LondonMetric Property and LXi REIT confirmed that they are in talks regarding a possible all-share merger of the two companies, pursuant to which LondonMetric would acquire the entire issued and to be issued ordinary share capital of LXi.
The combined portfolio is estimated to be valued around £6.4 billion.
”The making of any firm offer by LondonMetric is subject to a number of pre-conditions, waivable at LondonMetric’s discretion. These pre-conditions include the completion of mutual due diligence, the provision of certain consents, waivers and approvals by each company’s lenders and the recommendation of the Possible Merger to LXi’s shareholders by the Board of LXi,” said the companies in joint statement.
The boards of LondonMetric and LXi see the potential to bring together two companies with complementary strategic approaches and a key focus on delivering compounding income-led total shareholder returns through the cycle.
According to the statement the possible merger would result in:
- A UK-focused triple net lease REIT of scale with a pro forma gross asset value of approximately £6.4 billion and market capitalisation of approximately £3.9 billion which is expected to provide improved share liquidity and better access to capital;
- A combined portfolio aligned to structurally supported sectors (with approximately 93% exposure to the logistics, healthcare, convenience, entertainment and leisure sectors) and with income longevity and security; and
- An internally managed REIT delivering economies of scale and operating efficiencies, targeting sustainable earnings and dividend progression.
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