14 November 2007
SEGRO plc, the leading provider of flexible business space in Europe, today announces that its interests in the power generation operation in Slough (Slough Heat & Power – “SH&P”) are to be acquired by Scottish and Southern Energy plc (“SSE”), one of the largest energy companies in the UK.
Contracts have been exchanged under which SEGRO will sell its shares in Slough Heat & Power Limited to Scottish and Southern Energy (“SSE”) and will simultaneously grant SSE a 45 year lease of the site which the plant occupies. SSE is also contracting to an “Energy Availability Agreement” under which it will commit to ensuring that SH&P continues to offer a high level of utility services to SEGRO customers.
The gross consideration for the assets being transferred to SSE is £49.2m which compares to a book value as at 30 June 2007 of £38.6m. Completion of the transaction is expected to take place around the end of December 2007 once remaining contractual conditions have been satisfied.
SH&P is situated on the Slough Trading Estate and provides a valuable and environmentally friendly energy resource for SEGRO’s customers on the Estate. It is a leading generator of renewable energy. SEGRO believes that the services SH&P provides for its customers can be enhanced through the ownership and capabilities of a major national utility company. The Slough Trading Estate – the largest business centre of its kind under single ownership in Europe – provides facilities for more than 400 companies and their 17,000 employees.
Like SH&P, SSE is fully committed to increasing levels of renewable energy generation and is a major investor in and developer of renewable energy technology.
Ian Coull, SEGRO’s Chief Executive said:
“This transaction is good news for our customers and our shareholders. Our customers on the Slough Trading Estate will benefit from Scottish & Southern Energy’s dedicated expertise as a national utility operator and from its much greater capacity and scale. Our employees also will benefit, both from the specialist utility expertise and support which SSE will be able to provide and from the wider choice of opportunities associated with being part of a leading energy company. And our shareholders will benefit from the divestment of a non-core activity which will enable our management team to concentrate fully on its own area of expertise – the provision of Flexible Business Space across Europe.”
Ian Marchant, Chief Executive of SSE said:
“I am delighted that Slough Heat & Power is to become part of SSE. It is an important business, situated right in the heart of one of our traditional operating areas. With its mix of assets and customers, it is a ready-made fit for SSE’s business model, and over time we expect to secure efficiencies and synergies which will create further value. Its sustainable energy credentials are particularly appealing, and we are also looking forward to working with the team at Slough.”
Other Key Points
- SSE is firmly committed to increasing the generation of renewable energy and to a demanding sustainability agenda.
- The transaction will result in the ending of the current monopoly supply of electricity services, allowing Slough Trading Estate customers to consider alternative suppliers – an option which occupiers have requested. For example, occupiers may seek to integrate the supply of their utility services on the Slough Trading Estate with other UK wide national contracts
- Following completion of this agreement (anticipated around the end of December 2007 and subject to final clearance processes) SH&P employees will join SSE
- In addition to the commercial and business occupiers, residential occupiers on the trading estate are also supplied by SH&P and they will similarly soon be able to benefit from being supplied by SSE
SEGRO was advised on this transaction by KPMG Corporate Finance and by Nabarro.
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For SEGRO Investors/Analysts and Corporate Media Contacts |
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SEGRO |
+44 1753 21 3335 |
Michael Waring |
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Maitland |
+44 20 7379 5151 |
Colin Browne |
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For Slough Trading Estate and Slough area Media Contacts |
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FD Tamesis |
+ 44 20 7269 9360 |
Vicky Wallin |
Notes
SEGRO
SEGRO is the leading provider of Flexible Business Space in Europe. Headquartered in the UK, SEGRO is listed on the London Stock Exchange and on Euronext in Paris. The company is a UK Real Estate Investment Trust (“REIT”) with operations in ten countries (it completed the exit from its US business in August 2007), serving a diversified customer base of over 1,600 customers operating in a wide range of sectors, representing both small and large businesses, from start ups to global corporations. With investment property assets of £5.1 billion (including trading properties and development assets) and 3.9 million sq m of business space, SEGRO has an average lease length to expiry of 8.6 years and an annual rental income is excess of £200m.
www.segro.com
Financial Note: The SH&P business is represented in SEGRO’s profit and loss statement by the “Net income from utilities line” – which contributed a positive £0.8m in the six months to the end of June 2007.
Slough Trading Estate
A leading location for business in the South East of England. Where many of the world’s leading companies rub shoulders with some of the most exciting start-ups. The Estate’s aim is to help businesses to thrive by offering a unique combination of quality properties, lifestyle-oriented facilities and supportive customer care in an unrivalled location. For more information on the Estate and why the likes of Ferrari, O2, Black & Decker and LG Electronics have made Slough Trading Estate their home see the website below
http://www.sloughte.com
Slough Heat & Power
Renewable energy, secure supply, saving carbon emissions. Slough Heat and Power supplies electricity, hot water and steam to local businesses, and electricity to local residents. Energy supplies to all its customers are competitively priced and highly secure. Its energy centre uses advanced technologies to generate energy from renewable resources.
Scottish and Southern Energy
Scottish and Southern Energy is one of the largest energy companies in the UK. It is involved in the generation, transmission, distribution and supply of electricity; energy trading; the storage, distribution and supply of gas; electrical and utility contracting; and telecoms. Scottish and Southern Energy is more than just Scottish and Southern. It serves customers from more than 150 sites across the country. SSE’s core purpose is to provide the energy people need in a reliable and sustainable way. In line with this, its strategy has been and will continue to be the delivery of sustained real growth in the dividend payable to shareholders through the efficient operation of, and investment in, a balanced range of regulated and nonregulated energy-related businesses.
SSE recently announced that up to 800 new jobs could be created at a new multi-million pound electric company headquarters in Thatcham, Berkshire. The centre will be the logistics, sales and training base for Scottish and Southern Energy (SSE), and act as their ware-house for all of southern England and Wales.
www.scottish-southern.co.uk
Please click here for the full press release in PDF format.