Invista Share Discussion Threads

[gary1966] 31/8/2011 09:15

Tilts,

As I said shouldn't need to use my FSB for these shares and was only after about £600 worth and so it wasn't worth troubling him. Just reinvesting the dividend received the other day. On the other hand I have just e-mailed him to pick up 8K NWBD at 101p and I hope to hear that he has managed to do this shortly as he really is very good at his job.

Gary

[tiltonboy] 31/8/2011 08:09

Gary,

You could have gone on the SETS board and picked stock up. Last SETS trade was a sale of over 50,000 at 36.75p. Doesn't your broker use the SETS board!!!

[scburbs] 30/8/2011 22:48

I have not been following this closely, but my understanding from the press on the IERE pitch is that Schroders and Duncan Owen were pitching together and presumably this continued for the IFD pitch.

This is not explictly mentioned, other than reference to certain IREIM execs, and I would be shocked beyond belief if Duncan Owen was still an executive of IREIM given the eyewatering conflicts of interest (pitching with Schroders against IREIM on IERE was already extremely shocking!).

"It is also proposed under the Heads of Agreement that Schroders intends to recruit certain senior executives from IREIM, who have been directly involved with the management of the Company's portfolio in the past and who are therefore familiar with the key asset management initiatives which are under way."

If this were the case and if I were an IFD shareholder I wouldn't be rushing to choose a Schroders/Duncan Owen pitch over a PCTN merger (although the discount on the new arrangements was a good saving on the old arrangements as it should be, but does that say more about the old arrangements).

Whilst a no premium merger is not great sometimes it is better than the alternative as the enlarged group will be able to spread broadly the same management cost base over a much larger income stream thereby enhancing net operating profit margins.

[gary1966] 30/8/2011 21:47

Couldn't even get a quote let alone set a tight buy price. Kept getting a message about exceeding the market size available at the time. It was around 9.30am I think. You will see from the trades today that nothing went through until around 11am I believe.

I have a full service broker that I use on certain types of shares but this isn't a share I would expect to use him for. I have built up my holding with the broker that I was trying to buy through today and haven't had problems in the past.

[hieronymous1] 30/8/2011 17:30

Gary1966

I am genuinely curious. Were you setting a very tight buy price, which is a reasonable discipline, or do you need a new broker?

[gary1966] 30/8/2011 16:25

Tried to buy a few more of these this morning and couldn't get a quote for even 1000 shares. Nice to see some others have had better luck today.

[envirovision] 26/8/2011 22:27

1.86 Million late share trade @ 38p @ end of day printed. Nice one.

[skyship] 26/8/2011 17:15

Link to the CP+ thread - ADVFN having problems with non-alphabet symbols in the EPIC box, though hoping to sort it soon!

[skyship] 26/8/2011 14:34

Just gives late entrants the opportunity to benefit. The PCTN approach has to be dead in the water IMO.

This is what I wrote to the Chairman two weeks ago:

===============================================================
Andrew Sykes Esq.
INVISTA Foundation Property Trust
Trafalgar Court
Les Banques
St. Peter Port
Guernesey GY1 3QL 10th August 2011

Dear Mr Sykes

RE: INVISTA Foundation Property Trust ("IFD")

I am a private investor holding xxx IFD shares in my SIPP and in my personal portfolio.

I am writing to express my considerable disappointment in a critical element from your Chairman's Statement in the 11th July Annual Financial Report.

Under the heading of Strategy you state: "Over the past year the most important objectives for the Board and Investment Manager have been to grow income and dividend cover over the medium term, whilst also ensuring that the Company can withstand further short term market volatility."

This is of course all very well for the Investment Manager, Duncan Owen, as he reiterates further down in the Report. However, for the Board the principal objective must be, as ever, to maximise shareholder value. One of the prime targets for the Board has to be to reduce the historically high NAV discount. Indeed, this somewhat strangely appeared in Duncan Owen's Report.

This discount has grown yet further in recent months, regardless of the improved stockmarket conditions of 2009/10 and the improved property conditions at the same time.

