Citycon Board of Directors decided on a rights issue and related adjustment to the Company’s EPRA EPS (basic) outlook

12 Feb, 2013 19:00 CET

Citycon Oyj
Company Announcement (Disclaimer)

Citycon Board of Directors decided on a rights issue and related adjustment to
the Company’s EPRA EPS (basic) outlook

CITYCON OYJ Stock Exchange Release 12 February 2013 at 20:00 p.m.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG, SOUTH AFRICA OR JAPAN OR
ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. 

Rights issue

The Board of Directors of Citycon Oyj (“Citycon” or the “Company”) has today
decided on a rights issue of approximately EUR 200 million based on the
authorization granted at the Extraordinary General Meeting on 6 February 2013
(the "Offering"). Citycon will offer a maximum of 114,408,000 new shares (“New
Shares”) in accordance with the shareholders' pre-emptive subscription right.
The New Shares to be issued in the Offering represent a maximum of
approximately 35.0 percent of the total shares and voting rights in the Company
prior to the Offering. 

The Offering is a strategic move to permanently reduce Citycon’s leverage,
support the growth strategy and to give the Company the freedom to complete
restructuring, recycle capital accretively and to focus on core business. The
aggregate net proceeds to Citycon from the Offering, after deduction of the
fees and expenses payable by Citycon, will be approximately EUR 198.3 million
provided that the Offering will be subscribed in full. The net proceeds of the
Offering to be received by Citycon are intended to be used to strengthen the
Company’s balance sheet following the acquisition of Kista Galleria shopping
centre in Stockholm announced on 19 December 2012, and thereby to enable
Citycon to continue successfully implementing its strategic plan. 

The subscription price for the New Shares is EUR 1.75 per New Share. The
subscription period begins on 21 February 2013 at 9:30 a.m. and ends on 7 March
2013 at 4:30 p.m. (Finnish time). 

Shareholders of the Company, who are registered in the shareholders’ register
maintained by Euroclear Finland Ltd. on the record date of 18 February 2013,
shall automatically receive one (1) freely transferable subscription right
(“Subscription Right”) in the form of a book-entry for every one (1) share
owned on the record date. Each twenty (20) Subscription Rights will entitle
holders to subscribe for seven (7) New Shares. Trading in the Subscription
Rights on NASDAQ OMX Helsinki Ltd will commence on 21 February 2013 at 9:30
a.m. and end on 28 February 2013 at 6:30 p.m. (Finnish time).  The ex rights
date for the Offering is 14 February 2013. 

The Board of Directors of the Company will decide on the allocation of the New
Shares that may remain unsubscribed in a secondary subscription to shareholders
and/or other investors who, during the subscription period, submitted a
subscription assignment for the New Shares without Subscription Rights. 

The New Shares will entitle their holders to full shareholder rights in the
Company after the New Shares have been registered with the Finnish Trade
Register and in the Company’s shareholder register on or about 14 March 2013,
except for the distribution of dividend for the financial year ending on 31
December 2012 and the return of equity from the invested unrestricted equity
fund proposed to and to be resolved upon at the Annual General Meeting of the
Company to be held on 21 March 2013 (such distributions jointly the “2012
Dividend”). After the record date for the 2012 Dividend, the New Shares will
entitle their holders also to full dividend and other distribution of funds
declared by the Company, if any, in a similar manner to the existing shares in
the Company. 

Until the record date for the 2012 Dividend, the New Shares will be subject to
public trading as interim shares (ISIN Code FI4000060272). The interim shares
are combined with the existing shares of the Company (ISIN Code FI0009002471)
on the record date for the 2012 Dividend, on or about 26 March 2013. 

As the New Shares will not be registered with the Finnish Trade Register and in
the Company’s shareholder register before 11 March 2013, which is the record
date for the Annual General Meeting of the Company, the New Shares will not
entitle their holders to attend the Annual General Meeting of the Company to be
held on 21 March 2013. 

Citycon will announce the final result of the Offering through a stock exchange
release on or about 13 March 2013. The full terms and conditions of the
Offering are set out in the appendix to this release. 

Citycon continues to focus on increasing its net cash from operating activities
and direct operating profit. In order to implement this strategy, the Company
will pursue value-added activities, redevelopment projects, selected
acquisitions and proactive asset management. Citycon also intends to continue
the selective divestment of its non-core properties, in order to enhance the
quality of the property portfolio and further strengthen the Company’s
financial position. 

