Pre-Annual General Meeting Information • Mar 7, 2019
Pre-Annual General Meeting Information
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This Circular does not take into account the investment objectives, financial situation or needs of any particular person. If you are in any doubt as to the action you should take, you are recommended to seek your own financial or tax advice immediately from your stockbroker, bank manager, fund manager, solicitor, accountant, tax advisor or other appropriate independent financial adviser duly authorised under the Financial Services and Markets Act 2000 ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares, please send this Circular and the Form of Proxy as soon as possible to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you sell or have sold or otherwise transferred only part of your holding of Existing Ordinary Shares, please consult the bank, stockbroker or other agent through whom the sale or transfer was effected. However, neither this Circular nor the Form of Proxy should be forwarded to or sent in or into any jurisdiction in which to do so would constitute a breach of the relevant laws of such jurisdiction.
The distribution of this Circular and any accompanying documents into jurisdictions other than the United Kingdom may be restricted by law. Any person not in the United Kingdom into whose possession this Circular and any accompanying documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction.
(incorporated and registered in England and Wales with registered number 02877315)
Proposed Return of Cash to Shareholders of 30 pence per Existing Ordinary Share by way of a B Share Scheme and a related 20 for 21 Share Consolidation
Circular to Shareholders and Notice of General Meeting
This Circular should be read as a whole. Your attention is drawn to the letter from your Chairman which is set out in Part I of this Circular and which contains the recommendation of the Board that you vote in favour of the Resolutions to be proposed at the General Meeting referred to below. The Resolutions will be voted on by taking a poll.
You should note that the B Share Scheme and Share Consolidation are conditional upon, among other things, the approval by the Shareholders of the Resolutions.
This Circular contains notice of a General Meeting of the Company to be held at Redrow House, St David's Park, Ewloe, Flintshire CH5 3RX at 10.00 a.m. on Wednesday 27 March 2019. A Form of Proxy for use in connection with the Resolutions to be proposed at the General Meeting is enclosed.
Whether or not you intend to attend the General Meeting in person, holders of Existing Ordinary Shares are requested to complete the Form of Proxy in accordance with the instructions printed on it and return it so as to be received by the Company's registrar, Computershare Investor Services PLC of The Pavilions, Bridgwater Road, Bristol BS99 7NH, as soon as possible but, in any event, so as to arrive no later than 10.00 a.m. on Monday 25 March 2019. Completion and return of a Form of Proxy will not preclude you from attending and voting in person at the General Meeting if you wish to do so and are so entitled.
Application will be made to the UK Listing Authority and the London Stock Exchange, respectively, for the New Ordinary Shares resulting from the proposed Share Consolidation to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities in place of the Existing Ordinary Shares. It is expected that dealings in the Existing Ordinary Shares will continue until 4.30 p.m. on Friday 5 April 2019 and that Admission of the New Ordinary Shares will become effective and dealings in them will commence on the London Stock Exchange at 8.00 a.m. on Monday 8 April 2019.
No application will be made to the UK Listing Authority or to the London Stock Exchange for any of the B Shares to be admitted to the Official List or to trading on the London Stock Exchange's main market for listed securities, nor will the B Shares be listed or admitted to trading on any other recognised investment exchange. The B Shares will not be transferable, save in the very limited circumstances set out in Article 4A.8 of Part III of this Circular.
Barclays, which is authorised by the PRA and regulated by the FCA and PRA in the United Kingdom, is acting exclusively for the Company and for no one else in connection with the matters referred to in this Circular and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the matters referred to in this Circular. Neither Barclays, 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 Barclays in connection with this Circular, any statement contained herein or otherwise.
This Circular does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security. This Circular does not constitute an invitation to participate in the B Share Scheme in or from any jurisdiction in or from which, or to or from whom, it is unlawful to make such offer under applicable securities laws or otherwise or where such offer would require a prospectus to be published. Neither this Circular, nor any other document issued in connection with the proposed return of cash to Shareholders, may be issued or distributed to any person except under circumstances which do not constitute an offer to the public under applicable securities laws. This document does not constitute a prospectus. The attention of Overseas Shareholders is drawn to paragraph 9 of Part II of this Circular.
No person has been authorised to give any information or make any representations other than those contained in this Circular and, if given or made, such information or representations must not be relied on as having been so authorised. The delivery of this Circular shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Circular or that the information in it is correct as at any subsequent time to its date.
The contents of this document are not to be construed as legal, business or tax advice. Each Shareholder should consult their own legal adviser, financial adviser or tax adviser for legal, financial or tax advice respectively.
Percentages may have been rounded and accordingly may not add up to 100 per cent. Certain financial data has been rounded and, as a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.
Capitalised terms have the meanings ascribed to them in the "Definitions" section of this Circular.
| EXPECTED TIMETABLE OF PRINCIPAL EVENTS | 4 | |
|---|---|---|
| PART I | ||
| LETTER FROM THE CHAIRMAN | 5 | |
| 1. | INTRODUCTION | 5 |
| 2. | BACKGROUND TO AND REASONS FOR THE RETURN OF CASH | 5 |
| PART II | ||
| DETAILS OF THE B SHARE SCHEME AND SHARE CONSOLIDATION | 6 | |
| 1. | B SHARE SCHEME | 6 |
| 2. | CONDITIONS TO THE IMPLEMENTATION OF THE B SHARE SCHEME | 6 |
| 3. | ALLOTMENT AND ISSUE OF B SHARES | 6 |
| 4. | TERMS OF THE B SHARE PURCHASE OFFER | 6 |
| 5. | AGREEMENTS IN RELATION TO THE B SHARE PURCHASE OFFER | 8 |
| 6. | SHARE CONSOLIDATION | 9 |
| 7. | FRACTIONAL ENTITLEMENTS TO NEW ORDINARY SHARES | 10 |
| 8. | EFFECT OF B SHARE SCHEME AND SHARE CONSOLIDATION | 10 |
| 9. | OVERSEAS SHAREHOLDERS | 10 |
| 10. | GROUP EMPLOYEE SHARE SCHEMES AND REMUNERATION ARRANGEMENTS | 10 |
| 11. | DEALINGS AND DESPATCH OF DOCUMENTS | 11 |
| 12. | GENERAL MEETING | 11 |
| 13. | SUMMARY OF THE RESOLUTIONS TO BE PROPOSED AT THE GENERAL MEETING | 11 |
| PART III | ||
| RIGHTS AND RESTRICTIONS ATTACHED TO THE B SHARES | 14 | |
| PART IV | ||
| RIGHTS AND RESTRICTIONS ATTACHED TO THE DEFERRED SHARES | 16 | |
| PART V | ||
| UNITED KINGDOM TAXATION | 18 | |
| 1. | ISSUE OF B SHARES AND SHARE CONSOLIDATION | 18 |
| 2. | B SHARE PURCHASE OFFER | 18 |
| 3. | DEFAULT DIVIDEND | 19 |
| 4. | DIVIDENDS PAYABLE ON THE NEW ORDINARY SHARES | 19 |
| 5. | TRANSACTIONS IN SECURITIES | 19 |
| 6. | STAMP DUTY AND SDRT | 19 |
| PART VI | ||
| ADDITIONAL INFORMATION | 21 | |
| 1. | SUMMARY OF THE RIGHTS AND RESTRICTIONS ATTACHING TO THE NEW ORDINARY SHARES | 21 |
| 2. | FORM | 21 |
| 3. | CREST | 21 |
| 4. | CONSENT | 21 |
| 5. | DOCUMENTS AVAILABLE FOR INSPECTION | 21 |
| DEFINITIONS | 22 | |
| 26 NOTICE OF GENERAL MEETING |
| Latest time and date for receipt of Forms of Proxy and CREST Proxy Instructions |
10.00 a.m. on Monday 25 March 2019 |
|---|---|
| General Meeting | 10.00 a.m. on Wednesday 27 March 2019 |
| Latest time and date for dealings in Existing Ordinary Shares | 4.30 p.m. on Friday 5 April 2019 |
| Record Time | 6.00 p.m. on Friday 5 April 2019 |
| Existing Ordinary Share register closed and Existing Ordinary Shares disabled in CREST |
6.00 p.m. on Friday 5 April 2019 |
| Record time for entitlement to B Shares and the Share Consolidation |
6.00 p.m. on Friday 5 April 2019 |
| Cancellation of listing of Existing Ordinary Shares | before 8.00 a.m. on Monday 8 April 2019 |
| Admission Date | 8.00 a.m. on Monday 8 April 2019 |
| New Ordinary Shares admitted to the Official List and to trading on the London Stock Exchange |
8.00 a.m. on Monday 8 April 2019 |
| B Shares issued equal to number of Existing Ordinary Shares held at the Record Time |
8.00 a.m. on Monday 8 April 2019 |
| CREST accounts credited with New Ordinary Shares | 8.00 a.m. on Monday 8 April 2019 |
| Barclays makes the B Share Purchase Offer by means of a Regulatory Information Service announcement |
8.00 a.m. on Tuesday 9 April 2019 |
| Purchase of B Shares by Barclays to be completed and Barclays to be registered as the holder of such B Shares |
Tuesday 9 April 2019 |
| Single B Share Dividend paid and B Shares automatically reclassified as Deferred Shares |
Tuesday 9 April 2019 |
| Company repurchases and cancels Deferred Shares | Tuesday 9 April 2019 |
| Despatch of share certificates in respect of New Ordinary Shares |
Tuesday 16 April 2019 |
| Despatch of payments and CREST accounts credited in respect of proceeds from sale of fractional entitlements arising as a result of the Share Consolidation |
Tuesday 16 April 2019 |
| Despatch of payments and CREST accounts credited in respect of proceeds from the sale of the B Shares following the B Share Purchase Offer |
Tuesday 16 April 2019 |
(1) If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.
