Citycon Oyj - Company Announcement

Citycon Board of Directors decided on a rights issue and related adjustment to the Company’s EPRA EPS (basic) outlook

CITYCON OYJ Stock Exchange Release 15 June 2015 at 2.15 p.m.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SOUTH AFRICA OR JAPAN OR
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Rights issue

Citycon Oyj (“Citycon” or the “Company”) announced on 25 May 2015 that it had
entered into an agreement to acquire all the shares in the Norwegian shopping
centre company Sektor Gruppen AS ("Sektor") and convened an extraordinary
general meeting of shareholders to resolve on an authorization for the Board of
Directors to decide on a rights issue as part of the financing arrangements
relating to the acquisition. The extraordinary general meeting of Citycon held
on 15 June 2015 ("EGM") passed the necessary resolutions and the Board of
Directors of Citycon has today decided on a rights issue of approximately EUR
600 million based on the authorization granted by the EGM (the "Rights Issue"). 

Citycon will offer a maximum of 296,664,209 new shares (“New Shares”) in the
Rights Issue in accordance with the shareholders' pre-emptive subscription
right. The New Shares to be issued in the Rights Issue represent a maximum of
approximately 50.0 percent of the total shares and voting rights in the Company
prior to the Rights Issue and approximately 33.3 percent of the total shares
and voting rights after the Rights Issue, assuming that the Rights Issue is
subscribed in full. 

The subscription price for the New Shares is EUR 2.05 per New Share
("Subscription Price"). The Subscription Price will be recorded in its entirety
in the invested unrestricted equity fund of the Company. The subscription
period will commence on 23 June 2015 at 9:30 a.m. Finnish time and expire on 7
July 2015 at 4:30 p.m. Finnish time. 

The net proceeds to Citycon from the Rights Issue, after the deduction of the
estimated fees and expenses payable by Citycon, will be approximately EUR 604
million, provided that the Rights Issue is subscribed in full. The proceeds
from the Rights Issue will be used for the financing of the Sektor acquisition
and the premature redemption by Sektor of all of its outstanding bonds upon
closing of the acquisition. Citycon will also use bridge financing arrangements
up to an aggregate amount of EUR 400 million and, if needed, its existing bank
financing facilities to finance the acquisition. In addition, waivers have been
obtained for approximately EUR 671 million of the existing bank financing
facilities of Sektor to remain in place post-closing. The debt-free acquisition
price of Sektor payable by Citycon is approximately EUR 1,467 million (NOK
12,320 million, based on the exchange rate 8.4), subject to certain customary
balance sheet and post-closing adjustments. 

The Company's two largest shareholders Gazit-Globe Ltd. and CPP Investment
Board Europe S.à r.l. ("CPPIBE"), a wholly owned subsidiary of Canada Pension
Plan Investment Board, have undertaken, subject to certain conditions, to
subscribe for their pro rata allocation in the Rights Issue as follows:
Gazit-Globe Ltd. 127,068,487 New Shares and CPPIBE 44,499,631 New Shares. The
aforementioned subscription undertakings represent in aggregate approximately
57.8 percent of the maximum number of New Shares to be issued in the Rights
Issue. 

In addition, Gazit-Globe Ltd. and CPPIBE have each provided an additional
undertaking according to which they commit, subject to certain conditions, to
subscribe for further shares in the Rights Issue, Gazit-Globe Ltd. up to a
maximum subscription amount of EUR 50 million and CPPIBE up to a maximum
subscription amount of EUR 30 million, in the event that the maximum number of
New Shares to be issued in the Rights Issue will not be subscribed for during
the subscription period of the Rights Issue (the "Additional Undertakings").
The additional undertaking by Gazit-Globe Ltd. is also subject to Gazit-Globe
Ltd.'s ownership not exceeding 50 percent of the shares and votes in Citycon
through such subscription, in which case the number of shares to be subscribed
for by Gazit-Globe Ltd. pursuant to the additional undertaking would be reduced
as necessary. Any such reduction would reduce CPPIBE's additional subscription
undertaking accordingly on a pro rata basis. 

