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Capital & Counties making progress with Covent Garden demerger
26th Sep 2019 09:02
(Sharecast News) - Property investor Capital & Counties Properties said on Thursday that preparations for the demerger of its Covent Garden business have been "substantially" finalised and there has been progress with parties interested in buying its Earls Court business.
The group announced in July that it was planning to launch Covent Garden as a central London-focused real estate investment trust by way of a demerger.
As far as the Earls Court business is concerned, the company said there had been progress with interest parties in relation to due diligence and commercial terms and that certain relevant stakeholders have signalled that selected potential buyers would represent "acceptable counterparties".
"Indicative pricing continues to represent a range of discounts to the balance sheet value. In assessing interest from potential buyers, the board continues to focus on value and deliverability," it said.
"Accordingly the board has determined to continue to work with selected parties towards achieving a sale."
At 1500 BST, the shares were up 2% at 231.40p.
Broker Peel Hunt said it has long-believed a sale of Earls Court scheme would be the best outcome for shareholders "and at the current share price, there is effectively no value being attributed to the Earls Court scheme".
"A sale, even at a say 30% discount to book value (£560m) would lead to around 20% of upside to shareholders assuming Covent Garden trades on a similar net asset value discount to Shaftesbury," it said.
The group announced in July that it was planning to launch Covent Garden as a central London-focused real estate investment trust by way of a demerger.
As far as the Earls Court business is concerned, the company said there had been progress with interest parties in relation to due diligence and commercial terms and that certain relevant stakeholders have signalled that selected potential buyers would represent "acceptable counterparties".
"Indicative pricing continues to represent a range of discounts to the balance sheet value. In assessing interest from potential buyers, the board continues to focus on value and deliverability," it said.
"Accordingly the board has determined to continue to work with selected parties towards achieving a sale."
At 1500 BST, the shares were up 2% at 231.40p.
Broker Peel Hunt said it has long-believed a sale of Earls Court scheme would be the best outcome for shareholders "and at the current share price, there is effectively no value being attributed to the Earls Court scheme".
"A sale, even at a say 30% discount to book value (£560m) would lead to around 20% of upside to shareholders assuming Covent Garden trades on a similar net asset value discount to Shaftesbury," it said.