Company Announcements

·           21 per cent. to the three-month VWAP of 51.7 pence per Capital & Regional Share on the Offer Period Last Practicable Date; and

·            18 per cent. to the six-month VWAP of 53.0 pence per Capital & Regional Share on the Offer Period Last Practicable Date.

Under the Possible Offer Terms, Capital & Regional Shareholders would, in aggregate, receive approximately 98,527,475 New NewRiver Shares and, immediately following completion of the Combination, would own approximately 21 per cent. of the issued ordinary share capital of NewRiver (based on the existing issued ordinary share capital of NewRiver and the issued and to be issued ordinary share capital of Capital & Regional as at 17 September 2024, being the last Business Day prior to the date of this announcement (the "Last Practicable Date")).

In addition, pursuant to the Possible Offer Terms:

·           Capital & Regional Shareholders would be entitled to receive and retain an interim dividend declared by Capital & Regional in respect of the six month period to 30 June 2024, which is expected to be paid to entitled Capital & Regional Shareholders on 27 September 2024, with such dividend not to exceed an amount of 2.85 pence per Capital & Regional Share (the "Capital & Regional Interim Dividend");

·     Capital & Regional Shareholders would, once they have become NewRiver Shareholders following completion of the Combination, be entitled to receive an interim dividend to be declared by NewRiver in respect of the six month period to 30 September 2024, which is expected to be declared in November 2024 and paid to NewRiver Shareholders on the register of members of NewRiver on a record date to be set after the expected record time for the Scheme to effect any Combination (the "Scheme Record Time"), with such interim dividend to be in an amount of not less than 3.0 pence per NewRiver Share (the "NewRiver Interim Dividend"). Therefore, Scheme Shareholders who retain their New NewRiver Shares following completion of any Combination, and at the record date to be set for the NewRiver Interim Dividend (assuming such record date falls after the expected Scheme Record Time), would receive the NewRiver Interim Dividend; and

·           if the record date for the NewRiver Interim Dividend is a date prior to the Scheme Record Time, Capital & Regional would declare and pay, prior to the Scheme Record Time, a further interim dividend of 1.3 pence per Capital & Regional Share which Capital & Regional Shareholders would be entitled to receive and retain (the "Capital & Regional Additional Dividend").

If, on or after the date of this announcement and on or prior to the date on which any Combination becomes effective, Capital & Regional announces, declares, makes or pays:

·     any dividend, distribution or form of capital return in excess of the Capital & Regional Interim Dividend;

·     in the event that the record date for the NewRiver Interim Dividend is a date prior to the Scheme Record Time, any dividend, distribution or form of capital return in excess of any Capital & Regional Additional Dividend; and/or

·      any other dividend, distribution or form of capital return,

(each a "Capital & Regional Additional Distribution"), Capital & Regional Shareholders would be entitled to receive and retain such Capital & Regional Additional Distribution but NewRiver would be entitled to reduce the consideration payable pursuant to the Possible Offer Terms by an amount equivalent to all or any part of such Capital & Regional Additional Distribution.

It is proposed that the cash consideration payable by NewRiver pursuant to the Possible Offer Terms would be funded from NewRiver's existing cash resources and the net proceeds of the Placing. The cash consideration payable pursuant to the Possible Offer Terms would be priced in pounds sterling but Capital & Regional Shareholders on Capital & Regional's South African Register would, as is required as a consequence of Capital & Regional's secondary listing on the JSE, receive any cash consideration due to them under the Possible Offer Terms (as well as any Capital & Regional Additional Dividend) in South African Rand. The Scheme Document would include further details in relation to these currency exchanges. Further details in respect of the proposed treatment of Capital & Regional Shareholders who hold their Capital & Regional Shares on Capital & Regional's South African Register would also be set out in the Scheme Document.

Any firm offer, if made, would constitute a "significant transaction" for NewRiver for the purposes of the UK Listing Rules.

The announcement of any firm intention to make an offer for Capital & Regional by NewRiver under Rule 2.7 of the Code is subject to the satisfaction or waiver of a number of customary pre-conditions, including, amongst other things, finalisation of binding transaction documentation and the Placing, waivable at NewRiver's discretion. There can be no certainty that any firm offer will be made, even if the pre-conditions are satisfied or waived. A further announcement will be made in due course.

For the purposes of Rule 2.5(a) of the Code, NewRiver reserves the right to make a firm offer for Capital & Regional on less favourable terms than the Possible Offer Terms:

·            with the agreement or recommendation of the Capital & Regional Board; or

·            if a third party announces (after the date of this announcement) a firm intention to make an offer under Rule 2.7 of the Code or a possible offer under Rule 2.4 of the Code for Capital & Regional which, at that date, is of a value less than the value implied by the Possible Offer Terms; or

·             following the announcement of a whitewash transaction pursuant to the Code.

In addition, NewRiver reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any firm offer, if made.

In accordance with Rule 2.6(a) of the Code, NewRiver is required, by not later than 5.00 p.m. (UK time) / 6.00 p.m. (SA time) on 26 September 2024, either to announce a firm intention to make an offer for Capital & Regional in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Capital & Regional, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

In accordance with Rule 2.6(c) of the Code, the above deadline may be extended further at the request of the Capital & Regional Board and with the consent of the Panel.

In accordance with Rule 2.6(d), this deadline will cease to apply if any third party has announced a firm intention to make an offer for Capital & Regional.

There can be no certainty that any firm offer will be made for Capital & Regional, nor as to the terms on which any offer, if made, will be made.

Any firm offer, if made, would be subject to the approval of Capital & Regional Shareholders and NewRiver Shareholders would also be required to approve certain resolutions connected with the allotment and issue of the New NewRiver Shares to Capital & Regional Shareholders pursuant to the Possible Offer Terms at a general meeting of NewRiver Shareholders.

3.           RATIONALE FOR THE POSSIBLE OFFER

NewRiver is a leading real estate investment trust specialising in buying, managing and developing retail assets throughout the UK. Its community shopping centres and conveniently located retail parks are occupied by tenants predominantly focused on providing essential goods and services. Alongside its balance sheet assets, and in order to leverage its high-quality retail asset management platform, NewRiver also has a Capital Partnership business, which generates recurring fee income by providing asset management services to a high quality roster of institutional, private equity and public sector partners. NewRiver's objective is to own and manage the most resilient retail portfolio in the UK, focused on core shopping centres, retail parks, and regeneration opportunities in order to deliver long term attractive recurring income returns and capital growth for its shareholders.

Capital & Regional is a UK-focused retail property REIT specialising in shopping centres serving the non-discretionary and value-orientated needs of their local communities. It has a track record of delivering value enhancing retail and leisure asset management opportunities across a portfolio of tailored in-town community shopping centres. Capital & Regional is listed on the Main Market of the London Stock Exchange and has a secondary listing on the Main Board of the Johannesburg Stock Exchange, with gross assets of £350 million at 30 June 2024 (based on the property valuation report on Capital & Regional's portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this announcement) and a market capitalisation of approximately £144 million as at the Last Practicable Date.

The NewRiver Board believes that there is a strong strategic, operational and financial rationale for the Combination and that the Combined Group would benefit from enhanced scale, material cost savings, mid- to high-teens accretion to UFFO per share, better access to acquisition and asset management opportunities, improved debt optionality, expected cost of capital benefits and the potential for increased share liquidity.

Following a challenging period for the UK retail real estate sector, in which capital values have materially rebased, with the MSCI UK Shopping Centres Index declining by 53 per cent. between June 2019 and June 2024, the NewRiver Board believes the Combination represents a unique opportunity to create a significantly enlarged portfolio at an attractive point in the market cycle.

