TIDMKWE
RNS Number : 8784H
Kennedy-Wilson Holdings, Inc.
13 June 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO THE NEW KW SHARES EXCEPT ON THE
BASIS OF INFORMATION IN THE SCHEME DOCUMENT AND THE PROSPECTUS
WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
13 June 2017
RECOMMED MERGEr OF
KENNEDY WILSON EUROPE REAL ESTATE PLC
and
KENNEDY-WILSON HOLDINGS, INC.
NEW RECOMMED OFFER, ADDITIONAL SHAREHOLDER SUPPORT, PROSPECTUS
AND UPDATE ABOUT TIMING OF THE MERGER
Introduction
On 24 April 2017, Kennedy-Wilson Holdings, Inc. ("KW") and the
Independent Committee of Kennedy Wilson Europe Real Estate plc
("KWE") published an announcement (the "Rule 2.7 Announcement")
relating to a proposed recommended all-share merger of KW and KWE
(the "Merger"), which is to be implemented by means of a
Court-sanctioned scheme of arrangement of KWE under Article 125 of
the Jersey Companies Law (the "Original Offer"). Unless otherwise
defined in this announcement, capitalised terms used but not
defined in this announcement have the same meanings given to them
in the Rule 2.7 Announcement. Except as otherwise stated in this
announcement, all of the terms and conditions of the Merger, set
out in the Rule 2.7 Announcement, remain as announced on 24 April
2017.
New Offer
The KW Board and the Independent Committee of KWE are pleased to
announce that KW has agreed to make available a new alternative
proposal (the "New Offer"), which will be available alongside the
Original Offer. As set out in the Rule 2.7 Announcement, it was
originally intended under the Original Offer that each KWE Scheme
Shareholder would receive 0.667 New KW Shares for each KWE Scheme
Share, with no cash being payable. Under the New Offer, a partial
cash entitlement has been introduced and the exchange ratio has
been amended. Accordingly, each KWE Scheme Shareholder will now
have the option of electing to receive either:
under the Original Offer, 0.667 New KW Shares
for each KWE Scheme Share:
OR
under the New Offer, for 0.3854 New KW Shares (the
each KWE Scheme Share: "New KW Share Component");
300 pence in cash, paid
by KW (the "KW Cash Component");
and
250 pence in cash, paid
by KWE by means of a special
dividend (the "KWE Special
Distribution").
The KWE Special Distribution will be payable shortly after the
Effective Date to those KWE Shareholders who become entitled, in
respect of any KWE Share, to the consideration available under the
New Offer and who are on KWE's register of members at the Scheme
Record Time. The KWE Special Distribution will be paid in addition
to the other dividends contemplated in the Rule 2.7 Announcement
(including the Closing Dividend). KWE Scheme Shareholders who elect
to receive the Original Offer will not be entitled to receive the
New KW Share Component, the KW Cash Component or the KWE Special
Distribution. However, the dividend arrangements described in the
Rule 2.7 Announcement will continue to apply.
Based on the Closing Price of US$19.55 per KW Share on 12 June
2017 (being the Business Day immediately prior to the publication
of this announcement) (the "Latest Practicable Date") and a GBP /
US$ exchange rate of 1.2656, the New Offer values each KWE Share at
approximately 1,145 pence. Based on the Closing Price of US$19.55
per KW Share on the Latest Practicable Date and a GBP / US$
exchange rate of 1.2656, the Original Offer values each KWE Share
at approximately 1,030 pence.
If all KWE Scheme Shareholders elected to receive the New Offer,
KWE Shareholders (other than KW and its affiliates) would own
approximately 24% of the Combined Group and KW Shareholders would
own approximately 76% of the Combined Group following completion of
the Merger.
Additional shareholder support
KW has received additional irrevocable undertakings (the
"Additional Irrevocable Undertakings") from Quantum Strategic
Partners Ltd. and Franklin Templeton Institutional, LLC (in its
capacity as investment manager on behalf of certain funds and
accounts managed by it) to vote in favour of the Scheme at the
Scheme Court Meeting and the resolutions relating to the Merger at
the KWE General Meeting (or, in the event that the Merger is
implemented by way of a Takeover Offer, accept the Offer) in
respect of their entire holdings, representing, in aggregate,
approximately 21.8% of KWE's existing ordinary share capital as at
the Latest Practicable Date (or approximately 28.6% of the KWE
Shares entitled to a vote at the Scheme Court Meeting and KWE
General Meeting, as at the Latest Practicable Date).
