(Alliance News) - Green REIT PLC said Wednesday it has agreed to an EUR1.34 billion takeover offer by HPREF Dublin Office Bidco Ltd, a subsidiary of European real estate investor Henderson Park Group.
Under the acquisition's terms, Henderson Park will acquire Green REIT for EUR1.9135 per share, reflecting a 4.9% premium to Green REIT's closing price of EUR1.824 on Tuesday.
Shares in the Irish real estate investment trust were up 2.9% at EUR1.90 on Wednesday.
The acquisition is conditional on gaining at least 75% in shareholder approval at both the scheme meeting and extraordinary general meeting, as well as being sanctioned by the High Court of Ireland.
Green REIT expects the acquisition to be completed by November. So far Henderson has obtained irrevocable acceptances from around 43.1 million shares in Green REIT, reflecting 6.2% of the company's entire issued share capital.
"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," said Chair Gary Kennedy.
"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," Kennedy added.
In a separate announcement, Green REIT reported a considerable fall in profit for its recently ended financial year, on a drop in value for its investment properties.
For the year to the end of June, Green REIT reported a pretax profit of EUR91.8 million, down 36% from EUR144.2 million the year before. This was in spite of slight growth in gross income by 3.8% to EUR81.9 million from EUR78.9 million.
Green REIT's profit was hurt by a drop in the fair value gains from its investment properties to EUR52.9 million from EUR109.2 million.
As at June 30, Green REIT's EPRA net asset value rose by 5% to 187.1 euro cents per share from 178.9 cents the same date the prior year, on a portfolio value that increased by 8% to EUR1.53 billion from EUR1.42 billion.
Green REIT has not declared a final dividend for the period. It will be required, subject to remaining within the Irish REIT regime to pay a further dividend by the end of March 2020 for the year.
The dividend amount is to be at least 85% of Green REIT's property income of its rental business, which for the year came up to EUR42.7 million. As a result, Green REIT is obliged to pay a minimum of EUR36.3 million to shareholders.
