Segro will raise £250m in a share placing and open offer as it agrees to take over its indebted rival, Brixton.
Segro said that a deal to take over Brixton, its rival, had been achieved at a 36% discount to Brixton’s valuation at the end of December 2008.
It will also pay off some of Brixton’s bondholders, who fear a tie-up could lead to a fire-sale of its best assets.
Segro’s offer of 40.25p per share, valuing Brixton at £109.4m, had been expected for several days since the companies entered into a preliminary agreement. The deal could create £12m in cost savings, but would entail job cuts.
Brixton’s board have recommended the offer, which will give its shareholders 0.175 Segro shares for every one of Brixton’s, creating Europe’s largest industrial Real Estate Investment Trust. The new company will have a property portfolio of £5.5bn.
Daily Telegraph, The Times