REG - PRS REIT PLC (The) - Proposed Sale of PRS REIT Holdco
03/11/2025 13:15
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RNS Number : 9520F PRS REIT PLC (The) 03 November 2025
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PRSR.L
The PRS REIT plc
("the PRS REIT" or "the Company")
Proposed Sale of The PRS REIT Holding Company Limited
Conclusion of Strategic Review and Formal Sale Process
Publication of Circular and Notice of General Meeting
Further to the announcement on 17 September 2025, the Board of The PRS REIT
plc is pleased to announce that it has entered into a conditional agreement
for the Sale of The PRS REIT Holding Company Limited (PRS HoldCo), the
Company's operating subsidiary, which holds the entirety of the Company's
portfolio of property assets, to UK Housing Platform Bidco Limited (the
Buyer). The Buyer is a wholly owned subsidiary of UK Housing Platform LP, a
newly established fund that is advised by Waypoint Asset Management Limited as
investment adviser. The equity funding for the Sale is to be deployed from UK
Housing Platform LP, whose underlying investors comprise four leading UK local
government pension schemes.
Transaction highlights:
- The Sale will be implemented through the sale by the Company of
the entire issued share capital of PRS HoldCo to the Buyer, for cash
consideration of approximately £628.86 million (the Proposal).
- The terms of the Sale are in line with those announced by the
Company on 17 September 2025, adjusted for changes to the Company's net cash
position.
- If the Sale becomes unconditional and proceeds to Completion, it
is the intention of the Board to seek Shareholder approval for the voluntary
liquidation of the Company with a view to distributing the Company's net
assets to Shareholders as soon as reasonably practicable.
- If Shareholders approve the liquidation of the Company, expected
in December 2025, the Company expects to have net assets of approximately
£630.88 million((1)) (the Adjusted Net Assets). This is equivalent to
approximately 114.9 pence per Ordinary Share (the Adjusted Net Assets per
Ordinary Share).
- The Directors intend to unanimously recommend that Shareholders
vote in favour of the Resolution to be proposed at the General Meeting as they
have irrevocably undertaken to do in respect of their own beneficial and
connected holdings amounting, in aggregate, to 6,266,500 Ordinary Shares,
representing approximately 1.14% of the Company's issued share capital.
The Adjusted Net Assets per Ordinary Share of 114.9 pence would represent:
· a premium of approximately 27.43% to the volume weighted average
price of 90.14 pence per Ordinary Share for the six months prior to 22 October
2024 (being the last Business Day prior to the announcement of the Company's
Strategic Review and Formal Sale Process);
· a premium of approximately 6.55% to the closing price of 107.80
pence per Ordinary Share on 22 October 2024 (being the latest Business Day
prior to the announcement of the Company's Strategic Review and Formal Sale
Process);
· a discount of approximately 19.68% to the 30 June 2025 NAV per
Ordinary Share of 143.0 pence.
The Company has today declared an interim quarterly dividend of 1.1 pence per
Ordinary Share in respect of the first quarter (July - September) of its
current financial year ending 30 June 2026. Shareholders will be entitled to
this dividend, without any corresponding reduction to the Consideration. One
hundred per cent. (1.1 pence per Ordinary Share) of the dividend will be paid
as a Property Income Distribution. The dividend will be payable, on or around
28 November 2025, to Shareholders on the register on 14 November 2025. The
ex-dividend date will be 13 November 2025.
Conclusion of Strategic Review and Formal Sale Process
In conjunction with the Sale, the Company also announces the conclusion of its
Strategic Review and the termination of its Formal Sale Process. Prior to this
announcement, all parties including Long Harbour and KKR had withdrawn from
the Formal Sale Process. The Company is no longer considered to be in an
"offer period" as defined in the Takeover Code.
Notice of General Meeting and Recommendation
The Company will shortly post a circular to Shareholders which describes the
background to, and reasons for, the Proposal. It also explains why the Board
considers the Proposal to be in the best interests of the Company and its
Shareholders as a whole, and unanimously recommends that Shareholders vote in
favour of the Resolution.
Shareholder approval will be sought for the Sale at a General Meeting which
will be held at the offices of Dentons UK and Middle East LLP at One Fleet
Place, London, EC4M 7RA at 11a.m. on 27 November 2025. The Notice of General
Meeting will shortly be sent to Shareholders.
The Resolution to be proposed at the General Meeting shall be a special
resolution requiring at least 75 per cent. of votes cast to be in favour for
the Resolution to be passed.
Significant Transaction
The Sale constitutes a significant transaction for the purposes of the UK
Listing Rules, and is therefore notifiable in accordance with UKLR 7.3.1R and
UKLR 7.3.2R.
Circular
Extracts from the Circular are set out below in Appendix 1. The above
summary should be read in conjunction with the full text of this announcement
and the Circular. Your attention is drawn to the risk factors set out in Part
2 of the Circular.
Unless defined otherwise, capitalised terms used throughout this announcement
shall have the meanings given to such terms in the Definitions section below.
References to paragraphs below refer to the relevant paragraphs of the
Circular and references to 'this Document' refer to the Circular. References
to numbered 'Parts' below refer to the relevant parts of the Circular.
A copy of the Circular will be shortly available on the Company's website:
https://www.theprsreit.com/investor-centre/reports-circulars/
(https://www.theprsreit.com/investor-centre/reports-circulars/)
For further information, please contact:
The PRS REIT plc Tel: 020 7496 3000 (c/o Singer Capital Markets)
Geeta Nanda, Non-Executive Chair
Sigma PRS Management Ltd Tel: 0333 999 9926
Investment Adviser to The PRS REIT plc
Graham Barnet, Mike McGill
Singer Capital Markets Tel: 020 7496 3000
Sole Financial Adviser and Corporate Broker to The PRS REIT plc
James Moat, Asha Chotai, James Todd, Patrick Weaver
G10 Capital Limited (part of IQ-EQ group) Tel: 0207 397 5450
AIFM to The PRS REIT plc
Maria Baldwin
KTZ Communications Tel: 020 3178 6378
Financial PR Adviser to The PRS REIT plc
Katie Tzouliadis, Robert Morton
UBS AG London Branch Tel: 020 7567 8000
Sole Financial Adviser to UK Housing Platform LP Limited
Aadhar Patel, George Dracup, Ian Hart
Singer Capital Markets Advisory LLP ("Singer Capital Markets") is authorised
and regulated by the Financial Conduct Authority in the United Kingdom. Singer
Capital Markets is acting as financial adviser and corporate broker to The PRS
REIT plc and no one else in connection with the matters set out in this
announcement. In connection with such matters, Singer Capital Markets, its
affiliates and their respective directors, officers, employees and agents will
not regard any other person as their client, nor will they be responsible to
any other person for providing the protections afforded to their clients or
for providing advice in relation to the Sale, the contents of this
announcement or any other matter referred to herein.
UBS AG London Branch ("UBS") is authorised and regulated by the Financial
Market Supervisory Authority in Switzerland. It is authorised by the PRA and
subject to regulation by the FCA and limited regulation by the PRA in the
United Kingdom. UBS is acting as financial adviser to UK Housing Platform LP
Limited and no one else in connection with the matters set out in this
announcement. In connection with such matters, UBS, its affiliates and their
respective directors, officers, employees and agents will not regard any other
person as their client, nor will they be responsible to any other person for
providing the protections afforded to their clients or for providing advice in
relation to the Sale, the contents of this announcement or any other matter
referred to herein.
