Segro has reached agreement with the board of Brixton and announced its 'firm intention' to make an all-share offer to buy its rival.

The industrial REIT told the Stock Exchange today it would make an offer of 1.750 Segro shares for each Brixton share. This values Brixton at £105m, based on Segro's current share price of 22p.

Segro said its firm intention to make an offer for Brixton was conditional on a recommendation from the Brixton board and the satisfaction of the following non-waivable pre-conditions: (i) completion of final confirmatory due diligence by SEGRO; (ii) finalisation of documentation; and (iii) final approval of the offer by the Segro board.

Segro also confirmed, as tipped by Property Week, that the proposed offer will be accompanied by a further issue of new Segro shares in order to raise additional capital of up to £250m in cash.

It said there can be no certainty that any offer will be made even if the pre-conditions are satisfied.

Segro said the announcement was being made with the consent of the board of Brixton and a further announcement will be made when appropriate.

Segro's shares were down 2.2% and Brixton's shares were down more than 30% in early trading this morning.