(2) References to time in this document are to London time.
(3) All events in the above timetable following the holding of the General Meeting are conditional on the passing of the Resolutions at such meeting and all events in the above timetable following the Admission Date are conditional upon Admission.
Steve Morgan (Chairman) John Tutte (Group Chief Executive) Barbara Richmond (Group Finance Director) Nick Hewson (Senior Independent Director) Sir Michael Lyons (Non-executive Director) Vanda Murray (Non-executive Director)
Dear Shareholder,
Redrow House St. David's Park Flintshire CH5 3RX
7 March 2019
On 6 February 2019, the Company announced that it intended to return approximately £111 million to Shareholders alongside an interim dividend of 10p per Existing Ordinary Shares. I am now writing to you with full details of the Return of Cash and to seek your approval of the Resolutions required to be passed to implement it.
Since I returned to the business in 2009, we have successfully executed our strategy to grow the business and improve profitability. In recent years we have been able both to continue this growth and generate substantial amounts of cash. As a result, in the 2018 financial year we increased our dividend payout ratio to 33%, which the Board believes to be an appropriate and sustainable level for the business.
In view of the ongoing success of the business we recently completed a review of the Group's medium term cash requirements. The review concluded that the Group has a strong balance sheet which will be to its advantage through the economic cycle. In addition, the Group continues to generate substantial amounts of cash as evidenced by the net cash inflow of £174 million over the 18 months to 31 December 2018, which resulted in a £101 million net cash position at that date. Consequently the Board believes it is appropriate to return this surplus capital of approximately £111 million to Shareholders.
We believe the Return of Cash balances our ambitions to maximise Shareholder returns while operating the business in a prudent manner and maintaining financial flexibility. As the Group continues to execute its strategy, the Board intends to return future capital surpluses to Shareholders which are over and above the Group's internal cash needs both to deliver that strategy and to sustain its normal 33% dividend payout ratio, as appropriate in light of the prevailing economic conditions.
The Return of Cash amounts to 30 pence per Existing Ordinary Share and is to be implemented using the B Share Scheme. This structure has been chosen because it enables all Shareholders to participate equally in the Return of Cash in proportion to the size of their existing holdings in the Company and is expected to provide capital treatment for the majority of United Kingdom tax resident Shareholders.
To maintain comparability, so far as possible, between the market price per Existing Ordinary Share before and after the Return of Cash, and to reflect the value that will be returned to Shareholders, the B Share Scheme will be accompanied by the Share Consolidation.
The details and terms of the B Share Scheme and the Share Consolidation are summarised in Part II of this Circular.
For the avoidance of doubt, the B Share Scheme is separate to, and excluded from, the Company's dividend reinvestment plan.
The purpose of this document is to provide Shareholders with further information relating to the B Share Scheme and related Share Consolidation and to give notice of the General Meeting at which certain Resolutions will be considered and, if thought fit, passed to allow the B Share Scheme and Share Consolidation to proceed. This Circular also explains why the Board considers the Resolutions proposed to be in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as each Director intends to do in respect of his or her own beneficial holdings.
Yours faithfully
Steve Morgan
Chairman
The B Share Scheme is the way in which the Company proposes to effect the Return of Cash to Shareholders. This will involve the allotment and issue of B Shares to Shareholders and the subsequent purchase of the B Shares by Barclays pursuant to the B Share Purchase Offer (described in paragraph 4 of this Part II). This will be accompanied by the Share Consolidation (described in paragraph 6 of this Part II).
The exact aggregate amount to be returned under the B Share Scheme will depend on the number of Existing Ordinary Shares in issue at the Record Time. However, based on the number of Existing Ordinary Shares in issue as at close of business on the Latest Practicable Date and the proposal to return 30 pence per Existing Ordinary Share, the aggregate amount to be returned under the B Share Scheme is expected to be approximately £111 million.
The B Share Scheme is conditional on:
If these conditions are not satisfied by 8.00 a.m. on the Admission Date, neither the B Share Scheme nor the Share Consolidation will take effect.
Each Shareholder will receive one B Share for each Existing Ordinary Share held at the Record Time. The rights and restrictions attached to the B Shares are set out in Part III of this Circular.
It is proposed that the Company will capitalise a sum of approximately £369,800 standing to the credit of the Company's share premium account in order to pay up in full the B Shares with a nominal value of 0.1 pence each.
The exact number of B Shares to be issued will be equal to the number of Existing Ordinary Shares in issue at the Record Time (excluding any held in treasury by the Company). As at close of business on the Latest Practicable Date there were 369,799,938 Existing Ordinary Shares in issue and the Company does not, as at close of business on the Latest Practicable Date, hold any shares in treasury.
The B Shares will not be admitted to listing on the Official List or admitted to trading on the London Stock Exchange's main market for listed securities, nor will they be listed or admitted to trading on any other recognised investment exchange. The B Shares will not be transferable, save in the limited circumstances set out in Article 4A.8 of Part III of this Circular.
No share certificates will be issued in respect of the B Shares.
The Return of Cash under the B Share Scheme is separate from and will not affect the Company's dividend policy. Any future interim or final dividends declared by the Company will be in addition to the Return of Cash under the B Share Scheme. Accordingly, payment of the interim dividend for the current financial year to all Shareholders is expected to proceed on 9 April 2019 with a record date of 8 March 2019. Assuming the Resolutions are passed at the General Meeting and the B Share Scheme and related Share Consolidation are implemented, any future dividend, other than the interim dividend for the current financial year, will be paid per share on the number of New Ordinary Shares held by each Shareholder after the Share Consolidation.
On and subject to the terms set out in this Circular, it is expected that Barclays (acting as principal, and not as agent, nominee or trustee for the Company) shall make the B Share Purchase Offer to purchase all of the B Shares for an amount of 30 pence per B Share, free of all expenses and commissions.
Once Shareholders have approved the B Share Scheme as described in this Circular by the passing of the Resolutions, under the Company's new articles of association to be adopted with effect from Admission (the "New Articles") each of the Directors and the Company Secretary will be authorised on behalf of each Shareholder to do all acts and things which they consider necessary or desirable to accept the B Share Purchase Offer. No individual Shareholder will be able to accept or reject the B Share Purchase Offer with respect to the B Shares that such Shareholder has received pursuant to the B Share Scheme.
The following terms will apply to the B Share Purchase Offer:
(A) no contract between a Shareholder and Barclays will arise in relation to the sale and purchase of any B Shares, or under which Barclays may (subject to conditions or otherwise) become entitled or obliged to purchase any B Shares under the B Share Purchase Offer, unless and until Barclays (acting as principal, and not as agent, nominee or trustee for the Company) makes the B Share Purchase Offer, which is expected to be by way of an announcement through a Regulatory Information Service on 9 April 2019, on which date the Directors or the Company Secretary shall accept the B Share Purchase Offer on behalf of the Shareholders. Under the New Articles, each of the Directors and the Company Secretary is authorised on behalf of each Shareholder to execute all documents and do all acts and things in the name of each holder of B Shares or otherwise on behalf of each such holder of B Shares which such director or secretary shall in their absolute discretion consider necessary or desirable to accept the B Share Purchase Offer. The obligation of Barclays to make the B Share Purchase Offer is conditional upon the satisfaction, or waiver by Barclays, of a number of conditions which are summarised in paragraph 5 of this Part II. In addition, under the terms of the Purchase Offer Deed, Barclays shall only be obliged to make the B Share Purchase Offer if the Company serves written notice on Barclays by 6.00 p.m. on 10 April 2019 (or such other time and/or dates as Barclays and the Company may agree in writing);
requisite formalities and paid any issue, transfer or other taxes due from such Shareholder in any territory in connection with the acceptance of the B Share Purchase Offer by the Directors or the Company Secretary on behalf of that Shareholder (or any transaction resulting therefrom) and such Shareholder has not taken or omitted to take any action which may result in the Company, Barclays or any other person acting in breach of the legal or regulatory requirements of any territory in connection with the B Share Scheme or the acceptance of the B Share Purchase Offer by the Directors or the Company Secretary on behalf of that Shareholder (or any transaction resulting therefrom);
The Single B Share Dividend is expected to be paid to Barclays on 9 April 2019 for an amount of 30.15 pence per B Share, equal to the amount of 30 pence per B Share paid by Barclays pursuant to the B Share Purchase Offer plus the amount of stamp duty or SDRT arising on such purchase. Each B Share purchased by Barclays (acting as principal and not as agent, nominee or trustee for the Company) under the B Share Purchase Offer will, once the Single B Share Dividend has been paid on it, automatically be reclassified as a Deferred Share. It is intended that the Deferred Shares held by Barclays following the B Share Purchase Offer will be acquired by the Company from Barclays for an aggregate consideration of one penny and immediately cancelled.
