22nd Oct 2020 17:45
(Alliance News) - Shaftesbury PLC on Thursday said it completed the bookbuild process for the property company's capital raise as the coronavirus crisis hurts London's West End.
Shaftesbury, which is focused on London's west end tourist district, will issue a total of 74.3 million new shares at the offer price of 400 pence each, raising gross proceeds of GBP297 million. The stock closed down 16% at 420.00p, the worst performer in the FTSE 250 on Thursday.
The offer price represents a discount of 20% to the closing price of 498p on Wednesday.
Earlier Thursday, Shaftesbury said it intended to raise GBP307 million via the issue of new shares to ensure financial flexibility to navigate the "unprecedented" challenges created by the Covid-19 pandemic.
"Having assessed the group's financial position in light of the implications of the Covid-19 pandemic for its short- and medium-term prospects, the board has decided to issue equity by way of a firm placing, placing and open offer, and offer for subscription to help ensure the group maintains a strong financial base, is positioned to return to long-term growth as pandemic issues recede and, should conditions improve, is able to invest further in its exceptional portfolio," the FTSE 250-listed property company explained.
Separately, midcap peer Capital & Counties Properties PLC said it will participate in the Shaftesbury fundraise by providing GBP65 million.
Following the investment, London's Covent Garden market operator will own a 25% stake in Shaftesbury.
"The board believes that the investment is priced attractively in view of the long-term prospects and resilience of prime central London and is consistent with Capco's strategy to invest in attractive opportunities on or near the Covent Garden estate," Capital & Counties said.
Including holding in Shaftesbury shares, Capital & Counties currently has access to over GBP1 billion of liquidity.
Shares in Capital & Counties ended down 10% at 102.38 pence each in London and down 11% in Johannesburg at ZAR21.90.
By Tapan Panchal; [email protected]; Updated by Arvind Bhunjun; [email protected]
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