19 September 2017 – acquisition and placing
The company has announced a significant acquisition along with a related fundraising priced at 340p per share to finance the deal. The company has conditionally agreed to acquire the entire issued share capital of R.T. Warren (Investments) Limited for a total cash consideration of £53.3m. It is also proposing to undertake a placing to raise £70m, of which £4.3m is subject to clawback under an open offer to existing shareholders. RT Warren owns a portfolio of 21 commercial properties including 15 office buildings, 4 predominantly retail properties and 2 industrial holdings. Over 90% of the commercial properties are located in the Home Counties of England. RT Warren also owns 65 residential properties, predominately located around the London Borough of Hillingdon. Palace Capital aims to sell the residential assets, subject to being able to achieve an acceptable price. The deal looks sensible and will see the size of the business increase significantly ahead of its proposed move from AIM to the Main Market. We retain our BUY rating.