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PRS Reit Auction Takes Unexpected Turn with £646.2m Cash Bid from Waypoint Asset Management

Strategic Insights

— 1 min read

Waypoint Asset Management, a pension fund manager, has accepted a £646.2m cash bid for the rental properties fund PRS Reit (PRSR), marking an unexpected turn in the auction process. The bid, which is subject to further due diligence and a vote by PRS shareholders, comes after the board was in talks with private equity giant KKR, following a statement last week. Despite 19 interested parties initially being granted access to PRS's data room, the shares remain below the offer price, indicating scepticism over whether another bidder will emerge. The deal is priced at a steep 17% discount to PRS's net asset value at 31 December, likely to disappoint some who had hoped for a better outcome.

Key Takeaways:

  • PRS Reit has accepted a £646.2m cash bid from Waypoint Asset Management, a pension fund manager, to acquire the rental properties fund.
  • The bid is subject to further due diligence and a vote by PRS shareholders, with the transaction expected to complete by 30 November if passed.
  • The offer is priced at a steep 17% discount to PRS's net asset value at 31 December, which is likely to disappoint some investors.
  • The deal includes a break fee of £5.7m for Waypoint, should another firm offer emerge.
  • Waypoint will acquire the fund at a price of 116.4p per share, which is a slight premium to the 115p per share offer received from real estate fund manager Long Harbour in June.
  • The negotiations with KKR were reportedly going nowhere, leading to Waypoint's successful bid.
  • Richard Williams, property analyst at QuotedData, has expressed disappointment over the agreed price, considering it a substantial discount to PRS's last reported net asset value of 139.6p at December 2024.

Statistics:

  • £646.2m: The cash bid accepted by PRS Reit from Waypoint Asset Management.
  • 17%: The discount to PRS's net asset value at 31 December.
  • £5.7m: The break fee for Waypoint, should another firm offer emerge.
  • 116.4p: The price per share offered by Waypoint.
  • 115p: The price per share initially offered by real estate fund manager Long Harbour.
  • 139.6p: PRS's last reported net asset value at December 2024.
  • 115.3p: The price per share agreed in the non-binding sales agreement.
  • 118.7p: The price threshold for a competing bid to surpass the break fee.

Sources:

  • Association of Investment Companies
  • PRS Reit press release
  • Richard Williams, property analyst at QuotedData

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