The boards of LondonMetric Property plc and LXi REIT plc have confirmed ongoing discussions about a potential all-share merger. This move, if realized, would involve LondonMetric acquiring the entire issued and to be issued ordinary share capital of LXi.

The discussions are still at a preliminary stage, with several pre-conditions yet to be met. These include mutual due diligence, necessary consents, waivers, and approvals from each company’s lenders, and a recommendation of the merger to LXi’s shareholders by its board.

Both boards recognize the merger’s potential to unite two entities with aligned strategic approaches, focusing on income-led shareholder returns. The proposed merger aims to create a UK-focused triple net lease REIT of significant scale, with a pro forma gross asset value of around £6.4 billion and a market capitalisation of approximately £3.9 billion. This merger is anticipated to enhance share liquidity and provide better access to capital.

Additionally, the merger would result in a combined portfolio heavily invested in structurally supported sectors such as logistics, healthcare, convenience, entertainment, and leisure, accounting for about 93% of exposure. The goal is to ensure income longevity and security, alongside operating efficiencies, sustainable earnings, and dividend progression.

However, there is no certainty of a firm offer being made or the terms of any such offer. Further announcements will be made as the situation develops.

In compliance with Rule 2.6(a) of the Code, LondonMetric is required to announce its intentions regarding the offer by 5.00 pm (London time) on 15 January 2024. This deadline is subject to extension only with the consent of the Panel on Takeovers and Mergers.

The announcement, made with LondonMetric’s consent, marks the commencement of an offer period for LXi as defined in the Code. Shareholders are advised to be aware of the disclosure requirements outlined in Rule 8 of the Code. Further details regarding the financial and other information in this announcement are available upon enquiry.