KW has also received a letter of intent (the "Letter of Intent")
from the Värde Shareholders (as defined in Appendix 2), confirming
their intention to vote in favour of the Scheme at the Scheme Court
Meeting and the resolutions relating to the Merger at the KWE
General Meeting (or, in the event that the Merger is implemented by
way of a Takeover Offer, accept the Offer) in respect of their
entire holdings, representing, in aggregate, approximately 5.6% of
KWE's existing ordinary share capital as at the Latest Practicable
Date (or approximately 7.3% of the KWE Shares entitled to a vote at
the Scheme Court Meeting and KWE General Meeting, as at the Latest
Practicable Date).
Support from KWE Shareholders to vote in favour of the Scheme at
the Scheme Court Meeting and the resolutions relating to the Merger
at the KWE General Meeting (or, in the event that the Merger is
implemented by way of a Takeover Offer, accept the Offer) has been
received in respect of approximately 36.0% of the KWE Shares
entitled to a vote at the Scheme Court Meeting and KWE General
Meeting, as at the Latest Practicable Date.
Further details of the Additional Irrevocable Undertakings and
the Letter of Intent are set out in Appendix 2 to this announcement
and the full text of the Additional Irrevocable Undertakings and
the Letter of Intent can be found online at
http://ir.kennedywilson.com/kw-kwe-transaction.
In addition, Fairfax Financial Holdings Limited and Elkhorn
Partners LP have indicated to KW that they intend to vote in favour
of the KW Shareholder Resolution at the KW Special Meeting in
respect of their entire holdings, representing, in aggregate,
approximately 14.3% of KW's outstanding shares of common stock as
at the Latest Practicable Date.
The KW Directors, as well as Mary Ricks, Matt Windisch, In Ku
Lee and Justin Enbody (being all of the executive officers of KW
who hold KW Shares), also intend to vote in favour of the KW
Shareholder Resolution at the KW Special Meeting in respect of
their entire holdings, representing, in aggregate, approximately
17.1% of KW's outstanding shares of common stock as at the Latest
Practicable Date.
Support from KW Shareholders to vote in favour of the KW
Shareholder Resolution at the KW Special Meeting has been received
in respect of approximately 31.4% of KW's outstanding shares of
common stock as at the Latest Practicable Date.
Recommendation
The Independent Committee of KWE, which has been so advised by
Rothschild and J.P. Morgan Cazenove as to the financial terms of
the New Offer, considers the terms of the New Offer to be fair and
reasonable. In providing their advice to the Independent Committee
of KWE, Rothschild and J.P. Morgan Cazenove have taken into account
the commercial assessments of the Independent Committee of KWE.
Accordingly, the members of the Independent Committee of KWE
intend unanimously to recommend that KWE Shareholders vote in
favour of the New Offer at the Scheme Court Meeting and the
resolutions relating to the New Offer at the KWE General Meeting
(or, in the event that the New Offer is implemented by way of a
Takeover Offer, to recommend KWE Shareholders to accept such
Offer).
For the avoidance of doubt, neither the Independent Committee of
KWE nor Rothschild nor J.P. Morgan Cazenove express any view as to
the advantages or disadvantages of the Merger as far as KW
Shareholders are concerned.
Mix and match facility
KW will provide a mix and match facility under which KWE Scheme
Shareholders (other than certain Overseas Shareholders) who elect
to receive the New Offer may, subject to off-setting elections made
by other KWE Scheme Shareholders who elect to receive the New
Offer, elect to vary the proportion in which they receive the New
KW Share Component and the KW Cash Component available under the
New Offer (but not the KWE Special Distribution) (the "Mix and
Match Facility"). The Mix and Match Facility will not change the
total number of New KW Shares to be issued under the New Offer or
the maximum amount of the KW Cash Component payable by KW under the
New Offer.
Elections made by KWE Scheme Shareholders under the Mix and
Match Facility will be satisfied only to the extent that other KWE
Scheme Shareholders make off-setting elections. To the extent that
elections cannot be satisfied in full, they will be scaled down on
a pro rata basis. As a result, KWE Scheme Shareholders who make an
election under the Mix and Match Facility will not know the exact
number of New KW Shares or the amount of the KW Cash Component they
will receive until settlement of the consideration due to them,
although an announcement will be made of the approximate extent to
which elections under the Mix and Match Facility will be
satisfied.
The Mix and Match Facility will not affect the entitlement of
any KWE Scheme Shareholder who does not make an election under the
Mix and Match Facility or who elects to receive the Original Offer.
Any such KWE Scheme Shareholder will receive, for each KWE Scheme
Share it holds, either the consideration available under the New
Offer without alteration or, as applicable, the consideration
available under the Original Offer.
Further details of the Mix and Match Facility (including the
action to take in order to make a valid election, the deadline for
making elections, and the basis on which entitlement to receive
cash may be exchanged for an entitlement to additional new KW
Shares (or vice versa)) will be included in the Scheme
Document.