In particular, the NewRiver Board believes that the Combination would have the following benefits for the Combined Group:

·          Combination of high-quality, complementary assets - Capital & Regional's portfolio comprises six community shopping centres predominantly located in London and South East England and principally let to low-risk, essential and value-oriented retailers that are highly complementary to NewRiver's existing portfolio. Both portfolios comprise retail assets that are well-located to satisfy convenience-led shopping by an attractive customer base, with over 70 per cent. of shoppers in both NewRiver's and Capital & Regional's assets travelling less than five miles and over 55 per cent. of shoppers having above average post-tax net incomes. NewRiver believes that the disposal of non-core assets in recent years and the acquisition of The Gyle in Edinburgh in September 2023 have enhanced the quality and complementary nature of Capital & Regional's remaining portfolio;

·               Creation of a c. £0.9 billion retail portfolio - the Combined Group would have a portfolio focused on community shopping centres and retail parks, generating annualised rent of approximately £90 million, valued in aggregate at c. £889 million (based on the property valuation reports for NewRiver prepared by Knight Frank and Colliers, as set out in Parts A and B of Appendix 2 to this announcement and the property valuation report on Capital & Regional's portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this announcement) (comprising 47 assets) and with assets under management of c. £2.4 billion (comprising 84 assets);

·            Low-risk tenant profile with an attractive income profile and opportunities to add value - the Combined Group's portfolio would benefit from complementary low-risk tenant bases with low levels of tenant concentration. Approximately 87 per cent. of Capital & Regional's retail tenant base by rent is comprised of retail tenants focused on value and essential goods and services, comparable to approximately 80 per cent. of NewRiver's retail tenant base. The Combined Group's portfolio risk profile would be aligned with UK retail and industrial sector averages, by reference to the projected cumulative tenant probability of failure, with the benefit of a material yield premium and with an equivalent yield of approximately 8.5 per cent. compared to the UK retail and industrial sector averages of 6.8 per cent. and 6.1 per cent., respectively. With an affordable occupational cost ratio of c. 8.8 per cent. and strong in-store sales growth, the combined portfolio would be well-positioned for future rental growth, supported by ongoing asset management opportunities within Capital & Regional's portfolio, such as increasing occupancy and improving gross-to-net ratios;

·            Material cost savings and significant earnings accretion - the Combination would be expected to unlock approximately £6.2 million of net pre-tax run-rate recurring annual cost synergies, the majority of which would be expected to be effective shortly following completion of the Combination with the full benefit of the synergies from the Combination expected to be unlocked within 12 months of completion of the Combination on an annualised basis. These cost savings would be expected to arise from the removal of duplicative functions and the rationalisation of listing and other administrative and operational expenses, as outlined in the Quantified Financial Benefits Statement set out in this announcement. The Combination would be expected to generate a strong income return and mid- to high-teens accretion to UFFO per share, enhancing the Combined Group's ability to pay a materially higher, covered dividend;

·               Balance sheet strength maintained and debt maturity profile diversified - the Combined Group would seek to preserve a robust and conservatively leveraged balance sheet in line with NewRiver's existing LTV guidance. On completion of the Combination, the Combined Group would benefit from a weighted average cost of 3.5 per cent. across drawn debt of £444 million with no maturity on drawn debt until January 2027 as well as continuing to benefit from substantial available liquidity, improved debt optionality and expected cost of capital benefits resulting from the increased scale of the Combined Group; and

·           Increased share liquidity with expanded shareholder base - the Combination would create an enlarged REIT with enhanced equity market profile and a broader shareholder base, with shareholders benefitting from the potential for increased share liquidity and larger weightings in key indices.

Portfolio valuations

NewRiver and its advisers have carried out extensive due diligence on Capital & Regional's real estate portfolio and operations. This has included, but is not limited to, a detailed review of corporate, real estate and other information provided by Capital & Regional, site visits, sessions with Capital & Regional's senior management, rigorous internal valuation work and the commissioning of Knight Frank, which values the majority of NewRiver's existing portfolio, to conduct an external valuation of the Capital & Regional portfolio in accordance with the latest version of the RICS Valuation - Global Standards (the "Red Book"). Knight Frank's external valuation report on Capital & Regional's portfolio, which is unqualified and has been prepared in accordance with the requirements of Rule 29 of the Code by a valuer who has had access to sufficient information to prepare such report, is disclosed in Part C of Appendix 2 to this announcement.

In particular, the NewRiver Board has focused on understanding the impact of any Combination and, in particular, the potential acquisition of Capital & Regional's property portfolio, on the Combined Group's balance sheet and related financial metrics. Taking into account the Knight Frank valuation, the NewRiver Board has determined that a valuation for NewRiver's financial reporting purposes would be £350 million. The NewRiver Board recognises that this is different to the Red Book valuation provided by CBRE, as set out in Part D of Appendix 2 to this announcement. It is recognised that real estate valuations, and the assumptions underlying them, are in some cases subjective and that differences of opinion can and do occur between valuers. NewRiver does not contest the factual accuracy of CBRE's and Knight Frank's valuations or the reasonableness of the assumptions adopted by either valuer.

However, given that, in the event that a transaction were to be concluded, it would be the intention that Knight Frank would conduct independent valuations of the Capital & Regional assets on behalf of NewRiver for future financial reporting purposes, the NewRiver Board believes it appropriate to incorporate the Knight Frank valuation when analysing the Combined Group's balance sheet and related financial metrics.

4.           QUANTIFIED FINANCIAL BENEFITS STATEMENT

The NewRiver Directors, having undertaken a review and analysis of the potential cost savings of the Combined Group, as well as taking into account factors they can influence, believe the Combined Group could deliver shareholder value through the expected realisation of approximately £7.3 million of gross pre-tax run-rate recurring annual cost synergies. These would be expected to be realised primarily from consolidation of:

·           board, senior management, central and support functions and savings related to Capital & Regional's status as a publicly traded company (which would no longer be required on a standalone basis), together with third party support, including professional advisory fees, which would be expected to contribute approximately 85 per cent. (approximately £6.2 million) of the gross pre-tax run-rate recurring annual cost synergies; and

·          head office and other operating infrastructure such as technology and IT, which would be expected to contribute approximately 15 per cent. (approximately £1.1 million) of the gross pre-tax run-rate recurring annual cost synergies.

Potential areas of dis-synergy have been considered by the NewRiver Directors, with the principal area of dis-synergy being income generated from property management services (equating to approximately £1.1 million per annum), which is assumed to cease on completion of any Combination because Capital & Regional provides these services to tenants but NewRiver would intend to align this approach with its existing portfolio whereby these services are provided by a third party specialist. Potential cost savings associated with the outsourcing of these services have been reflected in the expected recurring cost synergy figure.

Accordingly, the NewRiver Directors believe that the Combined Group could deliver approximately £6.2 million of net pre-tax run-rate recurring annual cost synergies.

The majority of the above cost synergies would be expected to be effective shortly following completion of the Combination and it is expected that the full benefit of the synergies would be unlocked within 12 months of completion of the Combination on an annualised basis.

The identified cost savings would be contingent on the completion of the Combination and would not be achieved by either NewRiver or Capital & Regional independently. The estimated cost synergies referred to above reflect both the beneficial elements and the relevant costs.

The NewRiver Directors have considered one-off costs in connection with realising the expected cost synergies and estimated these to be approximately £2.9 million, which would predominantly be incurred in the first 12 months following completion. For the avoidance of doubt, this approximate £2.9 million is not factored into the £6.2 million of net pre-tax run-rate recurring annual cost synergies referred to above.

