LondonMetric buys Urban Logistics for $925 million
LondonMetric
is to buy
Urban Logistics
in a 698.9 million pound ($924.99 million) cash and stock deal, creating one of the country's largest property investment groups by market capitalisation.
LondonMetric made its first proposal for Urban Logistics in April and raised the bid a week later. The final offer represents a 22.2% premium to Urban Logistics's closing share price on April 10, a day before the proposal was publicly confirmed.
"The Urban Logistics Directors...unanimously consider the terms of the acquisition to be fair and reasonable," the company said in a statement.
LondonMetric will be valued between four billion pounds and five billion pounds after the merger, solidifying its position among the top five largest UK-listed REITs.
Currently,
Segro
holds the top position with a nearly 9 billion pound market cap, based on LSEG data.
Real estate investment trusts or REITS own and also often operate income-producing real estate, including offices, apartment buildings and shopping centres.
M&A activity in Britain has picked up in the last few months as investors returned to London markets, attracted by lower valuations and the government's efforts to ease regulations and boost investment.
A bidding war for European logistics real estate firm Tritax EuroBox kicked off late last year, as Canada's Brookfield Asset Management and Segro rushed to buy the company, highlighting strong investor demand for logistics and warehouse assets.
Under the deal, Urban Logistics shareholders will receive 0.5612 newly issued LondonMetric shares plus 42.8 pence in cash for each share held, valuing its stock at 150.3 pence apiece.
Urban Logistics shares were up 3.7% at 151 pence in early trading, while LondonMetric was up marginally at 0.2%.
Following completion, LondonMetric shareholders will hold about 89% of the combined company and Urban Logistics shareholders will hold about 11%.
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