Centrica announces tender offer

Centrica PLC

04 June 2024

 

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (EUWA).

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (the United States) OR IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

Centrica plc announces Tender Offer for its £770,000,000 7.00 per cent. Notes due 2033

4 June 2024. Centrica plc (the Offeror) announces today an invitation to holders of its outstanding £770,000,000 7.00 per cent. Notes due 2033 (ISIN: XS0388006123) (the Notes) to tender their Notes for purchase by the Offeror for cash (such invitation, the Offer).

The Offer is being made on the terms and subject to the conditions contained in the tender offer memorandum dated 4 June 2024 (the Tender Offer Memorandum) prepared by the Offeror and is subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Tender Agent as set out below. Capitalised terms used in this announcement but not defined have the meaning given to them in the Tender Offer Memorandum.

Summary of the Offer

Notes	ISIN / Common Code	Outstanding Nominal Amount	Maturity Date	Benchmark Security	Purchase Spread	Maximum Acceptance Amount
£770,000,000 7.00 per cent. Notes due 2033	XS0388006123 / 038800612	£770,000,000	19 September 2033	0.875 per cent. UK Treasury Gilt due 31 July 2033 (ISIN: GB00BM8Z2S21)	90 bps	Subject as set out in the Tender Offer Memorandum, up to £350,000,000 in aggregate nominal amount of the Notes

Rationale for the Offer

The rationale for the Offer is to proactively manage the Offeror's balance sheet and maturity profile.

Purchase Price and Accrued Interest

The Offeror will pay for any Notes validly tendered and accepted for purchase by the Offeror pursuant to the Offer a purchase price (the Purchase Price) for such Notes to be determined at or around 9.30 a.m. (London time) on 12 June 2024 (such time and date, the Pricing Time) by reference to the annualised sum (such annualised sum, the Purchase Yield) of (i) the purchase spread of 90 bps (the Purchase Spread); and (ii) the Benchmark Security Rate.

The Purchase Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the Notes accepted for purchase pursuant to the Offer (rounded to the nearest 0.001 per cent., with 0.0005 per cent. rounded upwards), and is intended to reflect a yield to maturity of the Notes on the Settlement Date based on the Purchase Yield. Specifically, the Purchase Price will equal (a) the value of all remaining payments of principal and interest on the Notes up to and including the scheduled maturity date of the Notes, discounted to the Settlement Date as a discount rate equal to the Purchase Yield, minus (b) Accrued Interest.

The Offeror will also pay an Accrued Interest Payment in respect of any Notes accepted for purchase pursuant to the Offer.

Final Acceptance Amount and Scaling

If the Offeror decides to accept any valid tenders of Notes for purchase pursuant to the Offer, the Offeror proposes that the aggregate nominal amount of Notes it will accept for purchase will be no greater than £350,000,000 (the Maximum Acceptance Amount), although the Offeror reserves the right, in its sole discretion, to accept significantly more or significantly less than (or none of) such amount of Notes for purchase pursuant to the Offer (the final aggregate nominal amount of Notes so accepted for purchase pursuant to the Offer being the Final Acceptance Amount).

If the Offeror decides to accept any validly tendered Notes for purchase pursuant to the Offer and the aggregate nominal amount of Notes validly tendered for purchase is greater than the Final Acceptance Amount, the Offeror intends to accept such Notes for purchase on a pro rata basis such that the aggregate nominal amount of Notes accepted for purchase pursuant to the Offer is no greater than the Final Acceptance Amount, as fully described in the Tender Offer Memorandum.

Tender Instructions

In order to participate in, and be eligible to receive the Purchase Price and Accrued Interest Payment pursuant to the Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 4.00 p.m. (London time) on 11 June 2024, unless extended, re-opened, amended and/or terminated as provided in the Tender Offer Memorandum (the Expiration Deadline).

Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

Tender Instructions must be submitted in respect of a minimum nominal amount of Notes of no less than £50,000, being the minimum denomination of the Notes, and may thereafter be submitted in integral multiples of £1,000.

A separate Tender Instruction must be completed on behalf of each beneficial owner of Notes wishing to participate in the Offer.

Indicative Timetable for the Offer

Events	Times and Dates (All times are London time)
Commencement of the Offer Offer announced. Tender Offer Memorandum available from the Tender Agent (subject to the restrictions set out in "Offer and Distribution Restrictions" below).	Tuesday 4 June 2024
Expiration Deadline Final deadline for receipt of valid Tender Instructions by the Tender Agent in order for Noteholders to be able to participate in the Offer.	4.00 p.m. on Tuesday 11 June 2024
Announcement of Indicative Results
Announcement by the Offeror of a non-binding indication of the level at which it expects to set the Final Acceptance Amount and (if applicable) indicative details of any pro rata scaling that will be applied in the event that the Offeror decides to accept valid tenders of Notes for purchase pursuant to the Offer.	Prior to the Pricing Time on Wednesday 12 June 2024
Pricing Time
Determination of the Benchmark Security Rate, the Purchase Yield and the Purchase Price.	At or around 9.30 a.m. on Wednesday 12 June 2024
Announcement of Results and Pricing
Announcement by the Offeror of whether it will accept valid tenders of Notes pursuant to the Offer and, if so accepted, the Final Acceptance Amount, the Benchmark Security Rate, the Purchase Yield, the Purchase Price and (if applicable) details of any pro rata scaling that will be applied to tenders of Notes.	As soon as reasonably practicable after the Pricing Time on Wednesday 12 June 2024
Settlement Date
Expected Settlement Date for the Offer. Payment of the Purchase Price and Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offer.	Friday 14 June 2024