These statements of estimated cost savings and synergies relate to future actions or circumstances which, by their nature, involve risks, uncertainties and contingencies. As a consequence, in the event that any firm offer were to be made and any Combination effected, the identified synergies and estimated savings referred to may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. For the purposes of Rule 28 of the Code, the statements of estimated cost savings and synergies contained in this announcement are solely the responsibility of NewRiver and the NewRiver Directors. Any statement of intention, belief or expectation for the Combined Group following any Combination becoming effective is also an intention, belief or expectation of the NewRiver Directors and not of the Capital & Regional Directors.

These statements are not intended as a profit forecast and should not be interpreted as such. No part of these statements, or this announcement generally, should be construed or interpreted to mean that the Combined Group's earnings in the first year following any Combination becoming effective, or in any subsequent period, would necessarily match or be greater than or be less than those of NewRiver and/or Capital & Regional for the relevant preceding financial period or any other period.

Appendix 3 to this announcement includes a copy of these statements of anticipated cost savings and synergies arising from a Combination and provides underlying information and bases of belief and calculation.

Appendix 3 to this announcement also includes reports from NewRiver's reporting accountant, BDO, and its lead financial adviser, Jefferies, in connection with the anticipated Quantified Financial Benefits Statement, as required pursuant to Rule 28.1(a) of the Code, and provides underlying information and bases of belief. Jefferies, as lead financial adviser to NewRiver, has provided such report for the purposes of the Code stating that, in its opinion and subject to the terms of its report, the Quantified Financial Benefits Statement, for which the NewRiver Directors are responsible, has been prepared with due care and consideration.

Further information on the bases of belief supporting the Quantified Financial Benefits Statement, including the principal assumptions and sources of information, is set out in Appendix 3 to this announcement.

Each of BDO and Jefferies has given and not withdrawn its consent to the inclusion of its report on the Quantified Financial Benefits Statement in Parts B and C, respectively, of Appendix 3 to this announcement.

5.           THE INDEPENDENT CAPITAL & REGIONAL DIRECTORS' VIEWS ON THE POSSIBLE OFFER

Norbert Sasse and Panico Theocharides, non-executive directors of Capital & Regional, are Growthpoint's nominated representatives on the Capital & Regional Board. As noted below, Growthpoint, in its capacity as Capital & Regional's largest shareholder, would be fully supportive of a firm offer made for Capital & Regional by NewRiver in line with the Possible Offer Terms, if made, and, accordingly, has irrevocably undertaken to vote, or procure the vote, in favour of the Scheme at the Court Meeting and of the Capital & Regional Resolution(s) to be proposed at the Capital & Regional General Meeting (or, in the event that any Combination would be implemented by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer). As a result of this, and of Growthpoint's interest in Capital & Regional, Norbert Sasse and Panico Theocharides have not participated in the Capital & Regional Directors' deliberations in relation to the proposal put to them in relation to the Possible Offer by NewRiver.

The Independent Capital & Regional Directors believe that a Combination would bring together two high-quality, complementary portfolios of community-focused shopping centres and retail parks capable of achieving significant strategic, operational and financial benefits as follows:

·        by establishing a c. £0.9 billion (based on the property valuation reports for NewRiver prepared by Knight Frank and Colliers, as set out in Parts A and B of Appendix 2 to this announcement and the property valuation report on Capital & Regional's portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this announcement) retail portfolio of 29 shopping centres, and 13 retail parks, with Capital & Regional Shareholders benefiting from increased geographic and tenant diversification from the NewRiver portfolio;

·       providing Capital & Regional Shareholders with exposure to retail parks, where vacancy rates and rental growth are being driven by robust occupational demand;

·          providing Capital & Regional Shareholders with significantly enhanced scale which should have the following benefits:

o   improved share liquidity, with a significantly improved free float and diversified shareholder base;

o     access to cheaper and more flexible sources of capital through an enlarged security pool and greater income diversification; and

o      larger weightings in key indices;

·          providing material cost synergies of approximately £6.2 million on a net pre-tax run-rate recurring annual cost basis, the majority of which would be expected to be effective shortly following completion of any Combination; and

·             giving Capital & Regional Shareholders the opportunity to share in the upside from the Combined Group, with Capital & Regional Shareholders holding, in aggregate, approximately 21 per cent. of the issued share capital of NewRiver immediately following completion of the Combination. Capital & Regional Shareholders would also benefit from partial liquidity from the cash component of any firm offer, if made. On the basis of the Closing Price per NewRiver Share of 74.5 pence on the Offer Period Last Practicable Date, the implied value of 62.5 pence per Capital & Regional Share under the Possible Offer Terms represents an attractive premium of approximately:

o     21 per cent. to the undisturbed Closing Price of a Capital & Regional Share of 51.5 pence on the Offer Period Last Practicable Date;

o     21 per cent. to the three-month VWAP of 51.7 pence per Capital & Regional Share on the Offer Period Last Practicable Date; and

o    18 per cent. to the six-month VWAP of 53.0 pence per Capital & Regional Share on the Offer Period Last Practicable Date.

In addition, under the Possible Offer Terms, Capital & Regional Shareholders would also be entitled to receive and retain (i) the Capital & Regional Interim Dividend of 2.85 pence per Capital & Regional Share for the six months ended 30 June 2024 which is expected to be paid on 27 September 2024 as well as (ii) the NewRiver Interim Dividend (in the event that the record date for the NewRiver Interim Dividend is a date falling after the expected Scheme Record Time). If the record date for the NewRiver Interim Dividend is a date prior to the Scheme Record Time, Capital & Regional would declare and pay, prior to the Scheme Record Time, the Capital & Regional Additional Dividend which is economically equivalent to the NewRiver Interim Dividend, and Capital & Regional Shareholders would be entitled to receive and retain such Capital & Regional Additional Dividend. The NewRiver Interim Dividend or the Capital & Regional Additional Dividend (as the case may be) would therefore represent an additional 1.3 pence per Capital & Regional Share of value uplift for Capital & Regional Shareholders as a result of any Combination.

The Independent Capital & Regional Directors believe that Capital & Regional has a proven strategy, high quality assets, a highly regarded internalised management team and strong prospects. While the Independent Capital & Regional Directors consider that Capital & Regional can execute its strategy on a standalone basis, the Independent Capital & Regional Directors accept that the business continues to be impacted by scale and liquidity challenges and that developments in the UK REIT sector are typically favouring larger REITs with greater liquidity, lower costs and better availability of capital.

Growthpoint has recently indicated to the Independent Capital & Regional Directors that it has undertaken a detailed, group-wide strategic and capital allocation review with the aim of simplifying its business, identifying assets that are deemed to be non-core and directing its focus to its core assets. Whilst Growthpoint maintains its belief that Capital & Regional is an attractive platform with a high quality portfolio of assets and strong prospects, Capital & Regional has been identified by Growthpoint as a non-core asset. The Independent Capital & Regional Directors note that this change in Growthpoint's position has an impact on Capital & Regional's prospects. Further to this change in Growthpoint's position, Growthpoint and Capital & Regional received certain unsolicited expressions of interest in exploring a possible offer for Capital & Regional. As at the date of this announcement, NewRiver is the only interested party to have presented a comprehensive proposal to the Independent Capital & Regional Directors and completed due diligence. Growthpoint has advised the Independent Capital & Regional Directors that it believes a Combination would represent an attractive opportunity to realise value for its investment in Capital & Regional. Given that Growthpoint has agreed to support a firm offer made by NewRiver in line with the Possible Offer Terms, if made, by way of an irrevocable undertaking over its c. 69 per cent. shareholding, the Independent Capital & Regional Directors believe that a firm offer, if made by NewRiver, would be highly likely to succeed.

