federation centres’ information booklet relating to the ... · 04/05/2015 · merger information...

Federation Centres’ Information Booklet relating to the proposed Merger with Novion Property Group

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ContentsLetter from the Chairman of Federation Centres 1

Summary of the Merger 2

Key dates and implementation 6

Next Steps 6

Benefits of the Merger 7

Disadvantages of the Merger 14

Glossary 15

Disclaimer 16

Contact Information Inside back cover

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MerGer INForMatIoN BooKLet 1

4 May 2015

Dear Securityholder,

On 3 February 2015, Federation Centres and Novion Property Group (Novion) announced their intention to merge the two groups (the Merger) to form one of Australia’s leading real estate investment trusts with over $22 billion in assets under management, invested across the full retail asset spectrum – that is, from super-regional centres to outlet centres.

The Merger combines two highly complementary platforms to provide existing Federation Centres securityholders with an enhanced investment proposition relative to Federation Centres on a stand-alone basis.

The benefits of the Merger include:

+ Increased portfolio scale and expertise;

+ Material value creation via cost savings and future opportunities;

+ Significant earnings and distribution accretion for Federation Centres and Novion securityholders;

+ Improved growth opportunities;

+ Enhanced asset and tenant diversification; and

+ Greater relevance for equity and debt investors through increased scale.

The Merger also provides Federation Centres’ securityholders with an interest in high quality retail assets such as Chadstone and Emporium in Melbourne, Chatswood Chase in Sydney and QueensPlaza in Brisbane. In the absence of the Merger, it is unlikely that interests in these assets could be acquired.

The Merger is a unique and compelling opportunity. The Board unanimously supports the Merger and believes that it is in the best interests of Federation Centres’ securityholders.

IMpLeMeNtatIoN

The Merger will be implemented by Federation Centres acquiring all of the securities of Novion. Novion securityholders will be required to approve the Merger and a meeting of Novion securityholders to vote on the Merger will be held at 10 am (Sydney time) on Wednesday, 27 May 2015. There is no requirement for Federation Centres’ securityholders to vote on the Merger.

The Board of Novion has unanimously recommended that Novion securityholders vote in favour of the Merger, in the absence of a superior proposal. In addition, The Gandel Group, Novion’s largest securityholder, has advised that its intention is to vote all of its securities in favour of the Merger, based on the disclosed terms of the Merger and in the absence of a superior proposal.

GoverNaNCe

Upon implementation of the Merger, Mr Peter Hay (a current Novion Independent Non-executive Director) will be Chairman of the Merged Group and I will step down from my role as both Chairman and as a Director. Mr Steven Sewell (the current Chief Executive Officer of Federation Centres) will be Chief Executive Officer of the Merged Group.

DIStrIButIoN GuIDaNCe For FY15

Federation Centres’ current distribution guidance for FY15 is 16.9 cents per security. Federation Centres has paid a distribution of 8.4 cents per security for the first half of FY15 and expects to pay a distribution of 8.5 cents per security for the second half of FY15. The Merger does not affect this distribution guidance.

Further INForMatIoN

A Scheme Booklet which provides information in relation to Novion, the Merger and the Merged Group has been sent to Novion securityholders and is also available to Federation Centres’ securityholders at www.federationcentres.com.au or on the ASX website.

CoNCLuSIoN

The Board is proud of the progress achieved through the efforts of everyone at Federation Centres in recent years. It has been a remarkable transformation leading to growth and success. The Board is confident that the Merger will be a very significant step forward for Federation Centres.

I would like to thank Federation Centres’ securityholders for the support they have shown to date and wish you well for the exciting period ahead as the Merger progresses.

Yours faithfully

Bob Edgar Chairman

Letter from the Chairman of Federation Centres

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2 MerGer INForMatIoN BooKLet

