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(Sharecast News) - Distribution centre investor Tritax Big Box REIT (BBOX) has reached an agreement to take over smaller peer Warehouse REIT for 485m, outbidding an earlier proposal by Blackstone.
The offer gives Warehouse REIT shareholders 0.4236 new BBOX shares and 47.2p in cash, which equates to 110p per Warehouse REIT share, based on BBOX's closing share price on Tuesday.
Assuming the payment of two interim dividends, this implies a total value of 114.2p for Warehouse REIT, a 38.6% premium to its share price before takeover speculation began and ahead of the 109p that Blackstone offered three weeks ago.
Following the potential deal, Warehouse REIT shareholders would hold 6.8% of the combined group.
BBOX believes the deal, recommended by Warehouse REIT's board, "has a compelling strategic and financial rationale" for both sets of shareholders, consolidating the former's position as a leading listing UK logistics real estate investment trust with a combined portfolio of 7.4bn.
The acquisition "provides shareholders with increased liquidity, a lower cost of capital and listed ownership of the sector with structural dynamics supporting long-term prospects", the company said.
For Warehouse REIT shareholders specifically, the cash-and-shares offer gives both upfront certainty and the potential to participate in future potential earnings growth, BBOX said.
"This transaction delivers value accretion to both BBOX and Warehouse shareholders driven by immediate cost synergies, rental reversion and strong structural drivers supporting valuation and income growth in urban and big box logistics," said Aubrey Adams, chair of BBOX.
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