Segro Regulatory News (SGRO)

15 December 2020

SEGRO TO ACQUIRE CONTROLLING INTEREST IN FRENCH URBAN WAREHOUSING COMPANY SOFIBUS PATRIMOINE

SEGRO TO LAUNCH A SIMPLIFIED MANDATORY OFFER TO PURCHASE REMAINING SHARES

SEGRO plc ("SEGRO") (LSE: SGRO, EPA: SGRO) announces that it has unconditionally agreed to acquire a further 74.9 per cent of the share capital of Sofibus Patrimoine ("Sofibus" or "the Company") for €313.71 per share. Following its acquisition of a 19.5 per cent interest in 2018, and upon completion of the transaction, SEGRO will own 94.4 per cent of Sofibus. SEGRO will file a simplified mandatory tender offer for the Sofibus shares not owned by SEGRO, at the same price of €313.71 per share, and intends to implement a squeeze-out procedure in order to delist the Company from Euronext Paris.

As a result, SEGRO will secure majority ownership and control of Sofibus's property portfolio, allowing SEGRO to increase its presence in the Paris urban warehouse market significantly.

SEGRO has agreed to acquire the 74.9 per cent stake through separate transactions with the controlling shareholders of Sofibus (the "Hottinguer Concert Party"[1]), owning 56.3 per cent of the share capital, and with several minority shareholders[2], owning in aggregate 18.6 per cent of the share capital. All these transactions have been agreed at the same acquisition price of €313.71 per share, equating to a value of €178.6 million. This values 100 per cent of the equity of Sofibus at €238.5 million and reflects a premium of 46.6 per cent compared with the last closing price before this announcement (11 December 2020), of 61.5 per cent compared with the volume-weighted average price over the last month and of 67.5 per cent compared with the volume-weighted average price over the last three months.

Sofibus's main asset is Parc d'Activités des Petits Carreaux ("PAPC"), a 149,900 sq m urban warehouse park in Bonneuil-sur-Marne, an established commercial area in close proximity to central Paris. The portfolio also includes 17 hectares of adjacent development land and an office building in Central Paris. Within the Income Statement for the financial year ended 31 December 2019, the Company reported passing rent of €12.6 million and EBITDA of €9.7 million.

David Sleath, Chief Executive of SEGRO, said:

"This is a rare opportunity to significantly increase our exposure to urban warehousing in Paris which has long been a core market for SEGRO. We have got to know Sofibus well as a shareholder and member of the Board of Directors over the past two years and look forward to the next stage of growth for the Parc d'Activités des Petits Carreaux.

"Our local team has intimate knowledge of the Paris warehouse market and will deploy its expertise to add value by actively managing Sofibus's existing assets and by developing new, state of the art warehousing on the adjacent plots of land to satisfy growing occupier demand."

Portfolio description and intentions

The Sofibus property portfolio comprises:

· Parc d'Activités des Petits Carreaux, a 149,900 sq m urban warehouse estate with easy access to central Paris. PAPC contains 35 units and is 96 per cent occupied. The local SEGRO team will take over management of the estate and will look to modernise it and increase rents over time.

· 17 hectares of development land suitable for further urban warehouse projects. The 17 hectares of development land is split between two sites, with potential to add approximately 50,000 sq m of new urban warehouse space in due course.

· A 2,700 sq m office building located in the 9th arrondissement of Paris. The building is fully let to eight tenants. As a warehouse owner and developer, SEGRO intends to dispose of this asset at the appropriate time.

Benefits to SEGRO

This transaction provides SEGRO with the following benefits:

· Allows SEGRO to add critical mass to its Paris urban warehouse portfolio, a core market in Continental Europe. SEGRO's urban warehouse assets in Paris represent over 350,000 sq m of space. This transaction increases the size of SEGRO's portfolio in Paris by approximately one-third.

· Provides exposure to a prime urban warehouse market displaying strong demand and supply characteristics.

· Secures ownership of PAPC which is a large-scale, ring-fenced industrial estate with good access to central Paris and which provides an opportunity to actively manage and increase rents on the estate over time.

· Gives SEGRO access to land for further urban warehouse development projects in Paris.

Details of the transaction

SEGRO acquired a 19.5 per cent interest in Sofibus in 2018 for €20.5 million (representing €138 per share). SEGRO has now unconditionally agreed to acquire a further 74.9 per cent of Sofibus from the Hottinguer Concert Party and several minority shareholders for €313.71 per share, a total of €178.6 million, which values 100 per cent of the equity of Sofibus at €238.5 million. Closing of the transaction is expected by 21 December 2020, at which point SEGRO will own 94.4 per cent of Sofibus. SEGRO will file a simplified mandatory tender offer at a price of €313.71 per share for the Sofibus Patrimoine shares not owned by SEGRO and intends to implement a squeeze-out procedure in order to delist the Company from Euronext Paris.

Details of financing

SEGRO will finance the acquisition from cash and its existing debt facilities.

Transaction timetable

In accordance with applicable laws and regulations, by the end of Q1 2021 SEGRO will file a simplified mandatory offer for the remaining share capital of Sofibus at a price of €313.71 per share (the "Offer"). Following the Offer, SEGRO intends to implement a squeeze-out on the Sofibus shares not tendered by the minority shareholders of Sofibus in the Offer.

SEGRO is being advised by Lazard, acting as its sole Financial Adviser, and Archers, acting as its Legal Counsel.

ENDS

For further information, please contact:

SEGRO plc

Claire Mogford (Head of Investor Relations)

Tel: +44 (0) 20 7451 9048 / claire.mogford@segro.com

Lizzie Humphreys (External Communications Manager)

Tel: +44 (0) 20 7451 9129 / lizzie.humphreys@segro.com

Richard Sunderland / Claire Turvey / Eve Kirmatzis (FTI Consulting)

Tel: +44 (0) 20 3727 1000/ segro@fticonsulting.com

Notes to Editors

About SEGRO

SEGRO is a UK Real Estate Investment Trust (REIT) which is listed on the London Stock Exchange and Euronext Paris, and is a leading owner, manager and developer of modern warehouses and industrial property. It owns or manages 8.1 million square metres of space (88 million square feet) valued at £13.3 billion as at 30 June 2020 serving customers from a wide range of industry sectors. Its properties are located in and around major cities and at key transportation hubs in the UK and in seven other European countries.

For 100 years SEGRO has been creating the space that enables extraordinary things to happen. From modern big box warehouses, used primarily for regional, national and international distribution hubs, to urban warehousing located close to major population centres and business districts, it provides high-quality assets that allow its customers to thrive.

See www.SEGRO.com for further information.