Tritax Big Box REIT PLC (LSE:BBOX) has launched a £924 million all-paper bid for UK Commercial Property REIT (LSE:UKCM) - a deal that would create Britain's fourth-largest real estate investment trust (REIT).
Tritax is offering 444 of its shares for every 1,000 UKCM shares, which is based on their respective net tangle asset values as of the end of last year.
Under the terms tabled, UKCM investors will get a 10.8% premium for their stock over the closing share price on Friday (9 February) and a 23% premium over the six-month volume-weighted average share price.
This deal would result in UKCM shareholders owning about 23.3% of the enlarged entity, aiming to create a significant logistics-focused REIT in the UK.
Strategically, the merger is expected to combine complementary logistics portfolios, enhance customer offerings across various property sizes, and provide opportunities for asset management and capital recycling.
Combined, the companies would manage a portfolio worth approximately £6.3 billion, generating over £290 million in rental income annually, positioning it as the fourth-largest UK REIT by market capitalisation.
Both companies will continue their quarterly dividend payments leading up to the merger's completion.
The UKCM board, advised by Rothschild & Co, is likely to approve the offer, given significant shareholder support has been signalled by non-binding letters of intent from Phoenix Life Limited and Investec Wealth & Investment UK, covering over 56% of UKCM's issued share capital.
The proposal is structured as an all-share offer, to be formalised through a scheme of arrangement, pending the fulfillment of customary pre-conditions including due diligence.