Cheung Kong Industrial Group Co., Ltd. has announced its acquisition of more than 64% of the issued share capital of Civitas Social Housing PLC, a real estate investment trust. The acquisition offer, which was initially set at 75% of the voting rights, has now been lowered to more than 50%. The transaction is expected to continue for a period of time, with preparations being made for the administrative procedures for financial settlement.
Ms. Li Side, manager of the corporate business development department of Cheung Kong Industrial Group Co., Ltd., expressed her satisfaction with the acquisition, stating that they are pleased to have acquired a majority stake in Civitas Social Housing. She also mentioned that the decision to lower the level of voting rights was due to the satisfactory response received.
Mr. Zhao Rucheng, Director of Special Projects of CK Asset Holdings Limited, explained that the group has been interested in the business of Civitas Social Housing for some time due to its financial and social significance. He added that the acquisition will add another asset with stable income and reliable returns to the group, expanding its global real estate asset portfolio.
Civitas Social Housing PLC is known for its holdings of Specialist Supported Housing and Residential Care Houses, which provide accommodation for 18- to 65-year-olds with long-term learning disabilities or mental health issues. The trust aims to provide the best quality of life for these individuals in their communities while saving the UK government a significant amount of money. In the UK, housing and care costs in professionally supported housing are fully borne by the government.
Cheung Kong affiliate Civitas Investment Management has been serving as the investment advisor to Civitas Social Housing PLC since its initial public offering.
The proposed acquisition by Cheung Kong involves a cash offer of 80 pence per share, which is 44.4% higher than the closing price of 55.4 pence per share on May 5, 2023. The board of directors of Civitas Social Housing PLC has recommended this acquisition. The total consideration for the acquisition is approximately GBP 485 million, equivalent to approximately HK$4.811 billion.
This acquisition marks a significant development in the real estate investment sector, as Cheung Kong Industrial Group Co., Ltd. expands its portfolio and strengthens its presence in the global market.
What benefits does acquiring controlling interest in Civitas Social Housing PLC provide to Cheung Kong Industrial Group’s real estate investment portfolio
Xplained that the acquisition of Civitas Social Housing PLC is a strategic move by the company to expand its real estate investment portfolio. By acquiring over 64% of the issued share capital, Cheung Kong Industrial Group aims to gain controlling interest in the real estate investment trust.
Initially, the acquisition offer included 75% of the voting rights, but it has now been lowered to more than 50%. This adjustment allows the company to proceed with the acquisition while maintaining flexibility in its investment decisions.
The transaction is expected to take some time to complete, as preparations are being made for the administrative procedures for financial settlement. These procedures are necessary for a smooth and efficient transfer of ownership.
Ms. Li Side, manager of the corporate business development department at Cheung Kong Industrial Group, highlighted the importance of this acquisition for the company’s overall growth strategy. The expansion of the real estate investment portfolio will allow the company to diversify its investment holdings and further strengthen its position in the market.
Cheung Kong Industrial Group Co., Ltd. is a prominent player in the real estate industry, with a strong reputation for its strategic investments. The acquisition of Civitas Social Housing PLC reflects the company’s commitment to expanding its presence and capitalizing on new investment opportunities.
Civitas Social Housing PLC is truly an innovative and commendable initiative that not only addresses the pressing need for quality accommodation for adults with disabilities and mental health issues, but also helps the UK government save valuable resources. It is heartening to see a solution that prioritizes vulnerable individuals while also promoting financial efficiency for the country.