts included in the table above reflect the time incurred up to the Latest Practicable Date.
12.1 In addition to the Barratt Directors (together with their close relatives and related trusts), and members of the Barratt Group, the persons who, for the purposes of the Takeover Code, are acting in concert with Barratt are:
| Name | Registered Office | Relationship with Barratt |
|---|---|---|
| UBS | 5 Broadgate, London, EC2M 2QS | Lead financial adviser, sole corporate broker and sole sponsor |
| Morgan Stanley | 25 Cabot Square, London, E14 4QA | Financial adviser |
12.2 In addition to the Redrow Directors (together with their close relatives and related trusts) and members of the Redrow Group, the persons who, for the purposes of the Takeover Code, are acting in concert with Redrow are:
| Name | Address/Registered office | Relationship with Redrow |
|---|---|---|
| Barclays | 1 Churchill Place, London, E14 5HP | Joint financial adviser and corporate broker |
| Peel Hunt | 100 Liverpool St, London, EC2M 2AT | Joint financial adviser, sole Rule 3 adviser and corporate broker |
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Each of UBS, Morgan Stanley, Barclays and Peel Hunt has given and not withdrawn its written consent to the issue of this Document with the inclusion of references to its name in the form and context in which they are included.
Copies of the following documents will be available for viewing on Redrow and Barratt's websites at https://investors.redrowplc.co.uk/offer-for-redrow and https://www.barrattdevelopments.co.uk/investors/barrattredrow respectively by no later than 12.00 noon on the Business Day following the date of this Document (subject to any applicable restrictions relating to persons resident in Restricted Jurisdictions):
(E) the irrevocable undertakings described in paragraph 5 of this Part VIII (Additional Information on Redrow and Barratt);
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In this Document, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:
8 The Redrow Employee Benefit Trust holds 8,027,828 Redrow Shares as at 17 April 2024 (being the latest practicable date before publication of this Document) which is sufficient to fully offset dilution from the exercise of existing options and the vesting of existing awards pursuant to the Redrow Share Plans.
(D) The value of the Combination by reference to the existing issued share capital of Redrow is based on the issued and to be issued share capital of Redrow (as set out in paragraph (C) above).
177042 Proof 3 Friday, April 19, 2024 04:20
In this Document, other than in the Scheme set out in Part IV (The Scheme of Arrangement) of this Document, the following words and expressions have the following meanings, unless the context requires otherwise:
| "2021 LTIP Awards" | Awards granted under the Redrow LTIP in 2021; |
|---|---|
| "2022 LTIP Awards" | Awards granted under the Redrow LTIP in 2022; |
| "2023 LTIP Awards" | Awards granted under the Redrow LTIP in 2023; |
| "2024 LTIP Awards" | has the meaning given to it in paragraph 13 of Part II (Explanatory Statement) of this Document; |
| "2022 Barratt Annual Report" | the annual report and audited accounts of the Barratt Group for the year ended 30 June 2022; |
| "2022 Redrow Annual Report" | the annual report and audited accounts of the Redrow Group for the 53 weeks ended 3 July 2022; |
| "2023 Redrow AGM Trading Statement" |
the annual general meeting trading update of Redrow issued on 10 November 2023 for the 18 weeks to 3 November 2023; |
| "2023 Barratt Annual Report" | the annual report and audited accounts of the Barratt Group for the year ended 30 June 2023; |
| "2023 Redrow Annual Report" | the annual report and audited accounts of the Redrow Group for the 52 weeks ended 2 July 2023; |
| "2024 Barratt Interim Results" | the half yearly results announcement of the Barratt Group for the six-month period to 31 December 2023; |
| "2024 Redrow Interim Results" | the half yearly results announcement of the Redrow Group for |
| the 26-week period ended 31 December 2023; | |
| "2.7 Announcement" | the joint announcement dated 7 February 2024 made by Redrow and Barratt which confirmed that they had reached an agreement on the terms of a recommended all-share offer for the combination of Barratt and Redrow pursuant to which Barratt will acquire the entire issued and to be issued ordinary share capital of Redrow to form the Combined Group; |
| "Admission" | admission of New Barratt Shares to the premium listing segment of the Official List (or, if there is no premium listing segment, the same listing segment as the Barratt Shares are trading on) and to trading on the Main Market; |
| "Articles of Association" | the articles of association of Redrow from time to time; |
| "associated undertaking" | has the meaning given to it in paragraph 19 of Schedule 6 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) but for this purpose ignoring paragraph 19(1)(b) of Schedule 6 to those regulations; |
| "Authorisations" | regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals, in each case of a Third Party; |
| "Award" | any award or option outstanding under the Redrow Share Plans from time to time; |
