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value attributable to intangible assets and
goodwill), by means of the Loan Stock Amendments. The Board does not currently intend to increase the actual level of
borrowings of the Group as a result of the Loan Stock Amendments.
It is also proposed pursuant to the Loan Stock Amendments that the maximum price at which the Company may purchase Loan
Stock by private treaty pursuant to the Loan Stock Trust Deed will be amended from a price (inclusive of interest) not
exceeding 115 per cent. of the middle market quotation of the Loan Stock on the dealing day before the relevant
purchase,
to the higher of the nominal value of the Loan Stock together with accrued interest and 115 per cent. of the middle
market
quotation of the Loan Stock on the dealing day before the relevant purchase. It is also proposed, pursuant to the Loan
Stock Amendments, that the reference to the Cash Distribution Programme in the Loan Stock Trust Deed shall be changed to
the Cash Distribution Programme, as described in paragraph 5, that will operate from 1 January 2010.
Implementation of the Loan Stock Amendments is conditional upon Admission taking place by 31 January 2010. Other than
the
proposed amendments to the Loan Stock described in this paragraph 11, no changes to the Loan Stock Trust Deed are
proposed
or envisaged by the Board.
On 17 December 2009, the Company entered into the Loan Stock Purchase Agreements with the Audley Investors, pursuant to
which the Audley Investors agreed to subscribe pursuant to the Placing, in aggregate P7.5 million for a total of 25
million
New Units at the Issue Price of 30 pence per Unit. The Company has agreed to purchase for cancellation a total of P7.5
million of Loan Stock currently held by the Audley Investors. Subject to completion of the Loan Stock Amendments, the
price
payable for this Loan Stock will be the nominal value of the Loan Stock to be purchased together with payment of the
accrued interest on the Loan Stock at the date of Admission. On the basis of the closing middle market quotation of the
Loan Stock of 95.0 pence per P1 nominal of Loan Stock on the dealing day immediately prior to the date of this
announcement, the purchase price for nominal value together with accrued interest on such Loan Stock on such day would
be
110.0 per cent. of such closing middle market quotation of the Loan Stock. Completion of the subscription of New Units
by
the Audley Investors and the purchase of the Loan Stock held by the Audley Investors pursuant to the Loan Stock Purchase
Agreements is conditional on the passing of the extraordinary resolution of Loan Stock Holders at the Loan Stock Meeting
to
approve the Loan Stock Amendments, and on Admission taking place by 31 January 2010. As a result of the purchase by the
Company and cancellation of the Loan Stock currently held by the Audley Investors in this manner, interest costs will
decrease by P0.7 million per annum and the Company's taxation charge will be adjusted to reflect the tax effect of the
reduction in interest costs.
The Company is convening the Loan Stock Meeting for 11.30 a.m. on 11 January 2010 at which an extraordinary resolution
of
Loan Stock holders (requiring a majority consisting of not less than 75 per cent. of Loan Stock holders voting on a show
of
hands or, if a poll is demanded, by a majority consisting of not less than 75 per cent. of the votes given on a poll)
will
be proposed, to implement the Loan Stock Amendments. A notice convening the Loan Stock Meeting and a further explanation
of
the Loan Stock Amendments is contained in a circular which has today been sent to Loan Stock holders.
The Audley Investors, Richard Balfour-Lynn, Andrew Blurton and certain other Loan Stock holders have signed irrevocable
undertakings to vote in favour of the resolution to be proposed at the Loan Stock Meeting in respect of a total of P23.6
million of the Loan Stock, representing approximately 78.8 per cent. of the Loan Stock in issue at the date of this
announcement.
12. 1997 Concert Party and its holdings
The Executive Directors (other than Andrew Blurton) together with John Harrison and Joseph Shashou (who were until 1
July
2005 directors of MWB Property), who all acquired ordinary shares in MWB Property at the time of the merger in 1997 of
Marylebone Warwick Balfour Group Plc with Ex-Lands Properties Plc (which following such merger changed its name to
Marylebone Warwick Balfour Group Plc), Andrew Blurton, William Broadbent, a senior executive of the Group, the Trustee
of
the LTIP and the Trustee of the 2009 EBT, are deemed by the Panel for the purposes of the Code to be acting in concert
in
relation to the Company and are referred to in this announcement as the "1997 Concert Party".
Under rule 9 of the Code, any person who acquires an interest (as such term is defined in the Code) in Units which,
taken
together with the Units in which he and persons acting in concert with him are interested, carry 30 per cent. or more of
the voting rights in the Company would normally be required to make a general offer to all of the remaining Shareholders
to
acquire their Units. Similarly, when any person, together with persons acting in concert with him, is interested in
Units
which in aggregate carry not less than 30 per cent. but does not hold Units carrying more than 50 per cent. of the
voting
rights of the Company, a general offer will normally be required if any further interests in Units are acquired by any
such
person. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any
member of the group of persons acting in concert with him, for any interest in Units during the 12 months prior to the
announcement of the offer.
At 16 December 2009, the members of the 1997 Concert Party beneficially held a total of 21,573,957 Units, representing
29.81 per cent. of the Existing Units in issue at that date.