A shareholder who is registered in the Company's shareholder register
maintained by Euroclear Finland Ltd on the record date of 17 June 2015 of the
Rights Issue will automatically receive one (1) freely transferable
subscription right (the “Subscription Right”) as a book-entry for every one (1)
share owned on the record date. Each two (2) Subscription Rights will entitle
holders to subscribe for one (1) New Share ("Primary Subscription Right"). The
Subscription Rights are subject to public trading on NASDAQ OMX Helsinki Ltd.
between 23 June 2015 and 1 July 2015. 

Further, a shareholder or other investor who has subscribed for New Shares
based on the Primary Subscription Right is entitled to subscribe for New Shares
not subscribed for by virtue of the Primary Subscription Right (the “Secondary
Subscription"). 

In the event New Shares are not fully subscribed for by virtue of the Primary
Subscription Right or the Secondary Subscription during the subscription period
of the Rights Issue, the Board of Directors of the Company may, following
consultation with the Joint Global Coordinators and Joint Bookrunners (as
defined below), offer for subscription and allocate the remaining unsubscribed
New Shares at the Subscription Price, in the first instance, to Gazit-Globe
Ltd. and CPPIBE in proportion to and in accordance with their Additional
Undertakings and, in the second instance, where the number of the New Shares
not fully subscribed for by virtue of the Primary Subscription Right and the
Secondary Subscription exceeds the Additional Undertakings, to any other
investors procured by the Joint Global Coordinators and Joint Bookrunners in a
private placement. The Additional Undertakings do not prevent Gazit-Globe Ltd.
and CPPIBE from participating in the Secondary Subscription. 

The ex-rights date for the Rights Issue is 16 June 2015. The prospectus for the
Rights Issue is expected to be published on or about 18 June 2015. 

Citycon will announce the final result of the Rights Issue through a stock
exchange release on or about 13 July 2015. Public trading in the New Shares
subscribed for in the Rights Issue based on the Primary Subscription Right as
interim shares is expected to commence on or about 8 July 2015. The interim
shares will be combined with the existing shares of the Company on or about 14
July 2015 and public trading in the New Shares is expected to commence on or
about 14 July 2015. The full terms and conditions of the Rights Issue are set
out in the appendix to this release. 

Danske Bank A/S, Helsinki Branch, Kempen & Co N.V., Pohjola Bank plc and
Skandinaviska Enskilda Banken AB (publ) Helsinki Branch are acting as joint
global coordinators and joint bookrunners in the Rights Issue (together "Joint
Global Coordinators and Joint Bookrunners"). 

Citycon has entered into a lock-up agreement with the Joint Global Coordinators
and Joint Bookrunners under which it has, subject to certain exceptions, agreed
not to issue or sell any shares in Citycon for a period ending 180 days after
the closing of the Rights Issue on or about 14 July 2015. In addition,
Gazit-Globe Ltd. and CPPIBE have in connection with their subscription
undertakings, subject to certain exceptions, agreed not to sell or transfer any
shares in Citycon prior to the listing of the New Shares on NASDAQ OMX Helsinki
Ltd. on or about 14 July 2015. 

Adjustment to the EPRA EPS (basic) outlook based on the Rights Issue

According to the outlook announced by Citycon on 30 April 2015, the Company
forecasted, based on the existing number of shares, that its EPRA EPS (basic)
will in 2015 be EUR 0.175-0.195. As the EPRA EPS (basic) forecast is based on
the number of shares in the Company, Citycon adjusts the EPRA EPS (basic)
forecast to reflect the increased number of shares as a result of the Rights
Issue. Assuming that the Rights Issue is subscribed in full, Citycon forecasts
that its EPRA EPS (basic) will be EUR 0.155-0.175 based on the combined
property portfolio of Citycon and Sektor and the increased number of shares
after the completion of the Rights Issue. 

