Segro Proposes All-Share Takeover of Tritax EuroBox Amid Potential Rival Bid

Segro, a major player in the FTSE 100 property sector, has announced a recommended all-share takeover bid valued at £552 million for Tritax EuroBox. This move may trigger a competitive response from Canadian investment firm Brookfield, which has indicated interest in formulating a cash offer for EuroBox.

The proposed all-share offer equates to approximately 68.4p per EuroBox share, a figure that is slightly above the recent closing price of 66.5p from Tuesday’s market. This minimal premium has led analysts to speculate that Brookfield or another interested party may consider a counter bid.

On Wednesday, EuroBox shares experienced a slight increase, closing at 68.5p—up 2p or 3.2%—suggesting market expectations of potential competition. Meanwhile, Segro shares fell by 11p, or 1.2%, bringing them down to 869p.

Brookfield, led by former Bank of England governor Mark Carney, had stated in June that it was in the process of evaluating a possible cash offer for Tritax EuroBox. The firm has until September 23 to decide on a formal bid.

Segro manages an expansive £20.6 billion portfolio that includes warehouses, delivery centers, and data facilities, benefiting from a rise in warehouse rents as older leases come up for renewal. In fact, tenants renewing leases from January to June have agreed to an average rent increase of 28%.

Earlier this spring, Segro successfully raised £900 million, signaling a strategic move to capitalize on what it views as the bottom of a two-year commercial property market decline.

David Sleath, chief executive of Segro, commented, «This transaction provides an opportunity to acquire a high-quality portfolio of large-scale warehouses in key European markets, which will complement our existing assets.» He further noted that Segro’s scale and internal management structure would allow for more cost-effective oversight of EuroBox’s portfolio.

Tritax EuroBox, which went public in London in 2018 and is currently listed in the FTSE 250, boasts a portfolio valued at £1.2 billion, with significant holdings in the Netherlands and Germany.

The EuroBox board has engaged with several potential bidders throughout the summer, including Brookfield. Chairman Robert Orr stated that Segro’s offer «represents a compelling opportunity for Tritax EuroBox shareholders to achieve significant and immediate value enhancement.»

Commercial property analyst Andrew Saunders from Shore Capital has remarked that the proposed deal appears to be a strong match. Should no alternative bidders arise, Segro anticipates finalizing the acquisition by year-end.