London-listed investment trust to go private after less than three years

Investment company Foresight Sustainable Forestry has struck a £167m deal to be taken private, adding to a growing list of London-listed firms set to exit the public market this year.

The firm’s shares have fallen 24 per cent since it was listed in London in November 2021.

Foresight is set to be acquired by Arizona Bidco, which is owned by Averon Park. The firm’s cash offer valued Foresight at a premium of around 32.88 per cent to its closing price of 73p at Tuesday’s close.

The price also marked a roughly 43.28 per cent premium to Foresight’s volume-weighted average price of 67.3p over the previous three months.

Meanwhile, it is just a 5.09 per cent discount to Foresight’s unaudited net asset value (NAV).

Averon said Foresight’s “persistent share price discount to NAV has prevented [it] from raising further funds to continue its growth as a publicly traded company and improve liquidity for investors”.

Under an alternative offer, most of Foresight’s scheme shareholders could choose to receive one unlisted rollover share in the acquisition vehicle for each and every scheme share held in Foresight up to a limit of the equivalent of 24.99 per cent of the acquisition vehicle shares.

Foresight announced on Wednesday that Averon Park intended to delist the company immediately after the transaction is completed, which is expected in the third quarter of this year.

Averon indirectly already holds a 29.64 per cent stake in Foresight via its Blackmead subsidiary. It has invested in forestry assets since 2020 and currently owns 7,292 hectares of UK forestry.

The firm said it believed “forestry represents an attractive asset class to diversify investors’ portfolios, protect against inflation and offers an opportunity to benefit from trends in favour of home-grown timber production”.

It added that forestry also offers “significant environmental and social benefits that are important in their own right and appeal to many investors”.

The deal will now go to a vote among Foresight’s scheme shareholders, requiring at least 75 per cent approval.

Foresight chair Richard Davidson commented: “The offer from Arizona Bidco is at a price that represents a significant premium to the volume weighted average price for the past three months. We believe this offer represents good value for shareholders, and therefore we are recommending it.

“The structure of the deal means investors can continue to participate in the compelling investment fundamentals presented by the forestry and carbon credit industries through a private structure.”

Graham Ross Russell, independent non-executive director of Averon Park, added: “Since its IPO, the FSFC team has rapidly developed its portfolio to become a leading forestry and afforestation player in the UK.

“Demand for domestic sources of timber and high integrity carbon credits is increasing, and the transaction presents good value for all involved and a great opportunity to grow the portfolio.”