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.
Segro has offered 1.75 of its own shares for each Brixton share, valuing Brixton at 39.4p a share or about £107m, based on Segro’s closing share price of 22-1/2p on Friday.
Segro first went public with an approach to Brixton a month ago, sending the latter’s shares to a three-month high. UBS and JPMorgan Cazenove are advising Segro. Citi and Nomura are advising Brixton.
Segro said its offer would be accompanied by an issue of new shares to raise additional capital of up to £250m in cash. The group, formerly known as Slough Estates, recently raised more than £500m from shareholders in a bid to strengthen its finances and position it for growth opportunities.
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 £80m so far from asset disposals.
Brixton’s estate portfolio was recently valued at £1.8bn, a thirty per cent drop since the property market’s peak in June 2007.