Liberty International PLC announces proposed demerger

Transcription

1 PRESS RELEASE 9 March 2010 Introduction Liberty International PLC announces proposed demerger Further to the announcement made by Liberty International PLC ( Liberty International ) on 5 February 2010 responding to press comment, Liberty International today announces its intention to separate into two businesses, Capital Shopping Centres and Capital & Counties. Liberty International has also announced today its audited preliminary results for the year ended 31 December The separation will be effected by way of a demerger (the Demerger ) of Liberty International s central London focused property investment and development division, to a new company called Capital & Counties Properties PLC ( Capital & Counties ), from the rest of the Liberty International Group comprising predominantly the UK shopping centres business. Liberty International will be renamed Capital Shopping Centres Group PLC ( Capital Shopping Centres ). The Demerger will create distinct entities with separate strategic, capital and economic characteristics and management teams: Capital Shopping Centres, a prime regional shopping centre focused UK REIT, aiming to deliver strong long-term returns through income and capital growth; and Capital & Counties, a central London focused, non-reit, property company focusing on total return opportunities in London s real estate market. Highlights Liberty International to retain its UK regional shopping centre assets, along with its US assets and Indian investments, and to be renamed Capital Shopping Centres Group PLC. Capital Shopping Centres had, on a pro forma basis as at 31 December 2009, investment and development properties of 5.0 billion, net external debt of 2.7 billion and adjusted, diluted net assets of 2.1 billion giving an adjusted, diluted net asset value per share of 339 pence. For the year ended 31 December 2009 Capital Shopping Centres had pro forma net rental income of 292 million. Capital & Counties to comprise Liberty International s interests in Covent Garden, Earls Court & Olympia, including the Empress State Building, and the Great Capital Partnership, as well as its Chinese fund investments. Capital & Counties had, on a pro forma basis as at 31 December 2009, investment and development properties of 1,240 million, net debt of 463 million and adjusted, diluted net assets of 791 million giving an adjusted, diluted net asset value per share of

2 pence. For the year ended 31 December 2009 Capital & Counties generated pro forma net rental income of 74 million (adjusted for certain non recurring items). Capital Shopping Centres Group PLC and Capital & Counties Properties PLC both to have premium listings on the Official List and to be traded on the London Stock Exchange. The approval and posting of documentation relating to the proposed Demerger remains subject to the Liberty International Board being satisfied with the South African listing requirements for the Demerger, in particular the listing status granted to Capital & Counties Properties PLC, and that the existing domestic listing status of Liberty International is not prejudiced as a result of the Demerger, both of which require formal approval from the South African authorities. The nature of the secondary listing on the JSE Limited (the JSE ) being sought for Capital & Counties Properties PLC is an inward listing, with South African institutional shareholders given a period of time to realign their portfolio if their foreign portfolio allowance is exceeded as a result of the Demerger. The requisite applications in this regard have been submitted to the relevant authorities. Capital Shopping Centres to remain a UK REIT, Capital & Counties to be a non-reit property company. Patrick Burgess MBE, the current Chairman of Liberty International, to be Chairman of Capital Shopping Centres and David Fischel, the current Chief Executive of Liberty International, to be Chief Executive of Capital Shopping Centres. Ian Durant, the current Finance Director of Liberty International, to be Chairman of Capital & Counties and Ian Hawksworth, the current Managing Director of Capital & Counties, to be Chief Executive of Capital & Counties. A search for a new Finance Director of Capital Shopping Centres Group PLC is underway to replace Ian Durant, who will stand down from this role after a transitionary period. Documentation relating to the proposed Demerger, which will include the timetable for the Demerger process, will be posted following the formal approval of the South African authorities. Patrick Burgess, Chairman of Liberty International, commented: The proposed Demerger announced today responds to what the Liberty International Board considers to be a changing approach to investment in real estate, both in the equity markets and in the property market, requiring greater focus and more active management. It will create two distinct listed businesses with different characteristics and attractions for shareholders. Capital Shopping Centres and Capital & Counties will be positioned to execute their own significant strategic plans, fully engaging with investors who will be able to select their individual weightings to each of the businesses over time. Coupled with the current experience and strength of the respective management teams, augmented as strategic growth opportunities arise, the Demerger will best position both businesses to deliver strong shareholder returns. A presentation to analysts and investors will take place at 100 Liverpool Street, London EC2 at GMT on 9 March The presentation will also be available to international analysts and investors through a live audio call and webcast. The presentation will be available on the group s website

