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Wellcome Trust to buy Urban&Civic for £506m
6th Nov 2020 10:14
(Sharecast News) - Wellcome Trust has agreed to buy Urban&Civic for £506m in cash to add town development to its investment portfolio.
The healthcare charitable foundation said it would pay 345p for each U&C share - 63.5% more than the 211p closing price on 5 November. The price is 65.3% more than the average price over the past month and a 53.8% premium on the share price over the past six months.
The price also recognises fully U&C's EPRA net asset value of 343.2p a share at the end of September. U&C said a cash offer in excess of NAV outperformed the FTSE 350 Real Estate Index by 70% since the company listed in 2014 and secured returns for its shareholders.
U&C's shares rose 64% to 346p at 10:44 BST, indicating investors expect the deal to go through without a counterbid.
The company was founded 10 years ago to turn large blocks of raw land into towns, selling chunks of land to housebuilders. U&C shares had fallen 39% in 2020 before the deal was announced, underperforming the wider real estate sector.
U&C said its board approved the deal unanimously and would vote for the deal alongside J O Hambro, which owns about 4.8% of the company.
Alan Dickinson, U&C's chairman, said: "The acquisition provides a persuasive outcome for all stakeholders. The proposal rests on comprehensive industrial logic. Wellcome is steeped in property experience and has a strong record of alternative asset class investment."
Wellcome Trust was founded in 1936 to support scientific research and the study of medicine according to the will of pharmaceutical entrepreneur Henry Wellcome. In 1985 the trust sold the first shares in what became Wellcome plc, now part of GlaxoSmithKline and in 1995 it became an independent foundation. The trust is funded by its £27bn investment portfolio.
Peter Pereira Gray, who runs Wellcome's investment division, said: "We are very pleased to announce this recommended offer, which is fully aligned with our existing strategy of investing in businesses over the long term. We know the Urban&Civic business and its experienced management team from our recent joint venture ... and look forward to working with them to invest in and develop the business further."
The healthcare charitable foundation said it would pay 345p for each U&C share - 63.5% more than the 211p closing price on 5 November. The price is 65.3% more than the average price over the past month and a 53.8% premium on the share price over the past six months.
The price also recognises fully U&C's EPRA net asset value of 343.2p a share at the end of September. U&C said a cash offer in excess of NAV outperformed the FTSE 350 Real Estate Index by 70% since the company listed in 2014 and secured returns for its shareholders.
U&C's shares rose 64% to 346p at 10:44 BST, indicating investors expect the deal to go through without a counterbid.
The company was founded 10 years ago to turn large blocks of raw land into towns, selling chunks of land to housebuilders. U&C shares had fallen 39% in 2020 before the deal was announced, underperforming the wider real estate sector.
U&C said its board approved the deal unanimously and would vote for the deal alongside J O Hambro, which owns about 4.8% of the company.
Alan Dickinson, U&C's chairman, said: "The acquisition provides a persuasive outcome for all stakeholders. The proposal rests on comprehensive industrial logic. Wellcome is steeped in property experience and has a strong record of alternative asset class investment."
Wellcome Trust was founded in 1936 to support scientific research and the study of medicine according to the will of pharmaceutical entrepreneur Henry Wellcome. In 1985 the trust sold the first shares in what became Wellcome plc, now part of GlaxoSmithKline and in 1995 it became an independent foundation. The trust is funded by its £27bn investment portfolio.
Peter Pereira Gray, who runs Wellcome's investment division, said: "We are very pleased to announce this recommended offer, which is fully aligned with our existing strategy of investing in businesses over the long term. We know the Urban&Civic business and its experienced management team from our recent joint venture ... and look forward to working with them to invest in and develop the business further."