27th Mar 2025 10:26
(Alliance News) - LondonMetric Property PLC on Thursday said it had agreed terms with Oxford, England-based real estate investment trust, Highcroft Investments PLC, as it advances its strategy of greater sector consolidation.
The London-based REIT said under the terms of the all-share deal, Highcroft shareholders will be entitled to 4.65 new LondonMetric shares for each Highcroft share owned.
The deal values each Highcroft share at 842.1 pence, based on LondonMetric's closing price of 181.1p on Wednesday, and values Highcroft's share capital at around GBP43.8 million. This represents a 40% premium to Highcroft's 600.00p closing price on Wednesday.
Under the transaction, Highcroft shareholders will also be entitled to an interim dividend of 35p per Highcroft share, noted LondonMetric.
Benefits for holders agreed on by both boards include: the opportunity for Highcroft holders to "crystallise a significant premium" and the opportunity for them to remain invested in a highly rated, more liquid vehicle with "a 10-year track record of uninterrupted dividend growth".
Both boards also agreed the acquisition would be earnings accretive to the combined group, with Highcroft holders benefitting from LondonMetric's greater scale.
For LondonMetric, the transaction supports its objective to "own and manage desirable real estate that meets occupiers' demands, delivers reliable, repetitive and growing income-led returns and outperforms over the long term."
Shares in LondonMetric were down 0.3% at 180.60p on Thursday morning in London.
LondonMetric noted that it has received irrevocable undertakings from 60% of Highcroft shareholders.
The transaction requires 75% approval from Highcroft holders at both the court meeting and general meeting, with these anticipated to be held "on or around May 15".
The transaction is expected to complete by May 21.
LondonMetric Chief Executive Andrew Jones said: "This transaction adds complementary assets in our favoured sectors on an attractive basis across all key property metrics. It supports our strategy of greater consolidation within the sector.
"We are confident of our ability to extract economies of scale to deliver both value and earnings accretion. We will immediately begin to integrate the Highcroft portfolio and work towards disposing of approximately 20% of assets that are deemed non-core."
By Christopher Ward, Alliance News reporter
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