LondonMetric will buy A&J Mucklow for £414.7m, in a cash and share offer announced today.
Acquisition of the Midlands urban logistics REIT would create one of the largest listed logistics and distribution platforms, with a combined portfolio of £2.3bn.
It will comprise 72% distribution and industrial assets, with total rental income of £115.8m and will see LondonMetric’s urban logistics exposure rise to £800m, up from £500m, driving heightened rental growth.
Mucklow has been valued at 655.2p per share. Shareholders will be entitled to receive 2.19 new LondonMetric shares and 204.5p in cash.
Patrick Vaughan, chairman of LondonMetric, said: “The combination of their assets, of which approximately 70% are distribution and industrial property, is consistent with our strategy of increasing our urban logistics exposure.
“The combination has compelling strategic and portfolio rationale with strong operational and financial benefits.”
Rupert Mucklow, chairman and chief executive of Mucklow, said: “LondonMetric has a complementary portfolio which mirrors Mucklow’s focus on high-quality income-producing properties and the LondonMetric management team has the necessary expertise to build on the success that Mucklow has achieved over the 57 years it has been a listed company.”
LondonMetric reported a net rental income increase of 3.5% to £93.8m in its annual results for the year ended 31 March 2019.
Its NAV per share rose 5.9% to 174.9p. Profit dropped to £119.7m, down 35% from £186m the previous year.
The REIT has shifted its portfolio, disposing of mega and regional distribution centres as well as retail parks, which now represent just 4.7% of the portfolio. It has focused on acquiring predominantly urban logistics assets, rising to form 72.5% its portfolio.
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