Tender Offer and Consent Solicitation

RNS Number : 7423A

Nationwide Building Society

03 June 2021

 

FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED) AND OUTSIDE THE REPUBLIC OF ITALY. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT.

Nationwide Building Society

(incorporated in England and Wales under the UK Building Societies Act 1986, as amended)

(LEI: 549300XFX12G42QIKN82)

announces tender offer and consent solicitation in respect of its

£10,000,000 Floating Rate Permanent Interest Bearing Shares

  (originally issued by Cheshire Building Society)

(ISIN: GB0001918076)

3 June 2021 . Nationwide Building Society ("Nationwide") today announces an invitation to eligible holders ("PIBS Holders") of its £10,000,000 Floating Rate Permanent Interest Bearing Shares (originally issued by Cheshire Building Society) (the "PIBS") to tender any or all of their PIBS for purchase by Nationwide for cash (the "Tender Offer") and a related consent solicitation with respect to proposed variations to the terms of the PIBS (the "Consent Solicitation"), all on the terms set out in an Offer Memorandum dated 3 June 2021 (the "Offer Memorandum") and as summarised below (the "Offers").

Defined terms used in this announcement and not otherwise defined herein have the same meaning given to them in the Offer Memorandum.

Tender Offer

Overview of the Tender Offer

Securities	ISIN	Outstanding nominal amount	Offer Price		Amount subject to the Tender Offer
			(expressed as a percentage)	(expressed as an amount)
PIBS	GB0001918076	£10,000,000	104.00%	£1,040 for each £1,000 in nominal amount of PIBS	Any and all

The Tender Offer is an invitation by Nationwide to PIBS Holders, subject to applicable offer restrictions, to offer to sell any or all of their PIBS to Nationwide at the Offer Price. Nationwide expects to cancel all PIBS purchased by it pursuant to the Tender Offer on or around the Settlement Date. The expected timetable for the Tender Offer, including the Participation Deadline and the Settlement Date, is set out below under 'Expected Timetable'.

Offer Price and Accrued Interest Payment

If a PIBS Holder validly tenders its PIBS by the Participation Deadline and Nationwide elects to purchase those PIBS pursuant to the Tender Offer, Nationwide will pay to such PIBS Holder a cash amount, in pounds Sterling, equal to 104.00 per cent., or £1,040 for each £1,000, of the nominal amount of such Holder's PIBS so purchased (the "Offer Price").

In addition, Nationwide will separately pay to the PIBS Holder an amount equal to the accrued and unpaid interest on the PIBS so purchased for the period from (and including) the Interest Payment Date on the PIBS immediately preceding the Settlement Date up to (but excluding) the Settlement Date (the "Accrued Interest Payment").

Tender Instructions

In order to participate in the Tender Offer, and be eligible to receive the Offer Price and Accrued Interest Payment, PIBS Holders must validly tender their PIBS by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by Equiniti Limited ("Equiniti") by the Participation Deadline. 

Only CREST Participants or Registered Holders of PIBS may submit Tender Instructions. Each PIBS Holder that is not itself a CREST Participant or a Registered Holder must arrange for the CREST Participant or Registered Holder through which it holds its PIBS to submit a valid Tender Instruction on its behalf.

Tender Instructions will be irrevocable except in the limited circumstances described in the Offer Memorandum (in the section "Amendment and Termination - Revocation Rights").

PIBS Holders should refer to the Offer Memorandum (in the section "Procedures for Participating in the Offers") for full details on how to participate in the Tender Offer.

The Consent Solicitation

Overview of the Consent Solicitation and Resolutions

In conjunction with the Tender Offer, PIBS Holders are being invited to consent to the making of certain variations to the Special Conditions of Issue of the PIBS (the "Conditions") by voting on two separate resolutions (the "Resolutions"):

(i)  Resolution 1 relates to the manner in which interest will be calculated on the PIBS from 30 September 2021, such that interest would be calculated by reference to a SONIA (Sterling Overnight Index Average) reference rate rather than the 6-month Sterling LIBOR (London inter-bank offered rate) reference rate. There would also be an additional adjustment margin of 0.2766 per cent. per annum (the "SONIA Adjustment Margin") to reflect the differences between 6-month Sterling LIBOR and SONIA. In addition, it is proposed to include 'fallback' language that would take effect if SONIA were to be discontinued in the future; and

(ii)  Resolution 2 relates to (1) the proposed inclusion in the Conditions of an option for Nationwide to elect, in its discretion, to redeem and repay the PIBS on the Interest Payment Date falling in September 2030 or any Interest Payment Date thereafter; and (2) the proposed increase in each Rate of Interest on the PIBS for each Interest Period commencing on or after 30 September 2021 by an additional margin of 1.50 per cent. per annum (the "Additional Margin").