The Mix and Match Facility is conditional upon the Merger
becoming effective.
Prospectus and Jersey regulatory condition
KW will be required to publish a prospectus in the UK in respect
of the New KW Shares to be issued to KWE Scheme Shareholders in
connection with the New Offer (the "Prospectus"). It is expected
that the Prospectus will be published at or around the same time as
the Scheme Document is posted to KWE Shareholders.
As a result of the requirement to publish the Prospectus, in
addition to the Conditions set out in Part A of Appendix 1 to the
Rule 2.7 Announcement and the further terms and conditions set out
in Part B of Appendix 1 to the Rule 2.7 Announcement, the New Offer
is also conditional upon (a) (i) the Prospectus being approved by
the UK Listing Authority and (ii) the Prospectus being made
available to the public in accordance with the prospectus rules
made by the Financial Conduct Authority under section 73A of the
Financial Services and Markets Act 2000 relating to the offer of
securities to the public and admission of securities to trading on
a regulated market (the "Prospectus Condition") and (b) to the
extent required, the Jersey Financial Services Commission having
consented to the circulation in Jersey of the offer of the New KW
Shares pursuant to Article 8(2) of the Control of Borrowing
(Jersey) Order 1958 as amended (the "COBO Condition").
If the Prospectus Condition and, to the extent required, the
COBO Condition is not satisfied within the period permitted by the
Panel, only the consideration available under the Original Offer
will be available to KWE Shareholders.
Timing update
The Scheme Document will contain further information about the
Merger and the Scheme and notices of the Scheme Court Meeting and
KWE General Meeting, and will specify the action to be taken by KWE
Scheme Shareholders. It is expected that the Scheme Document will
now be despatched to KWE Shareholders, together with the Forms of
Proxy, on or before 16 October 2017.
It is expected that the US Proxy Statement, containing details
of the Merger and notice of the KW Special Meeting, will be posted
to KW Shareholders at or around the same time as the Scheme
Document is posted to KWE Shareholders, with the KW Special Meeting
being held at or around the same time as the KWE Meetings.
It is expected that the Prospectus, containing details of the
New KW Shares, will be published at or around the same time as the
Scheme Document is posted to KWE Shareholders.
KW and KWE now expect that the Scheme will become effective in
the fourth quarter of 2017.
Financing
The aggregate value of the KW Cash Component of approximately
GBP288 million payable by KW under the New Offer will be funded
from cash resources of KW.
In accordance with Rule 2.7(d) of the Code, Goldman Sachs, as
lead financial adviser to KW, is satisfied that sufficient
resources are available to KW to satisfy in full the cash
consideration payable by KW pursuant to the New Offer.
Documents published on a website
Copies of the following documents will, by no later than 12 noon
(London time) on 14 June 2017, be published on KW's website at
ir.kennedywilson.com and KWE's website at www.kennedywilson.eu
until the completion of the Merger:
-- this announcement;
-- the Additional Irrevocable Undertakings; and
-- the Letter of Intent.
Appendix 1 to this announcement contains the sources of
information and bases of calculations of certain information
contained in this announcement. This announcement should be read in
conjunction with the full text of the Rule 2.7 Announcement
(including the appendices set out therein). Appendix 2 to this
announcement contains details of the Additional Irrevocable
Undertakings and the Letter of Intent. Each of the Original Offer
and the New Offer is subject to, among other things, the
satisfaction or waiver of the Conditions set out in Part A of
Appendix 1 to the Rule 2.7 Announcement and, as regards the New
Offer, the Prospectus Condition and, to the extent required, the
COBO Condition. Each of the Original Offer and the New Offer is
also subject to the further terms and conditions set out in Part B
of Appendix 1 to the Rule 2.7 Announcement and the further terms to
be set out in the Scheme Document.
Enquiries
Kennedy-Wilson Holdings, Inc.
