Warehouse REIT backs latest £489m Blackstone takeover offer
- Warehouse board withdraws support for Tritax Big Box REIT bid
Warehouse REIT has backed Blackstone’s latest £489million takeover offer and withdrawn its support for a rival bid from London-listed peer Tritax Big Box REIT.
The US private equity giant upped the ante in the fight over the British property firm on Thursday by gazumping the Tritax bid, which Warehouse had said last month it was minded to accept.
Warehouse chair Neil Kirton told shareholders on Friday the increased Blackstone offer provides them ‘with a certain all-cash offer’ at a premium to the Tritax bid.
He added: ‘Warehouse independent directors now switch their recommendation in favour of the increased Blackstone offer accordingly.’
It is the latest battle to control a London-listed firm after Primary Health Properties last month won a tussle with American buyout firm KKR for GP surgery owner Assura.
UK publicly-traded real estate investment trusts (REITs) have become takeover targets for private equity firms and property companies looking to snap up a bargain.
Bid battle: The board of British property firm Warehouse REIT said it was considering a sweetened proposal from US private equity giant Blackstone
Analysts said their shares are undervalued while commercial property prices have boomed.
Warehouse, which owns logistics hubs used by retailers and parcel couriers, agreed to be bought by Blackstone for £470million, or 110.5p per share, in June.
But Tritax Big Box, also listed in London, muscled in with a £485.2million bid that was accepted by Warehouse, subject to shareholders’ approval.
Tritax said the takeover, which valued Warehouse at 114.2p per share, would create a logistics property portfolio worth £7.4billion.
US buyout giant Blackstone yesterday said its sweetened bid, which values Warehouse shares at 115p each, is a 3.5 per cent premium to Tritax’s cash and shares offer.
Warehouse’s shares yesterday rose 2.7 per cent, or 3p, to 115.4p.
Oli Creasey, a researcher at Quilter Cheviot, said: ‘While the uplift over Tritax’s proposal is modest, it’s still a few percentage points higher, enough to keep the spot- light on this increasingly competitive deal.’
He said the battle was ‘shaping up to be the other’ bidding war in UK real estate, echoing the Assura tussle, adding: ‘What’s clear is that smart money sees value in the UK REIT space.
‘With commercial property valuations recovering across most sub-sectors, discounted shares are attracting attention – and bids.’
Warehouse said: ‘The board is reviewing the revised terms of the Blackstone offer with its advisers and will continue to engage in extensive shareholder discussions.
‘The board has always been, and will remain, objective and resolutely focused on carrying out its fiduciary duties in the interests of shareholders.’
It said a further announcement will be made ‘as appropriate’ and advised shareholders to take no action.
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