Tritax Eurobox accepts Segro’s all-share £552m offer

Segro, the London-listed warehouse giant, and Tritax Eurobox, the UK logistics specialist, have reached an agreement on an all-share offer by Segro for the entire issued capital of its smaller peer, valued at £552 million.

“This transaction offers the opportunity to acquire a high quality portfolio of big box warehouses in core European markets which would complement and enhance our existing assets,” said David Sleath, chief executive, Segro. “We recognise the high quality of the portfolio assembled by the manager and look forward to working with it for the benefit of our new and existing shareholders.”

Tritax Eurobox said it had received expressions of interest from other parties but believes that the deal with Segro is “fair and reasonable” and the best opportunity for its shareholders.

Investors in Tritax EuroBox will, get 0.0765 new Segro shares for each share they own and in addition they will be entitled to receive a dividend of 1.25 euro cents per share for the quarter ending 30 September. The offer represents a premium of 27% on Tritax Eurobox’s closing price on 31 May, the last business day before the offer period.

Last June Brookfield, a Canadian investment group chaired by Mark Carney, former Governor of the Bank of England, said it was assessing a “possible cash offer” for Tritax EuroBox. Brookfield now has a few weeks to make a firm offer and trump Segro’s.

“The management of the portfolio will be internalised on completion, taking advantage of economies of scale from our existing, locally-based operating platform,” said Sleath. “We intend to apply the long-established Segro strategy of disciplined capital allocation and operational excellence, based on an efficient and resilient corporate and capital structure and the responsible Segro principles as we do for all assets we own and manage.”

The transaction values Tritax Eurobox’s entire issued and to be issued ordinary share capital at £552 million, said Segro, which including net debt “implies an enterprise value of approximately £1.1 billion”.

Tritax Eurobox has assets in seven countries in Europe and focuses on logistics and distribution supply chains, serving clients in the manufacturing, pharmaceutical, retail and e-commerce sectors.

“The offer Segro has made for Tritax EuroBox is a positive move for the European listed real estate (LRE) sector and signals growing market appetite for high quality logistics assets,” said Dominique Moerenhout, CEO of EPRA. “What’s more, it demonstrates the ongoing strength LRE holds as an asset class. And with the scale and liquidity that this deal could bring we’re confident this is a great opportunity for investors given Tritax EuroBox’s pan-European portfolio. If Segro’s offer were to materialise, no doubt this would be a landmark achievement for the European LRE sector in 2024.”