Reasons for the Offer, allocation of proceeds, estimated net amount of the proceeds
Within the scope of the growth of its real estate portfolio, the Company aims at a balanced funding, both by borrowed capital and shareholders’ equity. Funding by shareholders’ equity can be realized by contributions in kind (in this context we can refer to the contribution operations realized by the Company in the past), or by the acquisition of financial resources through a capital increase in cash.
The main objective of the Offering can be found in the context of this aiming at a balanced funding structure and consists in allowing the Company to acquire new financial resources and strengthening its shareholders’ equity in order to pursue the realization of its growth strategy, and, at the same time, maintain an appropriate debt ratio within the limits of the 45% to 50% spread pursued by the Company. The Group’s debt ratio amounted to 47.9% on 30 September 2018. Furthermore, the Company has, at the Date of the Prospectus, € 487 million of credit lines, of which € 133 million undrawn credit lines.
Upon full subscription to the Transaction, the capital increase (including the issue premium) amounts to circa € 99,9 million and the net proceeds amount to approximately € 98,2 million. The company plans to use the net proceeds, as well as the available undrawn credit lines and the increased funding capacity following the Transaction, for the funding of its investment pipeline and further growth.
At the Date of the Prospectus the Company has different investment opportunities in different phases of a customary investment process. The investment opportunities exist both in the offices segment and in the logistics segment, and this, both in Belgium and in the Netherlands. Furthermore, Intervest plans to develop certain assets. The sum of the investment opportunities, renovations and (re)developments results in a total pipeline of circa € 197 million.
At the Date of the Prospectus € 56 million of this amount is the subject of fixed commitments entered into by the Company, officially published by the Company.
The Company will use the net proceeds of the Transaction, as well as the available undrawn credit lines and the increased funding capacity following the Transaction, for these announced and foreseen real estate investments of approximately € 197 million.
For a complete description of the committed announced investments, the investments announced subject to the condition precedent of funding and the investment opportunities in an advanced negotiation stage and due diligence, investors are referred to Section E.2a of the Summary or 5.4 of the Prospectus
Information on the Issuer
Intervest Offices & Warehouses NV positions itself as a public RREC as a qualitative and specialised player in both the office market and the logistics real estate segment. A unique combination on the Belgian market, with sufficient critical mass, which offers the advantage of a strong risk spread and which seeks attractive and long-term returns for shareholders.
Intervest’s strategy is to grow its real estate portfolio to € 800 million by the end of 2018. In doing so, Intervest is maintaining the strategic shift in emphasis previously initiated towards a ratio of 60% logistics real estate and 40% office buildings.
The office segment of the portfolio focuses on the Antwerp-Mechelen-Brussels axis, and is located both in the city centre and on campuses outside the city.
The logistics segment of the portfolio in Belgium is located on the Antwerp-Brussels-Nivelles (36%) and Antwerp-Limburg-Liège (57%) axes and, in the Netherlands, focuses on the Moerdijk-’s Hertogenbosch-Nijmegen and Bergen-op-Zoom-Eindhoven-Venlo axes.
More information is available at www.intervest.be.
Main characteristics of the Offer
This announcement is informative and does not constitute recommendations and/or advice from Bank Degroof Petercam NV. Investing in shares involves considerable risks. Investors are requested to read the Prospectus, in particular Chapter 2, ‘Risk Factors’ (pages 48 to 61) of the prospectus, and Section D. (pages 30 to 34) of the Summary, before investing in the New Shares, the Irreducible Allocation Rights or the Scrips. Any decision to invest in the New Shares, the Irreducible Allocation Rights or the Scrips within the scope of the Transaction must be based on all the information provided in the Prospectus. Potential investors must be capable of bearing the economic risk of an investment in shares and of taking a full or partial loss on their investment.
The Company is of the opinion that the risks listed below and the risks described in the Prospectus, reflect the principal risks and uncertainties deemed relevant, at the date of the Prospectus, in the framework of an investment in the Company, the Irreducible Allocation Rights and the Scrips, taking into account that other risks could exist which are considered, based on the currently available information to Intervest Offices & Warehouses NV, as principal risks or which the Company can not foresee at this moment. Intervest Offices & Warehouses NV does not claim that the list of risks below related to investing in the Company or in the New Shares is exhaustive.
