London’s M&A mini-boom gathered pace this morning with the third potential major takeover deal in under a week that could reshape the FTSE 100.
Warehouse owner Tritax Big Box unwrapped a £924 million offer for its peer UK Commercial Property.
Investors in UK Commercial Property are being offered 0.444 new Tritax shares for every share they hold, equivalent to a 10.8% premium to Friday’s share price.
The two real estate investment trusts (REITs) will have a combined property portfolio of £6.3 billion and a market capitalisation of £3.9 billion, enough to take the enlarged group onto London’s top-tier stock index.
The recommended all-stock offer will produce the fourth-largest REIT in the country.
It came after two deals last week that were also big enough to have implications for the FTSE 100. The biggest housebuilder in the country, Barratt, offered £2.5 billion for Redrow while DS Smith, the packaging giant, confirmed last week it has been approached over a potential £10 billion offer from fellow London-listed firm Mondi.
The flurry of dealmaking stoked hopes in the City that the M&A market was on the way back, with the potential to alleviate possible City job losses. It also came at the start of a week in which the official verdict is due on whether the UK is in recession, highlighting the potential of financial services to help the country rebound.
Tony Cross, of the regulatory news database Investegate, said: “The recovery in activity will be especially welcome as the country edges closer to recession and the prospect of redundancies continues to haunt the City.”
UK Commercial Property REIT shares rose by 5% this morning to 67.40p. Shares in Tritax Big Box fell by 2.7% to 155.9p.