Effect of implementation of the Placing on the 1997 Concert Party
If members of the 1997 Concert Party take up the 33,399,998 New Units they have undertaken to take up under the Placing,
the 1997 Concert Party would hold a total of 54,973,955 Units and such Units would represent approximately 33.51 per
cent.
of the Enlarged Issued Share Capital.
In the above circumstances, unless the Panel otherwise agrees to waive the requirement for members of the 1997 Concert
Party, individually or collectively, to make a general offer for the Company to all Shareholders as a result of the
increase in the aggregate percentage holding of Units held by the 1997 Concert Party, the 1997 Concert Party would be
required to make a general offer under rule 9 of the Code.
Subject to the Whitewash Resolution being passed on a poll by Independent Shareholders, the Panel has agreed to waive
the
requirement for members of the 1997 Concert Party, individually or collectively, to make a general offer to all
Shareholders as a result of the increase in aggregate percentage holding of Units held by the 1997 Concert Party in
circumstances where, following the subscription of Units under the Placing, there is an increase in the aggregate
percentage holding of Units held by the 1997 Concert Party.
Ability of the 1997 Concert Party to purchase further Units
Following subscriptions by the 1997 Concert Party pursuant to the Placing in the manner referred to above, to the extent
that the 1997 Concert Party will between them be interested in more than 30 per cent. but not more than 50 per cent. of
the
Company's voting share capital, for so long as they continue to be treated as acting in concert, any further increase in
that aggregate shareholding will be subject to the provisions of rule 9 of the Code in the manner referred to above.
13. Effect of the Placing on Shareholders
In structuring the Placing, the Directors have had regard to a number of factors, including current market conditions,
the
market price of the Company's Units, and certainty of fundraising. After considering all these factors, the Directors
have
concluded that the Placing is the most suitable form of equity fundraising option available to the Company and is in the
best interests of Shareholders. The Directors believe that the placing of the New Units with the Placees is an important
endorsement by the Placees of MWB and its management team, while providing certainty of funds to the Company.
In the uncertain economic climate and financial environment that exists at the date of this announcement,, the Directors
consider it important that the funds proposed to be raised under the fundraising are received with certainty and in a
manner that may not jeopardise the future price of Units of the Company. If a pre-emptive offer to Shareholders were
undertaken, it might result in a larger number of Units not being subscribed by Shareholders and therefore being
subscribed
by underwriters. In such a scenario, and if such Units were sold in the market by the underwriters or sub-underwriters,
it
could reduce the prevailing price of Units. The Directors have therefore concluded that it is advantageous for the
Company
and its Shareholders to raise the funds by means of the Placing. This is notwithstanding that this will result in
Shareholders (other than certain Shareholders who are also Placees) incurring dilution in their interests in MWB as a
result of the Placing in the manner referred to below.
Following issue of the New Units to be allotted pursuant to the Placing, Shareholders (other than those Shareholders
subscribing for New Units pursuant to the Placing) will suffer dilution of approximately 55.9 per cent. in their
interests
in the Company.
New Units issued through the Placing will represent 126.7 per cent. of the Existing Units in issue at the date of this
announcement. Upon completion of the Placing, the New Units will represent approximately 55.9 per cent., and the
Existing
Units will represent approximately 44.1 per cent., of the Company's Enlarged Issued Share Capital. The Placing
Resolutions
must be passed at the General Meeting in order for the Placing to proceed.
14. Related party transactions
Pyrrho and/or its associates, which currently holds 10,407,862 Units, representing 14.38 per cent. of the Existing Units
in
issue at the date of this announcement, has undertaken to subscribe as a Placee for a total of 19,166,666 New Units
under
the Placing at the Issue Price. The aggregate subscription price for such New Units will be P5.75 million. Based on this
undertaking, the issue of 19,166,666 New Units to Pyrrho and/or its associates under the Placing is treated as a related
party transaction pursuant to the Listing Rules and requires prior Shareholder approval, which is being sought pursuant
to
Resolution 6 at the General Meeting. Pyrrho, as a related party in relation to Resolution 6, has undertaken not to vote
on
that Resolution at the General Meeting, and has undertaken to take all reasonable steps to ensure that its associates do
not vote on Resolution 6.
The Executive Directors and certain of their associates (including the Trustee of the 2009 EBT) have undertaken to
subscribe as Placees for a total of 18,066,666 New Units under the Placing at the Issue Price. These subscriptions have
been made by Richard Balfour-Lynn and/or his associates in respect of 8,900,000 New Units; Andrew Blurton and/or his
associates (including, for these purposes, the Trustee of the 2009 EBT following Admission and subject to the passing of
the Revised Incentive Scheme Resolution) or himself personally in respect of 3,333,333 New Units; Jagtar Singh and/or
his
associates in respect of 2,500,000 New Units; and Michael Bibring and/or his associates in respect of 3,333,333 New
Units.
In addition, Richard Aspland-Robinson, a director of certain subsidiaries of MWB including Business Exchange and/or his
associates has undertaken to subscribe as a Placee for a total of 666,666 New Units under the Placing at the Issue
Price.
