RDI share price rises sharply after Starwood acquisition plans
The share price of the UK-based RDI real estate investment trust (Reit) shot up 34.57 percent to close at R25.34 on the JSE on Friday after its board agreed to a cash offer from Starwood Fund, the 29.59 percent owner of RDI's shares, to buy the rest of the shares.
SOF-12 Cambridge Bidco, a new company owned by Starwood Funds, and RDI's directors said in a statement on Friday morning that they had reached agreement on the cash offer for the entire issued share capital of RDI.
Starwood managing director and head of Real Estate Europe Krysto Nikolic said they believed the acquisition was an attractive opportunity for investors to realise liquidity, and at a significant premium to the threemonth average price per RDI share.
A scheme of arrangement would see each RDI shareholder entitled to receive 121.35 pence (R25.48) in cash for each RDI share, representing a 33.1 percent premium to RDI's 91.2p closing on the London Stock Exchange on February 25, 2021. The offer price also represents a 39.2 percent premium to the three-month weighted average price of 87.2p a share. RDI said a revised valuation of its property as at February 28 would be published.
The acquisition valued all the shares of RDI at about £467.9 million (R9.8 billion), which was intended to be financed by equity to be invested by Starwood Funds.
Starwood Funds had maintained a strategic shareholding in RDI since July 2020, and it believed RDI was well managed with a high-quality real estate portfolio.
However, “Starwood also notes the persistent discount (to net asset value) on which RDI has traded over the last three years,” a statement said.
“Given RDI's scale and constrained access to capital, Starwood believes the next stage of RDI's evolution will be better suited to ownership under the control of Starwood,” it said.
All independent RDI directors, who hold some 0.10 percent of existing RDI shares, had undertaken to accept the offer.
Earlier this month RDI, which owns industrial, commercial and retail real estate in the UK and Germany, reached an agreement to sell West Orchards, Coventry for £4.85m, which would leave RDI with just one remaining retail asset in the UK, St George's Shopping Centre in Harrow, Greater London.