Summary of the Merger

Market Capitalisation1

$4.4bn


$7.9bn

Total Assets2

$5.3bn

Total Assets2

$9.7bn

Number of portfolio assets3

66Number of

portfolio assets3

37

Earnings Per Security4

18.2¢


13.8¢

Federation Centres Novion

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$12.3bn

Total Assets6

$15.7bn

Merged Group

Number of portfolio assets3

102


19.2¢1 As at the close of trading on 13 April 2015.2 Based on 31 December 2014 Pro Forma Consolidated Statement of Financial Positions for both organisations. See section 8.2 of the Novion Scheme Booklet for further information.3 Number of owned and/or managed portfolio assets. Refer to footnotes 10 and 11. 4 FY15 Forecast Underlying Earnings Per Security.5 Based on the combination of Federation Centres’ and Novion’s stand-alone market capitalisations of approximately $4.4 billion and $7.9 billion respectively as at the close of trading on 13 April 2015.6 Total Assets of the Merged Group is calculated by adding the total assets of Federation Centres and Novion as at 31 December 2014 and including the $721 billion merger impact amount. See section 8.2

of the Novion Scheme Booklet for further information.7 FY15 Consolidated Forecast of Underlying Earnings per security. For further information, see section 8.3 of the Novion Scheme Booklet.

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4 MerGer INForMatIoN BooKLet4 MerGer INForMatIoN BooKLet

Summary of the Merger (continued)

8 Novion and Federation Centres data as at 31 December 2014, adjusted for post balance date acquisitions and disposals. All peer data as reported at 31 December 2014, other than Lend Lease (based on last reported data as at 30 June 2014).

The Merger combines two highly complementary platforms to provide existing Federation Centres securityholders with an enhanced investment proposition relative to Federation Centres on a stand-alone basis.

The Merged Group will be focussed on the ownership, management and redevelopment of Australian retail real estate. The Merged Group will be one of Australia’s leading REITs and a significant owner and manager across the full spectrum of Australian retail assets diversified by retail asset type, geographic location and tenant mix.

aSX-LISteD retaIL aSSet MaNaGerS8 (BY auStraLIaN retaIL aSSetS uNDer MaNaGeMeNt) ($ billion)

The Merged Group will also be the second largest listed manager of Australian retail assets as shown in the chart below:

38.1

Scentre

14.9

Novion

22.2

Merged Group

8.1

GPT

7.3

Federation Centres

6.0

Lend Lease

5.7

Stockland

3.8

DEXUS

3.3

Charter Hall

2.2

Mirvac

1.6

SCA Property

+=

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MerGer INForMatIoN BooKLet 5 MerGer INForMatIoN BooKLet 5

This scale across a national platform will enable the Merged Group to trial, innovate and implement market leading strategies with its retailer business partners to enable the delivery of superior customer experiences and drive retail sales.

A summary of Federation Centres’, Novion’s and the Merged Group’s direct portfolio and total owned and/or managed portfolio is set out below.

Federation Centres Novion Merged Group

Market capitalisation9 >$4.4bn >$7.9bn >$12.3bn

Number of direct portfolio assets 65 (including 20

co-owned assets)

27 (including 9

co-owned assets)

92 (including 29

co-owned assets)

Book value of direct portfolio $4.9bn $9.1bn $14.0bn

Number of owned and/or managed portfolio assets 6610 37 10211

Book value of owned and/or managed portfolio $7.6bn $14.9bn $22.2bn12

Gross lettable area of retail space (owned and/or managed portfolio, million sqm) 1.4+ 1.6+ 3.0+

Number of tenancies/leases (owned and/or managed portfolio) 4,700+ 5,100+ 9,500+

Annual retail sales13 (owned and/or managed portfolio) $8.7bn+ $9.6bn+ $18.2bn+

Occupancy (direct portfolio) 99.5% 99.7% 99.6%

Capitalisation rate (weighted average) (direct portfolio) 7.01% 6.1% 6.43%

MerGeD Group owNerShIp StruCture

Based on the exchange ratio of 0.8225 Federation Centres securities for each Novion security, existing Novion securityholders will own approximately 63.9% of the Merged Group and existing Federation Centres securityholders will own approximately 36.1% of the Merged Group.

9 The market capitalisations of Federation Centres and Novion in this row are as at the close of trading on 13 April 2015. The Merged Group market capitalisation is assumed to be the sum of those market capitalisations.

10 This includes Paradise Centre which is externally owned but managed by Federation Centres and includes Tuggeranong Hyperdome (50% owned by Federation Centres but managed by Novion).11 29 of the Merged Group’s direct assets will be co-owned with third parties. Tuggeranong Hyperdome has only been counted once for the purposes of this combined total. Federation Centres and Novion

are also engaging with the ACCC in relation to the potential divestment of either Karingal Hub (a 50% Federation Centres owned asset) or Bayside (a Novion owned asset). 12 The value of Tuggeranong Hyperdome ($0.3bn) has only been counted once for the purposes of this combined total.13 Based on sales data for the 12 months to 31 December 2014.