The subscriptions described in this paragraph are related party transactions for the purposes of the Listing Rules.
However, these subscriptions (other than the subscription by Richard Balfour-Lynn and/or his associates in respect of
8,900,000 New Units) are subject to modified requirements for smaller related party transactions pursuant to the Listing
Rules and therefore they do not require the approval of Shareholders.
Based on these undertakings, the issue of 8,900,000 New Units to Richard Balfour-Lynn and/or his associates pursuant to
the
Placing requires prior Shareholder approval in accordance with the Listing Rules because Richard Balfour-Lynn is treated
for the purposes of chapter 11 of the Listing Rules as a related party and because of the size of the transaction. Such
Shareholder approval is being sought pursuant to Resolution 7 at the General Meeting. Richard Balfour-Lynn has
undertaken
not to vote on that Resolution at the General Meeting, and has undertaken to take all reasonable steps to ensure that
his
associates do not vote on Resolution 7.
John Harrison, a director of certain subsidiaries of MWB including Liberty, and/or his associates has undertaken to
subscribe as a Placee for a total of 6,233,332 New Units under the Placing at the Issue Price. Based on this
undertaking,
the issue of 6,233,332 New Units to John Harrison and/or his associates pursuant to the Placing requires prior
Shareholder
approval in accordance with the Listing Rules because John Harrison, as a director of certain subsidiaries of MWB, is
treated for the purposes of chapter 11 of the Listing Rules as a related party and because of the size of the
transaction.
Such Shareholder approval is being sought pursuant to Resolution 8 at the General Meeting. John Harrison has undertaken
not
to vote on that Resolution at the General Meeting, and has undertaken to take all reasonable steps to ensure that his
associates do not vote on Resolution 8.
Joseph Shashou, a director of certain subsidiaries of MWB, and/or his associates has undertaken to subscribe as a Placee
for a total of 8,000,000 New Units under the Placing at the Issue Price. Based on this undertaking, the issue of
8,000,000
New Units to Joseph Shashou and/or his associates pursuant to the Placing requires prior Shareholder approval in
accordance
with the Listing Rules because Joseph Shashou, as a director of certain subsidiaries of MWB, is treated for the purposes
of
chapter 11 of the Listing Rules as a related party and because of the size of the transaction. Such Shareholder approval
is
being sought pursuant to Resolution 9 at the General Meeting. Joseph Shashou has undertaken not to vote on that
Resolution
at the General Meeting, and has undertaken to take all reasonable steps to ensure that his associates do not vote on
Resolution 9.
Details of other existing related party transactions which are material to MWB that have been entered into during the
period from 1 January 2006 to the date of this announcement are set out in the Prospectus.
15. Proposals to be voted on at the General Meeting
The following resolutions will be proposed at the General Meeting of the Company, which will be held at the offices of
Dechert LLP, 160 Queen Victoria Street, London EC4V 4QQ at 11.00 a.m. on 11 January 2010.
Placing Resolutions
The Placing Resolutions are conditional on each other. The Placing and Loan Stock Proposals can only be implemented if
all
of the Placing Resolutions are passed. The Placing Resolutions are not conditional on the passing of the Revised
Incentive
Scheme Resolution referred to below.
Resolution 1
The first Resolution, which is proposed as an ordinary resolution as required by the Articles, seeks an increase to the
Company's authorised share capital from P371,000 to P800,000 by the creation of 143,000,000 Ordinary Shares and
2,860,000,000 B Shares comprising 143,000,000 additional Units (representing an increase of approximately 133.6 per
cent.
over the existing authorised share capital). The purpose of this Resolution is to enable MWB to allot sufficient New
Units
under the Placing and for MWB to retain sufficient authorised but unissued share capital for its purposes generally.
Resolution 2
Subject to the passing of the first Resolution and such Resolution becoming unconditional, the second Resolution, which
is
also proposed as an ordinary resolution as required by section 551 of the 2006 Act, seeks authority to enable the
Directors
to allot Units up to an aggregate nominal amount of P183,333.34 (representing 91,666,670 Units, comprising 91,666,670
Ordinary Shares and 1,833,333,400 B Shares) for the purposes of the Placing and otherwise to allot up to an aggregate
nominal amount of P109,000 (representing 54,500,000 Units, comprising 54,500,000 Ordinary Shares and 1,090,000,000 B
Shares) being slightly less than one third of the Enlarged Issued Share Capital otherwise. In aggregate, this represents
approximately 202.0 per cent. of Existing Units at the date of this announcement. The Directors currently have no
specific
plans to allot shares in the Company other than in connection with the Placing.
