Kennedy Wilson shares rise on deal talk

Shares in Kennedy Wilson Europe have surged after its sister US fund said it plans to acquire the firm in an all-shares deal.

The property fund owns significant office and commercial holdings in Ireland and the UK.

The shares surged in London trade by almost 14% after US-based Kennedy- Wilson Holdings said the transaction would create a $8.2 (€7.65bn) global property giant.

The US fund and Kennedy Wilson Europe have significant holdings in Ireland which they acquired in recent years following the financial crash.

Kennedy Wilson’s properties here include the Baggot Plaza on Dublin’s Mespil Rd, the Portmarnock Hotel, Stillorgan, and Dundalk’s Marshes shopping centres, as well as residential units at Central Park in Co Dublin.

The shares transaction involves an offer to Kennedy Wilson Europe shareholders under which they will own around 36% of Kennedy-Wilson Holdings in the US.

The US fund said that the deal will most likely mean that its shares become the fourth largest property firm on the Russell 2000 index and will help spread its investor base.

It plans to increase a quarterly dividend when the deal is completed. The company has signalled the deal will not automatically mean that the enlarged company will be buying in Europe for the time being, a leading analyst said.

Kennedy Wilson Europe’s assets in the UK, Ireland, Spain, and Italy were valued at over £2.88bn last year. Most of the fund is invested in London, the south-east of England, and in Dublin.

“The combination will create a leading global real estate investment and asset management platform with enhanced diversification supported by the continuity of leadership with a strong, proven track record,” said William J McMorrow, chairman and chief executive at Kennedy-Wilson Holdings.

“The enterprise will benefit from greater scale and improved liquidity, which will enhance our ability to generate attractive risk- adjusted returns for our shareholders.

“The transaction significantly improves our recurring cashflow profile, and, as such, we are pleased to announce our intention to increase our first quarterly dividend by approximately 12% upon completing the transaction, which demonstrates our confidence in the combination and our long-term prospects.”