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Event Time and date14

Meeting of Novion securityholders to vote on the Merger 10 am Wednesday 27 May 2015

If the Merger is approved by Novion Securityholders and all other conditions precedent in connection with the Merger (such as court and regulatory approvals) are fulfilled or waived, the following key dates apply

Court Date (for approval of the Merger by the Supreme Court of New South Wales) Friday 29 May 2015

Date the Merger is expected to be implemented Thursday 11 June 2015

Key dates and implementation

Next Stepsthere IS No requIreMeNt For FeDeratIoN CeNtreS SeCurItYhoLDerS to taKe aNY aCtIoN.Existing Federation Centres securityholders will continue to hold Federation Centres securities. The number of Federation Centres securities held by existing Federation Centres securityholders will not change as a result of the Merger being implemented.

As part of the integration process, the Merged Group is expected to transition to a new corporate name. Federation Centres securityholders will be updated on this when further details are available. All securityholders in the Merged Group will vote on any new corporate name, which is expected to be put to securityholders at the first annual general meeting of the Merged Group later this year.

14 These dates and times are indicative only and are subject to change. Unless otherwise specified, all times and dates refer to Sydney, Australia time. Any changes to the timetable will be announced to the ASX and notified on Federation Centres' website at www.federationcentres.com.au.

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Benefits of the Merger

142

16

4

1

14

1518

14

3

3

0

6

7

17

2

7

1

20

22

31

5

The Board of Federation Centres believes the Merger will provide existing Federation Centres securityholders with an enhanced investment proposition relative to Federation Centres on a stand-alone basis.

The benefits of the Merger include:

(a) Increased portfolio scale and expertise

+ The Merger will create one of Australia’s leading REITs, with over $22 billion in assets under management15 invested across the full retail asset spectrum.

+ The Merged Group will manage a portfolio of 102 retail assets16, diversified by asset type, geography and tenant mix.

+ As the number one owner/manager of Australian sub-regional centres and outlet centres, and number two in Australian super-regional and regional centres combined17, the Merged Group will have scale and relevance across all retail sub-sectors.

+ By combining Federation Centres’ and Novion’s board and management expertise, the Merged Group will benefit from a highly experienced board and a management team with expert skills in managing the full spectrum of retail assets.

portFoLIo MIX oF the MerGeD Group

Retail assets under management

Number of assets

Value

Super-regional 1 $3.7bn

Regional 23 $11.3bn

Sub-regional 48 $5.2bn

Neighbourhood19 26 $1.0bn

Outlet centres 4 $1.0bn

Total 102 $22.2bn

Note: Metrics based on the Merged Group's total assets under management.

portFoLIo MIX oF the MerGeD Group BY StateNumber of assets

VictoriaSuper-regional 1Regional 7Sub-regional 16Neighbourhood 4Outlet centres 3New South Wales & ACTRegional 4Sub-regional 14Neighbourhood 3Outlet centres 1QueenslandRegional 5Sub-regional 8Neighbourhood19 7Western AustraliaRegional 3Sub-regional 5Neighbourhood 8South AustraliaRegional 3Sub-regional 3Neighbourhood 1TasmaniaRegional 1Sub-regional 2Neighbourhood 2Northern TerritoryNeighbourhood 1

15 As at 31 December 2014, adjusted for post balance date acquisitions and disposals.16 See footnote 11.17 Based on gross lettable retail area.18 Tuggeranong Hyperdome (50% owned by Federation Centres) is currently managed by Novion. 19 Includes one bulky goods centre.

Federation Centres Novion Merged Group

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Mandurah Forum, WA

DFO Homebush, NSW

#1in outlet centres

Strong portfolio with proven ability to create value

and growth

#1in sub-regional assets

Stable and high performing portfolio of scale

Competitive advantages across all retail sub-sectors

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Chadstone, VIC

Roselands, NSW #2in super-regional and

regional assets combined

▲

Leading portfolio in strong catchment areas

Joint owner of australia’s largest shopping centre (by moving annual turnover)

▼

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(b) Material value creation via cost savings and future opportunities

+ The Merger is expected to result in material cost savings for the Merged Group relative to Federation Centres and Novion on a stand-alone basis, which is expected to create significant value for Federation Centres’ securityholders.

