Ediston Property Investm... Share Discussion Threads

[marktime1231] 22/3/2023 12:20

The more this unfolds the more it looks like Investec pressed for this "strategic review" themselves, they are still trying to buy up the share price. A process probably triggered by EPICs lenders because they consider gearing to be at the max, and will not be releasing conditional funds. Actually if I were EPICs lenders I would be unhappy maintaining an uncovered dividend, eroding cash and NAV slightly.

Meanwhile the market backdrop for all forms of commercial property is weak. This is not a good time to be selling off assets. All while EPIC is being restrained from making reinvestments which were heralded blimey is it nearly two years now.

So the board has challenged Investec to put up or shut up, and it is backfiring on Investec because they are the only ones who think the share price can be talked up, the discount to NAV has not been closed by the prospect of a sale or merger. The chance of a major investor or outsider with deep pockets swooping in with an attractive offer appears to be slim.

If I am reading this right the likely outcome will be a sp-neutral eg discounted merger with a larger REIT, or EPIC will limp along on its own, but in either case there will be a reset of the current dividend by around 20-30%.

The alternative of selling off individual assets over a period of wind-down remains, messy but it would recover capital to suit the banks and traders.

As a disappointed income investor neither oucome is good, but I suspect if the board had been brave enough to reset the dividend to 4p, just for the time being, last year we would not be at this juncture.

[alan pt] 21/3/2023 13:37

SUPR+EPIC would actually be a decent fit, can't see it happening though

[flyer61] 21/3/2023 06:48

Thanks Rambuten2, of course it is actually a potential takeover situation after all.

[riverman77] 20/3/2023 23:39

PCTN might be the obvious candidate given it's a fairly large holding for TRY and could actually move the dial. CTPT another possibility although not sure if conflicts of interest there as the same fund manager. Most of the others too specialist and EPIC wouldn't be good fit.

[rambutan2] 20/3/2023 23:16

Flyer61, under the City Code all holders of 1% + have to reveal themselves and any subsequent dealings they do. Always interesting to see the under 3%ers.

[fordtin] 20/3/2023 10:07

If TRY are encouraging a merger, perhaps there's a clue as to who their preferred candidates are, in their list of investments?



Investment portfolio by country as at 30 September 2022
 
 




 
 
 


 
 
 


United Kingdom
 
 


 
 
 


Market value
£'000
% of total investments


 
 
 


Segro
51,869
5.3


Picton Property Income
37,278
3.8


Phoenix Spree Deutschland
35,646
3.7


Safestore Holdings
32,424
3.3


Industrials REIT
31,101
3.2


LandSec
23,687
2.4


Ediston Property
21,015
2.2


Londonmetric Property
19,945
2.0


Derwent London
17,314
1.8


Sirius Real Estate
14,451
1.5


Unite Group
13,617
1.4


CTPT
9,566
1.0


Workspace Group
9,227
1.0


Tritax Big Box REIT
5,260
0.5


Primary Health Properties
2,979
0.3


Atrato
2,573
0.3


Target Healthcare
1,835
0.2


Supermarket Income REIT
1,760
0.2


Helical.
1,670
0.2


CLS Holdings
1,546
0.2


Capital & Regional
966
0.1


 
 
 



335,729
34.6


 
 
 


Https://www.trproperty.com/wp-content/uploads/TRPIT_IR_2022.pdf
 
 


 
 

[flyer61] 20/3/2023 09:05

Bought more this morning. Any explanation for all the RNS's on Friday afternoon. Is it signalling of other institutions showing there stakes albeit they are not actually required to?

[nickrl] 20/3/2023 08:38

@spoole mkt a bit spooked over last few days and EPIC just catching up with late last week sell off

[chucko1] 20/3/2023 08:16

I doubt the point was to target a certain share price within a week!

[spoole5] 20/3/2023 08:07

Back to the pre strategic review level, what a pointless exercise

[dlp6666] 18/3/2023 20:47

@SpectoAcc - post #1505

Yes, although a long-term holder up to now, I'm thinking of coming out of TRY [maybe at a better time to sell ...] and switching to better-performing (and cheaper-charging) GBRE (or TREG).

[spectoacc] 18/3/2023 19:42

"The Board, for the reasons stated above, has a preference for structuring a merger with one or more REITs...".

Yes, they may well do something different. Or nothing at all - all options are open. But their stated preference is for a merger.

It's in black & white. Their stated preference is a merger.


@Alan PT - possible, and eg diluting CTPT's Industrials weighting might be no bad thing atm.

Then again - if you don't want a big Industrials weighting, you wouldn't own CTPT. If you wanted RP's, you'd be in EPIC.

[alan pt] 18/3/2023 17:28

Not that I think a merger is preferred or particularly likely, but presumably any merger would be by negotiation and would not *have* to value each component equally by NAV?