Appendix 1 - Extracts from the Circular
BACKGROUND TO AND REASONS FOR THE PROPOSAL AND THE RECOMMENDATION
Background to the Strategic Review and Formal Sale Process
On 29 August 2024, the Board received the Requisition Notice seeking to change
the composition of the Board. In the twelve months prior to the receipt of the
Requisition Notice, the Company's average share price was 78.61 pence.
Following receipt of the Requisition Notice, the Company carried out an
extensive consultation process with Shareholders. During this process, the
Board received feedback regarding the Company's strategic direction and the
prolonged period of share price underperformance relative to NAV. Shareholders
also provided feedback regarding the Company's approach and strategy towards
asset disposals and other options available to the Board to maximise value for
Shareholders, and the extension of the IAA with the Investment Adviser.
On 23 October 2024, the Company announced the commencement of its Strategic
Review in order to consider the future of the Company and to explore all the
various strategic options available to enhance value for Shareholders,
including a potential sale of the Company (the Strategic Review and Formal
Sale Process).
Information on the Strategic Review and Formal Sale Process
Following the commencement of the Strategic Review and Formal Sale Process,
the Company and its advisers commenced active discussions with a range of
interested parties in relation to, amongst other things, a potential sale of
the Company and prepared a data room to facilitate this process.
On 11 February 2025, the Board confirmed that, having made the data room
available to multiple interested parties, it had received several non-binding
proposals in connection with the acquisition of the Company. The majority of
these proposals were pitched within a price range representing a premium to
the then share price of 109.2 pence per Ordinary Share and a discount to the
Net Asset Value as at 30 June 2024 of 133.2 pence per Ordinary Share (being
the latest published NAV as at the date of the announcement). The Board
proceeded to invite a subsection of such parties to enter into a confirmatory
due diligence process.
On 11 June 2025, the Company announced it had received a non-binding proposal
from Long Harbour regarding a possible offer for the entire issued and to be
issued Ordinary Share capital of the Company, pursuant to the Strategic Review
and Formal Sale Process. Under the terms of this possible offer, Shareholders
would be entitled to receive 115.0 pence per Ordinary Share in cash. This
proposal was subject to, inter alia, confirmatory due diligence and financing.
On 30 June 2025, the Company announced that other than the Long Harbour
possible offer announced on 11 June 2025, all other non-binding proposals
received by the Company had now been withdrawn. The Board announced its
intention to consult with Shareholders regarding Long Harbour's possible offer
as well as other options available to the Company under the Strategic Review
and Formal Sale Process.
On 21 July 2025, the Board confirmed that it had completed its consultation
process with Shareholders and based on the feedback received, the Company
continued to progress with its Strategic Review and Formal Sale Process,
engaging with potentially interested parties including Long Harbour.
On 8 September 2025, the Board confirmed that KKR, in its capacity as adviser
to its affiliated investment funds and separately managed accounts, was
participating in the Company's Strategic Review and Formal Sale Process.
On 17 September 2025, the Board announced that it had entered into non-binding
heads of terms for the proposed sale of PRS HoldCo, to the Buyer (HOT
Announcement) for cash consideration of approximately £646.2 million. The
Board notes that it has not received any written proposals on superior terms
to the Sale, or an equivalent proposal that is not conditional on securing
further funding.
Rationale for the Proposal
· The Strategic Review and Formal Sale Process comprised a
competitive sale process, alongside a detailed review of the Company's
standalone strategy, and reflected ongoing feedback from Shareholders.
· Pursuant to the Formal Sale Process, the Company engaged with a
wide range of potential acquirers, with varying investment strategies, capital
structures and geographical locations. Following these discussions, 21
potential acquirers progressed to enter the Company's data room, and the
Company received several non-binding proposals in connection with the
acquisition of the Company or its assets.
· The Proposal reflects the most beneficial terms of any written
proposals received. The Company received other proposals on equivalent terms,
with all such proposals being conditional on securing further equity funding.
· In line with the process followed since IPO, the NAV of the
Company is calculated by reference to the aggregate valuation of each separate
Property asset. These individual Property valuations have been arrived at in
accordance with the requirements of IFRS 13 and the Royal Institution of
Chartered Surveyors' (RICS) Valuation - Global Standards, incorporating the
IVSC International Valuation Standards effective from 31 January 2025,
together, where applicable, with the UK National Supplement effective 14
January 2019, (together the RICS Red Book). These valuations include a number
of unobservable inputs and other valuation assumptions. The key unobservable
inputs are: estimated rental value; gross to net assumption; and investment
yield. Other special assumptions applied in addition to the key unobservable
inputs, and used since inception, include: all individual site valuations have
been treated assuming part of a larger portfolio (in excess of £50 million);
and an indirect purchase of a special purpose vehicle holding title to the
asset, so stamp duty is assessed on a share purchase basis rather than as
property.
· The Board has noted the disparity between the pricing presented
in these indications of interest and the Company's NAV which has highlighted
that, due to the size of the Property Portfolio, amongst other things, the
current realisable value of the Company's assets as a whole differs materially
from the aggregate of the estimate of each individual site's valuation.
Notably, the comparable transactions used to prepare the individual site
valuations, and therefore the NAV, comprised substantially smaller portfolios
that could more readily be integrated into a potential acquirer's existing
platform without significant investment in additional management capability.
· Throughout the Strategic Review, the Board considered its
strategy, and in particular with regards to piecemeal asset disposals, taking
into account market conditions, as well as technical, debt and tax
implications. The Board considers that the outcome of disposals of assets on a
piecemeal basis would be uncertain, take a substantial period of time and
reduce the Company's scale and liquidity. Accordingly, the Board does not
consider that this approach would improve returns for Shareholders.
· The capital raised by the Company has been deployed and there are
limited options available to grow the Company and Property Portfolio further.
· Prior to the launch of and throughout the course of the Strategic
Review and Formal Sale Process, the Board has engaged with Shareholders to
understand their views on the options available to the Company.
· The Sale is subject to Shareholder approval by way of special
resolution requiring at least 75 per cent. of votes cast to be in favour,
which emphasises the Board's commitment to corporate governance and ensuring
Shareholders determine the future strategy of the Company.
Conclusion
In evaluating the Proposal, the Board has determined that the Proposal is the
best option for Shareholders based on the following:
· the Proposal is expected to deliver Adjusted Net Assets per
Ordinary Share which would provide Shareholders with a near term cash return
which represents a 6.55 per cent. premium to the volume weighted average price
of 107.8 per Ordinary Share for the six months prior to 22 October 2024 (being
the latest Business Day prior to the Strategic Review and Formal Sale Process
Announcement);
· the Proposal reflects the most attractive terms received by the
Company having undertaken a competitive sale process and explored interest
from a number of potential acquirers;
· the views of Shareholders who have provided feedback to the
Company, indicating their support for the Sale and concerns over whether any
other actions taken under the Strategic Review and Formal Sale Process would
result in improved Shareholder returns in the near term; and
· the challenging interest rate environment, which presents
significant uncertainty in relation to the timing and terms of any possible
future process to realise the Company or its assets.
Accordingly, the Directors consider the Sale and the passing of the Resolution
to be in the best interests of the Company and its Shareholders as a whole.
Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the Resolution.
Termination of the Formal Sale Process
In conjunction with entering into the Sale Agreement, the Company announced
the conclusion of the Strategic Review and the termination of the Formal Sale
Process. Prior to the termination of the Formal Sale Process, all parties who
have approached the Company, including Long Harbour and KKR, had withdrawn
from the Formal Sale Process.
Accordingly, the Company is no longer deemed to be in an "offer period" as
defined in the Takeover Code.