Operationalcostsavings

+ After a detailed review, Federation Centres and Novion have jointly identified net operational cost savings of at least $42 million per annum, with the potential for more to be achieved through the integration process. After implementation of the Merger, the Merged Group will commence putting in place arrangements to achieve these operational cost savings. It is expected that:

• over a 12-month period, arrangements will be put in place to enable the realisation of approximately 75% of those operational cost savings on a go forward basis; and

• over a 24-month period, arrangements will be put in place to enable the realisation of approximately 90% of those operational cost savings on a go forward basis.

+ These savings are expected to be generated by:

• integrating board, management and executive teams;

• consolidating corporate costs and two highly complementary platforms;

• integrating reporting and IT systems;

• reduced listing, statutory and regulatory costs; and

• procurement efficiencies and cost optimisation at an individual asset level.

Refinancingsavings

+ As part of the Merger, Federation Centres’ and Novion's existing debt platforms are assumed to be refinanced.20

+ Given the current attractive debt markets, this will result in refinancing savings (net of the funding costs associated with funding the assumed refinancing costs) to the benefit of the securityholders of the Merged Group.

+ If all debt facilities are refinanced, total net refinancing savings of approximately $35 million21 per annum would be realised by the Merged Group.

+ Additionally, the scale of the Merged Group is expected to drive greater debt capital markets access, which should deliver further diversification and pricing benefits over time.

Capitalisedcostsavings

+ A further $7 million per annum of cash flow savings are expected via capitalised cost savings.

+ Capitalised cost savings are cost savings that will not be recognised in underlying earnings, but will improve cash flow and development returns.

+ The Merged Group expects to be fully achieving these savings within 12 months after the implementation of the Merger.

Totalcostsavings

+ Combining the net operational cost savings, net refinancing savings and capitalised cost savings outlined above, the Merger would provide cost savings of at least $84 million per annum.22

Opportunitiesforadditionalsynergiesovertime

+ In addition to the operational cost and assumed refinancing savings identified above, the Merged Group is also expected to generate other revenue and strategic synergies over time. These synergies are expected to be largely driven by:

• retailer relationships: deeper retailer relationships, as the Merged Group will be a key partner of, and have increased relevance and strategic importance to, domestic and international retailers;

• management and leasing: greater efficiencies in managing and leasing a larger portfolio and the combination of best practices in tenant and centre management; and

• development capability: further opportunities to optimise and accelerate the development pipeline given the Merged Group’s increased balance sheet, tenant coverage and development team capability.

(c) Significant earnings and distribution accretion

+ The Merger is expected to generate significant earnings and distribution accretion for Federation Centres’ securityholders.

+ Federation Centres’ pro forma FY15 EPS and DPS is expected to increase by 5.8% and 8.1% respectively.23

Benefits of the Merger (continued)

20 However there is no certainty that these will be refinanced. 21 Net of $11 million per annum of funding costs associated with the one-off costs (of $277 million) incurred to achieve these financing savings. Note, this estimate may vary based on market conditions during

the course of implementation, and the timing involved in implementing the refinancing of some categories of the financing arrangements. If the Merged Group only repays Federation Centres' and Novion's existing bank debt and resets its existing interest rate swap derivatives, this would result in $28 million of net refinancing savings.

22 Net of external share of cost savings allocated to properties, the annual funding cost associated with the one-off costs incurred to achieve these savings and capitalised costs. The total cost savings of $84 million per annum are made up of net operational cost savings of $42 million per annum, assumed net refinancing savings of $35 million per annum and $7 million per annum of capitalised cost savings.

23 FY15 pro forma impact assuming the Merger was implemented on 1 July 2014 and total net profit and loss cost savings of approximately $77 million per annum are achieved (i.e. excluding $7 million per annum of capitalised cost savings).

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FeDeratIoN CeNtreS FINaNCIaL IMpaCt

A summary of the pro forma financial impact of the Merger for Federation Centres is outlined below.

