29th Nov 2005 07:00
Hansteen Holdings plc 29 November 2005 29 November 2005 DEALINGS COMMENCE IN HANSTEEN SHARES FOLLOWING £125 MILLION FLOAT Hansteen Holdings PLC ('Hansteen' or 'the Company'), the new property company formed by Morgan Jones and Ian Watson the founders and former directors of Ashtenne Holdings PLC ('Ashtenne'), announces that its shares have today been admitted to trading on AIM under the symbol HSTN. The Company exceeded expectations and raised £125 million against an initial target of £100 million in a placing which was three times oversubscribed. Ian Watson and Morgan Jones have invested £2.5 million each at the Placing Price, representing, in aggregate, 4% of the share capital. In addition, James Hambro, non-executive chairman and Stephen Gee, non-executive director have invested £200,000 each. Using the funds raised, Hansteen will focus initially on investing in industrial properties in Continental Europe, where it hopes to replicate the success Ashtenne achieved in the UK. It will also seek to profit from opportunistic acquisitions in other property sectors both in the UK and abroad. KBC Peel Hunt is nominated adviser and broker to the float. Commenting on the float Ian Watson, joint chief executive, said: 'To have exceeded our initial target and successfully raised £125 million, with the Placing 3 times oversubscribed, is a strong endorsement of our investment strategy and our track record of delivering shareholder value at Ashtenne. We now look forward to replicating that same success with Hansteen.' Morgan Jones, joint chief executive, added: 'Having raised £125 million we can now push ahead with our investment strategy. Investing principally in Continental Europe, we aim to acquire a number of assets to which we can add value through intensive management. We believe that over the next few years there should be a strong appetite from institutions who are willing to pay a premium for ready assembled portfolios of quality income producing properties.' PLACING STATISTICS Placing Price 100 pence Number of new Ordinary Shares to be placed on behalf of the Company 124.5 million Number of new Ordinary Shares subscribed prior to the Placing by certain Directors 500,000 Market capitalisation at the Placing Price £125 million Number of Ordinary Shares in issue on Admission 125 million Gross proceeds of the Placing and the Directors initial subscription available to the Company £125 million Net proceeds of the Placing and the Directors initial subscription available to the Company £123.6 million Business strategy Hansteen will focus on providing its investors with consistent, high and realised returns. This will be achieved through acquisitions of properties over time to create a high yielding property portfolio in Continental Europe combined with other more opportunistic and management intensive acquisitions which, whilst lower yielding, should provide greater capital growth potential. Hansteen will focus on Continental European industrial investments which, in the opinion of the Board, have higher yields, cheaper financing costs, and greater opportunity for value improvement through asset management than can be achieved currently in the UK. Hansteen also intends to invest in property in the UK outside the industrial sector, such as land which can be improved by planning gain. In the opinion of the Directors there has been a growing recognition by investors over the last few years of the attractive investment characteristics of industrial property in the UK. This has led to increased demand for the stock, higher prices and lower yields. The Directors believe that this process will be repeated in Continental Europe over the next few years and Hansteen, using the experience of the Directors gained at Ashtenne, can take advantage of this opportunity. Hansteen aims to exploit the following opportunities: - Positive Yield Gap and Gearing As was the case in the UK some time ago, the difference between the yield on industrial property in Continental Europe and the cost of both short and medium term debt is significant. This should allow Hansteen to leverage these properties with borrowings in Euros or other local currency, thereby improving the returns to shareholders. - Asset Management Activities Hansteen expects that some purchases will include vacant units bought at discounted prices where significant improvement in values can be achieved once let. Previous experience in both the UK and Europe shows that a hands-on approach to marketing can result in significant capital uplifts. - Portfolio Assembly The Directors believe that over the next few years institutional funds and other large investors will increasingly want to invest in the Continental European industrial property market and that prices will rise as a result. In addition such funds normally tend to invest in larger lot sizes and, as currently is the case in the UK, will pay a premium for a ready prepared portfolio. This should present opportunities to sell at a profit portfolios of industrial properties that will have been assembled by Hansteen. - Corporate Outsourcing A substantial proportion of industrial property in Continental Europe is owner occupied. Opportunities exist to acquire such industrial property through sale and leaseback transactions and similar arrangements. Although it is envisaged that Continental European industrial property will account for the majority of Hansteen's assets, Hansteen intends to be opportunistic in making some non-industrial purchases both in the UK and Europe where the Directors believe there is potential to realise significant profits. The Directors' experience includes complex transactions in land, residential property, retail, office and corporate acquisitions and therefore the Directors intend to take advantage of opportunities in these areas. Furthermore, the Directors believe that the UK property cycle will turn down over the next two to three years and that this will provide significant opportunities for well capitalised companies with experienced and opportunistic management teams. Again, the Directors' intention is to try to position Hansteen to take advantage of any such downturn once their restrictions in dealing in UK industrial property expire on 10 May 2007. For further information: Jeremy Carey/Richard Sunderland Ian Watson/Morgan Jones Tavistock Communications Hansteen Holdings PLC Tel: 020 7920 3150 Tel: 020 7016 8820 Notes to editors: About Ashtenne Ian Watson and Morgan Jones founded Ashtenne in 1989 and achieved net returns for its shareholders equivalent to an annual rate of return in excess of 20 per cent. per annum through the acquisition, intensive management and profitable resale of industrial property investments in the UK. In September 2004 Ashtenne returned £142 million to its shareholders and in March 2005 the directors of Ashtenne announced the sale of the company to Warner Estate Holdings plc, which resulted in a total return to the Ashtenne shareholders of approximately £169.7 million. At the time of the sale Ashtenne had assets under management of circa £750 million. Hansteen's Board will comprise: James Hambro, aged 56, Non-Executive Chairman. James Hambro spent 15 years working at Hambros Bank, mostly in corporate finance and international debt markets, and from 1982 to 1985 with the position of Executive Director responsible for international operations. In 1986 he became a founder shareholder of J O Hambro & Co and in 1988 a founder and joint Managing Director of J O Hambro Magan, the corporate finance boutique. Mr Hambro is Chairman of J O Hambro Capital Management Ltd and a Director of Primary Health Properties PLC and Singer & Friedlander AIM II VCT. He was non-executive Chairman of Ashtenne from 1997 until 16 May 2005. Morgan Jones, aged 48, Joint Chief Executive. Morgan Jones is a chartered accountant who qualified with Touche Ross & Co. in 1984 prior to becoming a management consultant in that firm's consultancy division. He joined Arlington Securities plc in 1986 as a development executive and in 1989 left to set up Ashtenne's business with Ian Watson. Mr Jones was Joint Chief Executive of Ashtenne from 1990 until its successful sale. Ian Watson, aged 45, Joint Chief Executive. Ian Watson qualified as a solicitor with Gouldens in 1984. In 1986 he became a development executive at Arlington Securities plc and left in 1989 to set up Ashtenne's business with Morgan Jones. He was Joint Chief Executive of Ashtenne from 1990 until its successful sale. Stephen Gee, aged 61, Non-Executive Director. A chartered accountant, Stephen Gee worked for several years in the financial sector, in both corporate finance and private equity. He was co-founder and a director of My Kinda Town Limited, the restaurant and bar group from 1977 to 1997. He is now chairman of Carluccio's Ltd, and was on the board of Ashtenne as a Non-Executive Director from 1990 until 16 May 2005. This document has been approved by KBC Peel Hunt Ltd of 111 Old Broad Street, London EC2N 1PH., for the purposes of section 21 of the Financial Services and Markets Act 2000. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSTN.L