LondonMetric and LXi have entered into a strategic merger, laying the foundation for the creation of a major UK Real Estate Investment Trust (REIT).
LondonMetric and LXi have jointly revealed their agreement on the terms of a recommended all-share merger.
The merger will see LondonMetric acquire the entire issued and to be issued ordinary share capital of LXi through a scheme of arrangement under Part 26 of the Companies Act.
Under the terms of the merger, each LXi shareholder is slated to receive 0.55 New LondonMetric Shares for each LXi Share held, as per the designated Exchange Ratio.
As of the Undisturbed Closing Price per LondonMetric Share, standing at 197.4 pence on 15 December 2023 (the last Business Day before the Offer Period commenced), the merger places the valuation of LXi’s entire issued and to be issued ordinary share capital at approximately £1.9 billion. Noteworthy aspects of the deal include:
- A premium of approximately 9% to the Undisturbed Closing Price per LXi Share of 99.5 pence.
- A premium of approximately 13% to the volume-weighted average Closing Price per LXi Share for the one-month period ending on 15 December 2023, at 95.7 pence.
- An implied NTA discount of 4% based on each of the LondonMetric and LXi Rolled-Forward Unaudited EPRA NTAs.
Post-merger, existing LondonMetric shareholders are expected to retain approximately 54% of the enlarged issued share capital, while LXi shareholders will hold about 46%.
The Combined Group brings forth a robust £6.2 billion portfolio, primarily concentrated in structurally supported sectors. An impressive 93% exposure to logistics, healthcare, convenience, entertainment, and leisure sectors positions the entity strategically in sectors with sustained demand.