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OFFER TO PURCHASE THE SHARES OF "PRIME PROPERTY BG" REIT FROM "POBEDA" AD IS STARTED
With a decision under Protocol No. 81 of 10.11.2022, the Financial Supervision Commission did not issue a final ban on "POBEDA" AD as a shareholder owning 34,852,333 shares, representing 97.61 percent of the votes in the General Meeting of Shareholders of "PRIME PROPERTY BG" REIT, EIK 131148642, on the basis of Art. 157a, para. 1 of the Civil Procedure Code, to publish an OFFER FOR THE BUYOUT of the shares of all other shareholders of "PRIME PROPERTY BG" REIT, EIK 131148642.
Details of the tender offer
- ISIN number – BG1100109039
- Type of shares: Ordinary, bearer, registered, freely transferable
- Nominal value: 1 (one) BGN
- Offer price per share: 0.66 (sixty-six cents)
THE FULL TEXT OF THE REPURCHASE OFFER CAN BE FOUND HERE
THE DECISION OF THE FINANCIAL SUPERVISION COMMISSION CAN BE FOUND HERE
According to Art. 5, para. 3 of Ordinance No. 41, the fair price of shares that are not subject to active trading are determined as a weighted average value of the values obtained by applying the following valuation methods - discounted cash flow method, net asset value method and method of the market multiples of peer companies.
In view of the fact that the method of market multipliers of similar companies can be applied to the assessment of the fair price of the shares of "Prime Property BG" REIT, insofar as this value incorporates market information to the most significant extent, according to Art. 5, para. 3 of Ordinance No. 41 AD is defined as the weighted average value of the share values obtained according to the method of discounted cash flows and the method of the net value of assets and the method of market analogues.
The relative weights are as follows:
- Discounted cash flow method: The method has been determined not to be applicable.
- Net asset value method: 70%. The net asset value method reflects historical financial information and, in this sense, provides the most accurate information at a certain historical moment and since the majority of the company's assets are non-operating, as well as taking into account the fact that the company is established with a term, this method participates with a weight of 70% in determining the final grade.
- Method of market analogues: 30%. The method of market analogues reflects to the highest degree market information including expected development of the company itself and alternative investments in close analogues/competitors of the company, therefore this method to the highest degree reflects the principles of IFRS 13 and participates with a weight of 30% in determining the final grade.
Based on the application of two valuation methods - the method of market analogues with a relative weight of 30% and the net value of assets with a relative weight of 70%, we determine the fair value of one share at BGN 0.66.
According to Art. 6, para. 1 of Regulation 41 of the FSC, the fair price of the shares is their liquidation value in cases where:
1. the liquidation value exceeds the fair price of the shares, determined pursuant to Art. 5, or
2. the general meeting of shareholders has adopted a decision to liquidate the company or the company is in bankruptcy proceedings under the terms of Art. 630 of the Commercial Law.
There are circumstances referred to in Art. 6, para. 3, item 1 and item 8 of Regulation No. 41 of the Financial Supervisory Service, insofar as over the last three years "Prime Property BG" REIT has generated a negative financial result. In addition, there is a decapitalization, to the extent that the equity is BGN 10,975 thousand lower than the registered amount. It should also be noted that as a result of Decision No. 564 of 30.07.2021 of the Council of Ministers regarding the property of the company in Lozenets village, Tsarevo municipality, substantial doubts arise regarding the possibility of the property being sold or investments are made that bring economic utility from ownership of it. In connection with the above circumstances, on the basis of Art. 6, para. 3, item 1 of Regulation No. 41 of the Financial Supervisory Service, a liquidation assessment of "Prime Property BG" REIT was prepared.
Based on the provisions of Art. Art. 5, para. 3 of Ordinance No. 41, the fair price of the shares of PRIME PROPERTY BG REIT is a selected price of BGN 0.66. Since the company's shares do not meet the conditions of §1, Item 1 of the Additional Provisions of Ordinance No. 41 and cannot qualify as "Actively traded Shares", but the offeror has opted for the voluntary application of this additional threshold, their stock market price is taken into account in determining their fair value.
