British Pearl

Some odd statements in the Offer Letters that have just been sent out, including:

• Even after receiving a top bid that would have resulted in a 43% loss, they still believed this a sale was in the best interest of shareholders (!)
  
  
• It considers it "cannot take the risk of maintaining ownership of the Portfolio in the hope of market recovery" [what recovery is needed?]

I've got 4 at 83p and 1 at 89p.

Having skim read the documents, I'm unclear of the consequences of not signing. I didn't notice any minimum percentage of votes needed for the sales to take place. 

I just did the same as the gentleman above...long time lurker but have created an account.

Trying to be as rational and pragmatic as possible; and to see both sides of any argument, but there are a few things here that do appear strange to me. To try and be efficacious I'll write them as a list. If I rehash anything someone has presented above, not trying to be contrary, but I'm writing this simply because I am interested in what the next course of action should be, either - accept offer, reject offer (and what are consequences), or pursue recourse (what choices). So not trying to bluster, but interested in the thoughts of the more experienced.

So here is what I find interesting:
1. The offer is being presented as a carte blanche share investor 'bailout':
a). Much/most real estate has gone up in value in current market, including the fact there has been a stamp duty holiday to take advantage of for any first home buyer
b). British Pearl's fascination in going for a 'portfolio' sale only when the properties themselves were broadly different, regions, locales, scope and in fact the anticipated return valuations and sale timelines were broadly different
c). Many properties were presented with different investment return timelines, percentage return estimates; yet all these facts have been ignored in the risk return paradigm offered by the 'bailout'
d). There are a tonne of investment opportunities out there now caused by the pandemic, yet BP has been static for about a year prior to the pandemic itself, and static since. They didn't add a property for maybe perhaps two years? (this is a guess).
e). BP themselves indicate occupancy rates remained reasonably healthy, yet dividends have been mainly cannabalised
f). The presentation of the bailout itself (mainly a flat rate 83p bar one) is that the individual risk of the properties themselves has not been reflected back to the investors - ie those who made a good choice are penalised, and investment expectation rates and timelines have been tossed out of the window

2. The bailout is from the company benefactor
a). There may absolutely be an altruistic element to this and if purely in the spirit of 'protection shareholders' it should be commended, but what professional or family relationships are there, with other board members and employees are related to the benefactor or have personal interests
b). The sale of the total portfolio is an admission that the 'total strategy' was wrong or; an opportunity to recalibrate strategy under the guise of 'pandemic'. For instance, tossing retail investors for institutional ones perhaps (hence keeping the company going)
c). Blaming the pandemic solely is a bit rich given the market conditions.

Generally, BP were predicting a double digit annual capital return on one of their properties which was due to for sale in 23 months (roughly) prior to the pandemic (a return that was already approximately 2 years into aggregation), for it to now become a 17%/20% loss, just given the current market, beggars belief and constitutes a much grander value wipeout. And this 'bailout' rejects any of the upside coming out of the pandemic.

Anyway, my thoughts are that given that is presents as a wholesale change of strategy, the FCA should be submitting an advisory note here as to why, in their opinion, this constitutes a good result for shareholders from a company that operates under their practice mandate, rather than forcing shareholders to further consider legal means/review and to incur costs. A clear 'independent' voice here should be appreciated.

Is the FCA a politically affiliated body, or non-partisan, anyone know? I do ask as the benefactor is a conservative peer, and no, this does not constitute an allegation of impropriety. Simply, an independant assesment is incredibly valuable in times like this.

Best wishes to those who have incurred a hit, as I have. And also those that work at BP, stressful times. No malice intended but this is a strange one.

Completely agree. BP are acting on our behalf, that's why they took our fees. It would be great if they would accept the chance to - 

- Provide a balanced view as to acceptance of offer, or rejecting offer outcomes to allow investors to make a choice, as opposed to inflicting the us versus them get your own legal advice. This is railroading. Keep your investors engaged! You do this well, then you keep support for future investment if this is genuine.

- They should provide transparency on the numbers per property, particularly as their narrative was always "invest in individual properties". They should benchmark not only against the original investment costs but also against the anticipated dates/outcomes they projected on a per property basis.

If BP have nothing to hide, then they have nothing to fear either. If Lord Fink has 'recused himself' and truly made an offer in shareholder interests, then he has nothing to fear either. All BP need to do is back up the value of the offer with communicating more explicit financial facts between anticipated return. We're not stupid. If this transparency supports the business case they'd have nothing to fear from me or most other sane people. If the FCA made a public statement, which I believe they absolutely should, again this is transparent. 

A portfolio firesale really points to other things which I don't want to think about. If a government bailout works as promised, if the economy comes back as promised, if the oft quoted median effect of households saving money during the pandemic is real, then we have already experienced the depression. What we're now doing is possibly forsaking upside across the whole portfolio??

I point to one fact. Kuflink, Crowdproperty, those guys are not getting defaults nor were getting defaults nor are forecasting many. Yes, different model, but the net outcome is the same. It's all based on property valuation. 

Again this is in the spirit of making the best decision. Anyone with experience please contribute. I'll be the first to congratulate BP if they're really making the best decision for us, but we're in the dark here.

So they ignored both questions, and then volunteered information you didn't ask for. 

It sure feels like BP are simply done with retail investors and are hoping to scrub the record. It definitely does not feel like being 12 months away from a property sale with cumulative 11% cap gain per annum thats for sure 😂

If anyone's taking anything further I'd be interested to hear the basis, but I don't have enough money involved to drive the car. Is the general mood to sign and get it over and done with?

I'm abstaining because I don't agree with selling at this time. However, according to the non-answer given above, it's irrelevant as the sale is going ahead anyway. 

Quick, weekend reply from BP, abstaining does not prejudice your share of the sales’ distributions, perhaps more of an ass/liability covering, legal exercise (I’ve done all other crowd property sales via platform votes).


Me: Will Shareholders whose shares are compulsorily acquired automatically be included in any distribution to British Pearl accounts alongside Share Investors that directly sign to accept the Acceptance Offer.

BP: Yes, all Share Investors will be included in the distribution even if they did not accept the offer.


I would have considered a 20% equity loss (17% haircut + one year’s ~3% rent withheld in spv’s) a really good result in administration.

But they completely ballsed up their sale’s thesis - even justifying the continued sale last year to their owner because of the 2nd lockdown despite a world beating vaccine rollout, clear reopening roadmap and robust property market this year as he drew up their extensive legal docs - and Lord Xxxk is presumably not short of a pretty penny and now has the chance to recoup some of his cumulative platform losses from further improvement in the future performance of our properties.

I’ll be taking my losses but this has been a complete waste of 3 years of capital and a wholly unsatisfactory way for the platform to rid themselves of their loss making model.