| "Barratt" | Barratt Developments plc, a company incorporated in England and Wales with registered number 00604574 and with its registered office at Barratt House, Cartwright Way, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1UF; |
|---|---|
| "Barratt Additional Permitted Dividend" |
has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Barratt Circular" | the circular relating to the approval of the Combination to be sent by Barratt to Barratt Shareholders on or around the date of this Document summarising the background to, and reasons for the Combination, which will include a notice convening the Barratt General Meeting; |
| "Barratt Directors" | the directors of Barratt, whose names are set out in paragraph 2.2 of Part VIII (Additional Information on Redrow and Barratt) of this Document and "Barratt Director" means any of them; |
| "Barratt Executive Directors" | the executive directors of Barratt as at the date of this Document; |
| "Barratt Equalising Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Barratt Executive Committee" | the executive committee of Barratt as at the date of this Document or, where the context so requires, the executive committee of Barratt from time to time; |
| "Barratt General Meeting" | the general meeting of Barratt Shareholders to be convened in connection with the Combination, to consider and, if thought fit, approve the Barratt Resolution, including any adjournment, postponement or reconvening thereof; |
| "Barratt Group" | Barratt and its subsidiary undertakings; |
| "Barratt Interim Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Barratt Note Purchasers" | has the meaning given to it in paragraph 9.2 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Barratt Prospectus" | the prospectus to be published by Barratt on or around the date of this Document in respect of the New Barratt Shares to be issued to the Scheme Shareholders under the Scheme and for the purpose of Admission; |
| "Barratt PSP" | the Barratt Performance Share Plan 2023, as amended from time to time; |
| "Barratt RCF Agreement" or "Barratt RCF" |
has the meaning given to it in paragraph 9.2 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Barratt Resolution" | the ordinary shareholder resolution of Barratt necessary to approve, effect and implement the Combination including the resolutions to: (i) approve the Combination as a "Class 1" transaction for the purposes of the Listing Rules; and (ii) grant authority to the Barratt Directors to allot the New Barratt Shares (and any amendment(s) thereof); |
| "Barratt Remuneration Committee" the remuneration committee of the board of directors of Barratt; | |
| "Barratt Shareholders" | holders of Barratt Shares; |
| "Barratt Share Plans" | the Barratt Performance Share Plan 2023, the Barratt Long-Term Performance Plan 2017, the Barratt Deferred Bonus Plan 2023, the Barratt Deferred Bonus Plan 2017, the Barratt Employee Long-Term Incentive Plan and the Barratt Sharesave Plan 2018, each as amended from time to time; |
|---|---|
| "Barratt Shares" | the allotted and issued ordinary shares of 10 pence each in the capital of Barratt; |
| "Business Day" | any day (other than a Saturday, Sunday or a public holiday in the UK) on which banks are open for business in London; |
| "certificated" or "in certificated form" |
a share or other security which is not in uncertificated form (that is, not in CREST); |
| "Clean Team Agreement" | the clean team agreement between Barratt and Redrow dated 28 December 2023 (as amended by a side letter dated 18 January 2024), as described in paragraph 10 of Part VIII (Additional Information On Redrow And Barratt) of this Document; |
| "CMA Clearance" | the approval, consent, clearance, or confirmation from the CMA, as is necessary and/or expedient to satisfy the Regulatory Condition; |
| "Closing Price" | the closing middle market price of a Redrow Share or a Barratt Share (as relevant) on a particular trading day as derived from the Daily Official List; |
| "Combination" | the proposed all-share offer for the combination of Barratt and Redrow to be effected by means of the Scheme on the terms and subject to the conditions set out in this Document, or should Barratt so elect, subject to the consent of the Panel and the terms of the Co-operation Agreement, by means of a Takeover Offer on the terms and conditions set out in this Document and as amended accordingly; |
| "Combined Group" | the combined Redrow Group and Barratt Group following Completion; |
| "Companies Act" | the Companies Act 2006, as amended from time to time; |
| "Competition and Markets Authority" or "CMA" |
a UK statutory body established under the Enterprise and Regulatory Reform Act 2013; |
| "Conditions" | the conditions to the implementation of the Scheme and to the implementation of the Combination which are set out in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document; |
| "Confidentiality Agreement" | the confidentiality and standstill agreement between Barratt and Redrow dated 8 January 2024, as described in paragraph 10 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Confidentiality and Joint Defence Agreement" |
the confidentiality and joint defence agreement dated 28 December 2023 between Barratt, Redrow and their respective legal advisers, as described in paragraph 10 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Consideration" | the consideration payable to Scheme Shareholders under the terms of the Scheme, comprising 1.44 New Barratt Shares per Redrow Share and any subsequent adjustments thereof; |
