<pre>http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20090916:RnsP1603Z . RNS Number : 1603Z Westcity PLC 16 September 2009 not for release, publication or distribution (in whole or in part) in, into or from any jurisdiction outside the united kingdom where to do so would constitute a violation of the relevant laws of such jurisdiction 16 September 2009 Proposed delisting of WESTCITY PLC By way of a recommended proposal for the acquisition of WESTCITY PLC by BERKSHIRE BIDCO LIMITED (to be effected by a scheme of arrangement under Part 26 of the Companies Act 2006) Or by way of a special resolution of the members of WESTCITY PLC Summary (For ease of reference, capitalised words and terms in this summary are defined in Appendix IV to this announcement) * As referred to in the announcement made by Westcity on 24 August 2009, and for the reasons more fully set out in this announcement, the Board of Westcity believes that the costs of Westcity's current listing outweigh the benefits and that, accordingly, it is in the best interests of Westcity and its shareholders for Westcity to Delist from AIM. * The boards of Westcity and Berkshire are pleased to announce that they have agreed the terms of the proposed Delisting of Westcity to be effected by way of a recommended proposal for the acquisition of the entire issued share capital of Westcity by Berkshire for cash, with Shareholders being offered the opportunity to elect in the alternative to receive Berkshire Shares (defined as the Acquisition Proposal). The Cash Offer of 13 pence per Westcity Share in cash values the existing issued share capital of Westcity at approximately £9.66 million. * The Acquisition Proposal is to be implemented by means of a scheme of arrangement between Westcity and the Scheme Shareholders under Part 26 of the 2006 Act and involves a reduction of capital under section 135 of the 1985 Act (defined as the Scheme). * The Board believes it is in the best interests of Shareholders for the Scheme to be approved, for the reasons mentioned below, and if it is not, the Board nevertheless considers it to be in the interests of Westcity to proceed with a Delisting. The Board has therefore proposed that Shareholders vote in favour of a resolution for the Delisting of Westcity (defined as the Delisting Resolution) which is contained in the notice of the General Meeting. * Westcity's major asset is its 34.27 per cent. interest in Stonehage Westcity Property Fund Limited (defined as the Fund). The Fund has acquired an asset base of property investments, principally but not exclusively in Continental Europe. As well as its investment in the Fund, Westcity also owns 50 per cent. of the share capital of Stonehage Westcity Management Company Limited (defined as Manco) which acts as the manager of the Fund.As a result of the emergence of and the ongoing credit market and economic crisis, the Fund suspended further acquisition and development activity in June 2008. Due to this, Manco's (and in turn Westcity's) fee income has decreased substantially. Westcity has responded by significantly reducing its overhead and other variable costs. However the ongoing costs attached to Westcity's AIM listing exceed Westcity's quarterly income from Fund activities. * Despite incurring all the additional overheads involved in maintaining the Company's listing, the Company has seen limited trading volume in Westcity Shares, with an average daily volume of 1508 Westcity Shares traded over the 3 months prior to the suspension of Westcity Shares on AIM on 29 June 2009. Accordingly: * it is difficult for Shareholders to buy or sell Westcity Shares due to the lack of liquidity; * given its relatively small size, Westcity is unlikely to attract interest from any new institutional investors or additional analyst coverage in the secondary market; and * the majority of the Shareholders have holdings valued at less than £100 per Shareholder. * Therefore, the Board believes that the costs of Westcity's current listing outweigh the benefits and that, accordingly, it is in the best interests of Westcity and Shareholders for Westcity to delist from AIM to enable it to deal with its current difficulties with a suitably low overhead structure. * Under the terms of the Scheme, the shares in Westcity which are the subject of the Scheme (defined as the Scheme Shares) will be cancelled and, upon the Scheme becoming effective, Scheme Shareholders will receive: for each Scheme Share 13 pence in cash * This represents a premium of approximately: * 48.5 per cent. to the Closing Price of 8.75 pence per Westcity Share on 29 June 2009, being the day prior to the suspension of the Westcity Shares on AIM and the last Business Day that Westcity Shares were trading prior to the commencement of the Offer Period; and * 28.8 per cent. to the Closing Price of 10.25 pence per Westcity Share on 16 February 2009, being the highest Closing Price for Westcity Shares in 2009 prior to the commencement of the Offer Period. The Cash Offer represents a discount of 26.7 per cent. to the