Home Reit (HOME ), the suspended real estate investment trust at the centre of an accounting and governance scandal, is no longer for sale having decided not to pursue an offer of a 40p per share cash bid from Bluestar, an investment company linked to its fund manager Alvarium.

In a statement yesterday evening evening the board of the homeless accommodation provider said it had decided not to respond to Bluestar’s request for a third one-month extension to the bid process, believing it was unlikely to maximise value for shareholders, who have been locked into the stock since it was suspended in January.

‘The board and its financial adviser have given particular consideration to the significant uncertainties in relation to the deliverability of Bluestar’s non-binding and indicative proposal, including its key valuation assumptions, extensive due diligence requirements and extremely limited information on its financing,’ it stated.

The board said its priority was to appoint a new fund manager to replace Alvarium which was accused of over-valuing properties and conflicts of interest by short-seller Viceroy Research last November. Last month the board told shareholders it was reviewing a short list of six groups and is reported to have selected AEW, the manager of AEW UK Reit (AEWU ).

The appointment of a new manager was necessary to stabilise a portfolio that had been hit by a collapse in rental income from its charity tenants while protecting the interests of the people living in its properties, the board said.

‘The board will not proactively pursue a sale of the company at this time and therefore this part of the review of strategic options announced on 16 February 2023 is now concluded. The board and its new investment adviser, when appointed, will continue to monitor this position, in particular once it is in possession of a new property valuation,’ it stated.

Bluestar said it was ‘highly disappointed’ by the decision and confirmed it did not intend to make an offer. Home Reit is longer in an offer period under the Takeover Code.

There was no mention by the board of the fraud report it said in early April it had received from forensic accountants Alvarez & Marsal.

Jennifer Morrissey, partner at Harcus Parker, the law firm gathering shareholder support for legal action against Home, said: ‘What is striking about Home Reit’s handling of Bluestar’s proposal – and even Bluestar’s own account of its interactions with Home Reit – as well as the process of selecting an investment adviser is the complete lack of transparency, accountability, and communication with its shareholders and others.’