Shareholders in the embattled property firm Home Reit have received a lifeline from distressed asset specialist Southey Capital, which has launched a bid valuing the company at £32 million.
The specialist investment firm is offering shareholders 4p per share, marking a stark decline from the company’s previous trading price of 38p before its shares were suspended nearly two years ago. The offer comes with a tight deadline, as shareholders must decide by the end of December.
Robert Southey, the firm’s chief executive, emphasised the straightforward nature of the offer, positioning it as a clear exit route for investors seeking certainty rather than waiting for management’s property disposal programme. The bid is capped at 29.9% of total shares to avoid triggering mandatory takeover requirements.
Home Reit’s current position reveals a troubled narrative. The company, which raised £850 million during its 2020 flotation, has cleared most of its debts except for £9 million in fees owed to Scottish Widows. Its remaining property portfolio, valued at £175 million, is slated for disposal over the coming months.
The company’s woes began following a damaging report from short-seller Viceroy Research in November 2022, which raised serious concerns about tenant relationships and property valuations. Despite initial denials, Home Reit later admitted to significant rent collection issues and substantial property devaluations.
The situation is further complicated by ongoing shareholder litigation alleging misleading information provision and an active Financial Conduct Authority investigation. Southey Capital’s offer presents a strategic opportunity for investors to crystallise tax losses before year-end, with the firm promising 24-hour transaction completion.
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