Tritax EuroBox PLC on Thursday withdrew its backing for a takeover offer from FTSE 100-listed industrial property investor Segro PLC and instead supported a chunkier all-cash bid from private equity firm Brookfield Asset Management Ltd.
Toronto-based Brookfield will pay 69.0 pence in cash for Tritax Eurobox, a 6% premium to the implied 65.1p value of the Segro offer, based on the latter’s closing price on Wednesday, according to Brookfield and Tritax.
Tritax EuroBox shares rose 3.2% to 71.10 pence each on Thursday morning in London, while Segro shares were 0.6% higher at 842.00p each.
The Brookfield bid values the equity of London-based Tritax EuroBox at £557 million on a fully-diluted basis. The enterprise value, including debt, is £1.10 billion. Tritax EuroBox is a FTSE 250 constituent.
The Brookfield offer will come from newly formed bid vehicle Titanium Ruth Bidco Ltd, which is indirectly owned by one of Brookfield’s real estate private funds.
The acquisition is expected to complete in the current final quarter of 2024.
At the time that the offer by London-based Segro was agreed in early-September, that offer valued Tritax EuroBox’s equity at £552 million and implied a £1.10 billion enterprise value.
Under the Segro offer, investors in distribution centre investor Tritax EuroBox would have received 0.0765 of a new Segro for every one held in Tritax EuroBox.
However, the Brookfield bid is a cash offer. Tritax EuroBox noted ‘the scope for the implied value of the Segro offer to increase or decrease between now and completion, as compared to a fixed cash amount from Brookfield’.
‘While the deliverability of the two offers is now similar, a cash offer from Brookfield would provide increased certainty for Tritax EuroBox shareholders as compared to continued market risk between now and completion for the Segro offer,’ Tritax EuroBox said.
‘Accordingly, the Tritax EuroBox directors have withdrawn their recommendation that Tritax EuroBox shareholders vote in favour of the Segro offer.’
Brad Hyler, head of Real Estate in Europe at Brookfield said: ‘Tritax EuroBox has a high-quality portfolio of logistics assets in strategic locations across Europe. These assets are complementary to our existing portfolio and, using our global real estate expertise, we will actively manage these assets, provide access to capital, help build new relationships with our network of tenants and support the overall growth of the platform.’
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