What would be needed would be enough compromise that a majority of each set of shareholders would vote for it. So, for example, maybe CTPT shareholders, being used to a massive NAV discount, would take a NAV hit in trade for an increased divi

Anyway, just idle speculation, happy to sit here collecting the monthly divi and see what happens, the likelihood of any bad scenario seems remote

[skyship] 18/3/2023 16:46

An excerpt from the Strategic Review RNS:

"...it will consider all options available to the Company that offer maximum value for its shareholders including, but not limited to, selling the entire issued, and to be issued, share capital of the Company (which would be conducted under the framework of a "formal sale process" in accordance with the City Code on Takeovers and Mergers (the "Code"), undertaking some other form of consolidation, combination, merger or comparable corporate action, and selling the Company's portfolio or subsidiaries and returning monies to shareholders."

NB: "offer maximum value for its shareholders"

Clearly a merger with another microcap trading at a higher discount is not going to achieve that goal. Just increasing the size of the company won't of itself reduce the discount - note that UKCM with a £673m MCap trades on a 35% discount. PCTN with a £399m MCap trades on a 28.7% discount.

There is no magic bullet to this quandary; the BoD already knows this, as does TRY.

So as stated earlier:

# Voluntary Liquidation

or

# Status quo

[adae] 18/3/2023 15:24

The problem is clear - the board have stated an intention for merging with one or more smaller REITs. Unless that occurs with REITs on smaller discounts, and I struggle to see many, then EPIC shareholders will be worse off for it.

For example:

EPIC NAV 80p, market cap £136m, discount 20%
CTPT NAV 95p, market cap £142m, discount 35%

Combine the two at NAV and assume current market caps while ignoring merger costs, and the discount becomes 28%, so a de facto 8% fall for EPIC shareholders, or 59.8p in current money.

This is what the board have stated is their first choice, so can we assume 17% shareholder TR Property's first choice too, perhaps to create themselves the liquidity to eventually sell out again.

I would hope smaller shareholders might club together to block it, since this is a review few will have asked for.

[nickrl] 18/3/2023 14:01

@sky problem is they are spending money on advisors when we already have inv mgr who was more than capable of advising the BoD on dealing with the fact somebody got to them what happens should a potential acquisition become available? No doubt Bruce wont be authorised to proceed if not alraedy being told to just mind the shop until they decide what their doing.

Anyhow nought we can do about it will just have to keep collecting the divis.

[skyship] 18/3/2023 13:23

TRY from the same stable as CTPT & BCPT. CTPT definitely another too small with a MCap of £142m versus EPIC's £135m.

Re-reading that TRY Interim statement just confirms what a great buy. I added 50% to my holding yesterday at an average of 64.3p - lowest price paid 63.1p.

As said yesterday, I'll enjoy the 7.8% yield and await events; events which could well deliver a nice capital gain of 10%+ to add to that yield.

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...

[flyer61] 18/3/2023 12:14

So TRY can make an offer at NAV for what they don’t own.

Nothing less….

[fordtin] 18/3/2023 11:42

confirmation of rambutan's post #1500;

TR PROPERTY INVESTMENT TRUST PLC
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022

"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."




EPIC's RNS of 18/11/2022 suggests Threadneedle also trade under one or more other names;

Ameriprise Financial, Inc - 17.06% - 36,149,756

[nickrl] 17/3/2023 19:20

These are biggest holders and anyone with less than 5% cant carry that much influence

Thames River Capital 17.1%
Quilter Investors Ltd 13.4% (nominee accounts?)
Momentum Global Investment Management Ltd 8.6%
Investec Wealth & Investment Ltd 7.4%

One has to guess that its TRY as they have been building up their stake

[marktime1231] 17/3/2023 17:14

Looking at the declarations it was Investec themselves who spiked up the price, no doubt anticipating a strong response to the announcement but which didn't happen. Who is behind this then ... one of the larger investors needing to cash in for liquidity reasons, or an originator fed up with the lack of performance, or a bank signalling it will not likely extend or renew credit? And all without warning or a vote, so someone with the clout to tell the board what its strategy should be. But this is not a good time to be selling is it, in the depths of a buyers' market.

[spectoacc] 17/3/2023 17:12

You also get double charges tho.

HL say TRY is down over every time period from 1 week to 5 years (at least), albeit without including the divi.

TRY run by Columbia Threadneedle.

[riverman77] 17/3/2023 16:43

TRY had a good track record until recently, but been really poor over last year or so. They were heavy in German residential and industrials, low yielding areas that have been hit particularly hard by rising rates. You do get a double discount with TRY (the fund is on 10% with the underlying holdings on even wider discounts) plus a 5% yield, although can't say I'm particularly tempted.

[skyship] 17/3/2023 16:41

RAM - Doh! Of course; and it has been their manager constantly banging on about rationalisation in the sector.