SEGRO has agreed a £552m all-share takeover of Tritax EuroBox.
Based on the closing price per SEGRO share of 880p on 3 September 2024, the transaction price values each Tritax EuroBox share at 68.4p, representing a premium of approximately 27% on the closing price per Tritax EuroBox share of 53.8p as at 31 May.
For each Tritax EuroBox share held, EuroBox shareholders will receive 0.0765 new SEGRO shares and following completion of the takeover, SEGRO shareholders are expected to own approximately 96%, while Tritax EuroBox shareholders will own approximately 4% of SEGRO’s enlarged issued share capital.
The boards of Tritax EuroBox and SEGRO said the deal presented a “compelling opportunity” for shareholders in both companies as it would deliver a significant uplift in value for Tritax EuroBox shareholders and add a portfolio of “well-diversified and high-quality logistics assets to SEGRO’s portfolio on attractive terms”.
In addition to realising substantial savings in relation to Tritax EuroBox’s administrative costs, SEGRO said Tritax EuroBox’s rental income has reversionary potential of 21% and based on the transaction value SEGRO would acquire the Tritax EuroBox assets at a 5.2 % implied topped-up net initial yield.
The directors of Tritax EuroBox said they intend unanimously to recommend that Tritax EuroBox shareholders vote in favour of the deal.
David Sleath (pictured), chief executive of SEGRO, said: “This transaction offers the opportunity to acquire a high quality portfolio of big box warehouses in core European markets which would complement and enhance our existing assets. The management of the portfolio will be internalised on completion, taking advantage of economies of scale from our existing, locally-based operating platform.
“We intend to apply the long-established SEGRO strategy of disciplined capital allocation and operational excellence, based on an efficient and resilient corporate and capital structure and the Responsible SEGRO principles as we do for all assets we own and manage. While shareholders can expect this approach to lead to some capital recycling, we recognise the high quality of the portfolio assembled by the Manager and look forward to working with it for the benefit of our new and existing shareholders.”
Robert Orr, chair of Tritax EuroBox, added: “As set out at Tritax EuroBox’s half-year results in May this year, the board has been focused on how best to deliver value for Tritax EuroBox shareholders in an effective and efficient manner. The board would like to thank the manager for the important role it has played in curating and managing Tritax EuroBox’s high-quality asset base, and actively managing the portfolio in order to achieve the best outcome for shareholders in the context of a difficult macroeconomic environment for the property sector.
“The transaction with SEGRO represents a compelling opportunity for Tritax EuroBox shareholders to achieve a significant and immediate uplift in the value of their investment and stronger total shareholder returns, with the option either to retain exposure to the European industrial and logistics sector through holding shares in the largest and most liquid REIT in Europe, or to sell their new SEGRO shares for cash, taking advantage of SEGRO’s significantly greater trading liquidity. The board is pleased to recommend the transaction to Tritax EuroBox shareholders.”