The SONIA Adjustment Margin has been determined in accordance with a market-based pricing methodology which calculates the median difference between LIBOR and SONIA rates over a 5-year historical period, as published by Bloomberg Index Services Limited ("Bloomberg"). On 5 March 2021, the FCA announced the future cessation and loss of representativeness of the LIBOR rates across a range of currencies and tenors. As a result, Bloomberg announced that 5 March 2021 was the "Spread Adjustment Fixing Date" (as defined in Bloomberg's IBOR Fallback Rate Adjustments Rule Book). Accordingly, the relevant adjustment spreads were fixed as at 5 March 2021. The SONIA Adjustment Margin is equal to the rate fixed for the 6-month tenor in respect of the spread between Sterling LIBOR and SONIA, as announced in Bloomberg's announcement of 5 March 2021 and as set out on Bloomberg page "SBP0006M Index".

Meeting

The Resolutions will be voted upon by PIBS Holders or their proxies at a meeting of PIBS Holders (the "Meeting") which is being convened for 1.00 p.m. (UK time) on 7 July 2021. Nationwide is today giving PIBS Holders notice of the Meeting (the "Notice of Meeting"), which contains the full forms of the Resolutions.

In light of the ongoing developments in relation to Covid-19, and current guidance issued by the UK government, it may be impossible or inadvisable for PIBS Holders to attend the Meeting at the physical location, including if the Meeting venue is unable to admit entry to all PIBS Holders who wish to participate at the physical location due to ongoing Covid-19 restrictions. Nationwide is therefore also arranging for PIBS Holders to be able to attend the Meeting by way of a video conference. PIBS Holders who wish to vote on the Resolutions without tendering their PIBS are being urged to appoint the Chairperson of the Meeting (or their nominee) as proxy to cast their votes or, if they wish to attend the Meeting, to do so via the video conference facility.

Voting

A PIBS Holder who submits (or arranges the submission on its behalf of) a valid Tender Instruction pursuant to the Tender Offer will also, as part of that Tender Instruction, appoint the Chairperson of the Meeting (or their nominee) as proxy to cast the votes attaching to the tendered PIBS in favour of both Resolutions. PIBS Holders wishing to vote on the Resolutions without tendering their PIBS may submit Voting Only Instructions.

In order to vote on the Resolutions, PIBS Holders must ensure that their Tender Instructions or Voting Only Instructions are received by Equiniti by the Participation Deadline, which is also the Voting Deadline. 

Only CREST Participants or Registered Holders of PIBS may submit Tender Instructions and Voting Only Instructions. Each PIBS Holder that is not itself a CREST Participant or a Registered Holder must arrange for the CREST Participant or Registered Holder through which it holds its PIBS to submit a valid Tender Instruction or Voting Only Instruction on its behalf.

PIBS Holders should refer to the Notice of Meeting and the Offer Memorandum (in the section "Procedures for Participating in the Offers") for full details.

Eligibility Condition and other conditions to implementation

The implementation of each Resolution will be conditional upon (i) the passing of the relevant Resolution, and (ii) the quorum required for, and the requisite majority of votes cast in favour of the relevant Resolution at, the Meeting (or the adjourned Meeting, if applicable) being satisfied by Eligible Holders only, irrespective of any participation at the Meeting by Ineligible Holders (the "Eligibility Condition").

"Eligible Holders" means each PIBS Holder who is (a) located and resident outside the United States, is not a U.S. person and is not acting for the account or benefit of a U.S. person (in each case, as defined in Regulation S under the United States Securities Act of 1933, as amended), and (b) otherwise a person to whom the Offers can be lawfully made and that may lawfully participate in the Offers, including in accordance with the Offer and Distribution Restrictions set out in the Offer Memorandum.

