Tritax Big Box Reit has agreed terms of an all-share merger with UK Commercial Property Reit (UKCM).
Under the terms of the deal, Tritax Big Box will issue 0.444 new shares per UKCM share, representing a 10.8% premium to UKCM’s closing price on 9 February – the day the offer period commenced.
Once the merger is completed, UKCM shareholders will own 23.3% of the enlarged Tritax Big Box Reit, creating a £3.9bn Reit.
With the deal subject to shareholder approval, both boards have recommended their shareholders vote in favour of the merger.
Tritax’s board said it has received support by way of letters of intent from roughly 56.5% of UKCM shareholders so far.
Commenting on the combination, Margaret Littlejohns, senior independent director of UKCM, said: “The UKCM recommending directors believe this transaction allows all UKCM shareholders to benefit from continued investment in a Reit, but with significantly larger scale and improved share liquidity, as well as addressing the factors we believe have contributed to the persistent discount at which UKCM’s shares have traded for many years.
“The combined business will be invested in a high-quality UK logistics portfolio, where Tritax Big Box has a strong track record of delivering attractive, sustainable returns which will drive improved earnings for UKCM shareholders and support a fully covered dividend.
“By combining the businesses on an EPRA NTA-to-EPRA NTA basis, shareholders will be able to share fully in the future potential valuation upside whether that is delivered from asset management initiatives, rental growth, the potential of the BBOX development pipeline or a broader improvement in real estate sector sentiment. These factors together with the compelling strategic and financial rationale of the transaction lead us to recommend this deal to all shareholders.”
