New Issue, Migration to Premium Segment & eNAV

RNS Number : 9418G

Triple Point Social Housing REIT

07 March 2018

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW OR TO US PERSONS. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY ORDINARY SHARES OR ANY C SHARES IN THE COMPANY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES. ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN CONNECTION WITH THE ISSUE.

7 March 2018

Triple Point Social Housing REIT plc

(the "Company" or, together with its subsidiaries, the "Group")

PLACING, OPEN OFFER AND OFFER FOR SUBSCRIPTION OF C SHARES

MIGRATION OF ORDINARY SHARES TO THE PREMIUM SEGMENT OF THE OFFICIAL LIST

NEW ESTIMATED NET ASSET VALUE

Further to the Company's announcement on 1 March 2018, the Board of Triple Point Social Housing REIT plc (ticker: SOHO) is pleased to announce a Placing, Open Offer and Offer for Subscription of C shares in the Company (being a new class of convertible, non-voting preference shares) (the "C Shares") at a price of 100p per share (the "Issue Price") to raise up to £200 million (the "Issue").

The Board also considers  that it would be in the best interests of the Company and its shareholders, as a whole, to seek admission of the Company's ordinary shares ("Ordinary Shares") to the premium segment of the Official List of the UK Listing Authority (the "Migration") and to move their trading venue to the premium segment of the Main Market of the London Stock Exchange.  The Migration will be undertaken concurrently with, but independently of, the Issue and the Migration and the Issue are not inter-conditional.

Details of the terms of the C Shares are set out in a circular to Shareholders dated 1 March 2018 (the "Circular").

Any capitalised terms used but not otherwise defined in this announcement have the meaning set out in the Circular and the prospectus to be published by the Company in connection with the Issue.

Issue Highlights

·     The Issue, which is not underwritten, comprises the Placing, Open Offer and Offer for Subscription, in aggregate equalling up to 200 million C Shares at the Issue Price of 100 pence per C Share.

·     Under the Open Offer, up to an aggregate number of 133.3 million C Shares will be made available to Eligible Shareholders at the Issue Price, pro rata to their holdings of Existing Ordinary Shares, on the basis of:

2 C Shares for every 3 Ordinary Shares held on the Record Date (being an Eligible Shareholder's Open Offer Basic Entitlement).

·     If subscriptions under the Placing, Open Offer and Offer for Subscription exceed the maximum number of C Shares available, the Company (in consultation with Canaccord Genuity, Akur and the Delegated Investment Manager) will scale back subscriptions (other than Open Offer Basic Entitlements) at its absolute discretion.

·     The Issue, which is not underwritten, is conditional, amongst other things, upon the passing of the Issue Resolutions at the General Meeting, Admission of the C Shares occurring no later than 8.00 a.m. on 27 March 2018 (or such later time and/or date as the Company and Canaccord Genuity may agree) and the Placing Agreement not being terminated and becoming unconditional in accordance with its terms. If these conditions are not met, the Issue will not proceed and an announcement to that effect will be made via a Regulatory Information Service.

·     Application will be made for the C Shares to be admitted to the standard segment of the Official List of the FCA and to trading on the standard segment of the Main Market of the London Stock Exchange.

·     Application is also being made to the FCA for all of the Company's existing Ordinary Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Ordinary Shares to be admitted to trading on the premium segment of the Main Market. It is expected that the Migration will occur at the same time as (and irrespective of) Admission.

Benefits of the Issue

The Directors believe that the Issue will have the following principal benefits:

·     the Issue will provide additional capital, which will enable the Company to benefit from the continued investment opportunities identified by the Delegated Investment Manager in the Supported Housing sector;

·     it is expected that, following investment of the Net Proceeds, the Company's assets will be further diversified across geography, Approved Providers and different sub-sectors within Social Housing, which will complement the Company's existing portfolio;

·     having a greater number of Ordinary Shares in issue (following the conversion of the C Shares into Ordinary Shares) is likely to provide Shareholders with increased secondary market liquidity;

·     the increased size of the Company will mean fixed costs are spread over a larger asset base, reducing the ongoing charges per Share for Shareholders. In particular, the fee payable to the Delegated Investment Manager is tiered such that it reduces from 1 per cent. to 0.9 per cent. on NAV in excess of £250 million (not taking into account cash balances) (with further reductions triggered when the Company's last published NAV (not taking into account cash balances) exceeds £500 million and £1 billion); and

·     increasing the size of the Company will help to make it more attractive to a wider investor base, particularly as certain institutional investors are constrained by the maximum percentage of an issuer which they can own. If a company's market capitalisation is too small, such investors typically cannot invest as they cannot get a meaningful allocation in the context of their underlying funds.

