Logistics investor Tritax Eurobox announced on Thursday that it has received a cash offer from Canadian private equity giant Brookfield that trumps the all-share takeover bid agreed earlier with UK REIT Segro.
In a joint statement with Brookfield, Tritax Eurobox said it planned to withdraw its backing for the Segro offer and support the Brookfield bid instead.
Tritax said the offer from Brookfield, which is being made through one of its private real estate funds, represents a premium of approximately 6% to the Segro deal.
Brookfield’s offer values Tritax Eurobox’s share capital at around £557 mln and implies an enterprise value of around £1.1 bn.
Tritax Eurobox’s board said on Thursday that the terms of the Brookfield offer ‘represent an attractive premium for Tritax EuroBox shareholders over the terms of the Segro offer' and 'accordingly, the Tritax Eurobox shareholders are encouraged to take no action in respect of the Segro offer’.
In the statement, Brookfield said that bringing Tritax Eurobox under private ownership ‘will both better position it for further investment into existing assets, coupled with the benefits that accrue from being part of a scaled, better capitalised and actively growing real estate platform’.
The Canadian firm noted that since its IPO in 2018, Tritax Eurobox ‘has traded at a persistent discount to the value of its IFRS NAV and EPRA NDV, which has limited its ability to grow, in particular from further equity capital raises’. Brookfield said it intends to actively manage the Tritax EuroBox portfolio within its broader European logistics platform.
The Tritax Eurobox board said it had engaged with both Brookfield and Segro since receipt of Brookfield's latest proposal ‘and has considered the terms proposed by each bidder carefully, noting the scope for the implied value of the Segro offer to increase or decrease between now and completion, as compared to a fixed cash amount from Brookfield’.
The board noted that while the ‘deliverability’ of the two offers is now similar, ‘a cash offer from Brookfield would provide increased certainty for Tritax Eurobox shareholders as compared to continued market risk between now and completion for the Segro offer’.
It concluded: ‘Accordingly, the Tritax Eurobox directors have withdrawn their recommendation that Tritax EuroBox shareholders vote in favour of the Segro offer, and instead recommend unanimously that Tritax Eurobox shareholders vote in favour of the acquisition [by Brookfield].’
Tritax Eurobox is being advised on the acquisition by Lazard, Barclays and Jefferies.
