Hammerson plc (HMSO.L), a property development and investment company, Monday said it has signed an agreement to dispose off its stake in Value Retail to Silver Bidco Limited for a cash consideration of 600 million pounds. Additionally, upon closing the deal, Hammerson plans to buy back shares of up 140 million pounds.
On a pro forma basis, the disposal is expected reduce Loan-to-value (LTV) to 23 percent, and net debt. Net tangible assets will be reduced to about 1.9 billion pounds, or 39p per share.
"Following the Disposal, Hammerson will have the ability to rotate the proceeds from the low yielding Value Retail investment into higher yielding opportunities with attractive returns, with £350m allocated to reinvestment. In the near-term, Hammerson intends to prioritise opportunities within the existing core portfolio, including JV consolidation, repurposing and asset enhancement initiatives," the company said in a statement.
Following completion of the transaction, Hammerson intends to increase the dividend payout ratio to about 80 percent -85 percent of adjusted earnings from 60 percent -70 percent. The company's Board is also proposing a 1 for 10 share consolidation.
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