Hibernia to own its management

Hibernia REIT has proposed a move that would see it directly employ its current management team if approved by shareholders.

The investment trust announced its intention to internalise its external management team through the acquisition of its investment manager, WK Nowlan REIT Management Ltd.

The move would not result in any additional costs to shareholders, Hibernia said yesterday.

The acquisition, however, has a number of possible benefits, including broadening the range of potential investors. Other advantages include securing the management team for the longer term, simplifying the management structure and increasing transparency and management accountability.

Hibernia chairman Danny Kitchen said : “At the time of the IPO, we expressed the intention that at the expiry of the initial five-year term of the investment management agreement, subject to the EPRA NAV [ a measure of the fair value of net assets] of the company being not less than €650m , we would seek to internalise the management team for nil consideration.

“This milestone has already been exceeded and... the independent directors believe now is the appropriate time to internalise the management team.”

The acquisition is to completed in two parts with a combination of up front payments and potential deferred payments with the transaction to take effect from the start of April and the 16 team members moved to direct contracts with the company.

Upfront payments are proposed to be made 50% in cash and 50% in Hibernia shares and subject to three year year clawback and earn-out provisions.

Potential deferred payments at 31 March 2016, 2017 and 2018, payable in shares locked up over the three subsequent years.

Chief executive Kevin Nowlan and chief financial officer Tom Edward-Moss to join the board.