Adjustment of the terms and conditions of the 2011 stock options

In order to ensure the equal treatment of shareholders and the holders of the
Company's 2011 stock options, the Board of Directors of the Company has on 15
June 2015, due to the Rights Issue, adjusted the subscription ratio and the
subscription price of the 2011 stock options in accordance with the terms and
conditions of the 2011 stock options. Provided that the Rights Issue is
subscribed in full as described in the terms and conditions of the Rights
Issue, the subscription price for stock options 2011A—D(I) shall be adjusted to
EUR 2.5380 per share and the subscription ratio to 2.0169. As regards stock
options 2011A—D(II), the subscription price shall be adjusted to EUR 2.6075 per
share and the subscription ratio shall be adjusted to 2.0169. As regards stock
options 2011A—D(III), the subscription price shall be adjusted to EUR 2.2703
per share and the subscription ratio shall be adjusted to 2.0169. 

The total number of shares is rounded down to full shares in connection with
the subscription of the shares and the total subscription price is calculated
using the rounded amount of shares and rounded to the closest cent. Due to the
above adjustments, the adjusted maximum total number of shares to be subscribed
for based on the 2011 stock options shall be 12,474,526. 

The foregoing adjustment to the terms and conditions of the 2011 stock options
due to the Rights Issue will be effective as of its registration in the Trade
Register on or about 14 July 2015, provided that the Rights Issue is subscribed
in full as described in the terms and conditions of the Rights Issue. The 2011
stock options do not entitle their holders to participate in the Rights Issue. 

Adjustment of the terms and conditions of the performance share plan 2015

On 11 February 2015 Citycon announced that the Board of Directors had approved
a performance share plan 2015 for the Group key employees. The Board of
Directors of the Company has on 15 June 2015, due to the Rights Issue, decided
to adjust the amount of the maximum reward and the performance criterion under
the performance share plan 2015 in accordance with the terms and conditions of
the plan. The final impact of such adjustments on the maximum total number of
shares that can be paid under the performance share plan 2015 can be determined
only after the ex-rights date of the Rights Issue and will be confirmed in
connection with the closing of the Rights Issue. 



Helsinki, 15 June 2015

CITYCON OYJ
Board of Directors


APPENDIX: Terms and conditions of the Rights Issue



Media enquiries:
Geelmuyden Kiese (advisor to Citycon)
Tel. +47 482 00 570
helge.lunde@gknordic.com

Investor enquiries:
Henrica Ginström
Tel. +358 50 554 4296
henrica.ginstrom@citycon.com


About Citycon

Citycon is a leading owner, manager and developer of urban grocery-anchored
shopping centres in the Nordic and Baltic region, managing assets that total
approximately EUR 3.4 billion and with market capitalisation of EUR 1.8
billion. Citycon is the No. 1 shopping centre owner in Finland and Estonia and
among the market leaders in Sweden. Citycon has also established a foothold in
Denmark. www.citycon.com 

About Sektor

Sektor Gruppen AS is the second largest company in managing, developing and
marketing of shopping centres in Norway. Sektor's portfolio consists of 20
fully and majority-owned shopping centres, 4 minority-owned centres, 2 rented
shopping centres and 8 managed shopping centres. With these 34 shopping
centres, Sektor creates excellent shopping experiences for its customers in
partnership with tenants. Sektor's total portfolio under management has a gross
leasable area of more than 600,000 sq.m. www.sektor.no 


DISCLAIMER

This announcement is not an offer for sale of securities in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration under the U.S. Securities Act of 1933, as
amended. Citycon does not intend to register any portion of the Rights Issue in
the United States or to conduct a public offering of securities in the United
States. The Joint Global Coordinators and Joint Bookrunners will not engage in
any actions or assume any responsibility with regard to the Rights Issue within
the United States. The offering of the Subscription Rights and the New Shares
to the eligible shareholders in the United States will be the sole
responsibility of the Company. 