The order in which the risk factors are presented below is not related to the extent of their probability or their potential financial impact. Investors are requested to consult the description of these risk in the Prospectus.
Risks relating to the Group and its activities
- Investment market for office buildings and logistics real estate
- External factors - claims and insurance risk
- Cyclical movements
- Rental values and occupancy rate
- Development of fair value of the real estate portfolio
- Inflation risk
- Deflation risk
- Time of investment and divestment
- Possible bankruptcy of tenants and debtor risk
- Risk associated with macroeconomic factors
Operational and property-related risks
- Risk of vacant properties and loss of rental income
- Risk of leasability
- Risk relating to the structural condition of the buildings
- Concentration risk
- Risk associated with acquisitions
- Risk associated with key staff
- Risk associated with ICT and fraud
- Risk associated with changes in regulations
- Risks associated with non-compliance with regulations
- Risks associated with the status of public RREC
- Risks associated with the status of institutional RREC
- Liquidity risk
- Interest rate risk and risk related to the use of financial derivatives
- Risks relating to the combination of adverse interest movements, increased risk premium in the equity markets and an increase in the bank margin (cost of capital)
- Risk associated with banking counterparties
- Risk associated with the covenants of financing contracts
- Financial reporting risk
- Risk of financial budgeting and planning
- Risk associated with limited dividend distribution
Risks associated with the Shares
- Risks associated with investing in the New Shares
- Liquidity of the share
- Low liquidity of the Irreducible Allocation Rights market
- Irreducible Allocation Rights not (correctly) exercised
- Dilution of Existing Shareholders who do not or only partially exercise their Irreducible Allocation Rights
- Possibility of future dilution of the Shares
- Share price volatility and return of the Share
- Sale of Shares by shareholders of the Company and fluctuations in the price of the Shares or the Irreducible Allocation Rights
- No minimum amount for the Transaction
- Withdrawal of the subscription
- Risks associated with securities and industry analysts
- Risks associated with liquidation and settlement (clearing and settlement)
- Risks associated with exchange rates
- Risks associated with the Financial Transaction Tax
- Investors who are residents of countries other than Belgium
- Risks relating to acquisition provisions in Belgian legislation
- Risks associated with certain transfer and sales restrictions
The New Shares will be allocated ISIN code BE0003746600 and the Irreducible Allocation Rights have ISIN code BE6309506440.
Global Coordinator: Degroof Petercam
Joint Bookrunners: Degroof Petercam , ING Belgium, KBC Securities and Belfius Bank
Intervest, listed on the regulated market of Euronext Brussels, issues a maximum of 5,397,555 New Shares for a maximum amount of EUR 99,854,767.50. Each Existing Shareholder of the Company has an Irreducible Allocation Right for each Share held at the end of the trading day of 14 November 2018. The Irreducible Allocation Right is represented by coupon no. 20 attached to the Existing Shares. The Irreducible Allocation Right will be detached on 14 November 2018 after Euronext Brussels closes and can be traded during the entire Subscription Period on the Euronext Brussels regulated market, i.e. from 15 November 2018 until and including 26 November 2018.
The holders of Irreducible Allocation Rights can subscribe during the Subscription Period to the New Shares at a ratio of 2 New Shares for 7 Irreducible Allocation Rights.
The maximum amount for the Offer including the issue premium is EUR 99,854,767.50. No minimum amount was set for the Offer. If the Transaction is not fully subscribed, the Company is entitled to increase the capital only by the amount actually subscribed. The amount of the Transaction and the number of New Shares actually subscribed to will be confirmed in a press release.
The subscription to the New Shares through exercise of the Irreducible Allocation Rights will be possible during the entire Subscription Period, i.e. from 15 November 2018 (9h00 CET) until and including 26 November 2018 (16h00 CET).
30 November 2018.
The subscription forms can be submitted directly and free of charge with Bank Degroof Petercam NV.
Private placement of the Scrips
The Irreducible Allocation Rights not exercised on the closing date of the Subscription period and the exercised Irreducible Allocation Rights linked to registered shares for which the total Subscription Price was not paid in time will be qualified as Irreducible Allocation Rights that were not exercised and will automatically be converted into an equal number of Scrips. These Scrips will be sold by the Joint Bookrunners through a Private Placement of Scrips to investors, without this resulting in a public offer to purchase the Scrips or subscription for the underlying New Shares, in accordance with the applicable legislation.