|
|---|---|---|
| "Co-operation Agreement" | the co-operation agreement entered into between Barratt and Redrow dated 7 February 2024, as described in paragraph 10 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
|
| "Court" | the High Court of Justice in England and Wales; | |
| "Court Meeting" | the meeting of Scheme Shareholders to be convened pursuant to an order of the Court pursuant to section 896 of the Companies Act, notice of which is set out in Part X (Notice of Court Meeting) of this Document, for the purpose of considering and, if thought fit, approving (with or without amendment) the Scheme, including any adjournment thereof; |
|
| "Court Order" | the order of the Court sanctioning the Scheme under Part 26 of the Companies Act; |
|
| "Court Sanction Date" | the date on which the Scheme is sanctioned by the Court; | |
| "Court Sanction Hearing" | the hearing of the Court of the application to sanction the Scheme under Part 26 of the Companies Act, including any adjournment thereof; |
|
| "CREST" | the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755), including as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018) in respect of which Euroclear UK & International Ltd is the Operator (as defined in said Regulations); |
|
| "CREST Applications Host" | the communication hosting system operated by Euroclear; | |
| "CREST Manual" | the CREST Manual published by Euroclear, as amended from time to time; |
|
| "CREST Proxy Instruction" | has the meaning given to it in on page 12 (Action to be Taken); | |
| "CREST Regulations" | the Uncertificated Securities Regulations 2001 (SI 2001/3755) (including as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2019), as amended from time to time (including by means of the Uncertificated Securities (amendment and EU Exit) Regulations 2019 (SI 2019/679)); |
|
| "D" | the date of the Court Sanction Hearing, expected to be in the second half of 2024, subject to the satisfaction (or, if applicable, waiver) of the relevant Conditions and, in any event, prior to the Long Stop Date; |
|
| "Daily Official List" | means the daily official list of the London Stock Exchange; | |
| "Dealing Disclosure" | an announcement pursuant to Rule 8 of the Takeover Code containing details of dealings in interests in relevant securities of a party to an offer; |
|
| "Disclosed" | (A) in respect of Redrow, the information disclosed by, or on behalf of Redrow, (i) in the annual report and accounts of the Redrow Group for the 52 weeks ended 2 July 2023; (ii) in this Document or any of the documents listed in paragraph 16 of Part VIII (Additional Information on |
Redrow and Barratt) of this Document; (iii) in any other announcement to a Regulatory Information Service by, or on behalf of Redrow in the two calendar years prior to the date of publication of this Document and on the date of this Document; (iv) in filings with the Registrar of Companies in England and appearing on Redrow's files within the last two years prior to the 2.7 Announcement; or (v) as otherwise fairly disclosed to Barratt or any of its affiliates (or each of their respective officers, employees, agents or advisers) prior to the date of this Document; and (B) in respect of Barratt, the information disclosed by, or on behalf of Barratt, (i) in the annual report and accounts of the Barratt Group for the year ended 30 June 2023; (ii) in this Document or any of the documents listed in paragraph 16 of Part VIII (Additional Information on Redrow and Barratt) of this Document; (iii) in any other announcement to a Regulatory Information Service by, or on behalf of Barratt in the two calendar years prior to the date of publication of this Document and on the date of this Document; (iv) in filings with the Registrar of Companies in England and appearing on Barratt's files within the last two years; or (v) as otherwise fairly disclosed to Redrow or any of its affiliates (or each of their respective officers, employees, agents or advisers) prior to the date of this Document; the disclosure guidance and transparency rules issued by the FCA pursuant to Part 6 of FSMA, as amended from time to time; "Document" this document dated 19 April 2024 addressed to Redrow Shareholders containing the Scheme and an explanatory statement in compliance with section 897 of the Companies Act; "EA" the Enterprise Act 2002; "Effective" in the context of the Combination: (i) if the Combination is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or (ii) if the Combination is implemented by way of the Takeover Offer (subject to the consent of the Panel and the terms of the Co-operation Agreement), such Takeover Offer having become or been declared unconditional in accordance with its terms; "Effective Date" or "Completion" the date on which either: (i) the Scheme becomes Effective; or (ii) if Barratt elects to implement the Combination by means of a Takeover Offer, the date on which the Takeover Offer becomes or is declared unconditional in all respects; "Euroclear" Euroclear UK & International Limited; "Exchange Ratio" 1.44 New Barratt Shares for every 1 Redrow Share and, where the terms of the Combination allow, any subsequent adjustment thereof; "Disclosure Guidance and Transparency Rules"
