Blackstone makes 542p a share offer for St Modwen
By Michele Maatouk
Date: Friday 07 May 2021
(Sharecast News) - St Modwen Properties said on Friday that US private equity firm Blackstone has made a possible cash offer for the group at 542p a share.
The offer represents a 21.1% premium to Modwen's closing share price on Thursday. It follows a series of unsolicited proposals received from the Blackstone Funds.
St Modwen said its board of directors has indicated to Blackstone that the offer "is at a value the board would be willing to recommend unanimously" once it becomes firm, after due diligence has been completed.
"St Modwen and Blackstone are working closely together to complete Blackstone's confirmatory due diligence as soon as practicable," it said, adding that Blackstone has confirmed that the possible offer is not subject to any financing pre-condition.
"A further announcement will be made as appropriate," St Modwen said.
Blackstone now has until 4 June to either announce a firm intention to make an offer for the company or walk away.
At 0820 BST, the shares were up 19.3% at 534p.
Broker Liberum said: "We are not surprised that Blackstone sees value here. St Modwen is accelerating the speed of delivery of space in its two main business units Housebuilding and Industrial & Logistics. There is a strong pipeline to accelerate returns on capital and improve total returns on NAV to 9-10% over the medium term.
"We think possible positive read-across in the sector will be to Harworth foremost, who also focus on development in the residential and industrial sectors. Harworth's shares yesterday trading at a 23% discount to NAV versus the possible offer for St Modwen today at effectively a circa 20% premium."
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