Balanced Commercial Property Trust Ltd - Strategic Review and Commencement of Formal Sale Process and Offer Period
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY FIRM OFFER MIGHT BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
For Immediate Release
("BCPT" or the "Company")
Strategic Review and Commencement of Formal Sale Process and Offer Period
The Board announces that it is undertaking a strategic review to consider the future of the Company and will further explore all of the various strategic options available to enhance value for shareholders. This includes a sale but the Company is not in discussions with any potential offeror at the time of this announcement.
Background
Since its launch, BCPT has pursued its investment objective of providing shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified
BCPT's portfolio has outperformed its benchmark index, the MSCI
The Company's investment manager (the "
Manager
"), with the support of the Company's independent board of directors (the "
Board
"), has been rebalancing the Company's portfolio through its successful and ongoing strategic disposal programme. This has reduced the portfolio's exposure to the underperforming office sector and has resulted in the Company's industrial portfolio, which has significant rental reversion, becoming the Company's largest sector weighting.
The Company will soon publish its annual report and audited financial statements for the year ended
As announced in
The Board believes that BCPT offers an attractive investment proposition: a diversified portfolio of high-quality assets, with an income-focussed, total return strategy supported by active and opportunistic management initiatives. The Company also offers the scale that is lacking in its smaller peers . However, the Board also recognises that the Company currently faces significant challenges with a difficult near-term economic and property market backdrop in a higher interest rate environment and the current dislocation in capital markets. Despite the Manager delivering steady portfolio performance over recent years, and the share price discount having narrowed, the Company's shares continue to trade at a material discount to their net asset value, which the Board does not believe reflects the current value of the underlying property assets, nor the longer-term prospects of the portfolio.
Strategic Review
The Company's articles of incorporation require that the Company hold a continuation vote in 2024 (the " Continuation Vote "). The Board has been carefully considering for some time, with its advisers, its strategic options to enhance value for its shareholders. As a result of these deliberations, the Board has determined that it would be in the best interests of shareholders as a whole that it formalise these deliberations into a strategic review process (the " Strategic Review "), which will take into account the views of all shareholders. The outcome of the Strategic Review is expected to be announced in Q3 2024, and thereafter the Continuation Vote would also be held.
As part of the Strategic Review, the Board will consider all options including, but not limited to, continuing the Company with further actions to narrow the discount; selling the Company's portfolio or subsidiaries (or portion thereof); returning capital to shareholders; changing the Company's investment strategy and/or management arrangements; commencing a managed wind down; selling the entire issued share capital of the Company (which would be conducted under the framework of a "formal sale process" in accordance with the City Code on Takeovers and Mergers (the " Code ")) or undertaking some other form of consolidation, combination, merger or comparable corporate action.
Further details relating to the formal sale process are set out in the section titled "Formal Sale Process and Code considerations" below.
Next Steps
The Board will undertake an open consultation process with shareholders and welcomes shareholders to send comments to the Chairman (chairmanBCPT@georgeson.com), in particular on their priorities for their investment in the Company and the options described above.
The Board looks forward to updating shareholders on the progress of the Strategic Review and will make further announcements in due course, noting that there is currently no certainty as to the outcome of the Strategic Review.
"Following a very challenging period for REITs during the Covid-19 pandemic and subsequent economic and geopolitical events, BCPT has been repositioning the portfolio away from less attractive sectors and realising cash to facilitate strategic options for the Company. We believe our monthly dividend offers an attractive level of regular income to shareholders.
We recognise, however, despite recent improvements in the Company's share rating, the share price remains at a material discount to the Company's net asset value. In line with our commitment to do the right thing for our shareholders as a whole, we have commenced this Strategic Review to determine the best way to enhance value for shareholders, after which the independent Board will determine the best way forward.
We welcome the views of all of our shareholders during this consultation period and will carefully take those opinions into consideration before announcing our next steps. The Company will continue to explore all options available to enhance value for its shareholders."
For further information, please contact:
Balanced Commercial Property Trust Limited via Buchanan Paul Marcuse (Chairman)Dickson Minto Advisers LLP (Strategic Review +44 (0)20 7649 6823 Joint Financial Adviser)Douglas Armstrong Barclays Bank PLC, acting through itsInvestment Bank (Joint Financial Adviser and +44 (0)20 7623 2323 Joint Corporate Broker)Dion Di Miceli /Bronson Albery BCPTstrategicreview@barclays.comWinterflood Securities Limited (Joint Corporate +44 (0)20 3100 0265 Broker)Joe Winkley /Neil Morgan /Innes Urquhart Buchanan +44 (0)20 7466 5000Helen Tarbet / Henry Wilson /George Beale BCPT@buchanancomms.co.uk
Formal Sale Process and Code considerations
Accordingly, the
The Company is not in discussions with, nor in receipt of any approach from, any potential offeror at the time of this announcement.
Parties interested in submitting an expression of interest or any other proposal relating to any strategic option for the Company should contact the Company's joint financial adviser, Barclays Bank PLC
, acting through its
The BCPT Board reserves the right to alter any aspect of the process as outlined above or to terminate the process at any time and, in such cases, will make an announcement as appropriate. The BCPT Board also reserves the right to reject any approach or terminate discussions with any interested party at any time.
Shareholders are advised that this announcement does not represent a firm intention by any party to make an offer under Rule 2.7 of the Code and there can be no certainty that any offers will be made as a result of the formal sale process, that any sale or other transaction will be concluded, nor as to the terms on which any offer or other transaction may be made.
Other Notices
Barclays, which is authorised by the
In accordance with the
Code, normal
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.
The release, publication or distribution of this announcement in jurisdictions outside the
Disclosure Requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the persons interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the
Publication on a website
In accordance with Rule 26.1 of the Code, a copy of this announcement will, subject to certain restrictions relating to persons resident in restricted jurisdictions, be available on the Company's website at
https://www.balancedcommercialproperty.co.uk
no later than 12 noon (
Rule 2.9 of the Code
In accordance with Rule 2.9 of the Code, the Company confirms that as at the close of business on
MAR
This announcement is released by the Company and the information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Article 7 of the
LEI Number
The Company's LEI Number is 213800A2B1H4ULF3K397.