London & Stamford management to net £55m on REIT conversion

  London & Stamford today confirmed that it is to convert to a REIT by 1 October, and announced changes which will see its management net up to £55m in shares.   The company, which is currently an externally managed fund listed on the AIM stock exchange, has proposed that it will convert to a REIT listed on the main board of the London Stock Exchange no later than 1 October.   It said that a REIT listing is more in line with its market capital – currently £579m – and would provide more liquidity for shareholders.   Alongside the REIT conversion, London & Stamford has also proposed an internalisation of its management, in order to reduce administrative costs and simplify the management structure.   In order to terminate the existing management contract, the current management, headed by Raymond Mould, Patrick Vaughan and Martin McGann, will be paid £55m in the form of shares in the new REIT, £10m of which will be subject to clawbacks if certain performance targets are not hit.   The shares mean that the management will own 9% of the new REIT, which they say will align their interests with those of shareholders.   Raymond Mould, the Non-Executive Chairman of London & Stamford Property, said: “We believe that converting to a REIT, moving to the Official List and internalising management is the best way forward for shareholders.   “We are pleased to be announcing these proposals which we believe will enable us to enhance shareholder returns as we continue to grow the business and take advantage of the significant opportunities we see to deploy LSP’s capital at attractive long term cash yields.”   michael.phillips@estatesgazette.com   To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.