Primary Health Properties Share Discussion Threads

[robcoo] 09/10/2009 08:23

Adam Kinde

Why on earth do you clutter up this site with the above RNS?

[riskier] 07/10/2009 09:32

Sold 711 at 285p yesterday to balance the 711 i got in the offer at 230p. Nice way to average down!

Looking for strong newsflow over the next few months ("development pipeline of 21 properties identified").

Robocoo - no point in protesting, its a done deal.

[robcoo] 07/10/2009 08:18

riskier

This is the point that I was making in 421. The Company has effectively made a gift of 50p+ per share to those privileged to participate in the placing of 19m shares. Share holders were only offered 7m shares. I do not understand why there has not been a protest about this- either the discount should have been much smaller or all shares should have been offered to existing shareholders

[riskier] 06/10/2009 10:14

Seems like we only get about 1 in 7 of the Excess Application shares. Still any shares at 230p when the bid is currently around 290p is fine by me. It will be interesting what price we open tomorrow.

[topvest] 25/9/2009 12:08

I've bought back into these today; looks like their business model has survived the storm. Sold last year at about the same price on covenant risk concerns. Should have held, but lost my bottle. Better safe than sorry I suppose!

[topvest] 21/9/2009 21:40

Maybe they should have done a rights issue at £1 or something in March like many other real estate companies that destroyed shareholder value!! Ok, the price wasn't great and there is dilution, but give the company some credit for getting the timing right and preserving value. Most highly geared real estate companies have trashed shareholder value.

[robcoo] 21/9/2009 13:44

I'm not a holder of shares in PHP, but was considering buying. I will not now do so because I think that the proposal relating to placing a large proportion of the enlarged share capital at a substantial discount with third parties without offering all shares to existing shareholders is dreadful. Why not proceed by way of an ubnderwritten rights issue when a shareholder can either take up the rights or sell them for value? I do hope that shareholders will vote against the resolutions as a matter of principle- though no doubt it's all stitched up between the Company and the institutional shareholders.

[riskier] 21/9/2009 08:52

Article in Sunday Telegraph (Questor) suggests 'take up offer'. Sorry can't find weblink.

[redips2] 18/9/2009 12:09

agree riskier

[riskier] 18/9/2009 11:02

Just sold 25% of my holding, will take up 1 for 5 in the offer, maybe more. Sold at 287.05, can pick up at 230 in the offer, even allowing for loss of 8.5p divi this seems a no-brainer. DYOR

[westcountryboy] 18/9/2009 09:51

Very poor, considering MedicX have been raising capital at around 70p, which is hardly a discount to current price at all. In fact I have now switched entirely to MedicX and PSPI for public sector property.

[topvest] 18/9/2009 08:38

A sensible move, but if you compare with Unite (a far poorer company) they have raised the cash at a much steeper discount. I'm looking to get back into this, but will await a market wobble before doing so. Not buying anything at the moment.

[scburbs] 18/9/2009 08:29

"19,033,667 Firm Placed Shares (representing gross proceeds of approximately £43.8 million), pursuant to the Firm Placing; and

7,053,289 Open Offer Shares (representing gross proceeds of approximately £16.2 million) to be made available to Qualifying Shareholders pursuant to the Open Offer."

This is the main problem for existing shareholders, i.e. they are only able to participate in a small proportion of the overall offer. This means they are being diluted by a discounted share offer.

"Harry Hyman has irrevocably undertaken to apply for his full Basic Entitlement of 9,394 Open Offer Shares in respect of his beneficial holdings of Ordinary Shares and to subscribe for 869,565 Firm Placed Shares in respect of the non-beneficial holdings of Ordinary Shares held on behalf of Nexus Group Holdings Limited in the Firm Placing. Upon Admission, Mr Hyman intends to sell all of the New Shares he has subscribed for on behalf of Nexus Group Holdings Limited in the Firm Placing and simultaneously enter into a contract for difference over the same number of Ordinary Shares."

This is the second problem. Hang on a second, a dilutive firm placing not available to shareholders that is being significantly subscribed by the MD! Did anyone shout massive conflict of interest?

I have no position here, but PHP hold great properties and if I was a holder I wouldn't be happy about being diluted by such a large firm placing. By all means a placing and open offer where shareholders can claw back the placing shares, but the large firm placing doesn't look great particularly with the apparent conflict of interest in the Director investments (just a conflict IMV, I am sure they have taken legal advice that this is not a conflict of interest).

