LondonMetric, LXI REIT to merge in £1.9bn deal

LondonMetric and LXI REIT announced on Thursday that they have agreed to merge in a deal that will create a £4.1bn property company.

Under the terms of the deal, each LXI shareholder will receive 0.55 new LondonMetric shares for each of theirs. This values LXi at £1.9bn, and represents a premium of around 9% to the undisturbed share price.

Following completion of the merger, LondonMetric shareholders will own around 54% of the combined entity, while LXI shareholders will own the rest.

LondonMetric chief executive Andrew Jones said: "This is a compelling transaction which creates the UK's leading triple net lease REIT and underscores our ambitions to leverage our management platform and access exciting new opportunities across the UK real estate market.

"The deal gives us access to a very well let triple net portfolio of key operating assets and brings together two highly complementary investment approaches that embrace the qualities of income compounding.

"The combined £6.2 billion portfolio will have no legacy assets, full occupancy, high occupier contentment and exceptional income longevity with a high certainty of growth - both organically and contractually."

Shore Capital analyst Andrew Saunders said: "We believe the acquisition makes good sense for shareholders and would make the enlarged LondonMetric the fourth largest listed REIT with a market cap of around £4bn.

"LondonMetric has managed to avoid the recent beartraps befalling many of its peers and with a strong set of recent results confirming further growth and stabilised asset valuations, the shares have enjoyed one of the best relative performances and retain a high rating. We have predicted for some time that corporate activity would lead to a sector of fewer but stronger, bigger UK REITS and as 2024 gets underway, the super consolidator strikes again!"