Tritax Big Box is proposing to acquire Abrdn-managed UK Commercial Property REIT (UKCM) to create a business with a combined portfolio of £6.3bn (€7.4bn) assets, in the latest in a wave of consolidation among UK real estate investment trusts (REITs).
The deal would value 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.
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.
Shareholders Phoenix Life and Investec Wealth & Investment UK, holding 43.4% and 13.1% stakes, respectively, in UKCM, have stated their intentions to accept the proposal by voting in favour of the offer if implemented by way of a scheme of arrangement.
UKCM said its board, excluding chair Peter Pereira Gray, also intends to recommend the possible offer should a firm offer be made.
It added that the possible offer follows a series of proposals from Tritax Box to UKCM and a period of negotiation.
The latest deal involving Tritax Big Box and UKCM further consolidates the UK REIT landscape, coming after similar mergers like LondonMetric’s £1.9bn acquisition LXi and Custodian REIT’s merger with Abrdn Property Income Trust, all creating larger players in the market.
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