In addition, it is Nationwide's current expectation that:

(a)  if Resolution 1 is passed at the Meeting (or the adjourned Meeting, if applicable) and the Eligibility Condition is satisfied, Nationwide will implement Resolution 1 and vary the Conditions to reflect the proposed variations under Resolution 1 accordingly; and

(b)  if Resolution 2 is passed at the Meeting (or the adjourned Meeting, if applicable) and the Eligibility Condition is satisfied, Nationwide will implement Resolution 2 and vary the Conditions to reflect the proposed variations under Resolution 2 only if Resolution 1 is also passed and implemented.

Offer Memorandum

This announcement does not contain the full terms and conditions of the Offers, which are contained in the Offer Memorandum prepared by Nationwide. A copy of the Offer Memorandum is being mailed to Eligible Holders appearing on the register of PIBS Holders at close of business on 2 June 2021. Electronic copies of the Offer Memorandum will be available to Eligible Holders from Bondinvest Capital Limited ("BondCap") at the details set out below.

Expected Timetable

Nationwide currently expects the Tender Offer and the Consent Solicitation to proceed on the timetable below. However, the times and dates below are indicative only, and subject to change. Nationwide will announce any changes to the timetable.

Events	Times and Dates (All times are UK time)
Commencement of the Tender Offer and the Consent Solicitation	3 June 2021
Announcement of the Tender Offer and the Consent Solicitation. Offer Memorandum, Notice of Meeting and a Paper Instruction Form sent to PIBS Holders (subject to the offer and distribution restrictions).
Participation Deadline, Voting Deadline and PIBS Record Time	1.00 p.m. on 5 July 2021
Participation Deadline Deadline for receipt by Equiniti of all Tender Instructions for a PIBS Holder to be eligible (if such PIBS are accepted for purchase by Nationwide) to receive the Offer Price and Accrued Interest Payment. Accordingly, this is the latest time and date for (i) receipt of Tender Instruction Forms and the related PIBS certificates (or a Letter of Indemnity in lieu thereof, if applicable) for tendered PIBS in certificated form; and (ii) settlement of TTE Instructions for PIBS tendered in CREST. Voting Deadline Deadline for receipt by Equiniti of all Voting Only Instructions with respect to the Resolutions. PIBS Record Time Only PIBS Holders who hold their PIBS as at the PIBS Record Time (and continue to hold them until conclusion of the Meeting) will be eligible to vote (or to appoint a proxy to vote) at the Meeting (unless the Meeting is adjourned).
Meeting	1.00 p.m. on 7 July 2021
Meeting of PIBS Holders to consider the Resolutions approving the Proposed Variations.
Results Announcement	8 July 2021
If the Meeting will be adjourned, Nationwide expects to announce the adjournment of the Meeting and the Results Announcement will be delayed. If the Meeting will not be adjourned, Nationwide expects to announce the results of the Offers, including announcement of (i) the aggregate nominal amount of PIBS validly tendered prior to the Participation Deadline; (ii) whether Nationwide accepts for purchase any PIBS and, if so, the aggregate nominal amount of PIBS so accepted for purchase pursuant to the Tender Offer; (iii) the total amount (being the Offer Price plus Accrued Interest Payment) payable in respect of each £1,000 nominal amount of PIBS purchased, to be paid to PIBS Holders on the Settlement Date pursuant to the Tender Offer; and (iv) whether each of the Resolutions was passed at the Meeting, whether the Eligibility Condition for each Resolution was satisfied, and whether each Resolution will be implemented.
Settlement Date	14 July 2021
If the Meeting will be adjourned, Nationwide expects to delay the Settlement Date until after the adjourned Meeting. If the Meeting will not be adjourned, this is the expected settlement date of the Tender Offer, including (i) repurchase and cancellation of PIBS purchased in the Tender Offer and (ii) payment of the Offer Price and Accrued Interest Payment in respect of such PIBS.

The above times and dates are indicative only, and subject to the right of Nationwide to extend, re-open, amend and/or terminate the Offers (subject to applicable law and as provided in the Offer Memorandum). 