Return of Capital
Return to Shareholders and factors impacting such return
Subject to Completion of the Sale, the Board intends to convene the Second
General Meeting to propose a special resolution for the voluntary liquidation
of the Company. Should Shareholders approve the Liquidation Resolution, the
Company will distribute all of its net assets at that time to Shareholders.
The Adjusted Net Assets relate to future actions and circumstances which, by
their nature, involve risks, uncertainties and contingencies. As a result, the
net assets of the Company following Completion, or the actual cash return to
Shareholders in the event of a liquidation, may be more or less than the
Adjusted Net Assets.
In calculating the Adjusted Net Assets, the Company's Directors have adjusted
the Company's latest NAV, being as at 30 June 2025, for the following assumed
impacts of the Proposal:
· Completion of the Sale and receipt of the Consideration of
£628.86 million in accordance with the terms outlined in this document;
· Estimated transaction expenses of £5.60 million (comprised
largely of adviser, legal and due diligence fees);
· Estimated corporation tax of £7.16 million, reflecting the
corporation tax liability that will occur on the accounting profit made on the
Sale of PRS Holdco; and
· the Company is placed in liquidation and incurs estimated
termination and liquidation expenses of £0.59 million (comprised largely of
termination of the professional service providers contracts, liquidation fees,
delisting fees etc.).
Expected timing of return to Shareholders
Should Shareholders approve the Liquidation Resolution at the Second General
Meeting, the Company is targeting a distribution of substantially all its net
assets at that time (other than the one per cent. retention referred to in the
next paragraph) no later than the end of December (with the target being five
Business Days after entering liquidation).
As set out in paragraph 8 below and Part 3 (Summary of the principal terms and
conditions of the Sale) of this document, under the Sale Agreement, the
Company is required to retain one per cent. of the Consideration for a period
of at least three months to cover any claims under the Sale Agreement which
have been notified to the Company within that three month period. As soon as
possible after that period, the Company expects to make a further distribution
to Shareholders reflecting substantially all the remaining net assets of the
Company.
The Board therefore expect the following returns to be made to Shareholders
under the Proposal:
· November 2025: payment of a dividend of up to 1.1 pence per
Ordinary Share (to the extent such dividend is declared) in respect of Q1
FY26;
· December 2025: the initial distribution in liquidation,
comprising the Company's net assets less the one per cent. of Consideration
retention;
· February 2026: a further distribution in liquidation, which the
Board expects to comprise substantially all remaining net assets of the
Company. The Board expects that the initial and further distributions in
aggregate to Shareholders will be approximately 114.9 pence per Ordinary
Share; and
· By end of 2026: A final de-minimis distribution of any unutilised
liquidator's retention (estimated to be in aggregate £100,000).
The Board believes that this is the most efficient way to return the net
proceeds of the Sale to the Shareholders. Should Shareholder approval to put
the Company into voluntary liquidation not be obtained, the Board would
reassess the options available to the Company at that time.
Information on the Property Portfolio
The Property Portfolio has been assembled by the Investment Adviser since the
Company's initial public offering on 31 May 2017. The Company has invested
over £1 billion in a portfolio of high-quality homes for private rental
across the regions, having raised a total of £0.56 billion (gross) through
its IPO and subsequent fundraisings in February 2018 and September 2021. As at
30 June 2025 there are 5,478 new rental homes within the Property Portfolio,
which the Company believes is the largest build-to-rent single-family rental
portfolio in the UK.
Current trading update
As announced by the Company on 7 October 2025, over the first quarter of the
current financial year, the estimated rental value (ERV) of the Company's
completed portfolio increased to £73.4 million per annum as at 30
September 2025 (30 June 2025: 5,478 completed homes with an ERV of £72.0
million per annum and 30 September 2024: 5,425 completed homes with an ERV
of £67.5 million per annum).
Asset performance over the quarter was strong, with rent collection in the
first quarter at 99 per cent. (30 September 2024: 100 per cent.) and total
occupancy at 30 September at 96 per cent. (30 September 2024: 98 per cent.),
with 5,251 homes occupied out of the total of 5,478. Including those 83 homes
reserved for applicants who had passed referencing and paid rental deposits
but not taken occupancy by 30 September 2025, total occupancy was 97 per
cent. Gross arrears at 30 September 2025 stood at £2.1
million (2024: £1.6 million), and the like-for-like rental growth on
stabilised sites over the year to 30 September 2025 was circa 5 per cent.
(2024: circa 12 per cent.).
Information on the Buyer
The Buyer is wholly owned by UK Housing Platform GP Limited acting in its
capacity as general partner of UK Housing Platform LP. The fund is established
and advised by Waypoint.
Waypoint is a London-headquartered real estate investment and asset management
firm, overseeing a portfolio exceeding £3 billion in value. Waypoint manages
capital on behalf of a diverse client base including UK pension schemes,
institutional investors, high-net-worth individuals, lenders, and family
offices.
Waypoint currently manages five real estate equity investment funds, alongside
a complementary debt lending and loan servicing platform. The capital for this
transaction is being deployed from a co-mingled fund advised by Waypoint,
whose underlying investors comprise leading UK local government pension funds.
Summary of the principal terms of the Sale
The Sale is being made pursuant to the terms of the Sale Agreement. Under the
Sale Agreement, the Company has agreed to sell the entire issued share capital
of PRS HoldCo to the Buyer. The Sale Agreement contains certain warranties and
indemnities given by each of the Company and the Buyer which are customary for
a transaction of this nature.
The Consideration under the Sale Agreement payable by the Buyer to the Company
on Completion is £628.86 million, calculated on the basis of the Locked Box
Accounts as at the Locked Box Date of 30 June 2025.
The Company shall retain an amount of at least £6.31 million in cash (being
one per cent. of the Consideration) in order to pay any claim made by the
Buyer under the Sale Agreement which is notified to the Company within three
months from Completion and which is settled or finally determined in favour of
the Buyer.
Further details of the terms of the Sale, including the principal terms of the
Sale Agreement, are set out in Part 3 (Summary of the principal terms and
conditions of the Sale) of this document.
Completion of the Sale is conditional upon the approval of the Resolution by
Shareholders at the General Meeting and satisfaction of the SW Change of
Control Condition. The Board expects, subject to approval of the Resolution at
the General Meeting and satisfaction of the SW Change of Control Condition,
that Completion will occur on, or around, 11 December 2025.
In the event that the Resolution is not passed and, as a result, the Sale does
not proceed, the Company will be liable to pay the Break Fee to the Buyer of
approximately £5.7 million, in accordance with the Sale Agreement, and its
own abort costs which are expected to be approximately £2.46 million.
Financial effects of the Sale on the Company and use of net cash reserves and
Debt Facilities
Financial effects of the Sale on the Company
The Property Portfolio comprises the entire business of the Company's Group.
After adjustment for estimated transaction costs, the Company expects,
immediately following Completion, to have Adjusted Net Assets of approximately
£630.88 million, equivalent to 114.9 pence per Ordinary Share.
The Adjusted Net Assets per Ordinary Share equates to a 6.55 per cent. premium
to the Ordinary Share price of 107.8 pence as at 22 October 2024 (the closing
price immediately prior to the Strategic Review and Formal Sale Process
Announcement) and a 4.65 per cent. premium to the average Ordinary Share price
over the twelve months to 31 October 2025 of 109.76 pence. The Adjusted Net
Assets per Ordinary Share equates to a 19.68 per cent. discount to the latest
published Net Asset Value per Ordinary Share of 143.0 pence, as at 30 June
2025.
