Green REIT, the Irish listed property company, has recommended a €1.34 bn cash takeover bid from private London-based property fund manager Henderson Park.
Commenting on the offer, Gary Kennedy, chair of Green REIT, said: 'Green REIT has been trading at a persistent structural discount to its underlying Net Asset Value since early 2016. This persistent discount has been inconsistent with the value of the company’s assets, management, business plan and performance as well as the Irish commercial property sector.
'Having undertaken a detailed strategic analysis, the board determined that it was in the interests of shareholders to conduct a sale process to solicit offers for the company or its assets. Following a highly competitive process, the cash offer by Henderson Park to acquire the company represents an attractive outcome for shareholders delivering a premium to the share price prior to the announcement of the sale process and to Green REIT’s Net Asset Value.'
Nick Weber, founding partner and CEO of Henderson Park, said: ‘The acquisition of Green REIT offers a rare opportunity to invest in a large institutional quality office portfolio and a strategic logistics park through a single transaction.’ He added: ‘The portfolio offers exposure to high-quality properties located predominantly in Dublin, leased to blue chip tenants, and two strategic development sites. We believe in the short-term and long-term prospects of the Irish market with its strong macroeconomic backdrop and underlying real estate fundamentals.’
Green REIT is an Irish REIT listed on the Irish and London Stock Exchange. In July 2013 it was the first REIT to be established in Ireland following the introduction of REIT legislation. The stated strategy was to create a property portfolio consisting primarily of commercial assets in Ireland for income and capital growth through opportunistic investments and active property management.
Over a period of six years its total shareholders returns have been 109%. However, as previously reported in April, the company decided it would be sold or would sell its assets having conducted a strategic review. As well as Henderson Park, bidders reportedly included California-headquartered Kennedy Wilson, Germany’s DekaBank, and initially Irish Life.
On Wednesday, Green REIT said an independent board had unanimously recommended an offer from Henderson Park that values the company at €1.34 bn and is at a 24.7% premium to the share price of €1.534 on 12 April – the day before the company announced it wanted to be sold. As of 30 June, this year, the company’s portfolio was independently valued at €1.557 bn.
Henderson Park is making the acquisition via its Henderson Park Real Estate Fund I which reached a final close recently on $3.2 bn (€2.86 bn) of equity, of which around $1.5 bn is immediately available to be invested.
The takeover is conditional upon various factors including shareholders approving the Scheme Meeting Resolution and EGM Resolutions.
JP Morgan Cazenove is advising Green REIT, while Davy is joint financial advisor. CBRE is property advisor.
For Henderson Park, Eastdil Secured is the financial advisor along with Wells Fargo Securities.
See the September 2019 issue of PropertyEU for greater in-depth coverage of Green REIT's sale.