Segro agrees Brixton offer
INDUSTRIAL landlord Segro said yesterday it agreed an offer for warehouse specialist Brixton in a deal worth £109.4m.
The planned combination will give Segro – formerly known as Slough Estates – a property portfolio worth £5.5bn based on May valuations.
Segro is accompanying the Brixton deal with a £250m share issue, half of which will come via a placing to shareholders at 210p a share.
Segro chief executive Ian Coull yesterday told City PM : “We were able to buy at the bottom of the market. Due to the downturn some property companies couldn’t recapitalise and have found themselves in serious trouble. Brixton was one of these.”
He said: “This is a terrific deal for our shareholders and a good deal for Brixton’s shareholders.”
Segro also said that after acquiring Brixton in an all-share deal it expected to generate £12m of synergies a year from the start of 2010. Due to the group’s synergies Segro expects to take over from Brixton’s management in August.
Coull added: “I don’t believe that we are at the bottom of the cycle, but we’re pretty close in terms of yields. And in six to nine months property values will stabilise and move upwards. This is good timing.”
The group said it expects some job cuts in relocating Brixton staff to Slough head offices, but says it doesn’t expect “huge numbers.”
HOW SEGRO SNAPPED UP BRIXTON
4 March 2009
Segro announces a £500m rights issue to boost its fire-power and bolster its balance sheet.
22 May
Segro announces a preliminary approach for Brixton
22 June
Segro announces it has reached an agreement on financial terms with Brixton. It proposes an offer of one Brixton share for every 1.75 Segro.
9 July
Announces it has agreed an offer for rival Brixton that includes a £250m capital hike and a possible £325m buyback of Brixton bonds.
28 July
Segro general meeting, shareholders must approve the share raising and also the acquisition on this date.
25 August
Segro says Brixton will de-list its shares on this date.