SDCL Efficiency Income (SEIT) has suspended dividends while it reduces debts which had increased to 71.9% of net asset value above a 65% limit. The announcement from the former 14%-yielder came in a circular for a meeting on 10 July for shareholders to approve the managed wind-down proposed in April. Its shares tumbled 25%, or 11.5p, to 34.5p in response.
James Carthew, head of investment company research at QuotedData, said: “With the dividend cancelled, it is sounding as though SDCL Efficiency Income shareholders may have to wait a long while before they see any cash from the managed wind-down, as money freed up will be used to pay down debt in the first instance. The shares on a 48% discount may prove to be a bargain but, I am concerned that, if rushed, the wind down could be value destructive, so not a one-way bet.”
Alternative Income REIT (AIRE) has strongly advised its shareholders to take no action in relation to the hostile £56.3m bid made by 24% shareholder Glenstone on Friday. AIRE says the 70p per share cash offer at a 17% discount to net asset value could be detrimental to minority shareholders if it left them in a company dominated by the Guernsey-listed property company. In response to comments by Glenstone, its two independent board directors say there are no material issues that haven’t been disclosed in reference to the lapsed offer from AEW UK REIT (AEWU) and that Glenstone director Adam Smith, as an AIRE director, would have been “fully aware” of all matters requiring disclosure.
QuotedData’s James Carthew said: “The lack of information about why AEWU walked away from its bid for AIRE is frustrating, but AIRE’s independent directors have reiterated that there were no material matters that needed to be disclosed. I highlighted this issue around the August dividend on Friday’s show. I’m still hoping we’ll see a counteroffer from someone.”
LondonMetric Property (LMP) and Schroder Real Estate (SREI) are finalising the documentation to firm up their joint all-share bid for Picton Property Income (PCTN) they made in May, which currently values Picton at £396m and 76.9p per share.
James Carthew said: “We have a little more colour on the proposed LondonMetric-Schroder REIT bid for Picton. The split appears to be based on which party is providing the underlying debt funding to Picton’s portfolio, which will simplify the paperwork, but both end up buying assets on an average 4.7% net initial yield (NIY). We may see an asset swap or disposals following the deal to tidy things up. Hopefully, we’ll see a rally in the bidders’ share prices, too. I would have expected to see some rally on the back of the better news on Iran, which could ease upward pressure on inflation and interest rates.”
US Solar Fund (USF) says the unidentified bidder it announced on 18 May remains in due diligence on a possible offer for all its operational solar assets. In a first quarter update, the £112m renewables fund, whose share price stands 40% below net asset value (NAV) despite a 33% rally last month, said its portfolio rose 2% to $190m or 62 cents per share in the three months to 31 March. Generation was 8.8% below long-term forecasts due to technical problems and 0.9% below the revised forecasts for 2026 made in the 2025 annual report. However, its two Californian assets, which underwent significant capital works last year, demonstrated improved performance.
Baronsmead Venture Trust (BVT), the £204m VCT managed by Ken Wotton at Gresham House, saw net asset value fall 8.4% in the six months to 31 March to 45.7p per share. This was the result of falls in software stocks, turbulence from the war on Iran in the last month of the period and payment of the final 2p per share final dividend for the previous financial year to 30 September. It said this was a “disappointing result” after a 3% rise in the first four months of the half year but there had been a recovery since. Baronsmead Second Venture (BMD), a £200m sister fund also managed by a team including Wotton, also reported a difficult half year for the same reasons with NAV declining by 9.3% or 4.8p per share.
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