Resolution 3
Subject to the passing of Resolutions 1 and 2 and such Resolutions becoming unconditional, the third Resolution, which
is
proposed as a special resolution as required by section 570 of the 2006 Act, seeks a new authority to disapply statutory
pre-emption rights in relation to the allotment of equity securities for the purposes of the Placing. If approved, this
Resolution will authorise the Directors to allot equity securities for cash in connection with a rights issue, open
offer
or other pre-emptive offer, or in connection with the Placing to allot up to a maximum aggregate nominal amount of
P183,333.34 (representing 91,666,670 Units) in connection with the Placing, and otherwise to allot equity securities for
cash up to an aggregate nominal amount of P16,403 (representing 8,201,500 Units). This maximum amount of P16,403
represents
approximately 11.33 per cent. of Existing Units and slightly less than 5.0 per cent. of the Enlarged Issued Share
Capital.
The New Units to be allotted under the Placing will be allotted at a price of 30 pence per Unit.
Resolution 4
Subject to the passing of Resolutions 1 to 3 and such Resolutions becoming unconditional, the fourth Resolution, which
is
proposed as an ordinary resolution as required by the Listing Rules, seeks approval for the issue of the New Units on
the
terms set out in the Prospectus for cash at a price of 30 pence per New Unit (which represents a discount of 32.6 per
cent.
to the closing middle market price of the Existing Units on the last dealing day before the announcement of the terms of
the Placing of 44.5 pence). The purpose of this Resolution is to approve the terms of the Placing at the Issue Price,
which
represents a discount of greater than 10 per cent. to the closing middle market price of the Existing Units, such
approval
being required under the Listing Rules.
Resolution 5 (the Whitewash Resolution)
Subject to the passing of Resolutions 1 to 4 and such Resolutions becoming unconditional, the Whitewash Resolution which
is
proposed as an ordinary resolution as required by the Panel, seeks the approval of Independent Shareholders on a poll
(referred to as a "whitewash" under the Code) of a waiver granted by the Panel of any obligation which might otherwise
fall
on the 1997 Concert Party to make a general offer pursuant to rule 9 of the Code as a result of any increase in its
aggregate percentage shareholding in the Company in connection with the implementation of the Placing. Further details
relating to the 1997 Concert Party are set out in paragraph 12 of this announcement.
Resolution 6
Subject to the passing of Resolutions 1 to 5 and such Resolutions becoming unconditional, the sixth Resolution, which is
proposed as an ordinary resolution as required by the Listing Rules, seeks approval for the issue of 19,166,666 New
Units
to Pyrrho pursuant to the Placing. Pyrrho currently holds 10,407,862 Units, representing 14.38 per cent. of the Existing
Units at the date of this announcement, and is treated as a related party under chapter 11 of the Listing Rules. A
resolution to approve the issue of New Units to Pyrrho pursuant to the Placing is therefore required because this is a
related party transaction that requires Shareholder approval for the purposes of chapter 11 of the Listing Rules.
Resolution 7
Subject to the passing of Resolutions 1 to 6 and such Resolutions becoming unconditional, the seventh Resolution, which
is
proposed as an ordinary resolution as required by the Listing Rules, seeks approval for the issue by the Company of
8,900,000 New Units to Richard Balfour-Lynn and/or his associates, pursuant to the Placing. Richard Balfour-Lynn is an
Executive Director and is treated as a related party for the purpose of chapter 11 of the Listing Rules. A resolution to
approve the issue of New Units to Richard Balfour-Lynn pursuant to the Placing is therefore required because this is a
related party transaction that requires Shareholder approval for the purposes of chapter 11 of the Listing Rules.
Resolution 8
Subject to the passing of Resolutions 1 to 7 and such Resolutions becoming unconditional, the eighth LR13.3.2
Resolution,
which is proposed as an ordinary resolution as required by the Listing Rules, seeks LR13.6.1(3) approval for the issue
by
the Company of 6,233,332 New Units to John Harrison and/or his associates, pursuant to the Placing. John Harrison is a
director of certain subsidiaries of MWB, including Liberty, and is treated as a related party for the purpose of chapter
11
of the Listing Rules. A resolution to approve the issue of New Units to John Harrison pursuant to the Placing is
therefore
required because this is a related party transaction that requires Shareholder approval for the purposes of chapter 11
of
the Listing Rules.
Resolution 9
Subject to the passing of Resolutions 1 to 8 and such Resolutions becoming unconditional, the ninth LR13.3.2 Resolution,
which is proposed as an ordinary resolution as required by the Listing Rules, seeks LR13.6.1(3) approval for the issue
by
the Company of 8,000,000 New Units to Joseph Shashou and/or his associates, pursuant to the Placing. Joseph Shashou is a
director of certain subsidiaries of MWB and is treated as a related party for the purpose of chapter 11 of the Listing
Rules. A resolution to approve the issue of New Units to Joseph Shashou pursuant to the Placing is therefore required
because this is a related party transaction for the purposes of chapter 11 of the Listing Rules.
Revised Incentive Scheme Resolution
The Revised Incentive Scheme Resolution is not conditional on the passing of any of the other Resolutions. If the
Revised
Incentive Scheme Resolution is not passed, the existing terms of the 2002 Incentive Scheme will remain in place.
Resolution 10
The tenth and final Resolution is an ordinary resolution, as required by the Listing Rules, to approve the revisions to
the
2002 Incentive Scheme and the establishment of the MWB Group Employee Share Scheme as a sub-fund of the 2009 EBT. This
is
referred to further in paragraph 7 entitled "Incentive arrangements" and details of the proposed principal revised terms
of
the 2002 Incentive Scheme are contained in the Prospectus.
