Tesco PLC Tender Offer to Purchase Outstanding -4-

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RNS Number : 4951I

Tesco PLC

19 June 2017

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014.

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (the United States) OR IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

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Tesco PLC announces Tender Offers for its EUR600,000,000 5.125 per cent. Notes due 2047, GBP200,000,000 6 per cent. Notes due 2029, GBP200,000,000 5.50 per cent. Notes due 2033, GBP300,000,000 4.875 per cent. Notes due 2042 and GBP500,000,000 5.20 per cent. Notes due 2057

19 June 2017. Tesco PLC (the Company) announces today separate invitations to holders of its outstanding (a) EUR600,000,000 5.125 per cent. Notes due 2047 (ISIN: XS0295018070) (the 2047 Notes), (b) GBP200,000,000 6 per cent. Notes due 2029 (ISIN: XS0105244585) (the 2029 Notes), (c) GBP200,000,000 5.50 per cent. Notes due 2033 (ISIN: XS0159013142) (the 2033 Notes), (d) GBP300,000,000 4.875 per cent. Notes due 2042 (ISIN: XS0248395245) (the 2042 Notes) and (e) GBP500,000,000 5.20 per cent. Notes due 2057 (ISIN: XS0289810318) (the 2057 Notes and, together with the 2047 Notes, the 2029 Notes, the 2033 Notes and the 2042 Notes, the Notes and each a Series) to tender their Notes for purchase by the Company for cash (each such invitation an Offer and, together, the Offers).

The Offers are being made on the terms and subject to the conditions contained in the tender offer memorandum dated 19 June 2017 (the Tender Offer Memorandum) prepared by the Company, and are subject to the offer restrictions set out below and as more fully described in the Tender Offer Memorandum.

Copies of the Tender Offer Memorandum are (subject to distribution restrictions) available from the Information and Tender Agent as set out below. All documentation relating to the Offers will also be available (subject to distribution restrictions) via the Offers Website (https://sites.dfkingltd.com/TescoEUROFFER). Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

Summary of the Offers

Priority Notes ISIN / Common Outstanding Relevant Benchmark Purchase Spread Amount subject

Code Nominal Amount Rate or Security to relevant

Offer(s)

--------- ----------- --------------- --------------- --------------------- ---------------- -------------------

1 2047 Notes EUR600,000,000 2047 Notes 315 bps Subject as set out

XS0295018070 Interpolated in the Tender

/ 029501807 Mid-Swap Rate Offer Memorandum,

an aggregate

nominal amount of

2047 Notes

of up to (a)

GBP500,000,000

less (b) the

pounds sterling

equivalent of the

US Tender Offer

Amount (as defined

below)

--------- ----------- --------------- --------------- --------------------- ---------------- -------------------

2 2029 Notes XS0105244585 / GBP200,000,000 6 per cent. UK 280 bps Subject as set out

010524458 Treasury Gilt due 07 in the Tender

December 2028 Offer Memorandum,

(ISIN: GB0002404191) an aggregate

nominal amount of

2029 Notes

and/or 2033 Notes

and/or 2042 Notes

and/or 2057 Notes

of up to (a)

GBP500,000,000

less (b)

the sum of the

pounds sterling

equivalent of the

aggregate nominal

amount (if any) of

2047

Notes accepted for

purchase pursuant

to the relevant

Offer and the US

Tender Offer

Amount

----------- --------------- --------------- --------------------- ----------------

2033 Notes XS0159013142 / GBP200,000,000 4 1/4 per cent. UK 290 bps

015901314 Treasury Gilt due 07

June 2032

(ISIN: GB0004893086)

----------- --------------- --------------- --------------------- ----------------

2042 Notes XS0248395245 / GBP173,000,000 4 1/2 per cent. UK 300 bps

024839524 Treasury Gilt due

07 December 2042

(ISIN:

GB00B1VWPJ53)

----------- --------------- --------------- --------------------- ----------------

2057 Notes XS0289810318 / GBP279,200,000 4 1/4 per cent. UK 345 bps

028981031 Treasury Gilt due

07 December 2055

(ISIN:

GB00B06YGN05 )

Rationale for the Offers

The Offers are being made in the context of the Company's continuing efforts to strengthen the balance sheet and are aimed at efficiently using surplus liquidity to reduce gross debt.

