14th Jun 2016 08:47
LONDON (Alliance News) - Merchant banker and advisor James Stocks & Co on Tuesday said it had sent a letter to shareholders of Industrial Multi Property Trust PLC urging them to vote against the payment of fees to the trust's directors at the its annual general meeting later this month.
On June 1, James Stocks said it had made a cash offer to acquire Industrial Multi Property's property portfolio for GBP81.6 million, but the bid was rejected by the board of Industrial Multi Property.
Industrial Multi Property had said, in a separate statement, that the price indicated in the proposal was at a previous portfolio valuation, as published in its 2015 annual report, and is lower than its current published portfolio.
Additionally, the trust said it did not consider loan facility penalties or other costs of winding up, the trust said, which would have resulted in shareholders getting an amount at a substantial discount to its current net asset value.
On Tuesday, James Stocks said it had upped its offer to GBP82.1 million, in line with the most recent independent valuation, equivalent to GBP2.50 per share, but this offer was also rejected by the board, "despite Independent Multi Property suffering from a substantial discount to the net asset value".
"This discount reflects the performance of Industrial Multi Property, the high level of expensive borrowing and the failure to pay any dividend to shareholders since 2008," said James Stocks, noting that it believes the responsibility for this share price discount rests with the manager of Industrial Multi Property, Alpha Real Capital LLP.
James Stocks said Alpha "has benefited over the years from the receipt of management fees from Independent Multi Property, of approximately 5.0% of net assets in financial year 2015, whilst a related party has received the benefit of interest payments from Independent Multi Property".
"The board of Independent Multi Property have consistently failed to address this 'Alpha Price Discount' despite the strength of the UK property market over recent years, historically low interest rates, and the generous portfolio offer mentioned above," James Stocks added, and, in light of this, said the board should not receive fees for the financial year ended December 31.
James Stocks said it proposes to focus the board's attention on the merits of its cash offer, by voting against Resolution 2, the resolution regarding payment of directors, at the forthcoming annual general meeting of Industrial Multi Property, in its capacity as a shareholder. James Stocks said it urges other shareholders to do the same.
Shares in Industrial Multi Property were untraded on Tuesday, having last traded at 164.00 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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