Industrial property group set to be snapped up by rival in £25m deal

A property group which owns a spate of industrial sites across the Midlands is set to be acquired in a deal valued at more than £25m.

Industrial Multi Property Trust (IMPT) is set to be acquired by REIT Hansteen Holdings, which itself is a major commercial property investor in the region.

Isle of Man registered IMPT has a portfolio of around 100 properties across the UK. In the Midlands, its sites include Peartree Lane Industrial Estate in Dudley, St James Mill Business Park in Northampton, Webb Ellis Industrial Park, Rugby and Falcon Business Park in Burton-upon-Trent.

The directors of Hansteen said they had reached an agreement with the independent directors of IMPT to acquire the entire issued ordinary share capital of IMPT.

Under the terms of the offer, IMPT shareholders will receive 300p in cash for each IMPT share – a deal which values the business at £25,228,560.

Commenting on the offer, Jonathan Clague, chairman of IMPT, said: “The offer provides all IMPT shareholders with the opportunity of a cash exit at a significant premium to IMPT’s recent share price.  Furthermore, the 300p per share offer price represents considerable progress from IMPT’s refinancing in 2013 and over five times the share price of 54p in August 2015 just before IMPT announced initiatives aimed at improving shareholder value.”

He added that the IMPT independent directors considered the financial terms of the offer to be fair and reasonable.  
Ian Watson and Morgan Jones, Joint Chief Executives of Hansteen, said: “The IMPT portfolio, being very similar in nature to Hansteen’s own UK portfolio, can be easily absorbed on to our asset management platform with limited additional cost.  

“With experienced management teams in seven offices around the UK, which build close relationships with tenants and local stakeholders, we are well positioned be able to achieve sustainable growth in the portfolio’s rental income and occupancy through our intense asset management initiatives. We have a long standing track record of achieving above average returns for our stakeholders.”

The IMPT directors have said they intend to recommend to shareholders that the offer be accepted.

In August 2015 IMPT looked to improve shareholder value by introducing a series of initiatives. At that time, IMPT’s share price stood at 54p which the board believed reflected the group’s high gearing and lack of dividend rather than the quality of the property portfolio.

Since the group’s borrowings provided for the payment of certain fees in the event of prepayment in the first three years following drawdown, plans for a refinancing could only be targeted for Q4 2016 when such prepayment penalties fell away. 

In the event, IMPT announced that a refinancing was not possible and other ways of improving shareholder value would have to be considered.

The directors had favoured a refinancing structure which reduced the overall level of debt through an issue of new shares.

However, IMPT said the during such discussions, it became clear that Alpha Real Trust Limited (IMPT’s largest shareholder) and Alpha (investment manager to both IMPT and Alpha Real Trust) were only prepared to consider a relatively highly leveraged debt refinancing of the group which, if implemented, would have led to increased borrowings and new banking covenants at higher levels than at present, putting any potential dividend at greater risk.

In December 2016, Cushman & Wakefield valued the IMPT portfolio at £85.3m.
 

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