Pipeline of potential investments

The Company's Delegated Investment Manager, Triple Point Investment Management LLP ("Triple Point"), has access to a pipeline of potential investments and is engaged in discussions with various parties (including Approved Providers and developers) in relation to a number of assets that meet the Company's investment criteria and are on terms that the Delegated Investment Manager considers attractive for the Group. Together, the various sources equate to an identified pipeline in excess of £400 million, which may potentially be acquired (subject to, inter alia, satisfactory due diligence and agreement on terms) by the Group over the next 12 months. It is also envisaged that, due to the demand in the Social Housing market, the potential pipeline available to the Company will continue to increase.

There can be no certainty that the Company will complete any of these acquisitions, or that the Company will complete any of the transactions in its investment pipeline. However, with the preparatory work and discussions undertaken to date, and having the benefit of the Delegated Investment Manager's strong sector experience and relationships, the Directors expect the Company to be able to acquire a number of these assets subject to it having requisite funds at the time of any such opportunity arising.

The Issue will provide the Company with funds to capitalise on the investment opportunities referred to above. The Delegated Investment Manager expects to be able to deploy the Net Proceeds of the Issue such that the C Shares convert into Ordinary Shares by 31 December 2018 (although the Backstop Calculation Date is 28 February 2019 with conversion within two months thereafter).

Key terms of the C Shares

The C Shares:

·     are a new class of convertible, non-voting preference share to be listed on the standard segment of the Official List and admitted to trading on the standard segment of the Main Market of the London Stock Exchange. The restriction on voting is required in order to protect the Company's status as a REIT, although C Shareholders will be able to vote in relation to matters affecting the rights of C Shares;

·     subject to the requirements of the Companies Act, will receive a fixed rate dividend of three per cent. per annum, paid quarterly;

·     will convert into Ordinary Shares. The Calculation Date for the purposes of conversion of C Shares into Ordinary Shares will be the earliest of: (i) the month end in which 90 per cent. of the Net Proceeds are invested or committed; (ii) a month end on or after 30 November 2018 (being the Target Calculation Date) determined at the discretion of the Board; and (iii) 28 February 2019 (being the Backstop Calculation Date), with conversion occurring within two months of the Calculation Date (and therefore no later than 30 April 2019). In any event, the Board and the Delegated Investment Manager are targeting the Target Calculation Date, with conversion occurring by 31 December 2018; and

·     will convert on a Net Asset Value for Net Asset Value basis and, as a result, Ordinary Shareholders should not suffer any Net Asset Value dilution.

An issue of C Shares is designed to overcome the potential disadvantages for existing Ordinary Shareholders which could arise out of a conventional fixed price issue of further Ordinary Shares for cash. In particular:

·     the Net Proceeds will be applied to the C Share Pool and accounted for and managed as a distinct pool of assets and liabilities from the Ordinary Share Pool until the Calculation Date. Therefore, Ordinary Shareholders will not be exposed to a portfolio containing a substantial amount of un-invested cash prior to Conversion, which materially eliminates the risk of cash drag and diminished returns for Ordinary Shareholders; and

·     the Net Asset Value per Ordinary Share will not be diluted by the expenses associated with the Issue (subject to Gross Proceeds of at least £40 million being raised pursuant to the Issue), which will be borne by the subscribers for C Shares and will therefore not impact the returns to the Ordinary Shareholders. The Issue Costs are capped at two per cent. of the Gross Proceeds of the Issue for C Shareholders.

Estimated Net Asset Value

As at 20 February 2018, the unaudited estimated Net Asset Value (and EPRA NAV) per Ordinary Share was 100.91 pence.

