NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS) OR TO ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT)) (EACH, A U.S. PERSON) OR IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT.
2i Rete Gas S.p.A. (the Offeror) hereby announces that it invites all holders (the Noteholders) of its outstanding €750,000,000 1.75 per cent. Notes due 16 July 2019 (ISIN: XS1088274169) (the 2019 Notes) and its outstanding €540,000,000 1.125 per cent. Notes due 2 January 2020 (ISIN: XS1144492532) (the 2020 Notes and together with the 2019 Notes, the Notes and each a Series) to tender their Notes for purchase by the Offeror for cash up to €225,000,000 in aggregate nominal amount of the Notes (the Maximum Acceptance Amount, although the Offeror reserves the right, in its sole and absolute discretion and for any reason, to change the Maximum Acceptance Amount (or not to accept any Notes) or to accept less than or more than the Maximum Acceptance Amount for purchase pursuant to the Offers), subject to the satisfaction of the conditions described in the tender offer memorandum dated 10 January 2017 (the Tender Offer Memorandum) (the Offers and each an Offer).
The Offers are subject to the offer and distribution restrictions set out below. Capitalised terms used in this announcement and not otherwise defined have the meanings ascribed to them in the Tender Offer Memorandum.
* The Offeror reserves the right, in its sole and absolute discretion and for any reason, to increase or decrease the Maximum Acceptance Amount and/or to accept less than or more than the Maximum Acceptance Amount (or not to accept any Notes) for purchase pursuant to the Offers.
** For information purposes only, the 2019 Notes Purchase Price, determined in the manner described in “Purchase Price” below, will be 104.329 per cent. if the Settlement Date is 24 January 2017. Should the Settlement Date be postponed, the 2019 Notes Purchase Price will be recalculated and will be announced, for information purposes only, as provided in the Tender Offer Memorandum.
Details of the Offers
Rationale and Background for the Offers
The Offers are being made as part of the Offeror’s medium-term financial strategy aimed at pro-actively managing its liabilities and cost of debt financing. The Offeror’s intention is to cancel all of the Notes acquired pursuant to the Offers.
Maximum Acceptance Amount
If the Offeror decides, in its sole and absolute discretion, to accept valid tenders of Notes pursuant to the Offers, it will accept for purchase pursuant to the Offers up to the Maximum Acceptance Amount, although the Offeror reserves the right, in its sole and absolute discretion and for any reason, to change the Maximum Acceptance Amount or to accept less than or more than the Maximum Acceptance Amount (or not to accept any Notes) for purchase pursuant to the Offers. The final Maximum Acceptance Amount will be announced in the Announcement of Results of Offers and Pricing. The Offeror expects to announce a non-binding indication of the Maximum Acceptance Amount in the Announcement of Indicative Results of Offers at or around 11.00 a.m. (CET) on Wednesday, 18 January 2017, provided that the Offeror has the right, in its sole and absolute discretion and for any reason, to change any such non-binding indication of the Maximum Acceptance Amount or to accept for purchase an aggregate nominal amount of Notes less than or more than any such non-binding indication of the Maximum Acceptance Amount. The Offeror will determine the allocation of the nominal amount accepted for purchase pursuant to the Offers between the 2019 Notes and the 2020 Notes in its sole and absolute discretion, and reserves the right to accept significantly more or less (or none) of Notes of one Series as compared to the other Series of Notes. The Offeror reserves the right to accept, in its sole and absolute discretion, only the 2019 Notes or the 2020 Notes.
Series Acceptance Amounts and Scaling of Offers Series Acceptance Amounts
If the Offeror accepts any Notes of a Series for purchase pursuant to the relevant Offer and the aggregate nominal amount of such Series validly offered for purchase is greater than the final aggregate nominal amount of a Series accepted for purchase (the Series Acceptance Amount in respect of such Series), the Offeror intends to accept the Notes of such Series for purchase in the manner set out under “Scaling of Offers” below, such that the aggregate nominal amount of such Series accepted for purchase pursuant to the relevant Offer is no greater than the Series Acceptance Amount. See further “Scaling of Offers” below.
Scaling of Offers
The Offeror is under no obligation to accept for purchase any Notes tendered pursuant to the Offers. The acceptance for purchase by the Offeror of Notes tendered pursuant to the Offers is at the sole and absolute discretion of the Offeror and tenders may be rejected by the Offeror for any reason in its sole and absolute discretion. The amount of 2019 Notes and 2020 Notes that is purchased pursuant to the relevant Offer will be based on the Maximum Acceptance Amount, and tenders of Notes may be pro-rated.