On 17 January 2013 the Company announced the closing of its acquisition of the
Kista Galleria shopping centre in Stockholm for approximately EUR 530 million.
Citycon and the Canada Pension Plan Investment Board each own one half of the
shopping centre. Kista Galleria has approximately 90,000 square meters of gross
leasable area, including approximately 60,000 square meters of retail space and
the remaining approximately 30,000 square meters comprising a hotel, student
housing, healthcare premises and municipal services. Kista Galleria has an
annual footfall of approximately 18.1 million visitors and annual sales of
approximately EUR 280 million. 

The strategic acquisition of Kista Galleria has significantly strengthened the
Company’s market position in the Stockholm retail market. Citycon is now one of
the largest shopping centre owners in Sweden and as a result of the acquisition
of Kista Galleria Citycon is able to have an enhanced and more diverse retail
space offering to better serve local and international retailer chains. The
acquisition has enhanced the balance of Citycon’s property portfolio
geographically as well as in terms of overall quality, in accordance with the
Company’s stated strategy, with attractive embedded earnings enhancement
opportunities. 

Citycon is pursuing a long-term increase in the footfall, cash flow and
efficiency of its retail properties, as well as in the return on its investment
in the properties. The purpose of the Company’s redevelopment activities is to
keep its shopping centres competitive for both customers and tenants. The
largest properties under planning are Iso Omena in Espoo and IsoKristiina in
Lappeenranta, both in Finland. The Board of Directors has not yet made an
official decision to start the projects, but they are under planning. Iso Omena
is planned to be extended as the western metro line from Helsinki city center
will be located next to the centre and open in 2015. The total estimated
investment need for Citycon is approximately EUR 85 million. Citycon plans to
refurbish and expand IsoKristiina to better serve the growing clientele. Also,
the city of Lappeenranta plans to locate its city theatre into the shopping
centre's extension part. 

At the year-end 2012, the fair value of the Company’s entire property portfolio
was EUR 2,714.2 million (EUR 2,522.1 million in 2011), comprising 37 (36)
shopping centres and 41 (44) other properties. Of the shopping centres, 23 (23)
were in Finland, nine (nine) in Sweden, three (three) in Estonia, one (one) in
Lithuania and one (zero) in Denmark. The year-end equity ratio was 37.8 percent
(36.0 percent). 

The largest shareholder of the Company, Gazit-Globe Ltd., intends to make a
commitment to subscribe for New Shares in the Offering on a pro rata basis. The
undertaking by Gazit-Globe Ltd. is conditional upon receipt of customary
internal corporate approvals and the Finnish Financial Supervisory Authority
granting a permanent exemption to Gazit-Globe Ltd. from the obligation to make
a mandatory public tender offer for both the remaining Company shares and
securities entitling to Company shares, pursuant to the Finnish Securities
Market Act in the event that Gazit-Globe Ltd.'s shareholding would, based on
the subscription undertaking, exceed 50 percent of the votes in the Company as
a result of the Offering. Gazit-Globe Ltd. has informed the Company that it has
applied for such an exemption from the Finnish Financial Supervisory Authority. 

SEB Enskilda and UBS Investment Bank are acting as joint global coordinators,
joint lead managers and joint bookrunners of the Offering (the “Lead
Managers”). 

Citycon has entered into a lock-up agreement with the Lead Managers under which
it has, subject to certain exceptions, agreed not to issue or sell any shares
in Citycon for a period ending 180 days after the closing of the Offering. 

Adjustment to the EPRA EPS (basic) outlook based on the Offering) outlook based
on the Offering 
According to the outlook announced by Citycon on 6 February 2013, the Company
forecasted, based on the existing number of shares, that its EPRA EPS (basic)
will in 2013 be EUR 0.22–0.26. As the EPRA EPS (basic) forecast is based on the
number of shares in the Company, Citycon adjusts the EPRA EPS (basic) forecast
to reflect the increased number of shares as a result of the Offering. Assuming
that the Offering is subscribed in full, Citycon now forecasts that its EPRA
EPS (basic) will be EUR 0.19–0.24 based on the existing property portfolio and
the increased number of shares. 