The price, respectively the exchange value of the tender offer according to Art. 150, para. 7 of the LPA, cannot be lower than the highest value between
(a) offered under the tender offer, which reached the threshold under Art. 157a, para. 1 of the Civil Procedure Code, when sending it was mandatory (BGN 0.61 per share) and
(b) the price determined according to Art. 150, para. 6 and 7 of the Civil Procedure Code, which is defined as the highest among them
- the average market price per share of the company for the last 6 months (BGN 0.49 per share),
- the highest price for one share paid by the offeror, by the persons related to him or by the persons under Art. 149, para. 2 of the LPA in the last 6 months before the registration of the proposal, respectively before the date on which the obligation under Art. 149, para. 1 or 6 of the LLP, if the tender offer has not been registered by that date and this price is higher than the highest price for one share paid by the same persons in the last 6 months before the registration of the offer; in cases where the price of the shares cannot be determined according to the previous sentence, it is determined as the higher between the last issue value and the last price paid by the trading offeror. (BGN 0.61 per share, at which price 632,246 shares were acquired on 12.7.2022 under a tender offer and on 15.8. 2022 acquisition pursuant to Art. 157b of the Civil Procedure Code of 1,200 shares) and the fair price of one share, determined according to Ordinance No. 41 of the Financial Supervision Commission (BGN 0.66 per share).
Based on the above estimate, the offeror offers the remaining shareholders of "Prime Property" REIT to purchase their 854,260 shares in the Company at a price of BGN 0.66 per share.
The Proposer will finance the purchase of the shares from the shareholders who accepted the Proposal with own funds in the total amount of BGN 563,811.60, which funds are available on the Proposer's bank account at "KBC Bank Bulgaria" EAD.
In accordance with Art. 157a, para. 6 of the Civil Procedure Code, within a three-day period from the issuance of the approval by the FSC, the proposer Art. 157a, para. 1 is obliged to present the proposal to the company and the regulated market on which the company's shares are admitted to trading, and to publish it according to Art. 154. The transfer of the shares and the payment of the price are carried out simultaneously within 7 working days from the publication of the offer in accordance with Art. 157a, para. 7 of the Civil Procedure Code. Insofar as the shareholders to whom the offer is addressed do not have a legal option not to accept it, they are not required to submit an application for acceptance of the offer for redemption, respectively they are not required to deposit documents certifying the shares they own, and the actions for such certification are carried out ex officio by "Central Depository" AD before the transfer of the shares. The price is paid as follows:
(1) in relation to the persons whose shares are stored with an investment intermediary, the price for the purchased shares shall be paid by transfer to a common bank account in BGN for the storage of client funds of the investment intermediary of the relevant shareholder on the day of the transfer of the valuable documents (within 7 working days of publication of the proposal in accordance with Art. 157a, Para. 7 of the Civil Procedure Code);
(2) in relation to the persons whose shares are kept in personal accounts in Register A of the Central Depository, the payment of the price of the purchased shares is considered to have been made with the transfer of funds by the Offeror to the special account under a condition opened in favor of persons whose shares are subject to the offer to buy IBAN BG30RZBB91551062023335, opened at "KBC Bank Bulgaria" EAD, and the persons receive their funds through the office of "KBC Bank Bulgaria" EAD located in the city of Burgas, office Burgas 1/ Adam Mickiewicz, Address: 8000 Burgas, 1 Adam Mickiewicz Street, Telephones: (056) 897 842, (056) 897 845, as well as through all other offices and branches of the Bank on the territory of the Republic of Bulgaria outside the city of Burgas. Information about the Bank's offices is available at the following email address: https://www.rbb.bg/bg/. the faces in whose favor the account was opened under a condition, may present their claim at any time from the date of the transaction on the transfer of the shares until the expiration of the 5-year limitation period provided for in the Law for repayment of the claim. After the expiration of the limitation period, unclaimed claims are extinguished by limitation and the bank releases the deposited funds in favor of the Offeror or his legal successor. The mechanism for receiving funds from this account by each shareholder is provided for in the terms of the account, and implies making a transfer to the account of the relevant person in a commercial bank, or, when this is permissible by law, withdrawing the funds in cash from the relevant person from the account at "KBC Bank Bulgaria" EAD after verification of: can present their claim at any time from the date of the transaction on the transfer of the shares until the expiration of the 5-year statute of limitations for repayment of the claim provided for in the Law. After the expiration of the limitation period, unclaimed claims are extinguished by limitation and the bank releases the deposited funds in favor of the Offeror or his legal successor. The mechanism for receiving funds from this account by each shareholder is provided for in the terms of the account, and implies making a transfer to the account of the relevant person in a commercial bank, or, when this is permissible by law, withdrawing the funds in cash from the relevant person from the account at "KBC Bank Bulgaria" EAD after verification of: can present their claim at any time from the date of the transaction on the transfer of the shares until the expiration of the 5-year statute of limitations for repayment of the claim provided for in the Law. After the expiration of the limitation period, unclaimed claims are extinguished by limitation and the bank