Sovereign Reversions seals Grainger deal

Equity release provider Sovereign Reversions has accepted an acquisition bid from the UK’s largest quoted residential landlord Grainger. The deal is worth 202p per share in cash, or approximately £34.6 million, and is an advance on Grainger’s initial offer of 175p per share.

Sovereign believes the transaction will offer shareholders the opportunity to gain increased value from their shares compared with their market value before the offer period began.

Both companies are convinced the deal will allow Grainger to strengthen its position with the equity release market, a sector both firms strongly believe will become a mass market product as more and more retirees seek to supplement inadequate pension savings by releasing capital from their homes.

Commenting on the transaction, Grainger chairman, Robin Broadhurst, said: “This transaction will enhance our position as a leading equity release business with a substantial and complementary portfolio of reversionary assets and management expertise.”

Bob Wigley, chairman of Sovereign Reversions, said: “The board of Sovereign Reversions now believes its shareholders should be given the opportunity to accept Grainger’s increased offer of 202 pence per share, which provides a 65% premium to the market price prior to the announcement of the approach.”