3 Enquiries Liberty International PLC Tel: +44 (0) David Fischel Ian Durant Rothschild Joint Financial adviser and sole Sponsor in the UK and South Africa Tel: +44 (0) Alex Midgen Duncan Wilmer David Lake BofA Merrill Lynch Joint Financial adviser and joint Broker Tel: +44 (0) Simon Mackenzie-Smith Simon Fraser UBS Investment Bank Joint Broker Tel: +44 (0) Hew Glyn Davies Jonathan Bewes Public relations UK Hudson Sandler Tel: +44 (0) Michael Sandler SA College Hill Tel: +27 (0) Nicholas Williams Further information on the proposed Demerger Background to and reasons for the proposed separation Capital Shopping Centres and Capital & Counties are distinct businesses with different risk and reward profiles and capital requirements. The Demerger will create distinct entities with separate strategic, capital and economic characteristics and management teams: Capital Shopping Centres, a prime regional shopping centre focused UK REIT, aiming to deliver strong long-term returns through income and capital growth; and Capital & Counties, a central London focused, non-reit, property company focusing on total return opportunities in London s real estate market. The Demerger will enable existing shareholders of Liberty International to continue to participate in both of the businesses with the same initial economic weighting whilst providing flexibility for investors to select their own weighting to each of Capital Shopping Centres and Capital & Counties over time

4 Each business will be able to attract the most appropriate shareholder base to provide optimal support to continue its own strategic development. The Liberty International Board believes that the Demerger will enable Capital Shopping Centres and Capital & Counties to achieve greater value for shareholders over time than the current Liberty International would as one combined business. Capital Shopping Centres Upon Demerger, Capital Shopping Centres will be the only UK REIT focused on prime regional shopping centres and one of a small number of prime regional shopping centre REITs globally. Capital Shopping Centres has interests in 13 UK shopping centres (excluding Westgate, Oxford), which include nine of the UK s top 30 regional shopping centres. As at 31 December 2009 on a pro forma basis, Capital Shopping Centres had investment and development properties of 5.0 billion and adjusted, diluted net assets of 2.1 billion giving an adjusted, diluted net asset value per share of 339 pence. For the year ended 31 December 2009, on a pro forma basis, Capital Shopping Centres had net rental income of 292 million and adjusted earnings of 75 million giving an adjusted earnings per share of 15.1 pence. The table below provides selected information on Capital Shopping Centres UK assets. Market value of Gross retail area of centre Ownership CSC interests as at 31 Dec 2009 '000 sq. ft. m Out-of-town shopping centres Lakeside, Thurrock 1, % 890 MetroCentre, Gateshead 2,089 90% Braehead, Glasgow 1, % 505 The Mall at Cribbs Causeway, Bristol 1,025 33% Total out-of-town centres 5,608 2,375 In-town shopping centres The Harlequin, Watford % 335 Victoria Centre, Nottingham % 315 The Arndale, Manchester 1,600 48% Chapelfield, Norwich % 220 Eldon Square, Newcastle 1, % 218 St David's, Cardiff 1,395 50% 211 Other 5 1, Total in-town centres 8,181 2,202 Total UK regional shopping centres 13,789 4,577 Notes 1. Interest shown is that of the MetroCentre Partnership in the MetroCentre (90 per cent.) and the Metro Retail Park (100 per cent.). Capital Shopping Centres has a 60 per cent. interest in the MetroCentre Partnership which is consolidated as a subsidiary of the group