| "Excluded Shares" | any Redrow Shares which are: | |
|---|---|---|
| (i) | registered in the name of or beneficially owned by Barratt and/or any member of the Barratt Group (and/or any nominee of the foregoing); or |
|
| (ii) | held in treasury, | |
| in each case, at any relevant date or time as the context permits; | ||
| "Expected Timetable of Principal Events" |
the expected timetable of events, as set out at pages 14 to 15; | |
| "Explanatory Statement" | Document; | the explanatory statement (in compliance with section 897 of the Companies Act) relating to the Scheme, as set out in this |
| "FCA" | the Financial Conduct Authority of the United Kingdom, acting in its capacity as the competent authority for the purposes of Part VI of FSMA, or its successor from time to time; |
|
| "Form(s) of Proxy" | each of the BLUE Form of Proxy in relation to the Court Meeting and the WHITE Form of Proxy in relation to the General Meeting (or both, as the context requires); |
|
| "FSMA" | the Financial Services and Markets Act 2000, as amended from time to time; |
|
| "General Meeting" | the general meeting of Redrow Shareholders, convened by the notice set out in Part XI (Notice of General Meeting) of this Document, including any adjournment, postponement or reconvening thereof, for the purposes of considering and, if thought fit, approving the Special Resolution; |
|
| "HMRC" | HM Revenue and Customs or its successor from time to time; | |
| "holder" | a registered holder and includes any person(s) entitled by transmission; |
|
| "IFRS" | UK; | International Financial Reporting Standards as adopted by the |
| "ISIN" | International Securities Identification Number; | |
| "Latest Practicable Date" | close of business on 17 April 2024, being the latest practicable date before publication of this Document; |
|
| "Listing Rules" | the rules and regulations made by the FCA under FSMA and contained in the publication of the same name, as amended from time to time; |
|
| "London Stock Exchange" | the London Stock Exchange PLC or its successor; | |
| "Long Stop Date" | required)); | 7 February 2025 or, in the event of a Phase 2 CMA Reference, 7 August 2025 (or, in either case, such later date as may be agreed in writing by Barratt and Redrow (with the Panel's consent and as the Court may approve (if such approval(s) are |
| "Main Market" | the main market of the London Stock Exchange; | |
| "Market Abuse Regulation" | the retained EU law version of Regulation (EU) No. 596/2014 of the European Parliament and the Council of 16 April 2014 on market abuse as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended from time to time (including by the Market Abuse (Amendment) (EU Exit) Regulations 2019 (SI 2019/310)); |
| "Meeting(s)" | each of the Court Meeting and the General Meeting (pr both, as the context requires); |
|---|---|
| "Morgan Stanley" | Morgan Stanley & Co. International plc; |
| "New Barratt Shares" | the new Barratt Shares, to be issued and allotted to Scheme Shareholders pursuant to the Scheme and in connection with the Combination or in consideration for the transfer to Barratt of Redrow Shares pursuant to the Articles of Association, as amended by the Special Resolution; |
| "Nominated Person" | has the meaning given to it in each of Part X (Notice of Court Meeting) and Part XI (Notice of General Meeting) of this Document (as the context requires); |
| "Non-Executive Directors" | the non-executive directors of Redrow as at the date of this Document; |
| "Offer Period" | the offer period (as defined in the Takeover Code) relating to Redrow, which commenced on 7 February 2024, and ending on the earlier of the date on which it is announced that the Scheme has become Effective and/or the date on which it is announced that the Scheme has lapsed or has been withdrawn (or such other date as the Takeover Code may provide or the Panel may decide); |
| "Official List" | the Official List maintained by the FCA pursuant to Part 6 of FSMA; |
| "Opening Position Disclosure" | has the same meaning as in Rule 8 of the Takeover Code; |
| "Overseas Shareholders" | Redrow Shareholders (or nominees of, or custodians or trustees for Redrow Shareholders) who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom; |
| "Panel" or "Takeover Panel" | the Panel on Takeovers and Mergers of the United Kingdom, or any successor to it; |
| "Peel Hunt" | Peel Hunt LLP; |
| "Phase 2 CMA Reference" | a reference of the Combination under section 33 of the EA to the chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013; |
| "Proposed Barratt Directors" | Matthew Pratt, Nicky Dulieu and Geeta Nanda; |
| "PwC" | PricewaterhouseCoopers LLP, acting as reporting accountant for Barratt; |
| "Quantified Financial Benefits Statement" |
the statements of estimated cost savings and synergies arising out of the Combination set out in Appendix I (Quantified Financial Benefits Statement) of this Document; |
| "Redrow" or "Company" | Redrow plc, a company incorporated in England and Wales with registered number 02877315 and with its registered office at Redrow House, St Davids Park, Flintshire, CH5 3RX; |
| "Redrow Additional Permitted Dividend" |
has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Redrow DBP" | the Redrow Deferred Bonus Plan 2022, as amended from time to time; |
