25th Jun 2025 09:33
(Alliance News) - Tritax Big Box REIT PLC and Warehouse REIT PLC on Wednesday said they have reached an agreement that will see Tritax Big Box buy Warehouse REIT in a cash-and-shares deal that Warehouse REIT has chosen over a rival offer from private equity investor Blackstone Inc.
The pair promised the merger will result in enhanced earnings and dividends for both sets of shareholders. The two real estate investment trusts invest in large logistics warehouses.
The deal will see Tritax Big Box pay 47.2 pence in cash, plus 0.4236 of a new BBOX share for each share in Warehouse REIT.
Warehouse shareholders also will be entitled to their quarterly dividends on both July 25 and October 6. Warehouse REIT declared a fourth quarter interim dividend for financial 2025 of 1.60p on Wednesday, flat with a year earlier.
This values the industrial warehouse investor's shares at 114.2p, for a total equity value of GBP485.2 million.
This is a 4.8% premium to a prior 109p per share cash takeover proposal from New York-based Blackstone.
Earlier in June, Warehouse REIT had agreed to acquisition terms from Blackstone that valued the business at GBP470 million. The Warehouse REIT board now has withdrawn that recommendation in favour of the bid from Tritax Big Box. Include Warehouse REIT directors, the Tritax Big Box offer has acceptances representing 8.4% of shares.
Warehouse REIT shareholders will own around 6.8% of the combined group.
Warehouse REIT shares rose 6.0% to 113.20p on Wednesday morning in London, giving it a market capitalisation of GBP480.5 million. Tritax Big Box shares were down 1.3% at 148.68p for a market cap of GBP3.69 billion.
Discussing the deal rationale, Tritax Big Box argued the acquisition has compelling strategic and financial benefits.
These include the creation of a leading UK logistics REIT with complementary and attractive market fundamentals supporting long-term growth.
The investment trust also cited benefits of strategic alignment, enhanced performance and financial synergies, with Tritax Big Box expecting Warehouse's logistics assets to deliver "compelling returns" ahead of Tritax Big Box's cost of capital over the short to medium-term.
Tritax Big Box expects the acquisition to be earnings enhancing in the first full financial year following completion.
The acquisition is intended to be completed by way of a scheme of arrangement, with the scheme document expected to be published in July and the acquisition anticipated to complete during the fourth quarter of this year.
Warehouse REIT Chair Neil Kirton said: "The board is pleased to be recommending the acquisition, which is not only at a higher level to the previous offer for the company, but which also provides Warehouse shareholders with the opportunity to retain both the Warehouse Q4 and Q1 dividends and remain invested in this attractive asset class.
"The strategic rationale for the acquisition is very clear and having engaged closely with the BBOX team, we are confident in their ability to deliver value from this combination and to generate enhanced earnings and dividends for both BBOX and Warehouse shareholders. Warehouse shareholders will further benefit from the increased liquidity that comes from being invested in a larger company, providing them with greater optionality over when to crystalise returns."
By Christopher Ward, Alliance News reporter
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Related Shares:
Tritax Big BoxWarehouse Reit