TIDMRDI
RNS Number : 4376L
Redefine International PLC
19 July 2017
REDEFINE INTERNATIONAL P.L.C.
("Redefine International" or the "Company")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00B8BV8G91
PROPOSED ACQUISITION OF A FURTHER STAKE IN INTERNATIONAL HOTEL
PROPERTIES LIMITED
Redefine International, the FTSE 250 income-focused UK REIT,
announces that it has submitted a proposal to International Hotel
Properties Limited ("IHL") to increase its shareholding in IHL from
17.24% to 50%. IHL is listed on the Euro MTF market of the
Luxembourg Stock Exchange ("LuxSE") and on the AltX of the JSE.
Redefine International intends to increase its current
shareholding in IHL to 50% by acquiring 18,343,166 IHL shares from
the minority shareholders by way of a scheme of arrangement under
the BVI Business Companies Act, 2004. Consideration for the IHL
shares will be made through the issue of 2.5 Redefine International
shares for every 1 IHL share held, for which an additional
45,857,915 new Redefine International shares will be allotted. On
implementation of the scheme, the listing of IHL's shares on both
the JSE and LuxSE would be terminated (the "Proposed Transaction").
Following the transaction, hotels are expected to comprise
approximately 19% of the Company's gross assets, up from 16% at 28
February 2017. It is anticipated that material savings will be
generated through the integration of the hotel assets into the
Company's existing hotel portfolio and REIT status.
The IHL portfolio comprises nine good quality UK hotels valued
at GBP104.35 million and which complement Redefine International's
standing hotels portfolio. Four of the hotels, comprising 27.7% of
the portfolio, are let on long term leases to Travelodge with an
effective average unexpired lease term of over 20 years. The
Travelodge portfolio reflects a net initial yield of 5.3% and
benefits from five yearly RPI escalations providing attractive
rental growth prospects in a higher inflationary environment.
The remaining five hotels, valued at GBP75.4 million, will be
managed by the Company's associate RedefineBDL Hotel Group. Four of
the hotels are franchised to Holiday Inn Express and one to Hampton
by Hilton. The five hotels to be managed by RedefineBDL have a
strong trading record and provide exposure to the Hampton by Hilton
at Gatwick airport which is integrally linked to the airport
terminal building and the Holiday Inn Express, Edinburgh which has
shown strong growth since acquisition. The five franchised hotels
are anticipated to deliver an effective net initial yield of over
7.5%. The portfolio is currently financed at 50.0% loan to value at
an all-in cost of debt of 3.32%.
The Proposed Transaction, if it proceeds, will include the
acquisition of 2,410,315 IHL shares from Marc Wainer and his
associates, 28,316 IHL shares from Mike Watters, both of whom are
directors of Redefine International, and the acquisition (post
implementation of the Proposed Transaction and outside of the
scheme of arrangement) of a further 1,913,479 IHL shares from
Redefine Properties Limited, a substantial shareholder of the
Company (the "Related Parties"). The acquisition of the IHL shares
from the Related Parties will be on the same terms as those for all
other minority shareholders.
Redefine International will only proceed with the Proposed
Transaction if it is satisfied that it has sufficient support from
the minority IHL shareholders, is in compliance with Chapter 11 of
the UK Listing Rules and has final ratification by the Redefine
International Board.
Mike Watters, CEO of Redefine International, commented:
"This is an opportunistic acquisition which increases the
Company's ownership in a high-quality and high yielding hotel
portfolio to 50% and increases our exposure to the strong UK hotel
market, whilst increasing our exposure to RPI-linked leases."
For further information please refer to the IHL cautionary
announcement, released today on the JSE and LuxSE, which can be
found at http://www.internationalhotelproperties.com/news/
For further information:
Redefine International P.L.C.
Mike Watters, Stephen Oakenfull Tel: +44 (0) 20
7811 0100
FTI Consulting
UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Tel: +44 (0) 20
Ellie Sweeney 3727 1000
Instinctif Partners
SA Public Relations Adviser
Frederic Cornet, Lizelle du Tel: +27 (0) 11
Toit 447 3030
Java Capital
JSE Sponsor Tel: +27 (0) 11
722 3050
Note to editors:
About Redefine International
Redefine International is an income focused FTSE 250 UK Real
Estate Investment Trust (UK-REIT) committed to delivering superior
distributions to its shareholders throughout the property
cycle.
The Company's income driven total returns are underpinned by a
diversified portfolio, together with an efficient capital
structure. The continued transformation of both the corporate
structure and asset base offer a solid foundation to drive further
value. At 28 February 2017, the diversified portfolio,
independently valued at GBP1.5 billion, is focused in Europe's two
strongest economies, being the United Kingdom and Germany. The
portfolio is weighted towards well located properties across a
range of sectors, including retail, offices, distribution and
hotels, which benefit from strong demand and from which they can
capture income and value growth by attracting high calibre
occupiers on long leases. The Company's investment philosophy is to
effectively allocate recycled capital from mature assets into
sectors and locations with strong occupier fundamentals and
individual assets with realisable upside.
The secure income stream is supported by a diversified portfolio
and tenant base, with a WAULT of 7.5 years complemented by an
average debt maturity of 6.8 years of which over 95% of interest
costs are either fixed or capped. The Company is focused on all
aspects impacting shareholder distributions and boasts one of the
lowest cost ratios in the industry whilst continuously driving
lower cost of debt.
Redefine International holds a primary listing on the London
Stock Exchange and a secondary listing on the Johannesburg Stock
Exchange and is included within the FTSE 250, EPRA and GPR
indices.
For more information on Redefine International, please refer to
the Company's website www.redefineinternational.com.
About International Hotel Properties Limited
IHL is a hotel and leisure focused property Investment Company
that owns nine hotels in the UK. The Company's shares are currently
listed on the Euro MTF market of the Luxembourg Stock Exchange,
which constitutes its primary listing, and on the AltX of the JSE
which constitutes its secondary listing.
For more information on IHL, please refer to the Company's
website http://www.internationalhotelproperties.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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