Helical rebuffs undervalued unsolicited approaches

Helical has confirmed recent unsolicited takeover approaches following media speculation and said the proposals undervalued the UK commercial property firm.

Over the weekend, the Sunday Times reported that Helical had received a £500m (€562m) takeover bid from an unnamed US investor.

”We can confirm that the company has in the recent past been in receipt of more than one unsolicited approach from different parties,” Helical said today.

The London-listed firm said all proposals made have been at a ”significant discount to the company’s European Public Real Estate Association (EPRA) net asset value (NAV) and therefore in the board’s view did not reflect the fair value of the company”.

Helical said it always acts in the best interests of its shareholders and therefore has been “open to engaging with these potential offerors, including allowing due diligence to be conducted”.

Substantial shareholders include current chairman Mike Slade, Baillie Gifford, Janus Henderson Investors, Merian Global Investors and BlackRock.

Others investors, including M&G Investment Management, Dimensional Fund Advisors, Aviva Investors, Norges Bank Investment Management, Schroder Investment Management and Aberdeen Standard Investments also hold more than a 3% stake in the company.

Helical shares in London at midday, traded 10.7% higher at 393p, valuing the London and Manchester property company at £459.9m.

In a research report, analysts at Peel Hunt said the reported “£500m takeover bid”, if accurate, would reflect around 413p a share and an 11% discount to the March triple net asset value of 465p a share and a 14% discount to the EPRA NAV of 482p.

According to Peel Hunt, the “market has been undervaluing Helical for some time now and this third party interest – while perhaps not at an acceptable level – reflects this”.

In June last year, Helical completed the sale of its remaining non-core assets to transform from a multi-sector, geographically spread UK property company, into an office-led investment and development company focused purely on London and Manchester.

As at the fiscal 2019 year ending 31 March, Helical’s real estate portfolio, including its share of assets held in joint ventures, reduced to £876.4m from £909.6m the same period earlier, as gains from its annual revaluation and capital expenditure on the investment portfolio and development programme were offset by the sale of assets.

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