In the unlikely event that the Single B Share Dividend is not paid by the Company to Barclays by 6.00 p.m. on the first Business
Day after the B Share Purchase Completion, under the Option Agreement, (i) the Company has granted to Barclays a put option which, on exercise, will oblige the Company to purchase from Barclays all the B Shares purchased by Barclays pursuant to the B Share Purchase Offer and (ii) Barclays has granted the Company a call option which, on exercise, will oblige Barclays to sell to the Company all the B Shares purchased by Barclays pursuant to the B Share Purchase Offer. The price payable on exercise of either option will be an amount equivalent to that which would have been payable under the Single B Share Dividend.
The B Share Purchase Offer is subject to certain conditions and, although it is expected that Barclays will purchase the B Shares under the B Share Purchase Offer, there can be no guarantee that it will do so. In the unlikely event that the B Shares are not purchased by Barclays by 6.00 p.m. on 11 April 2019, it is expected that the Default Dividend will be paid on each such B Share. For the avoidance of doubt, each Shareholder will have no right to choose to decline the B Share Purchase Offer, and to receive the Default Dividend or the Single B Share Dividend, instead of the purchase price due to them under the B Share Purchase Offer.
Once the Default Dividend is paid on the Default Payment Date, the B Shares will be automatically reclassified as Deferred Shares. The Deferred Shares will carry extremely limited rights as more fully described in Part VI of this Circular. A Default Dividend will be taxed, in the hands of United Kingdom tax resident Shareholders, in the same way as any other dividend income from the Company, rather than providing capital treatment.
The Company may purchase all Deferred Shares held by Shareholders following the payment of the Default Dividend at any time for an aggregate consideration of one penny. To achieve this, it is currently expected that the Company, on behalf of all Shareholders who hold Deferred Shares at the relevant time, would execute a transfer of all such Deferred Shares to Barclays for an aggregate consideration of one penny and such Deferred Shares would be acquired by the Company from Barclays under the Option Agreement for an aggregate consideration of one penny. The Deferred Shares would then be cancelled. In view of the negligible amount of the aggregate consideration, no stamp duty or SDRT will be chargeable on the transfer of these Deferred Shares either from Shareholders to Barclays or from Barclays to the Company, and Shareholders will not be entitled to have any part of this consideration paid to them.
Details of the agreements relating to the B Share Purchase Offer are set out below.
The following agreements have been entered into in relation to the B Share Purchase Offer:
On 7 March 2019, the Company entered into the Purchase Offer Deed with Barclays. Under the Purchase Offer Deed, Barclays has agreed that it will, as principal (and not as agent, nominee or trustee for the Company), make an off-market offer to purchase the B Shares from Shareholders. Under the New Articles, each of the Directors and the Company Secretary is authorised on behalf of each Shareholder to execute all documents and do all acts and things in the name of each holder of B Shares or otherwise on each such Shareholder's behalf which such Director or the Company Secretary shall in their absolute discretion consider necessary or desirable in order to accept the B Share Purchase Offer. As such, once Shareholders have approved the steps to be taken by the Company and the Directors for the purposes of implementing the B Share Scheme and the Share Consolidation by the passing of the Resolutions, it is the Directors who will determine whether or not Shareholders sell their B Shares to Barclays pursuant to the B Share Purchase Offer, and no Shareholder will separately be able to take a decision to sell or not to sell the B Shares it receives.
The B Share Purchase Offer will be made in the manner and on the terms set out in this Circular and the Purchase Offer Deed. The obligation of Barclays to make the B Share Purchase Offer is conditional upon the satisfaction, or waiver by Barclays, of a number of conditions, including: (i) the passing of Resolutions 1, 2 and 3 without amendment other than as agreed between Barclays and the Company; (ii) the execution by the Company of the Option Agreement; (iii) the execution by the Company and the Escrow Agent of, and their compliance with the terms of, the Escrow Agreement, including the payment by the Company into the escrow account(s) of the Escrow Amounts; (iv) the allotment and issue of the B Shares in accordance with this Circular; and (v) the Company having sufficient distributable reserves (a) to pay the Single B Share Dividend and purchase the Deferred Shares, or (b) to the extent that the Single B Share Dividend is not paid by 6.00 p.m. on the first Business Day after B Share Purchase Completion and an Option Exercise Notice under the Option Agreement is validly served, to purchase the B Shares, each in accordance with this Circular.
The Purchase Offer Deed is also conditional upon Barclays not having exercised its right to terminate the Purchase Offer Deed before making the B Share Purchase Offer. Such termination right is exercisable upon the occurrence of certain events, including: (i) material failure by the Company to comply with its obligations under the Purchase Offer Deed, the Option Agreement or this Circular; (ii) material breach by the Company of the representations, warranties and/or undertakings given to Barclays under the Option Agreement and/or the Purchase Offer Deed; (iii) material disruption in financial markets; and (iv) an actual or prospective material adverse change affecting the Company.
On 7 March 2019, the Company entered into the Option Agreement with Barclays.
Under the Option Agreement, if the Single B Share Dividend has not been paid by the Company to Barclays by 6.00 p.m. on the first Business Day after B Share Purchase Completion (and the B Shares not therefore having been automatically reclassified as Deferred Shares), and conditional on B Share Purchase Completion and Barclays being registered as the holder of the B Shares, the Company has granted a put option to Barclays which, on exercise, will oblige the Company to purchase from Barclays the B Shares purchased by Barclays pursuant to the B Share Purchase Offer, at an aggregate price of (i) 30 pence per B Share multiplied by the number of B Shares purchased plus (ii) an amount equal to any stamp duty or SDRT payable by Barclays as a result of its purchase of the B Shares pursuant to the B Share Purchase Offer (the "Option Price"). Also under the Option Agreement, Barclays has granted the Company a call option which, on exercise, will oblige Barclays to sell to the Company the B Shares purchased by Barclays pursuant to the B Share Purchase Offer at the Option Price. It is currently expected that the put option and call option under the Option Agreement will not be exercised and that instead the Single B Share Dividend will be paid to Barclays (in an amount equal to that payable under the options), following which each B Share purchased by Barclays under the B Share Purchase Offer will be automatically reclassified as a Deferred Share and then be purchased by the Company from Barclays for an aggregate consideration of one penny and cancelled.
In the event that B Share Purchase Completion does not occur by 6.00 p.m. on 11 April 2019 and the Company instead pays the Default Dividend on the B Shares, Barclays has undertaken under the Option Agreement to purchase, on such date(s) as may be specified by the Company and for an aggregate consideration of one penny, all the Deferred Shares not already held by it and then in issue into which B Shares have been automatically reclassified as a result of the Default Dividend being paid. Barclays has also undertaken to sell any Deferred Shares which it holds (whether those Deferred Shares arise as a result of the B Share Purchase Offer followed by payment of the Single B Share Dividend, or as a result of payment by the Company of the Default Dividend) to the Company, as soon as reasonably practicable thereafter, for an aggregate consideration of one penny.
The Company has also entered into the Escrow Agreement relating to the transfer of the amounts payable in respect of the Single B Share Dividend or the Option Price, as applicable.
It is expected that, as a result of the decrease in the value of the Company's net assets due to the Return of Cash, there would, without a consolidation of the Company's ordinary share capital, be a corresponding decrease in the market price of the Existing Ordinary Shares. Accordingly, to maintain comparability, so far as possible, between the market price per Ordinary Share before and after the issue of the B Shares and the Return of Cash, a consolidation of the Company's ordinary share capital is proposed. This allows comparability of share prices and per share financial metrics (including dividends, net assets and earnings) with prior financial periods. The Share Consolidation involves a reduction of the total number of Ordinary Shares in issue by the consolidation of the Existing Ordinary Shares (which have a nominal value of 10 pence each) into a smaller number of New Ordinary Shares, each at a nominal value of 10 ½ pence per New Ordinary Share.
As a result of the Share Consolidation, each Shareholder will receive a number of New Ordinary Shares at an expected ratio of 20 New Ordinary Shares for every 21 Existing Ordinary Shares held at the Record Time.
The Return of Cash of £111 million represents approximately 4.72 per cent. of the Company's market capitalisation (based on the closing market price of 635 pence per Existing Ordinary Share as at close of business on Monday 4 March 2019) and the Share Consolidation will reduce the number of Ordinary Shares in issue by a similar percentage.
Although the number of Ordinary Shares in issue will decrease, each Shareholder will still own the same proportion of the issued share capital of the Company as immediately before the Share Consolidation, subject to fractional entitlements. The value of a Shareholder's holding in the Company immediately following the Share Consolidation, when added to the cash payment received as a result of the Return of Cash, will be the same as the value of its holding in the Company immediately before the Share Consolidation (subject to any fluctuations in the market price of the Ordinary Shares).
Following the Share Consolidation, it is expected that the Company's total issued share capital would comprise 352,190,420 New Ordinary Shares. The New Ordinary Shares will be equivalent in all material respects to the Existing Ordinary Shares (including as to dividend, voting and other rights), with the exception of the difference in nominal value and the New Ordinary Shares being subject to the rights of the B Shares.
Application will be made for the New Ordinary Shares to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities with a premium listing, with Admission expected to take place and dealings expected to commence at 8.00 a.m. on the Admission Date. The Company will apply for the New Ordinary Shares under the ISIN GB00BG11K365 to be admitted to CREST with effect from Admission so that general market transactions in the New Ordinary Shares may be settled within the CREST system.