If Shareholders subsequently approve the voluntary liquidation of the Company
in December 2025, the estimated amount per Ordinary Share available for
distribution to Shareholders in the liquidation is expected to be materially
the same as the Adjusted Net Assets per Ordinary Share of 114.9 pence, unless
and to the extent that any dividends are paid in the period between Completion
and the Company's liquidation.
Use of net cash reserves and Debt Facilities
If the Sale becomes unconditional, it is the intention of the Board to seek
Shareholder approval for the voluntary liquidation of the Company with a view
to distributing substantially all of the Company's net assets (which will
comprise of cash) to Shareholders as soon as reasonably practicable (as
outlined in paragraph 3 (Return of Capital) above).
The Buyer will retain the Debt Facilities and this is reflected in the
Consideration.
Prior to any distribution to Shareholders, the Board intends to hold the cash
proceeds of the Sale, together with existing cash reserves, in interest
bearing current accounts and money market instruments in accordance with its
investment policy.
Should Shareholder approval to put the Company into voluntary liquidation not
be obtained, the Board would reassess the options available to the Company at
that time.
REIT and listing status
Upon Completion, the Company will dispose of the entirety of the Property
Portfolio. The Company intends to notify HMRC in accordance with s.571 of the
CTA that it intends to exit the REIT regime from the date of Completion. As a
result, the Company will thereafter not benefit from the tax treatment
afforded by REIT status.
It is intended that the Company maintains its listing in the period
immediately prior to the Company's voluntary liquidation. Maintaining the
listing would allow Shareholders to continue to trade Ordinary Shares during
the intervening period. Should Shareholder approval be obtained for the
Proposal, the Company intends to cancel the listing of its shares on the Main
Market of the London Stock Exchange and the FCA's Official List, to take
effect immediately following appointment of liquidators, for which Shareholder
approval will be sought, at the Second General Meeting to be convened in due
course.
Recommendation to Shareholders
The Board, who have been so advised by Singer Capital Markets as to the
financial terms of the Sale, considers the terms of the Sale to be fair and
reasonable. In providing its advice to the Directors, Singer Capital Markets
has taken into account the commercial assessments of the Directors.
The Directors consider the Sale and the passing of the Resolution to be in the
best interests of the Company and its Shareholders as a whole. Accordingly,
the Directors unanimously recommend that Shareholders vote in favour of the
Resolution.
The Directors intend to vote in favour of the Resolution in respect of their
own beneficial and connected holdings of Ordinary Shares, amounting to
6,266,500 Ordinary Shares (representing approximately 1.14 per cent of the
issued share capital of the Company as at the latest practicable date prior to
publication of this document) and have signed undertakings to this effect.
RISK FACTORS
Prior to voting on the Resolution at the General Meeting, Shareholders should
consider carefully, together with all other information contained in this
document, the risks associated with the Sale that are described below. The
risks disclosed are those that the Company and the Directors consider: (a) are
material risks relating to the Sale; or (b) will be material new risks to the
Company as a consequence of the Sale; or (c) are existing material risks to
the Company that will be impacted by the Sale.
The risk factors set out in this document are those that are required to be
disclosed under the UK Listing Rules, and do not seek to cover all of the
material risks which generally affect the Company or the Target Group.
The following is not an exhaustive list or explanation of all the risks that
may affect the Ordinary Shares or the Target Group. Additional risks and
uncertainties relating to the Ordinary Share and the Target Group that are not
currently known to the Directors, or that the Directors currently deem
immaterial, may, individually or cumulatively, also have a material adverse
effect on the business, financial results or financial condition and prospects
of the Target Group, and, if any such risks, should materialise, the price of
the Ordinary Shares may decline and investors could lose all or part of their
investment.
The information given is at the date of this document and, except as required
by the UK Listing Rules or any other applicable law, will not be updated. Any
forward-looking statements are made subject to the reservations specified
under "Information regarding forward-looking statements" at the beginning of
this document.
1. Risks relating to the Sale
Conditions in the Sale Agreement
Completion of the Sale Agreement is conditional upon the passing of the
Resolution at the General Meeting and the satisfaction of the SW Change of
Control Condition. There can be no assurance that either of these Conditions
will be satisfied, in which case Completion will not occur and the Company
will not receive the Consideration.
The Buyer is entitled to terminate the Sale Agreement and withdraw from the
Sale if the Shareholder Condition is not satisfied on or before the Long Stop
Date, or if the SW Change of Control Condition is not satisfied on or before
26 November 2025, being the Business Day immediately prior to the General
Meeting (although this date may be extended by the parties). If the Resolution
is not passed on or before the Long Stop Date, or the SW Change of Control
Condition is not satisfied on or before the SW Condition Deadline and
Completion does not, therefore, occur, the Sale will not take place, and the
Company will not receive the Consideration.
The Company may incur liability under the Sale Agreement
The Sale Agreement contains certain customary warranties and indemnities given
by the Company, as seller, in favour of the Buyer. The Buyer has undertaken
due diligence in connection with the Sale and the Company has disclosed
matters against the warranties and has taken steps to minimise the risk of
liability under these provisions. In addition, the Buyer has obtained warranty
and indemnity insurance in respect of the warranties and tax covenant under
the Sale Agreement. Although the liability of the Company under the warranties
and tax covenant is limited to £1 under the Sale Agreement, claims other than
in respect of the warranties and tax covenant given by the Company would not
be covered by this £1 cap and, following Completion, the Company retains
liability in respect of any other non-warranty and non-tax covenant claims,
subject to customary liability caps.
Any liability to make a payment arising from a successful claim by the Buyer
under the Sale Agreement could have a material adverse effect on the Company's
financial condition and impact on the amount and timing of any distributions
of the Sale proceeds.
Also, if the Shareholder Condition is not satisfied by the Long Stop Date or
Completion fails due to default by the Company, the Company must pay the Break
Fee to the Buyer.
Third party interference with the Sale
Whilst the Company has concluded the Formal Sale Process, as a listed company,
the Company, is exposed to potential approaches from third parties seeking to
instigate a public takeover of the Company which may delay or prevent
Completion.
The Company might also be approached by a third party seeking to make a more
favourable offer than that of the Buyer for the Property Portfolio and the
Directors might consequently be required (in accordance with their fiduciary
duties) to withdraw their recommendation of the Resolution and the Sale.
Under the Sale Agreement, if the Shareholder Condition is not satisfied, the
Company will be liable to pay the Break Fee of approximately £5.7 million to
the Buyer.
If the Company were to terminate the Sale Agreement other than in accordance
with its terms, or were to otherwise breach the terms of the Sale Agreement,
the Company may be found liable to pay damages to the Buyer in respect of the
loss it has suffered as a result of such termination or breach. Alternatively,
at a court's discretion, the Company may be ordered to perform its obligations
under the Sale Agreement if such performance remained possible. There can be
no certainty as to the amount of any damages the Company may be required to
pay, although such damages typically seek to provide redress to a party as if
the breached contract has been properly performed.
Costs and expenses related to the Sale could exceed amounts currently
estimated
Whilst the Board believes it has the appropriate arrangements in place to
manage the expected costs and expenses in relation to the Sale, including
post-Completion costs, there can be no assurance that the costs and expenses
will not exceed the amounts currently estimated. There may also be further
additional and unforeseen expenses incurred in connection with the Sale either
due to delays or otherwise. Such costs and expenses may adversely affect the
Adjusted Net Assets that the Company expects to have at or following
Completion, or (if approved in due course by Shareholders) at the date of
liquidation of the Company.
