LONDON, UK: Wellness Unity Limited (CK Bidco) has agreed to takeover Civitas Social Housing Plc for 80 pence per share translating the offer value of the entire issued share capital of Civitas (excluding treasury shares) at approximately £485 million.
The cash consideration represents a premium of approximately 44.4 per cent to the closing price of 55.4 pence per Civitas share on 5 May 2023 (being the last business day prior to the date of this announcement).
The cash consideration payable to Civitas shareholders under the terms of the offer will be funded from the existing cash resources of the CKA Group.
Michael Wrobel, Non-executive Chair of Civitas, said: “Since our IPO in 2016, the Civitas portfolio has delivered consistently on its financial and social impact objectives.
Whilst the Civitas Board believes that the offer undervalues the long-term prospects of Civitas as expressed by net asset value, we also recognise that Civitas, and its sector as a whole, faces a number of challenges in sentiment which the public markets are unlikely to overcome in the short to medium term.
The offer provides liquidity to shareholders with the opportunity to exit in full and in cash at a significant premium to the current share price, in a time of macroeconomic uncertainty.
Moreover, CKA, as a current investor in the social housing sector, has a detailed understanding of the attractive fundamentals of the real estate and the expertise of the management team. The Civitas Board therefore considers the terms of the Offer to be fair and reasonable and we have recommended it to our shareholders.”
Civitas is a real estate investment trust founded in 2016 when it successfully listed as a closed-ended investment company on the premium segment of the London Stock Exchange’s Main Market with an investment objective focused on investing in a diversified portfolio of social housing in the United Kingdom.
Wellness Unity Limited (CK Bidco) is a wholly-owned indirect subsidiary of CK Asset Holdings Limited.
CK Bidco is a newly incorporated wholly-owned indirect subsidiary of CKA, which is a Hong Kong listed leading multinational corporation and has diverse capabilities with activities encompassing property development and investment, hotel and serviced suite operation, property and project management, pub operation, investment in infrastructure and utility asset operation. In particular, CKA already has strong experience in the UK specialist social housing sector with existing ownership of a substantial property portfolio.
CKA believes that Civitas’ social impact and earnings profile align with its investment criteria, making it a suitable strategic fit. In light of recent turbulent financing markets caused by macroeconomic uncertainties, CKA’s strong financial standing is expected to benefit Civitas in sourcing future financing commitments.
CKA intends to retain Civitas Investment Management Limited as the investment adviser to ensure uninterrupted management of Civitas’ portfolio. There will be no disruption to tenants, and CKA will prioritize maintaining relationships with regulated providers, care providers, and the Regulator of Social Housing.
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