Depending upon the price of an Existing Ordinary Share and the number of Existing Ordinary Shares in issue shortly before the date of the General Meeting, the ratio proposed above may no longer maintain comparability between the price of the Ordinary Shares before and after the issue of the B Shares. If this is the case, the Board may, at the General Meeting, propose
certain changes to Resolution 2 contained in the Notice of General Meeting so as to adjust the ratio to maintain, as far as possible, the comparability and may also propose certain consequential changes to Resolutions 4, 5 and 6 contained in the Notice of General Meeting. If such changes are to be proposed, notice will be given by issuing an announcement through the Regulatory Information Service of the London Stock Exchange.
Share certificates representing the New Ordinary Shares will be issued following the Share Consolidation and sent to Shareholders by 16 April 2019. Shareholders who hold their Existing Ordinary Shares in CREST will automatically have their New Ordinary Shares credited to their CREST account. The relevant CREST accounts will be credited at approximately 8.00 a.m. on the Admission Date.
Unless a holding of Existing Ordinary Shares is exactly divisible by 21, a Shareholder will have a fractional entitlement to a New Ordinary Share following the Share Consolidation. These fractional entitlements will all be aggregated into New Ordinary Shares and sold in the market on behalf of the relevant Shareholders. Subject to the below, the net proceeds of sale (after deduction of all expenses and commissions incurred) will be distributed pro rata to relevant Shareholders. Cheques in respect of the net proceeds of sale will be despatched to relevant Shareholders or CREST accounts credited with the net proceeds, as appropriate, together with certificates for New Ordinary Shares, where applicable, by 16 April 2019. Should the cash consideration for any Shareholder's fractional entitlement be less than £5.00 (net of expenses), that Shareholder will have no entitlement or right to the proceeds of sale and so will not receive a cheque or have its CREST account credited in respect of that entitlement due to the administrative costs incurred in doing so; rather, the net proceeds will be retained by the Company.
If necessary, to ensure that a whole number of New Ordinary Shares is created following the implementation of the Share Consolidation, it is proposed that, in advance of the Record Time, the Company will issue up to 100 Ordinary Shares to the Employee Share Trust.
For illustrative purposes, examples of how the B Share Scheme and Share Consolidation would affect Shareholders are set out below.
| A. Number of Existing Ordinary Shares held at the Record Time |
B. Number of New Ordinary Shares held after Share Consolidation |
C. Proceeds under B Share Scheme |
|---|---|---|
| 1 | 0 | £0.30 |
| 21 | 20 | £6.30 |
| 100 | 95 | £30.00 |
| 500 | 476 | £150.00 |
Although the number of Ordinary Shares held by each Shareholder will be reduced, following the Return of Cash and Share Consolidation each Shareholder will continue to own the same proportion of the issued share capital of the Company as immediately before the Return of Cash and Share Consolidation, subject to fractional entitlements.
These examples do not show fractional entitlements, the value of which will depend on the market value of the New Ordinary Shares at the time of sale, as described in paragraph 7 above.
Shareholders who are not resident in the United Kingdom or who are citizens, residents or nationals of other countries should consult their professional advisers to ascertain whether the issue, holding or disposal of the B Shares will be subject to any restrictions or require compliance with any formalities imposed by the laws or regulations of, or any body or authority located in, the jurisdiction in which they are resident or to which they are subject. In particular, it is the responsibility of any Overseas Shareholder to satisfy itself as to full observance of the laws of each relevant jurisdiction in connection with the B Share Scheme, including the obtaining of any government, exchange control or other consents which may be required, or the compliance with other necessary formalities needing to be observed and the payment of any issue, transfer or other taxes or duties in such jurisdiction.
The distribution of this document in certain jurisdictions may be restricted by law. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Neither this document nor any other document issued or to be issued by or on behalf of the Company in connection with the B Share Scheme constitutes an invitation, offer or other action on the part of the Company in any jurisdiction in which such invitation, offer or other action is unlawful.
Under the Group Employee Share Schemes, the Company has granted options and awards over Existing Ordinary Shares at varying exercise prices and with varying vesting dates. Participants under the Group Employee Share Schemes are not the beneficial owners of Existing Ordinary Shares under those schemes (save where options are exercised before the Record Time) and so will not participate in the B Share Scheme and Share Consolidation, other than in their separate capacity as Shareholders (if applicable). Where a participant under Group Employee Share Scheme has exercised an option or award before the Record Time, the participant will receive the B Shares and their Ordinary Shares will be subject to the Share Consolidation in the same way as other Shareholders.
It is intended that the Share Consolidation will ensure that the Return of Cash has a largely neutral outcome for participants under the annual bonus plan and the Group Employee Share Schemes, as options and awards over Existing Ordinary Shares will take effect as options and awards over the same number of New Ordinary Shares, which are expected to have approximately the same market value following the Share Consolidation as Existing Ordinary Shares, subject to market fluctuations. On this basis, it is anticipated that no adjustment will be made to the number of Ordinary Shares over which participants have options or awards, but that adjustments will be made to the performance targets under the LTIPs to neutralise the effect of the Return of Cash, thereby ensuring that the participants in those schemes are not disadvantaged by it.
As at close of business on the Latest Practicable Date, the total number of unvested options and awards under the Group Employee Share Schemes was 4,871,320. In aggregate, these outstanding options and awards represented approximately 1.32 per cent. of the issued Existing Ordinary Shares of the Company. Following the implementation of the Return of Cash, and assuming no further shares or options are issued between close of business on the Latest Practicable Date and the Share Consolidation becoming effective, the outstanding options and awards will represent approximately 1.38 per cent. of the issued New Ordinary Shares of the Company.
The Company has established an Employee Share Trust for the purpose of satisfying share options and awards under certain of the Group Employee Share Schemes. The Employee Share Trust holds Existing Ordinary Shares. Existing Ordinary Shares held by the Employee Share Trust will have the same rights under the B Share Scheme and Share Consolidation as Existing Ordinary Shares held by other Shareholders.
The B Share Scheme will be carried out by reference to holdings of Existing Ordinary Shares on the Company's register of members as at the Record Time.
It is expected that dealings and settlement within the CREST system of the Existing Ordinary Shares under ISIN GB0007282386 will continue until 4.30 p.m. on 5 April 2019 when, in the case of Existing Ordinary Shares held in certificated form, the register of members will be closed for transfers and no further transfers of Existing Ordinary Shares will be able to be made. The registration of uncertificated holdings in respect of Existing Ordinary Shares will be disabled in CREST at the Record Time.
In respect of New Ordinary Shares, Shareholders who hold their Existing Ordinary Shares in CREST will have their CREST accounts credited with the New Ordinary Shares under ISIN GB00BG11K365 at approximately 8.00 a.m. on the Admission Date. Shareholders holding New Ordinary Shares through the CREST system will not receive any share certificates.
With effect from Admission, share certificates in respect of Existing Ordinary Shares will cease to be valid. Share certificates in respect of New Ordinary Shares will only be issued following the Share Consolidation. It is therefore important that Shareholders holding certificate(s) in respect of Existing Ordinary Shares retain them until the New Ordinary Share certificates are despatched, which is expected to be by 16 April 2019. On receipt of share certificates in respect of New Ordinary Shares, certificates in respect of Existing Ordinary Shares should be destroyed.
No share certificates will be issued by the Company in respect of B Shares or Deferred Shares.
All share certificates and cheques will be sent by post, at the risk of the Shareholder(s) entitled thereto, to the registered address of the relevant Shareholder (or, in the case of joint Shareholders, to the address of the joint Shareholder whose name stands first in the register of members in respect of such joint shareholding).
The General Meeting will be held at Redrow House, St David's Park, Ewloe, Flintshire CH5 3RX at 10.00 a.m. on Wednesday 27 March 2019. A notice convening the General Meeting is set out at the end of this Circular.
Shareholders will find enclosed with this Circular a Form of Proxy for use at the General Meeting. Shareholders holding shares in CREST may appoint a proxy through a CREST Proxy Instruction.
Further details on proxy appointments and the action to be taken are set out in the Notice of General Meeting at the end of this Circular.
Six resolutions will be proposed at the General Meeting. Resolutions 1, 5 and 6 will be proposed as special resolutions, the passing of which requires at least 75 per cent. of the votes cast (whether in person or by proxy) to be in favour. Resolutions 2, 3 and 4 will be passed as ordinary resolutions, the passing of which requires a simple majority of votes cast to be in favour.
A summary of the resolutions is set out below:
This resolution is conditional on Admission occurring by 8.00 a.m. on the Admission Date. The Resolution proposes the adoption of the New Articles in order to implement the B Share Scheme. The New Articles will include the insertion into the Articles of Association of the rights and restrictions attaching to
the B Shares, as set out in Part III of this Circular. In addition, the New Articles will reflect the increase to the aggregate cap on the level of the ordinary remuneration of the Directors per annum. This increase was previously approved by means of an ordinary resolution passed by the Company's shareholders at the annual general meeting of the Company held on 9 November 2017.
This Resolution is conditional on the passing of Resolution 1 and on Admission occurring by 8.00 a.m. on the Admission Date. A summary of the paragraphs comprising the Resolution follows below.
