UK's Long Harbour proposes $852 million bid for PRS REIT

Long Harbour Offers £631.6 Million for PRS REIT in Takeover Bid

By Prerna Bedi

(Reuters) -UK property investor Long Harbour has made a 631.6 million pound ($852 million) takeover proposal for Britain's PRS REIT at below the market price, sending PRS REIT shares down around 2% on Wednesday.

PRS, a real-estate investment trust that has put itself up for sale, said London-based Long Harbour was proposing to offer 115 pence per share in cash, a 3.3% discount to PRS' closing price of 118.8 pence on Tuesday.

The shares hit a record high of 125 pence earlier in the day after Sky News reported the possible offer and said Long Harbour had secured financing to launch a 700 million pound bid.

A deal could add to a flurry of recent transactions within the UK-listed REIT industry, and underscore the growing appetite among players to bolster operations against an uncertain economic backdrop.

"Intra-REIT M&A ... makes fewer, larger and more investable stocks, so less is more," Jefferies analysts said in a note on Tuesday.

Last week, Unite Group proposed to buy Empiric Student Property for about $976 million, while Warehouse REIT agreed to be bought by investment firm Blackstone for $635 million.

LondonMetric agreed to buy Urban Logistics for $925 million in May.

PRS, which focuses on family homes in the private rented sector, said in February it had received several proposals from unidentified parties.

The company said on Wednesday it expected to provide an update on its sale process by the end of June.

The process followed the launch of a strategic review in October after PRS replaced two board members, including its then chair, in agreement with a group of shareholders who had demanded these changes.

($1 = 0.7413 pounds)

(Reporting by Prerna Bedi and DhanushVignesh Babu in Bengaluru. Writing by Pushkala Aripaka. Editing by Jan Harvey and Mark Potter)