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(Sharecast News) - Urban Logistics REIT has received a revised takeover proposal from LondonMetric Property, it announced on Monday, valuing the company at 674m.
The proposed offer comprised 0.5612 new LondonMetric shares and 42.8p in cash for each Urban Logistics share.
Based on LondonMetric's closing share price of 182.1p on 11 April, the offer equated to a value of 145p per Urban Logistics share, representing a 17% premium to Urban Logistics' undisturbed share price, and a 27% premium to its six-month volume weighted average price.
Urban Logistics shareholders would also retain the right to receive the second-half dividend of 4.35p, expected to be paid in July.
If completed, Urban Logistics shareholders would own 11.3% of the enlarged group, which would hold a 7.3bn portfolio with logistics assets accounting for 54% by value.
The board of Urban Logistics indicated that it was minded to recommend the offer, subject to agreement on the remaining terms and completion of due diligence, and had entered into discussions with LondonMetric.
Its board highlighted benefits for shareholders, including an immediate uplift in value, partial cash de-risking, earnings and dividend accretion, and increased liquidity through holding shares in a FTSE 100 company with an investment-grade credit rating.
The directors also pointed to expected cost efficiencies and improved access to capital under LondonMetric's internal management.
In light of the proposal, the company said it had paused its previously-announced management internalisation process, and was engaging with shareholders who had requisitioned a general meeting to discuss the impact of the possible offer.
LondonMetric had until 1700 BST on 9 May to announce a firm intention to make an offer or withdraw, in accordance with the Takeover Code.
At 1624 BST, shares in LondonMetric Property were up 1.32% at 184.5p, while those in Urban Logistics REIT were ahead 9.75% at 139.2p.
Reporting by Josh White for Sharecast.com.