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Capital & Regional in talks with Growthpoint over majority stake acquisition
11th Sep 2019 09:27
(Sharecast News) - Real estate investment trust Capital & Regional said on Wednesday that it is in talks with South Africa's Growthpoint Properties about the acquisition of a majority stake in the UK company through a partial offer.
The offer from Growthpoint would be in the form of cash for Capital & Regional shares, and an injection of capital through a subscription for new shares.
Growthpoint now has until the end of play on 9 October to either announce a firm intention to make an offer for Capital & Regional or walk away.
News of the talks came alongside Capital & Regional's first-half results, which showed that net asset value per share dropped to 51p in the six months to June from 66p in the same period a year ago, while the debt to assets ratio edged up to 52% from 48%.
The company said it swung to an IFRS loss of £55.4m from a profit of £6.7m as net rental income slipped to £25.2m from £26m. In addition, Capital & Regional said it has deferred the decision on the level of its interim dividend until discussions with Growthpoint have concluded.
Chief executive Lawrence Hutchings said: "The business has again produced a robust set of operational results in what remains a challenging period for UK retail.
"We have been making solid progress to strengthen the balance sheet and provide additional liquidity given the fall in valuations, due primarily to the impact of CVAs and retailer administrations and market yield shift, which has increased net LTV to 52%."
At 0920 BST, the shares were up 8.4% at 17.88p.
The offer from Growthpoint would be in the form of cash for Capital & Regional shares, and an injection of capital through a subscription for new shares.
Growthpoint now has until the end of play on 9 October to either announce a firm intention to make an offer for Capital & Regional or walk away.
News of the talks came alongside Capital & Regional's first-half results, which showed that net asset value per share dropped to 51p in the six months to June from 66p in the same period a year ago, while the debt to assets ratio edged up to 52% from 48%.
The company said it swung to an IFRS loss of £55.4m from a profit of £6.7m as net rental income slipped to £25.2m from £26m. In addition, Capital & Regional said it has deferred the decision on the level of its interim dividend until discussions with Growthpoint have concluded.
Chief executive Lawrence Hutchings said: "The business has again produced a robust set of operational results in what remains a challenging period for UK retail.
"We have been making solid progress to strengthen the balance sheet and provide additional liquidity given the fall in valuations, due primarily to the impact of CVAs and retailer administrations and market yield shift, which has increased net LTV to 52%."
At 0920 BST, the shares were up 8.4% at 17.88p.