Response to Possible Offer

Ground Rents Income Fund PLC

08 January 2025

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (DIRECTLY OR INDIRECTLY) IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS IS AN ANNOUNCEMENT RELATING TO A POSSIBLE OFFER FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY FIRM OFFER MIGHT BE MADE.

FOR IMMEDIATE RELEASE

8 January 2025

Ground Rents Income Fund plc ("GRIO", or the 'Company')

RESPONSE TO POSSIBLE OFFER ANNOUNCEMENT

Ground Rents Income Fund plc notes the announcement released today by Victoria Property Holdings Limited ("Victoria Property"), part of Martin Property Group, in accordance with Rule 2.4 of the City Code on Takeovers and Mergers (the "Code") and confirms that it has recently received three unsolicited approaches from Victoria Property, each containing a non-binding indicative cash offer by Victoria Property for the entire issued and to be issued share capital of GRIO. The most recent of the three non-binding indicative offers was at the same price of 34 pence per GRIO share as the possible offer announced today (the "Possible Offer").

The Board of Directors of GRIO (the "Board") confirms that it unanimously rejected all three previous approaches, on the basis that each of the three non-binding indicative offer prices wholly undervalued the Company. The Possible Offer price of 34 pence per GRIO share announced on 8 January 2025 is at a significant discount of 50.9 per cent to the 31 March 2024 NAV per share of 69.2 pence.  As such, the Board continues to believe that the Possible Offer price wholly undervalues the Company.

The Board has discussed the Possible Offer with its advisers and is receiving feedback from its shareholders. As such, shareholders are urged to take no action at this time.

A further announcement will be made if and when appropriate. There can be no certainty that a formal offer will be made, nor as to its terms.

The Board expects to announce the NAV as at 30 September 2024 with the audited year end results shortly.

As previously announced, GRIO and its advisers continue to pursue the strategy of realising the Company's assets in a controlled, orderly and timely manner. The Company will remain focused on delivering best-in-class residential asset management including fairness, transparency, and affordability for leaseholders. The Board further notes that at the General Meeting of the Company held on 18 November 2024 shareholders representing approximately 92% of voting rights supported the strategy to deliver the Company's Investment Policy.

In accordance with Rule 2.6(a) of the Code, Victoria Property is required, by not later than 5.00 p.m. (UK time) on 5 February 2025, either to announce a firm intention to make an offer for GRIO in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for GRIO, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. In accordance with Rule 2.6(c) of the Code, the 5 February 2025 deadline may be extended at the request of the GRIO Board and with the consent of the Panel on Takeovers and Mergers (the "Panel").

As a consequence of Victoria Property's announcement, an "Offer Period" commenced in respect of the Company in accordance with the Code. The attention of shareholders is drawn to the disclosure requirements of Rule 8 of the Code, which are summarised below.

This announcement has been made by GRIO without the agreement or approval of Victoria Property.

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Enquiries:

Schroder Real Estate Investment Management Limited

Matthew Riley / Chris Leek

020 7658 6000

Singer Capital Markets (Broker)

James Maxwell / Alaina Wong / Sam Butcher (Investment Banking)

Sam Greatrex (Sales)

020 7496 3000

Appleby Securities (Channel Islands) Limited (Sponsor)

Andrew Weaver / Michael Davies

01534 888 777

FTI Consulting

Richard Gotla / Oliver Parsons

0203 727 1000

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Disclosure requirements of the Code:

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of GRIO or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) GRIO and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of GRIO or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of GRIO or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of GRIO or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) GRIO and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of GRIO or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by GRIO and by any offeror and Dealing Disclosures must also be made by GRIO, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 disclosure

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available (subject to certain restrictions relating to persons in restricted jurisdictions) at www.schroders.com/en-gb/uk/individual/funds-and-strategies/investment-trusts/ground-rents-income-fund-plc/, by no later than 12 noon (London time) on the business day immediately following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Code, GRIO confirms that, as of close of business on 7 January 2025 (being the last business day prior to the release of this announcement), it had in issue 95,667,627 ordinary shares of 50 pence each ("Ordinary Shares"). The International Securities Identification Number for the Ordinary Shares is GB00B715WG26. There are no Ordinary Shares held in treasury.

Market abuse regulation

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

The person responsible for arranging the release of this announcement on behalf of the Company is Matthew Riley, a member of Company Secretarial team of the Company.

 

END