LR 10.7 Transactions by specialist companies

LR 10 Annex 1 is modified as follows in relation to acquisitions or disposals of property by a listed property company:

1. (1)

   for the purposes of paragraph 2R(1) (the gross assets test), the assets test is calculated by dividing the transaction consideration by the gross assets of the listed property company and paragraphs 2R(5) and 2R(6) do not apply;

2. (2)

   for the purposes of paragraph 2R(1) (the gross assets test), if the transaction is an acquisition of land to be developed, the assets test is calculated by dividing the transaction consideration and any financial commitments relating to the development by the gross assets of the listed property company and paragraphs 2R(5) and 2R(6) do not apply;

3. (3)

   for the purposes of paragraph 2R(2), the gross assets of a listed property company are, at the option of the company:

   1. (a)

      the aggregate of the company's share capital and reserves (excluding minority interests);

   2. (b)

      the book value of the company's properties (excluding those properties classified as current assets in the latest published annual report and accounts); or

   3. (c)

      the published valuation of the company's properties (excluding those properties classified as current assets in the latest published annual report and accounts);

4. (4)

   for the purposes of paragraph 4R(1) (the profits test), profits means the net annual rent;

5. (5)

   paragraph 5R (the consideration test) does not apply but instead the test in LR 10.7.2 R applies; and

6. (6)

   paragraph 7R (the gross capital test) applies to disposals as well as acquisitions of property.

1. (1)

   In addition to the tests in LR 10 Annex 1, if the transaction is an acquisition of property by a listed property company and any of the consideration is in the equity shares1 of that company, the listed company must determine the percentage ratios that result from the calculations under the test in (2).

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2. (2)

   The share capital test is calculated by dividing the number of consideration shares to be issued by the number of equity shares1 in issue (excluding treasury shares).

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LR 10 does not apply to the acquisition or disposal by a listed property company of a property in the ordinary course of business which:

1. (1)

   for an acquisition, will be classified as a current asset in the company's published accounts; or

2. (2)

   for a disposal, was so classified in the company's published accounts.

1. (1)

   In addition to the tests in LR 10 Annex 1, a listed mineral company undertaking a transaction involving significant mineral resources must determine the percentage ratios that result from the calculations under the test in paragraph (2).

2. (2)

   The reserves test is calculated by dividing the volume or amount of the proven reserves and probable reserves to be acquired or disposed of by the volume or amount of the aggregate proven reserves and probable reserves of the mineral company making the acquisition or disposal.

When calculating the size of a transaction under LR 10 Annex 1 and LR 10.7.5 R, account must be taken of any associated transactions or loans effected or intended to be effected, and any contingent liabilities or commitments.