The Company intends to cancel any Notes purchased pursuant to the Offers.

Purchase Prices and Accrued Interest

In respect of each Series, the Company will pay, for any Notes of the relevant Series validly tendered and accepted for purchase by the Company pursuant to the relevant Offer, a purchase price for such Notes (each a Purchase Price) to be determined at or around 1.00 p.m. (London time) on 3 July 2017 (the Pricing Time) in the manner described in the Tender Offer Memorandum by reference to the sum (annualised in the case of all Series except the 2047 Notes) (each such sum, a Purchase Yield) of:

(i) the relevant Purchase Spread specified in the table above; and

(ii) in the case of (a) the 2029 Notes, the 2033 Notes, the 2042 Notes and the 2057 Notes, the relevant Benchmark Security Rate or (b) the 2047 Notes, the 2047 Notes Interpolated Mid-Swap Rate.

Each Purchase Price will be determined in accordance with market convention and expressed as a percentage of the nominal amount of the Notes of the relevant Series accepted for purchase pursuant to the relevant Offer (rounded to the nearest 0.001 per cent., with 0.0005 per cent. rounded upwards), and is intended to reflect a yield to maturity of the Notes of the relevant Series on the Settlement Date based on the relevant Purchase Yield.

The Company will also pay an Accrued Interest Payment in respect of any Notes accepted for purchase pursuant to the relevant Offer(s).

US Tender Offer and Final Acceptance Amounts

The Company has launched, contemporaneously with the launch of the Offers, an offer to purchase for cash (the US Tender Offer) certain of its USD-denominated debt securities (the US Notes). The US Tender Offer is described in a separate offer document, and is not the subject of the Tender Offer Memorandum. Pursuant to the US Tender Offer, the Company currently proposes to accept valid offers of up to US$300,000,000 in aggregate nominal amount of US Notes for purchase (the Sterling Equivalent of such amount, as it may be increased by the Company in accordance with the terms of the US Tender Offer as at the early tender deadline for the US Tender Offer (being 5.00 p.m. (New York time) on 30 June 2017), being the US Tender Offer Amount).

If the Company decides to accept any 2047 Notes for purchase pursuant to the relevant Offer, the Company proposes that the aggregate nominal amount of such 2047 Notes (if any) (converted into Sterling at the GBP/EUR Applicable Exchange Rate) which it will accept for purchase pursuant to the relevant Offer will be up to an amount equal to GBP500,000,000 less the US Tender Offer Amount, although the Company reserves the right, in its sole discretion, to accept significantly more or significantly less than (or none of) such amount of 2047 Notes for purchase pursuant to the relevant Offer (the Sterling Equivalent of the final nominal amount of such 2047 Notes so accepted for purchase being the Final Priority 1 Notes Acceptance Amount).

If the Company decides to accept any 2029 Notes and/or 2033 Notes and/or 2042 Notes and/or 2057 Notes for purchase pursuant to the relevant Offer(s), the Company proposes that the aggregate nominal amount of 2029 Notes (if any) and/or 2033 Notes (if any) and/or 2042 Notes (if any) and/or 2057 Notes (if any) which it will accept for purchase pursuant to the relevant Offer(s) will be up to an amount equal to GBP500,000,000 less the sum of (i) the US Tender Offer Amount and (ii) the Final Priority 1 Notes Acceptance Amount, although the Company reserves the right, in its sole discretion, to accept significantly more or significantly less than (or none of) such amount of 2029 Notes and/or 2033 Notes and/or 2042 Notes and/or 2057 Notes for purchase pursuant to the relevant Offer(s) (the final nominal amount of such Notes accepted for purchase pursuant to such Offers being the Final Priority 2 Notes Acceptance Amount). The Company will determine the allocation of the Final Priority 2 Notes Acceptance Amount between each Series of the 2029 Notes, the 2033 Notes, the 2042 Notes and the 2057 Notes in its sole discretion, and reserves the right to accept significantly more or significantly less (or none) of any such Series as compared to the other such Series.