net asset value of 17.74 pence per Westcity Share as at 30 June 2009. * The Cash Offer values the whole of the existing issued ordinary share capital of Westcity at approximately £9.66 million. * Shareholders may elect, in respect of all (but not some only) of their Westcity Shares, to receive Berkshire Shares instead of the Cash Consideration to which they would otherwise be entitled under the terms of the Cash Offer (defined as the Unlisted Share Alternative) on the following basis: for each Scheme Share one Berkshire Share * It is expected that the document containing the terms of the Scheme(defined as the Scheme Document) will be posted to Shareholders on or around 21 September 2009. The Scheme requires the approval of the Scheme Shareholders at a meeting convened by the Court and the subsequent sanction of the Court. The Reduction of Capital requires the approval of members of Westcity at the General Meeting and the subsequent confirmation of the Court. Subject to the satisfaction of the Conditions, it is expected that the Scheme will become effective during November 2009. * As none of the Directors hold themselves as independent under the City Code for the purposes of the Acquisition Proposal, they make no recommendation that Shareholders vote in favour of the Scheme Resolutions. * KBC Peel Hunt, as financial adviser to the Company, considers the terms of the Acquisition Proposal to be fair and reasonable. In providing its recommendation, KBC Peel Hunt has taken into account the commercial assessments of the Directors. Accordingly, KBC Peel Hunt recommends that Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting for the purposes of approving and implementing the Scheme (defined as the Scheme Resolutions).The Unlisted Share Alternative is not the subject of a recommendation by KBC Peel Hunt and Shareholders are strongly advised to seek their own independent financial advice before making any such election. * Of the Directors, Sir Harry Solomon, Rex Wood-Ward and Ira Rapp (directly and/or indirectly) hold Westcity Shares. Westcity Properties Limited (which is ultimately controlled by Ira Rapp) has given an irrevocable undertaking to the Company to vote in favour of the Delisting Resolution and the other resolutions to be proposed at the General Meeting in respect of its entire holding of Westcity Shares, amounting to in aggregate 4,000,000 Westcity Shares, representing approximately 5.4 per cent. of Westcity's existing issued share capital. Sir Harry Solomon and Rex Wood-Ward have each given an irrevocable undertaking to Berkshire and the Company to vote in favour of the Scheme Resolutions and the Delisting Resolution in respect of their entire holding of Westcity Shares, amounting to in aggregate 2,233,790 Westcity Shares, representing approximately 3 per cent. of Westcity's existing issued share capital. Of the Westcity Directors, Ira Rapp(through his control of Westcity Properties Limited) and Rex Wood-Ward have irrevocably undertaken to elect to receive Berkshire Shares in respect of their Scheme Shares. * In addition, Berkshire and the Company have received irrevocable undertakings from certain Shareholders (other than Chapman) to vote in favour of the Scheme Resolutions and the Delisting Resolution in respect of their entire shareholdings representing in aggregate 12,640,306 Westcity Shares representing approximately 17 per cent. of the existing issued share capital of Westcity. Berkshire and the Company have also received irrevocable undertakings from Chapman to vote in favour of the Delisting Resolution in respect of its entire shareholding representing in aggregate 24,808,657 Westcity Shares representing approximately 33.4 per cent. of the existing issued share capital of Westcity. Lastly, Berkshire and the Company have also received irrevocable undertakings from some of these Shareholders (including Chapman but excluding the Directors) to elect for the Unlisted Share Alternative in respect of 27,208,657 Westcity Shares, representing approximately 36.62 per cent. of the existing issued share capital of Westcity. * KBC Peel Hunt is acting as financial adviser and corporate broker to Westcity. Horwath Clark Whitehill is acting as financial adviser to Berkshire. * This summary should be read in conjunction with, and is subject to, the full text of the following announcement and the Appendices. Appendix I sets out the Conditions and certain other terms of the Acquisition Proposal. Appendix II contains information on bases and sources used in this announcement, Appendix III provides information in relation to certain irrevocable undertakings and Appendix IV contains definitions of certain terms used in this announcement. Enquiries: WESTCITY Michael Tannenbaum (Company Secretary) Tel:+44 (0)207424 6711 KBC PEEL HUNT (Financial adviser and broker to Westcity) Alex Vaughan (Corporate Finance) Richard Kauffer (Corporate Finance) Tel:+44 (0)207418 8900 Tel:+44 (0)20 7418 8900 BERKSHIRE Ira Rapp (Director) Tel:+44 (0)207424 6714 HORWATH CLARK WHITEHILL (Financial adviser to