One reason for the lacklustre share performance must surely be the prolonged uncertainty regarding the Investment Manager status. It may be a debatable issue, but there did appear to be a rather unseemly period when Duncan Owen & his team arguably put their own interests ahead of the interests of the shareholders of Invista Real Estate Investment Management Holdings ("INRE"). It is not an accusation, it is an observation.

Until you are able to report a satisfactory replacement for the old regime, the uncertainty will surely continue, further damaging shareholder value.

That said, delivering shareholder value is increasingly difficult without some more profound action; indeed it may not be possible under any circumstances other than through the voluntary winding-up of the Company. This is an action recently and bravely decided upon by a number of companies, as you will no doubt be aware. I am personally aware of the following examples:

# Gresham House
# Henderson Private Equity Trust
# Invista Real Estate Investment Management Holdings
# Invista European Real Estate
# Matrix European Real Estate

A quote from the Gresham Annual Report effectively summarises the conditions for all five of those companies; and I contend also applies to IFD:

"After careful deliberation, your Board will be recommending to shareholders at the AGM that the Company should amend its investment objective to enable the orderly realisation of the Group's assets over a period of approximately two years with a view to returning capital to shareholders thereafter.

The present downturn in the commercial property market, coupled with the restricted availability of bank funding, will create a very flat market over the next few years thereby presenting fewer opportunities to generate returns for shareholders. This amendment to the investment objective should also address shareholders' concerns over the discount at which the shares are currently trading."

I would welcome your comments upon the all of the above; and I hope that at the AGM on 6th September you may be in a position to put to shareholders a resolution similar to that proposed by Gresham House and others.

Yours sincerely
=======================================================

Needless to say his reply received today is brief and anodyne:

"I can assure you that the Board shares your concerns about the discount at which our shares trade, and we have been working hard to address the uncertainty around the future which you correctly identify."

"Attached is a copy of an announcement we released on 19th August, which sets out some significant steps which are now under way.

Yours sincerely

Mr Andrew Sykes, Chairman
========================================================

I shall be replying...

[envirovision] 26/8/2011 12:53

I'm with you there sky. Good news about the manager but this PCTN approach would need to be very actractive to get anywhere. Surprised the share price is still so low.

[skyship] 23/8/2011 12:54

Well, all the news is good news, but disappointing if shareholders accept a merger unless on very good terms.

As I've posted, I am minded to decline as would prefer a future with Schroders as the new Investment Managers.

I suspect the PCTN approach will come to naught as I don't see how they can make it attractive for IFD shareholders without making a straight cash offer - and I don't see how they would be able to fund that.

Of course, the talks could flush out a real bidder.

We will see..

[skyship] 22/8/2011 13:41

Rooky - So, since last Annual Report (presumably yr reference source) Hambro increased; Cazenove reduced.

[skyship] 22/8/2011 13:39

Today's disclosures:

# Rathbones - 1.476m - 0.41%
# JO Hambro - 23.219m - 6.52%
# Norges Bank - 3.650m - 1.03%
# Cazenove Cap. Man. - 16.547m - 4.65%

[rooky4] 22/8/2011 10:04

Other significant holders are:

Schroder Investment Management Limited has 11.95% (guess which way they'll vote)
Investec Wealth & Investment Limited 9.89%
Cazenove Capital 7.01%
JO Hambro Capital Management Ltd 5.65%
Clerical & Medical 5.41%

[skyship] 20/8/2011 14:57

When a Company announces bid/merger discussions, holders of more than 1% have to declare. Plenty more to come presumably:



The only declarations so far are:

Name shares %

Baring Asset Man........5.528m........1.55
Laxey...................5.399m........1.52
L&G....................12.968m........3.76
Premier Asset Man......11.375m........3.20
RHJ Int. SA.............3.861m........1.08
State St. Global Adv....4.025m........1.17
Witan I.T..............15.750m........4.40

That little lot only adds up to 16.68%

[alanji] 19/8/2011 12:39

Still not sure what to make of the announcements. Obviously Schroders is good news but I think the proposed merger has muddied the waters a bit as it appears Schroders will be out if the merger goes ahead. Cannot see the benefit of appointing (and paying) them now if the board think a merger is likely.
Looks like the proposals have the backing of the large shareholders. I see Laxey have disclosed a 1.2% holding.
The only advantage I see from the merger is "increased attraction to a wider investor base as a result of improved index inclusion prospects." Does anyone know at what capitalisation value institutions will include as part of a tracker fund or similar?

