Redefine International ups stake in International Hotel Properties
Updated : 11:41
Redefine International has bought the remaining stake in UK-focused hotels outfit International Hotel Properties from parent company Redefine Properties Limited in a cash and shares deal.
The FTSE 250 UK real estate investment trust, which will in December change its name to RDI REIT Plc, on Friday acquired a further 8.5m IHL shares from Redefine Properties Limited, increasing the listed vehicle's stake from 58.9% to 74.1%.
The remaining 25.9% of IHL is held by Tsogo Sun, South Africa's largest hotel chain.
The additional IHL shares were acquired by issuing 2.5m new ordinary shares in RDI and a cash payment of £7.5m, resulting Redefine Properties Limited upping its stake to 559.4m shares in RDI or 29.62%.
Application is being made to list the new RDI shares will be admitted to the London Stock Exchange and JSE, taking its total issued share capital to 1,888,914,697 ordinary shares with one voting right per share.
RDI chief executive Mike Watters said it was an "opportunistic acquisition" to increase the listed vehicle's exposure to IHL's nine limited service UK hotel assets and "supports our strategic priority of achieving greater scale through investing in the right earnings enhancing opportunities".
He added that the market for limited-service hotels "remains positive and the strong brands represented in this portfolio, including Holiday Inn Express and Hilton, provide a defensive position in any economic downturn".
He went on: "Material cost savings will be generated through the delisting of IHL and the integration of the hotel assets into our existing hotel portfolio and REIT status. Furthermore, and in line with our strategy to reduce leverage, this portfolio is currently financed at 41.5% to value, which is comfortably below our medium-term target of between 45.0% and 50.0% loan to value."
Earlier this month Redefine agreed to sell its Leopard portfolio of German supermarket property assets for €205m.
The rebrand of Redefine to RDI REIT will take place on 1 December.