Starwood European Real Estate Finance (SWEF) has announced that it has appointed Jefferies International Limited to administer its share buyback programme. Details are as follows:
- As SWEF’s agent, Jeffries is permitted to buy back shares in the market independently of, and without influence by SWEF.
- This is provided that the maximum price payable for a share (on the Main Market of the London Stock Exchange) is an amount equal to the higher of:
- 105 per cent. of the average market value of the Company’s Shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which such share is contracted to be purchased;
- the higher of the price of the last independent trade and the highest current bid stipulated by Article 3(2) of the Commission Delegated Regulation (EU/2016/1052).
- The programme will commence with effect from today and will, unless extended or terminated earlier, end on 31 December 2020.
- The Company will announce any market repurchase of Shares no later than 7.30 a.m. on the business day following the calendar day on which the repurchase occurred.
- To the extent permitted by law, Shares repurchased will be held in treasury.
- Th company says that share repurchases on any trading day may represent a significant proportion of the daily trading volume in the Shares on the Exchange (and could exceed the 25% limit of the average daily trading volume of the preceding 20 business days as referred to in the Commission Delegated Regulation (EU) No. 2016/1052 on buy-back programmes).
- There can be no certainty that SWEF will actually acquire any shares under the programme.
About Starwood European Real Estate Finance
Starwood European Real Estate Finance is a Guernsey domiciled closed-end investment company that will originate, execute and service a diversified portfolio of commercial real estate debt investments in liquid markets (office, retail, logistics, light industrial, hospitality and residential) in the UK and Continental Europe.
[QD Comment: certain real estate sectors have been under pressure, as have the debt funds that lend to them (see our recent commentary on the travails of UK mortgages. which has found itself in the sights of M&G Investment Management) and SWEF finds itself at a marked discount to NAV. Given the nature of the relationships that lenders have with their borrowers, it seems reasonable that SWEF’s board and management could regularly find themselves in the position of material information that would effectively put them inside on SWEF’s stock and unable to authorise repurchase transactions. This approach is an elegant solution to the problem as it explicitly removes the board and manager by making repurchase them entirely independent of them. In the absence of such a mechanism, SWEF could find itself trade at a significant discount to NAV, for a prolonged period, before the board could intervene. By outsourcing the repurchase decision to Jeffries, the uncertainty around the ability to repurchase is removed, which is ultimately good for shareholders.]