Shares in listed investment vehicle CT Property Trust have rocketed today after the firm announced it had struck a £200m deal to sell itself to bigger rival Londonmetric.
In a statement this morning, Londonmetric, a FTSE 250 real estate investment trust (REIT), said it had agreed an all share offer for CTPT at a value of 85.5p per share. The offer marks a 34 per cent premium on CTPT’s share price on the before the offer period began.
Shares in CTPT surged 27 per cent in morning trading on Thursday after the deal was announced to the market.
Bosses at the firm have now recommended the offer to shareholders and said today the deal had a “compelling strategic and financial rationale for shareholders in both Londonmetric and CTPT”.
“Both companies have complementary and high quality property portfolios with a similar focus on income and income growth,” they added.
A tie-up between the two firms would create a firm with some £3.3bn in combined assets. The combined property portfolio would comprise of 313 properties with total contracted rental income of £163.4m per year, they added.
The deal comes amid a turbulent time for REITs which have been trading below the value of their property portfolios due to their sensitivity to interest rates.
The slump in valuations has already triggered some deals in the sector, with Blackstone swooping on London-listed Industrials REIT earlier this year.