In a significant development that has impacted the property sector, FTSE 100 company Segro has announced a £552 million all-share takeover of its smaller rival, Tritax EuroBox. This unexpected move could provoke a response from Brookfield, the Canadian investment firm chaired by Mark Carney, who is the former Governor of the Bank of England.
The recommended offer values each Tritax EuroBox share at 68.4p, based on Segro’s closing share price of 880p yesterday. Shareholders of Tritax will receive 0.0765 new Segro shares for each Tritax share they hold, bringing the total value of Tritax, including debt, to approximately £1.1 billion.
David Sleath, Chief Executive of Segro, expressed enthusiasm for the acquisition, stating, “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.” Tritax EuroBox’s Chairman, Robert Orr, also supported the deal, calling it “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.”
Tritax EuroBox, listed in London in 2018 and now part of the FTSE 250, focuses on investing in and managing a portfolio of warehouses across Europe. Segro, which boasts a £20 billion portfolio of warehouses, delivery depots, and data centres, has seen substantial rental growth in the warehouse sector over recent years.
Industry analysts have deemed the pricing of the deal sensible. Oli Creasey from Quilter Cheviot noted that “Segro deserves recognition for not overpaying.” However, he also highlighted uncertainty regarding whether EuroBox shareholders will accept the offer at the current share price, especially following a recent 24% increase in returns due to bid speculation.
Following the announcement, Segro shares fell by 14p, or 1.6%, to 866p, while Tritax EuroBox shares rose by ½p, or 0.45%, to 66¾p. This deal may ignite a bidding war, as Brookfield had previously shown interest in June, indicating they were in the “early stages of assessing a possible cash offer” for Tritax EuroBox. With the deadline for a firm offer from Brookfield approaching later this month, all eyes are on the Canadian firm’s next move in this high-stakes property sector scenario.
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