Matt Windisch +1 310 887 6400
Goldman Sachs (lead financial adviser to KW)
Mark Sorrell +44 (0) 20 7774 1000
Chris Emmerson +44 (0) 20 7774 1000
David Friedland +1 212 902 0300
Keith Wetzel +1 310 407 5700
BofA Merrill Lynch (financial adviser to KW)
Geoff Iles +44 (0) 20 7628 1000
Kieran Millar +44 (0) 20 7628 1000
Jeff Horowitz +1 646 855 3213
Cavan Yang +1 646 855 4157
Deutsche Bank (financial adviser to KW)
Drew Goldman +1 212 250 2500
Rishi Bhuchar +44 (0) 20 7545 8000
Brian Mendell +1 212 250 2500
Nancy Davey +1 212 250 2500
Joele Frank, Wilkinson Brimmer Katcher (public relations adviser
to KW)
Meaghan Repko +1 212 355 4449
Matt Gross +1 212 355 4449
Kennedy Wilson Europe Real Estate plc
Charlotte Valeur +44 (0) 1534 835 722
Rothschild (lead financial adviser to the Independent Committee
of KWE)
Alex Midgen +44 (0) 20 7280 5000
Sam Green +44 (0) 20 7280 5000
J.P. Morgan Cazenove (financial adviser to the Independent
Committee of KWE)
Dwayne Lysaght +44 (0) 20 7742 6000
Bronson Albery +44 (0) 20 7742 6000
Kirshlen Moodley +44 (0) 20 7742 6000
Tara Morrison +44 (0) 20 7742 6000
FTI Consulting (public relations adviser to KWE)
Dido Laurimore +44 (0) 203 727 1000
Richard Sunderland +44 (0) 203 727 1000
Further information
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, an offer,
invitation or the solicitation of an offer or invitation to
purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Merger or otherwise,
nor shall there be any sale, issuance or transfer of securities of
KW or KWE in any jurisdiction in contravention of applicable law.
The Merger will be implemented solely by means of the Scheme
Document and the accompanying Forms of Proxy (or, in the event that
the Merger is to be implemented by means of a Takeover Offer, the
Takeover Offer document), which will contain the full terms and
conditions of the Merger, including details of how to vote in
respect of the Merger.
KW will prepare the US Proxy Statement to be distributed to KW
Shareholders, containing details of the Merger, notice of the KW
Special Meeting and information on the New KW Shares. KW will also
publish the Prospectus, containing details of the New KW Shares. KW
urges KWE Shareholders to read the Scheme Document and the
Prospectus carefully when they become available, because they will
contain important information in relation to the Merger and the New
KW Shares. KW urges KW Shareholders to read the US Proxy Statement
carefully when it becomes available.
Any vote in respect of resolutions to be proposed at the KWE
Meetings or the KW Special Meeting to approve the Merger, the
Scheme or related matters should be made only on the basis of the
information contained in the Scheme Document, the Prospectus and,
in the case of KW Shareholders, the US Proxy Statement.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the FCA and the
Prudential Regulation Authority in the UK, and Goldman Sachs &
Co. LLC (in their capacity as financial advisors to KW) (together,
"Goldman Sachs") are acting exclusively for KW and no one else in
connection with the Merger or any other matter referred to in this
announcement and will not be responsible to anyone other than KW
for providing the protections afforded to clients of Goldman Sachs,
or for providing advice in relation to the Merger or any other
matters referred to in this announcement.
Merrill Lynch International, which is authorised by the
Prudential Regulation Authority and regulated by the FCA and the
Prudential Regulation Authority in the UK, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated (together with Merrill
Lynch International, "BofA Merrill Lynch") are acting exclusively
for KW and no one else in connection with the Merger or any other
matter referred to in this announcement and will not be responsible
to anyone other than KW for providing the protections afforded to
clients of BofA Merrill Lynch, or for providing advice in relation
to the Merger or any other matters referred to in this
announcement.
Deutsche Bank AG is authorised under German Banking Law
(competent authority: European Central Bank) and, in the UK, by the
Prudential Regulation Authority. It is subject to supervision by
the European Central Bank and by BaFin, Germany's Federal Financial
Supervisory Authority, and is subject to limited regulation in the
UK by the Prudential Regulation Authority and Financial Conduct
Authority. Details about the extent of its authorisation and
regulation by the Prudential Regulation Authority, and regulation
by the Financial Conduct Authority, are available on request or
from www.db.com/en/content/eu_disclosures.htm.
Deutsche Bank AG, acting through its London branch ("DB
London"), and Deutsche Bank Securities Inc. ("DBSI" and, together
with DB London, "DB") are acting as financial advisers to KW and no
other person in connection with this announcement and its contents.
DB will not be responsible to any person other than KW for
providing any of the protections afforded to clients of DB, nor for
providing any advice, in relation to any matter referred to herein.
Without limiting a person's liability for fraud, neither DB nor any
of their affiliates nor any of their or their affiliates'
respective directors, officers, representatives, employees,
advisers or agents shall have any liability to any other person in
connection with this announcement and its contents.
Rothschild, which is authorised and regulated by the FCA in the
UK, is acting exclusively for the Independent Committee of KWE and
no one else in connection with the Merger and any other matter
referred to in this announcement and will not be responsible to
anyone other than the Independent Committee of KWE for providing
the protections afforded to clients of Rothschild, or for providing
advice in relation to the Merger or any other matters referred to
in this announcement.
