Tritax Big Box and Abrdn-managed UK Commercial Property REIT (UKCM) have agreed on the terms of their proposed merger.
Last month, Tritax Big Box proposed to acquire UKCM to create a business with a combined portfolio of £6.3bn (€7.4bn) assets.
The deal valued UKCM’s share price at 71.1p with a market capitalisation of around £924m. Tritax Big Box which is also listed on the London Stock Exchange has a market capitalisation of around £3bn.
At the time, Tritax said the “possible offer” represented a 10.8% premium to UKCM’s shares’ last closing price of 64.2p.
The combined group’s portfolio value of £6.3bn, comprising Tritax Big’s £5bn portfolio and UKCM’s £1.3bn portfolio, will have assets generating over £290m of rental income per annum.
In the latest development, the companies said they have reached an agreement on the terms of a recommended all-share combination of Tritax and UKCM whereby Tritax acquires all the shares of UKCM.
The deal involves UKCM shareholders receiving 0.444 new Tritax shares for each UKCM share in a transaction that will give UKCM shareholders 23.3% and existing Tritax shareholders 76.7% of the combined group.
UKCM said its recommending directors consider the terms of the combination to be “fair and reasonable” and as a result intend to recommend that shareholders vote in favour of of the transaction at its general meeting.
Likewise, Tritax directors “intend unanimously to recommend” that shareholders vote in favour of all of the resolutions to be proposed at a general meeting.
Last month, shareholders Phoenix Life and Investec Wealth & Investment UK, holding 43.4% and 13.1% stakes, respectively, in UKCM, stated their intentions to accept the proposal by voting in favour of the offer if implemented by way of a scheme of arrangement.
Tritax said it has so far received irrevocable undertakings and a letter of intent representing, in aggregate, approximately 56.5% of the issued ordinary share capital of UKCM.
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