LBT - Liberty International PLC Announces Key Details Of A Proposed Demerger9 Mar 2010
LBT
LILII                                                                           
LBT - Liberty International PLC Announces Key Details Of A Proposed Demerger    
Liberty International PLC                                                       
Incorporated in the United Kingdom                                              
(Registration number: 03685527)                                                 
Short Name: LIB-INT                                                             
Share Code: LBT                                                                 
ISIN Number: GB0006834344                                                       
Liberty International PLC announces proposed demerger                           
Introduction                                                                    
Further to the announcement made by Liberty International PLC ("Liberty         
International") on 5 February 2010 responding to press comment, Liberty         
International today announces its intention to separate into two businesses,    
Capital Shopping Centres and Capital & Counties. Liberty International has      
also announced today its audited preliminary results for the year ended 31      
December 2009.                                                                  
The separation will be effected by way of a demerger (the "Demerger") of        
Liberty International`s central London focused property investment and          
development division, to a new company called Capital & Counties Properties     
PLC ("Capital & Counties"), from the rest of the Liberty International Group    
comprising predominantly the UK shopping centres business. Liberty              
International will be renamed Capital Shopping Centres Group PLC ("Capital      
Shopping Centres").                                                             
The Demerger will create distinct entities with separate strategic, capital     
and economic characteristics and management teams:                              
-    Capital Shopping Centres, a prime regional shopping centre focused UK      
    REIT, aiming to deliver strong long-term returns through income and         
    capital growth; and                                                         
-    Capital & Counties, a central London focused, non-REIT, property           
    company focusing on total return opportunities in London`s real estate      
    market.                                                                     
Highlights                                                                      
-    Liberty International to retain its UK regional shopping centre assets,    
    along with its US assets and Indian investments, and to be renamed          
    Capital Shopping Centres Group PLC.                                         
-    Capital Shopping Centres had, on a pro forma basis as at 31 December       
2009, investment and development properties of GBP5.0 billion, net          
    external debt of GBP2.7 billion and adjusted, diluted net assets of         
    GBP2.1 billion giving an adjusted, diluted net asset value per share of     
    339 pence. For the year ended 31 December 2009 Capital Shopping Centres     
had pro forma net rental income of GBP292 million.                          
-    Capital & Counties to comprise Liberty International`s interests in        
    Covent Garden, Earls Court & Olympia, including the Empress State           
    Building, and the Great Capital Partnership, as well as its Chinese         
fund investments.                                                           
-    Capital & Counties had, on a pro forma basis as at 31 December 2009,       
    investment and development properties of GBP1,240 million, net debt of      
    GBP463 million and adjusted, diluted net assets of GBP791 million           
giving an adjusted, diluted net asset value per share of 127 pence. For     
    the year ended 31 December 2009 Capital & Counties generated pro forma      
    net rental income of GBP74 million (adjusted for certain non recurring      
    items).                                                                     
-    Capital Shopping Centres Group PLC and Capital & Counties Properties       
    PLC both to have premium listings on the Official List and to be traded     
    on the London Stock Exchange.                                               
-    The approval and posting of documentation relating to the proposed         
Demerger remains subject to the Liberty International Board being           
    satisfied with the South African listing requirements for the Demerger,     
    in particular the listing status granted to Capital & Counties              
    Properties PLC, and that the existing domestic listing status of            
Liberty International is not prejudiced as a result of the Demerger,        
    both of which require formal approval from the South African                
    authorities. The nature of the secondary listing on the JSE Limited         
    (the "JSE") being sought for Capital & Counties Properties PLC is an        
inward listing, with South African institutional shareholders given a       
    period of time to realign their portfolio if their foreign portfolio        
    allowance is exceeded as a result of the Demerger. The requisite            
    applications in this regard have been submitted to the relevant             
authorities.                                                                
-    Capital Shopping Centres to remain a UK REIT, Capital & Counties to be     
    a non-REIT property company.                                                
-    Patrick Burgess MBE, the current Chairman of Liberty International, to     
be Chairman of Capital Shopping Centres and David Fischel, the current      
    Chief Executive of Liberty International, to be Chief Executive of          
    Capital Shopping Centres.                                                   
-    Ian Durant, the current Finance Director of Liberty International, to      
be Chairman of Capital & Counties and Ian Hawksworth, the current           
    Managing Director of Capital & Counties, to be Chief Executive of           
    Capital & Counties. A search for a new Finance Director of Capital          
    Shopping Centres Group PLC is underway to replace Ian Durant, who will      
stand down from this role after a transitionary period.                     