2. Material risks relating to the company arising in connection with the
Sale
Loss of Consideration
If the Sale does not complete, the Company will not receive the Consideration
from the Sale and, consequently, the transaction costs incurred by the Company
in connection with the Sale that are not contingent on Completion occurring
would not be offset by such Consideration. In the event that Completion does
not occur, the Company will be liable to pay its own abort costs and, in
certain specified circumstances, the Company may also be liable to pay the
Break Fee, as detailed above. In addition, the market's perception of a failed
transaction could result in a negative impact on the market price of the
Ordinary Shares and the Company's financial condition, results of operations
and prospects.
Transaction and liquidation costs
Whilst the Board believes it has appropriate arrangements in place to manage
the expected costs and expenses in relation to the Sale, including
post-completion costs, there can be no assurance that the costs and expenses
will not exceed the amounts currently estimated. There may also be further
additional and unforeseen expenses incurred in connection with the Sale either
due to delays or otherwise. Such costs and expenses may adversely affect the
net proceeds from the Sale that the Company expects to have at or following
Completion, or (if approved by Shareholders at the Second General Meeting)
upon commencement of the voluntary winding-up of the Company.
Loss of Shareholder value
The Board believes that the Sale is in the best interests of Shareholders and
the Company as a whole and that the Sale currently provides the best
opportunity to realise an attractive and certain value for the Property
Portfolio. If the Sale does not complete, the subsequent realisation price of
the Property Portfolio may be lower than can be realised by way of the Sale.
This could result in the financial position of the Company being materially
different to the position it would have been in if the Sale had completed.
No assurance of a future sale
If the Sale does not complete, there can be no assurance that the Company
would be able to realise the assets comprising the Property Portfolio (either
individually, in parcels or as a whole) at a later date, at an improved, or
equivalent, or favourable valuation or at all. It could also have a material
adverse effect on the Company's business, financial condition, results of
operations and prospects.
Potentially disruptive effect on the Company
To preserve Shareholder value in the event the Sale does not complete, the
Board and the Investment Adviser may be required to allocate additional time
and cost to the ongoing assessment of how best to maximise Shareholder value
in the medium term. This may limit the management and financial resources to
manage the Property Portfolio. These matters may adversely affect the
Company's financial condition and results of operations.
The Announcement of the Sale may have a disruptive effect on the operation
and/or management of the Properties
The Sale Agreement requires the Company to continue to procure the management
of the Property Portfolio in the ordinary course of business prior to
Completion. The Company is reliant on the skills and expertise of certain
individuals at the Company's third-party service providers, in particular the
Investment Adviser, in order to maintain its effective management. The
Announcement of the Sale may negatively impact the performance of such
individuals at the Company's key service providers. Such outcomes may impact
the Company's financial position and prospects in the event that Completion
does not occur.
Pre-Completion changes in the Property Portfolio
During the period from the signing of the Sale Agreement to Completion, events
or developments may occur, including changes in the investment performance and
outlook of the Property Portfolio or external market factors, that could make
the terms of the Sale Agreement less attractive for the Company. The gap
between the signing of the Sale Agreement and Completion is only expected to
be four to six weeks, but the Company would be obliged to complete the Sale
notwithstanding such events or developments. This may have an adverse impact
on the value that the Company is able to realise for Shareholders.
Potential counterparty risk relating to the cash proceeds of the Sale
The Consideration will be satisfied through a transfer of cash through the
banking system. The security of funds within the banking system is subject to
counterparty and fraud risk. There is possibility that the receiving or
custodial financial institution may fail to meet its obligations. This risk is
particularly relevant during periods of financial instability, where a bank's
liquidity or solvency may be compromised. Fraud risk is a growing concern,
especially in digital banking environments. Customers may be targeted by
phishing schemes, impersonation fraud, or unauthorized transactions during or
after the transfer process. Even where banks and businesses implement robust
security measures, vulnerabilities in payment systems or customer interfaces
can be exploited, leading to financial loss or compromised account integrity.
Post Completion the Company will hold the Consideration in cash or cash
equivalent instruments until it is able to be returned to Shareholders. While
these assets are generally considered low risk, there is a risk that the
counterparties with whom such cash and cash equivalents are held may fail or
otherwise be unable to meet their obligations, resulting in a loss to the
Company. In addition, when assets are held in cash or cash-equivalent
investments, they will be out of the market and will not benefit from positive
stock market movements. Returns on cash and cash equivalents are typically low
and may not keep pace with inflation or other investment opportunities.
Furthermore, in times of market stress or financial instability, the ability
to access or liquidate cash and cash equivalents may be limited or delayed.
Any such events could have a material adverse effect on the Company's access
to the Consideration.
3. Existing material risks to the Company that will be impacted by the
Sale
The Company's operations will be materially less diversified and therefore
materially more susceptible to specific risks. The Property Portfolio
comprises the entire business of the Company. After Completion, the Company
expects to have Adjusted Net Assets of £630.88 million in cash, and the Board
intends to seek Shareholder approval for the voluntary liquidation of the
Company in order to distribute substantially all of the assets of the Company
to Shareholders.
Following the Sale, the Company's operations will be materially less diverse
and will be materially more susceptible to adverse developments relating to
the holding, and value, of cash. Weak performance of cash as an asset class,
whether as a result of interest rate movements and or inflation, or otherwise,
will have a proportionately greater adverse impact on the financial condition
and valuation of the Company and a greater risk of share price volatility
following the Sale than would have been the case prior to Sale.
Inability to realise Shareholder value
If the Sale becomes unconditional, it is the intention of the Board to seek
Shareholder approval for the voluntary liquidation of the Company with a view
to distributing the Company's net assets to Shareholders as soon as reasonably
practicable. It is anticipated that the liquidators will be in a position to
make an initial distribution of substantially all of the net assets of the
Company in December 2025, approximately five Business Days after the expected
date of liquidation. This timeline is to allow a distribution prior to year
end.
Although the Company is targeting a voluntary liquidation in December 2025,
the timing and quantum of the distribution of substantially all of the
Company's net assets cannot be guaranteed and may be adversely impacted by the
level of the Company's liabilities and any claims made against the Company by
the Buyer pursuant to the Sale Agreement or claims made by any other
creditors.
The quantum of net assets to be distributed to Shareholders following the
voluntary liquidation (if approved by Shareholders) will be determined by
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the net assets of the Company
following Completion, or the actual cash return to Shareholders in the event
of a liquidation, may be more or less than the Adjusted Net Assets outlined
above.
In the event that Shareholders do not vote in favour of the Company entering
into voluntary liquidation, the Board would reassess the options available to
the Company to realise Shareholder value at that time, and there can be no
certainty that such options would result in the Company realising Shareholder
value in the near term.
In addition, in the event that the value of the Property Portfolio increases
following Completion, there is no guarantee that the anticipated return of
value to Shareholders will provide a better return to Shareholders than if the
Property Portfolio had been retained by the Company.
The market price of the Ordinary Shares may go down as well as up and may not
reflect the value of the underlying assets
Shareholders should be aware that the value of an investment in the Company
may go down as well as up and can be highly volatile. The price at which the
Ordinary Shares may be quoted and the price which Shareholders realise for
their Ordinary Shares will be influenced by a large number of factors, some
specific to the Company and its operations and some which may affect its
industry, other comparable companies or publicly traded companies as a whole.
