Merivale agrees funding

MERIVALE Moore, the property company, has found an alternative to making a cash call to strengthen its balance sheet by striking a deal with Warner Estate Holdings, writes John Shepherd.

Warner is selling a pounds 6m portfolio of high-street shops to Merivale, which will fund the purchase through an issue of 3.5 million shares at about 90p each and in cash. The share issue will give Warner a 20.5 per cent stake in Merivale.

Grenville Dean, chairman of Merivale, said: 'My company's recharging itself. A few months ago we were tempted to have a rights issue but the stock market became a bit wonky. This has the same effect as a rights issue. And we wanted to issue equity to somebody who could give something back.'

Merivale's gearing - debt as a percentage of shareholders' funds - will fall from 180 to 150 per cent.

Merivale's shares closed 11p up at 76p.