14th Jun 2016 10:58
LONDON (Alliance News) - Industrial Multi Property Trust PLC on Tuesday urged shareholders to take no action regarding a letter sent to them by merchant banker and advisor James Stocks & Co which recommended a vote against the payment of fees to the trust's directors at its annual general meeting later this month.
Industrial Multi Property said shareholders are recommended to vote in favour of all resolutions at its forthcoming AGM on June 29.
This follows a statement earlier on Tuesday in which James Stocks said it had raised its offer for the property portfolio of Industrial Multi Property to GBP82.1 million, in line with the most recent independent valuation. This would be equivalent to GBP2.50 per share, James Stocks said, but this offer was 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.
This followed a previous cash offer of GBP81.6 million by James Stocks earlier this month for Industrial Multi Property's property portfolio, which was rejected by the board.
Industrial Multi Property had said at the time 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 afternoon, the company reiterated its comments that "the unsolicited, conditional proposal did not take into account current loan facility repayment penalties or other costs of winding up".
"Contrary to the claims made by James Stocks, the board has communicated a very clear plan to address the discount to net asset value at which the company's shares trade," Industrial Multi Property said, pointing to a targeted refinancing of the portfolio in the fourth quarter of this year.
Industrial Multi Property said it has also undertaken that "if such a refinancing is not possible it will consider alternative ways to improve shareholder value at that time including a managed winding up of the company".
"Now is clearly not the time to consider the sale of the portfolio to the first party who makes an opportunistic, unsolicited and conditional proposal," Industrial Multi Property added.
Shares in Industrial Multi Property were up 2.9% at 175.00 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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