Tesco Lotus Property Fund IPO

RNS Number : 6669Y

Tesco PLC

05 March 2012

 



NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA

Tesco Lotus property fund IPO priced at top end of range following strong investor demand

Fund raises over THB18bn (£379m), making it Thailand's largest ever property fund IPO and biggest IPO since 2006

Ek-Chai Distribution System Co., Ltd. (Tesco Lotus), Thailand's leading retailer and shopping mall operator, today announced the final offering price for the Initial Public Offering (IPO) of its Tesco Lotus Retail Growth Freehold and Leasehold Property Fund (TLGF) at THB 10.40 (£0.21) per unit, at the top end of the pricing range of THB9.65 (£0.20) to THB10.40 (£0.21), due to strong demand from institutional and retail investors.

The IPO will raise approximately THB 18.4bn (£379m), making it Thailand's largest ever IPO of a property fund, and the country's biggest IPO in more than five years. The expected total distribution for the first year is 6.5%.

The offer attracted significant interest from global institutions and was heavily oversubscribed, with the institutional offering (special investors' tranche) excluding the cornerstone approximately 15 times covered.

Despite volatility in the global market, TLGF's strong investment thesis and outstanding growth potential attracted a number of global institutions as well as local retail investors. The total number of retail subscribers, at more than 10,000, is the highest in the history of property fund IPOs in Thailand. Due to the overwhelming demand from retail investors, Tesco Lotus, along with Phatra Securities, Bank of America Merrill Lynch, Nomura and Royal Bank of Scotland as joint bookrunners have decided to increase the retail allocation to approximately 597.8 million units, against the original size of 442.5 million units, resulting in local retail investors holding approximately 34% of the total units. This will allow a higher proportion of Tesco Lotus customers, employees, trade partners and the general public to be a part of the retailer's future success. Tesco Lotus will subscribe to 25% of the total units, making it the single largest unitholder of the fund, while global and Thai institutional investors will hold the remaining 41% of the total units.

Laurie McIlwee, Tesco Plc's Chief Financial Officer, said: "The successful pricing of the IPO of our Thai property fund at the top end of the pricing range clearly demonstrates the successful implementation of our strategy of recycling capital from property to fund innovation and growth for our customers and investors."

John Christie, Tesco Lotus Chief Executive Officer, said "The exceptional success of the TLGF IPO demonstrates investors' confidence in the fund. I would like to thank our IPO investors and welcome them to be a part of Tesco Lotus' continued success." 

Tesco Lotus Retail Growth Freehold and Leasehold Property Fund will be registered with the Office of the Securities and Exchange Commission on 13 March 2012. The property fund will commence trading on the Stock Exchange of Thailand on 19 March 2012 under the property fund industry group, with the ticker "TLGF".

Ends

The distribution of this announcement may be restricted by law in certain jurisdictions.  Persons into whose possession this announcement comes are required to inform themselves about and to observe any such restrictions.

This announcement is not an offer of securities for sale in the United States or elsewhere.  The securities referred to herein are not being registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Securities Act or pursuant to an exemption from such registration.

There will be no public offering of the securities referred to herein in the United States.  Copies of this announcement are not being, and should not be, distributed in or sent into the United States, Canada, Japan or Australia.

The distribution of this document (such term including any form of communication) is subject to the restrictions provided in section 21 (restrictions relating to "financial promotion") of the Financial Services and Markets Act 2000 ("FSMA"). With respect to the United Kingdom, this document should be addressed solely only to persons who (i) have professional experience in matters relating to investments ("investment professionals") and fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 , as amended (the "Order"), (ii) fall within Article 49(2)(a) to (d) of the Order or to whom (iii) this communication may otherwise lawfully be communicated (all such persons together with Qualified Investors (as defined in the Prospectus Directive) being referred to as "Relevant Persons"). This document must not be acted on or relied on in the United Kingdom by persons who are not Relevant Persons. Any investment to which this document relates is available only in the United Kingdom to Relevant Persons, and will be engaged in only with such persons.

With respect to the member states of the European Economic Area which have implemented the Directive 2003/71/EC of the European Parliament and the Council of November 4, 2003 (the "Prospectus Directive"), no action has been undertaken or will be undertaken to make an offer to the public of the securities referred to herein requiring a publication of a prospectus in any relevant member state. As a result, the securities referred to herein may not and will not be offered in any relevant member state except in accordance with the exemptions set forth in Article 3(2) of the Prospectus Directive, if they have been implemented in that relevant member state, or under any other circumstances which do not require the publication by Ek-Chai of a prospectus pursuant to Article 3 of the Prospectus Directive and/or to applicable regulations of that relevant member state.

For further information please contact:

Media
Greg Sage/Ian Hutchins	[phone]
Angus Maitland	[phone]
Investors
Chris Griffith	[phone]

Notes to editors

·     Tesco Lotus is a leading retailer and shopping mall operator in Thailand, with more than 900 stores across five formats (Plus mall, Extra, Hypermarket, Talad and Express) and employing more than 38,000 staff across the country.

·     Tesco Lotus' objective is to create value for customers to earn their lifetime loyalty, supported by its core value: no-one tries harder for customers, and to treat people as we ourselves would wish to be treated. It is currently celebrating its 17th anniversary.

·     Tesco is the world's third largest retailer, operating over 5,600 stores across 13 markets and employing 500,000 people. Group sales for the year ending February 2011 were £67.7bn. In Asia, Tesco operates over 1,400 stores in China, Korea, Malaysia and Thailand. Sales in Asia for the year ending February 2011 were £11bn.

·     Exchange rate: £1=THB48.5.

 

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