LONDON: Tritax Big Box REIT PLC has agreed to acquire Warehouse REIT PLC in a recommended cash-and-share deal valued at approximately £485.2 million, the companies announced Tuesday.
The acquisition, to be implemented via a scheme of arrangement under Part 26 of the Companies Act 2006, will see Warehouse shareholders receive 47.2 pence in cash and 0.4236 new BBOX shares for each share they own. They will also retain rights to receive dividends of up to 1.6 pence per share each in July and October 2025.
Based on Tritax’s closing share price of 150.6 pence as of June 24, the offer values each Warehouse share at 114.2 pence, including dividends. The price represents a 38.6% premium to Warehouse’s undisturbed closing share price of 82.4 pence and a 4.8% premium over a rival offer from Blackstone.
Post-merger, Warehouse shareholders will own about 6.8% of the combined group.
The deal will create a UK logistics real estate giant with an enhanced portfolio valued at £7.4 billion. The boards of both companies cited strategic alignment, improved liquidity, and rental growth potential in urban markets as key drivers behind the merger.
BBOX said the acquisition is expected to be earnings-accretive in the first full year post-completion, aided by £5.5 million in annual cost synergies and enhanced development capabilities through the Tritax Manager. Pro forma leverage is expected to be 32%, within the company’s loan-to-value guidance of below 35%.
Warehouse’s logistics portfolio is expected to generate returns ahead of BBOX’s cost of capital, with opportunities for near-term rental reversion complementing BBOX’s existing 28% upside potential.
Aubrey Adams, the Chair of BBOX, said: “This transaction delivers value accretion to both BBOX and Warehouse Shareholders driven by immediate cost synergies, rental reversion and strong structural drivers supporting valuation and income growth in urban and big box logistics. The Board of BBOX is delighted to be able to offer Warehouse Shareholders the opportunity to be invested in the upside potential of the UK’s leading listed logistics real estate portfolio, whilst also providing the certainty of a partial cash offer. The Tritax Manager is well placed to integrate the Warehouse portfolio, and capture the significant reversion, by bringing to bear its broad based and highly relevant asset management expertise, including in multi-let industrial logistics.
As a Board our conviction in complementing our leading big box portfolio with assets in the urban and last mile markets is driven by significant client demand for assets across the value chain. Shareholders in the Combined Group will benefit from strong risk adjusted returns, progressive dividends, and the upside opportunity provided by BBOX’s market leading development arm.”
Neil Kirton, the Chair of Warehouse, said: “The Board is pleased to be recommending the Acquisition, which is not only at a higher level to the previous offer for the Company, but which also provides Warehouse Shareholders with the opportunity to retain both the Warehouse Q4 and Q1 dividends and remain invested in this attractive asset class.
The strategic rationale for the Acquisition is very clear and having engaged closely with the BBOX team, we are confident in their ability to deliver value from this combination and to generate enhanced earnings and dividends for both BBOX and Warehouse Shareholders. Warehouse Shareholders will further benefit from the increased liquidity that comes from being invested in a larger company, providing them with greater optionality over when to crystalise returns.”