As there would be a share consideration component to any Combination under the Possible Offer Terms, which would result in Capital & Regional Shareholders holding NewRiver Shares representing 21 per cent. of the enlarged issued share capital of NewRiver following completion of any firm offer, if made, the Independent Capital & Regional Directors and their advisers have conducted due diligence on NewRiver. This diligence included a review of corporate and legal matters and the use of external independent real estate valuers and advisers to review NewRiver's portfolio of assets. This analysis was not, however, conducted in accordance with the latest version of the Red Book. The Independent Capital & Regional Directors carefully considered the output from the reverse due diligence in coming to their conclusions on the Possible Offer Terms.

The Independent Capital & Regional Directors have taken all of the above factors into consideration when assessing the value and deliverability of any firm offer, if made by NewRiver, and have concluded that the significant strategic, operational and financial benefits of a potential Combination would be superior to the medium-term standalone prospects of the Capital & Regional business.

In addition to their consideration of the Possible Offer Terms, in their evaluation of NewRiver as a suitable owner of Capital & Regional from the perspective of all stakeholders, the Capital & Regional Directors have taken into account NewRiver's intentions for the business in the event that it were to make a firm offer for Capital & Regional. The Capital & Regional Directors note that NewRiver has confirmed that the existing contractual and statutory employment rights, including in relation to pensions, of all Capital & Regional's management and employees would be fully safeguarded in accordance with applicable law in the event that NewRiver was to make a firm offer for Capital & Regional.

Accordingly, following careful consideration of the above factors, including the intentions of Growthpoint, the Independent Capital & Regional Directors would be prepared to recommend unanimously to Capital & Regional Shareholders a firm offer to be made by NewRiver to acquire the entire issued, and to be issued, share capital of Capital & Regional in the event that NewRiver was to make such a firm offer on the Possible Offer Terms and otherwise on the terms and subject to the conditions set out in this announcement and in the Rule 2.7 Announcement (as defined below).

Capital & Regional Board's views on valuation of Capital & Regional portfolio

The Board of Capital & Regional notes the difference between the valuation carried out by CBRE as at 30 June 2024 of £375 million and that commissioned by NewRiver's Board by Knight Frank of £350 million.

The Board of Capital & Regional supports the CBRE valuation of the Capital & Regional portfolio but acknowledges that real estate valuation by its nature is subjective and it is not unusual for independent and highly regarded valuation firms to use differing sets of assumptions and opinions to arrive at estimated market value.

6.           SHAREHOLDER SUPPORT FOR THE POSSIBLE OFFER

Capital & Regional's largest shareholder, Growthpoint Properties Limited ("Growthpoint"), would be fully supportive of a firm offer made in line with the Possible Offer Terms, if made, and, accordingly, has irrevocably undertaken to vote, or procure the vote, in favour of the Scheme at the Court Meeting and of the Capital & Regional Resolution(s) to be proposed at the Capital & Regional General Meeting (or, in the event that any Combination would be implemented by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer), in respect of 160,648,081 Capital & Regional Shares, in aggregate, representing approximately 69 per cent. of the issued ordinary share capital of Capital & Regional on the Last Practicable Date. Following completion of any Combination, Growthpoint would be expected to hold NewRiver Shares equivalent to approximately 14 per cent. of the enlarged issued ordinary share capital of NewRiver (based on the existing issued ordinary share capital of NewRiver and the issued and to be issued ordinary share capital of Capital & Regional as at the Last Practicable Date).

The obligations of Growthpoint under its irrevocable undertaking shall lapse and cease to have effect on and from the following occurrences:

·           a firm intention to make an offer announcement under Rule 2.7 of the Code is not released by 5.00 p.m. (UK time) on 2 October 2024 (or such later time or date as Capital & Regional and NewRiver may agree);

·       NewRiver announces, with the consent of the Panel, that it does not intend to proceed with the Combination and no new, revised or replacement Scheme or Takeover Offer (as applicable) is announced by NewRiver in accordance with Rule 2.7 of the Code at the same time;

·          the Combination does not become effective, is withdrawn or lapses in accordance with its terms, unless:

o   the Combination is withdrawn or lapses solely as a result of NewRiver exercising its right to implement the Combination by way of a Takeover Offer rather than a Scheme or vice versa; or

o     if the lapse or withdrawal either is not confirmed by NewRiver or is followed within 10 Business Days by an announcement under Rule 2.7 of the Code by NewRiver (or a person acting in concert with it) to implement the Combination either by a new, revised or replacement Scheme or Takeover Offer;

o    any competing offer for Capital & Regional is made which becomes, or is declared, unconditional or otherwise becomes effective; or

o    an announcement is made in accordance with Rule 2.7 of the Code of a competing offer (whether by means of a takeover offer within the meaning of section 974 of the Companies Act 2006 or by way of a scheme of arrangement under section 895 of the Companies Act 2006) for the ordinary shares in Capital & Regional, the value of the consideration per Capital & Regional Share available under which at the time it is made exceeds 68.75 pence per Capital & Regional Share and NewRiver does not match that competing offer with a revised offer that is at least equivalent to the value of such competing offer (in the reasonable opinion of the Capital & Regional Board, having taken advice from its financial adviser(s)) within 10 days of such competing offer being made.

Growthpoint has also undertaken not to sell any New NewRiver Shares which may be issued to it under the Possible Offer Terms (i) for a period of five months following any Combination becoming effective without the prior written consent of NewRiver and other than through NewRiver's financial adviser; and (ii) for a further period of four months thereafter, without first giving NewRiver reasonable written notice of any such sale, in both cases subject to certain customary exceptions.

7.           INFORMATION ON NEWRIVER

NewRiver is an established UK real estate investor, asset manager and developer which is listed on the Equity Shares (Commercial Companies) category of the Official List of the FCA, has its ordinary shares admitted to trading on the Main Market of the London Stock Exchange (ticker: NRR) and is a constituent member of the FTSE All-Share and the FTSE EPRA Indices.

NewRiver's community shopping centres and conveniently located retail parks are occupied by tenants predominantly focused on providing essential goods and services. Alongside its balance sheet assets, and in order to leverage its high-quality retail asset management platform, NewRiver also has a Capital Partnership business, which generates recurring fee income by providing asset management services to a high quality roster of institutional, private equity and public sector partners. NewRiver's objective is to own and manage the most resilient retail portfolio in the UK, focused on core shopping centres, retail parks, and regeneration opportunities in order to deliver long term attractive recurring income returns and capital growth for its shareholders. NewRiver is one of the largest owners and managers of retail real estate assets in the UK with gross assets of approximately £539 million as at 30 June 2024 and a market capitalisation of approximately £252 million as at the Last Practicable Date.

The NewRiver Group's purpose and strategy is to deliver a reliable and recurring income led 10 per cent. total accounting return by leveraging its significant knowledge and experience of the consumer, retail and capital markets and is underpinned by its business model:

•        Disciplined capital allocation - NewRiver assesses the long-term resilience of its assets, with capital allocation decisions made by comparing risk-adjusted returns on its assets to those available from other uses of capital. Capital allocation options include investing into its existing portfolio, acquiring assets in the direct real estate market and share buybacks. Assets can be acquired either on its balance sheet or in capital partnerships.

•       Leveraging its platform - NewRiver leverages its market leading platform to enhance and protect income returns through active asset management across its assets and on behalf of its capital partnerships. The latter also provide enhanced returns through asset management fee income and the opportunity to receive promote fees.

•     Flexible balance sheet - NewRiver's operating platform is underpinned by a conservative, unsecured balance sheet. NewRiver is focused on maintaining its prudent covenant headroom position and has access to significant cash reserves which provide it with the flexibility to pursue opportunities which support its strategy for growth.

