Nabarro and Norton Rose lead on ING’s takeover of Rugby Reit

Nabarro and Norton Rose have claimed leading roles on a deal that will see ING’s offshore real estate arm take over a portfolio of properties from Rugby Real Estates Investment Trust (Rugby Reit).

Lloyd Williams
Lloyd Williams

The deal is thought to be the first takeover offer for a UK Reit by a non-Reit.

A Norton Rose team led by corporate finance ­partne Mark Lloyd Williams advised longstanding client ING on the transaction, valued at around £40m.

The team also featured tax partner John Challoner, real estate partner ­Lindsay ­Morgan and banking ­partner Lucy Wolley Dod.

Nabarro advised Rugby Reit on the deal, with ­corporate partner Warren Taylor leading the team.

The recommended offer for Rugby Reit allows shareholders the option of taking ordinary shares in ING UK Real Estate Income Trust, zero ­dividend ­preference shares, cash or a combination of the three.

The issuance of zero ­dividend preference shares allows the deal to be funded using a cash alternative without recourse to a full rights issue.

It is understood to be one of the first takeover offers potentially ­funded through this hybrid structure.

Lloyd Williams said: “It fits in to a way of raising funds in a time when debt’s expensive and equity is dilutive.”

The zero dividend shares are being underwritten by hedge fund Laxey Partners, which owns 35 per cent of Rugby Reit but had its own offer for the trust rejected earlier this year.

LG is advising Laxey as underwriter to the share issue, with investment funds chief Nick Heather leading the team.