- Residential landlord Grainger said Wednesday it would raise funds through a rights issue to support its £396m acquisition of Grip REIT.

The company also reporting double-digit profit growth for the year through September, underpinned by net rental income growth and asset sales.

Grainger said it had conditionally agreed to acquire Grip REIT from its joint venture partner, APG, and would fund the deal via a £346.7m rights issue.

Shareholders would be entitled to 7 new shares for each 15 held at 178p a share, a 39% discount to the closing price on Tuesday.

Grip, a joint venture between Grainger and APG, was currently 75.1% owned by APG and 24.9% by Grainger.

For the year through September, Grainger's pre-tax profits rose 17% to £100.7m, earnings or EPRA NNNAV was up 4% to 316p a share and net rental income increased 8% to £43.8m.

The company said it secured private-rental-sector investments of £943m for the year, up from £651m a year earlier, with a further £45m from the Grip acquisition and £382m in the planning or legal stages, totalling £1.37bn.

The group raised its interim dividend by 8% to 5.26p a share. 'I am pleased to announce today the acceleration of our growth strategy in the UK private rented sector with the proposed acquisition of GRIP, our £696m PRS co-investment vehicle with APG, the expansion of our PRS investment pipeline to £1.37bn, and a strong set of financial results for the year' said Helen Gordon, Chief Executive of Grainger. 'The GRIP portfolio, which we have managed since 2013 and therefore know very well, is an exceptional acquisition. It will provide a step change in our investment in the PRS market and generate increased net rental income growth, which in turn will deliver enhanced shareholder returns.'

At 8:17am: [LON:GRI] Grainger PLC share price was -5.6p at 285.4p

Story provided by