The NewRiver Group owns and/or manages a portfolio of approximately £2.0 billion, of which approximately 74 per cent. is owned by its capital partners, and collects almost £190 million per annum of rent from over 3,000 tenants across 43 shopping centres and 30 retail parks (including Ellandi) (as at 30 June 2024).

The NewRiver Group's portfolio totals approximately 5.9 million sq. ft. and an occupancy rate of approximately 97 per cent. (as at 30 June 2024).

8.           INFORMATION ON CAPITAL & REGIONAL

Capital & Regional is a UK-focused retail property REIT specialising in community shopping centres listed on the Equity Shares (Commercial Companies) category of the Official List of the FCA. Its ordinary shares are admitted to trading on the Main Market of the London Stock Exchange (ticker: CAL) and it is a constituent member of the FTSE All-Share and the FTSE EPRA Indices. Capital & Regional also has a secondary listing on the Main Board of the Johannesburg Stock Exchange (ticker: CRP).

Capital & Regional has demonstrated a track record of delivering value-enhancing retail and leisure asset management opportunities across its portfolio of tailored and centrally located community shopping centres in Edinburgh, Hemel Hempstead, Ilford, Maidstone, Walthamstow and Wood Green. Capital & Regional also owns and manages the UK's largest indoor ski slope operator, Snozone, which has centres in Milton Keynes, Yorkshire and Madrid (Spain), delivering £8.3 million of revenue for the six months ended 30 June 2024. Capital & Regional focuses on shopping centres providing a strong retail offering consisting of services and non-discretionary retail in locations with strong transport links. Since the launch of Capital & Regional's community shopping centre strategy in 2017, Capital & Regional has seen a change in merchandising mix with 'Value Fashion' (24.0 per cent.), Health and Beauty (18.9 per cent.) and 'Food & Grocery' (18.2 per cent.) presently representing the largest segments across its portfolio. Capital & Regional had gross assets of £350 million as at 30 June 2024 (based on the property valuation report on Capital & Regional's portfolio prepared by Knight Frank, as set out in Part C of Appendix 2 to this announcement) and a market capitalisation of approximately £144 million as at the Last Practicable Date.

Capital & Regional's aim of driving sustainable growth, ultimately leading to sustained shareholder returns through dividend payments, is the product of its long-term strategy to:

•       define and own the community shopping centre category in the UK, guided by consumer insight and consistent with global best practice;

•          hold assets that sit at the heart of local communities, typically located adjacent to local transport hubs enabling easy access via public transport as well as available car parking;

•          focus around repositioning and re-purposing spaces to incorporate new stores and uses that reflect the demands of the communities they serve; and

•          ensure that Capital & Regional shopping centres provide the right offering to drive footfall and dwell time, boosting retailer sales and thus increasing demand, improving rental income, property values and consequently revenue and shareholder returns.

The Capital & Regional Group owns a portfolio of approximately £350 million (based on the property valuation report on Capital & Regional's portfolio prepared by Knight Frank, as set out in Part C of Appendix 3 to this announcement) and collected £38.2 million of rent from over 399 occupiers across six shopping centres for the six months ended 30 June 2024.

The Capital & Regional portfolio totals over 2.5 million sq. ft. of lettable space with 632 lettable units and an occupancy rate of 94 per cent. (as at 30 June 2024).

9.           CERTAIN RISKS ASSOCIATED WITH A FIRM OFFER

There would be certain risks associated with any firm offer, if made. These are summarised below:

Any firm offer, if made, would be subject to certain conditions which may not be satisfied or waived

Completion of any firm offer, if made, would be subject to certain conditions (including, but not limited to, those referred to at paragraph 13 below) (the "Conditions") being satisfied (or, if permitted, waived).

There is no guarantee that the Conditions would be satisfied in the necessary time frame (or waived, if applicable) and any firm offer, if made, could, therefore, be delayed or not complete. Delay in completing any firm offer would prolong the period of uncertainty for the NewRiver Group and the Capital & Regional Group and both delay and failure to complete could result in the accrual of additional costs to their businesses without any of the potential benefits of any Combination having been achieved.

Therefore, the aggregate consequences of a material delay in completing, or failure to complete, any firm offer, if made, could have a material adverse effect on the business, results of operations and financial condition of the NewRiver Group and the Capital & Regional Group.

NewRiver's ability to invoke certain conditions to any firm offer, if made, to either lapse such firm offer or to delay completion of such firm offer would be subject to the Panel's consent. The Panel would need to be satisfied that the underlying circumstances were of "material significance" to NewRiver in the context of any Combination and this is a high threshold to fulfil. Consequently, there is a significant risk that NewRiver could be required to complete any firm offer, if made, even where certain conditions have not been satisfied or where a material adverse change has occurred to the Capital & Regional Group. If any of the events described above were to occur, they could result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits and synergies relating to any Combination identified by the parties or could otherwise impact NewRiver's strategy and operations.

If any firm offer, if made, completes, the integration of the Capital & Regional Group with the NewRiver Group could result in operating difficulties and other adverse consequences

If any firm offer, if made, were to complete, the process of integrating Capital & Regional and its subsidiaries into the NewRiver Group could create unforeseen operating difficulties and expenditures and pose management, administrative and financial challenges. Specifically, integrating operations and personnel and pre-completion or post-completion costs could prove more difficult and/or more expensive than anticipated, thereby rendering the value of the Capital & Regional Group less than the value paid. The integration of the Capital & Regional Group could require significant time and effort on the part of NewRiver's management. The challenges of integrating the Capital & Regional Group could also be exacerbated by differences between the NewRiver Group's and the Capital & Regional Group's operational and business culture, the need to implement cost-cutting measures, difficulties in maintaining internal controls and difficulties in establishing control over cash flows and expenditures. Such difficulties in successfully integrating Capital & Regional could have an adverse effect on the Company's financial condition and results of operations.

The NewRiver Group could fail to realise the business growth opportunities, revenue benefits, cost savings, operational efficiencies and other benefits anticipated from any firm offer, if made

As stated at paragraph 3 above, the NewRiver Board believes that there is a strong strategic, operational and financial rationale for a Combination and that the Combined Group would benefit from enhanced scale, material cost savings, mid- to high-teens accretion to earnings per share, better access to acquisition and asset management opportunities, improved debt optionality, expected cost of capital benefits and the potential for increased share liquidity. However, these benefits may not be realised, for various reasons, including because the assumptions upon which the NewRiver Board determined the process of integration and the proposed cost savings could prove to be incorrect.

Under any of these circumstances, the cost savings, accretion to earnings per share, better access to acquisition and asset management opportunities, improved debt optionality, expected cost of capital benefits and the potential for increased share liquidity anticipated by the NewRiver Board to result from any firm offer, if made, may not be achieved as expected, or at all, or may be delayed, or may involve additional costs. To the extent that the NewRiver Group incurs higher integration costs or achieves lower revenue benefits or fewer cost savings than expected, the NewRiver Group's operating results, and prospects and the price of NewRiver Shares could suffer.

10.         CURRENT TRADING AND OUTLOOK

NewRiver

For details of NewRiver's current trading and prospects, please refer to NewRiver's First Quarter Company Update for the period from 1 April 2024 to 30 June 2024, released on 5 August 2024. A copy of the update is available on NewRiver's website at https://www.nrr.co.uk/investors/regulatory-news.

Capital & Regional

For details of Capital & Regional's current trading and prospects, please refer to Capital & Regional's Half Year Results to 30 June 2024, released on 1 August 2024. A copy of the announcement is available on Capital & Regional's website at https://capreg.com/wp-content/uploads/2024/09/cr-interim-press-release-hy24-final-aug-24.pdf.

