Lone Star has this afternoon extended its offer to shareholders of Quintain Estates and Development for a further two weeks, after the private equity firm’s offer received more than 53% approval.
No other bidders have emerged to rival Lone Star’s offer, CoStar News understands.
As at 1pm UK time this lunchtime, 53.31% of existing shareholders voted to accept Lone Star’s offer, through an investment vehicle called Bailey Acquisitions Limited, priced at 131 pence per share offer.
The offer extension allows remaining shareholders further time to deliberate whether or not to accept the terms or not.
Lone Star’s offering document to Quintain shareholders, which was which was published and sent to Quintain shareholders on 11 August, states that the private equity firm’s offer would go unconditional at 90% approval.
However, Lone Star retains the option to declare the offer “unconditional” at below the 90% approval threshold, under the terms of the offering document. In total, Lone Star has 60 days from the date the offering document was received by shareholders to progress the acquisition to “guaranteed” status.
The higher the proportion of shareholders which approve the acquisition prior to Lone Star declaring its offering unconditional, the stronger its position will be in persuading the minority of shareholders who do not wish to sell.
The two-extension, for which all terms remain unchanged, closes 1pm UK time Thursday 23 September.
In a statement to the Stock Exchange, Quintain Estates’ Board said “shareholders who have not yet accepted the offer are urged to do so as soon as possible”.
The shareholders backing the Lone Star acquisition represent 280,663,474 of Quinatin’s total 526,394,699 shares.
Lone Star’s offer comprises £700m to Quintain shareholders and directors and the inheritance of £204m debt. Wells Fargo will finance the acquisition with a £425m term facility, which will repay certain inherited debt likely including the £115m corporate bond due in 2020.
The £904m value on Quintain Estates reflects a 8.3% premium to its £834.6m booked valuation at the end of March 2013. The 131 pence per share offer is a 22.4% premium to yesterday’s closing price and 7.4% premium to Quintain’s 122p EPRA NAV, as at 31 March.
An analysis of Lone Star’s proposed acquisition of Quintain by CoStar News can be viewed here.