UK REIT Segro said on Wednesday that it has reached agreement on an all-share takeover of peer Tritax Eurobox in a deal valuing the company at €1.3 bn.
Under the terms of the agreement, Tritax shareholders will receive 0.0765 Segro new Segro shares for each Tritax stock and will be entitled to receive and retain a dividend of 1.25 cents per share in respect of the quarter ending 30 September 2024.
Based on the closing price per Segro Share of 880.0 pence as at 3 September 2024, the transaction value values each Tritax EuroBox share at 68.4 pence, representing a premium of 27% to the closing price per Tritax EuroBox share of 53.8 pence as at 31 May 2024, being the last business day prior to the commencement of the current offer period and a discount of 14% to Tritax EuroBox's last reported IFRS NAV per share of 93.9 cents as at 31 March 2024.
The deal values the entire share capital of Tritax EuroBox at £552 mln (€654 mln) and the entire company including debt at £1,101 mln (€1.3 bn).
Following the deal, Segro shareholders are expected to own 96% while Tritax EuroBox Shareholders will own 4% of Segro's enlarged issued share capital.
Tritax's board had been considering several expressions of interest regarding a potential sale of the company following a review launched in April.
'The Board of Tritax EuroBox believes that the transaction with Segro represents a compelling opportunity for Tritax EuroBox shareholders to achieve a significant and immediate uplift in the value of their investment with the prospect of stronger total shareholder returns and optionality by virtue of enhanced liquidity,' the company said in a statement.
Both Segro and Tritax EuroBox have pursued a strategy based on owning prime assets in Europe's major logistics hubs and along key transportation corridors, where occupier demand is most resilient. Tritax EuroBox's assets, most of which are located in Segro's existing core markets, will complement Segro's Continental European big box portfolio (including those assets managed under the SELP joint venture) and strengthen this part of its business, the company said.
Segro expects the transaction to be accretive to both EPRA NTA per share and adjusted earnings per share.
Commenting on the deal, David Sleath, the Chief Executive of Segro, said: 'This transaction offers the opportunity to acquire a high quality portfolio of big box warehouses in core European markets which would complement and enhance our existing assets. The management of the portfolio will be internalised on completion, taking advantage of economies of scale from our existing, locally-based operating platform.'
Robert Orr, the Chair of Tritax EuroBox, said: 'As set out at Tritax EuroBox's half-year results in May this year, the Board has been focused on how best to deliver value for Tritax EuroBox shareholders in an effective and efficient manner. The transaction with Segro represents a compelling opportunity for Tritax EuroBox shareholders to achieve a significant and immediate uplift in the value of their investment and stronger total shareholder returns, with the option either to retain exposure to the European industrial and logistics sector through holding shares in the largest and most liquid REIT in Europe, or to sell their New Segro Shares for cash, taking advantage of Segro's significantly greater trading liquidity.'