5 2. The group's interest is through a joint venture ownership of a 66 per cent. interest in the Mall at Cribbs Causeway and a 100 per cent. interest in The Retail Park, Cribbs Causeway. 3. The group's interest is through a joint venture ownership of a 95 per cent. interest in The Arndale, Manchester, and 90 per cent. interest in New Cathedral Street, Manchester. 4. Lettable area increased to 1,332,000 sq. ft. on completion of St. Andrew's Way in February Includes the group s interests in The Chimes, Uxbridge, The Potteries, Stoke-on Trent, The Glades, Bromley and Xscape, Braehead Liberty International exchanged contracts in January 2010 for the conditional sale of Westgate, Oxford for gross proceeds of 56 million. The sale is expected to complete in the first half of Figures relating to this asset are excluded from the above table. In addition to its UK shopping centre assets, Capital Shopping Centres will own Liberty International s US assets (which are predominantly retail and currently reported as Capco USA in Liberty International s accounts), and investments in Indian shopping centre developments. The US and Indian property related assets were valued at 348 million and 32 million respectively as at 31 December 2009 representing in aggregate approximately 8 per cent. of Capital Shopping Centres' property assets on a pro forma basis. Liberty International continues to actively explore a tax efficient solution to reduce exposure to the United States over time. Capital Shopping Centres strategy is to maintain a market leading position as an active owner, manager and developer of prime UK regional shopping centres. Capital Shopping Centres undertakes asset and centre management initiatives across its existing centres, combined with selective asset acquisitions and disposals, with the aim of delivering strong long-term returns for its shareholders through income and capital growth. Key strengths The Liberty International Directors believe the key strengths of Capital Shopping Centres are: Leading UK shopping centre business with focus on prime assets. High quality regional shopping centres continue to outperform secondary locations given the long-term trend for retail trade to gravitate towards the strongest destinations. Defensive and resilient rental income with recovery prospects. Despite a period of relatively high tenant failure levels at the end of 2008 and early 2009, like-for-like net rental income only fell by 3.4 per cent. in 2009 and Capital Shopping Centres has successfully restored occupancy levels to 97.8 per cent. as at 31 December Like-forlike footfall increased by 3 per cent. in Significant growth prospects, from a number of factors: (i) the re-letting of temporary leases, which were a feature of 2009, as they expire in 2010 and 2011; (ii) yield compression driving capital appreciation - Capital Shopping Centres centres were valued defensively as at 31 December 2009 on an average 7.1 per cent. nominal equivalent yield; (iii) active management projects at many of Capital Shopping Centres centres; and (iv) in the medium term, expansion projects at a number of centres. Robust financial position. Capital Shopping Centres had a pro forma loan-to-value of 55 per cent. as at 31 December Following the Lakeside refinancing in January 2010, Capital Shopping Centres has no UK asset-specific debt refinancing requirement until 2014, cash of 319 million as at 31 December 2009 and available undrawn facilities of 248 million

