LONDON: LondonMetric and Urban Logistics have agreed to the terms of a recommended cash and share offer, paving the way for LondonMetric to acquire Urban Logistics in a deal valued at approximately £698.9 million.
The acquisition will be carried out under a scheme of arrangement in accordance with Part 26 of the Companies Act, the companies announced.
Under the terms of the agreement, shareholders of Urban Logistics will receive 0.5612 new LondonMetric shares and 42.8 pence in cash for each Urban Logistics share held. Based on LondonMetric’s closing price of 191.5 pence as of the latest practicable date, the offer values Urban Logistics shares at 150.3 pence each.
The acquisition is set to create a combined group with expanded logistics capabilities, aligning with both firms’ strategic growth plans.
LondonMetric aims to own and manage valuable real estate that meets tenants’ needs and provides reliable, growing income over time.
Since 2019, the company has focused on expanding through acquisitions, becoming a key player in the UK real estate market. It has acquired A&J Mucklow plc (2019), CT Property Trust Limited (2023), and LXi REIT plc (2024), and is currently working on acquiring Highcroft Investments PLC, expected to finalize on 21 May 2025. LondonMetric continues to explore similar opportunities, backed by a management team with strong experience in handling and integrating these deals.
The boards of Urban Logistics and LondonMetric believe this acquisition is a smart move, offering benefits such as:
– A stronger company with a total market value of £4.4 billion, making LondonMetric one of the biggest real estate investment firms in the UK and improving its ability to raise capital and trade shares.
– A £7.3 billion property portfolio focused on logistics, convenience, healthcare, entertainment, and leisure—sectors expected to grow.
– A leading logistics platform with complementary assets worth £4.0 billion, with 40.3% in high-growth urban logistics properties.
– A better competitive position for securing large deals and competing with private equity investors.
– Stable income, with strong occupancy rates (97%) and long-term rental agreements averaging 17 years, backed by reliable tenants.
– Cost savings and operational improvements that strengthen LondonMetric’s financial performance and support a steady, growing dividend policy.
– A 24% increase in dividends for Urban Logistics shareholders due to LondonMetric’s efficient business model.
– Expected earnings growth over the next two years through property upgrades, development investments, rental increases, and cost efficiencies.
– A solid financial structure, with a loan-to-value ratio of 36%, an average debt cost of 4%, and available funding of £624 million.
– Better access to financing due to LondonMetric’s strong credit rating (BBB+).
– Shareholders benefiting from LondonMetric’s experienced leadership team, which has deep market knowledge and strong relationships with investors and tenants.
LondonMetric CEO Andrew Jones said the deal strengthens their logistics platform and supports their strategy of securing long-term rental income from urban warehouse properties. He believes the merger will bring cost savings, better financing options, and larger investment opportunities.
Urban Logistics Chairman Nigel Rich praised his company’s achievements since 2016, saying its portfolio has performed better than other real estate firms. He thanked the management team for their hard work.