In the circumstances in which valid tenders of Notes of a Series pursuant to the relevant Offer are to be accepted, at the sole and absolute discretion of the Offeror, on a pro rata basis, each such tender of Notes of the relevant Series will be scaled by a factor (each a Pro-Ration Factor) equal to (i) the relevant Series Acceptance Amount for such Series, divided by (ii) the aggregate principal nominal amount of Notes of the relevant Series validly tendered (subject to any adjustments following the rounding of tenders of Notes as described below).
Each tender of Notes that is scaled in this manner will be rounded down to the nearest €1,000 provided, in each case, that the Offeror will only accept valid tenders of Notes to the extent any such pro-rating would not result in the relevant Noteholder transferring Notes in an aggregate nominal amount which is less than the relevant Minimum Denomination (as defined below) of the relevant Series of Notes or the Notes being returned to the relevant Noteholder in an aggregate amount which is less than the relevant Minimum Denomination of the relevant Series of Notes.
Total amounts payable to Noteholders
If the Offeror decides to accept valid tenders of Notes pursuant to the relevant Offer, the total amount that will be paid to each Noteholder on the Settlement Date for such Notes accepted for purchase from such Noteholder will be an amount (rounded to the nearest €0.01, with €0.005 rounded upwards) equal to the sum of:
(a) the product of (i) the aggregate nominal amount of such Notes accepted for purchase from such Noteholder pursuant to the relevant Offer and (ii) the relevant Purchase Price (such product, the relevant Purchase Consideration); and
(b) the Accrued Interest Payment on such Notes.
Purchase Price
The Offeror will pay, for the 2019 Notes and 2020 Notes accepted by it for purchase pursuant to the relevant Offer, a price (the relevant Purchase Price, expressed as a percentage and rounded to the nearest 0.001 per cent., with 0.0005 per cent. being rounded upwards) as described below.
The Dealer Managers will determine at the Pricing Time on the Pricing Date, the Purchase Price (i) in relation to the 2019 Notes (the 2019 Notes Purchase Price) by reference to a fixed yield to maturity of 0 per cent.1 (the 2019 Notes Purchase Yield) in accordance with market convention and (ii) in relation to the 2020 Notes (the 2020 Notes Purchase Price) by reference to a yield to maturity (such yield, the 2020 Notes Purchase Yield) calculated as the sum of a purchase spread of +18 basis points (the 2020 Notes Purchase Spread) and the 2020 Notes Interpolated Mid-Swap Rate in accordance with the pricing formula described in the section entitled “Calculation of the Tender Consideration” in the Tender Offer Memorandum.
Accrued Interest Payment
The Offeror will also pay an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offers.
Tender Instructions
In order to participate in, and be eligible to receive the relevant Purchase Consideration and relevant Accrued Interest Payment pursuant to the relevant Offer, Noteholders must validly tender their Notes by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 5.00 p.m. (CET) on 17 January 2017 (the Expiration Deadline).
Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers by the deadlines specified in the Tender Offer Memorandum. The deadlines set by any such intermediary and each Clearing System for the submission and withdrawal of Tender Instructions will be earlier than the relevant deadlines specified in the Tender Offer Memorandum.
Once submitted, Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.
Tender Instructions must be submitted in respect of a minimum nominal amount of Notes of any Series of no less than €100,000, being the minimum denomination of each of the two Series (in relation to each Series of Notes, the Minimum Denomination) and may thereafter be submitted in integral multiples of €1,000. Tender Instructions which relate to a nominal amount of Notes of one Series of less than the relevant Minimum Denomination will be rejected. A separate Tender Instruction must be completed on behalf of each beneficial owner.
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1 For information purposes only, the 2019 Notes Purchase Price, determined in the manner described in “Purchase Price” above, will be 104.329 per cent. if the Settlement Date is 24 January 2017. Should the Settlement Date be postponed, the 2019 Notes Purchase Price will be recalculated and will be announced, for information purposes only, as provided in the Tender Offer Memorandum
Expected Timetable of Events
The following table sets forth the expected dates and times of the key events relating to the Offers. The times and dates below are indicative only.