6 Experienced management team. The team has complementary skills across managing, developing and investing in retail assets and a demonstrable track record in managing Capital Shopping Centres assets as part of the Liberty International Group throughout the economic cycle. Financial structure On a pro forma basis, adjusting for the Demerger, as at 31 December 2009 Capital Shopping Centres had gross external debt of 3.0 billion, cash balances of 0.3 billion and net external debt of 2.7 billion, giving a loan-to-value ratio of 55 per cent. As announced on 22 January 2010, a new seven year, 525 million loan facility secured against Lakeside, Thurrock has been agreed with a syndicate of seven banks. The proceeds of the loan, together with existing Liberty International cash resources, have been used to redeem in full the existing loans of 546 million which would otherwise have been repayable in July Liberty International has agreed an extension of the maturity of its existing and currently undrawn revolving credit facility by two years to June This facility, which has been reduced in size from 360 million to 248 million, will remain with Capital Shopping Centres following the Demerger. Capital & Counties Upon Demerger, Capital & Counties will be one of the largest listed central London focused investment and development property companies, with 81 investment properties held directly or through joint ventures, located predominantly in west London and the West End and with limited exposure to the City and Midtown. As at 31 December 2009 on a pro forma basis, Capital & Counties had investment and development properties of 1,240 million and adjusted, diluted net assets of 791 million giving an adjusted, diluted net asset value per share of 127 pence. For the year ended 31 December 2009, on a pro forma basis, Capital & Counties had net rental income of 79 million and adjusted earnings of 12 million giving an adjusted earnings per share of 2.0 pence. The net rental income of 79 million included 1.4 million of income from assets that have since been sold and 4.0 million of income attributable to Capital & Counties joint venture partner in respect of the Empress State Building, which was fully consolidated in Capital & Counties accounts until an accounting treatment change in August Capital & Counties has a concentration of assets in three landmark estates in the central London real estate market, with the potential for substantial active asset management to drive superior total returns for Capital & Counties shareholders. Capital & Counties assets principally comprise: Covent Garden London, which has property assets of 548 million (as at 31 December 2009); Earls Court & Olympia, an exhibition business with property assets of 340 million (as at 31 December 2009), which is wholly-owned by Capital & Counties following the recent buyout of its partners shares; a 50 per cent. interest in the Empress State Building, an office building adjacent to Earls Court, which is held in a joint venture with Land Securities Group plc, with a value of 94 million (as at 31 December 2009) for Capital & Counties interest; and a 50 per cent. interest in the Great Capital Partnership, a joint venture with Great Portland Estates plc focused predominantly on the West End, particularly Regent Street and - 6 -

7 Piccadilly, with Capital & Counties share of property assets valued at 247 million (as at 31 December 2009). As at 31 December 2009, these assets relate to, in aggregate, 3.5 million sq. ft., of which retail space accounted for 20 per cent., office space accounted for 41 per cent., exhibition space accounted for 35 per cent. and residential space accounted for 4 per cent. Capital & Counties also has investments in two real estate investment funds focused on China valued at 46 million as at 31 December Key strengths The Liberty International Directors believe the key strengths of Capital & Counties are: Focus on central London is expected to deliver rental resilience and capital value appreciation. London is the most active real estate investment market in the UK and is well positioned as an economic hub. High concentration of assets in landmark estates within London. This critical mass in the three core locations creates economies of scale and enables Capital & Counties to capture the wider benefit of its active management initiatives. For example, the strategy for Covent Garden London is to extend prime rents within the estate and to reposition this internationally known landmark as a world class destination. Substantial opportunity to actively manage its estate. The Earls Court & Olympia investment provides a land management opportunity to secure planning permission for Earls Court whilst investing in Olympia as a leading exhibitions business and optimising the value of the peripheral assets. The Great Capital Partnership provides the opportunity to capture rental reversion and potential yield compression from a well-positioned portfolio of 34 predominantly West End properties. Prudent capital structure. Capital & Counties had a pro forma loan-to-value of 37 per cent. and cash balances of 263 million as at 31 December Experienced management team. The business has been largely created in the last five years with the active involvement of its current management team through much of that period. Financial structure On a pro forma basis, adjusting for the Demerger, as at 31 December 2009, Capital & Counties had borrowings of 726 million in the form of debt facilities secured against specific property assets, cash balances of 263 million, amounting to net debt of 463 million, giving a group loan-to-value ratio of 37 per cent. Capital & Counties has no major debt refinancing requirement until the maturity of the loan secured on Earls Court & Olympia in February Capital & Counties will not initially be a REIT. Given the initial composition of assets and plans for active management, the Liberty International Directors believe that the business will have greater operating flexibility as a listed non-reit property company