11.         INTENTIONS FOR THE COMBINED GROUP

Listing and registered office

Following any Combination becoming effective, NewRiver would remain listed on the Equity Shares (Commercial Companies) category of the Official List and admitted to trading on the Main Market of the London Stock Exchange. The registered office of NewRiver would remain in London.

REIT status

Both the NewRiver Group and the Capital & Regional Group fall within the UK REIT regime and benefit from the tax efficiencies provided by that regime. The Combined Group would be expected to fall within the UK REIT regime and the relevant tax measures would continue to apply to the Combined Group.

Board and governance arrangements

Applications would be made to: (i) the FCA to cancel the listing and trading of the Capital & Regional Shares on the Equity Shares (Commercial Companies) category of the Official List and Main Market of the London Stock Exchange; and (ii) the JSE for the cancellation of the listing and trading of the Capital & Regional Shares on the Main Board of the JSE. Consequently, while NewRiver recognises the skills and experience of the Capital & Regional Board, Capital & Regional would no longer require listed company governance structures following any Combination and, accordingly, it is intended that the chair and other non-executive Capital & Regional Directors would step down from the Capital & Regional Board and the boards of Capital & Regional's subsidiaries (as applicable) with effect from any Combination becoming effective.

In addition, as announced by Capital & Regional on 8 May 2024, Lawrence Hutchings has resigned from his role as Chief Executive of Capital & Regional to take up a new role at Workspace Group PLC and it is intended that he would also step down from the Capital & Regional Board and the boards of Capital & Regional's subsidiaries (as applicable). It is also intended that Stuart Wetherly (Capital & Regional Group Finance Director) would step down from the Capital & Regional Board and the boards of Capital & Regional's subsidiaries (as applicable) on completion of a period of handover. It is anticipated that the current board and management structure of NewRiver would become the board and management structure of the Combined Group on completion of any Combination.

Portfolio

The NewRiver Directors believe that Capital & Regional's portfolio of community shopping centres would be complementary to NewRiver's existing portfolio and therefore would intend to implement individual business plans in respect of each asset and hold them within NewRiver's Core Shopping Centre portfolio. NewRiver has a track record of disciplined capital recycling based on risk-adjusted forward-looking returns and would intend to monitor the performance of Capital & Regional's assets in the 12 months post-completion of any Combination and, subject to market conditions, may consider the disposal of Capital & Regional's smaller shopping centres on a selective basis which would reduce the Combined Group's leverage.

Snozone operates three indoor snow sports centres in the UK and Spain and is a separate operating segment of Capital & Regional with its own management team. While Snozone would be expected to continue operating immediately post-completion of any Combination broadly as it does as at the date of this announcement, NewRiver is a specialist owner and manager of retail real estate and therefore it would be NewRiver's intention to undertake a strategic review of the Snozone business within the first 12 months post-completion of any Combination to establish whether it is a core hold for NewRiver or whether it would be more appropriate to recycle capital through its disposal. As at the date of this announcement, no decisions have been taken in relation to the Snozone business.

Management, employees, pensions, locations of business and research and development

Across the Combined Group, there would be duplicated costs and functions following completion of any Combination. NewRiver would therefore intend to seek operating cost and synergy benefits from the rationalisation of the board (as outlined above), and overlapping group functions including certain senior management.

In order to achieve the full potential benefits of any Combination, including the expected cost synergies, the NewRiver Directors would continue to undertake a detailed business, operational and administrative review of the Combined Group to assess how it can work most effectively and efficiently following completion of any Combination. This evaluation would include an assessment of the overlapping group functions of Capital & Regional and NewRiver, together with consolidating support and asset and property management functions (including the employment of certain Capital & Regional employees currently in asset and property management roles potentially being transferred by operation of law to one of NewRiver's current outsourced service providers), as well as removing duplicated costs in respect of certain corporate functions related to Capital & Regional's status as a listed and publicly traded company, which would no longer be required by the Combined Group. Any Combination would be likely to lead to a significant reduction in duplicative senior, corporate and operational Capital & Regional Group headcount, impacting a minority of total Capital & Regional Group employee headcount. Capital & Regional Group headcount would be further reduced by the proposed transfer of asset and property management staff by operation of law to one of NewRiver's current outsourced service providers (as referred to above).

NewRiver would intend to consolidate the head office functions of NewRiver and Capital & Regional so that the Combined Group could operate from a single location. It is anticipated that the Combined Group would operate from NewRiver's existing head office at 89 Whitfield Street, London, and that Capital & Regional's head office at Strand Bridge House, Strand, London, would, in due course, be sub-let. It is not envisaged that material changes would arise in relation to NewRiver's existing employees and headcount as a result of any Combination.

The proposals referred to above would remain subject to a fair and transparent process in accordance with applicable legal requirements (including, but not limited to, where required, any applicable prior information and consultation obligations).

The Combined Group would intend to safeguard existing statutory and contractual employment rights following completion of any Combination and NewRiver would not intend to make any material changes in the conditions of employment of existing Capital & Regional employees, including with respect to pension contributions.

Save as set out above, NewRiver would not otherwise intend any redeployment of Capital & Regional's fixed asset base. Owing to the nature of its business, Capital & Regional has no research and development function.

Neither Capital & Regional nor NewRiver have an existing defined benefit pension scheme.

Dividends

Following the completion of any Combination, the Combined Group would continue to pursue NewRiver's dividend policy of paying dividends equivalent to 80 per cent. of UFFO, with any top-up, including where required to ensure compliance with the REIT regime, to be confirmed at the Combined Group's full year results.

12.         PRE-CONDITIONS TO THE MAKING OF ANY FIRM OFFER

The making of any firm offer for the entire issued, and to be issued, ordinary share capital of Capital & Regional by NewRiver is subject to and conditional upon the following:

·          the satisfactory completion of the Placing (in accordance with the terms, and subject to the conditions, set out in the Placing Launch Announcement) (the "Placing Condition"); and

·                the receipt by NewRiver of confirmation from the Independent Capital & Regional Directors of their:

o    intention, in the event that a firm offer is made by NewRiver on the Possible Offer Terms and otherwise on the terms and subject to the conditions set out this announcement and in the Rule 2.7 Announcement (as defined below), to provide their unanimous, unqualified and unconditional recommendation to Capital & Regional Shareholders to vote, or procure the vote, in favour of the Scheme at the Court Meeting and of the Capital & Regional Resolution(s) to be proposed at the Capital & Regional General Meeting (or, in the event that any Combination would be implemented by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) (having been advised by Capital & Regional's financial advisers that the financial terms of such firm offer are fair and reasonable); and

o   agreement that an announcement of a firm offer by NewRiver under Rule 2.7 of the Code in substantially agreed form as at the date of this announcement (a "Rule 2.7 Announcement") on the Possible Offer Terms and otherwise on the terms and subject to the conditions set out in this announcement containing such recommendation may be released.

If either of the above pre-conditions is not satisfied or, if applicable, waived, NewRiver will be under no obligation to make a firm offer for Capital & Regional and to release a Rule 2.7 Announcement. However, there can be no certainty that a firm offer will ultimately be made, even if the above pre-conditions are satisfied or, if applicable, waived.

The Independent Capital & Regional Directors are not obliged to recommend any firm offer by NewRiver on the Possible Offer Terms. It is therefore possible that the Independent Capital & Regional Directors could decide against making such a recommendation, notwithstanding that the Placing Condition is satisfied or, if applicable, waived, in which case NewRiver would not be required to make a firm offer for Capital & Regional and release a Rule 2.7 Announcement.