The Company does not currently intend to accept any 2029 Notes and/or 2033 Notes and/or 2042 Notes and/or 2057 Notes for purchase pursuant to the relevant Offer(s) unless it has accepted all valid tenders of 2047 Notes in full, with no pro rata scaling.

As a result of the foregoing, the Final Priority 1 Notes Acceptance Amount and the Final Priority 2 Notes Acceptance Amount will be directly affected by the amount of US Notes accepted for purchase pursuant to the US Tender Offer.

Scaling

In respect of each Series, if the Company decides to accept any validly tendered Notes of such Series for purchase pursuant to the relevant Offer and the aggregate nominal amount of the relevant Series validly tendered is greater than the relevant Series Acceptance Amount, the Company intends to accept such Notes for purchase on a pro rata basis such that the aggregate nominal amount of such Series accepted for purchase pursuant to the relevant Offer is no greater than such Series Acceptance Amount, as further set out in the Tender Offer Memorandum.

Tender Instructions

In order to participate in, and be eligible to receive the relevant Purchase Price and 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 Information and Tender Agent by 4.00 p.m. (London time) on 30 June 2017 (the Expiration Deadline).

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 the relevant Series of no less than the minimum denomination for such Series, being GBP1,000 in respect of the 2029 Notes and the 2033 Notes, GBP50,000 in respect of the 2042 Notes and the 2057 Notes, and EUR50,000 in respect of the 2047 Notes, and may thereafter be submitted in integral multiples of GBP1,000 in respect of the 2029 Notes, the 2033 Notes and the 2042 Notes, EUR1,000 in respect of the 2047 Notes or GBP50,000 in respect of the 2057 Notes, as applicable. A separate Tender Instruction must be completed on behalf of each beneficial owner and in respect of each Series.

Indicative Timetable for the Offers

Events Times and Dates

(All times are London time)

Commencement of the Offers

Offers announced. Tender Offer Memorandum available from Monday, 19 June 2017

the Information and Tender Agent.

Expiration Deadline

Final deadline for receipt of valid Tender Instructions 4.00 p.m. on Friday, 30 June 2017

by the Information and Tender Agent

in order for Noteholders to be able to participate in the

Offers.

Announcement of Indicative Results

Announcement by the Company of a non-binding indication Monday, 3 July 2017

of the level at which it expects to

set the Final Priority 1 Notes Acceptance Amount, the

Final Priority 2 Notes Acceptance Amount

and each Series Acceptance Amount, and indicative details

of any Scaling Factor applicable

to valid tenders of Notes of each Series that will be

applied in the event that the Company

decides to accept valid tenders of Notes of such Series

pursuant to the relevant Offers.

Pricing Time

Determination of the 2047 Notes Interpolated Mid-Swap At or around 1.00 p.m. on Monday, 3 July 2017

Rate, each Benchmark Security Rate,

each Purchase Yield and each Purchase Price.

Announcement of Results and Pricing

Announcement of whether the Company will accept valid As soon as reasonably practicable after the Pricing Time

tenders of Notes pursuant to all or on Monday, 3 July 2017

any of the Offers and, if so accepted, the Final Priority

1 Notes Acceptance Amount, the Final

Priority 2 Notes Acceptance Amount, each Series

Acceptance Amount, each Purchase Yield, each

Benchmark Security Rate, the 2047 Notes Interpolated

Mid-Swap Rate, each Purchase Price, the

GBP/USD Applicable Exchange Rate and any Scaling Factors

that will be applied to Notes of

any Series.

Settlement Date

Expected Settlement Date for the Offers. Thursday, 6 July 2017

The Company may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate an Offer at any time (subject to applicable law and as provided in the Tender Offer Memorandum) and the above times and dates are subject to the right of the Company to so extend, re-open, amend and/or terminate such Offer.