The Company has not authorized any offer to the public of securities in any
Member State of the European Economic Area other than Finland. With respect to
each Member State of the European Economic Area other than Finland and which
has implemented the Prospectus Directive (each, a “Relevant Member State”), no
action has been undertaken or will be undertaken to make an offer to the public
of securities requiring publication of a prospectus in any Relevant Member
State. As a result, the securities may only be offered in Relevant Member
States (a) to any legal entity which is a qualified investor as defined in the
Prospectus Directive; or (b) in any other circumstances falling within Article
3(2) of the Prospectus Directive. For the purposes of this paragraph, the
expression an “offer of securities to the public” means the communication in
any form and by any means of sufficient information on the terms of the offer
and the securities to be offered so as to enable an investor to decide to
exercise, purchase or subscribe the securities, as the same may be varied in
that Member State by any measure implementing the Prospectus Directive in that
Member State and the expression “Prospectus Directive” means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive,
to the extent implemented in the Relevant Member State), and includes any
relevant implementing measure in the Relevant Member State and the expression
“2010 PD Amending Directive” means Directive 2010/73/EU. 

No public offer or invitation to acquire securities of Citycon is being made by
or in connection with this release. Any such offer will be made solely by means
of a prospectus once it has been approved by the Finnish Financial Supervisory
Authority and published in accordance with the law, and any supplement thereto.
This document is being distributed to and is only directed at (i) persons who
are outside the United Kingdom or (ii) to investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the “Order”) or (iii) high net worth companies, and
other persons to whom it may lawfully be communicated, falling within Article
49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above
together being referred to as “relevant persons”). Any invitation, offer or
agreement to subscribe, purchase or otherwise acquire securities will be
engaged in only with relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of its contents. 

This announcement is not for publication, distribution or release, directly or
indirectly, in or into the United States, Canada, South Africa, Australia, Hong
Kong or Japan or to any other jurisdiction where such announcement or
publication would be unlawful. The distribution of this announcement may be
restricted by law in certain jurisdictions and persons into whose possession
any document or other information referred to herein comes should inform
themselves about and observe any such restriction. Any failure to comply with
these restrictions may constitute a violation of the securities laws of any
such jurisdiction. 

Each of the Joint Global Coordinators and Joint Bookrunners and their
respective affiliates are acting exclusively for the Company and no one else in
connection with the Rights Issue. They will not regard any other person
(whether or not a recipient of this release) as their respective clients in
relation to the Rights Issue and will not be responsible to anyone other than
the Company for providing the protections afforded to their respective clients,
nor for giving advice in relation to the Rights Issue or any transaction or
arrangement referred to herein. No representation or warranty, express or
implied, is made by the Joint Global Coordinators and Joint Bookrunners as to
the accuracy, completeness or verification of the information set forth in this
release, and nothing contained in this release is, or shall be relied upon as,
a promise or representation in this respect, whether as to the past or the
future. The Joint Global Coordinators and Joint Bookrunners assume no
responsibility for its accuracy, completeness or verification and, accordingly,
disclaim, to the fullest extent permitted by applicable law, any and all
liability which they may otherwise be found to have in respect of this release. 

The information contained in this announcement is for background purposes only
and does not purport to be full or complete. No reliance may or should be
placed by any person for any purposes whatsoever on the information contained
in this announcement or on its completeness, accuracy or fairness. The
information in this announcement is subject to change. Any subscription for
shares in the proposed Rights Issue should be made solely on the basis of the
information contained in the prospectus to be issued by Citycon in due course. 

This announcement contains certain forward-looking statements. These
forward-looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key assumptions.
Many factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to these
uncertainties and risks, readers are cautioned not to place undue reliance on
such forward-looking statements, which speak only as of the date of this
announcement. Citycon disclaims any obligation to update any forward-looking
statements contained in this announcement, except as required pursuant to
applicable law.

Attachments:

Terms and Conditions of the Rights Issue.pdf