8 Summary of Demerger structure and listing status The Demerger will be effected through a reduction of Liberty International s capital, which requires the approval of shareholders and confirmation by the court in the UK. If the Demerger proceeds, Liberty International s shareholders will receive one share in Capital & Counties Properties PLC for each share in Liberty International that they own immediately prior to the Demerger and will continue to own their existing Liberty International shares. Liberty International will be renamed Capital Shopping Centres Group PLC. Save for the formal approval from the South African authorities, all other material third-party consents necessary to effect the Demerger, including from lenders where appropriate, have been obtained. The approval and posting of documentation relating to the proposed Demerger remains subject to the Liberty International Board being satisfied with the South African listing requirements for the Demerger, in particular the listing status granted to Capital & Counties Properties PLC, and that the existing domestic listing status of Liberty International is not prejudiced as a result of the Demerger, both of which require formal approval from the South African authorities. The nature of the secondary listing on the JSE being sought for Capital & Counties Properties PLC is an inward listing, with South African institutional shareholders given a period of time to realign their portfolio if their foreign portfolio allowance is exceeded as a result of the Demerger. The requisite applications in this regard have been submitted to the relevant authorities. If Capital Shopping Centres Group PLC retains Liberty International s secondary listing with domestic listing status then its shares will have the same exchange control status as the shares of a South African registered company on the JSE. Therefore all South African resident investors, including South African institutional investors, will be able to hold shares in Capital Shopping Centres Group PLC on its South African branch register free of any South African exchange control restrictions, save for those restrictions imposed by the South African Reserve Bank on all foreign companies that have been granted domestic listing status. If for South African exchange control purposes, Capital & Counties Properties PLC is granted an inward listing, the listing of its shares on the JSE will be treated as foreign assets in the hands of South African resident shareholders with the following consequences: South African resident investors who are individuals, corporate entities or trusts may continue to hold, sell or buy Capital & Counties shares on Capital & Counties South African branch register without restriction; and South African resident institutional shareholders may only hold Capital & Counties shares as part of their foreign portfolio allowances. Convertible Bonds In relation to the 3.95 per cent. convertible bonds issued by Liberty International and due in September 2010 (the Convertible Bonds ), of which 79.2 million are currently outstanding, the conversion price will be adjusted following completion of the Demerger in accordance with the terms and conditions of the Convertible Bonds to reflect the Demerger. Liberty International has also agreed with the trustee of the Convertible Bonds (the Trustee ) to grant to bondholders a put option in respect of the Convertible Bonds, to be exercisable at any time until shortly before maturity, at par plus accrued interest, and will deposit in a trust account with the Trustee an amount equal to the outstanding principal amount due on maturity plus the interest payment due on the final interest payment date. This amount will be used to meet any redemptions of Convertible Bonds on exercise of the put option, or on maturity. The put option will come into effect on deposit of the amount. Liberty International has agreed with the Trustee to make such deposit at least five business days before the effective date of the Demerger

9 The boards of Capital Shopping Centres and Capital & Counties Following the Demerger, Patrick Burgess MBE, the current chairman of Liberty International, will be chairman of Capital Shopping Centres, with David Fischel, the current chief executive of Liberty International, as chief executive, and Kay Chaldecott, the current managing director of the Capital Shopping Centres business, as executive director of property. The non-executive directors will be Rob Rowley (senior independent director), Ian Henderson CBE, Andrew Huntley, Neil Sachdev and Andrew Strang (all of whom are existing directors of Liberty International), Richard Gordon (who is replacing Graeme Gordon) and John Abel (formerly a director of Liberty International, who will rejoin the Liberty International Board at the next annual general meeting of Liberty International). The recruitment of a new finance director of Capital Shopping Centres is underway to replace Ian Durant, who is to become chairman of Capital & Counties, and who will stand down from his role at Liberty International after a transitionary period. As previously announced, Michael Rapp will retire from the Liberty International Board at this year s annual general meeting, and upon Demerger Ian Hawksworth will stand down from the Liberty International Board. Following the Demerger, Ian Durant, the current finance director of Liberty International, will be chairman of Capital & Counties, with Ian Hawksworth, the current managing director of Capital & Counties, as chief executive, Soumen Das as finance director and Gary Yardley as investment director. The non-executive directors will be Ian Henderson CBE (deputy chairman and senior independent director), David Fischel, Graeme Gordon, Andrew Huntley and Andrew Strang. A search for an additional independent non-executive director of Capital & Counties is underway. The Gordon family, whose combined interest in Liberty International is 14.8 per cent., intends to vote in favour of the Demerger and to remain invested in, and will be represented on the boards of, both companies. The existing Liberty International incentive plans will remain in place for Capital Shopping Centres. Details of certain adjustments, together with the new incentive arrangements for Capital & Counties, will be contained within the documentation to be posted in connection with the Demerger. Dividends As stated in the audited preliminary results released today, the Liberty International Board intends to pay a final dividend of 11.5 pence per share for the full year ended 31 December 2009, bringing the full year dividend to 16.5 pence per share in aggregate, which is the same level as for With respect to the year ending 31 December 2010, if the Demerger proceeds, it is currently intended that Capital Shopping Centres will pay a total dividend of not less than 15 pence per share and Capital & Counties will pay a total dividend of not less than 1.5 pence per share. Subject to performance and available resources, Capital Shopping Centres will in future years seek to grow its dividend from the level of 15 pence per ordinary share. Any growth in the Capital & Counties dividend in future years will depend on the level of net operating income (before exceptional items) while taking into account asset realisations and its active management plans and commitments within the central London market. Taxation For the purposes of UK taxation of chargeable gains, the Demerger should be treated as a reorganisation of share capital, so there should be no chargeable gain for UK tax purposes. In South - 9 -

