Goldstone and King's special purpose vehicle Ruskin bid 48p ($0.69) per Regalian share, valuing the company at £84.3 million ($120.5 million).Like many managers of quoted property companies, the two have lost patience with the stock market's continual discounting of property shares. In December 2000, Regalian shares were trading at just 38.25p.
Acquisition finance was provided by The Royal Bank of Scotland, and the management have also been backed by investors, Sir Tom Farmer, Aileen Pringle, Ervin Landau and Diana Darlington.
Regalian was founded as an up-market residential developer by Lee Goldstone's father, David, who remains Regalian chairman. Hard-hit by the property crash of the late 1980s, the company set about building up an investment portfolio to improve its asset backing.
But as Goldstone pointed out in last year's report and accounts: "It is disappointing to find, as our economy moves into a new technology inspired industrial revolution, that asset based companies have lost market support. This has resulted in a heavy discount to net asset value in the share price of virtually all property companies, compounded by a reluctance on the part of institutional investors to commit funds to the small capitalised companies.
"There can be no logic for shareholders to continue to invest in a sector where companies are valued at a discount of up to 40% of their net asset value," Goldstone concluded.
The new management team will adopt a 'back to basics' approach, concentrating on Regalian's core skills of inner-city residential development.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