Adjustment of the conversion price of the 2006 convertible capital bonds

As a consequence of the Offering, the Board of Directors of Citycon decided
today on an adjustment to the conversion price of the Company’s convertible
capital bonds listed on 22 August 2006, subject to the Offering being executed
in full as described in the terms and conditions of the Offering. The Board
adjusted the conversion price in accordance with Condition 6(b)(iv) of the
convertible bonds from EUR 4.05 to EUR  3.76. The new conversion price will be
effective as of 8 March 2013, provided that the Offering is executed in full as
described in the terms and conditions of the Offering. Assuming that the new
conversion price becomes effective, the total number of shares that can be
subscribed for on the basis of the convertible bonds is 10,585,106 and the
maximum increase in the share capital of the Company as a consequence of such
subscriptions is EUR 14,289,893.10. 

Adjustment of the terms and conditions of the 2011 stock options

In order to ensure the equal treatment of shareholders and the holders of the
Company’s 2011 stock options, the Board of Directors of the Company has today,
due to the Offering, adjusted the subscription price of the 2011 stock options
in accordance with the terms and conditions of the 2011 stock options. Provided
that the Offering is executed in full as described in the terms and conditions
of the Offering, the subscription price for stock options 2011A—D(I) shall be
adjusted to EUR 2.8009 per share, the subscription price for stock options
2011A—D(II) shall be adjusted to EUR 2.9199 per share and the subscription
price for stock options 2011A—D(III) shall be adjusted to EUR 2.3419 per share.
The subscription ratio for the 2011 stock options will remain unchanged. 

The foregoing adjustment to the terms and conditions of the 2011 stock options
due to the Offering will be effective as of its registration in the Trade
Register on or about 14 March 2013, provided that the Offering is executed in
full as described in the terms and conditions of the Offering. The 2011 stock
options do not entitle holders to participate in the Offering. 

Helsinki, 12 February 2013

CITYCON OYJ
Board of Directors


APPENDIX: Terms and conditions of the Offering

For further information, please contact:

Marcel Kokkeel, CEO
Tel. +358 20 766 4521 or +358 40 154 6760
 

Eero Sihvonen, Executive VP and CFO
Tel +358 20 766 4459 or +358 50 557 9137
 

Distribution:
NASDAQ OMX Helsinki
Major media
www.citycon.com

DISCLAIMER

The information contained herein is not for publication or distribution,
directly or indirectly, in or into the United States, Canada, Australia, Hong
Kong, South Africa or Japan. The issue, exercise and/or sale of securities in
the Offering are subject to specific legal or regulatory restrictions in
certain jurisdictions. The Company and SEB Enskilda Corporate Finance Oy Ab and
UBS Limited assume no responsibility in the event there is a violation by any
person of such restrictions. 

The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy or subscribe for, nor shall there be any sale
of the securities referred to herein in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration, exemption from
registration or qualification under the securities laws of any such
jurisdiction. Investors must neither accept any offer for, nor acquire, any
securities to which this document refers, unless they do so on the basis of the
information contained in the applicable prospectus published or offering
circular distributed by the Company. 

SEB Enskilda Corporate Finance Oy Ab and UBS Limited and their respective
affiliates are acting exclusively for the Company and no one else in connection
with the matters referred to in this stock exchange release and will not regard
any other person as their respective clients in relation to such matters and
will not be responsible to any other person for providing the protections
afforded to their respective clients, or for providing advice in relation to
such matters. 

United States

This stock exchange release does not constitute or form part of an offer or
solicitation of an offer to purchase or subscribe for securities in the United
States. The securities referred to herein have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, and the rules and
regulations thereunder (the “Securities Act”), and may not be offered or sold
in the United States absent registration under the Securities Act or an
exemption therefrom. No public offering of the securities referred to herein is
being made or will be made in the United States. 

European Economic Area

The Company has not authorized any offer to the public of securities in any
Member State of the European Economic Area other than Finland. With respect to
each Member State of the European Economic Area other than Finland and which
has implemented the Prospectus Directive (each, a “Relevant Member State”), no
action has been undertaken or will be undertaken to make an offer to the public
of securities requiring publication of a prospectus in any Relevant Member
State. As a result, the securities may only be offered in Relevant Member
States (a) to any legal entity which is a qualified investor as defined in the
Prospectus Directive; or (b) in any other circumstances falling within Article
3(2) of the Prospectus Directive, which, among others, include the right to
offer the securities to less than 150 investors per each Relevant Member State
(regardless of their sophistication as investors), even though the Company has
not authorized any offer to the public of securities in such a Relevant Member
State. 

