LondonMetric Property in talks to acquire LXi REIT

investmentweek.co.uk:

The boards said a merger would result create a UK-focused triple net lease REIT of scale with a pro forma gross asset value of approximately £6.4bn and market capitalisation of £3.9bn.

The statement revealed pre-conditions for LondonMetric to make a firm offer for the entire issued capital of LXi, including the completion of mutual due diligence, the provision of certain consents, waivers and approvals by each company's lenders and the board's recommendation of the merger to LXi's shareholders.

The boards said a merger would result create a UK-focused triple net lease REIT of scale with a pro forma gross asset value of approximately £6.4bn and market capitalisation of £3.9bn, which is expected to provide «improved share liquidity and better access to capital».

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A combined portfolio «aligned to structurally supported sectors» with 93% exposure to the logistics, healthcare, convenience, entertainment and leisure sectors and «income longevity and security» was also highlighted by the boards to be a potential result of a possible merger.

They added that the merger would deliver «an internally managed REIT delivering economies of scale and operating efficiencies, targeting sustainable earnings and dividend progression».

There can be no certainty that a firm offer will be made or what the terms of a potential offer could be, the boards said, adding that a further announcement will be made soon.

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Oli Creasey, property analyst at Quilter Cheviot, said: «REIT M&A has been something of a theme recently, and both LXi and LondonMetric have been some of the busiest in seeking ways to grow their