LondonMetric Property has announced its agreement to acquire LXI REIT in a merger, with the latter being valued at approximately £1.9 billion ($2.42 billion) in shares.
In this deal, LXI shareholders will receive 0.55 LondonMetric shares per LXI share held. With LondonMetric’s share price on December 15th at 197.4 pence, the merger values LXI’s share capital at around £1.9 billion.
This price offers a premium of about 9% compared to LXI’s closing share price on December 15th of 99.5 pence. LXI shares closed at 103.0 pence on Wednesday.
Once the merger is completed, which is expected by the end of March, LondonMetric shareholders will hold approximately 54% of the newly merged business. Meanwhile, LXI shareholders will hold the remaining 46%. The combined net tangible asset value of the new company will be around £4.1 billion, making it the fourth largest real estate investment trust in the UK. Its portfolio will be valued at £6.2 billion.
According to Andrew Jones, the Chief Executive of LondonMetric, the new company will have a portfolio without any legacy assets and will enjoy full occupancy, high occupier contentment, and exceptional income longevity with a high certainty of growth, both organically and contractually.