Home REIT gets unsolicited takeover approach from Bluestar

16th Feb 2023 08:07

(Sharecast News) - Beleaguered social housing landlord Home REIT said on Thursday that it was considering putting itself up for sale and that it had received an unsolicited takeover offer from Bluestar.

The company, which has been hit hard in recent months by short-seller attacks, did not disclose any financial details.

"Shareholders should note that there can be no certainty that an offer will ultimately be made for the company, nor as to the terms on which any firm offer might be made," it said, adding that a further statement will be made as and when appropriate.

The company also pointed to a "serious deterioration" in rent collections for the quarter to November 2022 and said it had identified "serious challenges" in rent collection for December 2022 and January 2023.

It noted that for the quarter ending November 2022, only 23% of rent has been collected. In addition, the rent forecast to be collected for the coming months is "highly uncertain", it said, as the investment adviser deals with a combination of issues surrounding the tenants' ability, or willingness, to pay.

"It is not possible to quantify the future amounts of rent to be collected with certainty as the issues are not straightforward," the company said.

Home REIT also noted recent media speculation of "allegations of wrongdoing" and confirmed it instructed independent forensic accounting experts Alvarez & Marsal to investigate these allegations in early January.

"This investigation is ongoing and it is not possible to confirm its outcome at this stage," it said.

The company said it continues to engage with BDO to finalise the enhanced audit of its accounts for the year ended 31 August 2022.

In addition, it has suspended the payment of quarterly dividend for the foreseeable future.

Russ Mould, investment director at AJ Bell, said: "Home REIT continues to unravel with its brokers quitting, barely any rent collected from tenants over the past two months and demands for up to £20m of refurbishments.

"It's astonishing how so much has gone wrong in such little time, and it's no surprise to see the board of directors indicate that the company might be put up for sale.

"Shareholders have been served the driest of turkeys and there is now a risk they may only get back pennies in the pound on their original investment given the multitude of problems."