-    Documentation relating to the proposed Demerger, which will include the    
    timetable for the Demerger process, will be posted following the formal     
    approval of the South African authorities.                                  
Patrick Burgess, Chairman of Liberty International, commented:                  
"The proposed Demerger announced today responds to what the Liberty             
International Board considers to be a changing approach to investment in        
real estate, both in the equity markets and in the property market,             
requiring greater focus and more active management. It will create two          
distinct listed businesses with different characteristics and attractions       
for shareholders. Capital Shopping Centres and Capital & Counties will be       
positioned to execute their own significant strategic plans, fully engaging     
with investors who will be able to select their individual weightings to        
each of the businesses over time. Coupled with the current experience and       
strength of the respective management teams, augmented as strategic growth      
opportunities arise, the Demerger will best position both businesses to         
deliver strong shareholder returns."                                            
A presentation to analysts and investors will take place at 100 Liverpool       
Street, London EC2 at 09.30 GMT on 9 March 2010.  The presentation will also    
be available to international analysts and investors through a live audio       
call and webcast.                                                               
The presentation will be available on the group`s website www.liberty-          
international.co.uk                                                             
Enquiries                                                                       
Liberty International PLC                                                       
Tel:    +44 (0) 20 7960 1200                                                    
David Fischel                                                                   
Ian Durant                                                                      
Rothschild                                                                      
Joint Financial adviser and sole Sponsor in the UK and South Africa             
Tel:  +44 (0) 20 7280 5000                                                      
Alex Midgen                                                                     
Duncan Wilmer                                                                   
David Lake                                                                      
BofA Merrill Lynch                                                              
Joint Financial adviser and joint Broker                                        
Tel:   +44 (0) 20 7628 1000                                                     
Simon Mackenzie-Smith                                                           
Simon Fraser                                                                    
UBS Investment Bank                                                             
Joint Broker                                                                    
Tel:   +44 (0) 20 7567 8000                                                     
Hew Glyn Davies                                                                 
Jonathan Bewes                                                                  
Public relations                                                                
UK - Hudson Sandler                                                             
Tel:    +44 (0) 20 7796 4133                                                    
Michael Sandler                                                                 
SA - College Hill                                                               
Tel:    +27 (0) 11 447 3030                                                     
Nicholas Williams                                                               
Further information on the proposed Demerger                                    
Background to and reasons for the proposed separation                           
-    Capital Shopping Centres and Capital & Counties are distinct businesses    
    with different risk and reward profiles and capital requirements.           
-    The Demerger will create distinct entities with separate strategic,        
capital and economic characteristics and management teams:                  
    -    Capital Shopping Centres, a prime regional shopping centre focused     
         UK REIT, aiming to deliver strong long-term returns through income     
         and capital growth; and                                                
-    Capital & Counties, a central London focused, non-REIT, property       
         company focusing on total return opportunities in London`s real        
         estate market.                                                         
-    The Demerger will enable existing shareholders of Liberty International    
to continue to participate in both of the businesses with the same          
    initial economic weighting whilst providing flexibility for investors       
    to select their own weighting to each of Capital Shopping Centres and       
    Capital & Counties over time.                                               
-    Each business will be able to attract the most appropriate shareholder     
    base to provide optimal support to continue its own strategic               
    development.                                                                
-    The Liberty International Board believes that the Demerger will enable     
Capital Shopping Centres and Capital & Counties to achieve greater          
    value for shareholders over time than the current Liberty International     
    would as one combined business.                                             
Capital Shopping Centres                                                        
Upon Demerger, Capital Shopping Centres will be the only UK REIT focused on     
prime regional shopping centres and one of a small number of prime regional     
shopping centre REITs globally. Capital Shopping Centres has interests in 13    
UK shopping centres (excluding Westgate, Oxford), which include nine of the     
UK`s top 30 regional shopping centres.                                          
As at 31 December 2009 on a pro forma basis, Capital Shopping Centres had       
investment and development properties of GBP5.0 billion and adjusted,           
diluted net assets of GBP2.1 billion giving an adjusted, diluted net asset      
value per share of 339 pence. For the year ended 31 December 2009, on a pro     
forma basis, Capital Shopping Centres had net rental income of GBP292           
