The board of Edinburgh-based rented housing developer Sigma Capital Group said on Friday it agreed to accept a cash takeover from funds managed by London-based private equity firm PineBridge Benson Elliot LLP that values Sigma at £188.4 million.
PineBridge Benson Elliot vehicle Six Bidco Ltd said it has received irrevocable undertakings and letters of intent amounting to 61% of the existing issued ordinary share capital of Sigma.
Sigma shareholders would receive 202.1p per share in cash, a premium of 35.6% to the closing price of 149p on 10 June 2021.
Sigma founder and CEO Graham Barnet said: “We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties.
“We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot’s capital backing, will make a powerful combination, and enable Sigma to expand its activities significantly.
“Sigma has been a pioneer in the delivery of new, single-family homes in the private rented sector, creating an unrivalled property delivery and management platform.
“We believe we have delivered one of the largest number of new family rental homes in the UK.
“We also manage the rental of thousands of homes for our partners.
“The need for high-quality, professionally-managed rental homes remains a critical unmet need in the UK, and we look forward to developing our model further in this exciting next step with PineBridge Benson Elliot.“
Sigma’s senior independent non-executive director David Sigsworth said: “Following a competitive sale process initiated by the company in line with its strategic growth plans, which attracted strong interest from multiple well-funded parties, the independent Sigma directors believe the cash offer of 202.1 pence per share from Bidco is highly attractive and in the interests of all Sigma shareholders.
“The offer presents an opportunity for Sigma shareholders to crystallise a meaningful premium today to various share price based metrics and the independent Sigma directors intend to recommend the offer unanimously.
“The independent Sigma directors believe Bidco and PineBridge Benson Elliot can provide Sigma with the platform required to capitalise on the significant market opportunity in the UK residential real estate sector.”
PineBridge Benson Elliot managing partner Joseph De Leo said: “Having spent the last number of months growing our understanding of the company’s many strengths and its strategic priorities as it strives to unlock its potential, we believe that the combination of our capital backing; strategic support; deep expertise; and track record can be an effective catalyst for achieving Sigma’s growth ambitions over the coming years.
“Sigma operates in an important part of the market that has shown remarkable resilience over the past year and, in partnership, we can further build on the successful UK housing platform the Sigma team have established.
“We are pleased that the independent members of the Sigma board have unanimously recommended our proposal and that the major Sigma shareholders have endorsed the board’s decision by adding their strong support.”