|---|---|
| "Redrow Directors" | the directors of Redrow, whose names are set out in paragraph 2.1 of Part VIII (Additional Information on Redrow and Barratt) of this Document and "Redrow Director" means any of them; |
| "Redrow Equalising Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Redrow Executive Directors" | Matthew Pratt and Barbara Richmond; |
| "Redrow Group" | Redrow and its subsidiary undertakings; |
| "Redrow Interim Dividend" | has the meaning given to it in paragraph 3 of Part I (Letter from the Chair of Redrow plc) of this Document; |
| "Redrow LTIP" | the Redrow 2014 Long-Term Incentive Plan, as amended from time to time; |
| "Redrow Profit Forecast" | has the meaning given to it in paragraph 1 of Part VI (Redrow Profit Forecast) of this Document; |
| "Redrow RCF" | has the meaning given to it in paragraph 9.1 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Redrow RCF Agreement" | has the meaning given to it in paragraph 9.1 of Part VIII (Additional Information on Redrow and Barratt) of this Document; |
| "Redrow Remuneration Committee" |
the remuneration committee of the board of directors of Redrow; |
| "Redrow Shares" | the existing unconditionally allotted or issued and fully paid ordinary shares of 10.5 pence each in the capital of Redrow and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes Effective; |
| "Redrow Shareholders" | holders of Redrow Shares; |
| "Redrow Share Plans" | the Redrow LTIP, the Redrow DBP and the Redrow Sharesave, each as amended from time to time; |
| "Redrow Sharesave" | Redrow Sharesave Plan 2014, as amended from time to time; |
| "Redrow Share Plan Notices" | has the meaning given to it in paragraph 13 of Part II (Explanatory Statement) of this Document; |
| "Redrow Staff Pension Scheme" | the Redrow Staff Pension Scheme established on 1 April 1984, as amended from time to time; |
| "Registrars" or "Computershare" | Computershare Investor Services PLC; |
| "Registrar of Companies" | the Registrar of Companies in England and Wales; |
| "Regulatory Condition" | has the meaning given to it in paragraph 3(c) of Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document; |
| "Relevant Awards" | has the meaning given to it in paragraph 13 of Part II (Explanatory Statement) of this Document; |
|---|---|
| "Replacement Awards" | has the meaning given to it in paragraph 13 of Part II (Explanatory Statement) of this Document; |
| "Restricted Jurisdiction" | any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Combination is sent or made available to Redrow Shareholders in that jurisdiction; |
| "Scheme" or "Scheme of Arrangement" |
the proposed scheme of arrangement under Part 26 of the Companies Act between Redrow and holders of Scheme Shares, as set out in Part IV (The Scheme of Arrangement) of this Document, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Redrow and Barratt; |
| "Scheme Record Time" | 6.00 p.m. on the Business Day immediately after the Court Sanction Hearing; |
| "Scheme Shareholders" | holders of Scheme Shares and a "Scheme Shareholder" shall mean any one of those Scheme Shareholders; |
| "Scheme Shares" | the Redrow Shares: |
| (i) in issue at the date of publication of this Document; |
|
| (ii) (if any) issued after the date of publication of this Document and prior to the Voting Record Time; and |
|
| (iii) (if any) issued at or after the Voting Record Time and prior to the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by this Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by this Scheme, |
|
| in each case (where the context requires), which remain in issue at the Scheme Record Time but excluding any Excluded Shares at any relevant date or time; |
|
| "SDRT" | UK stamp duty reserve tax; |
| "SEC" | the US Securities and Exchange Commission; |
| "Shareholder Helpline" | the helpline set up by Computershare, further details of which are provided in paragraph 21 of Part II (Explanatory Statement) of this Document; |
| "significant interest" | in relation to an undertaking, a direct or indirect interest in 20 per cent. or more of the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking; |
| "Sponsor's Agreement" | has the meaning given to it in paragraph 9.2 of Part VII (Additional Information on Redrow and Barratt) of this Document; |
| "Special Resolution" | the special resolution to be proposed at the General Meeting necessary to facilitate the implementation of the Scheme, including, without limitation, the amendment of the Articles of Association of Redrow by the adoption and inclusion of a new article under which any Redrow Shares issued or transferred after the Scheme Record Time (other than to Barratt and/or its nominee(s)) shall be automatically transferred to Barratt (or as it |
| may direct) (and, where applicable, for consideration to be paid to the transferee or to the original recipient of the Redrow Shares so transferred or issued) on the same terms as the Combination (other than terms as to timings and formalities) and as set out in full in Part XI (Notice of General Meeting) of this Document; |
|
|---|---|
| "subsidiary", "subsidiary undertaking" and "undertaking" |
shall have the meanings given to them in the Companies Act; |
| "Takeover Code" | the City Code on Takeovers and Mergers, as amended from time to time; |