million and adjusted earnings of GBP75 million giving an adjusted earnings      
per share of 15.1 pence.                                                        
The table below provides selected information on Capital Shopping Centres`      
UK assets.                                                                      
                                                 Market  value   of             
                       Gross                     CSC interests                  
retail     Ownership      as at 31 Dec 2009              
                       area  of                                                 
                       centre                                                   
                       `000 sq.                  GBPm                           
ft.                                                      
Out-of-town   shopping                                                          
centres                                                                         
Lakeside, Thurrock       1,434     100%           890                           
MetroCentre,             2,089     90%        1   775                           
Gateshead                                                                       
Braehead, Glasgow        1,060     100%           505                           
The   Mall  at  Cribbs   1,025     33%        2   205                           
Causeway, Bristol                                                               
Total      out-of-town  5,608                     2,375                         
centres                                                                         
                                                                                
In-town       shopping                                                          
centres                                                                         
The         Harlequin,   726       93%            335                           
Watford                                                                         
Victoria       Centre,   981       100%           315                           
Nottingham                                                                      
The           Arndale,   1,600     48%        3   289                           
Manchester                                                                      
Chapelfield, Norwich    530        100%           220                           
Eldon          Square,   1,020    460%            218                           
Newcastle                                                                       
St David`s, Cardiff      1,395     50%            211                           
Other 5                 1,929                     614                           
Total in-town centres   8,181                     2,202                         
                                                                                
Total    UK   regional  13,789                    4,577                         
shopping centres                                                                
Notes                                                                           
1.   Interest shown is that of the MetroCentre Partnership in the               
    MetroCentre (90 per cent.) and the Metro Retail Park (100 per cent.).       
Capital Shopping Centres has a 60 per cent. interest in the MetroCentre     
    Partnership which is consolidated as a subsidiary of the group.             
2.   The group`s interest is through a joint venture ownership of a 66 per      
    cent. interest in the Mall at Cribbs Causeway and a 100 per cent.           
interest in The Retail Park, Cribbs Causeway.                               
3.   The group`s interest is through a joint venture ownership of a 95 per      
    cent. interest in The Arndale, Manchester, and 90 per cent. interest in     
    New Cathedral Street, Manchester.                                           
4.   Lettable area increased to 1,332,000 sq. ft. on completion of St.          
    Andrew`s Way in February 2010.                                              
5.   Includes the group`s interests in The Chimes, Uxbridge, The Potteries,     
    Stoke-on Trent, The Glades, Bromley and Xscape, Braehead                    
Liberty International exchanged contracts in January 2010 for the               
conditional sale of Westgate, Oxford for gross proceeds of GBP56 million.       
The sale is expected to complete in the first half of 2010. Figures relating    
to this asset are excluded from the above table.                                
In addition to its UK shopping centre assets, Capital Shopping Centres will     
own Liberty International`s US assets (which are predominantly retail and       
currently reported as Capco USA in Liberty International`s accounts), and       
investments in Indian shopping centre developments. The US and Indian           
property related assets were valued at GBP348 million and GBP32 million         
respectively as at 31 December 2009 representing in aggregate approximately     
8 per cent. of Capital Shopping Centres` property assets on a pro forma         
basis. Liberty International continues to actively explore a tax efficient      
solution to reduce exposure to the United States over time.                     
Capital Shopping Centres` strategy is to maintain a market leading position     
as an active owner, manager and developer of prime UK regional shopping         
centres. Capital Shopping Centres undertakes asset and centre management        
initiatives across its existing centres, combined with selective asset          
acquisitions and disposals, with the aim of delivering strong long-term         
returns for its shareholders through income and capital growth.                 
Key strengths                                                                   
The Liberty International Directors believe the key strengths of Capital        
Shopping Centres are:                                                           
-    Leading UK shopping centre business with focus on prime assets. High       
    quality regional shopping centres continue to outperform secondary          
locations given the long-term trend for retail trade to gravitate           
    towards the strongest destinations.                                         
-    Defensive and resilient rental income with recovery prospects. Despite     
    a period of relatively high tenant failure levels at the end of 2008        
and early 2009, like-for-like net rental income only fell by 3.4 per        
    cent. in 2009 and Capital Shopping Centres has successfully restored        
    occupancy levels to 97.8 per cent. as at 31 December 2009. Like-for-        
    like footfall increased by 3 per cent. in 2009.                             