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, an Offer before the deadlines set out above. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) withdrawal of Tender Instructions will be earlier than the relevant deadlines set out above and in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offers will be made (i) by publication through RNS and (ii) by the delivery of notices to the Clearing Systems for communication to Direct Participants. Such announcements may also be found on the relevant Reuters Insider Screen and be made by the issue of a press release to a Notifying News Service. Copies of all such announcements, press releases and notices can also be obtained upon request from the Information and Tender Agent, the contact details for which are below. Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Information and Tender Agent for the relevant announcements during the course of the Offers. In addition, Noteholders may contact the Dealer Managers for information using the contact details below.

All documentation relating to the Offers, together with any updates, will also be available (subject to the offer and distribution restrictions referred to in the Tender Offer Memorandum) via the Offers Website (https://sites.dfkingltd.com/TescoEUROFFER).

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on the procedures for, participating in the Offers.

Questions and requests for assistance in connection with (i) the Offers may be directed to the Dealer Managers, and (ii) the delivery of Tender Instructions may be directed to the Information and Tender Agent, the contact details for each of which are set out below.

BNP Paribas (Telephone: +44 20 7595 8668; Attention: Liability Management Group; Email: liability.management@bnpparibas.com), Goldman Sachs International (Telephone: +44 20 7774 9862; Attention: Liability Management Group; Email: liabilitymanagement.eu@gs.com) and RBC Europe Limited (Telephone: +44 20 7029 7063; Attention: Liability Management; Email: liability.management@rbccm.com) are acting as Dealer Managers for the Offers.

D.F. King Ltd. (Telephone: (in London) + 44 20 7920 9700 / (in Hong Kong) +852 3953 7230; Email: TescoPLC@dfkingltd.com, Website: https://sites.dfkingltd.com/TescoEUROFFER) is acting as Information and Information and Tender Agent for the Offers.

This announcement is released by Tesco PLC and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the Offers described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Robert Welch, Group Company Secretary at Tesco PLC.

DISCLAIMER This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. If any Noteholder is in any doubt as to the contents of the Tender Offer Memorandum or the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender such Notes pursuant to the Offers. None of the Company, the Dealer Managers or the Information and Tender Agent or any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender Notes pursuant to the Offers.

OFFER AND DISTRIBUTION RESTRICTIONS

The distribution of this announcement and/or the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum come(s) are required by each of the Company, the Dealer Managers and the Information and Tender Agent to inform themselves about, and to observe, any such restrictions. Nothing in this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell the Notes (and tenders of Notes in the Offers will not be accepted from any Noteholders) in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require an Offer to be made by a licensed broker or dealer and any Dealer Manager or any of the Dealer Managers' respective affiliates is such a licensed broker or dealer in any such jurisdiction, such Offer shall be deemed to be made by such Dealer Manager or such affiliate, as the case may be, on behalf of the Company in such jurisdiction.

United States. The Offers are not being made, and will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. The Notes may not be tendered in the Offers by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any persons located or resident in the United States. Any purported tender of Notes in the Offers resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each Noteholder participating in an Offer will represent that it is not located in the United States and is not participating in such Offer from the United States, or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this and the above paragraph, United States means the United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Italy. None of the Offers, this announcement, the Tender Offer Memorandum or any other document or materials relating to the Offers have been or will be submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. Each Offer is being carried out in Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the Financial Services Act) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended. Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase in the Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

United Kingdom. The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or persons who are within Article 43 of the Financial Promotion Order, or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

France. The Offers are not being made, directly or indirectly, to the public in the Republic of France (France). Neither this announcement, the Tender Offer Memorandum nor any other document or material relating to the Offers has been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), other than individuals, acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier, are eligible to participate in the Offers. Neither this announcement nor the Tender Offer Memorandum have been or will be submitted for clearance to or approved by the Autorité des Marchés Financiers.

Belgium. None of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autoriteit voor financiële diensten en markten / Autorité des services marchés financiers) and, accordingly, the Offers may not be made in Belgium by way of a public offering, as defined in Articles 3 and 6 of the Belgian Law of 1 April 2007 on public takeover bids as amended or replaced from time to time. Accordingly, the Offers may not be advertised and the Offers will not be extended, and none of this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets, acting on their own account. Insofar as Belgium is concerned, this announcement and the

Tender Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this announcement and the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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(END) Dow Jones Newswires

June 19, 2017 09:45 ET (13:45 GMT)