releases the deposited funds in favor of the Offeror or his legal successor. The mechanism for receiving funds from this account by each shareholder is provided for in the terms of the account, and implies making a transfer to the account of the relevant person in a commercial bank, or, when this is permissible by law, withdrawing the funds in cash from the relevant person from the account at "KBC Bank Bulgaria" EAD after verification of: unclaimed receivables are repaid by statute of limitations and the bank releases the deposited funds in favor of the Offeror or his legal successor. The mechanism for receiving funds from this account by each shareholder is provided for in the terms of the account, and implies making a transfer to the account of the relevant person in a commercial bank, or, when this is permissible by law, withdrawing the funds in cash from the relevant person from the account at "KBC Bank Bulgaria" EAD after verification of: unclaimed receivables are repaid by statute of limitations and the bank releases the deposited funds in favor of the Offeror or his legal successor. The mechanism for receiving funds from this account by each shareholder is provided for in the terms of the account, and implies making a transfer to the account of the relevant person in a commercial bank, or, when this is permissible by law, withdrawing the funds in cash from the relevant person from the account at "KBC Bank Bulgaria" EAD after verification of:
(a) for natural persons - the identity of the person with a relevant identity document and
(b) for legal entities and impersonal entities - documents certifying representative authority and an identity document of the relevant natural persons exercising the representative authority. For foreign legal entities, additional apostilled and/or notarized documents are required, in accordance with the requirements of the Civil Code and the internal rules of the Civil Code of "KBC Bank Bulgaria" EAD for the specific jurisdiction of the relevant legal entity or impersonal entity. The persons whose shares were redeemed in connection with the Offer to redeem received the entire amount due, and for receiving it they do not owe any fees, commissions and/or other remunerations, and the Offeror assumes all expenses related to fees, commissions, and/or other remuneration in connection with the acquisition of shares under the Offer to Buy, incl. the costs of opening and maintaining the special account under a condition in favor of the shareholders whose shares are subject to compulsory redemption.
According to Art. 119, para. 1, item 4 of the Civil Procedure Code when buying all shares with the right to vote in the general meeting of the public company pursuant to Art. 157a of the Civil Procedure Code, it ceases to be public from the decision of the commission to remove it from the register. According to Art. 44g of Ordinance 13 of the Financial Supervisory Service, within 3 working days of the expiry of the period under Art. 44e, para. 1 of Regulation 13 of the FCS, the proposer notifies the commission of:
(a) the completed redemption of all shares with the right to vote in the general meeting of the public company pursuant to Art. 157a of the Civil Procedure Code;
(b) the amount of transferred funds in the opened bank account under Art. 44e, para. 2, the terms and conditions under which payments will be made in favor of the holders of the receivables, applying the relevant evidence certifying these circumstances.
In accordance with Art. 157a, para. 7 of the LPA, the transfer of the shares and the payment of the price thereof shall be carried out simultaneously within 7 working days of the publication of the offer. The shareholders to whom the buyout offer is addressed do not have the legal option of not accepting the offered offer, as their shares are officially transferred by "Central Depository" JSC to the offeror's account.
According to Art. 155, para. 1 of the LPA, a buyout offer pursuant to Art. 157a of the Civil Procedure Code after its publication cannot be withdrawn by the proposer. Exceptions are allowed only when the proposal cannot be carried out due to circumstances beyond the control of the proposer, the deadline for its acceptance has not expired and the approval of the FSC is available. Article 151, para. 1 and 3, Art. 152 and 153 of the LPA shall apply accordingly. Within 7 days of being notified of the issued approval, the proposer shall publish in a central daily newspaper or on the website of a news agency or other media that can ensure the effective dissemination of the regulated information to the public in all member states a notice of withdrawal of the proposal.
According to Art. 38, para. 2 of Regulation 13 of the FSC, on the day of the registration of the withdrawal of the offer to buy with the commission, the offeror shall notify the management body of the public company - subject of the offer, the representatives of its employees or employees, when there are no such representatives, as well as the regulated market, of the withdrawal. on which the company's shares are admitted for trading. The notice expressly states that the commission has not yet acted on the withdrawal.
The FSC rules on the withdrawal in accordance with Art. 151, para. 1, Art. 152 and 153 of the Civil Code. The Commission shall immediately notify the regulated market, the investment intermediary or the central depository of securities with which the certification documents for the shares have been deposited, of the withdrawal of the offer for redemption.
It should be noted that in the event of a realized buyout of all shares with voting rights in the General Meeting of Shareholders of the Company pursuant to Art. 157a of the Civil Procedure Code, the Company may cease to be public only if the special order provided for in the Law on companies with a special investment purpose and on securitization companies (ZDSITSDS) is observed, insofar as the Company is a REIT and falls within the scope of a specialized law.
In this sense, the Company may cease to be public only upon express refusal of a license pursuant to Art. 16, item 4 of the ZDSITSDS, applying the procedure described in Art. 18 of the same law.