Pre Post Impact

FY15 pro forma underlying earnings and distribution impact

FY15 pro forma EPS 18.2c 19.2c +5.8% ▲

FY15 pro forma DPS 16.9c 18.3c +8.1% ▲

Payout ratio 93% 95%24 +2% ▲

31 December 2014 pro forma balance sheet impact

Net asset value per security $2.58 $2.65 2.7% ▲

Net tangible assets per security $2.44 $2.32 (5.2%) ▼

Gearing – including intangibles25 25.0% 29.0% +400 bps ▲

Gearing – excluding intangibles26 24.9% 31.1% +620 bps ▲

Management expense ratio 55 bps 26 bps (29 bps) ▼

IMpaCt oN FY15 earNINGS

The impact of the Merger on FY15 underlying earnings for Federation Centres is expected to be neutral given the anticipated timing of implementation of the Merger.

Should the Merger be implemented, guidance on the outlook for the Merged Group in the 2016 financial year is expected to be provided at the Merged Group’s first results presentation in August 2015.

(d) Improved growth opportunities

+ The Merger is also expected to generate improved growth opportunities for the Merged Group relative to Federation Centres and Novion on a stand-alone basis.

+ Two areas where these opportunities are expected to be greatest are across its developments and strategic partnerships, where the Merger provides:

• development: the capability to optimise Federation Centres’ and Novion’s combined development pipeline of $2.5 billion27 across 18 key projects28 and unlock future redevelopment opportunities; and

• strategic partnerships: an opportunity to integrate and expand each group’s strategic partnership networks.

24 Assumed target payout ratio of the Merged Group, subject to approval of the Board of the Merged Group.25 Calculated as borrowings (net of deferred borrowing costs and cross currency swaps) divided by total assets (net of derivative assets). 26 Calculated as borrowings (net of cash) divided by total tangible assets (net of cash).27 The Merged Group’s share is $1.2 billion, with the remainder attributable to the Merged Group’s strategic partners.28 Key projects do not include minor projects such as Maitland Hunter Mall.

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(e) Increased asset and tenant diversification

+ The Merger will increase Federation Centres’ asset and tenant diversification.

+ The Merged Group will have scale and relevance across all major retail asset classes, providing a unique exposure to the Australian retail asset class.

+ The expanded retail asset base will provide the opportunity to maximise tenant relationships, retail trends and development across retail categories.

+ The Merged Group’s portfolio will be geographically diversified across all of Australia’s key retail markets, comprising centres located in established catchments predominantly in metropolitan areas and with a breadth of exposure to various sub-economies within Australia.

aSSet tYpe (BY BooK vaLue)

FederationCentres

Novion

Super-regional and regional

61%78%

30%

53%

17%13%

9%

27%

6%6%

MergedGroup

Sub-regional Neighbourhood29 Outlet centres

ChadstoneShopping

Centre20%

ChadstoneShoppingCentre13%

GeoGraphIC LoCatIoN (BY BooK vaLue)

Novion FederationCentres

44%

19%

22%

25%

17%

26%

56%

16%

6%

17%

5%3%

17%

11%

5%

MergedGroup

Victoria New South Wales Queensland Western Australia

South Australia Tasmania ACT Northern Territory

ChadstoneShopping

Centre20%

ChadstoneShoppingCentre13%

+ The Merged Group will be one of Australia’s largest retail landlords, with increased relevance and strategic importance to tenants.

+ The Merger will provide opportunities to integrate and expand Federation Centres' and Novion's existing relationships with leading domestic and international retailers across the combined portfolio.

+ The Merged Group will be the largest landlord to Woolworths Limited and Wesfarmers, with supermarket sales representing 32% of total portfolio sales.

Benefits of the Merger (continued)

29 Includes one bulky goods centre.30 Federation Centres and Novion data as at 31 December 2014, adjusted for post balance date acquisitions and disposals. Scentre, Stockland and GPT data as at 31 December 2014 based on publicly available information.

