Home REIT is pinning its hopes of a recovery on a new investment adviser after spurning its suitor’s advances.
Yesterday Bluestar Group confirmed that it had dropped its 40p-a-share bid for the suspended REIT.
“Bluestar today confirms it does not intend to make an offer,” it said in a statement last night.
It added that it was “highly disappointed that the board has not granted an extension to the PUSU deadline of 5pm on 11 May 2023.”
Yesterday’s admission of defeat followed an announcement on 10 May, which said it was “frustrated” by Home REIT’s refusal to provide documents and extend the “put up or shut up” deadline, which it added was “staggering”.
It urged Home’s shareholders to put pressure on the board to extend the deadline for a third month, but Home refused to do so.
Home responded, stating: “The board believes that progressing Bluestar’s proposal at this time is unlikely to maximise value for shareholders. The board and its financial adviser have given particular consideration to the significant uncertainties in relation to the deliverability of Bluestar’s non-binding and indicative proposal, including its key valuation assumptions, extensive due diligence requirements and extremely limited information on its financing.”
Bluestar Group was founded by Benoit Gotlieb, who has links to Home REIT founder Alvarium. But it is unclear where the money for the £350m cash offer would come from, as Bluestar Group is currently a company on paper only.
Bluestar claimed earlier this week that Home REIT had refused to allow it access to documents and key personnel after its initial approach.
The collapse of the deal now leaves Home REIT reliant on the appointment of a new investment adviser. Home parted company with its original investment adviser, Alvarium Home, in March after its own internal investigations raised serious concerns. It is understood that the board has now reached an agreement with AEW to take on the role, but the final details have yet to be agreed.
Home REIT told shareholders: “The board’s immediate concern is to complete the appointment of a new investment adviser in order to stabilise the company’s property portfolio and maximise value for shareholders, while at all times prioritising the interests of the occupants of the company’s properties.”
It added: “The board will not proactively pursue a sale of the company at this time and therefore this part of the review of strategic options announced on 16 February 2023 is now concluded.
“The board and its new investment adviser, when appointed, will continue to monitor this position, in particular once it is in possession of a new property valuation.”
But there is still no news on whether the deal with AEW, or anyone else, has been agreed. “A further announcement in relation to the appointment of a new investment adviser is expected to be made in the near term,” Home said.
Some shareholders had wondered if the bid from Bluestar was convenient, as it gave Home REIT cover for a few crucial months while it put its house back in order. If so, that cover is now gone.
As Home acknowledged: “The company is now no longer in an offer period under the Takeover Code.”
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