| Events | Times and Dates (All times are CET) |
| Commencement of the Offers Announcement of the Offers. Tender Offer Memorandum available from the Tender Agent (subject to offer and distribution restrictions). | Tuesday, 10 January 2017 |
| Expiration Deadline Final deadline for receipt of valid Tender Instructions by the Tender Agent in order for Noteholders to be able to participate in the Offers. | 5.00 p.m. on Tuesday, 17 January 2017 |
| Announcement of Indicative Results of Offers Announcement by the Offeror of a non-binding indication of whether it intends to accept valid tenders of Notes pursuant to the Offers and, if so, (i) a non-binding indication of the Maximum Acceptance Amount, (ii) in relation to each Series of Notes, the aggregate nominal amount of Notes validly tendered pursuant to the relevant Offer, the indicative Series Acceptance Amount and any indicative Pro-Ration Factor. | Wednesday, 18 January 2017 at or around 11.00 a.m. |
| Pricing Date and Pricing Time Provided that the Offeror has not elected to withdraw or terminate the relevant Offer in accordance with in the section entitled “Amendment, Termination and Revocation” in the Tender Offer Memorandum, in relation to the 2019 Notes, confirmation of the 2019 Notes Purchase Price and in relation to 2020 Notes, determination of the 2020 Notes Interpolated Mid-Swap Rate, the 2020 Notes Purchase Yield and the 2020 Notes Purchase Price and any Accrued Interest. | Wednesday, 18 January 2017 at or around 1.00 p.m. |
| Announcement of Results of Offers and Pricing Announcement of whether the Offeror will accept valid tenders of Notes of any Series pursuant to the relevant Offer and, if so, (i) the final Maximum Acceptance Amount, (ii) in relation to each Series of Notes, the aggregate nominal amount of Notes validly tendered, the Series Acceptance Amount and any Pro-Ration Factor, (iii) in relation to the 2019 Notes, the 2019 Notes Purchase Price, (iv) in relation to 2020 Notes, the 2020 Notes Interpolated Mid-Swap Rate, the 2020 Notes Purchase Yield, the 2020 Notes Purchase Price and (v) any Accrued Interest for the Notes accepted for purchase. | As soon as reasonably practicable after the Pricing Time on the Pricing Date |
| Settlement Date Expected Settlement Date for the Offers. | Tuesday, 24 January 2017 |
The above times and dates are subject to the right of the Offeror to extend, re-open, amend and/or terminate any of the Offers (subject to applicable laws and regulations and as provided in the Tender Offer Memorandum). Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary would need to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, any Offer, before the deadlines specified in the Tender
Offer Memorandum. The deadlines set by any such intermediary and each Clearing System for the submission of Tender Instructions will be earlier than the relevant deadlines specified above.
Further Information
A complete description of the terms and conditions of the Offers is set out in the Tender Offer Memorandum. Merrill Lynch International and Société Générale are the Structuring Advisors and Dealer Managers for the Offers.
Questions and requests for assistance in connection with the Offers may be directed to:
OFFEROR
2i Rete Gas S.p.A.
Via Alberico Albricci, 10 20122 Milan
Italy
STRUCTURING ADVISORS AND DEALER MANAGERS
Merrill Lynch International
2 King Edward Street London EC1A 1HQ
United Kingdom Telephone: +44 (0) 20 7996 5420
Attention: Liability Management Group Email: DG.LM_EMEA@baml.com
Société Générale
10 Bishops Square London E1 6EG United Kingdom
Telephone: +44 20 7676 7680 Attention: Liability Management
Email: liability.management@sgcib.com
TENDER AGENT
Lucid Issuer Services Limited
Tankerton Works 12 Argyle Walk London WC1H 8HA United Kingdom
Attention: Paul Kamminga / Arlind Bytyqi
Telephone: +44 20 7704 0880
Email: 2iretegas@lucid-is.com
Each Noteholder is solely responsible for making its own independent appraisal of all matters as such Noteholder deems appropriate (including those relating to the relevant Offer(s)) and each Noteholder must make its own decision, based upon its own judgement and upon advice from such financial, accounting, legal and tax advisers as it has deemed necessary, as to whether to tender any or all of its Notes for purchase pursuant to such Offer(s).
None of the Dealer Managers, the Tender Agent or any of their respective directors, officers, employees, agents or affiliates assumes any responsibility for the accuracy or completeness of the information concerning the Offeror, the Notes or the Offers contained in this announcement or in the Tender Offer Memorandum. None of the Offeror, the Dealer Managers, the Tender Agent or any of their respective directors, officers, employees, agents or affiliates is acting for any Noteholder, or will be responsible to any Noteholder for providing any protections which would be afforded to its clients or for providing advice in relation to the Offers, and accordingly none of the Dealer Managers, the Tender Agent or any of their respective directors, officers, employees, agents or affiliates assumes any responsibility for any failure by the Offeror to disclose information with regard to the Offeror or the Notes which is material in the context of the Offers and which is not otherwise publicly available.
None of the Offeror, the Dealer Managers, the Tender Agent or any of their respective directors, officers, employees, agents or affiliates make any representation or recommendation whatsoever regarding the Offers, or any recommendation as to whether Noteholders should tender the Notes in the Offers.