UK industrial REIT Segro said on Monday it had reached agreement with rival Brixton to make an all-share offer for the company subject to due diligence and final approval by the Segro board.
UK industrial REIT Segro said on Monday it had reached agreement with rival Brixton to make an all-share offer for the company subject to due diligence and final approval by the Segro board.
Segro proposes to exchange 1.75 shares for every Brixton share in a deal which would value the company at between £105 mln (EUR 124 mln) and £109 mln, based on Segro's share price which stood at around 23p at noon on Monday. Segro also said it plans to issue new shares to raise up to £250 mln in cash. The UK REIT stressed there can be no certainty that any offer will be made even if the pre-conditions are satisfied.
In a separate statement on Monday, Brixton said it is in talks with its banks to refinance its banking facilities and has secured a waiver of any potential breaches of the asset cover ratio covenants under those facilities prior to 31 July 2009. The company said it will update the market on its position by the end of August when it publishes its results for the half year ended 30 June 2009.
Brixton also said it has let 345,000 sq ft (32,000 m2) of space up to 31 May 2009, generating £3.5 mln of annualised rental income. Total space returned due to expiries, breaks, surrenders and insolvencies up to 31 May 2009 equated to an annualised loss of rent of £6.2 mln.
