(Alliance News) - Shares in property and land developer Urban&Civic PLC leapt on Friday after it said it has accepted a GBP506.0 million takeover offer from The Wellcome Trust.
The Wellcome Trust is a London-based research charity, established to fund research into improving human and animal health. As at September 30, 2019, the trust's investment portfolio was valued at GBP26.8 billion.
Wellcome has worked with Urban&Civic since 2018, with both being selected to partner with Basingstoke & Deane Borough and Hampshire County Councils to deliver 3,500 new homes at Manydown.
The trust itself said that Urban&Civic's business model is well-aligned with Wellcome's own long-term investment philosophy, due to its experience of working with companies in the real estate sector. On the deal's completion, the trust will continue to chase its existing pipeline of investment opportunities.
Under the acquisition's terms, Wellcome will acquire Urban&Civic for 345 pence per share, reflecting a 64% premium to the company's closing price of 211.0 pence on Thursday and above Urban&Civic's EPRA net asset value on September 30 of 343.2p.
Shares in Urban&Civic were 65% higher at 347.50 pence on Friday morning in London, giving a market capitalisation of GBP504.5 million. As of Thursday's close, the group's shares had been down 38% so far in 2020.
The acquisition is conditional on gaining at least 75% in shares at the upcoming court meeting, as well as the scheme being sanctioned by the Court of Session at Edinburgh.
So far, Wellcome has obtained irrevocable acceptances from around 10.3 million shares in Urban&Civic reflecting 7.1% of the group's issued share capital.
"The proposal rests on comprehensive industrial logic. Urban&Civic was established just ten years ago with the specific intention of disrupting prevailing residential presumptions and now leads in strategic site Master Development. Wellcome is steeped in property experience and has a strong record of alternative asset class investment," said Chair Alan Dickinson.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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