[horndean eagle] 19/8/2011 12:14

Skyship - Not sure why you are worried about refinancing at PCTN. They have a modestly geared portfolio and a decent enough tenant base. Sure the margin on any new debt would be higher than previously but to counter that swap rates are exceptionally low. I reckon they could refinance at 250bp and fix debt for 5 years around 2%. That would give them cheaper funding than they currently enjoy. IFD have a very inefficient balance sheet at present. By merging PCTN could buy back in debt at a discount to cover the swap break fee and reduce gearing overall. A couple of large disposals could do wonders on that front. Plantation place would be an ideal candidate. Once the current malaise dissipates I think sovereign wealth funds will look at stepping up purchases of prime London property rather than put money into Govt debt yielding nearer 2%.

[skyship] 19/8/2011 10:10

Dave - thnx for that.

Will have to wait for the merger details if they appear - but as previously stated, at the moment I prefer to stay with IFD under the Schroders umbrella.

[davebowler] 19/8/2011 09:10

Liberum

Real Estate

n Invista Foundation Property Trust (IFD / HOLD) – New investment manager and merger talks with Picton Property. IFD reports that it has received a merger approach from Picton Property Income Ltd ("PCTN"). A non-binding indicative offer was received by IFD's board on 29 July 2011 and discussions are ongoing. Separately, (as expected) IFD has announced that heads of terms have been agreed with Schroders Property Investment Management Ltd to take over as investment manager of the portfolio from Invista Real Estate Investment Management. Under the proposed terms Schroders will be paid a management fee of 1.1% of NAV (expected to generate savings of £1.8m p.a.). The contract will not be subject to a notice period or termination fee should the merger with PCTN proceed. Schroders intends to recruit certain senior executives from IREIM who have been part of the management of IFD's portfolio in the past and would therefore provide continuity of management and a strong knowledge of the existing assets. Liberum View: We view the potential merger with PCTN as a positive development for shareholder value for IFD. Liquidity would be enhanced as the market cap of the enlarged company would be c. £296m (based on current prices) vs. a current market cap of £128m for IFD. We would also expect a realigned, covered dividend - PCTN currently pays a dividend of 4.0p (8.2% yield) which we estimate was c. 105% covered in 2010 by recurring profits and cover should increase going forward due to lower management costs. IFD pays a dividend of 3.5p (9.8% yield) but only c. 50% covered in the year to Mar'11 although we see this increasing to c. 95% by Mar'14 as a result of asset management initiatives and acquisitions. Consequently we would expect the discount for the proposed enlarged company to narrow from IFD's current levels (IFD currently trades on a 37% discount to Jun'11 NAV).

[skyship] 19/8/2011 08:48

A fuller story just out from PCTN:

[skyship] 19/8/2011 08:29

Certainly wouldn't want a straight merger - PCTN haven't sorted their refinancing yet. If they're trying that on then I would prefer to stay independent with Schroders at the helm. That 9.4% yield is pretty compelling.

However you cut it the offer price of 37.5p is incredibly generous.

[jimbo3352] 19/8/2011 08:23

PCTN were internalising their investment management function through a wholly owned sub Picton Capital. I wonder how this will work out with IFD who were moving to Schroders. I presume there must be a plan since the Schroder contract has no notice period or termination payment if the merger proceeds as opposed to 9/12 months if it does not. It would be nice to see some economies of scale in the merged operations.

[horndean eagle] 19/8/2011 07:45

Took a while but PCTN finally came in with an offer. Had thought they would make an offer like they did at RUGB. Would prefer it to go through. Lower cost structure, better management team and higher profile. They have also been successful in negotiating with bondholders an an early buyback of debt at a discount to par. That would help with inefficient balance sheet at present. Just want a quick resolution to matters though.

[skyship] 19/8/2011 07:20

Looks like good news in bad times.....

Alan - you may be getting your bid after all!

If the PCTN approach comes to naught, then look at that £1.8m/annum management fee saving resulting from the Schroders appointment.