NewRiver tables £147m takeover bid for C&R

NewRiver REIT has finally submitted a formal bid to take over Capital & Regional. The firm, which first mooted a play for the shopping centre in May, has now submitted an offer valuing C&R at £147m. It is offering 31.25p for each Capital & Regional share and 0.4 new NewRiver shares. Together the two companies would create a shopping centre business with a £900m retail portfolio of community shopping centres and retail parks, generating annualised rent of around £90m. NewRiver said acquiring C&R would help it achieve its objective to own and manage the most resilient retail portfolio in the UK, focused on core shopping centres, retail parks and regeneration opportunities in order to deliver long-term attractive recurring income returns and capital growth for its shareholders. It said: “The NewRiver board believes that there is a strong strategic, operational and financial rationale for the combination and that the combined group would benefit from enhanced scale, material cost savings, better access to acquisition and asset management opportunities, improved debt optionality, expected cost of capital benefits and the potential for increased share liquidity.” It added that the combination of the two businesses represented a “unique opportunity to create a significantly enlarged portfolio at an attractive point in the market cycle”. Capital & Regional’s portfolio comprises six community shopping centres predominantly located in London and the South East and principally let to low-risk, essential and value-oriented retailers that NewRiver said were “highly complementary” to its existing portfolio. The merger of the two business is expected to unlock some £6.2m of net pretax run-rate recurring annual cost synergies, the majority of which would be expected to be effective shortly following completion of the deal. Cost savings would come from the removal of duplicate functions and the rationalisation of listing and other administrative and operational expenses, said NewRiver. NewRiver has raised £49.8m through a share issuance to back the deal, along with £400,000 from a retail offering. Allan Lockhart, NewRiver chief executive, said: “This successful placing to support our proposed offer for Capital & Regional further underpins our belief in the strategic rationale for the transaction. We would like to thank our investors for their support during this fundraising process, which we believe will contribute to the future growth and success of NewRiver.”