Certain investors wanting exposure to the Property Portfolio may sell their
Ordinary Shares as a result of the Sale. However, similarly, certain investors
wanting to capitalise on the Adjusted Net Assets may seek to acquire Ordinary
Shares and this may impact liquidity in the Ordinary Shares and the market
price of the Ordinary Shares. The sentiments of the market regarding the Sale
will be one such factor and this, together with other factors including the
actual or anticipated fluctuations in the financial performance of the
Company's competitors, market fluctuations, and legislative or regulatory
changes in the industry or those affecting real estate investment trusts
generally, could lead to the market price of the Ordinary Shares going up or
down. Changes in the market price of the Ordinary Shares will not alter the
Consideration payable by the Buyer.
HISTORICAL FINANCIAL INFORMATION ON PRS HOLDCO
The following historical financial information relating to The PRS REIT
Holding Company Limited has been extracted without material adjustments from
the consolidation schedules that underlie the Company's audited consolidated
financial statements for the years ended 30 June 2024 and 30 June 2025.
The financial information contained in this Part 4 does not constitute
statutory accounts within the meaning of section 434 of the Companies Act 2006
and has not been audited.
Shareholders should read the whole of this document and not rely solely on the
summarised financial information in this Part 4.
Income Statement
2024 2025
£'000 £'000
Rental income 58,231 66,476
Non-recoverable property costs (10,939) (13,168)
Net rental income 47,292 53,308
Other Income 194 101
Administrative expenses
Directors' remuneration 0 0
Investment advisory fee 0 0
Requisition/Strategic Review costs 0 0
Other administrative expenses (270) (181)
Total administrative expenses (270) (181)
Gain from fair value adjustment on investment property 73,412 53,626
Operating profit 120,628 106,853
Finance income 34 21
Finance costs (18,225) (20,649)
Dividend income
Profit before taxation 102,437 86,225
Taxation 0 0
Profit after taxation 102,437 86,225
Consolidated Statement of Financial Position
2025
£'000
ASSETS
Non-current assets
Investment property 1,200,092
Investments in subsidiaries 0
Current assets
Trade receivables 994
Other receivables 5,537
Cash and cash equivalents 4,681
11,212
1,211,304
LIABILITIES
Non-current liabilities
Accruals and deferred income 0
Interest bearing loans and borrowings 411,111
Capitalised loan costs (2,583)
IFRS16 lease liability 1,680
410,208
Current liabilities
Other payables - PRSR Plc interco 336,169
Trade and other payables 13,196
Provisions 0
Interest bearing loans and borrowings 18,240
Capitalised loan costs (375)
IFRS16 lease liability 20
367,250
Total liabilities 777,458
Net assets 433,846
EQUITY
Called up share capital 0
Share premium account 0
Capital reduction reserve 0
Members capital contributions 75,425
Retained earnings brought forward 309,846
Retained earnings in the period 86,225
Dividends paid (37,650)
Total equity attributable to the equity holders of the Company 433,846
ADDITIONAL INFORMATION
1 Company information
The Company was incorporated and registered in England and Wales on 24
February 2017 as a public limited company under the Companies Act.
The Company's registered office is at Floor 3, 1 St. Ann Street, Manchester,
M2 7LR. Contact by telephone, via the Company Secretary is on 0207 409 0181.
The principal laws and legislation under which the Company operates are the
Companies Act and the regulations made thereunder.
2 Directors
2.1 The Directors of the Company and their respective
functions are as follows:
Geeta Nanda Non-executive Chair
Steffan Francis Non-executive Director and Senior Independent Director
Roderick MacRae Non-executive Director
Robert Naylor Non-executive Director
Christopher Mills Non-executive Director
3 Directors' remuneration
As permitted by Article 83 of the Articles, the Board have determined that
each Director will be paid additional remuneration, equivalent to six months
of their annual fee, or twelve months in respect of Geeta Nanda as chair of
the Board, in recognition of each Director's time, effort and contribution to
the Strategic Review and Formal Sale Process, and the Sale. The aggregate
amount of these additional payments is approximately £149,500.
Mr Mills has indicated that he will donate his Director fees received from the
Company to the Harwood Charitable Trust, which provides educational support,
mainly for doctors in Africa.
4 Material contracts
4.1 The Company
Save as disclosed in this paragraph 4.1, no contracts have been entered into
(other than contracts entered into in the ordinary course of business) by the
Company, either: (a) within the two years immediately preceding the date of
this document which are or may be material to the Company; or (b) at any time,
which contain any provision under which the Company has any obligation or
entitlement which is or may be material to the Company as at the date of this
document.
Sale Agreement
Details of the Sale Agreement are set out in Part 3 (Summary of the principal
terms and conditions of the Sale) of this document.
Amendments to investment advisory agreement
On 8 July 2024 the Company amended its IAA with the Investment Adviser with
effect from 1 July 2024. The IAA was extended to 30 June 2029, an extension of
2.5 years from the end of the previous term and inclusive of a one-year notice
period.
The Investment Adviser fee was revised as follows:
· 0.90 per cent. (previously 1.00 per cent) per annum of the
adjusted Net Asset Value up to and including, £250 million;
· 0.85 per cent (previously 0.90) per annum of the adjusted Net
Asset Value in excess of £250 million and up to, and including £500 million;
· 0.70 per cent. (previously 0.75 per cent) per annum of the
adjusted Net Asset Value in excess of £500 million and up to, and including
£1 billion;
· 0.40 per cent. (previously 0.50 per cent) per annum of the
adjusted Net Asset Value in excess of £1 billion and up to, and including £2
billion; and
· 0.30 per cent (previously 0.40 per cent) per annum of the
adjusted Net Asset Value in excess of £2 billion.
Subsequently the IAA was amended on 8 November 2024 to provide that, in the
event of a change of control of the Company, both the Company and the
Investment Adviser receiving the right to serve notice to terminate the IAA on
12 months' notice.
The IAA and its amendments are governed by English law.
Amendment to the Development Management Agreements
The Company amended the Development Management Agreements with effect from 1
July 2024. The Development Management Fee was reduced to 3 per cent. on land
and to 3.5 per cent on construction components of the Development Cost. The
Development Management Fee remained payable monthly in arrears, with 50 per
cent. of the fee used to subscribe for Ordinary Shares in the Company
bi-annually.
The Development Management Agreements and their amendments are governed by
English law.
Singer Capital Markets financial advisory agreement
On 4 November 2024, the Company entered into a financial advisory agreement
with Singer Capital Markets in connection with the Strategic Review and Formal
Sale Process, pursuant to which Singer Capital Markets agreed to provide (i)
financial advisory services in relation to the Strategic Review and Formal
Sale Process under which the Sale has occurred, including in relation to the
Sale, advice on the merits and terms of the Sale and in respect of any
subsequent winding-up and de-listing of the Company; and (ii) advice in
respect of the Takeover Panel and compliance with the Takeover Code.
The agreement contains, amongst other thing, certain customary obligations on
the Company, including that the Company agrees to comply with the UK Listing
Rules and pay a fee to Singer Capital Markets on the terms agreed between
Singer Capital Markets and the Company.
The agreement contains certain customary warranties and indemnities from the
Company, together with provisions to enable Singer Capital Markets to
terminate the agreement in certain circumstances, which is usual for an
agreement of this kind.
The agreement is governed by English law.
4.2 The Target Group
Save as disclosed in this paragraph 4.2 and as otherwise disclosed in
paragraph 4.1 above, no contracts have been entered into (other than contracts
entered into in the ordinary course of business) by the Target Group, either:
(a) within the two years immediately preceding the date of this document which
are or may be material to the Target Group; or (b) at any time, which contain
any provision under which the Target Group has any obligation or entitlement
which is or may be material to the Target Group as at the date of this
document.