13.         CONDITIONS

It is intended that any firm offer, if made, would be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. NewRiver would reserve the right to effect any firm offer, if made, by way of a Takeover Offer, subject to the consent of the Panel.

Any firm offer, if made, would be subject to the following conditions:

·         the receipt of approval from the FCA to the proposed change of control of a regulated entity within the Capital & Regional Group;

·          a resolution to approve the Scheme being passed by the requisite majority of Capital & Regional Shareholders;

·            the Capital & Regional Resolution(s) being passed at the Capital & Regional General Meeting by the requisite majority or majorities of Capital & Regional Shareholders;

·              the NewRiver Combination Resolution(s) being passed at the NewRiver General Meeting by the requisite majority or majorities of NewRiver Shareholders;

·           the FCA having acknowledged to NewRiver or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New NewRiver Shares to the Equity Shares (Commercial Companies) category of the Official List has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied;

·            the London Stock Exchange having acknowledged to NewRiver or its agent (and such acknowledgement not having been withdrawn) that the New NewRiver Shares will be admitted to trading on the Main Market;

·           following the Capital & Regional Meetings, the Scheme being sanctioned by the Court (without modification, or with modification on terms agreed by NewRiver and Capital & Regional); and

·                following such sanction, a copy of the Scheme Court Order being delivered to the Registrar of Companies.

14.         CONSENTS

Jefferies, Kinmont, Panmure Liberum, Shore Capital, Deutsche Numis, Stifel and Java Capital have each given and not withdrawn their consent to the publication of this announcement with the inclusion herein of the references to their names in the form and context in which they appear.

Knight Frank, Colliers and CBRE have each given and not withdrawn their consent to the publication of their valuation reports in this announcement and the inclusion herein to the references to their names in the form and context in which they appear.

BDO has given and not withdrawn its consent to the inclusion of its report on the Quantified Financial Benefits Statement in Part B of Appendix 3 of this announcement.

15.         DOCUMENTS PUBLISHED ON A WEBSITE

In accordance with Rule 26.1 of the Code, copies of the following documents will, to the extent not already published there, by no later than 12.00 noon on the Business Day following the date of this announcement, be published on Capital & Regional's website at https://capreg.com/investor-info/possible-offer/ and NewRiver's website at https://www.nrr.co.uk/investors/possible-offer-for-capital-and-regional-plc/disclaimer during the Offer Period:

·                 this announcement;

·                 the irrevocable undertaking referred to in paragraph 6 above;

·         the consent letters from each of Jefferies, Kinmont, Panmure Liberum, Shore Capital, Deutsche Numis, Stifel, Java Capital, BDO, Knight Frank, Colliers and CBRE referred to in paragraph 14 above;

·                 the no material change letters from each of Knight Frank, Colliers and CBRE;

·             the reports from each of BDO and Jefferies in relation to the Quantified Financial Benefits Statement contained in Parts B and C, respectively, of Appendix 3 to this announcement;

·                 the Knight Frank valuation reports;

·                 the Colliers valuation report; and

·                 the CBRE valuation report.

The contents of Capital & Regional's website and NewRiver's website, and any website accessible from hyperlinks, are not incorporated into and do not form part of this announcement.

Appendix 1 to this announcement contains bases and sources of certain information contained in this announcement. Property valuation reports for Capital & Regional and NewRiver (as at 30 June 2024) pursuant to Rule 29 of the Code are set out in Appendix 2.

In the event that the assets within either Capital & Regional's or NewRiver's property portfolios were to be sold at the valuations contained in the valuation reports set out in Appendix 2 to this announcement, any gains realised on such disposals may be subject to taxation in the UK.

For the purposes of Rule 29.5 of the Code, the NewRiver Board confirms that each of Knight Frank and Colliers has confirmed to it that an updated valuation of the relevant properties within NewRiver's property portfolio (and, in the case of Knight Frank, Capital & Regional's property portfolio) as at the date of this announcement which it has valued would not be materially different from the valuations given by each of Knight Frank and Colliers as at 30 June 2024 and contained in their respective valuation reports set out in Appendix 2 to this announcement.

For the purposes of Rule 29.5 of the Code, the Capital & Regional Board confirms that CBRE has confirmed to it that an updated valuation of Capital & Regional's property portfolio as at the date of this announcement would not be materially different from the valuation given by CBRE as at 30 June 2024 and contained in CBRE's valuation report set out in Appendix 2 to this announcement.

For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement is the responsibility of NewRiver and the NewRiver Directors. Appendix 3 to this announcement sets out the Quantified Financial Benefits Statement relating to cost savings and synergies arising out of any Combination and provides underlying information and bases of belief. Appendix 3 also includes reports from NewRiver's reporting accountant, BDO, and its lead financial adviser, Jefferies, in connection with the Quantified Financial Benefits Statement, as required pursuant to Rule 28.1(a) of the Code.

Appendix 4 to this announcement sets out certain information in relation to the Combined Group's debt position. Appendix 5 to this announcement sets out certain additional information in relation to the Combined Group's portfolio. Appendix 6 contains certain information in relation to the top five tenants of each of NewRiver, Capital & Regional and the Combined Group. Certain terms used in this announcement are defined in Appendix 7.

This is an announcement falling under Rule 2.4 of the Code and does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the code and there can be no certainty that any firm offer will be made nor as to the terms on which any firm offer might be made. This announcement does not constitute an offer for sale of any securities or an invitation to purchase or subscribe for any securities.

Enquiries

Eversheds Sutherland (International) LLP is acting as legal adviser to NewRiver in connection with the Possible Offer.

CMS Cameron McKenna Nabarro Olswang LLP is acting as legal adviser to Capital & Regional in connection with the Possible Offer.

Further information

This announcement contains inside information in relation to NewRiver and Capital & Regional for the purposes of Article 7 of the Market Abuse Regulation. This announcement has been authorised for release on behalf of NewRiver by the NewRiver Board. The person responsible for arranging the release of this announcement on behalf of Capital & Regional is Stuart Wetherly, Company Secretary.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise, or the solicitation of any vote in favour or approval of any offer in any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction and any such offer (or solicitation) may not be extended in any such jurisdiction.

This announcement has been prepared in accordance with English law and the Code, and information disclosed may not be the same as that which would have been prepared in accordance with laws outside of the United Kingdom. The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Disclaimers

Jefferies International Limited ("Jefferies"), Panmure Liberum Limited ("Panmure Liberum") and Shore Capital Stockbrokers Limited ("Shore Capital", and together with Jefferies and Panmure Liberum, the "Joint Brokers") are authorised and regulated by the FCA in the United Kingdom. Jefferies is acting as lead financial adviser, Panmure Liberum is acting as sole sponsor, and the Joint Brokers are each acting as joint broker, joint global co-ordinator and joint bookrunner exclusively for NewRiver and no one else in connection with the Possible Offer and shall not be responsible to anyone other than NewRiver for providing the protections afforded to their clients, nor for providing advice in connection with the Possible Offer or any matter referred to herein. None of the Joint Brokers nor any of their affiliates (nor any of them or their respective directors, officers, employees, representatives or agents) owe or accept any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of such Joint Broker in connection with the Possible Offer, this announcement, any statement contained herein or otherwise.

Kinmont Limited ("Kinmont"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for NewRiver and no one else in connection with the Possible Offer and shall not be responsible to anyone other than NewRiver for providing the protections afforded to clients of Kinmont, nor for providing advice in connection with the Possible Offer or any matter referred to herein. Neither Kinmont nor any of its affiliates (nor any of its or their respective directors, officers, employees, representatives or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Kinmont in connection with the Possible Offer, this announcement, any statement contained herein or otherwise.