Resolution 3 is conditional upon the passing of Resolutions 1 and 2 and on Admission occurring by 8.00 a.m. on the Admission Date (or such later date or time as the Directors may determine).
The Resolution proposes to approve the terms of the Option Agreement between Barclays and the Company under which (i) the Company would be entitled to require Barclays to sell to it all the Deferred Shares previously transferred to Barclays for an aggregate consideration of one penny and (ii) conditional on the Single B Share Dividend not having been paid by the Company to Barclays by 6.00 p.m. on the first Business Day after B Share Purchase Completion (and the B Shares not therefore having been automatically reclassified as Deferred Shares), Barclays would be entitled to require the Company to purchase from Barclays, and the Company would be entitled to require Barclays to sell to the Company, those B Shares purchased by Barclays (acting as principal and not as agent, nominee or trustee for the Company) from Shareholders under the B Share Purchase Offer at the Option Price. Such authority will expire at the conclusion of the next annual general meeting of the Company after the passing of Resolution 3 or, if earlier, the close of business on 31 December 2019.
At the 2018 AGM, Shareholders authorised the Directors, under section 551 of the Act, to allot Existing Ordinary Shares without the prior consent of Shareholders for a period expiring at the conclusion of the next annual general meeting of the Company or, if earlier, on 31 December 2019 (the "AGM Allotment Authority"). Resolution 4 will seek to renew the AGM Allotment Authority and to authorise the Directors under section 551 of the Act to allot New Ordinary Shares or grant rights to subscribe for or convert any security into New Ordinary Shares in the Company, for a period expiring at the conclusion of the next annual general meeting of the Company after the passing of Resolution 4 or, if earlier, the close of business on 31 December 2019. This is necessary in order to preserve the effect of the AGM Allotment Authority once the Share Consolidation has resulted in the replacement of the Existing Ordinary Shares with the New Ordinary Shares. If Resolution 4 is passed, the AGM Allotment Authority will therefore cease to have effect.
Paragraph (A)(i) of Resolution 4 will allow the Directors to allot New Ordinary Shares up to a maximum nominal amount of £12,326,664.63 representing approximately one-third (33.3 per cent.) of the Company's New Ordinary Share capital in issue immediately following the Share Consolidation (excluding treasury shares) (based on the total issued share capital of the Company as at close of business on the Latest Practicable Date).
In accordance with guidance issued by the Investment Association, paragraph (A)(ii) of Resolution 4 will allow the Directors to allot, including the Ordinary Shares referred to in paragraph (A)(i) of Resolution 4, further of the Company's New Ordinary Shares in connection with a pre-emptive offer by way of a rights issue to Shareholders up to a maximum nominal amount of £24,653,329.37 representing approximately twothirds (66.6 per cent.) of the Company's New Ordinary Share capital immediately following the Share Consolidation (excluding treasury shares). The Directors will exercise the authority to allot new shares or undertake a rights issue only when satisfied that it is in the best interests of the Company and the Shareholders as a whole to do so. There are no present plans to undertake a rights issue or to allot new shares pursuant to the authority granted under Resolution 4. The Directors consider it desirable to have the maximum flexibility permitted by the Investment Association guidance to respond to market developments and to enable allotments to take place to finance business opportunities as they arise.
Resolution 4 will be proposed as an ordinary resolution to renew this authority in relation to the New Ordinary Shares until the conclusion of the next annual general meeting of the Company or, if earlier, close of business on 31 December 2019.
At the 2018 AGM, a special resolution was passed, under sections 570 and 573 of the Act, empowering the Directors to allot equity securities for cash without first being required to offer such shares to existing shareholders (the "AGM General Disapplication of Pre-emption Rights"). Resolution 5 will seek to renew this authority in relation to the New Ordinary Shares, in line with the Pre-emption Group's Statement of Principles. If Resolution 5 is passed, the AGM General Disapplication of Preemption Rights will cease to have effect.
If approved, Resolution 5 will authorise the Directors, in accordance with the Company's New Articles, to issue shares in connection with a rights issue or other pre-emptive offer and otherwise to issue shares for cash (including the sale for cash on a non pre-emptive basis of any shares held in treasury) up to a maximum nominal amount of £1,848,999.71, which represents approximately 5 per cent. of the Company's New Ordinary Share capital, excluding treasury shares, immediately following the Share Consolidation (based on the total issued share capital of the Company as at close of business on the Latest Practicable Date).
The Directors intend to adhere to the provisions in the Preemption Group's Statement of Principles for the disapplication of pre-emption rights and do not intend to allot shares or other equity securities or sell treasury shares for cash on a non-preemptive basis pursuant to the authority in Resolution 5 in excess of an amount equal to 7.5 per cent. of the Company's New Ordinary Share capital within a rolling three-year period, other than (i) with prior consultation with Shareholders; or (ii) in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment.
Resolution 5 will be proposed as a special resolution to renew this authority in relation to the New Ordinary Shares until the conclusion of the next annual general meeting of the Company after the passing of Resolution 5, or, if earlier, close of business on 31 December 2019.
Resolution 6: To authorise the Directors to disapply pre-emption rights for the purposes of acquisitions or capital investments ("Resolution 6")
At the 2018 AGM, a separate special resolution was passed, in line with the best practice guidance issued by the Pre-Emption Group, authorising the Directors to allot equity securities or sell treasury shares for cash without first being required to offer such securities to existing shareholders (the "AGM Additional Disapplication of Pre-emption Rights"). If Resolution 6 is passed the AGM Additional Disapplication of Pre-emption Rights will cease to have effect.
Resolution 6 requests further Shareholder approval, by way of a separate special resolution, for the Directors to allot equity securities or sell treasury shares for cash without first being required to offer such securities to existing shareholders, in relation to the New Ordinary Shares. The proposed resolution reflects the Pre-emption Group's Statement of Principles for the disapplication of pre-emption rights and will expire on 31 December 2019 or at the conclusion of the next annual general meeting of the Company, whichever is earlier.
The authority granted by Resolution 6, if passed:
The authority granted by this Resolution 6 would be in addition to the general authority to disapply pre-emption rights under Resolution 5. The maximum nominal value of equity securities which could be allotted if both authorities were used would be £3,697,999.42, which represents approximately 10 per cent. of the Company's New Ordinary Share capital, immediately following the Share Consolidation (based on the total issued share capital of the Company as at close of business on the Latest Practicable Date).
The Directors have no current intention of exercising the authorities in Resolutions 5 and 6 but consider such authorities to be appropriate in order to allow the Company flexibility to finance business opportunities or to conduct a pre-emptive offer or rights issue without the need to comply with the strict requirements of the statutory pre-emption provisions.
The following sets out the rights of the B Shares and the restrictions to which they are subject. These are included in the New Articles proposed to be adopted at the General Meeting.
The following paragraphs will be inserted as a new Article 4A in the New Articles.
Please note that the defined terms in this Part III have been aligned with those in the Articles of Association and therefore defined terms used elsewhere in this Circular do not apply to this Part III.
Notwithstanding Article 4, the non-cumulative irredeemable preference shares of 0.1 pence each in the capital of the Company (the "B Shares") shall have the rights, and be subject to the restrictions, attaching to shares set out in these Articles save that in the event of a conflict between any provision in this Article 4A and any other provision in these Articles, the provisions in this Article 4A shall prevail.
On and subject to the terms set out in the circular sent by the Company to its shareholders on 7 March 2019, it is expected that Barclays Bank PLC (or a subsidiary thereof) ("Barclays") shall make an offer to purchase the B Shares acting as principal (and not as agent, nominee or trustee for the Company) (the "B Share Purchase Offer"). Each of the Directors and the Secretary is hereby authorised on behalf of each holder of those shares to execute all documents and do all acts and things in the name of each holder of B Shares to execute all documents and do all acts and things in each such holder's name or otherwise on behalf of each such holder's behalf which such Director or Secretary shall in their absolute discretion consider necessary or desirable in order to accept the B Share Purchase Offer. No individual shareholder will be able to accept or reject the B Share Purchase Offer with respect to the B Shares that such shareholder has received pursuant to the B Share Scheme.
one business day of the Dividend Time of an amount equal to the Single B Share Dividend.
person for any loss or damage arising as a result of the choice of the Default Dividend Time in connection with Article 4A.3.5 above.
how to vote on a show of hands, this shall be treated as an instruction by the relevant holder of B Shares to vote in the way in which the proxy elects to exercise that discretion.
The B Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The B Shares shall not be transferable except in accordance with Article 4A.8 below.
No B Share may be transferred, except to Barclays (which transfer may be made directly to Barclays or via any receiving agent appointed by the Company) in accordance with the terms of the B Share Purchase Offer or to the Company.
Articles 35 to 38 shall not apply to the B Shares.
Article 4A shall remain in force until there are no longer any B Shares in existence (including as a result of all B Shares having been automatically reclassified as Deferred Shares in accordance with this Article 4A), notwithstanding any provision in these Articles to the contrary. Thereafter Article 4A shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 4A are referred to in other Articles) and shall be deleted and replaced with the wording "Article 4A has been deleted", and the separate register for the holders of B Shares shall no longer be required to be maintained by the Company; but the validity of anything done under Article 4A before that date, and accrued rights in respect of the payment of dividends arising before that date, shall not otherwise be affected and any actions taken under Article 4A before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
The following sets out the rights of the Deferred Shares and the restrictions to which they are subject. These are included in the New Articles proposed to be adopted at the General Meeting.
