Hi Just_a_guy My beef is less with the terms of the agreement,...

Hi Just_a_guy
My beef is less with the terms of the agreement, and more the sequence of events and conflicted interests of the parties. By signing a new lease, NCK has boosted the value of the property. Ie, You would expect that an independent valuation of the property without their renewed lease would be lower than with it. This is due to the risks of vacancy, inducements etc, higher outgoings, higher discount rate to landlord if tenant vacates. That would feed into a lower DCF.

So part of the negotiation strategy of any lease (or acqn) is to make the landlord think you have other options - and fearful of those risks and costs, you get a better deal. But none of that works went the landlord is a related party (your CEO) with intimate knowledge of the value of that property to you, your plans and strategies, your lack of other options, etc. So the related party's position, and knowledge (and possibly influence) has been to shareholders' detriment, IMHO. Consider also the position of the staffer tasking with trying to progress the purchase. You are negotiating (on behalf of the independent directors) with your boss (wearing another hat).

As an outsider it is hard to unpick and/or estimate quantum impact, but the episode does not reflect well on the participants, IMHO. Hopefully it is not repeated.