REG - Life Science REIT - Strategic Review Conclusion & Formal Sale Process

Life Science ReitAnnouncement

19/09/2025 07:00

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RNS Number : 9674Z  Life Science REIT PLC  19 September 2025

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VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").

19 September 2025

 

Life Science REIT plc

(the "Company" or "LABS")

Conclusion of the Strategic Review and Formal Sale Process

The Board of Life Science REIT plc today announces the outcome of the
strategic review and formal sale process that commenced on 14 March 2025.

Background to Strategic Review

The Board initiated the strategic review and formal sales process
acknowledging the macroeconomic and company specific challenges that LABS has
faced, which have impacted on both operational and share price performance. In
particular, higher inflation and elevated interest rates have driven a
fundamental slowdown in leasing activity and negatively impacted investor
sentiment. The continued slow pace of leasing activity within the LABS
portfolio has been a significant challenge for the Company in allowing it to
support its capital expenditure initiatives and commitments for certain assets
within the portfolio, which aimed to increase the life science sector focus
and drive increased rent.

Since June 2022, the Company's share price has also traded at a persistent and
significant discount to net asset value, making it difficult to raise further
equity capital, which would have supported growth, as well as delivering a
larger and more liquid vehicle for shareholders, with a more diversified pool
of assets.

In light of the above factors, and the prospect of increasingly challenging
headwinds for the Company, on 14 March 2025 the Company announced a strategic
review to consider the future of the Company and to explore all strategic
options available to maximise value for shareholders. At the same time, the
Board decided to suspend any future dividends.

Outcome of Strategic Review

As part of the strategic review, the Board and its advisers considered all
available options including, but not limited to, selling the Company's
portfolio or subsidiaries (or portions thereof), changing its investment
strategy and/or management arrangements, commencing a managed wind down,
selling the entire issued share capital of Company (under the framework of a
"formal sale process" in accordance with the City Code on Takeovers and
Mergers (the "Takeover Code")) and undertaking some other form of
consolidation, combination, merger or comparable corporate action.

The Board received a number of non-binding offers for the Company and/or its
assets from parties representing a range of sources of capital and comprising
alternative transaction structures. Certain shortlisted parties were granted
access to additional due diligence materials and meetings with Ironstone Asset
Management Limited ("Ironstone" or the "Investment Adviser") and were
subsequently invited to submit revised proposals. This culminated in a period
of extensive negotiation between the parties over a number of months.

In parallel, the Board carried out a detailed assessment of the likely return
to shareholders that could be delivered in a managed wind-down of its
portfolio, taking into account the views of the Investment Adviser, other
investment managers in the real estate sector, the committed development spend
and available liquidity of the Company, as well as proposals for individual
assets received during the strategic review process.

Following a detailed review of the options available to the Company and after
consultation with its advisers, as well as taking into account feedback
received from a number of larger shareholders, the Board has concluded that it
would be in the best interests of shareholders as a whole to put forward a
proposal for a managed wind-down of the Company (the "Managed Wind-Down").

In arriving at this decision, the Board has determined that the indicative
potential value from the Managed Wind-Down would be materially in excess of
the value achievable from the indicative offers received, which represented
material discounts to the Company's latest net asset value. In addition, the
Managed Wind-Down provides the opportunity to capture the value associated
with further asset management initiatives and potential additional letting
activity ahead of disposals.

As the strategic review and formal sale process have now concluded, the
Company is no longer in an "offer period" as defined by the Takeover Code and
the disclosure requirements pursuant to Rule 8 of the Takeover Code are no
longer applicable from the time of this announcement. The Company is not in
currently in receipt of any approaches, or in discussions with any party, in
relation to a sale of the Company.

Managed Wind-Down Approach

The Board intends that under the proposed Managed Wind-Down process, the
Company will be managed with the intention of realising all the assets in its
portfolio in an orderly manner, with a view to initially repaying borrowings,
followed by making timely returns of capital to shareholders, whilst aiming to
obtain the best achievable value for the Company's assets at the time of their
realisations. Realisations may take the form of disposals of single assets,
groups of assets or the portfolio as a whole. It is anticipated that the
realisation of the portfolio will be concluded over a 12-18 month period,
depending on, amongst other things, the prevailing market environment.

Amendments to the Investment Objective and Policy

The implementation of the Managed Wind-Down will require amendments to the
Company's investment objective and investment policy. Such amendments are
subject to the approval of shareholders pursuant to Listing Rules.
Accordingly, the Board intends to publish a circular in the coming weeks (the
"Circular") to convene a general meeting at which it will seek approval from
shareholders of the proposed new investment objective and policy by way of an
ordinary resolution.

Investment Management Arrangements

The Board is considering appropriate arrangements for provision of investment
management services during the Managed Wind-Down, in order to ensure it is
managed in a timely fashion in line with the objectives set out by the Board,
and in particular to maximise returns for shareholders. The Board has
commenced discussions with Ironstone in this  regard. Further information
will be provided in due course.

Claire Boyle, Chair of Life Science REIT plc, commented:

"Further to a detailed strategic review, and following consideration of the
alternative options available, the Board believes that a Managed Wind-Down
will maximise value for shareholders and is in the best interests of
shareholders. The Board would like to thank the Company's shareholders for
their significant patience and support during this challenging period."

FOR FURTHER INFORMATION, PLEASE CONTACT:

 Life Science REIT plc

 Claire Boyle, Chair                                                            via Panmure Liberum

 MUFG Corporate Governance Limited - Company Secretary

 labs_cosec@cm.mpms.mufg.com

 Panmure Liberum - Financial Adviser & Corporate Broker                         +44 20 7886 2500

 Tom Scrivens / Chris Clarke / Alex Collins / Tim Medak

 G10 Capital Limited - AIFM                                                     +44 20 7397 5450

 Maria Baldwin

 FTI Consulting - PR Adviser

 Dido Laurimore / Richard Gotla / Oliver Parsons                                +44 20 3727 1000

 LifeScienceReit@fticonsulting.com (mailto:LifeScienceReit@fticonsulting.com)

The Company's LEI is 213800RG7JNX7K8F7525.

 

 

 

The person responsible for arranging for the release of this announcement on
behalf of the Company is MUFG Corporate Governance Limited.

 

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