Indicative timetable

The Open Offer
Record Date for entitlements under the Open Offer	Close of business on 5 March 2018
Ex-entitlement date for the Open Offer	8.00 a.m. on 7 March 2018
Open Offer Application Forms despatched to Eligible Non-CREST Shareholders	7 March 2018
Open Offer Entitlements credited to stock accounts in CREST of Eligible CREST Shareholders	8.00 a.m. on 8 March 2018
Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 16 March 2018
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 19 March 2018
Latest time and date for splitting of Open Offer Application Forms	3.00 p.m. on 20 March 2018
Latest time and date for receipt of completed Open Offer Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 22 March 2018
The Placing and Offer for Subscription
Placing and Offer for Subscription opens	7 March 2018
Latest time and date for receipt of completed Application Forms and payment in full under the Offer for Subscription (which includes the Intermediaries Offer)*	11.00 a.m. on 22 March 2018
Latest time and date for receipt of placing commitments under the Placing	3.00 p.m. on 22 March 2018
Other key dates
Announcement of the results of the Issue	23 March 2018
Trade date (on a T+2 basis) for C Shares to be issued to Placees pursuant to the Placing	23 March 2018
General Meeting	11.00 a.m. on 26 March 2018
Admission of the C Shares to the standard segment of the Official List and commencement of dealings on the London Stock Exchange	8.00 a.m. on 27 March 2018
Crediting of CREST stock accounts	27 March 2018
Share certificates despatched (where appropriate)	week commencing 2 April 2018 (or as soon as possible thereafter)
Admission of the Ordinary Shares to the premium segment of the Official List and the transfer of trading of the Ordinary Shares from the Specialist Fund Segment to the premium segment of the Main Market	8.00 a.m. on 27 March 2018

* Certain Intermediaries may have earlier deadlines.

The dates and times specified in this Prospectus are subject to change without further notice. All references to times in this Announcement are to London time unless otherwise stated. In particular the Board may, with the prior approval of the Delegated Investment Manager, Canaccord Genuity and Akur, bring forward or postpone the closing time and date for the Issue. In the event that such date is changed, the Company will notify investors who have applied for C Shares or taken up Open Offer Basic Entitlements of changes to the timetable either by post, by electronic mail or by the publication of a notice through a Regulatory Information Service.

Dealing codes

Ordinary Shares

Ticker of the Ordinary Shares	SOHO
ISIN for the Ordinary Shares	GB00BF0P7H59
SEDOL for the Ordinary Shares	BF0P7H5
C Shares
Ticker of the C Shares	SOHC
ISIN for the C Shares	GB00BFYV7J12
SEDOL for the C Shares	BFYV7J1
Open Offer
ISIN for the Open Offer Basic Entitlements	GB00BG139Q83
SEDOL for the Open Offer Basic Entitlements	BG139Q8
ISIN for the Excess Open Offer Entitlements	GB00BG139R90
SEDOL for the Excess Open Offer Entitlements	BG139R9

Prospectus

Further details of the Issue, Admission and Migration will be set out in the Prospectus, which will be available today on the Company's website at www.triplepointreit.com (together with the Circular) and can be inspected at the offices of Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW.

A copy of the Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

Triple Point Investment Management LLP (Delegated Investment Manager)	(via Newgate below)
James Cranmer
Ben Beaton
Max Shenkman
Justin Hubble
Akur Limited (Joint Financial Adviser)	Tel: [phone]
Tom Frost
Anthony Richardson
Siobhan Sergeant
Canaccord Genuity Limited (Joint Financial Adviser and Corporate Broker)	Tel: [phone]
Lucy Lewis
Denis Flanagan
Andrew Zychowski
Newgate (PR Adviser)	Tel: [phone]
James Benjamin	Em: [e-mail]
Anna Geffert
Leena Patel

The Company's LEI is 213800BERVBS2HFTBC58.

Further information on the Company can be found on its website at www.triplepointreit.com.

NOTES:

The Company invests in social housing assets in the UK, with a particular focus on supported housing. The assets within the portfolio are subject to inflation-adjusted, long-term (typically from 20 years to 30 years), Fully Repairing and Insuring ("FRI") leases with Approved Providers (being Housing Associations, Local Authorities or other regulated organisations in receipt of direct payment from local government). The portfolio comprises investments into properties which are already subject to an FRI lease with an Approved Provider, as well as forward funding of pre-let developments but does not include any direct development or speculative development.

There is increasing political and financial pressure on Housing Associations to increase their housing delivery and this is creating opportunities for private sector investors to participate in the market. The Group's ability to provide forward financing for new developments not only enables the Company to secure fit for purpose, modern assets for its portfolio but also addresses the chronic undersupply of suitable supported housing properties in the UK at sustainable rents and delivering returns to investors.

Triple Point Investment Management LLP (part of the Triple Point Group) is responsible for management of the Group's portfolio (with such functions having been delegated to it by Langham Hall Fund Management LLP, the Company's alternative investment fund manager).