NuMBer oF StoreS30

Retailer type Major retailer Novion Federation Centres

Merged Group

Scentre Stockland GPT

Supermarkets Woolworths 22 42 64 31 27 12

Coles 32 36 68 36 22 13

Discount department stores Kmart 15 23 38 25 12 6

Big W 9 15 24 19 12 8

Target 18 12 30 34 12 10

Department stores Myer 5 4 9 23 2 6

David Jones 3 1 4 16 - 4

Total 104 133 237 184 87 59

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The Merged Group will have a diversified tenant mix with a balanced exposure to discretionary and non-discretionary retail spending and anchor tenants are expected to represent 56% of sales.31

The Merged Group’s total property platform will have:

+ 3.0+ million square metres of lettable area;

+ 9,500+ retail tenancies;

+ 500+ million customer visits annually; and

+ >$18 billion in annual retail sales generated by tenants.32

teNaNt MIX (BY MovING aNNuaL turNover)33

FederationCentres

Novion

33%

32%

37%

21%

8%

9%

10%

29%

41%

8%

7%

13%

10%5%

11%

5%

8%5%6%

MergedGroup

Specialties Supermarkets Department stores Discount department stores

Mini majors Outlet centres Other retail

(f) Greater relevance for equity and debt investors through increased scale

+ The Merged Group will also be of greater relevance to equity and debt investors through its increased scale relative to Federation Centres on a stand-alone basis.

+ Based on a market capitalisation of over $12 billion34, the Merged Group will be:

• the third largest A-REIT;

• a top-30 company on the ASX35; and

• a top-10 listed manager of retail assets globally.36

+ The Merged Group’s enlarged balance sheet is expected to provide greater funding flexibility and enhance its ability to access a broader range of funding sources and tenor.

+ This scale, combined with the cost savings expected to be generated by the Merger, is expected to improve the Merged Group’s cost of capital.

31 Based on direct portfolio sales data for the 12 months to 31 December 2014.32 Based on sales data for the 12 months to 31 December 2014.33 Based on direct portfolio sales data for the 12 months to 31 December 2014.34 Based on the combination of Federation Centres’ and Novion’s stand-alone market capitalisations of approximately $4.4 billion and $7.9 billion respectively as at the close of trading on 13 April 2015.35 Based on the closing trading prices of ASX listed entities as at 13 April 2015.36 Based on the constituents of the FTSE EPRA/NAREIT Global index, adjusted to include CapitaLand Limited, as at 13 April 2015 (Sydney time).

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Disadvantages of the Merger

There are a number of disadvantages associated with the Merger which are outlined below.

(a) requires material transaction and refinancing costs to be incurred

+ Implementing the Merger and refinancing the debt of Federation Centres and Novion is assumed to require material one-off transaction and refinancing costs of approximately $458 million to be incurred by the Merged Group. These costs are expected to comprise:

• stamp duty, advisory and other ancillary costs totalling implementation costs of $106 million;

• operational cost saving implementation costs of $75 million; and

• assumed debt restructuring costs of $277 million (including $29 million of net derivative liability positions repaid).37

+ These costs represent approximately 4% of the combined market capitalisation of Federation Centres and Novion.38

+ Federation Centres is expected to have incurred one-off transaction costs of approximately $3.4 million up to the date of the Novion securityholders’ meeting, which will be payable by Federation Centres regardless of whether the Merger is implemented or not.

(b) results in a reduction in Federation Centres’ net tangible asset value per security

+ The Merger is expected to result in Federation Centres’ net tangible asset value per security reducing by 5.2% from $2.44 to $2.32 per security. This reduction is largely due to the material one-off transaction and refinancing costs referred to above that are assumed to be incurred by the Merged Group in implementing the Merger.

(c) the Merged Group is expected to have higher gearing than Federation Centres

+ The Merged Group is expected to have pro forma gearing (excluding intangibles) of 31.1%39 compared to 24.9% for Federation Centres on a pro forma 31 December 2014 basis. This increase is largely due to the material one-off transaction and refinancing costs referred to above that are assumed to be incurred in implementing the Merger. The Merged Group’s expected gearing is within Federation Centres’ target range of 25% to 35%.

(d) the risk and investment profile of Federation Centres’ securityholders will change

+ If the Merger is implemented, the Merged Group will own and operate the retail operating platforms currently separately owned and operated by Federation Centres and Novion.

+ Existing Federation Centres securityholders will consequently be subject to the risks relating to the ownership and operation of Novion's retail property platform and its funds and asset management services business including in respect of various wholesale funds and mandates, co-owners and third parties going forward and to any risks and liabilities relating to these businesses and Novion entities to which they were not previously directly exposed.