J.P. Morgan Limited (which conducts its UK investment banking
business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove")), which
is authorised and regulated in the UK by the FCA, is acting
exclusively for the Independent Committee of KWE and no one else in
connection with the Merger or any other matter referred to in this
announcement and will not be responsible to anyone other than the
Independent Committee of KWE for providing the protections afforded
to clients of J.P. Morgan Cazenove, or for providing advice in
relation to the Merger or any other matters referred to in this
announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement in
or into jurisdictions other than the UK, Jersey or the United
States may be restricted by law and therefore any persons who are
subject to the law of any jurisdiction other than the UK, Jersey or
the United States should inform themselves about, and observe, any
applicable legal or regulatory requirements. In particular the
ability of persons who are not resident in the UK, Jersey or the
United States to vote their KWE Shares with respect to the Scheme
at the Scheme Court Meeting, or to appoint another person as proxy
to vote at the Scheme Court Meeting on their behalf, may be
affected by the laws of the relevant jurisdictions in which they
are located. Any failure to comply with the applicable restrictions
may constitute a violation of the securities laws of any such
jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Merger disclaim any
responsibility or liability for the violation of such restrictions
by any person. This announcement has been prepared for the purpose
of complying with Jersey law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside of England and Wales and Jersey.
Unless otherwise determined by KW or required by the Code, and
permitted by applicable law and regulation, the Merger will not be
made available directly or indirectly in, into or from a Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Merger by use
of mail or any other means or instrumentality (including, without
limitation, facsimile, email or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction.
Copies of this announcement and any formal documentation
relating to the Merger will not be and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from any Restricted Jurisdiction or any jurisdiction where
to do so would violate the laws of that jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in, into or from any Restricted Jurisdiction. Doing so may
render invalid any related purported vote in respect of the Merger.
If the Merger is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law or regulation), the Offer may
not be made, directly or indirectly, in or into or by use of mail
or any other means or instrumentality (including, without
limitation, facsimile, email or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or any
facility of a national, state or other securities exchange of, any
Restricted Jurisdiction and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or
from within any Restricted Jurisdiction.
The availability of New KW Shares pursuant to the Merger to KWE
Shareholders who are not resident in the UK, Jersey or the United
States or the ability of those persons to hold such shares may be
affected by the laws or regulatory requirements of the relevant
jurisdictions in which they are resident. Persons who are not
resident in the UK, Jersey or the United States should inform
themselves of, and observe, any applicable legal or regulatory
requirements.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document and the Prospectus.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
No profit forecast
Unless expressly stated otherwise, no statement in this
announcement is intended as a profit forecast or profit estimate
for any period.
Additional information and where to find it
The Merger relates to the shares of a Jersey company and is
being made by means of a scheme of arrangement provided for under
Jersey law. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules under the US
Exchange Act and is exempt from the registration requirements under
the US Securities Act. Accordingly, the Merger will be subject to
disclosure requirements and practices applicable in the UK and
Jersey to schemes of arrangement, which are different from the
disclosure and other requirements of the US tender offer and
securities laws.
It may be difficult for US holders of KWE Shares to enforce
their rights and any claims they may have arising under US federal
securities laws in connection with the Merger, since KWE is
organised under the laws of a country other than the US, and some
or all of its officers and directors may be residents of countries
other than the US and most of the assets of KWE are located outside
of the US. US holders of KWE Shares may not be able to sue a non-US
company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to
compel a non-US company and its affiliates to subject themselves to
a US court's jurisdiction or judgment.
The Merger may, in the circumstances provided for in the Rule
2.7 Announcement, instead be carried out by way of a Takeover Offer
under Jersey law. If KW exercises its right to implement the Merger
by way of a Takeover Offer, such Offer will be made in compliance
with applicable US tender offer and securities laws and
regulations, including the exemptions therefrom.
In accordance with normal UK practice, KW or its nominees, or
its brokers (acting as agents), may from time to time make certain
purchases of, or arrangements to purchase, KWE Shares outside of
the US, other than pursuant to the Merger, until the date on which
the Merger becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing
prices or in private transactions at negotiated prices. Any
information about such purchases will be disclosed, as required in
the UK, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website at
www.londonstockexchange.com.
This announcement may be deemed to be solicitation material in
respect of the proposed acquisition of KWE by KW, including the
issuance of the New KW Shares in respect of the Merger. In
connection with the foregoing proposed issuance of New KW Shares,
KW expects to file a proxy statement on Schedule 14A with the SEC.
