LondonMetric Property has made a proposal to acquire Urban Logistics REIT, valuing the company at £674m.

The proposal, made on 13 April, consists of new shares in LondonMetric based on an adjusted EPRA net tangible assets (NTA) for adjusted EPRA NTA exchange ratio plus a fixed amount in cash.

Under the terms of the proposal, shareholders in Urban Logistics would be entitled to receive 0.5612 new LondonMetric shares and 42.8p in cash.

In addition, Urban Logistics shareholders would be entitled to retain the dividend for the second half of the financial year ending 31 March 2025, currently expected to be 4.35 pence per Urban Logistics share and to be paid in July 2025.

Based on LondonMetric’s closing share price of 182.1p on 11 April, the proposal values each Urban Logistics share at 145.0p and Urban Logistics’ entire issued and to be issued share capital at around £674m.

This represents:

• a premium of around 17% to the Urban Logistics closing share price of 123.4p as at 10 April 2025;
• a premium of around 23% to the Urban Logistics three-month volume weighted average price of 118.1p;
• a premium of around 27% to the Urban Logistics six-month volume weighted average price of 114.3p; and
• a discount of around 3% to Urban Logistics’ EPRA NTA based on each of LondonMetric’s and Urban Logistics’ EPRA NTAs per share as at 30 September 2024.

The board of Urban Logistics has indicated to LondonMetric that, should a firm offer be made on the financial terms set out above, it would be minded to recommend such an offer to Urban Logistics shareholders.

The board is holding discussions with LondonMetric in relation to these terms and to allow LondonMetric to undertake a period of confirmatory due diligence.

It said that the deal would offer advantages for Urban Logistics shareholders, including an uplift in value, with approximately 30% de-risked via the cash consideration, and meaningful accretion in earnings and dividends per share in respect of the share consideration.

Urban Logistics shareholders would have continued participation in the logistics sector, which would represent 54% of the combined group’s £7.3bn portfolio, with increased scale and diversification as well as greater cost efficiency under LondonMetric’s internal management team.

Urban Logistics shareholders should also benefit from increased liquidity through holding shares in a FTSE 100 constituent, and cost of capital benefits through the combined group’s superior access to financing and LondonMetric’s investment grade credit rating.

Urban Logistics announced on 7 March 2025 a proposal to internalise the company’s management arrangements. In light of the possible offer, the board has decided to pause the internalisation process. 

In addition, the board said it would discuss the merits of pausing the requisition and general meeting process with those shareholders.