Real estate property investment company Phileo is looking to delist from the ASX after more than three decades as a listed entity — and it’s offering shareholders $12.66 a share to sell out.

Phileo (ASX:PHI), which has a market cap of $378m but only 28.9m shares on issue, had been thinking of ways to deliver its shareholders value after accumulating a huge cash pile  from selling properties.

At the end of June it had $153m compared to $19m the year before.

Shareholders “expressed an interest in these sale proceeds being distributed to them”, Phileo said in a lengthy document posted to the ASX this morning.

Phileo said the proposed transaction “represents an opportunity for exiting shareholders to realise the value of their shares at an attractive price, noting Phileo’s shares have been characterised by deep illiquidity and low daily trading volumes for many years”.

The proposed capital return and delisting was put forward by Rudy Koh, the majority shareholder and managing director of the company.

The capital return will cancel the number of shares on issue by 10.5m, and give shareholders the option to sell out for $12.66 a pop, remain a shareholder in the delisted company, or a mix of the two.

Phileo shares rose 7pc on the news.

Phileo shares (ASX:PHI) over the past year.

Mr Koh, who currently holds 36 per cent, will own 56 per cent in the private company if the transaction goes through.

In late June, Mr Koh was handed a $5 million bonus for “his excellent past performance in enhancing the growth and value of the company”.

That was on top of the $5 million bonus handed to director Alfred Sung for the same reason in November last year.

The company said remaining listed on the ASX would be a detriment to the company partly because it simply doesn’t need to be on there: it has not once raised equity capital via the ASX or accessed public debt markets in the 31 years it’s been listed.

“The ongoing costs and compliance burden associated with remaining as a listed entity are substantial and impacting on shareholder value,” it said in a statement.

Phileo chairman Graham Homes said the board unanimously recommended shareholders vote in favour of the scheme.

“Phileo’s future is bright with a valuable property portfolio but also uncertain due to company-specific and broader industry risks,” he said.

“The proposed transaction has been structured in such a way that gives shareholders the opportunity to exit their Phileo investment at an attractive price or to retain it. This flexibility and equality of opportunity are key features.”

Shareholder documents will be sent in November, with voting to take place in December and the transaction to be finalised if successful in January.

Phileo recorded a full-year profit of $85.1 million for the 2018 financial year, and revenue of $151 million, but declined to pay a dividend to shareholders whilst it “examined the quite onerous task of determining the most effective way of returning capital to our shareholders”.

Stockhead has reached Phileo for comment about why it has not raised capital through the ASX and what the company-specific risks they say they’re facing are.

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