For the purposes of this paragraph, the expression an “offer of securities to
the public” means the communication in any form and by any means of sufficient
information on the terms of the offer and the securities to be offered so as to
enable an investor to decide to exercise, purchase or subscribe the securities,
as the same may be varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression “Prospectus
Directive” means Directive 2003/71/EC (and amendments thereto, including the
2010 PD Amending Directive), and includes any relevant implementing measure in
the Relevant Member State and the expression “2010 PD Amending Directive” means
Directive 2010/73/EU. 

United Kingdom

This communication is directed only at (i) persons who are outside the United
Kingdom or (ii) persons who have professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005 (the “Order”) and (iii) high net
worth entities, and other persons to whom it may lawfully be communicated,
falling within Article 49(2) of the Order (all such persons together being
referred to as “relevant persons”). Any investment activity to which this
communication relates will only be available to and will only be engaged with,
relevant persons. Any person who is not a relevant person should not act or
rely on this document or any of its contents. 

Forward-looking Statements

Certain statements in this stock exchange release may constitute
forward-looking statements. The words “believe”, “expect”, “anticipate”,
“intend” or “plan” and similar expressions identify certain of such
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of Citycon, or industry results, to
differ even materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. 

APPENDIX: TERMS AND CONDITIONS OF THE OFFERING

TERMS AND CONDITIONS OF THE OFFERING

On 6 February 2013, the Extraordinary General Meeting of Citycon Oyj (the
“Company”) authorised the Company’s Board of Directors to decide by one or
several decisions on the issuance of a maximum of 125,000,000 shares, which
corresponds to approximately 38.2 percent of all the shares in the Company at
the date of this stock exchange release. The authorisation will be valid until
the end of the next Annual General Meeting and it revokes the share issue
authorization given by the Annual General Meeting on 21 March 2012. 

On 12 February 2013, the Board of Directors of the Company resolved, based on
the above authorisation of the Extraordinary General Meeting, to issue a
maximum of 114,408,000 new shares (the “New Shares”) through a share issue
based on the pre-emptive subscription right of shareholders as set forth in
these terms and conditions of the Offering (the “Offering”). 

The New Shares to be issued in the Offering represent approximately 35.0
percent of the total shares and voting rights in the Company before the
Offering and approximately 25.9 percent of the total shares and voting rights
in the Company after the Offering provided that the Offering is subscribed in
full. 

Right to Subscribe

Primary Subscription Right

The New Shares will be offered for subscription by the shareholders of the
Company in proportion to their shareholding in the Company. 

A shareholder who is registered in the Company’s shareholders’ register
maintained by Euroclear Finland Ltd on the record date of 18 February 2013 of
the Offering (“Record Date”) will automatically receive one (1) freely
transferable subscription right (the “Subscription Right”) as a book-entry
(ISIN Code FI4000060264) for every one (1) share owned on the Record Date (the
“Primary Subscription Right”). 

A shareholder, or a person or an entity to whom such Primary Subscription
Rights have been transferred, is entitled to subscribe for seven (7) New Shares
for every twenty (20) Subscription Rights. No fractions of New Shares will be
allotted. 

Secondary Subscription

The Board of Directors of the Company will decide on the allocation of the New
Shares that may remain unsubscribed in a secondary subscription to shareholders
and/or other investors who, during the Subscription Period, submitted a
subscription assignment for the New Shares without the Subscription Rights
(“Secondary Subscription”). See below section “Subscription of New Shares
without Subscription Rights (Secondary Subscription) and Allocation”. 

Subscription Undertaking

The largest shareholder of the Company, Gazit-Globe Ltd., intends to make a
commitment to subscribe for New Shares in the Offering on a pro rata basis. The
undertaking by Gazit-Globe Ltd. is conditional upon receipt of customary
internal corporate approvals and the Finnish Financial Supervisory Authority
granting a permanent exemption to Gazit-Globe Ltd. from the obligation to make
a mandatory public tender offer for both the remaining Company shares and
securities entitling to Company shares, pursuant to the Finnish Securities
Market Act in the event that Gazit-Globe Ltd.'s shareholding would, based on
the subscription undertaking, exceed 50 percent of the votes in the Company as
a result of the Offering. Gazit-Globe Ltd. has informed the Company that it has
applied for such an exemption from the Finnish Financial Supervisory Authority. 