Berkshire) Nicola Horton (Corporate Finance Partner) Tel:+44 (0)20 7842 7100 KBC Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Westcity and no one else in connection with the Acquisition Proposal and will not be responsible to anyone other than Westcity for providing the protections afforded to clients of KBC Peel Hunt nor for providing advice in relation to the Acquisition Proposal or the content of, or any other matter or arrangement described or referred to in, this announcement. Horwath Clark Whitehill, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Berkshire and no one else in connection with the Acquisition Proposal and will not be responsible to anyone other than Berkshire for providing the protections afforded to clients of Horwath Clark Whitehill nor for providing advice in relation to the Acquisition Proposal or the content of, or any other matter or arrangement described or referred to in, this announcement. The announcement of which the above summary forms part is not intended to, and does not, constitute or form any part of an offer to sell or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy or subscribe for any securities pursuant to the Acquisition Proposal or otherwise nor shall there be any sale, issuance or transfer of the securities referred to in the announcement in the United States or any jurisdiction in contravention of applicable law. The Acquisition Proposal will be made solely on the basis of the Scheme Document, which will contain the full terms and conditions of the Acquisition Proposal. The Scheme Document will be posted to those shareholders able to receive it in due course. Any response in relation to the Acquisition Proposal should be made only on the basis of the information in the Scheme Document. Shareholders receiving the formal documentation in relation to the Acquisition Proposal are advised to read it carefully, once it has been dispatched as it will contain important information. The availability of the Acquisition Proposal to Shareholders who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be contained in the Scheme Document. The announcement has been prepared in accordance with English law and the City Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. The Acquisition Proposal will be subject to the applicable rules and regulations of the London Stock Exchange and the City Code. The Acquisition Proposal relates to the shares in an English company and is proposed to be made by means of a scheme of arrangement provided for under company law of the United Kingdom. Westcity is not subject to the Securities Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to the proxy and tender offer rules under the Exchange Act. Accordingly, the Acquisition Proposal is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy and tender offer rules. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the UK that may not be comparable to the financial statements of US companies. If Berkshire exercises its right to implement the Acquisition Proposal by way of a Takeover Offer, the Acquisition Proposal will be made in compliance with applicable US laws and regulations, including applicable provisions of the tender offer rules under the Exchange Act. Berkshire Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state in the United States and may not be offered or sold directly or indirectly in or into the United States unless registered under the US Securities Act or issued pursuant to an exemption therefrom. Accordingly, no application or election by Shareholders (who are US Persons) for Berkshire Shares under the Unlisted Share Alternative will be accepted by the Company if (i) such US Holder is unable to warrant to Berkshire that he is in full compliance with an available exemption under the US Securities Act and all applicable laws or (ii) Westcity, Berkshire or their agent has reason to believe such US Holder is ineligible to apply for the Unlisted Share Alternative. Any US Holder who elects for the Unlisted Share Alternative but does not qualify for this alternative for the reasons referred to above will be deemed not to have so elected and shall be paid the cash consideration to which he is entitled under the Cash Offer in respect of his Westcity Shares. Cautionary and Forward-Looking Statements This announcement contains a number of "forward-looking statements" relating to Westcity and Berkshire and the business sectors in which they operate. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "forecast", "plan" and "project" or similar expressions identify forward-looking statements. Such statements reflect the relevant company's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks, assumptions and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions, changes in general economic and business conditions, introduction of competing products and services, lack of acceptance of new products or services and the behaviour of other market participants. Although Berkshire and Westcity believe that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Shareholders should not, therefore, place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in, one per cent or more of any class of "relevant securities" of Westcity or Berkshire, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by not later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Acquisition proposal becomes, or is declared, unconditional as to acceptances or lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Westcity or Berkshire, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Westcity or Berkshire by Westcity or Berkshire, or by any of their respective "associates" must also be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0) 20 7638 0129; fax number +44 (0) 20 7236 7013. The Westcity Directors accept responsibility for all the information contained in this announcement except for that information for which the sole director of Berkshire accepts responsibility. To the best of the knowledge and belief of the Westcity Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. The sole director of Berkshire accepts responsibility for all information in this announcement relating to Berkshire and himself as director of Berkshire. To the best of the knowledge and belief of the sole director of Berkshire (who has taken all reasonable care to ensure that such is the case), the information contained in this announcement for which he is responsible is in accordance with the facts and does not omit anything likely to affect the import of such information. not for release, publication or distribution (in whole or in part) in, into or from any jurisdiction outside the united kingdom where to do so would constitute a violation of the relevant laws of such jurisdiction 16 September 2009 Proposed delisting of WESTCITY PLC By way of a recommended proposal for the acquisition of WESTCITY PLC by BERKSHIRE BIDCO LIMITED (to be effected by a scheme of arrangement under Part 26 of the Companies Act 2006) Or by way of a special resolution of the members of WESTCITY PLC 1. Introduction As referred to in the announcement made by Westcity on 24 August 2009, and for the reasons more fully set out in paragraph 6 below, the Board of Westcity believes that the costs of Westcity's current listing outweigh the benefits and that, accordingly, it is in the best interests of Westcity and its shareholders for Westcity to Delist from AIM. The Board considered various options for achieving a Delisting and ultimately came to the view that it would be in the best interests of Shareholders to combine a Delisting with the proposed scheme of arrangement described in this announcement. The boards of Berkshire and Westcity are pleased to announce that they have reached agreement on the terms of a recommended proposal for the acquisition of the entire issued share capital of Westcity by Berkshire for cash, with Shareholders being offered the opportunity to elect in the alternative to receive Berkshire Shares (defined as the Acquisition Proposal and as further described in paragraph 2 below). The Cash Offer of 13 pence per Westcity Share in cash values the existing issued share capital of Westcity at approximately £9.66 million. The Acquisition Proposal is designed to facilitate the Delisting of Westcity in a manner that will provide those Shareholders who do not wish to remain invested in an unlisted company with a mechanism to exit prior to the Delisting at a premium to the current share price. The Acquisition Proposal is not designed to achieve a controlling interest by Chapman in Westcity, although this could be the ultimate result. The Board believes it is in the best interests of Shareholders for the Scheme to be approved. However, if it is not, the Board nevertheless considers it to be in the interests of Westcity to proceed with a Delisting. The Board has therefore proposed the Delisting Resolution which is contained in the notice of the General Meeting which will be contained within the Scheme Document to be posted to Shareholders in due course. 2. The Acquisition Proposal It is intended that the Acquisition Proposal will be implemented by means of a scheme of arrangement between Westcity and the Scheme Shareholders under part 26 of the 2006 Act. The purpose of the Scheme is to enable Berkshire to acquire the entire issued share capital of Westcity and the consequential Delisting. Under the terms of the Scheme, the Scheme Shares will be cancelled and, upon the Scheme becoming effective, Scheme Shareholders will receive: for each Scheme Share 13 pence in cash This represents a premium of approximately: * 48.5 per cent. to the Closing Price of 8.75 pence per Westcity Share on 29 June 2009, being the day prior to the suspension of the Westcity Shares on AIM and the last Business Day that Westcity Shares were trading prior to the commencement of the Offer Period; and * 28.8 per cent. to the Closing Price of 10.25 pence per Westcity Share on 16 February 2009, being the highest Closing Price for Westcity Shares in 2009 prior to the commencement of the Offer Period. The Cash Offer represents a discount