16. Directors' participation in the Placing
The Executive Directors and persons connected with them (including the Trustee of the 2009 EBT) have undertaken to
subscribe as Placees for a total of 18,066,666 Units under the Placing at the Issue Price.
Based on these undertakings, following completion of the Placing, the Directors and persons connected with them
(including
the Trustee of the 2009 EBT) will beneficially own, in aggregate, 29,907,477 Units, representing approximately 18.23 per
cent. of the Enlarged Issued Share Capital.
17. Irrevocable undertakings to vote in favour of the Resolutions
The Directors and persons connected with them have given irrevocable undertakings to the Company to vote in favour of
Resolutions 1 to 4 (inclusive), 6, 8, 9 and 10 to be proposed at the General Meeting (and to procure that such action is
taken by the relevant registered holders) in respect of their beneficial holdings totalling 11,840,811 Units,
representing
16.36 per cent. of the Existing Units at the date of this announcement.
David Marshall, the Independent Director who is also an Independent Shareholder, and the only Director holding Units
eligible to vote in favour of the Whitewash Resolution at the General Meeting, and persons connected with him, have
given
irrevocable undertakings to the Company to vote in favour of the Whitewash Resolution (which is Resolution 5) at the
General Meeting (and to procure that such action is taken by the relevant registered holders) in respect of his
beneficial
holding totalling 2,000,000 Units, representing 2.76 per cent. of the Existing Units at the date of this announcement.
The Directors and persons connected with them (other than Richard Balfour-Lynn and his associates) have given
irrevocable
undertakings to the Company to vote in favour of Resolution 7 to be proposed at the General Meeting (and to procure that
such action is taken by the relevant registered holders) in respect of their beneficial holdings totalling 4,307,156
Units,
representing 5.95 per cent. of the Existing Units at the date of this announcement.
Pyrrho and persons connected with it has given irrevocable undertakings to the Company to vote in favour of the
Resolutions
(other than Resolution 6 as it is interested in its outcome) at the General Meeting (and to procure that such action is
taken by the relevant registered holders) in respect of 10,407,862 Existing Units, representing approximately 14.38 per
cent. of the Existing Units at the date of this announcement.
John Harrison and persons connected with him have given an irrevocable undertaking to the Company to vote in favour of
the
Resolutions (other than Resolutions 5 and 8 as he is interested in their outcome) at the General Meeting (and to procure
that such action is taken by the relevant registered holders) in respect of his beneficial holdings totalling 4,366,999
Units, representing 6.03 per cent. of the Existing Units at the date of this announcement.
Joseph Shashou and persons connected with him have given an irrevocable undertaking to the Company to vote in favour of
the
Resolutions (other than Resolutions 5 and 9 as he is interested in their outcome) at the General Meeting (and to procure
that such action is taken by the relevant registered holders) in respect of his beneficial holdings totalling 6,116,402
Units, representing 8.45 per cent. of the Existing Units at the date of this announcement.
William Broadbent, a member of the 1997 Concert Party, and persons connected with him have given an irrevocable
undertaking
to the Company to vote in favour of the Resolutions (other than Resolutions 5 as he is interested in its outcome) at the
General Meeting (and to procure that such action is taken by the relevant registered holders) in respect of his
beneficial
holdings totalling 483,739 Units, representing 0.67 per cent. of the Existing Units at the date of this announcement.
18. Importance of vote
If the Placing Resolutions are not approved at the General Meeting, or if any of the conditions to the Placing Agreement
are not satisfied or waived, or Admission does not take place, the Company will be unable to complete the Placing and,
consequently, the Loan Stock Proposals will not be implemented. As explained above under the paragraph entitled
"Background
to and reasons for the Placing", the Directors believe there is a material risk that, if the Placing does not proceed,
the
Group will breach one of the gearing covenants in the Loan Stock Trust Deed at the testing date of 30 June 2010. Also,
there is a risk, albeit more remote, that if the Placing does not proceed, the Group may have a funding shortfall by May
2010. The gearing covenant referred to above stipulates that the Group's borrowings must not exceed four times
Shareholders' funds (excluding the consolidated balance sheet value attributable to intangible assets and goodwill). At
the
most recent testing date of 30 June 2009, Group borrowings were 3.2 times Shareholders' funds (excluding the
consolidated
balance sheet value attributable to intangible assets and goodwill), giving headroom of P18.4 million (or 17 per cent.)
in
Shareholders' funds. The gearing covenants contained in the Loan Stock Trust Deed and the Group's banking facilities
have
been impacted by reductions in the Group's property values over the course of the 18 months ended 30 June 2009, with
gross
reductions totalling P89.6 million.
The Directors cannot quantify the extent of any potential breach or funding shortfall under the Group's banking and
borrowing facilities as this would be dependent on the trading performance of the Group over the next 12 months, the
valuations of the Group's property portfolio to be undertaken by Group's property valuers, DTZ, at 31 December 2009 and
30
June 2010 and the level of borrowings at that date.
