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Key Points:
- Tritax EuroBox shareholders will receive 69 pence per share, representing a 6% premium over SEGRO’s offer.
- Brookfield sees this acquisition as a strategic addition to its European logistics portfolio, valuing the entire share capital of Tritax EuroBox at approximately £557 million.
- The Tritax EuroBox board unanimously supports the Brookfield acquisition and has withdrawn its recommendation for SEGRO’s competing offer.
Tritax EuroBox plc (LSE:EBOX), a key player in the logistics-focused real estate market, has reached an agreement with Titanium Ruth Bidco Limited, a company indirectly owned by one of Brookfield's real estate private funds, for a recommended cash acquisition. The acquisition involves Bidco buying the entire issued and to be issued share capital of Tritax EuroBox. This deal will be executed through a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
Under the terms of the acquisition, each Tritax EuroBox shareholder is entitled to receive 69 pence in cash per share. This price represents a 6% premium compared to the 65.1 pence implied value of a previous offer from SEGRO, a real estate investment trust (REIT), and a 28% premium over the closing price of 53.8 pence on May 31, 2024, before the offer period began. However, the acquisition price also reflects a 12% discount to Tritax EuroBox’s last reported net asset value per share, standing at 93.9 cents, as of March 31, 2024.
This acquisition values Tritax EuroBox’s entire share capital at around £557 million, while the total enterprise value of the company, taking into account net debt, is approximately £1.1 billion. The deal also offers shareholders an attractive premium compared to the terms proposed by SEGRO, and as a result, Tritax EuroBox's board has recommended its shareholders not to take action on the SEGRO offer.
Background and Rationale
Brookfield, a global investment firm with significant experience in the European real estate sector, sees the acquisition as a strategic fit for its portfolio. Over the years, Brookfield has closely followed the progress of Tritax EuroBox, particularly admiring the high-quality logistics assets the company has accumulated. Currently, Brookfield manages a global logistics portfolio covering over 85 million square feet of space.
The persistent undervaluation of Tritax EuroBox’s shares relative to its net asset value (NAV) has limited the company's ability to raise additional equity capital and grow. Bringing Tritax EuroBox into private ownership under Brookfield’s platform is expected to provide better opportunities for future investments and growth. Brookfield plans to actively manage Tritax EuroBox’s portfolio within its larger European logistics platform, which would allow the company to benefit from being part of a scaled, well-capitalized, and expanding real estate portfolio.
This acquisition offers a compelling opportunity for Tritax EuroBox shareholders to realize the value of their investments in cash, especially in light of the ongoing uncertainty surrounding the SEGRO offer. Brookfield’s proposed acquisition price presents a solid premium over the trading price on the "Undisturbed Date" (the last business day before the offer period started) as well as the value implied by SEGRO’s bid.
Board Recommendations
The board of Tritax EuroBox, advised by Lazard, Barclays, and Jefferies, has deemed the terms of the acquisition as fair and reasonable. The independent advice provided by these financial institutions was based on the commercial assessments of Tritax EuroBox's directors. Given this recommendation, the directors of Tritax EuroBox unanimously plan to advise shareholders to vote in favor of the scheme at the upcoming Court Meeting, as well as the resolutions to be proposed at the General Meeting.
Due to the favorable recommendation of the Brookfield offer, the board has decided to withdraw its support for SEGRO’s offer and intends to adjourn the SEGRO shareholder meetings that were scheduled for October 24, 2024. Tritax EuroBox shareholders have been urged to take no action concerning the SEGRO bid as a result.