-    Significant growth prospects, from a number of factors: (i) the re-        
    letting of temporary leases, which were a feature of 2009, as they          
    expire in 2010 and 2011; (ii) yield compression driving capital             
    appreciation - Capital Shopping Centres` centres were valued                
defensively as at 31 December 2009 on an average 7.1 per cent. nominal      
    equivalent yield; (iii) active management projects at many of Capital       
    Shopping Centres` centres; and (iv) in the medium term, expansion           
    projects at a number of centres.                                            
-    Robust financial position. Capital Shopping Centres had a pro forma        
    loan-to-value of 55 per cent. as at 31 December 2009. Following the         
    Lakeside refinancing in January 2010, Capital Shopping Centres has no       
    UK asset-specific debt refinancing requirement until 2014, cash of          
GBP319 million as at 31 December 2009 and available undrawn facilities      
    of GBP248 million.                                                          
-    Experienced management team. The team has complementary skills across      
    managing, developing and investing in retail assets and a demonstrable      
track record in managing Capital Shopping Centres` assets as part of        
    the Liberty International Group throughout the economic cycle.              
Financial structure                                                             
On a pro forma basis, adjusting for the Demerger, as at 31 December 2009        
Capital Shopping Centres had gross external debt of GBP3.0 billion, cash        
balances of GBP0.3 billion and net external debt of GBP2.7 billion, giving a    
loan-to-value ratio of 55 per cent.                                             
As announced on 22 January 2010, a new seven year, GBP525 million loan          
facility secured against Lakeside, Thurrock has been agreed with a syndicate    
of seven banks. The proceeds of the loan, together with existing Liberty        
International cash resources, have been used to redeem in full the existing     
loans of GBP546 million which would otherwise have been repayable in July       
2011.                                                                           
Liberty International has agreed an extension of the maturity of its            
existing and currently undrawn revolving credit facility by two years to        
June 2013. This facility, which has been reduced in size from GBP360 million    
to GBP248 million, will remain with Capital Shopping Centres following the      
Demerger.                                                                       
Capital & Counties                                                              
Upon Demerger, Capital & Counties will be one of the largest listed central     
London focused investment and development property companies, with 81           
investment properties held directly or through joint ventures, located          
predominantly in west London and the West End and with limited exposure to      
the City and Midtown.                                                           
As at 31 December 2009 on a pro forma basis, Capital & Counties had             
investment and development properties of GBP1,240 million and adjusted,         
diluted net assets of GBP791 million giving an adjusted, diluted net asset      
value per share of 127 pence. For the year ended 31 December 2009, on a pro     
forma basis, Capital & Counties had net rental income of GBP79 million and      
adjusted earnings of GBP12 million giving an adjusted earnings per share of     
2.0 pence. The net rental income of GBP79 million included GBP1.4 million of    
income from assets that have since been sold and GBP4.0 million of income       
attributable to Capital & Counties` joint venture partner in respect of the     
Empress State Building, which was fully consolidated in Capital & Counties`     
accounts until an accounting treatment change in August 2009.                   
Capital & Counties has a concentration of assets in three landmark estates      
in the central London real estate market, with the potential for substantial    
active asset management to drive superior total returns for Capital &           
Counties` shareholders.                                                         
Capital & Counties` assets principally comprise:                                
-    Covent Garden London, which has property assets of GBP548 million (as      
    at 31 December 2009);                                                       
-    Earls Court & Olympia, an exhibition business with property assets of      
    GBP340 million (as at 31 December 2009), which is wholly-owned by           
Capital & Counties following the recent buyout of its partners` shares;     
-    a 50 per cent. interest in the Empress State Building, an office           
    building adjacent to Earls Court, which is held in a joint venture with     
    Land Securities Group plc, with a value of GBP94 million (as at 31          
December 2009) for Capital & Counties` interest; and                        
-    a 50 per cent. interest in the Great Capital Partnership, a joint          
    venture with Great Portland Estates plc focused predominantly on the        
    West End, particularly Regent Street and Piccadilly, with Capital &         
Counties` share of property assets valued at GBP247 million (as at 31       
    December 2009).                                                             
As at 31 December 2009, these assets relate to, in aggregate, 3.5 million       
sq. ft., of which retail space accounted for 20 per cent., office space         
accounted for 41 per cent., exhibition space accounted for 35 per cent. and     
residential space accounted for 4 per cent.                                     