In the event that the Placing is not completed, the Directors would immediately pursue appropriate remedial courses of
action, such as disposing of assets, seeking alternative sources of financing or renegotiating further the terms of
existing sources of debt finance.
If the Placing is not completed, the Directors would be likely to seek immediately to negotiate amendments to the Loan
Stock Trust Deed and further amendments to the relevant banking facility agreements. The Directors are confident that
such
amendments could be capable of being achieved, but consider that the cost would be materially more expensive to the
Group
in terms of fees and margin compared with the Group's existing arrangements and that any such amendments may also not be
on
terms which are commercially acceptable to the Group. The Directors also expect that this would most likely result in
the
imposition of more onerous obligations on the Group than those that currently apply under the Loan Stock Trust Deed and
the
Group's existing debt facilities, which would be disadvantageous to Shareholders.
In such circumstances, in addition to attempting to secure appropriate revised arrangements with its lenders or under
the
Loan Stock Trust Deed, the Directors would need to consider simultaneously taking immediate alternative steps, such as
disposing of assets or stakes in the Group's businesses. The Directors are reasonably confident that the Group would be
able to implement a sale of assets and that consent of the relevant lender under the Group's loan facilities to any
disposals of encumbered assets would be granted. However, the Directors are not confident that any sale price offered in
the current adverse economic and financial environment would deliver good value to Shareholders.
If the Group were to seek alternative equity financing from other sources, given the current economic and financial
environment, the Directors are not confident that the Group would be able to obtain the necessary proceeds in the
required
time frame on terms that are any more favourable than those of the Placing.
In the event that these remedial actions were unsuccessful and if an event of default occurred under any of the
agreements
with the Group's debt providers as discussed above which could also cause default under the cross-default provisions in
the
Group's other borrowing or banking facilities, the Loan Stock Trustee and/or lending banks, as appropriate, would be
entitled to take steps to enforce their rights which could ultimately result in the commencement of insolvency
proceedings
against the Company or other relevant members of the Group.
Accordingly, the Directors consider that it is very important that Shareholders vote in favour of the Placing
Resolutions
in order that the Placing can proceed.
19. Recommendation
The Board considers that the Proposals and the Resolutions are in the best interests of the Company and the Shareholders
as
a whole and accordingly recommends that Shareholders vote in favour of the Resolutions. The Board, having been so
advised
by Panmure Gordon, considers that the Primary Resolutions are fair and reasonable and in the best interests of the
Company
and the Shareholders as a whole. In providing advice to the Board on the Primary Resolutions, Panmure Gordon has taken
into
account the Directors' commercial assessments.
In addition, the Board, which has been so advised by Panmure Gordon, considers that the Related Party Transactions are
fair
and reasonable and in the best interests of the Company and the Shareholders as a whole. As Richard Balfour-Lynn is a
related party of the Company for the purposes of the Listing Rules, he did not take part in the Board's consideration of
Resolution 7. In providing advice to the Board on the Related Party Transactions, Panmure Gordon has taken into account
the
Directors' commercial assessments of the Related Party Transactions.
The Independent Directors, who have been so advised by Panmure Gordon, consider the proposal to approve the waiver under
rule 9 of the Code and the Whitewash Resolution (which is Resolution 5) to be fair and reasonable and in the best
interests
of the Company and the Independent Shareholders as a whole and accordingly unanimously recommend that Independent
Shareholders vote in favour of the Whitewash Resolution. As the Executive Directors are members of the 1997 Concert
Party,
they did not take part in the Board's consideration of the Whitewash Resolution. In providing advice to the Independent
Directors in respect of the proposed waiver under rule 9 of the Code, Panmure Gordon has taken into account the
Independent
Directors' commercial assessments. The members of the 1997 Concert Party are considered to be interested in the outcome
of
Resolution 5 and accordingly they have undertaken not to vote on this resolution, which will be conducted by means of a
poll of Independent Shareholders.
The Board (other than Richard Balfour-Lynn in the case of Resolution 7) intends to vote in favour of all of the
Resolutions
(other than the Whitewash Resolution for the reason referred to above) at the General Meeting in respect of the
Directors'
own holdings totalling 11,840,811 Units, representing 16.36 per cent. of the Existing Units. David Marshall, the
Independent Director who is also an Independent Shareholder intends to vote in favour of the Whitewash Resolution in
respect of his own holding of 2,000,000 Units, representing 2.76 per cent. of the Existing Units.
Richard Balfour-Lynn, who holds 7,533,655 Units (representing 10.41 per cent. of the Existing Units), will not, and has
undertaken to take all reasonable steps to ensure that his associates (within the meaning set out in the Listing Rules)
will not, participate in the vote in respect of Resolution 7 at the General Meeting.
John Harrison, who holds 4,366,999 Units (representing 6.03 per cent. of the Existing Units), will not, and has
undertaken
to take all reasonable steps to ensure that his associates (within the meaning set out in the Listing Rules) will not,
participate in the vote in respect of Resolution 8 at the General Meeting.