of 26.7 per cent. to the net asset value of 17.74 pence per Westcity Share as at 30 June 2009. The Cash Offer values the whole of the existing issued ordinary share capital of Westcity at approximately £9.66 million. Under the Unlisted Share Alternative, Shareholders may elect, in respect of all (but not some only) of their Westcity Shares, to receive Berkshire Shares instead of the Cash Consideration to which they would otherwise be entitled under the terms of the Cash Offer on the following basis: for each Scheme Share one Berkshire Share It is expected that the Scheme Document will be posted to Shareholders on or around 21 September 2009. The Scheme requires the approval of the Scheme Shareholders at a meeting convened by the Court and the subsequent sanction of the Court. The Reduction of Capital requires the approval of members of Westcity at the General Meeting and the subsequent confirmation of the Court. Subject to the satisfaction of the Conditions, it is expected that the Scheme will become effective during November 2009. 3. Recommendation As none of the Directors hold themselves as independent under the City Code for the purposes of the Acquisition Proposal, they make no recommendation that Shareholders vote in favour of the Scheme Resolutions. KBC Peel Hunt, as financial adviser to the Company, considers the terms of the Acquisition Proposal to be fair and reasonable. In providing its recommendation, KBC Peel Hunt has taken into account the commercial assessments of the Directors. Accordingly, KBC Peel Hunt recommends that Shareholders vote in favour of the Scheme Resolutions to be proposed at the Court Meeting and the General Meeting. The Unlisted Share Alternative is not the subject of a recommendation by KBC Peel Hunt and Shareholders are strongly advised to seek their own independent financial advice before making any such election. All Directors holding Westcity Shares have irrevocably undertaken to vote in favour of the Scheme Resolutions and the Delisting Resolution, with the exception of Ira Rapp who has only provided an irrevocable undertaking to vote in favour of the Delisting Resolution and the other resolutions to be proposed at the General Meeting, as he is precluded from voting at the Court Meeting under the City Code. Of the Westcity Directors holding Westcity Shares, Ira Rapp and Rex Wood-Ward have irrevocably undertaken to elect for Berkshire Shares in respect of their holdings, and Sir Harry Solomon has not elected for the Unlisted Share Alternative. Michael Rapp and Michael Tannenbaum do not own shares in the Company. 4. Background to and reasons for the recommendation of the Acquisition Proposal As a result of the emergence of and the ongoing credit market and economic crisis, the Fund suspended further acquisition and development activity in June 2008. Due to this, Manco's (and in turn Westcity's) fee income has decreased substantially. Westcity has responded by significantly reducing its overhead and other variable costs. However the ongoing costs attached to Westcity's AIM listing exceed Westcity's quarterly income from Fund activities. Against this background, the Board has spent significant time evaluating different strategic alternatives for the Company. These deliberations have taken into account the current and anticipated financial position of the Company, the current and anticipated financial climate and the relative benefits of being a private limited company compared to the ongoing costs of maintaining a listing on AIM. These costs include reporting to over 1,500 shareholders, fees paid to the Company's nominated adviser and broker, registrars' fees, annual fees paid to the London Stock Exchange, costs relating to public announcements, fees and expenses of Directors and fees and expenses of accountants and lawyers engaged to provide services in connection with the Westcity Shares being admitted to trading on AIM. Despite incurring all the additional overheads involved in maintaining the Company's listing, the Company has seen limited trading volume in Westcity Shares, with an average daily volume of 1,508 Westcity Shares traded over the last 3 months prior to the suspension of trading on AIM on 29 June 2009. Accordingly: * it is difficult for Shareholders to buy or sell Westcity Shares due to the lack of liquidity; * given its relatively small size, Westcity is unlikely to attract interest from any new institutional investors or additional analyst coverage in the secondary market; * the majority of the Shareholders have holdings valued at less than £100 per Shareholder. Therefore, the Board believes that the costs of the Company's current listing outweigh the benefits and that, accordingly, it is in the best interests of the Company and Shareholders for Westcity to delist from AIM to enable it to deal with its current difficulties with a suitably low overhead structure. The Board has also taken into account the views of the Shareholders and believes that its Shareholders should be given the opportunity to dispose of all their Westcity Shares