Tritax Big Box REIT has usurped Blackstone’s offer for Warehouse REIT by making its own bid for the investment trust.
In a stock exchange announcement this morning, Tritax Big Box announced a 111p per share bid for Warehouse REIT, higher than the 109p offer Blackstone made, which it had described at the time as “best and final”.
The Warehouse REIT board has pivoted away from the Blackstone offer, instead recommending shareholders back the Tritax deal.
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If approved, Warehouse REIT shareholders will receive a mixture of 0.4236 new Tritax Big Box shares and 47.2p in cash.
The offer represents a 38.6% to Warehouse REIT’s closing price of 82.4p before bidding took place.
“Shareholders are getting a higher price than offered by Blackstone and they get ongoing investment exposure to the assets should they choose to keep the Tritax shares paid as part of the offer,” said Russ Mould, investment director at AJ Bell.
“Blackstone had previously said its 109p was its best and final offer but reserved the right to increase the price if someone else expressed interest in the business.
“History suggests that such battles rarely end on the first competing bid. Expect Blackstone to come back with more and for the drama to unfold.”
Bidding war?
Oli Creasey, head of property research at Quilter Cheviot said Tritax Big Box has put in an “audacious” bid to gain the Warehouse REIT board’s recommendation.
“Blackstone’s bid was described as final, but did include a clause to increase the offer in the event of a third-party competing bid being made. With that in mind, it’s possible that this becomes another bidding war in the UK REIT space, hot on the heels of the Assura/PHP/KKR saga.
“These sorts of moves underline how attractive the UK REIT market looks right now. Big discounts to net asset value are still prevalent in most REITs and crucially it appears has if the property cycle has renewed as well.
“These factors are making UK based REITs prime targets, with private equity facing off against those who wish to consolidate the market and ensure they do not miss out on what are some quality assets.”
QuotedData property analyst Richard Williams said the deal is “pleasing to see”.
“As we have said on a number of occasions, the Blackstone deal was substantially undervaluing the company in our view.
“It is the second time in a week that a listed peer has come in and (seemingly) beaten off competition from private equity bids following PHP’s recommended offer for Assura – long may it continue. We have seen too many REITs taken out by private equity on the cheap.”
