Life Science REIT Launches Strategic Review, Suspends Dividends
Why we think this is bad
The announcement of a strategic review and formal sale process for Life Science REIT suggests significant challenges the company has faced since its IPO, including a slowdown in leasing activity, elevated interest rates, and a share price trading at a substantial discount to net asset value. The suspension of dividends is also a negative development for shareholders. While the company is exploring options to maximize value, there is no certainty that a transaction will occur or that it will be on favorable terms for shareholders.
Key Points
- Commencement of strategic review to consider the future of the company, including potential sale or managed wind-down
- Appointment of Panmure Liberum as financial advisor to assist with strategic review and formal sale process
- Suspension of future dividends until strategic review is concluded
- Company's EPRA NTA as of 31 December 2024 was £260.4 million or 74.4 pence per share
- Negotiation of significant reduction in investment advisory fees to further align interests with shareholders
Summary
Life Science REIT plc has announced the commencement of a strategic review to consider the future of the company, including a potential sale or managed wind-down. The company has faced significant headwinds since its IPO in November 2021, including higher inflation, elevated interest rates, and a slowdown in leasing activity, which have negatively impacted investor sentiment and the company's share price. As a result, the company's share price has traded at a substantial discount to its net asset value of 74.4 pence per share as of 31 December 2024. The company has also been unable to achieve its forecast leasing activity and occupancy levels, leading to the suspension of future dividends until the strategic review is concluded. The company has appointed Panmure Liberum as its financial advisor to assist with the strategic review and formal sale process.