To the extent KW effects the acquisition of KWE as a scheme of
arrangement under Jersey law, the issuance of the New KW Shares in
the Merger would not be expected to require registration under the
US Securities Act, pursuant to an exemption provided by Section
3(a)(10) of the US Securities Act. In the event that KW determines
to effect the Merger pursuant to an Offer or otherwise in a manner
that is not exempt from the registration requirements of the US
Securities Act, it will file a registration statement with the SEC
containing a prospectus with respect to the New KW Shares that
would be issued in the Merger. INVESTORS AND SECURITY HOLDERS OF KW
ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMMENTS OR
SUPPLEMENTS THERETO) AND
ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE MERGER THAT
KW WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT KW, THE PROPOSED ISSUANCE
OF THE NEW KW SHARES AND THE MERGER. The preliminary proxy
statement, the definitive proxy statement, in each case as
applicable, and other relevant materials in connection with the
proposed issuance of the New KW Shares and the Merger (when they
become available), and, if required, the registration
statement/prospectus and other documents filed by KW with the SEC,
may be obtained free of charge at the SEC's website at www.sec.gov.
In addition, investors and security holders may obtain free copies
of the documents filed with the SEC at KW's website,
ir.kennedywilson.com, or by contacting KW's Investor Relations
department in writing at 151 S. El Camino Drive, Beverly Hills, CA
90212, United States of America.
KW believes that KW, KWE, their respective directors and certain
KW executive officers may be deemed to be participants in the
solicitation of proxies from KW Shareholders with respect to the
Merger, including the proposed issuance of New KW Shares.
Information about KW's directors and executive officers and their
ownership of KW Shares and KWE Shares or securities referencing KWE
Shares is set out in KW's Annual Report on Form 10-K for the fiscal
year ended 31 December 2016, which was filed with the SEC on 27
February 2017, KW's proxy statement for its 2017 Annual Meeting of
Stockholders, which was filed with the SEC on 28 April 2017, and
KWE's Annual Report for the year ended 31 December 2016, which was
filed with the SEC by KW on Form 8-K on 23 March 2017. Information
about the directors of KWE is set out in KWE's Annual Report for
the year ended 31 December 2016, which was filed with the SEC by KW
on Form 8-K on 23 March 2017. Information regarding the identity of
the potential participants, and their direct or indirect interests
in the solicitation, by security holdings or otherwise, will be set
out in the proxy statement and other materials to be filed with the
SEC in connection with the Merger and issuance of New KW
Shares.
For the avoidance of doubt, neither the Independent Committee of
KWE nor Rothschild nor J.P. Morgan Cazenove express any view as to
the advantages or disadvantages of the Merger as far as KW
Shareholders are concerned.
Forward-looking statements
This announcement, oral statements made regarding the Merger,
and other information published by KW and KWE contain statements
which are, or may be deemed to be, "forward-looking statements"
with respect to the financial condition, results of operations and
businesses of KWE and KW and the KWE Group and the KW Group, and
certain plans and objectives of KWE and KW with respect to the
Combined Group. All statements other than statements of historical
fact are forward-looking statements. Forward-looking statements are
prospective in nature and are not based on historical facts, but
rather on current expectations and projections of the management of
KW and KWE about future events, and are therefore subject to risks
and uncertainties which could cause actual results to differ
materially from the future results expressed or implied by the
forward-looking statements. The forward-looking statements
contained in this announcement include statements relating to the
expected effects of the Merger on KW and KWE, the expected timing
and scope of the Merger and other statements other than historical
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans",
"expects", "does not expect", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "does not anticipate", "believes", or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "should", "would", "might" or "will" be
taken, occur or be achieved. Although KW and KWE believe that the
expectations reflected in such forward-looking statements are
reasonable, KW and KWE can give no assurance that such expectations
will prove to be correct. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied
by such forward-looking statements. These factors include the
satisfaction of the Conditions, as well as additional factors, such
as: risks relating to the KW Group's and the KWE Group's credit
rating; local and global political and economic conditions,
including Brexit; the KW Group's and the KWE Group's economic model
and liquidity risks; financial services risk; the risks associated
with KW's and KWE's brand, reputation and trust; environmental
risks; safety, technology, data security and data privacy risks;
the ability to realise the anticipated benefits and synergies of
the Merger, including as a result of a delay in completing the
Merger or difficulty in integrating the businesses of the companies
involved; legal or regulatory developments and changes; the outcome
of any litigation; the impact of any acquisitions or similar
transactions; competition and market risks; the impact of foreign
exchange rates; pricing pressures; and business continuity and
crisis management. Other unknown or unpredictable factors could
cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should
therefore be construed in the light of such factors. Neither KW nor
KWE, nor any of their respective associates, directors, officers or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur. You are cautioned not to place undue reliance on these
forward-looking statements. Each forward-looking statement speaks
only as of the date of this announcement. None of KWE, the KWE
Group, KW or the KW Group undertakes any obligation publicly to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Publication on website and availability of hard copies
A copy of this announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, on KW's website at ir.kennedywilson.com and KWE's
website at www.kennedywilson.eu by no later than 12 noon (London
time) on 14 June 2017. For the avoidance of doubt, the contents of
that website are not incorporated into and do not form part of this
announcement.
