(Alliance News) - Sigma Capital Group PLC said Friday it has agreed to be taken over by funds managed by PineBridge Benson Elliot LLP, in a deal worth GBP188.4 million.
The build-to-rent housing provider shareholders will receive 202.1 pence per share in cash, representing a premium of 36% to Sigma's closing price on Thursday.
Shares in Sigma were trading 35% higher in early trading in London on Friday at 200.50 pence each.
PineBridge Benson Elliot is a pan-European real estate private equity specialist, with USD3.2 billion of managed equity.
The offer has acceptances representing 61% of Sigma Capital shares and is recommended unanimously by Sigma's independent shareholders.
"We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties. We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot's capital backing, will make a powerful combination," said Sigma Capital Founder & Chief Executive Graham Barnet.
Sigma noted that, in late 2020, it decided to "review the strategic options and relative benefits of the various routes available to the business to fund its future growth and maximise shareholder value."
"This process attracted participation from multiple well-funded parties and Sigma provided interested parties with access to due diligence information through a virtual data room and a series of management sessions," it explained.
Sigma added: "Following a period of review, further discussions with its advisers and a thorough evaluation of the proposals received by Sigma, including follow-up discussions with the relevant interested parties, the independent Sigma directors believe that the all-cash offer from Bidco represents the most attractive option for all Sigma shareholders in terms of value, the form of consideration offered and execution certainty. Discussions with all other interested parties have terminated."
Sigma believes the offer will allow it to execute its current strategy but feels it needs "consistent access" to capital to deliver its next phase of growth.
"Sigma would require consistent access to capital to invest in scale into UK PRS product and further grow the business through forming new housebuilder partnerships, expanding operations into new regional markets and widening its rental product offering," it added.
Sigma Capital is the parent company of London-listed PRS REIT PLC's investment adviser, Sigma PRS Management.
PRS REIT noted it has been reassured that following completion of the deal, Sigma will continue to "operate materially in the same way without significant disruption".
The board of the PRS REIT is also reassured that there will be no changes to the team providing services to the Company and that service levels will be uninterrupted by the transaction," PRS REIT added.
By Paul McGowan; paulmcgowan@alliancenews.com
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