LONDON (Alliance News) - Property investor Terrace Hill Group PLC Monday said it will acquire unlisted property group Urban&Civic in a reverse takeover and be renamed Urban&Civic PLC.
The new group also plans to raise GBP170 million through a placing of 75.6 million shares priced at 225 pence per share to fund further developments. The placing shares are consolidated shares that will be created from 10-for-1 share consolidation.
Terrace Hill said the combined company will use the proceeds of the placing to further develop Urban&Civic sites at Alconbury Weald and Rugby, at a cost of GBP50 million, while GBP30 million will go towards the development of current commercial projects. The rest of the funds will be used to "purchase and develop pipeline opportunities", it said.
Under the terms of the acquisition, Glasgow-based Terrace Hill will issue 430.8 million unconsolidated shares to the owners of Urban&Civic, double the current number of Terrace Hill shares in issue. The share payment values unlisted Urban&Civic at GBP95.3 million.
Terrace Hill unconsolidated ordinary shares last traded at 22.17 pence on Friday. Its trading on AIM was suspended following Monday's announcement.
The acquisition constitutes a reverse takeover under AIM rules and is conditional on the approval of shareholders. Terrace Hill said trading of its shares on AIM will be suspended until publication of the prospectus relating to the placing and acquisition, which is expected to be later Monday.
Following completion of the acquisition and placing, the enlarged group will operate under the new name, Urban&Civic PLC. Nigel Hugill and Robin Butler, who founded Urban & Civic in 2009 will become executive chairman and managing director, respectively, of the enlarged group.
Philip Leech the current chief executive of Terrace Hill, will become property director, while Jon Austen, Terrace Hill's finance director, will continue his role in the enlarged group.
Urban & Civic owns two large strategic residential land sites in the UK which, in aggregate, have a resolution to grant outline planning consent for 11,200 houses with an estimated value of GBP2.7 billion.
Terrace Hill said it believes that the enlarged group will create a new "Best in Class" UK real estate company with a focus on large-scale strategic residential holdings and commercial development opportunities across central London and the UK.
The merged company plans to acquire plots of land for homes in prime locations and then sell them to housebuilders. The group also may construct and deliver for sale private residential housing units itself with the aim of generating recurring cashflows in the longer term.
The company said it plans to adopt a progressive dividend policy once the acquisition has been completed and will target a first dividend after a full year of trading for the period ending September 30, 2015 of around 1% of the placing price.
The enlarged company has applied for admission to the London Stock Exchange's Main Market and will cancel its trading on AIM.
Oriel Securities Ltd and JP Morgan Ltd will act as joint bookrunners.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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