Real estate company St Modwen (SMP.L) has agreed a £1.2bn ($1.7bn) buyout deal with US private equity and investment firm BlackStone.
The offer of 542p a share represented a 21% premium to the company’s closing price of 448p a day before it was first announced. The company’s board is recommending to all shareholders to accept the bid.
Birmingham-based St Modwen, which develops and manages industrial properties, climbed 2% on the back of the news on Thursday.
The listed group told the stock exchange it had received "multiple proposals" from Blackstone in the intervening period since its preliminary results were announced in February.
"Over the last four years, St Modwen has successfully reshaped its business to focus on logistics and housebuilding,” chairman Danuta Gray said. "While both sectors benefit from long-term structural growth trends, St Modwen's financial position is strong and there is a solid strategy in place.
"The board has therefore been able to evaluate today's recommendation from a position of strength. Following careful consideration, we believe this offer is in the best interests of shareholders and significantly accelerates the value that could be realised if it were to remain independent."
St Modwen made a loss of £120.8m last year, hit by site closures during national lockdowns across the UK, despite recording profits in the second half.
It has a 19 million square feet pipeline of logistics projects and has confirmed that it wants to sell £200m of its assets by 2023.
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St Modwen, which built 948 homes last year and is aiming for 1,500 per year by 2023, also builds industrial and logistics spaces such as warehouses. It counts Amazon UK (AMZN), DHL (DPW.DE) and Ocado (OCDO.L) as some of its clients.
Warehouse space has been in growing demand since the COVID-19 crisis triggered a surge in online shopping.
Due to this, competition for warehouse properties across Europe has intensified and global investors, including Goldman Sachs (GS) and Cerberus Capital Management are betting on rising rents fuelled by demand from e-commerce.
The St Modwen acquisition gives Centre Parcs owner Blackstone more exposure to UK warehouses.
James Seppala, head of Blackstone Real Estate Europe, said: "Our strong conviction in the UK, together with St Modwen's high-quality asset base, its team and its operational capabilities, give us confidence we can further build on the company's successes.
"We look forward to working with the talented team at St Modwen in the years ahead."
Blackstone, which joined forces with former Gatwick owner GIP and Bill Gates’ investment vehicle to buy private jet services firm Signature Aviation in February, is currently in a takeover battle for Australia’s Crown Resorts.
Blackstone bought NEC Group, which includes the National Exhibition Centre in Birmingham, in 2018.
It also includes the International Convention Centre, Resorts World Arena and Utilita Arena among its assets as well as caterer Amadeus and national ticketing agency The Ticket Factory.
The move comes just a day after private-equity firm KKR agreed to buy UK infrastructure investor John Laing (JLG.L). The 403p-a-share cash bid marked a 27% premium on the price before the talks were confirmed.
KKR also proposed a £175m cash injection into the company’s pension fund, along with a further £50m in 18 months.
John Laing, which listed in London in 2015, has invested in more than 150 projects and businesses since it was founded, across a range of sectors including transport and energy.
It owns assets including schools, hospitals and infrastructure in the US, Australia and Europe.
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