RDI REIT shares jump on takeover approach from Cromwell – RDI REIT’s (RDI), shares are up 15.1% at the time of writing, after it confirmed it had received an unsolicited approach from Cromwell Property Group (CMW). In an announcement responding to media speculation surrounding a potential offer, RDI says there can be no certainty that any offer will actually be made, or what the terms of any such offer might look like.
Cromwell Property Group is a global real estate investment manager based in Australia. It says that it is looking to expand into the UK and Europe, as it continues to grow its international business, particularly with the Australian property market in a downturn. [QD comment: Probably aided by cheap sterling and negative sentiment surrounding the UK depressing the value of UK stocks]
Under the rules of the takeover code, Cromwell now has until 5.00pm on 23 April 2019 to announce whether or not it intends to make a firm offer for RDI REIT (this being 28 days after the date on which the press speculation first occurred).
RDI has been reducing exposure to shopping centres
RDI has been taking measures to strengthen itself with the ultimate aim of positioning itself as the UK’s leading income-focused REIT. A key part of the strategy has been to reduce its exposure to shopping centres, with retail progressively falling from over nearly 60% of the company’s portfolio to less than half over recent years.
Reducing its LTV ratio is a key strategic priority too. We looked at its portfolio recycling activity and balance sheet headlines in an earlier note on its 2017/2018 results (https://quoteddata.com/2018/10/rdi-reit-cuts-cost-ratio-to-boost-earnings/).
RDI: RDI REIT shares jump on takeover approach from Cromwell