Having said that, a capital raise is a good idea IMV to increase PHP's flexibility within their business and support expansion with the benefit of a solid yield gap.

[jacob fox] 18/9/2009 08:20

The market seem to have taken to the announcement though riskier, well so far anyway. Do you know what the divi yield is for PHP per chance?

[riskier] 18/9/2009 08:18

I'm disappointed at the discount of the offer price, will probably top slice what i have and take up the 1 for 5 using the proceeds. Long term prospects still good imho.

[jacob fox] 18/9/2009 07:10

18 September 2009




Primary Health Properties PLC

('PHP' or the 'Company')




Proposed Firm Placing and Placing and Open Offer

and Notice of General Meeting




The Board of PHP announces a fully underwritten share issue to raise gross proceeds of approximately £60.0 million (approximately £57.5 million net of expenses) through the issue of 26,086,956 new Ordinary Shares by way of a Firm Placing and Placing and Open Offer at a price of 230 pence per New Share. The Open Offer will allow the Company's existing Shareholders the opportunity to participate in the fundraising on the basis of 1 Open Offer Share for every 5 Existing Ordinary Shares. Qualifying Shareholders are also being offered the opportunity to subscribe for New Shares in addition to their Basic Entitlements under the Excess Application Facility.




The Issue Price represents a discount of 27.0 per cent. to the Closing Price of 315.0 pence per Ordinary Share on 17 September 2009 (being the last Business Day prior to this announcement). The New Shares to be issued will represent approximately 42.5 per cent. of the enlarged issued share capital of the Company following the Firm Placing and Placing and Open Offer.




PHP will shortly be publishing a Prospectus in connection with the Firm Placing and Placing and Open Offer and will convene a General Meeting to approve certain matters necessary to implement the proposed fundraising.




Highlights




A fully underwritten Firm Placing and Placing and Open Offer to raise gross proceeds of approximately £60.0 million (approximately £57.5 million net of expenses).

The net proceeds of the New Issue will initially be used to repay existing debt in order to enable PHP to take advantage of attractive opportunities to invest in additional investment properties to expand PHP's property portfolio.

Opportunity to capitalise on attractive fundamentals - exploiting positive yield gap in improving market.

Development pipeline of 21 properties identified with a total unaudited value of approximately £90 million.

Trading continues in line with the half year report for the six months ended 30 June 2009 released on 18 August 2009.




Details of the Firm Placing and Placing and Open Offer




Under the Firm Placing and Placing and Open Offer, PHP intends to issue 26,086,956 new Ordinary Shares, comprising:




19,033,667 Firm Placed Shares (representing gross proceeds of approximately £43.8 million), pursuant to the Firm Placing; and

7,053,289 Open Offer Shares (representing gross proceeds of approximately £16.2 million) to be made available to Qualifying Shareholders pursuant to the Open Offer.




The Issue Price is 230 pence per New Ordinary Share.




Under the Open Offer, Qualifying Shareholders have Basic Entitlements of 1 Open Offer Share for every 5 Existing Ordinary Shares registered in their name on the Record Date. In addition, Qualifying Shareholders may also apply, under the Excess Application Facility, for any whole number of Excess Shares in excess of their Basic Entitlements up to a maximum number of Excess Shares equal to approximately 0.54 times the number of Existing Shares registered in their name on the Record Date.


Each of the Directors is supportive of the fundraising and the Directors have irrevocably undertaken to subscribe or apply, in aggregate, for 1,156,771 New Shares under the Firm Placing and Placing and Open Offer. In addition, each of the Directors has irrevocably undertaken to vote in favour of all of the Resolutions in respect of his own beneficial holding to the extent that he has any such holding.




The Firm Placing and Placing and Open Offer are being fully underwritten by Numis subject to, and in accordance with, the terms of the Underwriting Agreement.




The Firm Placing and Placing and Open Offer are conditional on the passing of the New Issue Resolutions at the General Meeting. If the New Issue Resolutions are passed and the other conditions to the Firm Placing and Placing and Open Offer are satisfied, it is expected that dealings in the New Shares will commence at 8.00 a.m. on 7 October 2009.




The Prospectus concerning the Firm Placing and Placing and Open Offer will shortly be sent to Shareholders. Further details of the Firm Placing and Placing and Open Offer are set out in this announcement and in the Prospectus.




