Home REIT receives unsolicited tender offer

Home REIT shareholders have received an unsolicited tender offer from Southey Capital, a London-based capital markets firm, valuing the company at £32m. The board of Home REIT noted that it had not been contacted by Southey in respect of the announcement and would not comment on its validity. It also said Southey wishes to avoid a mandatory offer under the Takeover Code and therefore “aims to restrict acceptances to any legal and regulatory limit that may impose a requirement to make a mandatory offer”. The troubled investment firm, which specialises in accommodation for homeless people, paid off its loans from Scottish Widows after a failure to refinance its borrowing earlier this year added to mounting problems ahead of a wind-down. In a stock exchange update, the company said its last property auctions in October meant it could make a final repayment of £28.6m on 27 November. Additionally, Home REIT is also looking to sell a £175m portfolio of all its remaining assets in an effort to make timely returns of capital to shareholders. However, it added that its ability to make distributions to shareholders may be constrained while it faces potential shareholder litigation and an FCA investigation. “The company remains committed to seeking a restoration of the company’s shares to trading on the London Stock Exchange as soon as practicable upon publication of the half-year and annual accounts for the years ended 31 August 2023 and 31 August 2024,” Home REIT said in its response to the tender offer.  “The company intends to publish historical accounts for the year ended 31 August 2023 by the end of 2024, with the results for the year ended 31 August 2024 following in the first quarter of 2025. The financial information to be published by the company will provide shareholders with an updated property valuation and net asset value per share ahead of the expected restoration of trading in its shares.” It added: “The tender offer values the company at approximately £32m. The company’s remaining property portfolio of 850 assets is currently being marketed for sale, quoting in excess of £175m. In addition, the company has exchanged on properties for which gross proceeds of £17m are expected to be received with such funds, in addition to rental income, being available to fund the company’s operational expenses and fees in the medium term. including the payment of the additional £9m fee to the lender.”