Workspace to acquire McKay Securities for £272m

Workspace to acquire McKay Securities for £272m

London-based flexible office space provider Workspace Group plans to acquire McKay Securities, a United Kingdom-based real estate investment trust (REIT), for £272m.

Workspace Group Plc, a FTSE 250 REIT, and McKay Securities Plc have reached agreement on the terms and conditions of a recommended offer to be made by Workspace for the entire issued, and to be issued, ordinary share capital of McKay.

Under the terms of the deal, each McKay shareholder will be entitled to receive 209 pence per share in cash and 0.115 new Workspace shares.

On the basis of the closing price per Workspace share of 769 pence on 1 March 2022, the acquisition values each McKay share at 297 pence and the entire issued and to be issued share capital of McKay at approximately £272 million.

The acquisition represents a premium of approximately 36.2% to the closing price of 223 pence per McKay share on Tuesday.

Commenting on the acquisition, Richard Grainger, Chair of McKay said:

“The McKay board’s recommendation of the acquisition follows a detailed and rigorous review during which we considered a broad range of options to unlock value for McKay shareholders and which determined Workspace’s proposal to be the most attractive. The offer from Workspace provides McKay shareholders with an opportunity to receive a return which values the business substantially above where it has been trading historically with a substantial proportion of this return payable in cash. It also provides McKay shareholders with the opportunity to participate in the future success of the enlarged and well capitalised Workspace Group, whose business model is well placed to meet post Covid-19 demand for high quality, flexible business space.”

Commenting on the Acquisition, Graham Clemett, Chief Executive Officer of Workspace said:

“The market for office space is shifting, with businesses prioritising greater flexibility and the right location for their teams. This acquisition is a fantastic opportunity to accelerate our growth plans by capturing more of the strong demand we are seeing for our flexible offer in London, whilst selectively extending our reach into attractive commercial locations in the South-East. We will be a larger, more resilient company with an enhanced financial profile, and by applying our proven operational model and expertise, we expect to generate strong returns from McKay’s portfolio of high-quality assets over the medium term.”