(Alliance News) - Telford Homes PLC, which is currently wrestling with falling profitability, has agreed a GBP267 million takeover by US commercial real estate firm CBRE Group Inc, CBRE announced on Wednesday.
CBRE has offered 350 pence per Telford share, with Telford's board recommending shareholders accept the deal.
Shares were up 12% on Wednesday morning at 352.00p, though the stock remains 8.2% lower compared to this time a year ago.
The price, CBRE continued, is an 11% premium to Telford's London closing price on Tuesday, a 14% premium to its volume weighted average price in the month to Tuesday, and a 21% premium to the volume weighted average price for the three months up to Tuesday.
The deal values Telford at GBP267.4 million on a fully diluted basis. The offer price is final, CBRE added, and will not be increased, though it could be should another bidder arise.
CBRE, which is listed on the New York Stock Exchange and is one of the world's largest commercial real estate firms by revenue, has over 90,000 employees in 480 offices worldwide.
Telford Chair Andrew Wiseman said: "The board believes the offer from CBRE represents fair value for shareholders in light of Telford Homes' market positioning, the current operating environment, and the underlying value of Telford Homes' site portfolio and pipeline.
"The board remains confident in the long-term prospects of the business, however, the board also recognises the risks posed by the political and macro-economic environment, as well as the already stated impact on the group's short and medium-term profitability from the implementation of its new build to rent strategy, which is lower margin in nature," he continued.
"The offer allows Telford Homes shareholders to obtain liquidity for their full investment at a meaningful premium to the prevailing share price. The board believes the offer of 350 pence per share is a good outcome for shareholders and intends to recommend unanimously they accept this offer."
Telford has had a difficult few months, having issued a profit warning in February. In May, when reporting annual figures, pretax profit fell 13% to GBP40.1 million, well below the company's GBP50 million guidance.
Profit was hurt by a subdued London sales market, as well as increased exposure to lower margin build-to-rent developments which Telford is going to focus on going forward.
On top of the disappointing profit figure, Telford also expects profit in its new financial year to fall "significantly" once again.
