Shares in A & J Mucklow Group PLC (LON:MKLW) soared after the board recommended a shares plus cash offer from LondonMetric Property PLC (LON:LMP).
Mucklow shares rose 19% to 650p after LondonMetric revealed it had made a recommended offer worth around 655.2p a share, valuing its fellow property group at around £415mln.
READ A&J Mucklow looking for CEO as executive chairman steps back; first-half profits fall
LondonMetric is offering 2.19 of its shares plus 204.5p in cash for every Mucklow share.
The takeover, if approved, will be effected by a scheme of arrangement. Shareholders representing around 39.4% of the entire issued share capital of Mucklow have indicated they will vote in favour of the takeover.
"The combination of their assets, of which approximately 70% is in distribution and industrial property, is consistent with our strategy of increasing our urban logistics exposure,” declared Patrick Vaughan, the chairman of LondonMetric.
“The combination has compelling strategic and portfolio rationale with strong operational and financial benefits. I am delighted to say that we think this deal will be immediately earnings enhancing for shareholders. There will be work to do, but we are excited by the reversionary and asset management potential of their assets which will underpin and further support our progressive dividend policy," he added,
Rupert Mucklow, the chairman of the family firm who has been filling in as chief executive as well, said he was confident that LondonMetric is the right fit for Mucklow.
“The combination recognises the value of the Mucklow portfolio and resolves the uncertainty around succession planning. I am excited about the future for the combined group as a more resilient and diversified UK-REIT," Mucklow said.
Shares in LondonMetric were up 0.4% at 206.6p.