PRS REIT puts itself up for sale

PRS REIT is inviting offers for a takeover after months of shareholder pressure and the resignation of its chair. The proposed sale is one of several strategic options the FTSE 250 residential investor is looking into. The company appointed Rothschild & Co to advise on strategy and value maximisation for shareholders earlier this year.  The company’s existing portfolio includes 5,425 homes, with an estimated rental value of £67.5m per annum. Its occupancy and rent collection rates are at 98% and 100%, respectively. The company’s market capitalisation of its portfolio on the stock exchange is £592m. PRS REIT’s strategic review was launched in August, when a group of investors, including Harwood Capital, Waverton Investment Management, CCLA Investment Management, Alder Investment Management and CG Asset Management requisitioned an extraordinary general meeting to vote on the removal of its chairman.  The shareholders, who between them manage shares constituting around 17.3% of the issued share capital, wanted to see non-executive chairman Stephen Smith and non-executive director Steffan Francis removed from the business and replaced by Robert Naylor and Christopher Mills with immediate effect. In a stock market update last month, the company said its board fully acknowledged and shared the frustration raised by the requisitioning shareholders. It added that it understood shareholders’ discontent around the discount to NAV and a share price performance that did not reflect the strong operational performance and opportunity of the business. “The board notes that PRS REIT is not alone in trading at such a discount with the UK REIT and UK investment trust sectors all trading at meaningful average discounts, with circa 60% of UK REITs trading at a 20% discount or more as of 28 August 2024,” the statement said. Following the update, PRS REIT formed a sub-committee comprising the three independent non-executives not subject to the proposed votes – Geeta Nanda, Rod MacRae and Karima Fahmy – to lead the company’s response. PRS REIT said parties interested in bidding for the business should contact Nanda or non-executive director Robert Naylor. The company said it is not currently in discussions with, or in receipt of an approach from, any potential offeror. Image © Buffik/Pixabay