10 Africa there is no demerger structure available to Liberty International that would provide rollover relief on capital gains in South Africa but the Demerger will be structured to minimise the capital gains tax consequences, which will be limited by reference to the share price of Capital & Counties following the Demerger. Capital & Counties will not be a REIT immediately following the Demerger, so will need to recognise current tax on rental profits and deferred tax on revaluation surpluses accrued in respect of those assets currently within the Liberty International REIT business (Covent Garden London, and its interests in the Empress State Building and Great Capital Partnership joint ventures) following the Demerger. Earls Court & Olympia and the China investments are not currently part of the Liberty International REIT business. Timetable Documentation relating to the proposed Demerger, which will include the timetable for the Demerger process, will be posted following the formal approval of the South African authorities. The Demerger is currently expected to complete in May. Chairman and Executive Directors of Capital Shopping Centres Group PLC Patrick Burgess MBE Chairman Patrick Burgess MBE was appointed a non-executive director of Liberty International in 2001 and chairman in August He was a partner of the law firm, Gouldens, from 1974, serving as senior partner for six years, culminating with the merger of Gouldens with Jones Day in 2003 from whom he retired in He is also a non-executive director of Standard Bank PLC. David Fischel Chief Executive David Fischel joined Liberty International in He was appointed finance director in 1988, managing director in 1992 and chief executive in March Throughout his career at Liberty International, he has been closely involved with its corporate development, including its shopping centre business. Kay Chaldecott Executive Director, Property Kay Chaldecott joined the group in She was appointed a director of the Capital Shopping Centres business in 2000 and was appointed to the Liberty International Board in February In October 2005, she was appointed managing director of the Capital Shopping Centres business. Before her appointment as managing director and during her twenty-six year career with the group, Kay worked on all of the shopping centres now in the Capital Shopping Centres business. Her experience comprises investment, leasing and retailer relationships, development, asset management and property management. Chairman and Executive Directors of Capital & Counties Properties PLC Ian Durant Chairman Ian Durant will be chairman of Capital & Counties Properties PLC following the completion of the Demerger. Ian Durant is currently finance director of Liberty International, having joined in March He has wide experience in international finance and commercial management. A former finance director of Hongkong Land Holdings and Dairy Farm International he was based in Hong

