Green Reit deal on track despite €65m tax bill shock

Planned €1.34bn takeover of UK property firm Henderson Park moving towards conclusion

The Green Reit transaction will incur an unforeseen tax bill of up to €65m. File photograph: Cyril Byrne

The Green Reit transaction will incur an unforeseen tax bill of up to €65m. File photograph: Cyril Byrne

 

Green Reit said on Monday that its planned €1.34 billion takeover by UK property firm Henderson Park is progressing towards a conclusion, after shares in the Dublin-based firm were rattled last week as it emerged the deal will incur an unforeseen tax bill of up to €65 million.

The so-called scheme of arrangement that will cement the takeover will come before the Irish High Court on November 6th for final approval, Green Reit said in a statement.

The announcement helped lift shares in Green Reit by as much as 0.64 per cent to €1.898. It follows silence from Henderson Park last week to media enquiries after Budget 2020, unveiled by Minister for Finance Paschal Donohoe last Tuesday, included negative tax surprises for Green Reit’s suitor.

Green Reit’s stock had fallen to as low as €1.856 last Thursday amid nervousness over the deal as Mr Donohoe slapped a 1 per cent stamp duty on the type of scheme of arrangement deal being pursued by Henderson Park, as well as an additional capital gains tax (CGT) bill as Green Reit is set to leave the stock market a little over six years after it floated.

New measures mean that some of the CGT relief that real-estate investment trusts (Reits) benefit from will evaporate if they exit the stock market within 15 years of an initial public offering. The Henderson Park bid is priced at €1.9135 per Green Reit share.

Separately, shareholders in Dublin-domiciled Botox maker Allergan voted on Monday in favour of the group’s $63 billion (€57.2 billion) takeover by US pharmaceutical giant AbbVie. The deal, also being carried out by a scheme of arrangement, faces being hit by the new 1 per cent stamp duty – equating, in this case, to €572 million.