CITYCON OYJ Stock Exchange Release 10 September 2007 at 9.30 a.m. NOT FOR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA The Board of Directors of Citycon Oyj has today decided on a rights issue amounting to approximately EUR 99 million (the "Offering") based on the authorisation granted by the Annual General Meeting of 13 March 2007. Citycon will offer a maximum of 27,594,782 new shares in accordance with shareholders' pre-emptive subscription right. The shares to be issued in the Offering represent a maximum of approximately 14.3 percent of the total shares and the voting rights in the Company prior to the Offering. The share subscription period will commence on 19 September 2007 and expire on 3 October 2007. The subscription price is EUR 3.60 per share. Each shareholder of Citycon is entitled to subscribe for one (1) new share for every seven (7) shares held on the record date, 13 September 2007. The subscription rights are transferable and are expected to be traded on the Helsinki Stock Exchange from 19 September 2007 through 26 September 2007. OKO Corporate Finance Ltd. will act as the Lead Manager of the Offering. Citycon intends to continue its strategy of responsible growth by expanding the Company's property portfolio in the retail business and selected market areas and by developing and redeveloping the company's properties in order to better serve the retail sector. The most desirable acquisition targets are shopping centres that offer substantial development and redevelopment potential and possibilities for increasing rental yield through active retail property management. Citycon's new investments are focused in areas where the number of inhabitants and their purchasing power are expected to increase. In the execution of its growth strategy Citycon intends to utilise equity, equity-linked financing as well as debt financing in a flexible manner in order to ensure optimal balance sheet structure of the company taking into account the progression of its investment plans. In addition, investments can be financed by divesting non-core properties. The net proceeds of the Offering are intended to be used to partially finance the acquisition of the shopping centre Iso Omena announced in August. The acquisition is expected to be closed during September 2007. The purchase price of Iso Omena is approximately EUR 329 million and the acquisition will initially be financed with existing credit lines and new financing arrangements. Gazit-Globe Ltd. has informed Citycon that its holding in Citycon as of 4 September 2007 was 39.3 per cent of all the shares in Citycon and has informed Citycon of its non-binding intention to use its subscription rights and to subscribe for shares in the Offering. In addition, Gazit-Globe Ltd. has informed Citycon of its non-binding intention to participate in the secondary subscription. Amendments to terms and conditions of stock options and convertible capital bonds The Board of Directors of Citycon has today approved the share subscriptions made and paid by 3 September 2007 based on the Company's 1999 stock options. The new shares are intended to be recorded in the book-entry accounts of the subscribers prior to the record date for the Offering, on or around 11 September 2007. The stock options 1999 and 2004 that have not been used for share subscription do not entitle to participate in the Offering. In order to ensure equal treatment of the stock option holders and the shareholders, the Board of Directors of Citycon has today decided on amendments to the terms and conditions of the 2004 stock options due to the Offering. In addition, the Board of Directors of Citycon decided to adjust the conversion price of the convertible capital bonds listed on 22 August 2006. The amendments described above regarding the convertible bonds will take effect on 4 October 2007 and regarding the stock options on 10 October 2007 provided that the Offering will be executed in accordance with the terms presented above. Since the Company's stock option scheme 1999 expires on 30 September 2007, the Offering has no effect on the terms and conditions of the said stock option scheme. More detailed information on said amendments will be provided in a separate release to be issued later today. Press conference for media and analysts Citycon will host a news conference for media and analysts at 12.00 noon today. The conference will be held at the Company's head office, Pohjoisesplanadi 35 AB, third floor, Helsinki. The news conference may also be attended via conference call. The details for the conference call are as follows: Conference number +358(0)9 8248 2775, PIN 8584. Helsinki, 10 September 2007 CITYCON OYJ Board of Directors APPENDIX: Terms and conditions of the Offering For further information, please contact: Petri Olkinuora, CEO, tel. +358 9 6803 6738 or mobile +358 400 333 256 Eero Sihvonen, CFO, mobile +358 50 557 9137 Distribution: Helsinki Stock Exchange Major media www.citycon.fi This release is not an offer of securities for sale in the United States. The securities referred to herein may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements. The issuer does not intend to conduct a public offering in the United States or register any part of the offering in the United States. Copies of this release are not being made and may not be distributed or sent into the United States, Canada, Japan or Australia. APPENDIX: TERMS AND CONDITIONS OF THE OFFERING On 13 March 2007, the Annual General Meeting of Citycon Oyj (the"Company" or "Citycon") resolved to authorise the Company's Board of Directors to decide on a share issue. The maximum number of shares to be issued may be 100,000,000 in total. On 10 September 2007, the Board of Directors of the Company resolved, based on the authorisation of the Annual General Meeting, to issue a maximum of 27,594,782 new shares (each "Share") through a share issue based on the pre-emptive subscription right of shareholders (the"Offering") as set forth in these terms and conditions of the Offering. The Shares to be issued in the Offering represent approximately 14.3 per cent of the total shares and voting rights in the Company before the Offering. Right to Subscribe Primary Subscription Right The 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 the Finnish Central Securities Depository Ltd. on the record date of 13 September 2007 of the Offering (the "Record Date"), will automatically receive one (1) freely transferable subscription right as a book-entry (ISIN FI0009503023) (the"Subscription Right") 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 one (1) Share for every seven (7) Subscription Rights. No fractions of Shares will be allotted. Secondary Subscription Right Further, a shareholder who is registered in the Company's shareholders' register on the Record Date and who has exercised his or her Primary Subscription Right, is entitled to subscribe for Shares not subscribed for by virtue of the Primary Subscription Right (the "Secondary Subscription Right"). Shares Not Subscribed for The Shares not subscribed for may be allocated for subscription by persons selected by the Board of Directors. Subscription Price The Shares may be subscribed for in the Offering at the subscription price of EUR 3.60 per Share (the "Subscription Price"). The Subscription Price will be recorded in its entirety under the