Joseph Shashou, who holds 6,116,402 Units (representing 8.45 per cent. of the Existing Units), will not, and has
undertaken to take all reasonable steps to ensure that his associates (within the meaning set out in the Listing Rules)
will not, participate in the vote in respect of Resolution 9 at the General Meeting.
20. Prospectus and General Meeting
The prospectus containing details of the Placing is expected to be posted to Shareholders shortly. For the purposes of
effecting the Placing Resolutions will be proposed at a General Meeting, which is to be held at the offices of Dechert
LLP,
160 Queen Victoria Street, London, EC4V 4QQ at 11.00 a.m. on 11 January 2010.
Appendix I
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Event Time/date
Announcement and publication of Prospectus 17 December 2009
Latest time and date for receipt of Forms of Proxy for use at the General Meeting 11.00 a.m. on 9 January 2010
General Meeting 11.00 a.m. on 11 January 2010
Loan Stock Meeting 11.30 a.m. on 11 January 2010
Admission and commencement of dealings in the New Units 8.00 a.m. on 12 January 2010
New Units in uncertificated form expected to be credited to accounts in CREST 12 January 2010
Despatch of definitive certificates for the New Units in certificated form by 18 January 2010
Notes to above timetable:
*
References to times in this announcement are to London time.
*
The times and dates set out in the expected timetable of principal events above and mentioned throughout this
announcement
may be adjusted by MWB, in which event details of the new times and dates will be notified to the UK Listing Authority
and
the London Stock Exchange.
Appendix II
DEFINITIONS AND GLOSSARY
The following definitions apply throughout this announcement, unless the context otherwise requires:
"1985 Act" the Companies Act 1 985, as amended from time to time
"1997 Concert Party" R.G. Balfour-Lynn, A.F. Blurton, J. Singh, M.A. Bibring, W. Broadbent,
J.W. Harrison, J.S. Shashou, (and persons associated with any of them) the Trustee of the LTIP and the Trustee of the
2009 EBT, all of whom are deemed by the Panel for the purposes of
the Code to be acting in concert
"2002 Bonus Plan" the MWB Management bonus plan which provides cash based incentives
(payable to MWB Management by MWB under the Services Agreement) to certain employees of MWB Management (other than the
Executive Directors) who were employees of MWB Property in May 2002
and which plan was adopted by MWB Management in May 2002 and which
will terminate with effect from 1 January 2010 (being the date at which the Services Termination Agreement becomes
effective)
"2002 Incentive Scheme" the long term incentive scheme provided to employees, including the
Executive Directors, of MWB Management, approved at an extraordinary general meeting of MWB Property held on 24 May 2002
(as amended and approved by MWB Independent Shareholders at
meetings of MWB Property held on 4 March 2004 and 22 May 2007 and
novated by MWB Property to MWB with effect from completion of the Scheme, with MWB assuming the rights and liabilities
of MWB Property pursuant to such incentive scheme), the rules of which
will be amended, subject to the Revised Incentive Scheme Resolution
being passed and becoming unconditional
"2006 Act" the Companies Act 2006, as amended from time to time
"2008 Financial Statements" the consolidated audited financial statements of MWB for the year
ended 31 December 2008
"2009 EBT" the 2009 MWB Group Employee Benefit Trust, which is intended, subject
to the passing at the Revised Incentive Scheme Resolution, is to be established primarily for the purposes of the
Revised Incentive Scheme and pursuant to which (subject also to the
passing of the Revised Incentive Scheme Resolution) it is intended
that the MWB Group Employee Share Scheme will be created as an employee share scheme of the Group
"2009 Half-Yearly Financial Report" the half-yearly financial report of MWB for the six months ended 30
June 2009 announced on 27 August 2009
"Admission" admission of the New Units (i) to the Official List and (ii) to
trading on the London Stock Exchange's main market for listed securities becoming effective in accordance, respectively,
with LR 3.2.7G of the Listing Rules and paragraph 2.1 of the Admission
and Disclosure Standards
"Admission and Disclosure Standards" the requirements contained in the publication "Admission and
Disclosure Standards" issued by the London Stock Exchange containing, inter alia, the admission requirements to be
observed by companies seeking admission to trading on the London Stock
Exchange's main market for listed securities
"Adopted IFRS" International Financial Reporting Standards as adopted by the EU which
are required to be applied in the consolidated financial statements of listed companies, and which were first so adopted
by MWB Property in the preparation of its financial statements
for the eighteen months ended 31 December 2006
"AIM" the AIM market of the London Stock Exchange
"Articles" the articles of association of the Company, summary details of which
are set out in the Prospectus
"Audit Committee" the audit committee established by the Board
"Audley Investors" Audley Capital Development Limited and Audley Investments Portfolio
Limited, both companies incorporated in the British Virgin Islands
"BoS" the Bank of Scotland (now Bank of Scotland Plc)
"B Shares" the B ordinary shares of 0.01 p each in the capital of the Company
"business centres" or "serviced offices" commercial premises used by occupiers on flexible terms, for periods
of one month to five years with occupiers typically charged for the full service accommodation including but not limited
to information technology, telephony and telecoms infrastructure,
