British Land buys Pillar Property (UK)

The boards of The British Land Company PLC (“British Land”) and Pillar Property PLC ("Pillar") are pleased to announce the terms of recommended Proposals under which British Land will acquire the entire issued and to be issued ordinary share capital of Pillar.

The Proposals
It is intended that the Acquisition is to be implemented by way of a Court sanctioned Scheme of Arrangement under section 425 of the Companies Act.

The terms of the Acquisition will enable all Pillar Shareholders to receive 855 pence in cash in respect of each Pillar Share held by them, valuing the entire issued and to be issued ordinary share capital of Pillar at approximately £811.0 million. There will be no final dividend paid.

The Acquisition price represents a premium of:

  • 9.6 per cent. to the fully diluted net asset value of 780 pence per Pillar share as at 31 March 2005;
  • 7.5 per cent. to the closing price of 795 pence per Pillar Share as of 19 May 2005, the day prior to announcement that Pillar was in discussions with a possible offeror.

The Pillar Directors, who have been so advised by Credit Suisse First Boston and JPMorgan Cazenove, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Pillar Directors, Credit Suisse First Boston and JPMorgan Cazenove have taken into account the commercial assessments of the Pillar Directors. The Pillar Directors are unanimously recommending Pillar Shareholders to vote in favour of the Scheme as they intend to do in respect of their own holdings of Pillar Shares.

The Acquisition of Pillar is consistent with British Land's strategic evolution, to be more fully presented with its preliminary results for the year ended 31 March 2005 on Wednesday, 25 May. This builds on the bedrock of British Land’s existing focus on UK real estate offering growth, quality and security. The aim is to further intensify British Land’s asset management and its portfolio management, as well as to build and renew its talent base.

The principal benefits of the transaction include:
The transaction, together with existing assets, gives British Land a unique and distinctive leadership position in the highest performing retail asset class. Pillar (directly and indirectly) owns approximately £1.3 billion of high quality property assets and manages an attractive portfolio of some of the largest out of town retail parks in the UK valued at approximately £2.7 billion. Retail warehousing has been and is expected to remain one of the most attractive asset classes with strong prospects. Following the Acquisition, British Land will own or manage in excess of £10 billion of retail assets. This is expected to create management synergies and further strategic options if UK REITs are successfully implemented.

The acquisition of Pillar’s fund management operations creates an additional revenue stream which is expected to grow. This is a logical and attractive extension of British Land’s distinctive track record in property partnerships with third parties. Additionally, this fund management expertise may be useful in considering future options around British Land’s existing assets.

British Land will also welcome Pillar's high quality management team which has a track record of generating growth from active property management with a strong performance orientation. They will intensify and add to the property management skills of British Land's existing team.

• British Land has today acquired from GE Pension Trust its holding of 19,335,710 Pillar shares representing approximately 21.5 per cent. of the existing issued ordinary share capital of Pillar.
• Irrevocable undertakings to vote in favour of the Scheme have been received from the Pillar Directors in respect of a total of 4,093,617 Pillar Shares representing approximately 4.5 per cent. of the existing issued ordinary share capital of Pillar. These irrevocable undertakings will only cease to be binding in the event that the Scheme lapses or is withdrawn.
• An irrevocable underta

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