Subscription Price

The New Shares may be subscribed for in the Offering at the subscription price
of EUR 1.75 per New Share (the “Subscription Price”). The Subscription Price
will be recorded in its entirety under the invested unrestricted equity fund.
The Subscription Price is approximately 27.4 percent lower than the closing
price of the Company’s share on the trading day preceding the decision on the
Offering. 

Subscription Period

The subscription period will commence on 21 February 2013 at 9:30 a.m. Finnish
time and expire on 7 March 2013 at 4:30 p.m. Finnish time (the “Subscription
Period”). Account operators may impose a deadline for subscription that is
earlier than the expiry of the Subscription Period. 

Subscription for New Shares pursuant to the Subscription Rights and Payments

Subscription of the New Shares by a holder of Subscription Rights will take
place by subscribing for New Shares pursuant to the Subscription Rights
registered on his or her book-entry account and by paying the Subscription
Price. Each twenty (20) Subscription Rights entitle their holder to subscribe
for seven (7) New Shares. Fractional New Shares cannot be subscribed. In order
to participate in the Offering, a holder of Subscription Rights must submit a
subscription assignment in accordance with the instructions given by the
relevant custodian or account operator. 

Holders of Subscription Rights who do not receive instructions for subscription
from his or her account operator, can contact SEB Operations via email at the
address   or telephone +358 9 6162 8241, where they will
receive all necessary information in order to submit a subscription assignment. 

Subscription assignments may be submitted to the account operators, who have
entered into an agreement with Skandinaviska Enskilda Banken AB (publ) Helsinki
branch office on reception of subscriptions in the Offering. Account operators
may request submission of a subscription assignment already by a certain date
which might take place before the public trading in Subscription Rights ends.
The Subscription Price of the New Shares subscribed for in the Offering shall
be paid in full at the time of submitting the subscription assignment in
accordance with the instructions given by the relevant custodian or account
operator or by the Lead Managers. 

Shareholders and other investors participating in the Offering whose shares or
Subscription Rights are held through a nominee must submit their subscription
assignments in accordance with the instructions given by their custodial
nominee account holder. 

Any exercise of the Primary Subscription Right is irrevocable and may not be
modified or cancelled otherwise than as stated in section “Cancellation of
Subscriptions under Certain Circumstances” in these terms and conditions. 

Any Subscription Rights remaining unexercised at the end of the Subscription
Period on 7 March 2013 will expire without any compensation. 

Subscription of New Shares without Subscription Rights (Secondary Subscription)
and Allocation 

Subscription of the New Shares by a shareholder and/or other investor without
the Subscription Rights will take place by submitting a subscription assignment
and at the same time paying the Subscription Price in accordance with the
instructions given by the relevant custodian or account operator or, in the
case of nominee registered investors, by the nominee. A shareholder and/or
other investor who does not receive subscription instructions from his or her
custodian, account operator or nominee, can contact SEB Operations via email at
the address   or telephone +358 9 6162 8241, where he or
she will receive all necessary information in order to submit a subscription
assignment. A shareholder’s and/or investor’s custodian, account operator or
nominee, or SEB Operations if the subscription order is submitted to it, must
receive the subscription assignment and payment no later than 7 March  2013, or
earlier in accordance with the instructions given by the custodian, account
operator or nominee. 

If all the New Shares to be issued in the Offering have not been subscribed for
by virtue of the Primary Subscription Right, the Board of Directors of the
Company will decide on the allocation of the New Shares subscribed for without
the Subscription Rights as follows: 

a) Firstly, to those shareholders and/or other investors who have subscribed
for the New Shares also based on the Subscription Rights. If such subscribers
oversubscribe the Offering, the allocation to such subscribers will be
determined with respect to each book-entry account in proportion to the number
of the Subscription Rights used for subscription of the New Shares in
accordance with the Primary Subscription Right but not more than up to the
maximum amount of the subscription made per book-entry account and, if this is
not possible, by drawing lots. 

b) Secondly, to those shareholders and/or other investors who have subscribed
for the New Shares only without the Subscription Rights. If such subscribers
oversubscribe the Offering, the allocation will be determined with respect to
each book-entry account in proportion to the number of the New Shares
subscribed for without the Subscription Rights and, if this is not possible, by
drawing lots. 

