LondonMetric Property has agreed the terms of a £44m takeover of Highcroft Investments, a logistics and retail warehousing-focused REIT.
If the deal is approved, Highcroft shareholders will receive 4.65 new LondonMetric shares for each Highcroft share they hold, valuing the target at £43.8m, a premium to its market capitalisation.
Highcroft’s directors are recommending the deal to shareholders, with shareholders representing almost 57% of Highcroft’s share capital already on board. When directors are included, that figure rises to 60%.
LondonMetric chief executive Andrew Jones said: “This transaction adds complementary assets in our favoured sectors on an attractive basis across all key property metrics. It supports our strategy of greater consolidation within the sector.
“ We are confident of our ability to extract economies of scale to deliver both value and earnings accretion. We will immediately begin to integrate the Highcroft portfolio and work towards disposing of approximately 20% of assets that are deemed non-core.”
Charles Butler, non-executive chairman of Highcroft, added: “The Highcroft board believes that the acquisition is a good outcome for all Highcroft shareholders, who will receive new shares in LondonMetric, which is a highly rated company with a strong history of paying dividends.
“As a small company, Highcroft would over time struggle to remain competitive and be able to maintain or even grow its future dividends – something which we believe is key to our shareholders.”
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