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Civitas Social Housing agrees £485m takeover by Hong Kong property developer despite bid ‘undervaluing’ the trust amid sector turmoil


Civitas Social Housing has agreed to be snapped up by Wellness United Limited, a wholly-owned subsidiary of CK Asset Holdings, in a £485million deal.

London-listed investment trust Civitas aims to provide investors with income and the potential for capital growth from investing in a portfolio of social homes.

Wellness will pay 80p per share in cash for Civitas, representing a 44.4 per cent premium to the closing share price on Friday.

While the announcement saw Civitas shares skyrocket on Tuesday, the trust’s board accepts the deal undervalues its prospects but has urged shareholders to vote in favour of it amid broader turmoil in the social housing trust sector.

But city analysts are critical of the deal, suggesting Civitas shareholders ‘deserve better than this’…

CKA already has a presence in the UK specialist social housing sector with a substantial property portfolio.

Civitas shares have surged today and were up 44.4 per cent or 24.60p to 80.00p in late morning trading, having slipped around 5 per cent in the last year.

UK social housing trusts have been under pressure in recent months, with the most notable example of Home REIT.

London-listed Home REIT has been embroiled in a series of crises, including legal disputes with tenants, a probe into its accounts and an investigation into allegations of bribery.

Commenting on the takeover bid for Civitas, head of investment at QuotedData James Carthew said: ‘We have been warning for some time that the extreme discounts that investors have applied to valuations of investment companies investing in alternative assets might lead to opportunistic bids.

‘Many other funds could be targets. However, the Civitas shareholders that stuck by the company over the past few years deserve better than this and should reject the offer at this level, as I intend to do with my shareholding.’

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