| "Takeover Offer" | should the Combination be implemented by way of a Takeover Offer as defined in Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on behalf of Barratt to acquire the entire issued and to be issued ordinary share capital of Redrow and, where the terms of the Combination permit, any subsequent revision, variation, extension or renewal of such takeover offer; |
| "TCGA" | Taxation of Chargeable Gains Act 1992; |
| "Third Party" | each of a central bank, government or governmental, quasi governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, employee representative body or any other body or person whatsoever in any jurisdiction; |
| "Transition Awards" | has the meaning given to it in paragraph 13 of Part II (Explanatory Statement) of this Document; |
| "UBS" | UBS AG London Branch; |
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland; |
| "UK Holders" | has the meaning given to it in Part VII (United Kingdom Taxation) of this Document; |
| "UK listing conditions" | has the meaning given to it in Part III (Conditions to the Implementation of the Scheme and to the Combination) of this Document; |
| "uncertificated" or "in uncertificated form" |
a share or other security recorded on the relevant register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST; |
| "US", "U.S." or "United States" | the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction; |
| "US Exchange Act" | the US Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; |
| "US Redrow Shareholder" | a Redrow Shareholder resident or located in the United States of America; |
| "US Securities Act" | the US Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder; |
| "Voting Record Time" | 6.00 p.m. on the day which is two Business Days prior to the date of the Court Meeting and the General Meeting or, if the Court Meeting and/or the General Meeting is adjourned, 6.00 p.m. on the day which is two Business Days before the date of such adjourned Meeting; |
| "Wider Barratt Group" | Barratt and associated undertakings and any other body corporate, partnership, joint venture or person in which Barratt and all such undertakings (aggregating their interests) have a significant interest; |
|---|---|
| "Wider Redrow Group" | Redrow and associated undertakings and any other body corporate, partnership, joint venture or person in which Redrow and such undertakings (aggregating their interests) have a significant interest; |
| "£" or "Sterling" or "Pounds Sterling" |
pounds sterling, the lawful currency for the time being of the UK and references to "pence" and "p" shall be construed accordingly; and |
| "\$" or "U.S. dollars" | United States dollars, the lawful currency for the time being of the U.S. and references to "cents" shall be construed accordingly. |
For the purposes of this Document:
177042 Proof 3 Friday, April 19, 2024 04:21
and
NOTICE IS HEREBY GIVEN that, by an Order dated 17 April 2024 made in the above matters, the Court has given permission for a meeting (the "Court Meeting") to be convened of the holders of Scheme Shares as at the Voting Record Time (each as defined in the Scheme (defined below)) for the purpose of considering and, if thought fit, approving (with or without modification) a scheme of arrangement proposed to be made pursuant to Part 26 of the Companies Act 2006 (the "Act") between Redrow plc (the "Company") and the holders of Scheme Shares (the "Scheme") and that such meeting will be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY on 15 May 2024 at 11.00 a.m. (London time) at which place and time all holders of Scheme Shares are requested to attend.
Unless the context requires otherwise, any capitalised term used but not defined in this Notice of Court Meeting shall have the meaning given to such term in the Document of which this Notice of Court Meeting forms part.
A copy of the Scheme and a copy of the explanatory statement required to be published pursuant to section 897 of the Companies Act 2006 are incorporated in the Document of which this Notice of Court Meeting forms part.
Voting on the resolution to approve the Scheme of Arrangement will be by way of poll, which shall be conducted as the Chair of the Court Meeting may determine.
Holders of Scheme Shares may vote in person at the meeting or they may appoint another person, whether a member of the Company or not, as their proxy to attend, speak and vote in their stead at the Court Meeting. A proxy need not be a member of the Company but must attend the meeting. A holder of Scheme Shares may appoint more than one proxy in relation to the Court Meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that holder. A BLUE Form of Proxy for use at the Court Meeting is enclosed with this Notice of Court Meeting. Holders of Scheme Shares held through CREST may also appoint a proxy or proxies using CREST by following the instructions set out on pages 10 to 12 and 45 to 47 of the document of which this Notice of Court Meeting forms part. Completion and return of a BLUE Form of Proxy, or the appointment of proxies through CREST, electronically via www.investorcentre.co.uk/eproxy or the Proxymity platform (for institutional investors only), will not preclude a holder of Scheme Shares from attending and voting in person at the Court Meeting, or any adjournment thereof.