The Private Placement of the Scrips will take place as soon as possible after the closing of the Subscription Period, and in principle on 28 November 2018. On the day of publication of the press release on the results of the Offer with Irreducible Allocation Rights, scheduled for 28 November 2018 (before trading hours), the Company will request the suspension of trading of the Shares from the opening of the stock exchange on 28 November 2018 until the time of publication of the press release relating to the results of the Transaction.
One single market price for the Scrips will be determined on the basis of a book building procedure. Investors acquiring Scrips undertake irrevocably to exercise them on the same day and hence to subscribe to the corresponding number of New Shares at the Subscription price and in accordance with the Subscription ratio.
The net proceeds of the sale of the Scrips, after deduction of the costs, expenses and charges of any kind incurred by the Company (the ‘Excess Amount’) will be divided proportionally among all holders of Irreducible Allocation Rights not exercised during the Subscription Period (or qualified as such). The Excess Amount will be communicated in a press release issued by the Company on 28 November 2018 and will be made available to the holders of coupon no. 20 as from 4 December 2018 upon presentation of coupon no. 20.
All Shares participate, in the same manner, in the results of the Company and give entitlement to the dividends that are to be granted by the Company. However, the New Shares will be issued without coupon no. 21, entitling to a pro rata temporis dividend for the current 2018 financial year through 29 November 2018. The New Shares will therefore only participate in the result for the current 2018 financial year as from 30 November 2018 because the New Shares will be issued on 30 November 2018, according to the Schedule.
To this end, coupon no. 21 will in principle be detached from the Existing Shares on 14 November 2018 (after the close of trading). This coupon represents the right to receive the pro rata temporis portion of the dividends, up to and including 29 November 2018, that are to be granted for the current 2018 financial year (always subject, if applicable, to the approval of the general meeting to be held on or about 24 April 2019). The payment of the dividends that are to be granted for the 2018 financial year will, in principle, take place on or about 21 May 2019.
The New Shares will thus be issued with coupons no. 22 and subsequent coupons attached. Coupon no. 22 or, where applicable, one of the subsequent coupons, represents the right to receive the pro rata temporis part of the dividend for the current 2018 financial year as from 30 November 2018.
The subscription price amounts to € 18.50. The Subscription Price was determined by the Board of Directors, assisted by the Joint Bookrunners, on 13 November 2018, based, among other things, on the market price of the Share on the Euronext Brussels regulated market, on which, as usual with similar transactions, a discount was applied, in light of the market conditions and the conditions applicable at that time.
The Subscription price is lower than the net value (fair value) per share of the Intervest Offices & Warehouses share as at 30 September 2018 (€ 19.82), and the net value per share (EPRA) of the Intervest Offices & Warehouses share as at 30 September 2018 (€ 20.04).
The Subscription price is 15.0% lower than the closing price of the Share on the Euronext Brussels regulated market on 13 November 2018 (which amounted to € 23.05), adjusted to take into account the estimated value of coupon no 214 detached on 14 November 2018 (after closing of the stock exchange), or € 21.77 after this adjustment. On the basis of that closing price, the theoretical ex-right price (‘TERP’) is € 21.04, the theoretical value of an Irreducible Allocation Right is € 0.73, and the discount of the Subscription price with respect to TERP is 12.1%.
Part of the Subscription Price for the total number of New Shares equal to the par value of the Existing Shares of the Company, i.e. (rounded at) € 9.11, multiplied by the total number of New Shares (and then rounded up to the next euro cent), will be allocated to the share capital of the Company. The remaining part of the total Subscription price will be recorded as issue premium. The value of all Shares representing the capital (both the New Shares and the Existing Shares) will finally be equalised, so that all these shares will represent the same fraction of the Company’s share capital.
The issue is in Euros (€, EUR).
Admission to trading and place of listing
An application has been filed with Euronext Brussels for the admission to trading of the New Shares that may be issued in the context of the Transaction. The New Shares are expected to be tradable as of 30 November 2018 under the same ISIN code as the Existing Shares (BE0003746600).
