The board of Sigma Capital Group, the private rented sector (PRS) specialist, has reached agreement on the terms and conditions of a recommended cash offer for the business, valuing it at £188.7m.
Private equity company PineBridge Benson Elliott has offered 202.1p per share for the company, which is a 35.6% premium to last night’s closing price of 149.0p.
The acquisition is being unanimously recommended by Sigma’s independent directors and has support from independent Sigma shareholders representing around 51.5% of the issued shares (and 61.0% including Sigma management shareholders and the Sigma independent directors).
Sigma is a PRS, residential development, and urban regeneration specialist, which sources sites and brings together construction resource to develop them, enabling Sigma to deliver an integrated solution to partners. As well as sourcing sites and managing all stages of the planning and development process, Sigma also manages the rental of completed homes through its rental brand, ‘Simple Life’. It is also the parent company to PRS REIT’s investment adviser.
Sigma’s directors appointed Rothschild & Co in late 2020 to run a private sale process for Sigma after conducting a strategic review of the company and options available to fund its future growth and maximise shareholder value.
Several offers were made, but Sigma’s directors said that it believed the all-cash offer from PineBridge Benson Elliott represented the most attractive option for all Sigma shareholders in terms of value, the form of consideration offered and execution certainty.
PineBridge Benson Elliot is a UK-based, pan-European real estate private equity specialist, with $3.2bn of managed equity and holds a diversified real estate portfolio, currently comprised of office, retail, hotel and residential assets in the UK, France, Germany, Italy, Spain, Belgium and Central Europe.
In a stock exchange announcement, Sigma said: “In order to deliver its next phase of growth, Sigma would require consistent access to capital to invest in scale into UK PRS product and further grow the business through forming new housebuilder partnerships, expanding operations into new regional markets and widening its rental product offering. The independent Sigma directors believe the acquisition will accelerate the delivery of these strategic benefits to Sigma’s business at a rate which would be otherwise difficult to achieve as a standalone AIM-listed company.”
Impact of deal on PRS REIT
Sigma is the parent company of the PRS REIT’s investment adviser, Sigma PRS Management Limited. The board of the PRS REIT said it was reassured that PineBridge Benson Elliott wishes to maintain and strengthen Sigma’s relationship with the PRS REIT and that there will be no changes to the team providing services to the company and that service levels will be uninterrupted by the transaction.
SGM : Takeover offer for Sigma Capital Group