Regional REIT to Acquire UK Properties from Conygar Investment in GBP 129m Deal.
M2 EQUITYBITES-February 24, 2017-Regional REIT to Acquire UK Properties from Conygar Investment in GBP 129m Deal
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24 February 2017 - UK regional office and industrial property focused property investor Regional REIT Ltd. (LSE: RGL) has reached an agreement with The Conygar Investment Co plc (LSE: CIC) to acquire UK regional office, industrial and retail and retail distribution investment properties owned by Conygar, valued at around GBP 129m, the company said.
Regional REIT will acquire the properties by way of purchasing the Special Purpose Vehicles that own the individual assets.
The Conygar Property Portfolio to be acquired comprises 31 mixed-use property assets amounting to 1,280,980 sq. ft. with a gross investment value of GBP 129m (as at 30 September 2016). The portfolio consists of 153 units and 115 tenants.
Regional REIT said the Conygar Property Portfolio to be acquired comprises 31 mixed-use property assets amounting to 1,280,980 sq. ft. with a gross investment value of GBP 129m (as at 30 September 2016). The portfolio consists of 153 units and 115 tenants.
Under the terms of the proposed acquisition Regional REIT will issue ordinary shares at its EPRA Net Asset Value (30 June 2016), adjusted as agreed between the parties, to acquire the Conygar Property Portfolio at the net asset value of the SPVs, again adjusted as agreed between the parties.
The consideration will be satisfied as to GBP 28m by the issue of approximately 26.3m Regional REIT ordinary shares to Conygar (subject to adjustment) and the assumption of two existing secured banking facilities (totalling GBP 69.5m).
Regional REIT said the balance of the consideration will be satisfied by its Regional Commercial Midco Ltd. subsidiary acquiring Conygar ZDP PLC (LSE: CICZ), a wholly-owned subsidiary of Conygar, and assuming Conygar's obligations to fund the liabilities of Conygar ZDP (subject to certain agreed adjustments), being approximately GBP 35.7m in relation to zero dividend preference shares issued by Conygar ZDP as at the expected date of completion on 24 March 2017.
The total consideration for the proposed acquisition, which includes shared transaction savings and certain balance sheet adjustments agreed between the parties, is subject to a potential net assets adjustment following completion.
This acquisition is conditional upon the approval of Conygar's ordinary shareholders and, separately, of the holders of the ZDPs. In addition, the completion of the proposed acquisition requires the approval of the change of control by the two banks currently providing secured debt facilities to Conygar.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Feb 24, 2017|
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