Capital & Counties also has investments in two real estate investment funds     
focused on China valued at GBP46 million as at 31 December 2009.                
Key strengths                                                                   
The Liberty International Directors believe the key strengths of Capital &      
Counties are:                                                                   
-    Focus on central London is expected to deliver rental resilience and       
capital value appreciation. London is the most active real estate           
    investment market in the UK and is well positioned as an economic hub.      
-    High concentration of assets in landmark estates within London. This       
    critical mass in the three core locations creates economies of scale        
and enables Capital & Counties to capture the wider benefit of its          
    active management initiatives. For example, the strategy for Covent         
    Garden London is to extend prime rents within the estate and to             
    reposition this internationally known landmark as a world class             
destination.                                                                
-    Substantial opportunity to actively manage its estate. The Earls Court     
    & Olympia investment provides a land management opportunity to secure       
    planning permission for Earls Court whilst investing in Olympia as a        
leading exhibitions business and optimising the value of the peripheral     
    assets. The Great Capital Partnership provides the opportunity to           
    capture rental reversion and potential yield compression from a well-       
    positioned portfolio of 34 predominantly West End properties.               
-    Prudent capital structure. Capital & Counties had a pro forma loan-to-     
    value of 37 per cent. and cash balances of GBP263 million as at 31          
    December 2009.                                                              
-    Experienced management team. The business has been largely created in      
the last five years with the active involvement of its current              
    management team through much of that period.                                
Financial structure                                                             
On a pro forma basis, adjusting for the Demerger, as at 31 December 2009,       
Capital & Counties had borrowings of GBP726 million in the form of debt         
facilities secured against specific property assets, cash balances of GBP263    
million, amounting to net debt of GBP463 million, giving a group loan-to-       
value ratio of 37 per cent.                                                     
Capital & Counties has no major debt refinancing requirement until the          
maturity of the loan secured on Earls Court & Olympia in February 2012.         
Capital & Counties will not initially be a REIT. Given the initial              
composition of assets and plans for active management, the Liberty              
International Directors believe that the business will have greater             
operating flexibility as a listed non-REIT property company.                    
Summary of Demerger structure and listing status                                
The Demerger will be effected through a reduction of Liberty International`s    
capital, which requires the approval of shareholders and confirmation by the    
court in the UK. If the Demerger proceeds, Liberty International`s              
shareholders will receive one share in Capital & Counties Properties PLC for    
each share in Liberty International that they own immediately prior to the      
Demerger and will continue to own their existing Liberty International          
shares. Liberty International will be renamed Capital Shopping Centres Group    
PLC.                                                                            
Save for the formal approval from the South African authorities, all other      
material third-party consents necessary to effect the Demerger, including       
from lenders where appropriate, have been obtained.                             
The approval and posting of documentation relating to the proposed Demerger     
remains subject to the Liberty International Board being satisfied with the     
South African listing requirements for the Demerger, in particular the          
listing status granted to Capital & Counties Properties PLC, and that the       
existing domestic listing status of Liberty International is not prejudiced     
as a result of the Demerger, both of which require formal approval from the     
South African authorities. The nature of the secondary listing on the JSE       
being sought for Capital & Counties Properties PLC is an inward listing,        
with South African institutional shareholders given a period of time to         
realign their portfolio if their foreign portfolio allowance is exceeded as     
a result of the Demerger. The requisite applications in this regard have        
been submitted to the relevant authorities.                                     
If Capital Shopping Centres Group PLC retains Liberty International`s           
secondary listing with domestic listing status then its shares will have the    
same exchange control status as the shares of a South African registered        
company on the JSE. Therefore all South African resident investors,             
including South African institutional investors, will be able to hold shares    
in Capital Shopping Centres Group PLC on its South African branch register      
free of any South African exchange control restrictions, save for those         
restrictions imposed by the South African Reserve Bank on all foreign           
companies that have been granted domestic listing status.                       
If for South African exchange control purposes, Capital & Counties              
Properties PLC is granted an inward listing, the listing of its shares on       
the JSE will be treated as foreign assets in the hands of South African         
resident shareholders with the following consequences:                          
-    South African resident investors who are individuals, corporate            
entities or trusts may continue to hold, sell or buy Capital & Counties     
    shares on Capital & Counties` South African branch register without         
    restriction; and                                                            
-    South African resident institutional shareholders may only hold Capital    
& Counties shares as part of their foreign portfolio allowances.            
