- The board of Primary Health Properties (PHP) has entered into a conditional share purchase agreement to internalise the company's management function by acquiring Nexus Tradeco Holdings, subject to shareholder approval.

Nexus Tradeco Holdings is the holding company of its longstanding external property adviser Nexus Tradeco and certain subsidiaries, including Nexus's primary care development business.

PHP has agreed to acquire the entire issued ordinary share capital of Nexus Tradeco Holdings for £33.1 million (subject to a completion net assets adjustment), comprised of £16.55 million payable in cash and £16.55 million. This will be met by issuing 11,485,080 new ordinary shares priced at 12.5 pence each in the share capital of PHP at a price of 144.1 pence per share.

The board PHP said there are a number of "compelling financial and strategic benefits" of the acquisition, as internalising the management function is expected to result in immediate and longer-term adjusted EPRA EPS enhancement, with some minor one-off EPRA NAV dilution.

The board also said the acquisition would secure a structure more appropriate to a UK-REIT of the scale of PHP which will broaden interest in the investment community, reduce costs and improve shareholder returns. Also, it will help to enhance management succession for the group for the longer-term.

The company expects annual cost savings of approximately £4 million following the acquisition.

At 9:36am: [LON:PHP] Primary Health Properties PLC share price was 0p at 150p

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