for cash prior to any Delisting of the Company. Accordingly, the Board has agreed that Company should proceed with Acquisition Proposal on the terms set out in this announcement. KBC Peel Hunt considers the terms of the Acquisition Proposal to be fair and reasonable and it recommends that Shareholders vote in favour of the Scheme Resolutions to be proposed at the Court Meeting and the General Meeting. In arriving at its decision to recommend the Acquisition Proposal, KBC Peel Hunt took into account the Board's commercial assessment of the following: * the business outlook for Westcity and the difficult economic and trading environment in which Westcity currently operates; * the risks, costs, and the timescales associated with the continued turnaround of Westcity's business; * the likely requirement for additional finance in addition to the existing Chapman Loan; * the current underperformance of the operational and trading performance of the Company, together with the restricted strategic alternatives to grow Westcity whilst remaining as a quoted company; and * the valuation of the Fund's properties. The decision of Shareholders with respect to accepting the Cash Offer as opposed to the Unlisted Share Alternative will depend on their short and medium term liquidity requirements and on their overall investment objectives. In considering the respective merits of the Cash Offer and the Unlisted Share Alternative, Shareholders should take into account the following: The Cash Offer offers Shareholders: * a premium of 48.6 per cent. to the Closing Price of 8.75 pence per Westcity Share on 29 June 2009, being the day prior to the suspension of the Westcity Shares on AIM and the last Business Day that Westcity Shares were trading prior to the commencement of the Offer Period; * a premium of 26.8 per cent. to the Closing Price of 10.25 pence per Westcity Share on 16 February 2009, being the highest Closing Price for Westcity Shares in 2009 prior to the commencement of the Offer Period; * the immediate and certain benefits of obtaining a full cash exit for their Westcity shareholding in a tax efficient manner, free of dealing costs; and * a discount of 26.7 per cent. to the net asset value of 17.74 pence per Westcity Share as at 30 June 2009. However, Shareholders should note that by accepting the Cash Offer they will have no future equity participation in Westcity and will forego the right to participate in any upside in the value of the assets of Westcity. The Unlisted Share Alternative offers Shareholders shares in Berkshire, an unlisted company. The following considerations apply to the Unlisted Share Alternative: * the value of these shares is uncertain and the estimate of value of these shares made by Horwarth Clark Whitehill in paragraph 5 below as required by Rule 24.10 of the City Code could be under or over optimistic; * there are no plans for Berkshire to seek a public quotation for Berkshire Shares and consequently may be difficult to sell; * Berkshire will not be subject to the Listing Rules of the UK Listing Authority, the AIM Rules, the City Code, the Combined Code or other similar rules devised to protect shareholders in publicly quoted companies; and * holders of Berkshire Shares that do not participate in the Berkshire Fundraising will have their shareholding diluted. Further details on the risks involved in accepting the Unlisted Share Alternative will be contained within the Scheme Document. Shareholders accepting the Unlisted Share Alternative will have the right to participate in any upside in the value of the assets of Westcity. In light of the factors set out above, KBC Peel Hunt believes that it is in the best interests of Shareholders to be afforded the opportunity to realise their investment for cash prior to the Company seeking to delist from the AIM Market. The Unlisted Share Alternative is not the subject of a recommendation by KBC Peel Hunt and Shareholders are strongly advised to seek their own independent financial advice before electing to participate in the Unlisted Share Alternative. 5. Estimate of value of the Berkshire Shares As required by Rule 24.10 of the City Code, Horwath Clark Whitehill has provided Berkshire with a letter containing an estimate of the value of the Berkshire Shares. As at the date of this estimate of value and based on matters set out in the estimate so provided and the information reviewed, Horwath Clark Whitehill considers that the estimate of the value of one Berkshire Share is approximately 10 pence. The value of shares can go down as well as up and there will be no market for the Berkshire Shares. The full text of Horwath Clark Whitehill's letter containing the estimate of value will be set out in the Scheme Document and has been provided solely for the use and benefit of Berkshire, for the purposes of Rule 24.10 of the City Code. Horwath Clark Whitehill's letter is not addressed to and should not be relied upon by any other parties for any purpose whatsoever and Horwath Clark Whitehill expressly disclaims any liability to anyone other than Berkshire with respect to its contents. In particular, it does not constitute the provision of advice or a recommendation by Horwath Clark Whitehill to any Shareholder or any other person as to the fairness of the Unlisted Share Alternative. Shareholders are strongly recommended to take their own independent financial advice. Horwath Clark Whitehill will not be responsible to anyone other than Berkshire for providing the protections afforded to clients of Horwath Clark Whitehill in connection with the estimate of value of the Berkshire Shares. 