Harry Hyman, Managing Director of PHP said:




'This £60 million capital raising will give PHP the headroom on its existing facilities to enable it to rapidly enlarge its asset base through a series of targeted acquisitions as well as accelerating its debt reduction plan. PHP is an opportunistic acquirer of healthcare property assets and current market conditions are ideal to make investments at historic valuations that will deliver shareholder returns over many years to come. In essence, the fundraising ensures that the Company is better capitalised to take advantage of the current market conditions.'




Further details of the Firm Placing and Placing and Open Offer are set out in this announcement. Readers are referred to the important notice that applies to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time. This announcement has been issued by and is the sole responsibility of Primary Health Properties PLC.






For further information contact:




Primary Health Properties PLC
[phone]

Harry Hyman, Managing Director








Bell Pottinger Corporate and Financial
[phone]

David Rydell / Victoria Geoghegan








Numis Securities Limited
[phone]

Corporate Finance: Michael Meade / Brent Nabbs



Corporate Broking: David Poutney / Rupert Krefting / Alex Ham

[nickcduk] 25/8/2009 14:25

Why would you be holding PHP over PSPI?

[nil desperandum] 25/8/2009 14:10

Nope. Just nothing to say really ... nice solid long term hold.

[tinker] 25/8/2009 13:50

Guess I'm the only shareholder

[tinker] 19/8/2009 17:23

No comments on yesterday's half yearly report? Everyone asleep out there? I'm new to PHP so will leave it to the experts but it does look a trifle bullish to me!

[johnnylig] 14/8/2009 14:35

Some good news on this share price at last! Given its market I have found it difficult to understand why it has fallen so far, its as if it is just another property company, market doesn't seem to recognise its long term qualities

[mctmct] 14/8/2009 13:02

Here's the Telegraph tip (13 August)

Questor believes that Primary Health Properties has one of the safest dividends around – that's why the shares were recommended on December 18 at 263p. They were also named as one of Questor's tips of the year in January at 299p as a safe dividend play. Ahead of the company's interim figures next Tuesday, this remains the case and the shares remain a buy.

PHP is one of the largest providers of primary healthcare properties in the UK. It builds and owns GP surgeries, pharmacies and other medical facilities across the country.

There are many concerns about future government spending as the economy has decimated public finances, but healthcare is unlikely to see funding cuts. The company's model is also relatively low risk, as it does not build surgeries on spec. Just like Questor's bullish stance on food and the food supply chain, healthcare is another long-term global bull market supported by demographics.

Last month, the US Census Bureau released a study which showed that, within 10 years, there will be more people in the world over the age of 65 than under the age of five. This has never happened before.

In the next 30 years, the number of people in the world over the age of 65 is expected to double. This means healthcare provision is as near to a perpetual bull market as there could possibly be.

In the UK, this trend is very pronounced. According to data compiled by the Office for National Statistics, it is not just increasing life expectancy that is contributing to the UK's ageing population.

The baby boomer generation of just after the Second World War are moving into older age bands, but there are fewer people down the age ranges to replace them. This was because of low fertility rates in the mid-to-late 1970s and in the late 1980s and 1990s.

PHP is therefore operating in a fundamentally strong market, which should provide it with plenty of opportunities to grow over the longer term.

However, the reason Questor advises buying the shares is not for any near-term capital appreciation, it is for the dividend.

The shares are currently yielding an impressive 6.2pc. The payout is secure because the company's revenues are locked in for years.

In fact, its average lease length is about 20 years. A total of 91pc of its revenues are derived from government-linked agencies, primarily the NHS. The majority of the rest of its revenues comes from rentals to pharmacies, which are an essential part of the healthcare chain.

At its trading update in April, the company confirmed that it was maintaining its progressive dividend policy, with analysts pencilling in a 17p payout for 2009, rising to 17½p in 2010.

The last trading update was upbeat and the company said rental incomes continued to grow, and tenant demand for modern healthcare facilities remained high.

The group also said in April that rent rises in the first quarter of this year were at an equivalent level to the prior year. The market in which PHP operates is very tightly supplied. The company reviews its rental agreements every three years – and they are "upward only".

The group does not have significant debt to refinance until 2013. The company raised £3.3m in March at 220p a share, so it looks fully funded for its current plans.

The shares, which are trading on a December 2009 earnings multiple of 14.8 times, remain a buy for the dividend.

[mctmct] 14/8/2009 12:11

Brilliant!

I've got a few other shares I'd like them to tip,too ....

Or could it be buying ahead of the results next week?

It's movement on low volumes.

[riskier] 14/8/2009 09:03

Tipped in today Telegraph as a buy for the dividend.