KW Shareholders may request a hard copy of this announcement,
and any future documents, announcements and information, by
contacting Goldman Sachs International during business hours on +44
(0) 20 7774 1000 or by submitting a request in writing to Chris
Emmerson at Goldman Sachs International, Peterborough Court, 133
Fleet Street, London EC4A 2BB, United Kingdom.
KWE Shareholders may request a hard copy of this announcement,
and any future documents, announcements and information, by
contacting the Corporate Services team at Crestbridge during
business hours on +44 (0) 1534 835600 or by submitting a request in
writing to the Corporate Services Team, Crestbridge, 47 Esplanade,
St Helier, Jersey JE1 0BD.
If you have received this announcement in electronic form,
copies of this announcement and any document or information
incorporated by reference into this document will not be provided
unless such a request is made.
If you are in any doubt about the contents of this announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the UK or, if not,
from another appropriately authorised independent financial
adviser.
APPIX 1
SOURCES OF INFORMATION AND BASES OF CALCULATION
1 Unless otherwise stated, all figures and percentages in this
announcement have been calculated on the assumption that all KWE
Scheme Shareholders elect to receive the consideration available
under the New Offer.
2 The implied value of the Original Offer is calculated:
2.1 by reference to the Closing Price of US$19.55 per KW Share
on the Latest Practicable Date;
2.2 on the basis of an exchange rate of 1.2656 US Dollars per
Pound Sterling, taken from Bloomberg as at 5:00 p.m. on the Latest
Practicable Date;
2.3 on the basis of the exchange ratio of 0.6670 New KW Shares
in exchange for each KWE Scheme Share held; and
2.4 on the basis of the existing number of KWE Shares in issue
referred to in paragraph 4 below.
3 The implied value of the New Offer is calculated:
3.1 by reference to the Closing Price of US$19.55 per KW Share
on the Latest Practicable Date;
3.2 on the basis of an exchange rate of 1.2656 US Dollars per
Pound Sterling, taken from Bloomberg as at 5:00 p.m. on the Latest
Practicable Date;
3.3 on the basis of the exchange ratio of 0.3854 New KW Shares
in exchange for each KWE Scheme Share held; and
3.4 on the basis of the existing number of KWE Shares in issue
referred to in paragraph 4 below.
4 As at the Latest Practicable Date, KWE had 126,133,407 KWE
Shares in issue and KW had 114,237,750 KW Shares in issue.
5 As at the Latest Practicable Date, KW and its subsidiaries
held 30,015,924 KWE Shares.
6 As at the Latest Practicable Date, KWE had no dilutive options
or awards outstanding over KWE Shares. KW has granted RSUs to
certain KW Directors and certain of its employees, which convert
into KWE Shares on a one-for-one basis on vesting. As at the Latest
Practicable Date, there were 533,549 unvested RSUs.
7 The share capital of the Combined Group (being 151,281,428 KW
Shares) has been calculated as the sum of:
7.1 a total number of 114,237,750 KW Shares in issue as referred
to in paragraph 4 above; and
7.2 37,043,678 KW Shares which would be issued pursuant to the
terms of the New Offer (being the number of KWE Shares as referred
to in paragraph 4 above, less the number of KWE Shares held by KW
and its subsidiaries as referred to in paragraph 5 above,
multiplied by the exchange ratio of 0.3854 as referred to in
paragraph 3.3 above).
8 The percentage of the share capital of the Combined Group that
will be owned by KWE Shareholders following the Merger (being
approximately 24%) is calculated by dividing the number of KW
Shares to be issued pursuant to the New Offer referred to in
paragraph 7.2 above by the issued share capital of the Combined
Group (as set out in paragraph 7 above) and multiplying the
resulting sum by 100 to produce a percentage.
9 Unless otherwise stated, all prices quoted for KWE Shares have
been derived from the Daily Official List and represent closing
middle market prices on the relevant date.
10 Unless otherwise stated, all prices quoted for KW Shares have
been derived from the NYSE and represent closing middle market
prices on the relevant date.
11 For the purposes of the financial comparisons contained in
this Announcement, no account has been taken of any liability to
taxation or the treatment of fractions under the Merger.