6. Directors, Management, Employees and Locations Berkshire values highly the skills, knowledge and expertise of Westcity's existing management and employees and believes that they have made a significant contribution to Westcity's business. Berkshire has given assurances to the Directors that, following the Scheme becoming effective, the existing employment rights of the management and employees of Westcity will be fully safeguarded. Berkshire does not employ any employees or management on a full-time or part-time basis. As at the date hereof, Berkshire is managed by Ira Rapp who is not an employee and receives no remuneration for his services. Both Berkshire and Westcity will continue to be headquartered in England. Following the Scheme becoming effective: * Michael Rapp and Sir Harry Solomon will voluntarily step down from the Board of the Company with the result that the Board will comprise Michael Tannenbaum, Ira Rapp and Rex Wood-Ward. The fees and terms of employment or engagement of the remaining Westcity Directors will continue on the same terms as apply on the date hereof prior to the implementation of the Scheme; * Eldad Levy, Michael Tannenbaum and Rex Wood-Ward will be appointed to the board of directors of Berkshire. The directors of Berkshire (other than Eldad Levy) will not receive any director fees or salaries from Berkshire. Eldad Levy will be entitled to a fee of £12,000 per annum for his directorship services to Berkshire. Save as disclosed in this announcement the effect of the Scheme on the interests of the Westcity Directors will not differ from its effect on the interests of any other Westcity Shareholder. 7. Westcity Share Schemes Certain of the Westcity Directors, namely Ira Rapp, Michael Tannenbaum and Rex Wood-Ward and one employee of Westcity (Reshma Patel) will be entitled to exercise their options to acquire Westcity Shares pursuant to the vesting of awards under certain of the Westcity Share Schemes immediately after the Court sanctions the Scheme and for forty five days thereafter. As these option and awards are out of the money, each of the holders has irrevocably undertaken to Westcity and Berkshire not to exercise any of his or her rights under the Westcity Share Schemes and accordingly all such rights under the Westcity Share Schemes will lapse upon expiry of the aforementioned forty five day period. 8. Information on Westcity In 2006, Westcity became a property-related investment, development and management company. The focus of Westcity is to seek out property opportunities for investment, co-investment, development and management. Westcity's major asset is its 34.27 per cent. interest in the Fund. The Fund has acquired an asset base of global property investments, principally but not exclusively in Continental Europe. As well as its investment in the Fund, Westcity also owns 50 per cent. of the share capital of Manco which acts as the manager of the Fund. Westcity's income stream includes (i) fees receivable for sourcing and acquiring property investments on behalf of the Fund (ii) Westcity's 50 per cent. share of the net fees received by Manco from the Fund and (iii) income distributions relating to Westcity's investment in the Fund together with any capital appreciation relating to Westcity. Further information on Westcity will be set out in the Scheme Document. 9. Information on Berkshire Berkshire was incorporated in England and Wales on 18 June 2009 with registered number 06937709 at the instance of Westcity's largest shareholder, Chapman. The registered office of Berkshire is 4 Prince Albert Road, NW1 7SN. The authorised share capital of Berkshire is £1,500,000 divided into 150,000,000 Berkshire Shares of 1 pence each. The total number of Berkshire Shares in issue as at the date of this announcement is 100 Berkshire Shares held by Ira Rapp. At the date of this announcement there are no other Berkshire Shares in issue and since it is not known what the take up by Shareholders of the Unlisted Share Alternative will be, it will not be known what the total number of Berkshire Shares in issue will eventually be until the Effective Date. Berkshire was formed in order to offer Shareholders the ability to realise their investment in Westcity Shares at a premium to the prevailing market price whilst also offering Shareholders the opportunity to choose to participate in the ongoing risks and rewards associated with the underlying assets and investments of Westcity. Immediately following the Effective Date, Rex Wood-Ward, Michael Tannenbaum and Eldad Levy will join Ira Rapp on the board of Berkshire as directors. Following implementation of the Scheme, an aggregate of 4,233,790 of the Berkshire Shares will be owned by Ira Rapp and Rex Wood-Ward, each of whom having irrevocably undertaken to elect the Unlisted Share Alternative in respect of all of their Westcity Shares. Further information on Berkshire and Chapman will be set out in the Scheme Document. 