Bluestar Group, which has bid for Home REIT, has launched a scathing attack on the board of the embattled homeless accommodation provider accusing it of effectively ignoring it or ‘ghosting’ it.
The group complained that the board had not been in contact in weeks, despite offering 40p per share to buy the company on 14 April 2023, which has scuppered due diligence attempts.
The board of Home REIT responded by saying that it is no longer pursuing a sale of the company. It said: “The board believes that progressing Bluestar’s proposal at this time is unlikely to maximise value for shareholders. The Board and its financial adviser have given particular consideration to the significant uncertainties in relation to the deliverability of Bluestar’s non-binding and indicative proposal”
“The board’s immediate concern is to complete the appointment of a new investment adviser in order to stabilise the company’s property portfolio and maximise value for shareholders, while at all times prioritising the interests of the occupants of the company’s properties.”
“The board will not proactively pursue a sale of the company at this time and therefore this part of the review of strategic options announced on 16 February 2023 is now concluded.”
Bluestar had said that it had been “frustrated by the lack of engagement from the board, which has been particularly pronounced in the last three weeks”.
It said the board had declined to provide a formal response to the possible offer, and yesterday (10 May) decided not to extend the deadline for a formal offer to be submitted (which stands at 5pm today – 11 May).
Bluestar added: “[We] consider that the Board should have greater attention to its fiduciary duties to shareholders to promote the success of Home and considers that this Board decision removes a major element of optionality for Shareholders at what is undoubtedly a very difficult time for Home given its suspension, potential delisting and the very challenging circumstances it finds itself in.
“It is the firm view of Bluestar that it would be in the best interests of shareholders and other Home stakeholders for the Board to extend the PUSU Deadline and to engage properly with Bluestar on ways to facilitate a streamlined due diligence process. Bluestar considers that the Possible Offer would attract the support of shareholders and so should be permitted to explore whether the Possible Offer can progress to a firm offer that can be presented to shareholders for their consideration.
“Bluestar considers that the Possible Offer provides a route to upfront liquidity, at a valuation level that Bluestar does not anticipate Home achieving in the public markets in the medium term and with significantly reduced execution risk relative to other strategic options that may be available to the Board to deliver value to the shareholders of Home.”
It has been reported that the board is set to appoint property giant AEW as its new investment manager.
HOME : Home REIT board ‘ghosts’ potential bidder