Numis Securities Limited ("Deutsche Numis"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Capital & Regional and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of Deutsche Numis, nor for providing advice in relation to any matter referred to herein. Neither Deutsche Numis nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Deutsche Numis in connection with this announcement, any statement contained herein or otherwise.

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for Capital & Regional and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of Stifel, nor for providing advice in relation to any matter referred to herein.

Java Capital Trustees and Sponsors Proprietary Limited ("Java Capital"), which is authorised and regulated in South Africa by the JSE, which is licensed as a securities exchange and is regulated by the Financial Sector Conduct Authority and the Prudential Authority of South Africa, is acting as JSE sponsor exclusively for Capital & Regional and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of Java Capital or for providing advice in relation to the contents of, or matters referred to in, this announcement or any matter referred to herein. Neither Java Capital nor any of its subsidiaries, affiliates or branches owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Java Capital in connection with this announcement, any statement or other matter or arrangement referred to herein or otherwise.

Notice to US investors in Capital & Regional

US holders of Capital & Regional Shares should note that any firm offer, if made, would relate to the shares of an English company and would be made by means of a scheme of arrangement provided for under, and governed by, English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, any firm offer, if made, would be subject to the disclosure and procedural requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of United States tender offer and proxy solicitation rules.

The financial information included in this announcement and to be included in any Scheme Document if a firm offer is made (or, if any firm offer is implemented by way of a Takeover Offer, any Offer Document) has been, or will have been, prepared in accordance with International Financial Reporting Standards and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

If a firm offer is made, any New NewRiver Shares would be expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof.

For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by Section 3(a)(10) thereunder, Capital & Regional would advise the Court that its sanctioning of the Scheme would be relied on by NewRiver as an approval of the Scheme following a hearing on the fairness of the terms and conditions of the Scheme to Capital & Regional Shareholders, at which Court hearing all Capital & Regional Shareholders would be entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all such holders.

None of the securities referred to in this announcement have been approved or disapproved by the SEC or any US state securities commission, nor have any such authorities passed judgment upon the fairness or the merits of any firm offer, if made, or determined if this announcement is accurate or complete. Any representation to the contrary is a criminal offence in the United States.

If, in the event a firm offer is made, NewRiver exercises the right to implement any Combination by way of a Takeover Offer and determines to extend the offer into the United States, the Takeover Offer would be made in compliance with applicable United States tender offer and securities laws and regulations and the requirements of US state securities laws, in each case, to the extent any exemptions thereunder are not applicable.

A US holder of Capital & Regional Shares should be aware that any transactions contemplated herein could have tax consequences for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. In the event that a firm offer is made, each Capital & Regional Shareholder would be urged to consult with legal, tax and financial advisers in connection with making a decision regarding any Combination.

It may be difficult for US holders of Capital & Regional Shares to enforce their rights and any claims arising out of US federal laws, since each of NewRiver and Capital & Regional are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Capital & Regional 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 judgement.

To the extent permitted by applicable law, in accordance with normal UK practice, NewRiver, certain affiliated companies and their nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Capital & Regional Shares outside of the US, other than pursuant to any firm offer, if made, until the date on which any Combination and/or Scheme becomes Effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act. Any information about such purchases would be disclosed as required in the UK, would be reported to the Regulatory News Service of the London Stock Exchange and would be available on the London Stock Exchange website at www.londonstockexchange.com and via SENS.

Forward-looking statements

This announcement (including information incorporated by reference into this announcement), oral statements made regarding the Possible Offer, and other information published by NewRiver and Capital & Regional contain statements which are, or may be deemed to be, "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 NewRiver and Capital & Regional 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 any firm offer, if made, on NewRiver and Capital & Regional, the expected timing and scope of any firm offer, if made, 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" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "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. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business and management strategies and the expansion and growth of NewRiver's or Capital & Regional's or the Combined Group's operations and potential synergies resulting from any firm offer, if made.

Although NewRiver and Capital & Regional believe that the expectations reflected in such forward-looking statements are reasonable, neither NewRiver nor Capital & Regional can give 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 is 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, but are not limited to: the ability to complete any firm offer, if made; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions on the proposed terms; changes in the global political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or disposals; changes in general economic and business conditions; changes in the behaviour of other market participants; the anticipated benefits from any Combination not being realised as a result of changes in general economic and market conditions; weak, volatile or illiquid capital and/or credit markets; changes in the degree of competition in the geographic and business areas in which NewRiver and Capital & Regional operate; and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.

Neither NewRiver nor Capital & Regional, nor any of their respective associates or 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. Given the risks and uncertainties, you are cautioned not to place any reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations, neither NewRiver nor Capital & Regional is under any obligation, and each of NewRiver and Capital & Regional expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Quantified Financial Benefits Statement

Statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to in the event a firm offer is made may not be achieved, may be achieved later or sooner than estimated, or those achieved could be materially different from those estimated. Neither the Quantified Financial Benefits Statement nor any other statement in this announcement should be construed as a profit forecast or interpreted to mean that the Combined Group's earnings in the first full year following any Combination becoming effective, or in any subsequent period, would necessarily match or be greater than or be less than those of NewRiver or Capital & Regional for the relevant preceding financial period or any other period. For the purposes of Rule 28 of the Code, the Quantified Financial Benefits Statement contained in this announcement is the responsibility of NewRiver and the NewRiver Directors.

No profit forecasts or estimates

No statement in this announcement is intended as a profit forecast or profit estimate for any period and no statement in this announcement should be interpreted to mean that earnings or earnings per share for NewRiver or Capital & Regional for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for NewRiver or Capital & Regional.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables and paragraphs may vary slightly and figures shown as totals in certain tables and paragraphs may not be an arithmetic aggregation of the figures that precede them.

Rule 2.4 information

In accordance with Rule 2.4(c)(iii) of the Code, NewRiver confirms that it is not aware of any dealings in Capital & Regional Shares that would require it to offer a minimum level, or a particular form, of consideration under Rule 6 or Rule 11 of the Code. However, it has not been practicable for NewRiver to make enquiries of all persons acting in concert with it prior to the date of this announcement in order to confirm whether any details are required to be disclosed under Rule 2.4(c)(iii) of the Code. To the extent that any such details are identified following such enquiries, NewRiver will make an announcement disclosing such details as soon as practicable, and in any event by no later than the time it is required to make its Opening Position Disclosure under Rule 8.1 of the Code.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Capital & Regional's website at https://capreg.com/investor-info/possible-offer/ and NewRiver's website at https://www.nrr.co.uk/investors/possible-offer-for-capital-and-regional-plc/disclaimer by no later than 12 noon (London time) on the first Business Day following the date of this announcement.

For the avoidance of doubt, neither the contents of these websites nor the contents of any websites accessible from any hyperlinks is incorporated into or forms part of this announcement.

Requesting hard copy documents

In accordance with Rule 30.3 of the Code, Capital & Regional Shareholders may request a hard copy of this announcement (and any information incorporated by reference in this announcement), free of charge, by contacting Equiniti during business hours on 0371 384 2438 (from within the United Kingdom) and +44 (0) 121 415 7047 (from outside the United Kingdom) or by submitting a request in writing to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines will be open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales.

Capital & Regional Shareholders recorded on the South African Register may request hard copies of this announcement by contacting JSE Investor Services at One Exchange Square, 2 Gwen Lane, Sandown, Sandton 2196, South Africa or on 011 713 0800 (from within South Africa) and +27 11 713 0800 (from outside South Africa) between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (public holidays excepted). Calls to this number from persons who are not resident in South Africa are charged at the applicable international rate. Calls from a mobile device may incur network extras.

For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Combination should be in hard copy form.