Combined Share Purchase Agreement with a Market Value Bridge

We completed an extremely complex and highly technical transaction for a client — one that involved both a corporate acquisition and a sophisticated, multi-layered finance structure. From the outset, we designed a clear strategy around the client's objectives, ensuring every element of the deal worked cohesively and delivered maximum financial efficiency.

The Challenge

Our client agreed to purchase a holding company, acquiring the business and all the properties within it. Transactions of this nature are inherently complex: they involve corporate due diligence, multiple legal parties, and finance structures that go well beyond a standard property purchase.

The client needed to complete the acquisition with minimal equity input while also securing funds to improve the value of the property portfolio. With five different solicitors acting across various parties, coordination, precision, and timing were essential.

What the Client Needed

• Finance structured to minimise the equity required for the acquisition
• Lending based on true asset value rather than the purchase price
• Multiple layers of debt working together cohesively
• A build facility to uplift and enhance the portfolio
• Coordination across five sets of solicitors

Our Approach

We structured a solution that combined several advanced components to deliver the best possible outcome for the client:

1. Market value bridge — We arranged a market value bridge, allowing the lending to be based on the true asset value rather than the purchase price. This significantly increased available leverage and reduced the client's cash requirement.
2. Multi-layered debt structure — We arranged a main lender providing core funding, with mezzanine finance layered behind the senior debt to maximise the total borrowing available.
3. SPV land transfer — We facilitated a strategic transfer of land into a separate SPV, with additional borrowing secured against that entity.
4. Build facility — We secured a £470,000 build facility to uplift and enhance the value of the property portfolio.
5. Cross-party coordination — With five different solicitors acting across the transaction, our team ensured every element aligned exactly as needed, allowing the deal to progress smoothly.

Key Considerations

Share purchases and market value bridges are advanced strategies. Here are some factors to consider if you are exploring a similar approach:

• Stamp duty implications — Purchasing the shares of a company rather than individual properties can result in significant stamp duty savings, but the structure must be carefully considered with appropriate legal and tax advice.
• Corporate due diligence — Acquiring a holding company means inheriting its liabilities as well as its assets. Thorough due diligence is essential.
• Lender appetite — Not all lenders are comfortable with share purchase structures or market value bridges. Working with a broker who has access to specialist lenders is important.
• Legal complexity — Multiple solicitors and legal workstreams need to be coordinated precisely. Delays in one area can affect the entire transaction.
• Mezzanine finance — Layering mezzanine behind senior debt increases total leverage but also increases cost. The commercial viability of the overall structure needs to be assessed carefully.

Outcome

The transaction completed successfully with all elements aligned. By combining a share purchase agreement with a market value bridge, our client saved £623,250 in stamp duty, dramatically improving the commercial viability of the acquisition. The £470,000 build facility provided the capital needed to enhance the portfolio's value.

Frequently Asked Questions

What is a share purchase agreement in property?

Rather than buying individual properties, the buyer acquires the shares of the company that owns them. This transfers ownership of the company — and therefore its assets — without triggering individual property transfers.

What is a market value bridge?

A market value bridge is a short-term loan where the lender bases the borrowing on the open market value of the assets rather than the purchase price. This can increase leverage when acquiring below market value or through a corporate structure.

How does a share purchase save stamp duty?

When you buy shares in a company, you typically pay stamp duty on the share value rather than on each individual property. Depending on the transaction, this can result in significant savings. Professional tax advice is essential.

What is mezzanine finance?

Mezzanine finance sits behind the senior (main) loan and fills the gap between the senior debt and the borrower's equity. It increases total leverage but usually carries a higher interest rate than the senior loan.

Can any broker arrange this type of deal?

Transactions involving share purchases, market value bridges, and mezzanine finance are specialist. Not all brokers have the lender relationships or structuring experience needed. Visit our development finance page for more information.

What is an SPV?

A Special Purpose Vehicle (SPV) is a company set up specifically to hold a property or group of properties. SPVs are commonly used in property investment for tax efficiency and liability management.

Next Steps

If you are considering a corporate acquisition, a multi-lender structure, or the use of market value bridging to minimise equity input, we are happy to discuss your options. Get in touch to talk through your project, or learn more about how we work.