11 Kong until He was finance director of Thistle Hotels PLC and from 2005 to 2007 was chief financial officer of Sea Containers. He is a non-executive Director of Greene King Plc. Ian Hawksworth Chief Executive Ian Hawksworth will be chief executive of Capital & Counties Properties PLC following the completion of the Demerger. He joined Liberty International in After 14 years in Hong Kong, the last 10 years of which were as a director of Hongkong Land Limited responsible for commercial property, he was appointed as managing director of the Capital & Counties business and as a director of Liberty International in September He is also a non-executive director of AIM-listed Japan Residential Investment Company. Soumen Das Finance Director Soumen Das will be finance director of Capital & Counties Properties PLC following the completion of the Demerger. He is currently corporate finance manager of Liberty International, having joined in July He was previously a partner of Mountgrange Investment Management LLP responsible for corporate finance and acquisitions. Prior to that he was an executive director of UBS Investment Bank based in London, where he spent nine years in the real estate investment banking and real estate finance groups. Gary Yardley Investment Director Gary Yardley will be investment director of Capital & Counties Properties PLC following completion of the Demerger. He was appointed chief investment officer and director of the Capital & Counties business in June He was previously a senior equity partner of King Sturge LLP and managing director of its financial services company. He is experienced in large-scale mixeduse developments and complex joint ventures with the public sector. This announcement is not a prospectus but an advertisement and investors should not acquire any new ordinary shares in Capital & Counties referred to in this announcement except on the basis of the information contained in the prospectus to be published by Capital & Counties and any supplement or amendment thereto (the Prospectus ). A copy of the Prospectus, when published, will be available from the registered office of Capital & Counties at 40 Broadway, London SWlH 0BT and on the Liberty International website at The Prospectus, when published, will also be available for inspection during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ and at the offices of Edward Nathan Sonnenbergs, 50 West Street, Sandton, 2196 South Africa, South Africa, up to and including 17 May This announcement is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or investment advice in any jurisdiction. The securities to which this announcement relate have not been and are not required to be registered under the US Securities Act. These securities have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of these securities or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States Rothschild is acting as sole sponsor and joint financial adviser in the UK and South Africa to Liberty International and Capital & Counties in respect of the Demerger. Rothschild is acting for Liberty International and Capital & Counties, and in the case of Rothschild South Africa, the JSE, and no one else in connection with the Demerger, and will not regard any other person as a client in relation to the Demerger and will not be responsible to anyone other than Liberty International and Capital & Counties, and in the case of Rothschild South Africa, the JSE, for providing the protections afforded to their respective clients or for providing advice in relation to the Demerger or any matters referred to in this announcement

12 Merrill Lynch International (a subsidiary of Bank of America Corporation) ("BofA Merrill Lynch") is acting exclusively for Liberty International and no one else in connection with the Demerger and will not regard any other person as a client in relation to the Demerger, nor will they be responsible to anyone other than Liberty International for providing the protections afforded to clients of Merrill Lynch International or for providing advice in connection with the Demerger, any transaction or arrangement referred to in this announcement or the contents of this announcement. Merrill Lynch International will also act as joint broker to Capital & Counties upon the listing of its shares. UBS Limited ( UBS Investment Bank ) is acting as joint broker to Liberty International and Capital & Counties in respect of the Demerger. UBS Limited is acting for Liberty International and Capital & Counties and no one else in connection with the Demerger, and will not regard any other person as a client in relation to the Demerger and will not be responsible to anyone other than Liberty International and Capital & Counties for providing the protections afforded to their respective clients or for providing advice in relation to the Demerger or any matters referred to in this announcement. This announcement includes statements that are, or may be deemed to be, "forward-looking statements", including within the meaning of Section 27A of the Securities Act and Section 21E of the US Exchange Act of These forwardlooking statements can be identified by the use of a date in the future or forward-looking terminology, including, but not limited to, the terms may, "believes", "estimates", "plans", aims, targets, "projects", "anticipates", "expects", "intends", "may", "will", could or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding Liberty International s or Capital & Counties intentions, beliefs or current expectations. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Any forward-looking statements in this announcement reflect Liberty International s and/or Capital & Counties view with respect to future events as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Liberty International or Capital & Counties operations, results of operations, financial condition, growth, strategy, liquidity and the industry in which Liberty International or Capital & Counties operate. No assurances can be given that the forward-looking statements in this announcement will be realised. Liberty International and Capital & Counties undertake no obligation and do not intend to revise or update any forward-looking statements in this announcement to reflect events or circumstances after the date of this announcement