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London rental homes firm Sigma gets takeover offer

·2-min read
A  homes project Sigma has been involved in (Sigma Capital Group)
A homes project Sigma has been involved in (Sigma Capital Group)

Sigma Capital Group, a firm looking to create thousands of rental homes in London, has received a takeover offer that values it at £188.4 million.

The AIM-listed company which helps source land, work with housebuilders and manage sites when completed in the capital and other parts of the UK, said it has reached an agreement with a suitor.

Six Bidco, a subsidiary of funds managed by property investment group PineBridge Benson Elliot, has proposed a cash offer at 202.1p per Sigma share. That represents a 35.% premium to the closing price yesterday.

Sigma has helped deliver thousands of homes, and has recently entered into new long-term partnerships with housebuilders and investors, with expansion plans to deploy further capital towards new PRS (private rented sector) opportunities.

The bidder “aims to build on this solid foundation, and intends to continue to grow the business”.

Graham Barnet, chief executive of Sigma, said: “The need for high-quality, professionally-managed rental homes remains a critical unmet need in the UK, and we look forward to developing our model further in this exciting next step with PineBridge Benson Elliot."

In the capital many landlords have seen people look to lease professionally managed properties for longer, as high prices continue to make it hard for renters to get on the housing ladder.

In late 2020 Sigma appointed Rothschild & Co to run a sales process. It said it recognised “the attractiveness of Sigma as a platform for investors with access to greater capital availability”.

Sigma’s independent directors believe in order to deliver its next phase of growth, the firm “would require consistent access to capital to invest in scale into UK PRS product and further grow the business through forming new housebuilder partnerships, expanding operations into new regional markets and widening its rental product offering”.

The company said that as certain directors, Ian Sutcliffe, Graham Barnet, Michael McGill and Gwynn Thomson, have a personal interest in the reinvestment and incentive arrangements (and consequently the acquisition more generally), the board of Sigma has a committee comprised of the independent directors for the purpose of evaluating and recommending the acquisition.

Evercore is advising PineBridge Benson Elliot.

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