Convertible Bonds                                                               
In relation to the 3.95 per cent. convertible bonds issued by Liberty           
International and due in September 2010 (the "Convertible Bonds"), of which     
GBP79.2 million are currently outstanding, the conversion price will be         
adjusted following completion of the Demerger in accordance with the terms      
and conditions of the Convertible Bonds to reflect the Demerger. Liberty        
International has also agreed with the trustee of the Convertible Bonds (the    
"Trustee") to grant to bondholders a put option in respect of the               
Convertible Bonds, to be exercisable at any time until shortly before           
maturity, at par plus accrued interest, and will deposit in a trust account     
with the Trustee an amount equal to the outstanding principal amount due on     
maturity plus the interest payment due on the final interest payment date.      
This amount will be used to meet any redemptions of Convertible Bonds on        
exercise of the put option, or on maturity. The put option will come into       
effect on deposit of the amount. Liberty International has agreed with the      
Trustee to make such deposit at least five business days before the             
effective date of the Demerger.                                                 
The boards of Capital Shopping Centres and Capital & Counties                   
Following the Demerger, Patrick Burgess MBE, the current chairman of Liberty    
International, will be chairman of Capital Shopping Centres, with David         
Fischel, the current chief executive of Liberty International, as chief         
executive, and Kay Chaldecott, the current managing director of the Capital     
Shopping Centres business, as executive director of property. The non-          
executive directors will be Rob Rowley (senior independent director), Ian       
Henderson CBE, Andrew Huntley, Neil Sachdev and Andrew Strang (all of whom      
are existing directors of Liberty International), Richard Gordon (who is        
replacing Graeme Gordon) and John Abel (formerly a director of Liberty          
International, who will rejoin the Liberty International Board at the next      
annual general meeting of Liberty International).                               
The recruitment of a new finance director of Capital Shopping Centres is        
underway to replace Ian Durant, who is to become chairman of Capital &          
Counties, and who will stand down from his role at Liberty International        
after a transitionary period. As previously announced, Michael Rapp will        
retire from the Liberty International Board at this year`s annual general       
meeting, and upon Demerger Ian Hawksworth will stand down from the Liberty      
International Board.                                                            
Following the Demerger, Ian Durant, the current finance director of Liberty     
International, will be chairman of Capital & Counties, with Ian Hawksworth,     
the current managing director of Capital & Counties, as chief executive,        
Soumen Das as finance director and Gary Yardley as investment director. The     
non-executive directors will be Ian Henderson CBE (deputy chairman and          
senior independent director), David Fischel, Graeme Gordon, Andrew Huntley      
and Andrew Strang. A search for an additional independent non-executive         
director of Capital & Counties is underway.                                     
The Gordon family, whose combined interest in Liberty International is 14.8     
per cent., intends to vote in favour of the Demerger and to remain invested     
in, and will be represented on the boards of, both companies.                   
The existing Liberty International incentive plans will remain in place for     
Capital Shopping Centres. Details of certain adjustments, together with the     
new incentive arrangements for Capital & Counties, will be contained within     
the documentation to be posted in connection with the Demerger.                 
Dividends                                                                       
As stated in the audited preliminary results released today, the Liberty        
International Board intends to pay a final dividend of 11.5 pence per share     
for the full year ended 31 December 2009, bringing the full year dividend to    
16.5 pence per share in aggregate, which is the same level as for 2008.         
With respect to the year ending 31 December 2010, if the Demerger proceeds,     
it is currently intended that Capital Shopping Centres will pay a total         
dividend of not less than 15 pence per share and Capital & Counties will pay    
a total dividend of not less than 1.5 pence per share.                          
Subject to performance and available resources, Capital Shopping Centres        
will in future years seek to grow its dividend from the level of 15 pence       
per ordinary share.                                                             
Any growth in the Capital & Counties dividend in future years will depend on    
the level of net operating income (before exceptional items) while taking       
into account asset realisations and its active management plans and             
commitments within the central London market.                                   
Taxation                                                                        
For the purposes of UK taxation of chargeable gains, the Demerger should be     
treated as a reorganisation of share capital, so there should be no             
chargeable gain for UK tax purposes. In South Africa there is no demerger       
structure available to Liberty International that would provide rollover        
relief on capital gains in South Africa but the Demerger will be structured     
to minimise the capital gains tax consequences, which will be limited by        
reference to the share price of Capital & Counties following the Demerger.      
