Canada's Brookfield Asset Management will buy European logistics real estate firm Tritax EuroBox, the companies said on Thursday, the latest sign of booming investor interest in warehouses and distribution centres.
The deal, for 1.1 billion pounds (US$1.44 billion) including debt, could kick off a bidding war for Tritax EuroBox, which backed last month an all-share takeover deal by British warehouse owner Segro.
Tritax said on Thursday it planned to withdraw its backing for the Segro offer and support the Brookfield bid instead.
Segro said its all-stock offer would enable Tritax EuroBox shareholders to retain exposure to the European industrial and logistics sector, or later cash in on their holdings given the "significant liquidity" in the FTSE 100 company's shares.
Shares of Tritax EuroBox were last up 2.0 per cent at 70.5 pence while Segro stock gave up earlier gains and was down 0.3 per cent.
British-listed commercial real estate companies have witnessed a flurry of deals this year including the $1.2 billion purchase of UK Commercial Property by Tritax Big Box, the UK-focused publicly traded fund of the Tritax group, and LondonMetric's deal for LXI.
European logistics, including warehouses, have been a bright spot in a struggling commercial real estate market, as the boom in e-commerce creates demand for more space. Private equity giant Blackstone last month agreed to buy an 80 per cent stake in a European warehouse portfolio run by landlord Burstone .
STRATEGIC OPTIONS
The cash deal for Tritax Eurobox with Brookfield's real estate private funds values each Tritax EuroBox share at 69 pence, while Segro's all-share offer had valued it at about 68.4 pence apiece.
"A cash offer from Brookfield would provide increased certainty for Tritax EuroBox shareholders as compared to continued market risk between now and completion for the SEGRO offer," Tritax EuroBox's board said in a statement.
Tritax EuroBox, whose shares had been struggling over the past three years, losing nearly half of their value from an all time high reached in 2021, had explored strategic options in April, including a managed wind down and a significant share buyback funded by asset sales.
Tritax's properties span seven countries in mainland Europe, focusing on logistics and distribution supply chains, serving clients in the manufacturing, pharmaceuticals, retail, and e-commerce sectors.
Brookfield, one of the world's largest owners and operators of real estate, intends to actively manage the Tritax EuroBox portfolio within its broader European logistics platform, it said.
(US$1 = 0.7653 pounds)