invested unrestricted equity fund. The Share Subscription Price has been set such that it includes a discount of approximately 22 per cent compared to the closing price of the shares on the trading day preceding the day of the decision on the share offering. Subscription Period The subscription period will commence on 19 September 2007 at 9.30 a.m. Finnish time and expire on 3 October 2007 at 4.30 p.m. Finnish time (the "Subscription Period"). The Shares that have not been subscribed for by virtue of the Primary and Secondary Subscription Period and that are to be offered for subscription by persons selected by the Board of Directors, must be subscribed for in accordance with the instructions given by the Board of Directors, however, on 8 October 2007 at the latest. Places of Subscription Subscriptions can be made at: - the OP Bank Group's member banks and the offices of Helsinki OP Bank Plc during their opening hours. - the OP 0100 0500 telephone service. The clients subscribing for Shares via the telephone service must have a personal Internet service agreement with the OP Bank Group. When subscribing for Shares via the telephone service, the subscriber must identify himself by using the codes for Internet services. In addition, subscriptions may be submitted to the account operators who have an agreement with OKO Corporate Finance Ltd. on the routing of subscriptions. Account operators may ask their customers to submit their subscriptions at an earlier date than the date of expiration of the Subscription Period. Subscription for Shares and Payments A holder of the Subscription Rights may participate in the Offering by subscribing for Shares pursuant to the Subscription Rights registered on his or her book-entry account and by paying the Subscription Price. Each seven (7) Subscription Rights entitle their holder to subscribe for one (1) Share. Fractional Shares cannot be subscribed. In order to participate in the Offering, a holder of the Subscription Rights must submit a subscription assignment in accordance with the instructions given by his or her own account operator, or if a holder of the Subscription Rights has not received instructions for subscription form his or her account operator, he or she must contact a subscription place. The Subscription Price of the 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 subscription place or the relevant account operator during the term of payment determined by the account operator. 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 holders. Any exercise of the Primary Subscription Right and the Secondary Subscription Right is irrevocable and may not be modified or cancelled otherwise than as stated in section "Cancellation of Subscriptions under Certain Circumstances". Any Subscription Rights remaining unexercised at the end of the Subscription Period on 3 October 2007 will expire without any compensation. Cancellation of Subscriptions under Certain Circumstances According to the Finnish Securities Market Act if the prospectus relating to the Offering is supplemented between the time the prospectus was approved by the Finnish Financial Supervision Authority and the time when trading with the Shares begins due to a material mistake or inaccuracy relating to the information in the prospectus which could be of material relevance to the investor, then investors who have already agreed to subscribe for Shares before the supplement is published, shall have the right to withdraw their subscription. The procedure for such withdrawal right will be announced together with any such supplement to the prospectus through a stock exchange release. Public Trading of the Subscription Rights The Subscription Rights will be publicly traded on the OMX Nordic Exchange Helsinki Ltd. between 19 September 2007 and 26 September 2007. 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 and applicable laws and regulations. In case of over-subscription by virtue of Secondary Subscription Rights, the subscriptions made by the Company's shareholders will be approved in proportion to their holdings on the Record Date, but not more than up to the maximum number of the subscription undertaking. Should the shareholder not receive all Shares subscribed for by virtue of the Secondary Subscription Right, the subscription price for the Shares not received by the shareholder will be repaid to the bank account informed by the shareholder in connection with the subscription on or about 10 October 2007. No interest will accrue for the repayable funds. If all Shares are not subscribed for pursuant to the Primary and Secondary Subscription Right and if the Board of Directors gives the unsubscribed Shares for subscription to a party it decides, the Board of Directors may in its discretion approve or refuse these subscriptions. The Company will publish the final result of the Offering in a stock exchange release on or about 8 October 2007. Registration of the Shares to the Book-entry Accounts The Shares subscribed for in the Offering will be recorded on the subscriber's book-entry account after the registration of the subscription as interim shares (ISIN Code FI0009015648) representing the new Shares. The interim shares will be combined with the Company's existing class of shares (ISIN Code FI0009002471) when the Shares have been registered with the Trade Register. Such combination is expected to occur on or about 10 October 2007. The Shares subscribed for and approved by virtue of the Secondary Subscription Right will be recorded on the subscriber's book-entry account after the registration of the Shares with the Trade Register, on or about 10 October 2007. Shareholder Rights The Shares will entitle their holder to full dividends declared by the Company, if any, and to other shareholder rights in the Company after the new Shares have been registered with the Trade Register, on or about 10 October 2007. Treatment of Holders of Stock Options and Convertible Bonds According to the terms and conditions of the stock options approved by the Company's Annual General Meeting of Shareholders on 15 March 2004, if the Company increases its share capital on the basis of the pre-emptive subscription rights of shareholders prior to subscription of shares by the holder of stock options, such stock option holder shall be granted the same or an equivalent right as the shareholders. In order to ensure equal treatment of the stock options holders and the shareholders the Board of Directors of the Company has on 10 September 2007 decided upon amendments to the subscription ratio and the subscription price based on 2004 stock options due to the Offering. The Company's stock options 2004 do not entitle 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 per cent 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 10 September 2007 decided to adjust the conversion price of the convertible bonds from EUR 4.3432 to EUR 4.20, provided that the Offering is executed as described in the offering note. The new conversion price will be effective as of 4 October 2007. The notice regarding the conversion will be given to the holders of convertible bonds on 11 September 2007. 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, Pohjoisesplanadi 35 AB, FI-00100 Helsinki. Applicable Law and Dispute Resolution The Offering and the 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.