It is requested that BLUE Forms of Proxy (together with any power of attorney or other authority under which they are signed) be returned to the Company's Registrars, Computershare Investor Services PLC ("Computershare"), The Pavilions, Bridgwater Road, Bristol BS99 6ZY by post, courier or hand (or in accordance with the instructions printed on the BLUE Form of Proxy enclosed with this Notice of Court Meeting) so as to be received by Computershare not later than 11.00 a.m. on 13 May 2024, or, if the Court Meeting is adjourned, not less than 48 hours before the time of such adjourned meeting (excluding any part of such 48 hour period falling on a weekend or a public holiday in the UK) but, if BLUE Forms of Proxy are not so returned, they may be handed to Computershare or to the Chair of the meeting at the start of the meeting.
As an alternative to appointing a proxy, any Scheme Shareholder which is a corporation may appoint one or more corporate representatives who may exercise on its behalf, all its powers as a member provided that no more than one corporate representative exercises power over the same share. Only one corporate representative is to be counted in determining whether under section 899(1) of the Companies Act a majority in number of the Scheme Shareholders approved the Scheme. The Chair of the Court Meeting may require a corporate representative to produce to the Company's Registrars his/her written authority to attend and vote at the Court Meeting at any time before the start of the Court Meeting. The representative shall not be entitled to exercise the powers conferred on them by the Scheme Shareholder until any such demand has been satisfied.
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In the case of joint holders of Scheme Shares the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holder(s) and, for this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding (the first being the most senior). If you are an institutional investor, Forms of Proxy may alternatively be submitted electronically via the Proxymity platform by visiting www.proxymity.io. For an electronic proxy appointment to be valid, the appointment must be lodged no later than 11.00 a.m. on 13 May 2024.
Entitlement to attend and vote at the Court Meeting and the number of votes which may be cast thereat will be determined by reference to the register of members of the Company at 6.00 p.m. on 13 May 2024 or, if the Court Meeting is adjourned, 6.00 p.m. on the day which is two Business Days before the day of such adjourned meeting (excluding any part of such 48 hour period falling on a non-working day). In each case, changes to the register of members of the Company after such time shall be disregarded for these purposes.
By the said Order, the Court has appointed Richard Akers, or failing him, Matthew Pratt or, failing him, any director of the Company to act as Chair of the Court Meeting and has directed the Chair to report the result of the Court Meeting to the Court.
The Scheme of Arrangement will be subject to the subsequent sanction of the Court.
Dated 19 April 2024
Slaughter and May One Bunhill Row London EC1Y 8YY
Solicitors for the Company
Notes:
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Notice is hereby given that a General Meeting of Redrow plc (the "Company") shall be held at Slaughter and May, One Bunhill Row, London EC1Y 8YY at 11.15 a.m. on 15 May 2024 (or as soon thereafter as the Court Meeting (as defined in Part IX (Definitions) of the Document of which this Notice of General Meeting forms part) concludes or is adjourned) for the purpose of considering and, if thought fit, passing the following resolution, which shall be proposed as a special resolution.
Unless the context requires otherwise, any capitalised term used but not defined in this Notice of General Meeting shall have the meaning given to such term in the Document of which this Notice of General Meeting forms part.
THAT:
for each Post-Scheme Share equal to the consideration per Scheme Share to which a New Member would have been entitled pursuant to the Scheme had the Post-Scheme Share been a Scheme Share, provided that:
177042 Proof 3 Friday, April 19, 2024 04:21
If notice has been validly given pursuant to this Article but the New Member does not immediately transfer to their spouse or civil partner the Post-Scheme Shares in respect of which notice was given, such shares shall be transferred directly to Barratt (or as it may direct) pursuant to this Article.
131.4 The Consideration Shares allotted and issued or transferred to a New Member (or nominee) pursuant to paragraph 131.3 of this Article shall be credited as fully paid and shall rank equally in all respects with all other fully paid Barratt Shares in issue at that time (other than as regards any dividend or other distribution payable by reference to a record date preceding the date of allotment or transfer) and shall be subject to the articles of association of Barratt from time to time.