10. Irrevocable undertakings Of the Directors, Sir Harry Solomon, Rex Wood-Ward and Ira Rapp (directly and/or indirectly) hold Westcity Shares. Westcity Properties Limited (which is ultimately controlled by Ira Rapp) has given an irrevocable undertaking to the Company to vote in favour of the Delisting Resolution and the other resolutions to be proposed at the General Meeting in respect of its entire holding of Westcity Shares, amounting to in aggregate 4,000,000 Westcity Shares, representing approximately 5.4 per cent. of Westcity's existing issued share capital. Sir Harry Solomon and Rex Wood-Ward have each given an irrevocable undertaking to Berkshire and the Company to vote in favour of the Scheme Resolutions and the Delisting Resolution to be proposed at the Meetings in respect of their entire holding of Westcity Shares, amounting to in aggregate 2,233,790 Westcity Shares, representing approximately 3 per cent. of Westcity's existing issued share capital. Of the Westcity Directors, Ira Rapp (through his control of Westcity Properties Limited) and Rex Wood-Ward have irrevocably undertaken to elect to receive Berkshire Shares in respect of their Scheme Shares. In addition, Berkshire and the Company have received irrevocable undertakings from certain Shareholders (other than Chapman) to vote in favour of the Scheme Resolutions and the Delisting Resolution in respect of their entire shareholdings representing in aggregate 12,640,306 Westcity Shares representing approximately 17 per cent. of the existing issued share capital of Westcity. Berkshire and the Company have also received irrevocable undertakings from Chapman to vote in favour of the Delisting Resolution in respect of its entire shareholding representing in aggregate 24,808,657 Westcity Shares representing approximately 33.4 per cent. of the existing issued share capital of Westcity. Lastly, Berkshire and the Company have also received irrevocable undertakings from some of these Shareholders (including Chapman) to elect for the Unlisted Share Alternative in respect of 27,208,657 Westcity Shares, representing approximately 36.62 per cent. of the existing issued share capital of Westcity. The irrevocable undertakings mentioned above will lapse, inter alia: * if the Scheme is not approved by Shareholders at the Scheme Meeting or is withdrawn by Westcity or Berkshire other than in respect of the Delisting Resolution; or * if a person other than Berkshire (or any person acting in concert with it) announces an offer for Westcity pursuant to Rule 2.5 of the City Code at a price per Westcity Share representing, as at the date of such Rule 2.5 announcement, at least 110 per cent. to the cash price per Westcity Share available pursuant to the Acquisition Proposal. Further details of these irrevocable undertakings are set out in Appendix III to this announcement. 11. Financing of the Acquisition Proposal Berkshire has secured committed financing arrangements through the Bridging Loan for the provision to Berkshire of the necessary financing to fund the Cash Consideration payable by Berkshire to Shareholders under the Cash Offer. Approximately £5.989 million under the Bridging Loan was drawn down by Berkshire as at 15 September 2009. It is intended that the Bridging Loan will be repaid in due course by proceeds to be raised under the Berkshire Fundraising. The Company and Berkshire and Horwath Clark Whitehill have received, pursuant to the irrevocable undertakings referred to in paragraph 10, from Shareholders and Directors (who together hold approximately 42.32 per cent. of the issued share capital of the Company) irrevocable undertakings to elect for the Unlisted Share Alternative in respect of their Westcity Shares. Should all other Shareholders elect to receive the Cash Offer, a maximum Cash Consideration of £5,571,391 would be required to be paid to such Shareholders. Taking into account the above, Horwath Clark Whitehill confirms that it is satisfied that the resources available to Berkshire are sufficient to satisfy the Cash Consideration due to Shareholders under the Scheme. 12. Structure of the Acquisition Proposal 12.1 Introduction The Acquisition Proposal will be effected by means of a scheme of arrangement between Westcity and the Scheme Shareholders under Part 26 of the 2006 Act involving a reduction of capital under section 135 of the 1985 Act. The purpose of the Scheme is to provide for Berkshire to become the owner of the entire issued and to be issued share capital of Westcity. This is to be achieved by the More to follow, for following part double-click [nRn2P1603Z]</pre>