The Offeror may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Offer at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of the Offeror to so extend, re-open, amend and/or terminate the Offer.

Noteholders are advised to check with any bank, securities broker, clearing system or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offer by the deadlines specified in the Tender Offer Memorandum.  The deadlines set by any such intermediary and each Clearing System for the submission and withdrawal of Tender Instructions will be earlier than the relevant deadlines specified in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offer will be made (i) by publication through RNS and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants.  Such announcements may also be made on the Informa IGM Screen Insider service and by the issue of a press release to a Notifying News Service.  Copies of all such announcements, press releases and notices can also be obtained upon request from the Tender Agent, the contact details for which are below.  Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Tender Agent for the relevant announcements during the course of the Offer.  In addition, Noteholders may contact the Dealer Managers for information using the contact details below.

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for, participating in the Offer.

Questions and requests for assistance in connection with the Offer may be directed to the Dealer Managers.

DEALER MANAGERS
Barclays Bank PLC 1 Churchill Place London E14 5HP United Kingdom Telephone: [phone] Attention: Liability Management Group Email: [e-mail]	BNP PARIBAS 16, boulevard des Italiens 75009 Paris France Telephone: [phone] Attention: Liability Management Group Email: [e-mail]
RBC Europe Limited 100 Bishopsgate London EC2N 4AA United Kingdom Telephone: [phone] Attention: Liability Management Email: [e-mail]	SMBC Nikko Capital Markets Limited 100 Liverpool Street London EC2M 2AT United Kingdom Telephone: [phone] Attention: Liability Management Email: [e-mail]

Questions and requests for assistance in connection with the delivery of Tender Instructions may be directed to the Tender Agent.

TENDER AGENT

Kroll Issuer Services Limited The Shard 32 London Bridge Street London SE1 9SG United Kingdom Telephone: [phone] Attention: Alessandro Zorza Email: [e-mail] Offer Website: https://deals.is.kroll.com/centrica

This announcement is made by Centrica plc and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the EUWA (UK MAR), encompassing information relating to the Offer described above. For the purposes of UK MAR and the Implementing Technical Standards, this announcement is made by Raj Roy, Company Secretary at Centrica plc.

LEI: E26EDV109X6EEPBKVH76

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offer.  If any Noteholder is in any doubt as to the contents of the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser.  Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, clearing system, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offer. None of the Offeror, the Dealer Managers or the Tender Agent or any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender Notes pursuant to the Offer.

Offer and Distribution Restrictions

Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offer in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law.  Persons into whose possession this announcement and/or the Tender Offer Memorandum come(s) are required by each of the Offeror, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions. Nothing in this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell the Notes (and tenders of Notes in the Offer will not be accepted from any Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer and either Dealer Manager or any of the Dealer Managers' respective affiliates is such a licensed broker or dealer in any such jurisdiction, the Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Offeror in such jurisdiction in accordance with applicable laws and regulations.

United States

The Offer is not being made, and will not be made, directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of or of any facilities of a national securities exchange of, the United States.  This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication.  The Notes may not be tendered in the Offer by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States.  Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States.  Any purported tender of Notes in the Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each Noteholder participating in the Offer will represent that it is not located in the United States and is not participating in the Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in the Offer from the United States. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Italy

None of the Offer, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offer have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. The Offer is being carried out in the Republic of Italy (Italy) as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended.

Accordingly, Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase in the Offer through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes and/or the Offer.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offer is not being made, and such documents and/or materials have not been approved by, an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom.  The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or persons who are within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

Belgium

The Offer is not being made, and will not be made or advertised, directly or indirectly, to any individual in Belgium qualifying as a consumer within the meaning of Article I.1 of the Belgian Code of Economic Law, as amended from time to time (a Belgian Consumer) and none of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Offer has been, and shall not be, distributed, directly or indirectly, in Belgium to Belgian Consumers.

France

The Offer is not being made, directly or indirectly, to the public in the Republic of France (France).  This announcement, the Tender Offer Memorandum and any other document or material relating to the Offer have only been, and shall only be, distributed in France to qualified investors as defined in Article 2(e) of Regulation (EU) 2017/1129. Neither this announcement nor the Tender Offer Memorandum have been or will be submitted for clearance to or approved by the Autorité des Marchés Financiers.

 

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