131.5 On any reorganisation of, or material alteration to, the share capital of either the Company or Barratt (including, without limitation, any subdivision and/or consolidation) effected after the Effective Date, the number of Consideration Shares to be allotted and issued or transferred to a New Member for each Post-Scheme Share pursuant to paragraph 131.3 of this Article may be adjusted by the Directors in such manner as the auditors of the Company may determine to be appropriate to reflect such reorganisation or material alteration. References in this Article to "ordinary shares", "Redrow Shares" and/or "New Barratt Shares" shall, following such adjustment, be construed accordingly.
131.8 Notwithstanding any other provision of these Articles, neither the Company nor the Directors shall register the transfer of any Scheme Shares between the Scheme Record Time and the Effective Date."
19 April 2024
By Order of the Board Registered Office: Redrow House St Davids Park Flintshire CH5 3RX Beth Ford No. SC226712 Group Company Secretary Registered in England and Wales
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If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and approved by Computershare. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 11.15 a.m. on 13 May 2024 in order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.
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Barratt has made the following quantified financial benefits statement in paragraph 6 of Part I (Letter from the Chair of Redrow plc) of this Document (the "Quantified Financial Benefits Statement"):
"The Barratt Directors, having reviewed and analysed the potential cost synergies of the Combination, and taking into account the factors they can influence, believe that the Combined Group can deliver at least £90 million of pre-tax cost synergies on an annual run-rate basis by the end of the third year following Completion.
The quantified cost synergies, which are expected to originate from the cost bases of both Barratt and Redrow, are expected to be realised primarily from:
expected to contribute approximately 38 per cent. (£34 million) of the full run-rate pre-tax cost synergies;
The Barratt Directors expect that approximately 50 per cent. (£45 million) of the annual run-rate pre-tax cost synergies will be realised by the end of the first year following Completion and approximately 90 per cent. of the annual run-rate pre-tax cost synergies will be realised by the end of the second year following Completion, with the full run-rate achieved by the end of the third year following Completion.
The Barratt Directors estimate that the realisation of the quantified cost synergies will result in one-off costs of approximately £73 million, with approximately 57 per cent. incurred in the first year following Completion, approximately 32 per cent. expected to be incurred in the second year following Completion and the remainder by the end of the third year following Completion.
Potential areas of dis-synergy expected to arise in connection with the Combination have been considered and were determined by the Barratt Directors to be immaterial to the above analysis.
The identified cost synergies will accrue as a direct result of the Combination, and would not be achieved on a standalone basis. The identified pre-tax cost synergies reflect both the beneficial elements and relevant costs."
The Barratt Directors believe that the Combined Group should be able to achieve the synergies set out in the Quantified Financial Benefits Statement.
Further information on the bases of belief supporting the Quantified Financial Benefits Statement, including the principal assumptions and sources of information, is set out below.
In preparing the Quantified Financial Benefits Statement, Redrow has provided Barratt with certain operating and financial information to facilitate a detailed analysis in support of evaluating the potential synergies available from the Combination. In circumstances where data has been limited for commercial, regulatory or other reasons, Barratt management has made estimates and assumptions to aid its development of individual synergy initiatives. The assessment and quantification of the potential synergies have, in turn, been informed by the Barratt management's industry experience and knowledge of the existing businesses, together with close consultation with Redrow.
The cost base used as the basis for the quantified exercise is:
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For the potential synergies arising from the combination of group functions, organisation information was reviewed.
The assessment and quantification of such potential synergies have in turn been informed by Barratt management's industry experience as well as their experience of executing and integrating past acquisitions.
Cost-saving assumptions were based on a detailed, bottom-up evaluation of the benefits available from elimination of duplicate activities, the leverage of combined scale economics and operational efficiencies arising from consolidation of procurement and activities within operational facilities. In determining the estimate of costs savings achievable through the combination of Barratt and Redrow, no savings relating to operations have been included where no overlap exists.
In general, the synergy assumptions have in turn been risk-adjusted, exercising a degree of prudence in the calculation of the estimated synergy benefit set out above.
Where appropriate, assumptions were used to estimate the costs of implementing the new structures, systems and processes required to realise the synergies. In particular, the Barratt Directors have made the following assumptions, which are outside the influence of Barratt:
In addition, the Barratt Directors have made an assumption within the influence of Barratt that there will be no material divestments from the Barratt Group.
In addition, the Barratt Directors have assumed that the cost synergies are substantively within Barratt's control, albeit that certain elements are dependent in part on negotiations with third parties.
On 7 February 2024, PwC, as reporting accountants to Barratt, and UBS and Morgan Stanley, as financial advisers to Barratt, gave the reports relating to the Quantified Financial Benefits Statements required by Rule 21.8(a) of the Takeover Code. Copies of their reports were included in Part B of Appendix IV of the 2.7 Announcement.
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The Barratt Directors confirm that:
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