37 This figure assumes that all of Federation Centres' and Novion's existing debt financing arrangements are repaid. However, there is no certainty that this will occur.38 Based on the combination of Federation Centres’ and Novion’s stand-alone market capitalisations of approximately $4.4 billion and $7.9 billion respectively as at the close of trading on 13 April 2015.39 Calculated as borrowings (net of cash) divided by total tangible assets (net of cash). The Merged Group's pro forma 31 December 2014 gearing (including intangibles) is 29.0% (calculated as borrowings, net

of deferred borrowing costs and cross currency swaps, divided by total assets, net of derivative assets).

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The meanings of certain terms used in this booklet are set out below:

ACCC Australian Competition and Consumer Commission.

A-REIT Australian real estate investment trust.

ASX ASX Limited (ABN 98 008 624 691) and, where the context requires, the financial market that it operates (that is the Australian Securities Exchange).

bps basis points.

Corporations Act the CorporationsAct2001 (Cth).

DPS distribution per security.

EPS earnings per security.

Federation Centres Federation Centres, comprising Federation Limited ABN 90 114 757 783, Federation RE and their related entities.

Federation RE Federation Centres Limited ABN 88 149 781 322 in its capacity as responsible entity of Federation Centres Trust No. 1 ARSN 104 931 928.

FY15 the 2015 financial year.

Merged Group Federation Centres and its related entities immediately after implementation of the Merger (which, for the avoidance of doubt, will include Novion).

Merger the proposed merger of Novion with Federation Centres pursuant to a company scheme of arrangement and a trust scheme.

Moving Annual Turnover retail sales for a 12 month period calculated on a rolling monthly basis.

Novion or Novion Property Group Novion Limited, Novion RE and their related entities.

Novion Limited Novion Limited ABN 79 167 087 363.

Novion RE Novion RE Limited ABN 33 084 098 180 in its capacity as responsible entity of Novion Trust ARSN 090 150 280.

REIT real estate investment trust.

The Gandel Group The Gandel Group Proprietary Limited ABN 29 006 190 709 and its related bodies corporate.

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Disclaimer

The information in this information booklet has been prepared without reference to the investment objectives, financial and taxation situation or particular needs of any Federation Centres securityholder or any other person and does not constitute financial product advice.

Forward-looking statements or statements of intent in relation to future events in this information booklet should not be taken to be a forecast or prediction that those events will occur. Forward-looking statements generally may be identified by the use of words such as ‘aim’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘forecast’, ‘foresee’, ‘future’, ‘intend’, ‘likely’, ‘may’, ‘planned’, ‘potential’, ‘should’ or other similar words. Similarly, statements that describe the objectives, plans, goals or expectations of Novion, Federation Centres or the Merged Group are or may be forward-looking statements.

You should be aware that such statements are only predictions as at the date of this information booklet and are subject to inherent risks and uncertainties as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets, that could cause actual results to differ materially from the expectations described in such prospective information.

Actual events or results concerning Novion, Federation Centres or the Merged Group may differ materially from the events or results expressed or implied in any forward-looking statement and deviations are both normal and to be expected. None of Novion, Federation Centres, their directors, officers, employees, or any person named in

this information booklet or involved in its preparation makes any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward-looking statement.

This information booklet does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or future performance of Federation Centres or the Merged Group and no representation or warranty is made as to the accuracy, correctness, completeness or adequacy of any statements or other information contained in this information booklet. To the maximum extent permitted by law, Federation Centres and their directors, officers and employees disclaim liability for any direct, indirect or consequential loss or damage which may be suffered by any person (including because of negligence or otherwise) through the use (directly or indirectly) or reliance on anything contained in or omitted from this information booklet.

Subject to any continuing obligations under the ASX Listing Rules or the Corporations Act, Federation Centres and their directors, officers and employees disclaim any obligation or undertaking to distribute after the date of this information booklet any updates or revisions to any forward-looking statements to reflect any change in expectations in relation to them or any change in events, conditions or circumstances on which any such statement is based.

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Contact Information

IF You have aNY queStIoNS IN reLatIoN to thIS INForMatIoN BooKLet, pLeaSe CoNtaCt:

MeDIa INveStorS

Brandon Phillips Grant Mackenzie telephone: +61 3 9236 6321 telephone: +61 3 9236 6328

[email protected] [email protected]

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federation centres’ information booklet relating to the ... · 04/05/2015 · merger information...

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