The boards of LondonMetric and Urban Logistics have reached agreement on a recommended £698.9 million cash and share offer that would see LondonMetric take over Urban Logistics.
The acquisition values each Urban Logistics share at 150.3 pence and the entire issued and to be issued ordinary share capital of Urban Logistics at approximately £698.9 million. The transaction represents a premium of approximately 21.8% to the closing price per Urban Logistics share of 123.4 pence.
Following completion of the acquisition, existing LondonMetric shareholders would have 89% and Urban Logistics shareholders 11% of the enlarged issued share capital of LondonMetric.
In a stock market filing the Boards said for each Urban Logistics share held, the scheme shareholders will receive 0.5612 new LondonMetric shares and 42.8 pence in cash.
Since 2019, LondonMetric has been a major consolidator in the UK listed real estate market, having completed the acquisitions of A&J Mucklow in 2019, CT Property Trust in 2023 and LXi REIT in 2024, while progressing a recommended all-share acquisition of Highcroft Investments which is expected to complete on 21 May 2025.
The boards said the latest acquisition has a "compelling strategic and financial rationale for Urban Logistics and LondonMetric shareholders".
They flagged that the combined group would benefit from further scale with a pro forma market capitalisation of £4.4 billion, making LondonMetric one of the largest UK real estate investment trusts by market capitalisation.
They said it would now have a £7.3 billion portfolio "aligned to winning macro thematics" of logistics, convenience, healthcare, entertainment and leisure.
Within this there is a logistics platform with a portfolio with a value of £4 billion representing 54.5% of the combined group’s portfolio, of which £2.9 billion, or 40.3%, is in "higher growth urban logistics assets".
It added that the tie-up would lead to an "enhanced competitive position for pursuing opportunities of scale and competing with large private equity investors on substantial transactions".
Andrew Jones, chief executive of LondonMetric, said in a statement: “This is an excellent transaction that grows our urban logistics platform and supports our triple net strategy. Urban warehousing remains our strongest conviction call for organic rental growth across the UK real estate market. The portfolio is well located, highly reversionary and our asset management focus will ensure that it delivers reliable, repetitive and growing income-led returns.
“We have a demonstrable track record of successfully executing on M&A and we expect the transaction will deliver substantial synergies, cost savings and accelerated earnings growth. Our scale will continue to deliver enhanced access to capital, more debt optionality, increased share liquidity and larger investment opportunities.”
Nigel Rich, independent non-executive chairman of Urban Logistics, said: "Since its IPO in 2016, Urban Logistics has assembled an exceptional portfolio of single-let, ‘last mile’ assets and has outperformed the UK REIT sector and other relevant benchmarks. I would like to congratulate Richard Moffitt [CEO] and the rest of the management team on this achievement and to thank them for their commitment and dedication.
"The board of Urban Logistics believes that the acquisition offers Urban Logistics shareholders a premium price for their shares, an attractive combination of cash and share consideration and ongoing exposure to the logistics sector via a company of greater scale and liquidity.”