Tritax and UKCM agree terms to create UK's fourth largest REIT

The boards of Tritax Big Box REIT (BBOX) and UK Commercial Property REIT (UKCM) have reached agreement on the terms of a possible all-share offer for the entire share capital of UKCM.

The agreed offer represents an exchange ratio of 0.444 new ordinary BBOX shares per UKCM share, with reference to BBOX's 31 December unaudited EPRA net tanglible assets (NTA) of 177.2 pence per share, and UKCM’s 31 December 2023 unaudited EPRA NTA of 78.7 pence per share.

The offer would result in UKCM shareholders holding approximately 23.3% of the issued share capital of the combined group. It implies a value of 71.1 pence per UKCM share and approximately £924 mln (€1.08 bn) for the entire issued share capital of UKCM.

Both boards said they believed the possible offer to have compelling strategic and financial rationale, acting as a way to bring together complementary logistics-oriented investment portfolios with a shared focus on resilient income, enhancing the overall customer offering across a broader range of property sizes and tenant uses.

The combine would form the fourth largest UK REIT based on market capitalisation, establishing a £6.3 bn portfolio focused on high-quality UK logistics assets generating over £290 mln of rental income per annum with significant embedded and growing rental reversion potential, the firms said in a statement.

The board of UKCM has comfirmed that it intends to recommend the offer to shareholders should a firm offer be made, having received advice from Rothschild & Co.

Major UKCOM shareholders, including Pheonix Life and Investec, who together hold some 56.5% of the firm, have submitted non-binded letters of intent to BBOX to vote in favour of the takeover.

BBOX has until 8 March to make a firm offer or step back from the deal.


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