UPDATE: Pollen Street Investment Manager "Disappointed" By Termination

(Alliance News) - PSC Credit Holdings LLP on Tuesday said it was "deeply disappointed" by Pollen ...

Alliance News 25 February, 2020 | 12:09PM
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(Alliance News) - PSC Credit Holdings LLP on Tuesday said it was "deeply disappointed" by Pollen Street Secured Lending PLC's decision to terminate the investment management agreement between the two companies.

Pollen Street Secured Lending, which invests in credit assets from non-bank lending platforms, gave 12 months' notice to terminate its investment management agreement with PSC Credit over its handling of a 900 pence per share cash offer from funds advised by Waterfall Asset Management LLC.

Pollen Street Secured Lending's view was that it had "been unable to obtain from the manager all of the company's own documentation and information, which has been requested, to allow the board to make its own proper assessment of what due diligence materials to pass on to the potential offeror."

However, PSC Credit contested that the offeror's due diligence request document was "unusually extensive" for a public takeover offer and it was concerned as to "whether sharing such extensive information is in the best interests of shareholders".

Further, in PSC Credit's view, the sharing of such information breached confidentially provisions and would leave Waterfall "in possession of highly confidential information".

Pollen Street Secured Lending earlier cited "a number of other serious governance issues" with PSC Credit, including its publishing of information about the company's dividend without the knowledge or permission of the board, including a factsheet from PSC Credit stating that it had recommended a 15 pence per share per quarter dividend to Pollen Street's board.

The company has declared an unchanged 12.0p per share dividend for the fourth quarter of 2019 and said it requires "further evidence" that increases the quarterly dividend would be "sustainable" and is seeking to increase its revenue reserve.

PSC Credit said it noted that the Pollen Street board had "determined to maintain the dividend at 12p per share despite the underlying improvement in the assets".

"We will continue to work in the best interests of the company and its shareholders in pursuit of the company's investment objectives and, as outlined above, remain fully committed to working with the board and the company's shareholders to reach a satisfactory resolution to the matters outlined in this note and, more generally, to ensuring that shareholder returns are maximised,2 PSC Credit said.

Shares in Pollen Street were up 6.6% at 883.00 pence in midday trading. The 900p offer represents an 8.7% premium over its Monday closing price of 828.00p.

As at February 25, Pollen Street Secured Lending had 86.3 million shares in issue, of which 12.1 million were held as treasury shares. Its total number of voting rights, therefore, was 74.2 million. Based on the 74.2 million figure, the 900p cash offer is worth GBP667.8 million.

Waterfall also noted that it has received an irrevocable undertakings from Invesco Asset Management Ltd, Pollen Street Secured Lending's largest shareholder with a 25% stake.

Pollen Street Secured Lending said it "would be minded to recommend the offer" given its value, provided a firm intention to make the offer is announced. It has confirmed this to Waterfall.

By Anna Farley; annafarley@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Pollen Street Secured Lending Ord 692.00 GBX 2.06 -

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