Any exercise of the Secondary Subscription is irrevocable and may not be
modified or cancelled otherwise than as stated in section “Cancellation of
Subscriptions under Certain Circumstances” in these terms and conditions. 

The Company will confirm the acceptance or rejection of the subscriptions of
New Shares without the Subscription Rights to all shareholders and investors
who have submitted a subscription assignment for the New Shares without the
Subscription Rights. 

Cancellation of Subscriptions under Certain Circumstances

In accordance with the Finnish Securities Market Act, if the Offering Circular
relating to the Offering is supplemented between the time the Offering Circular
was approved by the FSA and the time when trading in the New Shares begins due
to a material mistake or inaccuracy or relevant new information relating to the
information in the Offering Circular which could be of material relevance to
the investor, then investors who have already agreed to subscribe for New
Shares before the supplement is published, shall have the right to withdraw
their subscription. The investors have a right to withdraw their subscription
within two (2) banking days or within a longer period determined by the FSA for
special reasons, however, at the latest four (4) banking days after the
supplement has been published. The right to withdraw can only be exercised if
an investor has subscribed for New Shares before the supplement is published
and such supplement has been published during a time period between the
beginning of the Subscription Period and when the trading of the interim shares
corresponding to the New Shares subscribed for by the virtue of the
Subscription Rights has begun on the Helsinki Stock Exchange. The cancellation
right also requires that the material mistake, inaccuracy or relevant new
information has emerged before the New Shares have been delivered to the
investors. The withdrawal of a subscription applies to the subscription to be
withdrawn as a whole. The right to withdraw and the procedure for such
withdrawal right will be announced together with any such possible supplement
to the Offering Circular through a stock exchange release. If the holder of a
Subscription Right has sold or otherwise transferred the Subscription Right,
such sale or transfer cannot be cancelled. 

Public Trading of the Subscription Rights

The holders of Subscription Rights may sell their Subscription Rights any time
before the public trading in Subscription Rights ends. The Subscription Rights
are subject to public trading on the Helsinki Stock Exchange between 21
February 2013 at 9:30 a.m. Finnish time and 28 February 2013 at 6:30 p.m.
Finnish time. 

Approval of the Subscriptions

The Board of Directors of the Company will approve all subscriptions pursuant
to the Primary Subscription Right made in accordance with these terms and
conditions of the Offering and applicable laws and regulations. 

If all New Shares to be issued in the Offering have not been subscribed for by
virtue of the Primary Subscription Right, the Board of Directors of the Company
will decide on the allocation of the New Shares subscribed without the
Subscription Rights in accordance with the principles set forth in section
“Subscription of New Shares without Subscription Rights (Secondary
Subscription) and Allocation” in these terms and conditions. 

If several subscription assignments are given concerning a certain book-entry
account, these subscription assignments are combined as one subscription
assignment concerning a certain book-entry account. Should the subscriber not
receive all New Shares subscribed for by virtue of the Secondary Subscription,
the subscription price for the New Shares not received by the subscriber will
be repaid to the bank account informed by the subscriber in connection with the
subscription on or about 14 March 2013. No interest will be paid for the
repayable funds. 

The Company’s Board of Directors will approve the subscriptions on or about 13
March 2013. The Company will publish the final result of the Offering in a
stock exchange release on or about 13 March 2013. 

Registration of the New Shares to the Book-entry Accounts

The New Shares subscribed for in the Offering by virtue of the Primary
Subscription Right will be recorded on the subscriber’s book-entry account
after the registration of the subscription as interim shares corresponding to
the New Shares. The interim shares will be subject to public trading with the
ISIN Code FI4000060272 and will be combined with the existing shares of the
Company with ISIN Code FI0009002471 on the record date for the distribution of
dividend for the financial year ending on 31 December 2012 and the return of
equity from the invested unrestricted equity fund proposed to and to be
resolved upon at the Annual General Meeting of the Company to be held on 21
March 2013 (such distributions jointly the “2012 Dividend”). 

The New Shares subscribed for and approved by virtue of the Secondary
Subscription will be recorded on the subscriber’s book-entry account after the
registration of the New Shares with the Finnish Trade Register on or about 14
March 2013 as interim shares (ISIN Code FI4000060272), and will be combined
with the existing shares of the Company with ISIN Code FI0009002471 on the
record date for the 2012 Dividend on or about 26 March 2013. 

Shareholder Rights

The New Shares will entitle their holders to full shareholder rights in the
Company after the New Shares have been registered with the Finnish Trade
Register and in the Company’s shareholder register on or about 14 March 2013,
except for the 2012 Dividend. After the record date for the 2012 Dividend, the
New Shares will entitle their holders also to full dividend and other
distribution of funds declared by the Company, if any, in a similar manner as
the existing shares in the Company. 

Until the record date for the 2012 Dividend, the New Shares will be recorded on
the subscriber’s book-entry account and be subject to public trading as interim
shares (ISIN Code FI4000060272). The interim shares are combined with the
existing shares of the Company (ISIN Code FI0009002471) on the record date for
the 2012 Dividend, on or about 26 March 2013. 

As the New Shares will not be registered with the Finnish Trade Register and in
the Company’s shareholder register before 11 March 2013, which is the record
date for the Annual General Meeting of the Company, the New Shares will not
entitle their holders to attend the Annual General Meeting of the Company to be
held on 21 March 2013. 

Treatment of Holders of Stock Options and Convertible Bonds

According to the terms and conditions of the stock options resolved upon by the
Board of Directors of the Company on 3 May 2011 (“2011 Stock Options”) by
virtue of an authorisation granted by the Annual General Meeting of the Company
held on 13 March 2007, a 2011 Stock Option holder shall have the same right as,
or an equal right to, that of a shareholder should the Company, before the
share subscription based on the 2011 Stock Options, decide on an issue of
shares or an issue of new stock options or other special rights entitling to
shares so that shareholders have pre-emptive rights of subscription. Equality
is reached in the manner determined by the Board of Directors by adjusting the
number of shares available for subscription, the share subscription prices or
both of these. 

In order to ensure the equal treatment of shareholders and the 2011 Stock
Option holders the Board of Directors of the Company has on 12 February 2013,
due to the Offering, adjusted the subscription price of the 2011 Stock Options
in accordance with the terms and conditions of the 2011 Stock Options. Provided
that the Offering is executed in full as described in the terms and conditions
of the Offering, the subscription price for stock options 2011A—D(I) shall be
adjusted to EUR 2.8009 per share, the subscription price for stock options
2011A—D(II) shall be adjusted to EUR 2.9199 per share and the subscription
price for stock options 2011A—D(III) shall be adjusted to EUR 2.3419 per share.
The subscription ratio for the 2011 Stock Options will remain unchanged. 

The foregoing adjustment to the terms and conditions of the 2011 Stock Options
due to the Offering will be effective as of its registration in the Trade
Register on or about 14 March 2013, provided that the Offering is executed in
full as described in the terms and conditions of the Offering. The 2011 Stock
Options do not entitle holders to participate in the Offering. 

According to provision 6(b)(iv) of the terms and conditions of Citycon’s
convertible capital bonds listed on 22 August 2006, the conversion price of the
convertible bonds shall be adjusted, among other things, when the Company
issues its shares to its shareholders at a price which is less than 95 percent
of the market price of the shares. According to provision 6(f) of the terms and
conditions of the convertible bonds the Company must give notice of any
adjustments to the conversion price to bondholders after the determination of
the adjustment. The Company’s Board of Directors has in its meeting on 12
February 2013 determined an adjustment to the conversion price of the
convertible bonds from EUR 4.05 to EUR 3.76, provided that the Offering is
executed in full as described in these terms and conditions. If so, the new
conversion price will be effective as of 8 March 2013. A notice regarding the
new conversion price will be given to the holders of convertible bonds no later
than on 15 February 2013. 

Information

Documents mentioned in Chapter 5, Section 21 of the Finnish Companies Act are
available for review as of the start of the Subscription Period at the head
office of the Company, Korkeavuorenkatu 35, FI-00130 Helsinki, Finland. 

Applicable Law and Dispute Resolution

The Offering and the New Shares shall be governed by the laws of Finland. Any
disputes arising in connection with the Offering shall be settled by the court
of jurisdiction in Finland. 

Other Issues

Other issues and practical matters relating to the Offering will be resolved by
the Board of Directors of the Company.