The following paragraphs will be inserted as a new Article 4B in the New Articles.
Please note that the defined terms in this Part IV have been aligned with those in the Articles of Association and therefore defined terms used elsewhere in this Circular do not apply to this Part IV.
Notwithstanding Article 4, the Deferred Shares (as defined in Article 4A.3 above) shall have the rights, and be subject to the restrictions, attaching to shares set out in these Articles save that in the event of a conflict between any provision in this Article AB and any other provision in these Articles, the provisions in this Article 4B shall prevail.
The Deferred Shares shall confer no right to participate in the profits of the Company.
The holders of the Deferred Shares shall not be entitled, in their capacity as holders of such shares, to receive notice of any General Meeting or to attend, speak or vote at any such meeting.
4B.5.1 The Company may from time to time create, allot and issue further shares, whether ranking pari passu with or in priority to the Deferred Shares, and on such creation, allotment or issue any such further shares (whether or not ranking in any respect in priority to the Deferred Shares) shall be treated as being in accordance with the rights attaching to the Deferred Shares and shall not involve a variation of such rights for any purpose or require the consent of the holders of the Deferred Shares.
4B.5.2 The reduction by the Company of the capital paid up on the Deferred Shares shall be in accordance with the rights attaching to the Deferred Shares and shall not involve a variation of such rights for any purpose and the Company shall be authorised at any time to reduce its capital (in accordance with the Companies Acts) without obtaining the consent of the holders of the Deferred Shares.
The Deferred Shares shall not be listed or traded on any stock exchange nor shall any share certificates be issued in respect of such shares. The Deferred Shares shall not be transferable except in accordance with Article 4B.8 below or with the written consent of the Directors.
Articles 35 to 38 shall not apply to the Deferred Shares.
Article 4B shall remain in force until there are no longer any Deferred Shares in existence, notwithstanding any provision in these Articles to the contrary. Thereafter Article 4B shall be, and shall be deemed to be, of no effect (save to the extent that the provisions of Article 4B are referred to in other Articles) and shall be deleted and replaced with the wording "Article 4B has been deleted", and the separate register for the holders of Deferred Shares shall no longer be required to be maintained by the company; but the validity of anything done under Article 4B before that date shall not otherwise be affected and any actions taken under Article 4B before that date shall be conclusive and not be open to challenge on any grounds whatsoever.
The following comments are intended only as a guide to United Kingdom tax law and HM Revenue & Customs published practice current as at the date of this Circular, both of which are subject to change at any time (potentially with retrospective effect). They do not constitute, and should not be taken as, tax advice. They are not exhaustive and relate only to certain limited aspects of the United Kingdom tax treatment of the B Share Scheme and Share Consolidation. Other than paragraph 6 of this Part V, they are intended to apply only to Shareholders who: (i) are resident and, in the case of individuals, also domiciled in (and only in) the United Kingdom for United Kingdom tax purposes and to whom split-year treatment does not apply; and (ii) are and will be the direct absolute beneficial owners of their Existing Ordinary Shares, B Shares, New Ordinary Shares and Deferred Shares (and any dividends paid on them) and who hold, and will hold, them as investments other than under an individual savings account or pension arrangement (and not as securities to be realised in the course of a trade or which constitute carried interest).
The comments may not apply to certain Shareholders, such as dealers in securities, insurance companies and collective investment schemes, Shareholders who are exempt from tax and Shareholders who have (or are deemed to have) acquired their Existing Ordinary Shares by virtue of an office or employment. Such persons may be subject to special rules.
The position may be different for future transactions and may alter between the date of this Circular and the implementation of the B Share Scheme.
Shareholders should always seek their own advice from an appropriate independent and authorised professional if they are in any doubt as to their tax position or are subject to tax in a jurisdiction other than the United Kingdom.
The following comments apply for the purposes of CGT.
The issue of the B Shares and the New Ordinary Shares as a result of the Share Consolidation should constitute a tax-free reorganisation of the share capital of the Company. Accordingly:
To calculate the tax due on a subsequent disposal of all or part of a Shareholder's B Shares or New Ordinary Shares, that Shareholder's CGT base cost in their holding of Existing Ordinary Shares will need to be apportioned between the B Shares and the New Ordinary Shares by reference to their respective values on the first day on which the New Ordinary Shares are listed.
The sale on behalf of relevant Shareholders of fractional entitlements to New Ordinary Shares resulting from the Share Consolidation should not generally be treated as a part disposal for CGT purposes. Instead, provided that it does not exceed the relevant Shareholder's existing base cost, an amount equal to any payment received by that Shareholder from such sale should in practice be deducted from the base cost of the New Ordinary Shares received.
The issue of the B Shares and the Share Consolidation should not give rise to a liability to United Kingdom income tax (or corporation tax on income) in a Shareholder's hands.
The sale of the B Shares by Shareholders to Barclays pursuant to the B Share Purchase Offer should be treated as a disposal for the purposes of CGT. This may, subject to the relevant Shareholder's individual circumstances and any available exemption or relief, give rise to a chargeable gain (or allowable loss) for the purposes of CGT.
Any such gain or loss should be calculated by reference to the difference between (i) the sale proceeds received by the Shareholder and (ii) the part of the Shareholder's original base cost in their Existing Ordinary Shares that is apportioned to the B Shares in the manner described under paragraph 1 above.
The amount of CGT, if any, payable by an individual Shareholder as a consequence of the sale of the B Shares will depend on their own personal tax position. No tax will be payable on any gain realised on the sale of the B Shares if the amount of the net chargeable gains realised by the Shareholder, when aggregated with other gains realised by that Shareholder in the year of assessment (and after taking account of allowable losses), does not exceed the annual exempt amount (£12,000 for 2019/20). Broadly, any gains in excess of this amount will be taxed at a rate of 10 per cent., or 20 per cent. for higher rate and additional rate taxpayers. Where the gains of a basic rate taxpayer subject to CGT exceed the unused part of their basic rate band, that excess is subject to tax at the 20 per cent rate.
A corporate Shareholder is normally subject to corporation tax on all of its chargeable gains, subject to any available reliefs and exemptions. Corporate Shareholders should be entitled to indexation allowance in respect of changes in the retail price indices up to December 2017. New legislation introduced by the Finance Act 2018 has, broadly, frozen indexation allowance for corporation tax purposes as at 31 December 2017, so that changes in the retail price indices in January 2018 and subsequent months will not qualify for the allowance.
In the very unlikely event that the B Shares are not purchased by Barclays pursuant to the B Share Purchase Offer and as a result the Default Dividend becomes payable, the Default Dividend will be taxed as dividend income, in the same way as any other dividend paid by the Company and as outlined in paragraph 4 of this Part V.
For the avoidance of doubt, each Shareholder will have no right to choose to decline the B Share Purchase Offer, and to receive the Default Dividend or the Single B Share Dividend, instead of the purchase price due to them under the B Share Purchase Offer.
Dividends payable on the New Ordinary Shares should be subject to income tax or corporation tax on income under the normal rules applicable to dividends, in the same way as for dividends on the Existing Ordinary Shares.
There is no withholding tax on dividends paid by the Company.
The general tax treatment of dividends paid by the Company to a Shareholder who is an individual resident in the United Kingdom for United Kingdom tax purposes is as follows:
Where a Shareholder's taxable dividend income for a tax year (taking into account the personal allowance to the extent available) exceeds the Nil Rate Amount, the excess amount (the "Relevant Dividend Income") will be subject to income tax:
In determining whether and, if so, to what extent the Relevant Dividend Income falls above or below the threshold for the higher rate of income tax or, as the case may be, the additional rate of income tax, the Shareholder's total taxable dividend income for the tax year in question (including the part within the Nil Rate Amount) will, as noted above, be treated as the highest part of the Shareholder's total income for income tax purposes.
Shareholders within the charge to United Kingdom corporation tax which are "small companies" (for the purposes of United Kingdom taxation of dividends) should not generally expect to be subject to tax on dividends from the Company.
Other Shareholders within the charge to United Kingdom corporation tax will not be subject to tax on dividends from the Company so long as the dividends fall within an exempt class and certain conditions are met. In general, a dividend paid to a United Kingdom corporate shareholder which holds less than 10 per cent. of the issued share capital of the payer (or any class of that share capital in respect of which the dividend is paid) and is entitled to less than 10 per cent. of the profits and assets of the Company available for distribution to shareholders (or satisfies these tests in relation to any class of that share capital in respect of which the dividend is paid) is an example of a dividend that falls within an exempt class, subject to certain anti-avoidance rules. Corporate Shareholders will need to ensure that they satisfy the requirements of any exempt class before treating any dividend as exempt and should seek appropriate professional advice where necessary.
Under the provisions of Part 15 of the Corporation Tax Act 2010 (for companies subject to corporation tax) and Chapter 1 of Part 13 of the Income Tax Act 2007 (for individuals and others subject to income tax), HM Revenue & Customs can in certain circumstances counteract tax advantages arising in relation to a transaction or transactions in securities. If these provisions were to be applied by HM Revenue & Customs to the proposed Return of Cash, in broad terms, Shareholders might be liable to tax as if they had received an income rather than a capital amount.
