views

Brixton and Segro hammer out terms of takeover deal

SHARES in Brixton property group plummeted 30 per cent to 43.5p yesterday after its board agreed to an all-share offer from larger rival Segro, which values the company at a 40 per cent discount to its market capitalisation on Friday.<br /><br />Segro has offered 1.75 of its own shares for each Brixton share, valuing Brixton at 39.4p a share or about &pound;107m, based on Segro&rsquo;s closing share price of 22-1/2p on Friday.<br /><br />Segro first went public with an approach to Brixton a month ago, sending the latter&rsquo;s shares to a three-month high. UBS and JPMorgan Cazenove are advising Segro. Citi and Nomura are advising Brixton.<br /><br />Segro said its offer would be accompanied by an issue of new shares to raise additional capital of up to &pound;250m in cash. The group, formerly known as Slough Estates, recently raised more than &pound;500m from shareholders in a bid to strengthen its finances and position it for growth opportunities.<br /><br />Brixton yesterday said to shareholders at its annual meeting it was continuing to look at every possibility to avoid breaching covenants and it has raised &pound;80m so far from asset disposals.<br /><br />Brixton&rsquo;s estate portfolio was recently valued at &pound;1.8bn, a thirty per cent drop since the property market&rsquo;s peak in June 2007.