Invista board picks Townsend-funded Palmer Capital bid over Internos’s
A Townsend Group-backed offer to buy the rump of Invista REIM’s assets has trumped a bid by Internos Real Investors.
Boutique UK fund manager Palmer Capital made a 14.75p- per-share cash offer for Invista REIM, valuing it at £40m.
Invista’s board recommended the offer and said the plan is for Invista’s remaining fund assets to be owned by clients of US pension fund adviser Townsend, which are funding the bid.
Invista’s directors and 78.9% shareholders Lloyds and The Wellcome Trust have supported the bid in place of Internos’s 12.5p-per-share offer.
The majority of the funding for Internos’s £33.6m bid would have come from cash on Invista’s balance sheet, in the form of loans. US hedge fund and minority shareholder Weiss Asset Management said this bid was “completely unacceptable”.
Invista’s main assets are in the two remaining funds that it manages. Invista clients own half of Invista Real Estate Opportunity Fund, which has one Swiss and six UK investments; Achmea owns the other 50% after buying HBOS firm Friends First.
Invista clients and Achmea also own 50% each of Invista Real Estate International Fund, which in turn owns 50% of BOSS, the Big Orange self storage business with five assets in Hong Kong and Singapore.
US investor Oak Hill, which specialises in self storage, owns the other 50% of BOSS. As of December 2011, Invista had £65m of net assets, its fund interests accounting for £52m.
Palmer Capital, headed by Alex Price and Ray Palmer, approached The Townsend Group. Palmer has a newly-opened Hong Kong office and a UK opportunity fund business and would takeover the Invista REIM business, staff and fund management contracts.
The bid is structured as a court-sanctioned scheme of arrangement, which means the bidders do not have to go out to buy shares in the market.
The bidders would also inherit Invista’s outstanding litigation against majority shareholder Lloyds, which it alleges failed to pay fees relating to early termination of management contracts transferred to Scottish Widows. Lloyds has issued a £4.2m counter-claim.
Hawkpoint is advising Invista.