FINANCE: AIM-listed Palace Capital has entered into a conditional agreement to buy Weybridge-based Property Investment Holdings for £32m.
Palace Capital aims to raise around £20m through the placing of 6.5m shares priced at 310p each to fund this and other purchases.
PIH owns 17 commercial properties in the South East, which generate a gross annual income of £2.5m and show a net initial yield of 7.35%.
As part of the deal, which would see the takeover the entire issued share capital of PIH, Palace Capital will handle the repayment of £27.4m of PIH’s outstanding bank debt owed to Lloyds and RBS. Palace Capital announced today that it has secured a £16m facility from NatWest.
This will be Palace Capital’s second major portfolio acquisition, following the purchase of the £42.4m Sequel Portfolio from Quintain in October last year at a 13.2% net initial yield. The 24-strong portfolio represented the last of Quintain’s regional assets and was financed by a £23.5m share placing.
sophia.furber@estatesgazette.com