12 Certain figures included in this Announcement have been
subject to rounding adjustments.
APPENDIX 2
ADDITIONAL IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT
Additional Irrevocable Undertakings
The following KWE Shareholders have given irrevocable
undertakings to vote in favour of the Scheme at the Scheme Court
Meeting and the resolutions to be proposed at the KWE General
Meeting in relation to the following KWE Shares currently held by
them, as well as any further KWE Shares they may acquire:
Name Number of KWE Percentage of
Shares issued ordinary
share capital
of KWE (%)
Quantum Strategic
Partners Ltd. 15,981,750 12.7
Franklin Templeton
Institutional,
LLC 11,534,900 9.1
Total 27,516,650 21.8
The obligations of Quantum Strategic Partners Ltd. under its
irrevocable undertaking will lapse and cease to have effect if:
-- this announcement is not released by midday Eastern Time on
13 June 2017, or such later time and/or date as KW and KWE may
agree;
-- the Scheme Document has not been posted within the period permitted by the Panel;
-- at any time before the date of the Scheme Court Meeting, a
third party announces its intention to make an offer for KWE or
substantially all of its business and assets which, in Quantum
Strategic Partners Ltd.'s reasonable opinion, represents an
improvement on the New Offer;
-- KW's offer to implement the Merger by means of a Scheme
lapses or is withdrawn (provided that KW has not announced, within
10 business days of the Scheme having so lapsed or been withdrawn,
that it intends to implement the Merger by way of a Takeover
Offer); or
-- the Scheme has not become effective by the earlier of (i)
midday Eastern Time on 31 October 2017 and (ii) any date specified
in the Scheme Document as being the latest date by which the Scheme
must have become effective.
Pursuant to the irrevocable undertaking, Quantum Strategic
Partners Ltd. has also agreed to refrain from certain actions,
including (a) disposing of any KWE Shares currently held by it or
any further KWE Shares it may acquire (subject to certain
exceptions), (b) acquiring any KWE Shares, (c) selling any KWE
Shares short or entering into any short derivative position
referenced to them or (d) soliciting, directly or indirectly, or
initiating discussions with a third party in connection with a
competing offer for KWE.
The obligations of Franklin Templeton Institutional, LLC under
its irrevocable undertaking will lapse and cease to have effect
if:
-- this announcement is not released by 5.00 pm on 13 June 2017,
or such later time and/or date as KW and KWE may agree;
-- the Scheme Document has not been posted within the period permitted by the Panel;
-- at any time before the date of the Scheme Court Meeting, a
third party announces its intention to make an offer for KWE which
is governed by the Code which, in Franklin Templeton Institutional,
LLC's reasonable opinion, represents an improvement on the New
Offer; or
-- KW's offer to implement the Merger by means of a Scheme
lapses or is withdrawn (provided that KW has not announced that it
intends to implement the Merger by way of a Takeover Offer).
Pursuant to the irrevocable undertaking, Franklin Templeton
Institutional, LLC has also agreed to refrain from certain actions,
including (a) disposing of any KWE Shares currently held by it or
any further KWE Shares it may acquire, (b) acquiring any KWE
Shares, (c) selling any KWE Shares short or entering into any short
derivative position referenced to them or (d) soliciting, directly
or indirectly, or initiating discussions with a third party in
connection with a competing offer for KWE. However, Franklin
Templeton Institutional, LLC will be permitted to sell KWE Shares
if it is instructed to do so by clients on whose account it holds
those KWE Shares.
Letter of Intent
The Värde Fund X (Master), L.P., The Värde Fund XI, (Master)
L.P., The Värde Fund VI-A, L.P., Värde Investment Partners, L.P.,
Värde Investment Partners (Offshore) Master, L.P., Värde Credit
Partners Master, L.P. and The Värde Skyway Master Fund, L.P.
(together, the "Värde Shareholders"), all of which are ultimately
controlled by Värde Partners, Inc., have confirmed their intention
to vote in favour of the Scheme at the Scheme Court Meeting and the
resolutions relating to the Merger at the KWE General Meeting (or,
in the event that the Merger is implemented by way of a Takeover
Offer, accept the Offer) in respect of their entire holdings,
representing, in aggregate, approximately 5.6% of KWE's existing
ordinary share capital as at the Latest Practicable Date. The
Letter of Intent is non-binding and does not prevent the Värde
Shareholders from modifying or withdrawing their support for the
Merger in the event that a higher offer to acquire KWE is made or
from transferring or disposing of their interests in the KWE Shares
to which the Letter of Intent relates. The Letter of Intent will
lapse if this announcement is not released by 12 noon on 13 June
2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFUUUORBNANAUR
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