(Alliance News) - Land Securities Group PLC on Monday has agreed to buy fellow UK property developer U&I Group PLC in a deal worth GBP190 million.
LandSec has offered 149 pence per U&I share, representing a 73% premium to Friday's closing price of 86p.
U&I is a London-based mixed-use space regeneration and property specialist. U&I shares were trading 72% higher in London on Monday morning at 148.10p each.
LandSec stock was up 0.2% at 688.60p a share, while the wider FTSE 100 index was up 0.5%.
The deal has been unanimously endorsed by U&I directors, LandSec said.
In addition, LandSec said it has secured letters of intent to vote in favour of the acquisition from Aberforth Partners LLP, JO Hambro Capital Management Ltd, Jupiter Asset Management Ltd and Ennismore Fund Management Ltd, which together hold about 39.8 million U+I shares, representing about a 32% stake.
In order to become effective, the acquisition must be approved by at least 75% of shareholders.
The deal is expected to close next month or early 2022.
"Landsec set out a strategy in October 2020 to recycle investment in order to drive growth and generate higher returns, including through urban opportunities in London and other major regional cities. The acquisition accelerates that strategy, adding an attractive pipeline of mixed-use urban development opportunities along with complementary skills and expertise," LandSec said.
The company noted that U&I provides access to a pipeline of mixed-use development schemes, of which two are well-progressed through planning. LandSec said it believes that it can accelerate the pace of development of these two.
Back in January, U&I promoted Richard Upton to chief executive officer from chief development officer to replace Matthew Weiner. Chief Financial & Operating Officer Marcus Shepherd departed after completing the results for the financial year ending March 31, replaced by James Christmas.
Those results subsequently were described by Upton in May as "hugely disappointing".
At the time of the changes at the top, U&I embarked on a 100-day strategic review to simplify and refocus the business toward more predictable income streams.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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