Company Announcements

THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (EUWA).

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN 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 OR THE DISTRICT OF COLUMBIA (THE UNITED STATES) OR TO ANY U.S. PERSON OR IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT (SEE "OFFER AND DISTRIBUTION RESTRICTIONS" BELOW).

Marks and Spencer plc announces Tender Offers for its outstanding:

£300,000,000 3.000 per cent. Notes due 2023 (XS1531151253) (the 2023 Notes)
and
£400,000,000 4.750 per cent. Notes due 2025 (XS0863523030)
(the 2025 Notes and, together with the 2023 Notes, the Notes and each a Series)

25 May 2022.

Marks and Spencer plc (the Company) announces today invitations to holders of its outstanding Notes to tender their Notes for purchase by the Company for cash in an aggregate nominal amount of up to the Maximum Acceptance Amount (as defined below) (each, 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 25 May 2022 (the Tender Offer Memorandum) prepared by the Company, and is 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 Tender Agent as set out below. Capitalised terms used in this announcement but not defined have the meanings given to them in the Tender Offer Memorandum.

Summary of the Offers

* currently paying out a coupon of 4.250 per cent., including a Step Up Margin of 1.25 per cent. per annum following the occurrence of a Step Up Rating Change as that term is defined in the final terms for the Notes.

** currently paying out a coupon of 6.000 per cent., including a Step Up Margin of 1.25 per cent. per annum following the occurrence of a Step Up Rating Change as that term is defined in the final terms for the Notes.

Rationale for the Offers

The Offers are being made as part of the Company's liability management relating to debt maturities and cost of debt.

Purchase Prices

In respect of each Series, the Company will pay for Notes of the relevant Series accepted by it for purchase pursuant to the relevant Offer, a price (in respect of each Series, the Purchase Price) to be determined at or around 11:00 a.m. (London time) (the Pricing Time) on or around 1 June 2022 (subject to the right of the Company to amend such date in its sole discretion and without prior notice to Noteholders) (the Pricing Date) in the manner described in the Tender Offer Memorandum by reference to:

(a)      in the case of the 2023 Notes, the annualised sum (such sum, the 2023 Notes Purchase Yield) of a purchase spread of              270 basis points (the 2023 Notes Purchase Spread) and the Relevant Benchmark Security Rate; and

(b)     in the case of the 2025 Notes, the annualised sum (such sum, the 2025 Notes Purchase Yield and together with the                  2023 Notes Purchase Yield, the Purchase Yields and each a Purchase Yield) of a purchase spread of 370 basis points              (the 2025 Notes Purchase Spread and, together with the 2023 Notes Purchase Spread, the Purchase Spreads and each            a Purchase Spread) and the Relevant Benchmark Security Rate.

Each Purchase Price will be determined by the Company, after consultation with the Dealer Managers, in accordance with market convention and expressed as a percentage of the principal amount of the Notes of the relevant Series (and rounded to the nearest 0.001 per cent. with 0.0005 per cent. being rounded upwards), and is intended to reflect a yield to maturity of the relevant Series on the Settlement Date based on the relevant Purchase Yield.

Specifically, each Purchase Price will equal (a) the value of all remaining payments of principal and interest on the relevant Series up to and including the scheduled maturity date of such Series, discounted to the Settlement Date at a discount rate equal to the relevant Purchase Yield, minus (b) Accrued Interest in respect of the Notes of the relevant such Series.

Accrued Interest

The Company will also pay accrued and unpaid interest (an Accrued Interest Payment) from (and including):

(a)    in the case of the 2023 Notes, 8 December 2021 (being the immediately preceding interest paymentdate for the 2023 Notes); and

(b)       in the case of the 2025 Notes, 12 June 2021 (being the immediately preceding interest payment date for the 2025 Notes),

in each case, to (but excluding) the Settlement Date in respect of any Notes accepted for purchase by the Company pursuant to the Offers.

Maximum Acceptance Amount

The Company proposes to accept Notes for purchase up to a maximum aggregate nominal amount of £150,000,000 (the Maximum Acceptance Amount) on the terms and subject to the conditions contained in the Tender Offer Memorandum (although the Company reserves the right, in its sole and absolute discretion and for any reason, to increase or decrease the Maximum Acceptance Amount).

For the avoidance of doubt, the Company will determine the allocation of funds between each Series in its sole discretion, and may purchase considerably less (or none) of one Series than of the other Series.

Scaling of Tenders of Notes

The Company proposes to accept Notes for purchase pursuant to the Offers up to the Maximum Acceptance Amount (subject to the right of the Company, in its sole discretion, to accept less than or more than such amount for purchase pursuant to the Offers).

If the aggregate nominal amount of Tendered Notes is less than the Maximum Acceptance Amount, the Company intends to accept all such Tendered Notes. If the aggregate nominal amount of the Tendered Notes is greater than the Maximum Acceptance Amount, (subject to the right of the Company, in its sole discretion, to accept less than or more than such amount for purchase pursuant to the Offers), the Company may accept Notes for purchase on a pro rata basis.

In the circumstances described above in which valid tenders of Notes are to be accepted on a pro rata basis, each such tender of Tendered Notes will be scaled by a scaling factor applicable to Notes of the relevant Series (each such factor, a Scaling Factor) based on: (A) in respect of each Series, the aggregate nominal amount of Notes of such Series (if any) accepted for purchase by the Company pursuant to the relevant Offer (the Series Acceptance Amount), divided by (B) the aggregate nominal amount of the Tendered Notes of such Series (subject to adjustment to allow for the aggregate nominal amount of Notes of such Series accepted for purchase, following the rounding of tenders of Notes described in the next sentence, to equal the relevant Series Acceptance Amount exactly).

