NewRiver REIT has tabled a £147m cash and share offer for Capital & Regional.
Under the terms of the deal, NewRiver would acquire the entire issued and to be issued share capital of Capital & Regional, with Capital & Regional shareholders entitled to receive 31.25p in cash and 0.41946 new NewRiver shares per share. Following completion of the merger, Capital & Regional shareholders would own approximately 21% of NewRiver.
The offer terms imply a value of 62.5p per Capital & Regional share and approximately £147m for the entire issued, and to be issued, ordinary share capital of Capital & Regional, which represents a premium of approximately 21% to the undisturbed closing price of a Capital & Regional share of 51.5p on 17 September.
The board of NewRiver REIT said there was a strong strategic, operational and financial rationale for the merger, which would create a company with a circa £900m retail portfolio.
It added that as well as benefiting from enhanced scale, the enlarged business would enjoy material cost savings, mid- to high-teens accretion to UFFO per share, better access to acquisition and asset management opportunities, improved debt optionality, expected cost of capital benefits and the potential for increased share liquidity.
Growthpoint – Capital & Regional’s largest shareholder – has indicated to the board of Capital & Regional that it would vote in favour of the proposed deal and the independent directors of Capital & Regional said they would be prepared to unanimously recommend the terms of the deal to shareholders should a firm offer be made by NewRiver REIT.
Earlier today, NewRiver REIT announced it had raised approximately £50.2m from a share placing, the proceeds of which would be used to fund its bid for Capital & Regional.
Allan Lockhart (pictured), chief executive officer of NewRiver REIT, said: “This successful placing to support our proposed offer for Capital & Regional further underpins our belief in the strategic rationale for the transaction. We would like to thank our investors for their support during this fundraising process, which we believe will contribute to the future growth and success of NewRiver.”
