Numis slams property deal
NUMIS SECURITIES has turned the heat up in the £1.6bn merger wrangle between two of the London market’s largest property trusts, describing the tie-up as “not compelling”.
The boards of F&C Property Trust (FCPT) and UK Commercial Property Trust (UKCPT) have recommended joining forces, with the blessing of their largest shareholders, but minority investors hold the crucial votes as the merger is classed as a related parties transaction. The deal would be structured as a takeover of FCPT by UKCPT. FCPT shareholders would be offered a cash exit at 91p, a 1p discount to the share price.
Some minority investors are unhappy because the arrangement would incur extra costs and FCPT’s actively managed approach would be mashed together with UKCPT’s “index-aware” style. The battle is building to a climax at two extraordinary general meetings on 9 August.
After several analysts voiced negative views, Numis this week said F&C Asset Management, which runs FCPT at arm’s length from the board, had “put up a well-reasoned defence against the merger”.
Numis said FCPT’s portfolio, which consists of 32 properties including the St Christopher’s Place shopping centre on Bond Street, was already well diversified. The stockbroker added investors would potentially receive more competitive fees by sticking with F&C Asset Management.
Numis said in a note: “The arguments in favour of the merger are not compelling and the key beneficiary is likely to be Ignis AM [which runs UKCPT] at the expense of F&C.”
Ignis said yesterday it was confident the majority of independent shareholders would vote for the deal.