TR Property Trust is the likely instigator of EPIC’s Strategic Review. They now own 17.1% of EPIC and their manager has been calling for consolidation in the sector.
See this interesting excerpt from TRY’s recent Interim statement:
"Our retail exposure in the UK remains minimal. However, I have steadily added to the specialist retail warehouse owner, Ediston, where we now own 16% of the company. It has successfully deleveraged with the sale of its remaining office buildings and is now a pure retail warehouse play. As a very small company in listed terms (market cap. £130m) it has failed to attract a broader range of investors even though its portfolio and balance sheet are sound. Its dividend yield is over 7% and its implied yield on current share price of over 10%. It has no refinancing requirements until late 2025 with 100% fixed priced debt."
Https://www.trproperty.com/wp-content/u ... R_2022.pdfClearly EPIC’s BoD are not going to recommend a course of action contrary to the best interests of shareholders; so a merger with another poorly rated REIT is one for the birds!
IMO there are likely just two outcomes on the table:
# Voluntary liquidation - which could take up to a year
# Status quo
The first would not result in cherry-picking of the best sites and an unmarketable rump left over. All the RW sites are attractive assets; readily marketable; and may well go to one buyer as a discrete portfolio.
However the company has put up a FOR SALE sign, so the shares should trade at a higher level because at any stage someone could swoop for the company or the portfolio.
So to earn 7%-8% whilst waiting for perhaps a 10%-20% capital gain on a deal, seems a pretty fair proposition.
Peel Hunt came out with a BUY note yesterday with a TP of 80p. I view that as a tad optimistic, still, I'll enjoy the 7.8% yield at 64.2p and await events; events which could well deliver a nice capital gain of 10%+ to add to that 7.8%.
Downside? Well, I suppose if nothing happens they could drop back temporarily to the 60p support level for a 25.9% discount and 8.33% yield. Not a problem that...