US group Apollo Global Management is set to take control of a UK-focused logistics REIT with a property portfolio valued at £335 mln.
Apollo, on behalf of its European Principal Finance Fund III and European Principal Finance Fund III and Apollo European Principal Finance Fund III, is offering £152 mln (€170 mln) in total for the entire share capital of Atlantic Leaf Properties in a deal which has been unanimously recommended by the company’s independent directors.
The company’s board has also irrevocably undertaken to tender its shares as well as Vukile Property Fund – Atlantic’s largest shareholder – with regards to its 34.9% shareholding.
Under the deal, which is expected to complete in August, the company would be taken private.
Atlantic’s CEO Paul Leaf-Wright says that despite facing various challenges in the UK real estate market, the company has consistently generated attractive dividend returns by acquiring well tenanted, strategically located assets that have offered rental growth from a relatively defensive asset base.
However, the challenging environment in both South Africa and the UK has seen continued market uncertainty, particularly surrounding Brexit and more recently the Covid-19 pandemic.
‘Limited support for capital raises and reduced liquidity has put pressure on Atlantic’s share price, which has, in turn, made it uneconomic to raise new capital to fund portfolio growth.’
‘Share prices of listed property companies have fallen considerably and the wider property sector is expected to face continued headwinds in the near future. Vukile also stated their intention to dispose of their stake in Atlantic, adding further pressure on our share price,’ Leaf-Wright said.
