Thalassa Holdings Limited Update on The Local Shopping REIT PLC (4364Q)
29 Novembro 2016 - 9:15AM
UK Regulatory
TIDMTHAL
RNS Number : 4364Q
Thalassa Holdings Limited
29 November 2016
29 November 2016
Thalassa Holdings Ltd
(Reuters: THAL.L, Bloomberg: THAL:LN)
("Thalassa" or "the Company")
Update on The Local Shopping REIT PLC ("LSR")
The Board of Thalassa reviewed the circular to shareholders
published by LSR on 22 November 2016 ("Circular") indicating the
LSR board's apparent volte-face in respect of the costs being
incurred by the business and recognising that the Internos contract
should be potentially renegotiated. In light of this fresh
information, Thalassa wrote to the board of LSR on 25 November 2016
(a redacted version of the letter appears below) setting out the
basis on which it would be prepared to withdraw its shareholder
meeting requisition and work collaboratively with the board of LSR.
On 28 November 2016 the board of LSR responded, flatly rejecting
this offer and also sadly but somewhat predictably failing to
address the question of excessive costs.
Accordingly, the Board of Thalassa will publish a full response
to the letter from LSR's chairman contained in the Circular in
order for those parties interested to form their own view of the
management and performance of LSR.
Duncan Soukup, Chairman of Thalassa, said:
"It is disappointing that the LSR board have not taken this
second opportunity to engage constructively with us. It is quite
clear that they are more interested in pursuing their own agenda
rather than working with and in the interest of all shareholders to
achieve the objective set out in the 8 July 2013 circular to
shareholders under the heading Proposed New Investment Policy (page
8), which clearly states "The Company's investment objective is to
maximise value for its Shareholders from its existing portfolio of
local real estate assets, comprising local shops in urban and
suburban areas, as well as neighbourhood and convenience properties
throughout the UK."
This strategy has clearly failed and has now been replaced,
without shareholder consent, to "The overriding aim of the current
Board is to execute the strategy approved by shareholders in 2013,
being to dispose of the property portfolio and return the net
proceeds to shareholders as speedily and efficiently as possible,
consistent with the protection of value." (extracted from the
Chairman's letter in the Circular). This distortion of reality is
unfortunately entirely consistent with our previous experience with
the LSR board, despite their apparently reasonable public
statements to the contrary. Our response to the Circular will
highlight and call into question Internos' appointment without full
disclosure or shareholder approval and the LSR board's reluctance
to allow outside participation on an open and constructive basis,
the objective of which is simply to deliver better value to
shareholders. It seems quite clear that by rejecting the offer set
out below that the LSR board is more interested in certain
contractors than shareholders."
APPENDIX - Thalassa letter to the board of LSR on 25 November
2016
Gentlemen,
I write further to The Local Shopping REIT plc (LSR or the
Company) notice of general meeting announced on 22 November 2016
and the letter from Stephen East of even date (Chairman's
Letter).
As we made clear in our requisition letter sent on 9 November
2016, we have no interest in destabilising relationships with key
stakeholders. However, we are interested in reducing the Company's
costs to reflect the reduction in assets and income, as well as in
accelerating asset disposals or an outright sale of the
Company.
We, therefore, wholeheartedly welcome the disclosure set out in
paragraph 4.4 in the Chairman's Letter. We were astonished to read
that LSR would consider renegotiating Internos' contract given
Nick's (Mr Vetch's) insistence at our meeting on 20 September 2016
that no cost savings were possible. Indeed, had Nick (Mr Vetch) not
been so adamant that Internos' contract was wholly appropriate and
under no circumstances open to review or renegotiation
(notwithstanding the 55% reduction in the value of the Company's
assets), we would not have pursued a requisition.
In light of the positive and welcomed change in the board's
position, we would be willing to immediately withdraw our
requisition upon the appointment to the LSR board of myself or John
Hutchinson, with the explicit commitment of the LSR board to:-
1. undertake a global review of LSR's cost structure, in order
to bring it in line with the Company's decreasing level of assets
and revenue;
2. review and renegotiate the Internos retainer and amend the
bonus structure to a "performance" based bonus at a materially
higher level than 0.5% (e.g. 20%+ on any return of capital to
shareholders above a realistic hurdle of say a 5% discount to last
published NAV of 42.75p or 40.6p per share); and
3. engage with previously interested parties or new potential
buyers of LSR's entire portfolio of assets or the Company itself.
On Thursday 24 November I spoke with at , who expressed an interest
in reviewing LSR's tenancy schedule . As you may be aware, reviewed
the Renouvier portfolio a couple of years ago but has not been
contacted since.
We would be grateful for your response by close of business
Monday 28 November.
Sincerely,
Duncan Soukup
Chairman
Investor Enquiries:
Thalassa Holdings Ltd
Duncan Soukup, Chairman +33 (0)6 78 63 26 89
WH Ireland Limited (Nominated Adviser and Broker)
Chris Fielding, Head of Corporate Finance +44 (0)207 220 1650
Press Enquiries:
Square1 Consulting (Public Relations)
David Bick +44 (0)207 929 5599
www.thalassaholdingsltd.com
This information is provided by RNS
The company news service from the London Stock Exchange
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