UK commercial property landlord Landsec has inked a deal to acquire UK regeneration and development specialist U and I Group (U+I) for around £190 mln (€224 mln).
A newly created indirect subsidiary of Landsec Developments has agreed the takeover with the board of U+I at a price of 149p per share. U+I's board of directors said that it would recommend that shareholders vote unanimously in favour at its upcoming general meeting.
The all-cash offer values the takeover over at around £190 mln, representing a premium of 73% to U+I's closing price of 86p on 29 October. The price reflects a 9% discount to the NAV of 163p reported by U+I in March 2021.
Mark Allan, Landsec CEO, said: 'Developing truly world-class mixed-use communities that inspire and create opportunity is more important than ever.
'The combination of Landsec and U+I is compelling and will help us accelerate our strategy, both by introducing exciting new urban development opportunities and by further strengthening Landsec's front end development capabilities and placemaking skills.
'Landsec has tremendous potential and this transaction is an example of our ability to capitalise on our strengths and create future value for all of our stakeholders - investors, employees, communities and partners alike.'
U+I, which was formerly known as Development Securities, changed its name to U+I in 2015 after acquiring Cathedral Group in 2014. The Cathedral takeover saw the firm reposition to becoming a development, regeneration and placemaking specialist with primary interests in London, Dublin and Manchester.
U+I's regeneration portfolio, currently around 22% of its holdings, comprises five schemes across the country, most of which are public-private partnerships with a mandate to build on publicly-owned land.
They have a total gross development value of £66 bn and include city centre sites in Manchester, Southwark in London, and Grenwich Peninsula.
Landsec said that the acquisition was in line with its strategy set out in October 2020 to recycle investment in order to drive growth and generate higher returns, adding that the deal would add an attractive pipeline of mixed-use urban development opportunities along with complementary skills and expertise.
Said Richard Upton, CEO of U+I: 'This acquisition represents a compelling opportunity to bring together two companies with strong and clear complementary value systems. U+I's core portfolio of large, mixed-use regeneration schemes can now achieve its full potential with the capital, experience and market positioning that Landsec can provide.
'U+I's purpose to effect valuable social and economic changes through authentic, inclusive regeneration is an important proposition for Landsec and the wider industry. This acquisition demonstrates confidence in our highly skilled and valuable team and for our many joint venture partners.
'Our strategy to re-focus on what we do best has proved to be highly effective in capturing value for our existing shareholders and providing Landsec with an opportunity to unlock future value from our regeneration pipeline. We look forward to a hugely productive and exciting new future with Landsec.'
