Twentyfour Income Fund Ltd - closed-ended fund which targets less liquid, higher-yielding asset-backed securities - Agrees on Tuesday to terms for proposed all-share merger with UK Mortgages Ltd. The merger will see UK Mortgages reconstructed and wound up, and its assets transferred to TwentyFour. In turn, Twentyfour will issue new ordinary shares to UK Mortgages shareholders. The proposed acquisition value per share in UK Mortgage will be 84 pence. It was trading at 79.50p in London on Wednesday just before midday.
This transaction is expected to complete at the end of the current financial quarter, subject to conditions such as UK Mortgages shareholder approval. Both boards have consulted major shareholders of the respective companies, who were all supportive.
The companies say the merger will produce an enlarged group net asset value of around £720 million, with around 7.2% gross market-to-market yield. The enlarged group will have a ‘strengthened market position due to greater scale and combined asset management and securitisation expertise’.
Numis Corp PLC is acting as adviser and broker to both parties.
TwentyFour Income current stock price: 113.76 pence, up marginally on Wednesday
12-month change: up 5.6%
UK Mortgages current stock price: 79.50 pence, up 0.5% on Wednesday
12-month change: up 7.9%
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