Capital & Counties will not be a REIT immediately following the Demerger, so    
will need to recognise current tax on rental profits and deferred tax on        
revaluation surpluses accrued in respect of those assets currently within       
the Liberty International REIT business (Covent Garden London, and its          
interests in the Empress State Building and Great Capital Partnership joint     
ventures) following the Demerger. Earls Court & Olympia and the China           
investments are not currently part of the Liberty International REIT            
business.                                                                       
Timetable                                                                       
Documentation relating to the proposed Demerger, which will include the         
timetable for the Demerger process, will be posted following the formal         
approval of the South African authorities. The Demerger is currently            
expected to complete in May.                                                    
Chairman and Executive Directors of Capital Shopping Centres Group PLC          
Patrick Burgess MBE - Chairman                                                  
Patrick Burgess MBE was appointed a non-executive director of Liberty           
International in 2001 and chairman in August 2008. He was a partner of the      
law firm, Gouldens, from 1974, serving as senior partner for six years,         
culminating with the merger of Gouldens with Jones Day in 2003 from whom he     
retired in 2007. He is also a non-executive director of Standard Bank PLC.      
David Fischel - Chief Executive                                                 
David Fischel joined Liberty International in 1985. He was appointed finance    
director in 1988, managing director in 1992 and chief executive in March        
2001. Throughout his career at Liberty International, he has been closely       
involved with its corporate development, including its shopping centre          
business.                                                                       
Kay Chaldecott - Executive Director, Property                                   
Kay Chaldecott joined the group in 1984. She was appointed a director of the    
Capital Shopping Centres business in 2000 and was appointed to the Liberty      
International Board in February 2005. In October 2005, she was appointed        
managing director of the Capital Shopping Centres business. Before her          
appointment as managing director and during her twenty-six year career with     
the group, Kay worked on all of the shopping centres now in the Capital         
Shopping Centres business. Her experience comprises investment, leasing and     
retailer relationships, development, asset management and property              
management.                                                                     
Chairman and Executive Directors of Capital & Counties Properties PLC           
Ian Durant - Chairman                                                           
Ian Durant will be chairman of Capital & Counties Properties PLC following      
the completion of the Demerger. Ian Durant is currently finance director of     
Liberty International, having joined in March 2008. He has wide experience      
in international finance and commercial management. A former finance            
director of Hongkong Land Holdings and Dairy Farm International he was based    
in Hong Kong until 2001. He was finance director of Thistle Hotels PLC and      
from 2005 to 2007 was chief financial officer of Sea Containers. He is a non-   
executive Director of Greene King Plc.                                          
Ian Hawksworth - Chief Executive                                                
Ian Hawksworth will be chief executive of Capital & Counties Properties PLC     
following the completion of the Demerger. He joined Liberty International in    
2006. After 14 years in Hong Kong, the last 10 years of which were as a         
director of Hongkong Land Limited responsible for commercial property, he       
was appointed as managing director of the Capital & Counties business and as    
a director of Liberty International in September 2006. He is also a non-        
executive director of AIM-listed Japan Residential Investment Company.          
Soumen Das - Finance Director                                                   
Soumen Das will be finance director of Capital & Counties Properties PLC        
following the completion of the Demerger. He is currently corporate finance     
manager of Liberty International, having joined in July 2009. He was            
previously a partner of Mountgrange Investment Management LLP responsible       
for corporate finance and acquisitions. Prior to that he was an executive       
director of UBS Investment Bank based in London, where he spent nine years      
in the real estate investment banking and real estate finance groups.           
Gary Yardley - Investment Director                                              
Gary Yardley will be investment director of Capital & Counties Properties       
PLC following completion of the Demerger. He was appointed chief investment     
officer and director of the Capital & Counties business in June 2007. He was    
previously a senior equity partner of King Sturge LLP and managing director     
of its financial services company. He is experienced in large-scale mixed-      
use developments and complex joint ventures with the public sector.             
