21st Mar 2019 18:01
LONDON (Alliance News) - The Local Shopping REIT PLC said Thursday it disputes Thalassa Holdings Ltd announcement on Wednesday claiming Thalassa's offer represents a "deliverable and certain exit" for Local Shopping REIT shareholders.
Thalassa is offering 14.64 pence in cash and 0.26 Thalassa consideration shares for every share in the real estate investment trust that it does not already own, equivalent to around 35.7p in total.
Shares in Local Shopping REIT closed 0.7% lower at 28.70 pence, while Thalassa shares closed down 1.2% at 80.00 pence on Thursday.
LSR said the majority of Thalassa's offer for LSR is in Thalassa shares. As of last Thursday, Thalassa owned a 26% stake in LSR.
LSR, therefore, said Thalassa's offer "does not provide the full cash exit which LSR shareholders desire" and which 99.9% voted in favour of in a general meeting in December.
Including Thalassa's vote, however, only 62% of shareholders voted in favour of winding up the LSR, falling short of the 75% majority required.
LSR said it "remains committed" to achieving the outcome shareholders, that are not Thalassa, voted for.
On April 5, Local Shopping REIT is holding a general meeting where it will propose a resolution to liquidate the company, and has urged shareholders to accept the resolution and ignore Thalassa's offer, calling it "an opportunistic attempt to take control of shareholders' money".
On Wednesday, Thalassa characterised LSR's plan for an orderly wind-up as lacking substance, having no commitment to timing or value, and only adding to the costs borne by the trust's shareholders.
LSR replied Thursday saying "the content of Thalassa's statement is, for the most part, wholly irrelevant to the simple decision before LSR shareholders."
The real estate investment trust said it continued to "strongly" advise shareholders to seek a full cash exit by "ignoring" Thalassa's offer and voting in favour of the resolution to be held April 5.
LSR added: "The board further notes that, whilst making much of its share buy-back programme, Thalassa has given no guarantee that this will provide an exit for LSR shareholders - or that, should it acquire control of LSR, that it would have sufficient cash remaining to enable it to do so.
"Furthermore, the board continues to believe that Thalassa's ordinary shares, comprising the majority of the offer are unacceptably risky."
LSR believes Thalassa's shares are risky due to its "poor record of investment returns, non-existent income returns and only one of its 7 investments has delivered a material profit".
LSR also commented on Thalassa's "unfocused investment strategy" and its corporate governance "falling short" of UK guidelines.
"By Thalassa's own admission, there can be no guarantee that it will be able to maintain its standard listing if its offer is successful, which could mean that the Thalassa ordinary shares are not capable of being traded on any exchange or market for quoted for listed securities," added LSR.
LSR said had the voluntary liquidation gone ahead, the initial distribution to shareholders would have been GBP22 million, equating to 26.7p per share. LSR said it now has about GBP22.8 million in cash, equating to 27.6p per share.
LSR expects to incur costs of between GBP435,000 and GBP520,000 for the Thalassa offer.
The company said it is in the process of selling its remaining portfolio. It has agreed to exchange contracts for two properties, netting GBP400,000, and has 12 assets remaining. LSR said it is concluding terms of agreement for six of the remaining 12.
Related Shares:
Thalassa (di)LSR.L