Home REIT’s potential buyer has issued a stinging attack against the REIT’s board, after its “put up or shut up” option was apparently cancelled.
Bluestar Group, which has links to Home REIT’s founder, the US company Alvarium, said that yesterday afternoon (10 May) Home’s adviser, Smith Square Partners, had “delivered the staggering message that the board had met and decided that it would not grant an extension to the PUSU deadline”.
Home has until 5pm today to extend the deadline. Bluestar had made a possible offer of 40p per share.
In a statement last night, Bluestar said: “On 5 May 2023, Bluestar made a formal request to Home for an extension to the PUSU deadline of 5pm on 11 May 2023. In the subsequent days, we have repeatedly attempted to engage and meet with Home and SSP. On the afternoon of 10 May 2023, approximately 27 hours before the expiration of the PUSU deadline, SSP delivered the staggering message that the board had met and decided that it would not grant an extension to the PUSU deadline.”
Bluestar said Home had claimed that its suitor “has not sufficiently progressed the possible offer”.
Bluestar has vehemently denied this, stating that it has been blocked by Home from progressing its offer, and has not been handed relevant documents or given access to key personnel. It added that it had “received no information since February” from Home, since its initial offer.
Bluestar said it had “been guided by SSP that Home desired Bluestar to wait patiently until the board is able to assess the possible offer and provide Bluestar with the requested due diligence information”.
It said Home had only provided Bluestar with “limited diligence information in February 2023”, but “despite repeated attempts by Bluestar, has provided nothing in the subsequent months”.
It added that it had “not been provided access to the board of Home” either.
In recent weeks, it said, it had repeatedly attempted to meet with Home’s chair, Lynne Fennah, and SSP “in order to explore ways in which it might receive information and access in order to progress its due diligence”.
However, it said: “Bluestar has been disappointed to receive no meaningful engagement, with the only meeting that Bluestar was able to schedule between Lynne Fennah, the Home chairperson, SSP, Bluestar and Numis being cancelled by SSP on behalf of Home at short notice.”
Bluestar said it “has invested significant time and resources in arranging financing, carrying out outside-in due diligence and continuing to engage or attempt to engage with Home on the possible offer”.
It transpires that, on 14 April, Bluestar submitted a proposal to the board for the entire issued and to be issued share capital of Home for 40p per share in cash.
The possible offer represents a slight premium to Home’s share price at its suspension on 3 January. This left Home stalled at 38.05p, giving it a market capitalisation of £300m.
Bluestar said this offer was generous, in the context of “a heavily negative news flow and a serious deterioration in Home’s rent collections and broader operational performance”.
Bluestar said the possible offer “provides a route to upfront liquidity, at a valuation level that Bluestar does not anticipate Home achieving in the public markets in the medium term”.
It said its attempts to engage with Home REIT about the offer were rebuffed, adding: “Home has declined repeatedly to provide a formal response to the possible offer.”
The apparent cancellation of the PUSU extension was “staggering”, as “SSP was also clear that it expected the board to view favourably any requests by Bluestar to extend the current and future PUSU deadlines”.
Bluestar said it was “requesting shareholders to immediatley urge the board” to extend the PUSU deadline before the 5pm deadline today.
It added: “Bluestar remains highly motivated and enthusiastic about the possible offer but has been frustrated by the lack of engagement from the board, which has been particularly pronounced in the last three weeks.”
If the deadline is not extended, Bluestar will not be allowed to make an approach within the next six months.
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