Having consulted its professional advisers, the Company does not expect the above provisions to be applied to individual or corporate Shareholders but no application for clearance has been made to HM Revenue & Customs in this regard. Any individual or corporate Shareholder which is in any doubt as to their tax position in the light of its own particular circumstances should take appropriate professional advice.
The following statements are intended as a general guide to the current stamp duty and SDRT position and apply regardless of whether or not a Shareholder is resident for tax purposes in the United Kingdom. It should be noted that certain categories of person, including market makers, brokers, dealers and other specified intermediaries, are entitled to exemption from stamp duty and SDRT in respect of certain securities in specified circumstances. The following statements do not apply in relation to the issue or transfer of B Shares, New Ordinary
Shares or Deferred Shares to an operator of a clearance service or depositary receipt system (or to their nominees); such issues or transfers may be subject to special rules.
No stamp duty or SDRT will be payable on the issue of the B Shares or the New Ordinary Shares.
No stamp duty or SDRT will be payable by Shareholders on the Share Consolidation.
No stamp duty or SDRT will be payable by Shareholders on, or as a result of, any reclassification of the B Shares into Deferred Shares.
Subject to an exemption for certain low-value transfers, a purchaser of B Shares, New Ordinary Shares or Deferred Shares held in certificated form will generally be liable to pay stamp duty on the transfer of such B Shares, New Ordinary Shares or Deferred Shares at the rate of 0.5 per cent. of the amount or value of the consideration given (such duty to be rounded up to the nearest £5).
An agreement to transfer B Shares, New Ordinary Shares or Deferred Shares will generally give rise to a liability on the purchaser to SDRT when the agreement becomes unconditional, at the rate of 0.5 per cent. of the amount or value of the consideration given, but will be cancelled (and any SDRT already paid will be refunded) if the agreement is completed by a duly stamped or exempt instrument of transfer within six years of the date of the agreement to transfer (or the date on which such agreement became unconditional).
A purchaser of B Shares, New Ordinary Shares or Deferred Shares held within CREST will generally be liable to pay SDRT on the agreement to transfer such B Shares, New Ordinary Shares or Deferred Shares at the rate of 0.5 per cent. of the amount or value of the consideration paid for such transfer. The SDRT should be collected through CREST and accounted to HM Revenue & Customs in accordance with the CREST rules.
From 29 October 2018 transfers of listed securities to connected companies are subject to stamp duty or SDRT on no less than the market value of such securities.
As the B Shares are not listed, liability for stamp duty or SDRT is expected to arise on the purchase by Barclays of the B Shares pursuant to the B Share Purchase Offer.
For the avoidance of doubt, neither a sale of B Shares under the B Share Purchase Offer nor any acquisition of Deferred Shares by the Company will give rise to any liability to stamp duty or SDRT for the selling Shareholder. Any such liability will fall on Barclays or the Company, not the selling Shareholder.
The rights and restrictions attaching to the New Ordinary Shares will be the same as the rights and restrictions set out in the Articles of Association in respect of the Existing Ordinary Shares.
The New Ordinary Shares, B Shares and Deferred Shares are not renounceable. The New Ordinary Shares will be transferable by an instrument of transfer in usual or common form. The B Shares and Deferred Shares will only be transferable to Barclays or the Company. The New Ordinary Shares, B Shares and Deferred Shares will be in registered form. The Company will apply for the New Ordinary Shares to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in the New Ordinary Shares may take place within the CREST system in respect of general market transactions.
Shareholders who hold their Existing Ordinary Shares in CREST will, following the Share Consolidation, have their CREST accounts credited with New Ordinary Shares under ISIN GB00BG11K365 on the Admission Date.
Barclays has given and has not withdrawn its written consent to the issue of this Circular with the inclusion of its name and references to it in the form and context in which they appear.
Copies of the following documents may be inspected at the registered office of the Company, Redrow House, St David's Park, Flintshire, CH5 3RX and/or at the offices of Slaughter and May, One Bunhill Row, London EC1Y 8YY, during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted), up to and including the date of the General Meeting and will also be available for inspection at the General Meeting for at least 15 minutes before the General Meeting and until the General Meeting ends:
A copy of this Circular will be made available on the Company's website at http://investors.redrowplc.co.uk from the date of this document. For the avoidance of doubt, the contents of this website are not incorporated into and do not form part of this Circular.
The following definitions apply throughout this Circular, unless the context requires otherwise and excluding Part III and Part VI.
| 2018 AGM | means the annual general meeting of the Company held on 7 November 2018 at the offices of Instinctif Partners, 1st Floor, 65 Gresham Street, London EC2V 7NQ; |
|---|---|
| Act | means the Companies Act 2006; |
| Admission | means admission of the New Ordinary Shares to (i) the premium listing segment of the Official List and (ii) trading on the London Stock Exchange's main market for listed securities; |
| Admission Date | means 8 April 2019 or such later date as the Board may in its absolute discretion determine; |
| AGM Additional Disapplication of Pre-emption Rights | has the meaning given in paragraph 13 of Part II; |
| AGM Allotment Authority | has the meaning given in paragraph 13 of Part II |
| AGM General Disapplication of Pre-emption Rights | has the meaning given in paragraph 13 of Part II; |
| Articles of Association | means the articles of association of the Company in their current form as of the date of this Circular; |
| B Share Purchase Completion | means the completion of the sale and purchase of the B Shares by Barclays from the Shareholders pursuant to the B Share Purchase Offer; |
| B Share Purchase Offer | means the off-market offer expected to be made by Barclays, acting as principal (and not as agent, trustee or nominee for the Company), to purchase the B Shares from the Shareholders, the terms of which are set out in paragraph 4 of Part II of this Circular and which, under the New Articles, each of the Directors and the Company Secretary will be irrevocably authorised (on behalf of each Shareholder) to accept, such that no Shareholder will separately be able to accept or reject the B Share Purchase Offer in respect of the B Shares that it receives; |
| B Share Scheme | means the return of cash by way of payment of 30 pence per Existing Ordinary Share to be effected by the B Share Purchase Offer; |
| B Shares | means the non-cumulative irredeemable preference shares of 0.1 pence each in the capital of the Company carrying the rights and restrictions summarised in Part III of this Circular; |
| Barclays | means Barclays Bank PLC of 1 Churchill Place, London, E14 5HP, a company incorporated in England and Wales with registered number 01026167 (or a wholly-owned subsidiary thereof); |
| Barclays Group | means Barclays Bank PLC and its subsidiaries (as defined in the Act); |
| Board | means the board of Directors of the Company; |
| Business Day | means a day other than a Saturday or Sunday or public holiday in England and Wales on which banks are open in London for general commercial business; |
|---|---|
| CGT | means the United Kingdom taxation of capital gains and corporation tax on chargeable gains; |
| Circular | means this document; |
| Company | means Redrow plc, of Redrow House, St David's Park, Flintshire, CH5 3RX, a company incorporated in England and Wales with registered number 02877315; |
| Company Secretary | means the company secretary of the Company; |
| CREST | means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the CREST Regulations); |
| CREST Manual | means the CREST manual issued by Euroclear UK & Ireland Limited; |
| CREST member | means a person who has been admitted by Euroclear UK & Ireland Limited as a system-member (as defined in the CREST Regulations); |
| CREST Proxy Instruction | means the instruction whereby CREST members send a CREST message appointing a proxy for the General Meeting and instructing the proxy how to vote and containing the information set out in the CREST Manual; |
| CREST Regulations | means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended; |
| Default Dividend | means the single dividend of 30 pence per B Share to be declared on the Default Dividend Date and paid to holders of the B Shares on the Default Payment Date, in the circumstances described in paragraph 4 of Part II of this Circular; |
| Default Dividend Date | means such date as the Directors may in their absolute discretion determine, being the date on which the Directors will declare the Default Dividend; |
| Default Payment Date | means such date as the Directors may in their absolute discretion determine being, in any event, a date within one Business Day of the Default Dividend Date; |
| Deferred Shares | means the deferred shares of 0.1 pence each in the capital of the Company carrying the rights and restrictions summarised in Part IV of this Circular; |
| Directors | means the directors of the Company; |
| Employee Share Trust | means The Redrow Employee Share Trust; |
| Escrow Agent | means Barclays in its capacity as escrow bank under the Escrow Agreement; |
| Escrow Agreement | means an agreement dated 7 March 2019 between Barclays, the Company and the Escrow Agent relating to the operation of certain escrow accounts; |
|---|---|
| Existing Ordinary Shares | means ordinary shares of 10 pence each in the capital of the Company, prior to the Share Consolidation; |
| FCA | means the Financial Conduct Authority of the United Kingdom; |
| Form of Proxy | means the Form of Proxy enclosed with this Circular; |
| FSMA | means the Financial Services and Markets Act 2000, as amended from time to time; |
| General Meeting | means the general meeting of the Company to be held at 10.00 a.m. on Wednesday 27 March 2019 at Redrow House, St David's Park, Ewloe, Flintshire CH5 3RX; |
| Group | means the Company and its subsidiaries (as defined in the Act); |
| Group Employee Share Schemes | means the LTIP, Save As You Earn Share Option scheme and Deferred Bonus Incentive Plan; |
| ISIN | means International Securities Identification Number; |
| Latest Practicable Date | means 5 March 2019, being the latest practicable date prior to the publication of this Circular; |
| Listing Rules | means the listing rules of the UK Listing Authority; |
| London Stock Exchange | means London Stock Exchange PLC; |
| LTIP | means the Company's Long Term Incentive Plan; |
| New Articles | means the new articles of association of the Company to be proposed at the General Meeting and adopted with effect from Admission; |
