Industrial property real estate investment trust Segro has agreed to buy its arch rival, the heavily indebted industrial Reit , in an all-share deal worth £109m. It now plans to raise £250m from a share placing via an open offer at 210p-a-share (after a share consolidation) to finance the deal and tackle Brixton's crippling debts.
Brixton's shareholders still have to approve the deal, which will see every Brixton share swapped for 1.75 Segro shares (valued at roughly 40p). Brixton's shares leapt to 70p in May, when it was believed were also considering bids. However, none has been forthcoming, and Segro is now in pole position to acquire Brixton's industrial portfolio for less than one-tenth of its £1.8bn December valuation.
Brixton was expected to breach its banking covenants at the end of this month, weighed down by net debt of £862m and liabilities from a derivatives portfolio. Segro has separately announced a tender offer to holders of Brixton's corporate bonds.
