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.
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