Amendment to the RBS Facility
The RBS Facility was amended and restated on 19 March 2025 relating to the
exercise of the accordion option under the RBS Facility agreement and increase
of the total commitments of £82,500,000.
The RBS Facility contains terms with are customary for agreements of this
nature, including obligations on the Target Group.
The agreement is governed by English law.
Cancellation of the Barclays Facility
The Barclays Facility was cancelled on 1 September 2025. The final development
site in the Barclays Facility, The PRS REIT (Hexthorpe Phase 4) Limited was
refinanced out of this facility and flipped into the RBS Facility. The
Barclays Facility was then cancelled and any remaining security under the
Barclays Facility was released.
5 Litigation
5.1 The Company
There are no governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which the Company is
aware) which may have, or have had, during the 12 months prior to the date of
this document, a significant effect on the Company's financial position or
profitability.
5.2 The Target Group
There are no governmental, legal or arbitration proceedings (including any
such proceedings which are pending or threatened of which the Company is
aware) which may have, or have had, during the 12 months prior to the date of
this document, a significant effect on the Company's financial position or
profitability.
6 No significant change
Other than disclosed in paragraph 6 of Part 1 (Letter from the Chair) of this
document, there has been no significant change in the financial or trading
position or the financial performance of the Company since 30 June 2025, being
the date to which the last published financial information relating to the
Company was prepared.
7 Consent
Singer Capital Markets has given, and not withdrawn, its written consent to
the publication of this document with references to its name being included in
the form and context in which they appear. Singer Capital Markets is regulated
in the UK by the FCA.
DEFINITIONS
The following definitions apply throughout this document unless the context
requires otherwise:
Adjusted Net Assets has the meaning given to it in paragraph 1 of Part 1 (Letter from the Chair)
of this document
Adjusted Net Assets per Ordinary Share has the meaning given to it in paragraph 1 of Part 1 (Letter from the Chair)
of this document
AIFM G10 Capital Limited a private limited company incorporated in England and
Wales with registered number 09224491 with their registered office at 4(th)
Floor, 3 More London Riverside, London, SE1 2AQ
Announcement the significant transaction announcement in accordance with Chapter 7 of the
UK Listing Rules made by the Company on or about the date of this document
Articles the articles of association of the Company
Barclays Facility the facility agreement originally dated 25 September 2020 between, amongst
others, The PRS REIT (Bluebird) Borrower Limited as borrower and Barclays Bank
PLC as arranger, original lender, original hedge counterpart, the agent and
security agent as amended: (i) pursuant to an amendment letter dated 17
November 2020, (ii) as amended and restated on 7 July 2021, (iii) as further
amended pursuant to amendment letters dated 29 December 2021, 28 February 2022
and 25 May 2022 respectively, (iv) as further amended pursuant to amendment
letters dated 28 July 2022, 1 November 2022, 30 January 2023, 26 May 2023, 15
June 2023, 16 April 2024, 11 July 2024, 23 September 2024, 2 December 2024, 24
February 2025 and 27 May 2025, as further amended from time to time
Board or Directors the board of directors of the Company or any duly constituted committee
thereof
Break Fee an amount equal to £5,701,230 (inclusive of any irrecoverable VAT in
connection therewith), payable by the Company to the Buyer in the event of a
Trigger Event
Business Day any day other than a Saturday, Sunday or public holiday in England and Wales
on which banks are open in London for general commercial business
Buyer UK Housing Platform Bidco Limited, a company incorporated in England and Wales
with registered number 16745563 and having its registered address at 4th Floor
17-19 Maddox Street, London, W1S 2QH
Circular or document this circular to Shareholders
Companies Act the Companies Act 2006, as amended from time to time
Company The PRS REIT plc, a public limited company incorporated in England and Wales
with registered number 10638461 and having its registered office at Floor 3, 1
St. Ann Street, Manchester, M2 7LR
Company Secretary Hanway Advisory Limited, a private limited company incorporated in England and
Wales with registered number 11178874 and having its registered office at The
Scalpel 18(th) Floor, 52 Lime Street, London EC3M 7AF
Completion completion of the Sale in accordance with the provisions of the Sale Agreement
Conditions the Shareholder Condition and the SW Change of Control Condition
Consideration the consideration payable by the Buyer to the Company in respect of the Sale
of £628.86 million
CREST the UK-based system for the paperless settlement of trades in listed
securities and the holding of uncertificated listed securities operated by
Euroclear in accordance with the Uncertificated Securities Regulations 2001
(SI 2001/3755), as amended from time to time
CREST Manual the manual published by Euroclear describing the CREST system, as amended from
time to time
CREST Proxy Instruction a proxy appointment or instruction made using CREST, authenticated in
accordance with Euroclear's specifications and containing the information set
out in the CREST Manual
CTA 2010 the Corporation Tax Act 2010 and any subsidiary modification or re-enactment
thereof for the time being in force
Debt Facilities means the RBS Facility, the Lloyds Facility and the Scottish Widows Facility I
and Scottish Widows Facility II
Development Cost has the meaning given to it in the Development Management Agreements being,
the aggregate cost (excluding VAT) incurred at the relevant time to acquire
and develop the development site
Development Management Agreements means (i) the amended and restated development management agreement dated 2
July 2020 between The PRS REIT Development Company I Limited and the
Investment Adviser; and (ii) the amended and restated development management
agreement dated 2 July 2020 between The PRS REIT Development Company II
Limited and the Investment Adviser, both as amended from time to time
Development Management Fee has the meaning given to it in paragraph 4.1 of Part 5 (Additional
Information) of this document
Disclosure Guidance and Transparency Rules the Disclosure Guidance and Transparency Rules made by the FCA for the
purposes of Part VI of FSMA
Euroclear Euroclear UK & International Limited, the operator of CREST
FCA or Financial Conduct Authority the Financial Conduct Authority of the United Kingdom including any
replacement or substitute thereof and any regulatory body or person
succeeding, in whole or in part, to the functions thereof
Form of Proxy the form of proxy for use by Shareholders at the General Meeting
Formal Sale Process the formal sale process launched as part of the Strategic Review and Formal
Sale Process
FSMA Financial Services and Markets Act 2000, as amended
General Meeting the general meeting of the Company to be held at the offices of Dentons UK and
Middle East LLP at One Fleet Place, London, EC4M 7RA at 11 a.m. on 27 November
2025 (or any adjournment thereof), notice of which is set out in the Notice of
General Meeting
HOT Announcement has the meaning given to it in paragraph 1 of Part 1 (Letter from the Chair)
of this document
IAA the amended and restated investment advisory agreement between the Company,
the AIFM and the Investment Adviser dated 19 January 2021, as amended and
supplemented from time to time
Investment Adviser Sigma PRS Management Ltd, a private limited company incorporated in England
and Wales with registered number 10615738 and having its registered office at
Floor 3, 1 St. Ann Street, Manchester, M2 7LR
KKR Kohlberg Kravis Roberts & Co. L.P., a limited partnership incorporated in
Delaware
Liquidation Resolution the special resolution to be tabled at the Second General Meeting in respect
of the voluntary winding up of the Company
Lloyds Facility facility agreement dated 4 July 2023 between, amongst others, The PRS REIT
(LGIM) Borrower Limited as borrower, LGIM Commercial Lending Limited (as
arranger) and CBRE Loan Services Limited (as agent and security trustee), as
amended, restated, varied, waived and/or supplemented from time to time
Locked Box Accounts the unaudited consolidated balance sheet of the Target Group as at the Locked
Box Date
Locked Box Date 30 June 2025
