Medical centre investor and landlord Assura’s (AGR) plans to reduce debt and expand its portfolio have sent its shares plummeting 13.8% to 54p.
The steep fall is the result of the group intending to sell 618 million shares in a placing at 50p each, 21% lower than they were worth when the market closed on Wednesday evening. The deal includes a one new share for every five held open offer in a bid to raise £309 million overall.
Around half of the proceeds will reduce the real estate investment trust’s (Reit) debt, while the remaining £125 million will fund growth with Assura identifying £96 million worth of acquisitions and £27 million of development projects.
The deal depends on a shareholder vote on 12 October, with the new shares trading two days later if approval is granted.
Management will increase the quarterly dividend by 10% to 0.5p a share from January due to increased rental income expected from the growth in its portfolio, which stood at £925 million on 31 March.
‘The shares have had a great run recently gaining 22% so far this month, but the 21% discount to the prevailing share price seems high,’ says Sanlam analyst Mark Cartlich. ‘We will revise our forecasts after speaking to management, but maintain our target and rating for now.’