This announcement is not a prospectus but an advertisement and investors        
should not acquire any new ordinary shares  in Capital & Counties referred      
to in this announcement except on the basis of the information contained in     
the prospectus to be published by Capital & Counties and any supplement or      
amendment thereto (the "Prospectus").                                           
A copy of the Prospectus, when published, will be available from the            
registered office of Capital & Counties at 40 Broadway, London SWlH 0BT and     
on the Liberty International website at www.liberty-international.co.uk. The    
Prospectus, when published, will also be available for inspection during        
normal business hours on any weekday (Saturdays, Sundays and public holidays    
excepted) at the offices of Linklaters LLP, One Silk Street, London EC2Y 8HQ    
and at the offices of Edward Nathan Sonnenbergs, 50 West Street, Sandton,       
2196 South Africa, South Africa, up to and including 17 May 2010.               
This announcement is for information purposes only and does not constitute      
an offer to sell or the solicitation of an offer to buy any securities or       
investment advice in any jurisdiction.                                          
The securities to which this announcement relate have not been and are not      
required to be registered under the US Securities Act. These securities have    
not been approved or disapproved by the US Securities and Exchange              
Commission, any state securities commission in the United States or any US      
regulatory authority, nor have any of the foregoing authorities passed upon     
or endorsed the merits of the offering of these securities or the accuracy      
or adequacy of this document. Any representation to the contrary is a           
criminal offence in the United States                                           
Rothschild is acting as sole sponsor and joint financial adviser in the UK      
and South Africa to Liberty International and Capital & Counties in respect     
of the Demerger. Rothschild is acting for Liberty International and Capital     
& Counties, and in the case of Rothschild South Africa, the JSE, and no one     
else in connection with the Demerger, and will not regard any other person      
as a client in relation to the Demerger and will not be responsible to          
anyone other than Liberty International and Capital & Counties, and in the      
case of Rothschild South Africa, the JSE, for providing the protections         
afforded to their respective clients or for providing advice in relation to     
the Demerger or any matters referred to in this announcement.                   
Merrill Lynch International (a subsidiary of Bank of America Corporation)       
("BofA Merrill Lynch") is acting exclusively for Liberty International and      
no one else in connection with the Demerger and will not regard any other       
person as a client in relation to the Demerger, nor will they be responsible    
to anyone other than Liberty International for providing the protections        
afforded to clients of Merrill Lynch International or for providing advice      
in connection with the Demerger, any transaction or arrangement referred to     
in this announcement or the contents of this announcement. Merrill Lynch        
International will also act as joint broker to Capital & Counties upon the      
listing of its shares.                                                          
UBS Limited ("UBS Investment Bank") is acting as joint broker to Liberty        
International and Capital & Counties in respect of the Demerger. UBS Limited    
is acting for Liberty International and Capital & Counties and no one else      
in connection with the Demerger, and will not regard any other person as a      
client in relation to the Demerger and will not be responsible to anyone        
other than Liberty International and Capital & Counties for providing the       
protections afforded to their respective clients or for providing advice in     
relation to the Demerger or any matters referred to in this announcement.       
This announcement includes statements that are, or may be deemed to be,         
"forward-looking statements", including within the meaning of Section 27A of    
the Securities Act and Section 21E of the US Exchange Act of 1934. These        
forward-looking statements can be identified by the use of a date in the        
future or forward-looking terminology, including, but not limited to, the       
terms "may", "believes", "estimates", "plans", "aims", "targets",               
"projects", "anticipates", "expects", "intends", "may", "will", "could" or      
"should" or, in each case, their negative or other variations or comparable     
terminology. These forward-looking statements include matters that are not      
historical facts and include statements regarding Liberty International`s or    
Capital & Counties` intentions, beliefs or current expectations. By their       
nature, forward-looking statements involve risk and uncertainty because they    
relate to future events and circumstances. A number of factors could cause      
actual results and developments to differ materially from those expressed or    
implied by the forward-looking statements. Any forward-looking statements in    
this announcement reflect Liberty International`s and/or Capital & Counties`    
view with respect to future events as at the date of this announcement and      
are subject to risks relating to future events and other risks,                 
uncertainties and assumptions relating to Liberty International or Capital &    
Counties` operations, results of operations, financial condition, growth,       
strategy, liquidity and the industry in which Liberty International or          
Capital & Counties operate. No assurances can be given that the forward-        
looking statements in this announcement will be realised. Liberty               
International and Capital & Counties undertake no obligation and do not         
intend to revise or update any forward-looking statements in this               
announcement to reflect events or circumstances after the date of this          
announcement.                                                                   
Date: 09/03/2010 09:09:11 Produced by the JSE SENS Department.                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.