| New Ordinary Shares | means ordinary shares of 10 ½ pence each (or such other nominal value as may be proposed in accordance with the terms of Resolution 2(B)) in the capital of the Company, following the Share Consolidation; |
| Notice of General Meeting | means the notice of general meeting set out at pages 26 to 29 of this Circular; |
| Official List | means the official list maintained by the UK Listing Authority; |
| Option Agreement | the agreement dated 7 March 2019 between the Company and Barclays, details of which are set out in paragraph 5 of Part II of this Circular; |
| Option Exercise Notice | means a written notice validly served under the Option Agreement in respect of the exercise of the put option or the call option under the Option Agreement; |
| Option Price | has the meaning given in paragraph 5 of Part III; |
| Ordinary Shares | means, as the context permits, Existing Ordinary Shares or New Ordinary Shares; |
| Overseas Shareholders | means Shareholders who are not resident in the United Kingdom or who are citizens, residents or nationals of a country other than the United Kingdom or who have a registered address which is not in the United Kingdom. For the avoidance of doubt, Shareholders who are not resident in the United Kingdom include Shareholders who are resident in the Channel Islands or the Isle of Man; |
|---|---|
| PRA | means the Prudential Regulation Authority of the United Kingdom; |
| Purchase Offer Deed | means the agreement dated 7 March 2019 between the Company and Barclays, details of which are set out in paragraph 5 of Part II of this Circular; |
| Record Time | means 6.00 p.m. on 5 April 2019 (or such other time and date as the Directors may determine); |
| Regulatory Information Service | means any service included in the definition of "regulatory information service" contained in Appendix 1 to the Listing Rules; |
| Resolutions | means the resolutions to be proposed at the General Meeting, as set out in the Notice of General Meeting; |
| Return of Cash | means the transactions comprising the B Share Scheme which are proposed to return capital to Shareholders; |
| SDRT | means stamp duty reserve tax; |
| Share Consolidation | means the proposed subdivision and consolidation of the Company's share capital, as described in paragraph 6 of Part II of this Circular; |
| Shareholders | means holders of Ordinary Shares and, where the context so requires, holders of B Shares and/or Deferred Shares; |
| Single B Share Dividend | means the dividend which may be declared and paid to Barclays, reflecting the price of 30 pence per B Share paid by Barclays to Shareholders, together with stamp duty or SDRT at a rate of 0.5 per cent. on such purchase per B Share; and |
| UK Listing Authority | means the FCA in its capacity as competent authority for the purposes of Part VI of FSMA. |
(incorporated and registered in England and Wales under the Companies Act 2006 (the "Act") with registered number 2877315)
NOTICE IS HEREBY GIVEN that a GENERAL MEETING of Redrow plc (the "Company") will be held at Redrow House, St David's Park, Ewloe, Flintshire CH5 3RX at 10.00 a.m. on Wednesday 27 March 2019 for the purpose of considering and, if thought fit, passing the following resolutions. Resolutions 1, 5 and 6 will be proposed as special resolutions. Resolutions 2, 3 and 4 will be proposed as ordinary resolutions.
THAT, conditional upon the New Ordinary Shares (as defined below) being admitted to the premium listing segment of the official list of the UK Listing Authority and to trading on the London Stock Exchange PLC's main market for listed securities by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the directors of the Company (the "Directors") may in their absolute discretion determine) ("Admission"), the draft articles of association produced to the meeting, marked "A" and signed by the Chairman of the meeting for identification purposes (the "New Articles"), be and are hereby approved and adopted as the articles of association of the Company with effect from Admission in substitution for, and to the exclusion of, all existing articles of association of the Company.
THAT, subject to the passing of resolution 1 and also conditional upon Admission occurring by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the Directors may in their absolute discretion determine):
£400,000 to the holders of the ordinary shares of 10 pence each in the capital of the Company ("Existing Ordinary Shares") (the "Existing Shareholders") on the basis of one B Share for every Existing Ordinary Share (excluding the Existing Ordinary Shares held by the Company in treasury, if any) held and recorded on the register of members of the Company at 6.00 p.m. on 5 April 2019 (or such other time and/or date as the Directors may determine) (the "Record Time"), in accordance with the terms of the circular sent by the Company to its shareholders on 7 March 2019 and the directors' determination as to the number of B Shares to be allotted and issued;
(B) each Existing Ordinary Share, as shown in the register of members of the Company at the Record Time, be subdivided into 20 undesignated shares in the capital of the Company (each an "Undesignated Share") and immediately thereafter, every 21 Undesignated Shares be consolidated into one new ordinary share of 10 ½ pence each in the capital of the Company (or such other number and price as the Directors may in their absolute discretion determine if the price of an Existing Ordinary Share and the number of Existing Ordinary Shares in issue shortly before the date of the General Meeting mean that this ratio would no longer maintain comparability of the Company's share price before and after the return of capital) (each a "New Ordinary Share"), provided that, where such consolidation and subdivision would result in any member being entitled to a fraction of a New Ordinary Share, such fraction shall, so far as possible, be aggregated with the fractions of a New Ordinary Share (if any) to which other members of the Company would be similarly so entitled and the Directors be and are hereby authorised to sell (or appoint any other person to sell) to any person or persons any and all the New Ordinary Shares representing such fractions at the best price reasonably obtainable to any person(s), and to distribute the proceeds of sale (net of expenses) in due proportion among the relevant members who would otherwise be entitled to the fractions so sold, save that (I) any fraction of a penny which would otherwise be payable shall be rounded up or down in accordance with the usual practice of the registrar of the Company, and (II) any due proportion of such proceeds of less than £5.00 (net of expenses) shall be retained by the Directors for the benefit of the Company and the relevant member shall not be entitled thereto (and, for the purposes of implementing the provisions of this paragraph, any director of the Company (or any person appointed by the Directors) shall be and is hereby authorised to execute one or more instrument(s) of transfer in respect of such New Ordinary Shares on behalf of the relevant member(s) and to do all acts and things the Directors consider necessary or desirable to effect the transfer of such New Ordinary Shares to, or in accordance with the directions of, any buyer of such New Ordinary Shares).
THAT, subject to the passing of resolutions 1 and 2 and also conditional upon Admission occurring by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the Directors may in their absolute discretion determine), the terms of the contract dated 7 March 2019 between Barclays Bank PLC ("Barclays") and the Company (a copy of which is produced to the meeting and initialled for the purposes of identification by the Chairman) under which (I) the Company would be entitled to require Barclays to sell to it all the B Shares following their reclassification as deferred shares (howsoever arising) (the "Deferred Shares") and (II) conditional on a single dividend of 30.15 pence per B Share not having been paid by the Company to Barclays by 10.00 a.m. on the second Business Day (as defined in the Option Agreement) after Barclays purchases the B Shares under the contract (A) Barclays will be entitled to require the Company to purchase the B Shares from Barclays, and (B) the Company will be entitled to require Barclays to sell the B Shares to the Company (the "Option Agreement"), be and are hereby approved and authorised for the purposes of section 694 of the Act and otherwise, but so that such approval and authority shall expire at the end of the next annual general meeting of the Company to be held in 2019 or, if earlier, at the close of business on 31 December 2019.
THAT, subject to the passing of resolutions 1 and 2 and also conditional upon Admission occurring by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the Directors may in their absolute discretion determine):
(i) up to an aggregate nominal amount of £12,326,664.63; and
(ii) in so far as such shares comprise equity securities (as defined in section 560 of the Act) up to a further nominal amount of £12,326,664.63 in connection with an offer by way of a rights issue:
and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter.
(B) this authority shall (unless previously revoked or renewed) expire at the earlier of the conclusion of the next annual general meeting of the Company or at close of business on 31 December 2019, provided that the Company shall be entitled, at any time prior to the expiry of this authority, to make offers and enter into agreements which would or might require shares to be allotted or rights to subscribe for or to convert any security into shares to be granted after such expiry and the Directors may allot shares or grant rights to subscribe for or convert any security into shares in pursuance of any such offer or agreement as if the authority had not expired.
THAT, subject to the passing of resolutions 1, 2 and 4 and also conditional upon Admission occurring by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the Directors may in their absolute discretion determine):
consider it necessary, as permitted by the rights of those securities,
and so that the director may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and
THAT, subject to the passing of resolutions 1, 2 and 4 and also conditional upon Admission occurring by 8.00 a.m. on 8 April 2019 (or such later time and/or date as the Directors may in their absolute discretion determine):
determine to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this Notice,
(B) this authority shall expire at the earlier of the conclusion of the next annual general meeting of the Company or at close of business on 31 December 2019, provided that the Company shall be entitled, at any time prior to the expiry of this authority, to make a contract of purchase which would or might be executed wholly or partly after the expiry of this authority and to purchase ordinary shares in accordance with such contract as if the authority had not expired.
By Order of the Board
Company Secretary 7 March 2019
Registered in England and Wales No. 2877315 Registered Office: Redrow House St. David's Park Flintshire CH5 3RX
in note 2 above. 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 the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to a proxy appointed through CREST should be communicated to him by other means.
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