CK Asset Holdings has made a US$612.9 million offer to acquire London-listed Civitas Social Housing, a real estate investment trust (REIT) that invests in social care housing and healthcare facilities in the United Kingdom.
The flagship developer of tycoon Li Ka-shing’s family made an all-cash, general offer for Civitas at 80 pence (US$1.01) per share for a total of 485 million pounds, according to a filing to the Hong Kong stock exchange on Tuesday.
The takeover offer by the developer’s wholly-owned indirect subsidiary, Wellness Unity Limited, was a 44.4 per cent premium to Civitas’ closing price of 55.4 pence on Friday.
CK Asset believes that Civitas’ “position as one of the leading social housing providers in the UK and its social impact and earnings profile are complementary to its investment criteria, and make for a suitable strategic fit”, according to the stock exchange filing.
“Underpinned by steady income and stable returns, Civitas Social Housing PLC fits well within our investment criteria and adds to our global real estate portfolio,” said Chiu Yue-seng, head of special projects at CK Asset Holdings in a statement to media.
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“[Civitas] has established a good track record throughout the years, working with multiple local authorities, care providers and housing associations. Civitas Social Housing PLC’s role to facilitate delivery of social care, which alleviates pressure on the NHS [National Health Service] in the United Kingdom is a meaningful one.”
Civitas owns specialised supported housing and residential care houses which are used to provide accommodation to vulnerable adults aged 18 to 65 with long-term learning disabilities or mental health issues, according to the statement from CK Asset.
Supported housing provided by Civitas is “funded 100 per cent from central government with a 24-year unbroken commitment to support vulnerable adults and meet their accommodation and care costs”, according to its website.
Following the completion of the takeover, CK Asset expects Civitas to “maintain its position as one of the leading social housing providers in the UK”, according to the filing.
After the offer is accepted, relevant regulators in the UK will be requested to cancel the trading and listing of Civitas’ shares on the London Stock Exchange, according to the filing.
“Post deal, we estimate UK assets (including properties, Greene King and Utilities) would account for around 25 per cent of [the developer’s] assets, the majority of which being pre-existing assets,” Jefferies analyst Sam Wong wrote in a report after the announcement on Tuesday.
“We expect minimal earnings impact from the deal, given the relatively small asset size and the otherwise earned deposit income in a high rate environment,” said Wong, adding that the deal terms were “favourable”.
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