heating, air conditioning, electricity, facilities management and
security systems
"Business Day" any day (excluding Saturdays and Sundays) on which banks are open in
London for normal banking business
"Business Exchange" MWB Business Exchange Plc, of which MWB Group owns an interest of
approximately 71.5 per cent, whose ordinary shares are admitted to trading on AIM, and including, where the context
requires, its wholly owned subsidiaries
"Business Exchange Centres" MWB Business Exchange Centres Limited, a wholly owned subsidiary of
Business Exchange
"Cash Distribution Programme" the programme as approved by MWB Independent Shareholders at an
extraordinary general meeting of MWB Property held on 24 May 2002, as extended on 17 February 2004, 17 April 2007 and 10
April 2008, pursuant to which MWB Property and, following
implementation of the Scheme, MWB, proposes to realise all or
substantially all of its assets in cash or cash equivalents in order to make Gross Cash Returns to Shareholders and
which is to be extended as described in this announcement
"certificated" or "certificated form" evidenced by a physical form of certificate
"Code" the City Code on Takeovers and Mergers
"Combined Code" the UK Combined Code on Corporate Governance
"Companies Acts" the 1985 Act and the 2006 Act, including any orders, regulations or
other subordinate legislation passed under such acts, from time to time in force as they apply to the Company
"Conflicts Committee" the conflicts committee established by the Board
"CREST" the relevant system, as defined in the CREST Regulations, and the
holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST
Regulations)
"CREST Manual" the rules governing the operation of CREST, consisting of the CREST
Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service
Standards, Settlement Discipline Rules, CCSS Operations Manual,
Daily Timetable, CREST Application Procedure and CREST Glossary of
Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended from time
to time
"CREST member" a person who has been admitted to Euroclear as a system-member (as
defined in the CREST Regulations)
"CREST participant" a person who is, in relation to CREST, a system# participant (as
defined in the CREST Regulations)
"CREST Regulations" or "Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as
amended
"CREST sponsor" a CREST participant admitted to CREST as a CREST sponsor
"CREST sponsored member" a CREST member admitted to CREST as a sponsored member
"Daily Official List" the daily record setting out the prices of all trades in shares and
other securities conducted on the London Stock Exchange
"Directors" or the "Board" the current directors of the Company whose names are set out in the
Prospectus
"Disclosure and Transparency Rules" the disclosure and transparency rules of the UK Listing Authority made
in accordance with section 73(A) of FSMA, as amended from time to time
"DTZ" or the "Valuer" DTZ Debenham Tie Leung Limited
"EBITDA" earnings before interest, tax, depreciation and amortisation
"EEA" the European Economic Area
"Enlarged Issued Share Capital" the issued ordinary share capital of the Company immediately following
completion of the Placing
"Equity Attributable to Shareholders" the net assets of the Group attributable to Shareholders, or, prior to
3 April 2008, attributable to shareholders of MWB Property, as disclosed by the consolidated Group financial statements
from time to time
"EU" European Union
"Euroclear" Euroclear UK & Ireland Limited, the operator of CREST
"Excluded Territory" or "Excluded Territories" Australia, Canada, Japan and South Africa
"Executive Directors" any or all of Richard Balfour-Lynn, Andrew Blurton, Jagtar Singh and
Michael Bibring and from the date of Admission Richard Balfour-Lynn, Jagtar Singh and Michael Bibring
"Existing Units" the Units in issue at the date of this announcement
February 2004 Circular" the circular dated 17 February 2004 from MWB Property to, amongst
others, its shareholders at that time relating to proposed amendments to the 2002 Incentive Scheme which were approved
at an extraordinary general meeting of shareholders of MWB Property
held on 4 March 2004
"FSA" the Financial Services Authority of the United Kingdom
"FSMA" the Financial Services and Markets Act 2000, as amended from time to
time
"General Meeting" the general meeting of the Company convened for 11 .00 a.m. on 11
January 2010, including any adjournment thereof
"Gross Cash Returns to Shareholders" the aggregate gross distributions to Shareholders by the Company in
the form of cash or readily realisable assets adjusted by adding back any corporation tax payable by the Company on any
disposals, and including the aggregate gross cash or cash equivalent
paid to shareholders by a third party on a takeover of the Company
"Group" or "MWB Group" before 3 April 2008, MWB Property and its subsidiaries, and from that
date onwards, the Company and its subsidiaries including MWB Property
"HMRC" Her Majesty's Revenue and Customs and, where relevant, any predecessor
body which carried out part of its functions and references to any approval by HMRC shall, where appropriate, include
approval by an officer of Her Majesty's Revenue and Customs
"Hotel du Vin" Hotel du Vin Limited and its subsidiaries, a wholly owned subsidiary
of Malmaison and forming part of the Malmaison operating business of the Group since October 2004
"IAS" International Accounting Standards
"IASB" International Accounting Standards Board
"Independent Directors" Eric Sanderson, Robert Burrow and David Marshall
"Independent Shareholders" Shareholders other than members of the 1 997 Concert Party
"Interested Directors"
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