LondonMetric Property is buying another London-listed company A&J Mucklow Group to become a £2.3bn (€2.6bn) logistics group.
The recommended offer allows Mucklow shareholders to receive 2.19 new LondonMetric shares and 204.5p in cash for each Mucklow ordinary share, valuing Mucklow at £414.7m.
The offer represents a 19.7% premium to Mucklow shares’ last closing price of 547.5p.
UK real estate investment trust LondonMetric said merging with West Midlands focussed Mucklow will provide it with access to a “substantial portfolio of distribution and industrial assets” materially expanding LondonMetric’s footprint without incurring normal purchaser costs that would have arisen on a typical asset acquisition.
The combination will add 3.2m sqft of distribution space to LondonMetric’s portfolio and would increase LondonMetric’s end-to-end logistics platform to £1.65bn and its total portfolio to approximately £2.3bn.
The deal will lift LondonMetric’s urban logistics exposure from £0.5bn to £0.82bn, it said.
Patrick Vaughan, chairman of LondonMetric, said the combination of Mucklow’s assets, of which approximately 70% is in distribution and industrial property, is consistent with LondonMetric’s strategy of increasing its urban logistics exposure.
“There will be work to do, but we are excited by the reversionary and asset management potential of their assets which will underpin and further support our progressive dividend policy.”
Rupert Mucklow, chairman and CEO 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.
“The combination recognises the value of the Mucklow portfolio and resolves the uncertainty around succession planning.”