LondonMetric in talks to buy LXi REIT

LondonMetric and LXi REIT confirmed on Monday that they are in talks about a possible all-share merger to create a real estate company worth £3.9bn.

The making of any firm offer by LondonMetric is subject to a number of pre-conditions. These include the completion of mutual due diligence, the provision of certain consents, waivers and approvals by each company's lenders and the recommendation of the possible merger by LXi’s board.

Responding to an earlier press report by Bloomberg, the companies said: "The boards of LondonMetric and LXi see the potential to bring together two companies with complementary strategic approaches and a key focus on delivering compounding income-led total shareholder returns through the cycle."

The possible merger would result in a UK-focused triple net lease REIT of scale, they said, with a pro-forma gross asset value of around £6.4bn and a market cap of £3.9bn.

It would also result in a combined portfolio aligned to structurally supported sectors - with approximately 93% exposure to the logistics, healthcare, convenience, entertainment and leisure sectors - and with income longevity and security, they said.

At 1515 GMT, LXi REIT shares were up 4.4% at 103.90p and LondonMetric shares were 0.8% lower at 195.80p.