Each tender of Notes that is scaled in this manner will be rounded down to the nearest £1,000 in principal amount of Notes.

In addition, in the event of any such scaling, the Company intends to apply pro rata scaling to each valid tender of Notes of the relevant Series in such a manner as will result in both (a) the relevant Noteholder transferring Notes of the relevant Series to the Company in an aggregate nominal amount of at least the minimum denomination for such Series (being £100,000), and (b) the relevant Noteholder's residual amount of Notes of the relevant Series (being the nominal amount of the Notes the subject of the relevant Tender Instruction that are not accepted for purchase by virtue of such scaling) amounting to either (i) at least the minimum denomination of the relevant Series (being £100,000) or (ii) zero, and the Company therefore intends to adjust the relevant Scaling Factor applicable to any relevant Tender Instruction accordingly.

Tender Instructions and Offer Conditions

In order to participate in, and be eligible to receive the relevant Purchase Price 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 4:00 p.m. (London time) on 31 May 2022 (the Expiration Deadline). 

Tender Instructions will be irrevocable except in the limited circumstances described 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, an Offer 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.

Tender Instructions must be submitted in respect of a nominal amount of Notes of no less than £100,000, being the minimum denomination of the Notes, and may, in each case, be submitted in integral multiples of £1,000 above £100,000. Tender Instructions which relate to a nominal amount of Notes of less than the minimum denomination of the Notes will be rejected.

Announcement of Results and Pricing

The Company intends to announce a non-binding indication of the levels at which it expects to set the Final Acceptance Amount and each Series Acceptance Amount, and indicative details of any pro rata scaling that is expected to be applied to valid tenders of either Series, in the event that the Company decides to accept valid tenders of Notes pursuant to the relevant Offer(s), prior to the Pricing Time on the Pricing Date.

The Company intends to announce, as soon as reasonably practicable on 1 June 2022, whether the Company will accept valid tenders of Notes pursuant to either of the Offers and, if so accepted, (i) the aggregate nominal amount of Notes of each Series accepted for purchase; (ii) each Purchase Yield; (iii) each Purchase Spread; (iv) each Purchase Price; (v) any applicable Scaling Factors; (vi) the Settlement Date; (vii) the Accrued Interest Payment payable in respect of each Series; and (viii) the nominal amount of Notes of each Series that will remain outstanding after the Settlement Date. 

Indicative Timetable for the Offers

The above times and dates are subject to the right of the Company to, extend, re-open, amend and/or terminate either Offer (subject to applicable law 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, an 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 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 made on the relevant Reuters Insider Screen and 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 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 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.

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 Tender Agent, the contact details for each of which are set out below.

The Dealer Managers

BNP PARIBAS

16, Boulevard des Italiens

75009 Paris

France

Telephone: +33 1 55 77 78 94

Attention: Liability Management Group

Email: liability.management@bnpparibas.com

NatWest Markets Plc

250 Bishopsgate

London EC2M 4AA

United Kingdom

Telephone: +44 20 7678 5222

Attention: Liability Management

Email: NWMLiabilityManagement@natwestmarkets.com

The Tender Agent

Kroll Issuer Services Limited

The Shard

32 London Bridge Street

London SE1 9SG

United Kingdom

Telephone: +44 20 7704 0880

Attention: Harry Ringrose

Email: marksandspencer@is.kroll.com 

Website: https://deals.is.kroll.com/marksandspencer

This announcement is released by Marks and Spencer 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), as it forms part of UK domestic law by virtue of the EUWA (UK MAR), encompassing information relating to the Offers described above. For the purposes of UK MAR and Article 2 of the binding technical standards published by the Financial Conduct Authority in relation to MAR as regards Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Eoin Tonge, Chief Financial Officer at Marks and Spencer 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 and legal advice, including in respect of any tax consequences, immediately from its broker, bank manager, solicitor, accountant or other independent financial 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 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 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 the Offers to be made by a licensed broker or dealer and either of the Dealer Managers or any of their 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 or to any U.S. Person (as defined in Regulation S of the United States Securities Act of 1933, as amended (each, a U.S. Person)).  This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication.  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 or by, or by any person acting for the account or benefit of, a U.S. Person.  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 or to any U.S. Person.  Any purported tender of Notes in an Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by, or by any person acting for the account or benefit of, a U.S. Person or 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 the Offers will represent that it is not a U.S. Person, it is not located in the United States and is not participating in an 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 an Offer from the United States and is not a U.S. Person. For the purposes of this and the above two paragraphs, 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. The Offers are being carried out in the Republic of Italy (Italy) as exempted offers 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.

Accordingly, Noteholders or beneficial owners of the Notes that are located in Italy can tender Notes for purchase pursuant to the Offers through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February 2018, as amended, and Legislative Decree No. 385 of 1 September 1993, as amended) and in compliance with any other applicable laws and regulations and with any requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offers.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are 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 (FSMA).  Accordingly, this announcement, the Tender Offer Memorandum and such documents and/or materials are not being distributed to, and must not be passed on to, persons in the United Kingdom other than (i) 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)), (ii) to those persons falling within Article 43(2) of the Financial Promotion Order, or (iii) to 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).  This announcement, the Tender Offer Memorandum and any other offering material relating to the Tender Offer may be distributed in France only to qualified investors (investisseurs qualifiés) as defined in Article 2(e) of Regulation (EU) 2017/1129 and in accordance with Articles L.411-1 and L.411-2 of the French Code monétaire et financier. None of this announcement, the Tender Offer Memorandum, or any other such offering material has been or will be submitted for clearance to, or approved by, the Autorité des marches financiers.