PIBS Holders are advised to check with any bank, custodian, securities broker or other Intermediary through which they hold their PIBS when such Intermediary would need to receive instructions from a PIBS Holder in order for that PIBS Holder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers before the relevant deadlines specified in the Offer Memorandum. The deadlines set by any such Intermediary will be earlier than the relevant deadlines specified above.

PIBS Holders are also advised to ensure that, where any documents are posted to Equiniti, they allow sufficient time to ensure receipt of such documents by Equiniti by the relevant deadline. 

If a quorum is not achieved at the Meeting (or if the quorum is achieved and either or both Resolutions are passed but the Eligibility Condition is not satisfied), the Meeting shall be adjourned until a date not less than 14 days nor more than 42 days later. The date of the adjourned Meeting will be notified to the PIBS Holders in the notice of the adjourned Meeting in accordance with the Conditions, such notice to be given at least 10 days (exclusive of the day on which the notice is given and of the day on which the Meeting is to be resumed) prior to the proposed adjourned Meeting.

Any such notice will also specify any amendments to the timetable for the Offers, including any extension of the offer period, the new Participation Deadline, Voting Deadline, PIBS Record Time and Settlement Date and any other amendments.

Further information

Nationwide has appointed (i) Equiniti and BondCap to provide further information to Retail Investors and (ii) Lloyds Bank Corporate Markets plc and Nomura International plc as Dealer Managers to provide further information to Institutional Investors. Their details are set out below.

A "Retail Investor" is a PIBS Holder that is not an Institutional Investor (as defined below). Any PIBS Holder who is an individual (rather than a company or other organisation) will be a Retail Investor. Any PIBS Holder that is unsure of their status may contact BondCap. An "Institutional Investor" is a PIBS Holder that is (i) an "eligible counterparty" or a "professional client", each as defined in Directive 2014/65/EU (as amended); or (ii) an "eligible counterparty" as defined in the FCA Handbook Conduct of Business Sourcebook or a "professional client" as defined in Regulation (EU) No 600/2014 as it forms part of English domestic law by virtue of the European Union (Withdrawal) Act 2018.  

Retail Investors

Retail Investors may contact: (i) Equiniti with respect to questions regarding the delivery of Tender Instructions and Voting Only Instructions; or (ii) BondCap with respect to any other questions regarding the Offers.

Equiniti

Address:  Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom

Telephone: ^*   0371 384 2050 (if calling from within the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (UK time) Monday to Friday (excluding public holidays in England and Wales). If calling from outside the UK, please call [phone].

Bondcap

Telephone: ^*   020 7058 0080 / 0090 (if calling from within the UK). Lines are open from 9.00 a.m. to 5.00 p.m. (UK time) Monday to Friday (excluding public holidays in England and Wales). If calling from outside the UK, please call [phone] / 0090.

Email:  [e-mail] / [e-mail]

^* Calls to the helplines from within the UK are charged at the standard geographic rate and will vary by provider. Calls to the helplines from outside the UK will be charged at the applicable international rate. Please note that calls may be monitored for security and training purposes. The helplines cannot provide advice on the merits of the proposals nor give any financial, legal or tax advice.

Institutional Investors

Institutional Investors may contact: (i) Equiniti with respect to questions regarding the delivery of Tender Instructions and Voting Only Instructions; or (ii) Lloyds Bank Corporate Markets plc or Nomura International plc with any other questions regarding the Offers.

Lloyds Bank Corporate Markets plc	Nomura International plc
Tel: [phone] / 1726 Email: [e-mail] Attn: Liability Management Group	Tel: [phone] / 3634 Email: [e-mail] Attn: Liability Management

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UK MARKET ABUSE REGULATION

This announcement is released by Nationwide Building Society 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 domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"), encompassing information relating to the Offers described above. For the purposes of UK MAR, this announcement is made by Sarah Robinson, Senior Manager, Funding & Capital Markets of Nationwide Building Society .