London Stock Exchange London Stock Exchange plc
Long Harbour Long Harbour Ltd, a private limited company incorporated in England and Wales
with registered number 06905581 and having its registered office at One, New
Change, London EC4M 9AF
Long Stop Date 3 February 2026, being three months after exchange of the Sale Agreement or
such later date as may be agreed by the Company and the Buyer
Net Asset Value or NAV the net asset value of the Company calculated by the Company in accordance
with the Company's accounting policies
Ordinary Shares ordinary shares with a nominal value of £0.01 each in the capital of the
Company
Properties the properties comprised in the Property Portfolio
Property Income Distribution the distribution by the Company of the profits of its Property Rental
Business, as defined for the purposes of Part 12 CTA 2010, by way of a
dividend in cash in accordance with Section 530 of the CTA 2010
Property Portfolio the whole of the portfolio of Properties owned by the Target Group that the
Buyer has agreed, subject to the passing of the Resolution, to acquire through
the Sale pursuant to the Sale Agreement
Proposal the proposed Sale of PRS HoldCo to the Buyer
PRS private rental sector
PRS HoldCo The PRS REIT Holding Company Limited, a private limited company incorporated
in England and Wales with registered number 10695914 and having its registered
office at 3(rd) Floor, 1 St. Ann Street, Manchester, M2 7LR
RBS Facility facility agreement dated 29 June 2018, as amended and restated on 13 February
2020, 25 January 2021, 28 December 2022, 4 July 2023 and 19 March 2025
between, amongst others, The PRS REIT (LBG) Borrower Limited as borrower, and
The Royal Bank of Scotland plc (as arranger, agent and security trustee), as
amended, restated, varied, waived and/or supplemented from time to time
Register of Members the register of Shareholders
Registrar Computershare Investor Services PLC, a public limited company incorporated in
England and Wales with registered number 03498808 and having its registered
office at The Pavilions, Bridgwater Road, Bristol, BS13 8AE
Regulatory Information Service a primary information provider approved by the FCA under section 89P of the
FSMA to disseminate regulatory announcements required by the UK Listing Rules,
Disclosure Guidance and Transparency Rules and UK Market Abuse Regulation
REIT a company or group to which Part 12 of the CTA 2010 applies (including, where
relevant, a REIT Group)
REIT Group a group UK REIT within the meaning of Part 12 of the CTA 2010
REIT Regime Part 12 of the CTA 2010 (and related regulations)
Requisition Notice the requisition notice from Shareholders representing approximately 17.3 per
cent. of the issued share capital of the Company dated 29 August 2024
Resolution the special resolution to be proposed at the General Meeting to approve the
Sale and to grant the Directors authority to implement the Sale, as set out in
the Notice of General Meeting
Sale the proposed sale by the Company of the entire issued share capital of PRS
HoldCo to the Buyer in accordance with the provisions of the Sale Agreement,
as more fully described in Part 3 (Summary of principal terms and conditions
of the Sale) of this document
Sale Agreement the sale and purchase agreement dated 3 November 2025 between the Company and
the Buyer in respect of the Sale
Singer Capital Markets Singer Capital Markets Advisory LLP, a limited liability partnership
incorporated in England and Wales with registered number OC364131 and having
its registered office at One Bartholomew Lane, London EC2N 2AX
Scottish Widows Facilities means Scottish Widows Facility I and Scottish Widows Facility II
Scottish Widows Facility I the facility agreement dated 29 June 2018 and made between (among others) The
PRS REIT (SW) Borrower Limited as borrower, Scottish Widows Limited as
original lender and Lloyds Bank Plc as arranger, agent and security trustee as
amended and restated by an amendment and restatement deed dated 28 June 2019
Scottish Widows Facility II the facility agreement dated 28 June 2019 and made between (among others) The
PRS REIT (SW II) Borrower Limited as borrower, Scottish Widows Limited as
original lender and Lloyds Bank Plc as arranger, agent and security trustee,
as amended on 25 March 2021 and as further amended, restated, varied, waived
and/or supplemented from time to time;
Second General Meeting the general meeting of the Company to be held as soon as possible after the
completion of the Sale at which the Liquidation Resolution will be tabled to
Shareholders
Shareholder Condition the Shareholders passing the Resolution at the General Meeting
Shareholders holders of Ordinary Shares
Strategic Review the strategic review undertaken as part of the Strategic Review And Formal
Sale Process
Strategic Review and Formal Sale Process has the meaning given to it in paragraph 2 of Part 1 (Letter from the Chair)
of this document
Strategic Review and Formal Sale Process Announcement the announcement of the Strategic Review and Formal Sale Process on 23 October
2024
SW Change of Control Condition means, on terms which would include the Sale, consent to, and/or a waiver of
the change of control within the Scottish Widows Facilities
SW Condition Deadline means 26 November 2025, being the Business Day immediately prior to the date
on which the General Meeting is due to be held, or as extended by agreement of
the Company and the Buyer
Takeover Code the City Code on takeovers and mergers, as amended from time to time
Takeover Panel the UK Panel on Takeovers and Mergers
Target Group PRS HoldCo and any subsidiaries of PRS HoldCo from time to time
Trigger Event Either (a) the Shareholder Condition has not been satisfied at or before the
Long Stop Date, or (b) the Shareholder Condition has been satisfied at or
before the Long Stop Date and Completion fails to take place by reason of the
default of the Company
UK Corporate Governance Code the UK Corporate Governance Code as published by the Financial Reporting
Council from time to time
UK Listing Rules the Listing Rules made by the FCA for the purposes of Part VI of FSMA, as
amended from time to time
UK Market Abuse Regulation the UK version of Regulation (EU) No. 596/2014 of the European Parliament and
of the Council of 16 April 2014 on market abuse as it forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended and
supplemented from time to time including by the Market Abuse (Amendment) (EU
Exit) Regulations 2019
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
Waypoint Waypoint Asset Management Limited, a private limited company incorporated in
England and Wales with registered number 08443180 and having its registered
office at 17-19 Maddox Street, London, W1S 2QH
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2025
Publication of this document and the Notice of General Meeting 3 November
Latest time and date for receipt for proxy appointments (whether online, via 11 a.m. on 25 November
CREST Proxy Instruction or by hard copy proxy form) in respect of the General
Meeting
General Meeting 11 a.m. on 27 November
Publication of results of the General Meeting As soon as practicable after the conclusion of the General Meeting
Anticipated date of Completion (subject to the Resolution being passed at the 11 December
General Meeting)
Long Stop Date 3 February 2026 (or such other date as may be agreed between the Company and
the Buyer)
Notes:
1) All references to time in this document are to London (UK) time,
unless otherwise stated.
2) The timetable set out above and referred to throughout this document
and any accompanying document may be subject to change. If any of the times
and/or dates should change, the new times and/or dates will be announced to
Shareholders through a Regulatory Information Service.
3) The timing of Completion is dependent upon, amongst other things, the
Conditions being satisfied, and if there is any delay in the Conditions
(including the passing of the Resolution) being satisfied, the anticipated
date of Completion may change. If the Shareholder Condition is not satisfied
by the Long Stop Date, or if the SW Change of Control Condition is not
satisfied by the SW Condition Deadline, the Company or the Buyer may terminate
the Sale Agreement, in which case the Sale will not take place and (if the
termination is a result of the Shareholder Condition not having been
satisfied) the Break Fee will become payable by the Company to the Buyer.
1 After taking into account, inter alia, the Consideration, the estimated
transaction expenses, including corporation tax liabilities, and liquidation
expenses.
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