The Company was admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 8 August 2017 and operates as a UK Real Estate Investment Trust.

IMPORTANT NOTICE

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is for information purposes only, is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are tentative and are subject to revision and amendment.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, South Africa, New Zealand or Japan or to US persons. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is an advertisement and not a prospectus. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the Prospectus intended to be published by the Company in due course in connection with the proposed Issue. Copies of the Prospectus will, following publication, be available on the Company's website (www.triplepointreit.com).

In member states of the European Economic Area ("EEA"), this announcement is only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State).

This announcement does not contain or constitute an offer for sale of, or the solicitation of an offer or an invitation to buy or subscribe for, Ordinary Shares or C Shares to any person in the United States, Australia, Canada, South Africa, New Zealand or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, the C Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to or for the account or benefit of US persons absent registration or an exemption from the registration requirements of the Securities Act and in compliance with any applicable state securities laws and in circumstances that will not require registration of the Company under the Investment Company Act. There will be no public offer of the Ordinary Shares or the C Shares in the United States.

The offer and sale of Ordinary Shares and the C Shares has not been and will not be registered under the applicable securities laws of any state, province or territory of Australia, Canada, South Africa, New Zealand or Japan. Subject to certain exceptions, the Ordinary Shares and the C Shares may not be offered or sold in Australia, Canada, South Africa, New Zealand or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, South Africa, New Zealand or Japan.

This announcement has not been approved or authorised by the Guernsey Financial Services Commission for circulation in Guernsey, and may not be distributed or circulated directly or indirectly to any persons in the Bailiwick of Guernsey other than (i) by a person licensed to do so under the terms of the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, or (ii) to those persons regulated by the Guernsey Financial Services Commission as licensees under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended, the Banking Supervision (Bailiwick of Guernsey) Law, 1994, the Insurance Business (Bailiwick of Guernsey) Law, 2002 or the Regulation of Fiduciaries, Administration Business and company Directors etc. (Bailiwick of Guernsey) Law, 2000.

In Jersey, this announcement (and the financial services to which it relates) has not been approved by and will not be submitted for approval to the Jersey Financial Services Commission (JFSC) for the purposes of public offering or sale in the Island of Jersey.

The Company has a limited investment history.  Without limitation, results can be positively or negatively affected by market conditions beyond the control of the Company or Triple Point which may be different in many respects from those that prevail at present or in the future, with the result that the performance of investment portfolios originated now may be significantly different from those originated in the past.  The past performance of the Company is not a reliable indicator of, and cannot be relied upon as a guide to, the future performance of the Company or Triple Point.  Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the initial public offering and prospective investors should note that the value of the Ordinary Shares or C Shares could decrease as well as increase. 

Canaccord Genuity Limited ("Canaccord Genuity") is authorised and regulated by the Financial Conduct Authority. Akur Limited ("Akur") is authorised and regulated by the Financial Conduct Authority. Each of Canaccord Genuity and Akur is acting exclusively for the Company and no-one else in connection with the Issue and the Migration. They will not regard any other person as their respective clients in relation to the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

None of the Company, Triple Point, Canaccord Genuity, Akur and any of their respective affiliates accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, Triple Point, Canaccord Genuity, Akur and their respective affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

This announcement does not constitute a recommendation concerning the Issue. The price and value of securities and any income from them can go down as well as up and investors may not get back the full amount invested on disposal of the securities. Past performance is not a guide to future performance. Before purchasing any Ordinary Shares or C Shares, persons viewing this announcement should ensure that they fully understand and accept the risks that will be set out in the Prospectus, when published. Information in this announcement or any of the documents relating to the proposed Issue cannot be relied upon as a guide to future performance. The Issue timetable may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Issue will occur and you should not base your financial decisions on the Company's intentions in relation to the Issue or the information contained in this announcement. The contents of this announcement are not to be construed as legal, business or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) MiFID II; (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the C Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors identified in accordance with Chapter 3 of PROD; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the C Shares may decline and investors could lose all or part of their investment; the C Shares offer no guaranteed income and no capital protection; and an investment in the C Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Notwithstanding the Target Market Assessment, Canaccord Genuity will only place C Shares to investors meeting the definitions of "professional investors" or "eligible counterparties", each as defined in the FCA Rules.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the C Shares and determining appropriate distribution channels.

 

END

 

 

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