DISCLAIMER : This announcement must be read in conjunction with the Offer Memorandum. This announcement and the Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Tender Offer or the Consent Solicitation. If any PIBS Holder is in any doubt as to the action it should take or is unsure of the impact of the implementation of the Resolutions, it is recommended to seek its own financial and legal advice, including in respect of any tax consequences, immediately from its broker, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose PIBS are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must contact such entity if it wishes to participate in the Tender Offer or Consent Solicitation. 

None of Nationwide, Equiniti, BondCap, Lloyds Bank Corporate Markets plc or Nomura International plc is able to provide any financial, legal, tax, accounting or any other advice in connection with the Offers referred to in this announcement, or to express any opinion on the merits of the Offers or otherwise to make any recommendations as to whether or not PIBS Holders should participate in the Tender Offer or the Consent Solicitation. If any PIBS Holder requires any such advice or recommendation, it will need to contact its own broker, solicitor, accountant or other independent financial, tax, legal or accounting adviser.

OFFER AND DISTRIBUTION RESTRICTIONS : The distribution of this announcement and the Offer Memorandum in certain jurisdictions may be restricted by law, and persons into whose possession this announcement or the Offer Memorandum comes are requested to inform themselves about, and to observe, any such restrictions. Neither this announcement nor the Offer Memorandum constitutes an offer to buy or the solicitation of an offer to sell PIBS (and tenders of PIBS in the Tender Offer will not be accepted from PIBS Holders) in the United States or in any other jurisdiction or circumstance in which such offer or solicitation would be unlawful. 

United States : The PIBS have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States, and the PIBS may not be offered, sold or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws.

The Offers are not being made, and will not be made, to (or for the account or benefit of) U.S. persons (as defined in Regulation S under the Securities Act) or 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 PIBS may not be tendered in the Tender Offer by any such use, means, instrumentality or facility from or within the United States or by U.S. persons or by persons located or resident in the United States as defined in Regulation S of the Securities Act.

United Kingdom : The communication of this announcement or the Offer Memorandum and any other documents or materials relating to the Offers are 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, as amended (the "FSMA"). 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, and may only be acted upon by, those persons in the United Kingdom falling within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order") (which includes an existing member of Nationwide and, therefore, includes the PIBS Holders) or within the definition of investment professionals (as defined in Article 19(5) of the Financial Promotion Order) or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

Italy : The Offers are not being made, directly or indirectly, in the Republic of Italy. None of the Offers, this announcement, the Offer Memorandum or any other document or materials relating to the Offers 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. Accordingly, (i) neither the Offers, nor this announcement or the Offer Memorandum or any other offering material relating to the Offers or the PIBS may be distributed or made available in the Republic of Italy and (ii) no marketing, promotional, informative or solicitation activity whatsoever can be performed in the Republic of Italy.

France : This announcement, the Offer Memorandum and any documents or offering materials relating to the Offers may not be distributed in the Republic of France except to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of the Prospectus Regulation, as amended, and Article L.411-2 of the French Code monétaire et financier as amended from time to time. This announcement and the Offer Memorandum have not been and will not be submitted for clearance to nor approved by the Autorité des marchés financiers.

Belgium : The Offers are not being made, directly or indirectly, to the public in Belgium. Neither this announcement nor the Offer Memorandum nor any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autoriteit voor financiële diensten en markten / Financial Services and Markets Authority) and, accordingly, the Offers may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids as amended or replaced from time to time (the "Belgian Takeover Law").

Accordingly, the Offers may not be advertised and the Offers will not be extended, and neither this announcement nor the Offer Memorandum nor any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than (i) "qualified investors" in the sense of Article 2I of the Prospectus Regulation (as amended from time to time), acting on their own account, and provided that they do not qualify as a "consumer" within the meaning of Article I.1 of the Belgian Code of Economic Law (as amended or replaced from time to time) or (ii) in any circumstances set out in in Article 6, §4 of the Belgian Takeover Law. Insofar as Belgium is concerned, this announcement and the Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this announcement and the Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

UK MiFIR professionals/ECPs and existing PIBS Holders only / No EEA or UK PRIIPs KID - Manufacturer target market (UK MiFIR product governance) is eligible counterparties, professional clients and existing PIBS Holders only (all distribution channels). No European Economic Area or UK PRIIPs key information document (KID) has been or will be prepared.

 

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