The Irreducible Allocation Rights (coupon no. 20) will be detached and negotiable on the regulated market of Euronext Brussels on 14 November 2018 after the closure of the exchange under ISIN code BE6309506440 during the entire Subscription Period, namely from 15 November 2018 (from 9:00 a.m.) through 26 November 2018 (4:00 p.m.).
General: The tax treatment will depend on each investor's individual circumstances and may be subject to change in the future. The general principles are set out in chapter 8. “Tax System” of the Securities Note.
Taxes on stock market transactions: No tax on stock market transactions is due on the New Shares. The tax on stock market transactions is due on the acquisition of the existing shares, of which the rate amounts to 0.35% of the purchase price, with a ceiling of EUR 1,600 per transaction and per party.
Tax regime in Belgium: For Belgian income tax purposes, the gross amount of all benefits paid on or attributed to the New Shares is generally treated as a dividend distribution. By way of exception, the repayment of capital carried out in accordance with the Belgian Companies Code is not treated as a dividend distribution to the extent that such repayment is imputed to the fiscal capital. This fiscal capital includes, in principle, the actual paid-up statutory share capital and, subject to certain conditions, the paid-up issuance premiums and the cash amounts subscribed to at the time of the issue of profit sharing certificates. However, as of 1 January 2018, a repayment of capital carried out in accordance with the Belgian Companies Code is partly considered to be a distribution of the existing taxed reserves (irrespective of whether they are incorporated into the capital) and/or of the tax-free reserves incorporated into the capital whereby such portion is determined on the basis of the ratio of certain taxed reserves and tax-free reserves incorporated into the capital over the aggregate of such reserves and the fiscal capital.
Belgian withholding tax of 30% is normally levied on dividends, subject to such relief as may be available under applicable domestic or tax treaty provisions.
Annual tax on securities accounts: As of 1 January 2018, a new annual tax on securities accounts has been introduced, whereby private individuals holding one or more securities accounts in Belgium or abroad with total assets (including listed shares, bonds, funds) exceeding EUR 500,000 (EUR 1,000,000 for married couples) are subject to tax at a rate of 0.15 % of the total amount. Pension savings accounts and life insurances are excluded. The tax is collected by the intermediary financial institution, who also determine the value of the accounts concerned, in case this financial institution is a Belgian financial institution or a foreign financial institution which has appointed a representative in Belgium to do so. If not, the securities account holder would be responsible for reporting and paying the annual tax on securities accounts.
Investors should consult their own professional advisors in relation to the annual tax on securities accounts.
Objective of the investment
A share is an instrument which represents a portion of the capital. A share has an unlimited maturity and does not guarantee any repayment of the capital. The shares will be traded on the regulated market of Euronext Brussels, which could lead to both capital gains and losses on the capital. The shares can entitle to dividends and include the right to vote at the General Meeting of Shareholders. However, dividend payments are not guaranteed and are subject to availability of distributable profits and a decision by the General Meeting of Shareholders. In case of liquidation, other creditors will be prioritized over the shareholders. Generally, shareholders do not recover their capital. As a shareholder of the Company, your rights will be governed by Belgian law.
Any complaints, insofar addressed to Bank Degroof Petercam NV, must be submitted to Bank Degroof Petercam NV, Operational Risk Management, Nijverheidsstraat 44, 1040 Brussels, or by e-mail to firstname.lastname@example.org. If you are not satisfied with the complaints service, you can contact the Ombudsman in financial conflicts North Gate II, Koning Albert II laan 8, 1000 Brussels (www.ombudsfin.be).
The Prospectus and the Summary were drawn up in accordance with the Act of 16 June 2006 on the public offering of investment instruments and the admission of investment instruments to trading on a regulated market and in accordance with European Commission regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements, and its Annexes I, III and XXII, all as amended from time to time. The Dutch versions of the Prospectus and the Summary were approved by the FSMA on 13 November 2018 in accordance with article 23 of the Act of 16 June 2006. The approval of the FSMA does not include an evaluation of the appropriateness or quality of the Offer, nor of the situation of the Company.
The following documents are available here:
More information can be found on the website of Intervest through the following link: