LondonMetric announced on Thursday that it has agreed a £1.9 bn (€2.2 bn) takeover of LXi REIT in a deal that will create the UK’s fourth largest REIT with net tangible assets of £4.1 bn.
Under the deal, each LXi shareholder will receive 0.55 new LondonMetric shares for each of theirs in a deal that values LXi shares at a 9% premium.
Following completion of the takeover, LondonMetric shareholders will own 54% of the combined group, with LXi investors owning the remaining equity.
The companies first announced that they were in preliminary discussions about an all-share merger in December last year. LondonMetric focuses on logistics and grocery-anchored income, while LXI invests in diverse sectors like healthcare, budget hotels, and even theme parks.
The merged entity will boast a portfolio of properties, of which 93% invested in sectors like logistics, healthcare, and leisure, ensuring long-term income and stability.
Commenting on the merger, Andrew Jones, Chief Executive of LondonMetric, said: 'This is a compelling transaction which creates the UK’s leading triple net lease REIT and underscores our ambitions to leverage our management platform and access exciting new opportunities across the UK real estate market. The deal gives us access to a very well let triple net portfolio of key operating assets and brings together two highly complementary investment approaches that embrace the qualities of income compounding.'
He added: 'the combined £6.2 bn portfolio will have no legacy assets, full occupancy, high occupier contentment and exceptional income longevity with a high certainty of growth - both organically and contractually. In the world of income compounding, bigger is better and the deal will deliver economies of scale, substantial cost savings, better liquidity and improved terms in both debt and equity markets which will drive accelerated earnings and dividend progression.
Cyrus Ardalan, Chairman of LXi, added: 'The merger will position the Combined Group for continued growth and outperformance and the delivery of reliable, sustainable and progressive dividends through the cycle, thereby underpinning superior total shareholder returns.'
