Ediston to sell portfolio to Realty Income for £201m

(Sharecast News) - London-listed property investment company Ediston confirmed on Friday that it is to sell its entire property portfolio to American real estate group Realty Income for £201m, after receiving multiple bids. Discussions with Realty Income about a potential sale, which comprises 11 operational, convenience-led retail warehouse assets located across the UK, had been first reported back in August.

"Having considered multiple options, and after detailed analysis, the board determined a sale of the property portfolio to Realty Income was the best means of maximising shareholder value," said chairman William Hill.

Once completed, Ediston estimates it will have net assets worth £152m, which it intends to return to shareholders through the voluntary liquidation of the company. This represents an 18% premium to the 61.2p share price in March before it announced a strategic review.

"If the disposal becomes unconditional, it is the intention of the board to seek shareholder approval for the voluntary liquidation of the company with a view to distributing substantially all of the company's net assets (which will comprise of cash) to shareholders as soon as reasonably practicable (with the target being by the end of this calendar year), unless an appropriate corporate opportunity is identified in the meantime which, in the view of the board (having consulted with key Shareholders), merits further consideration," Ediston said in a statement.

"The board would only recommend an alternative corporate opportunity if it reasonably believed that such opportunity would offer shareholders greater benefit than a simple return of capital."

The sale followed a strategic review of the business in response to several challenges Ediston was facing, which included: low levels of liquidity; a small market cap that limited the ability of larger investors to achieve their desired quantum of investment commitment; constraints on the ability to diversify across larger schemes in the retail warehouse market; and cost inefficiencies from operating a subscale company.