The Boards of London & Stamford Property Plc ('London & Stamford') and Metric Property Investments PLC ('Metric') announced that they are in advanced merger discussions.
Whilst there can be no certainty that such discussions will conclude successfully, it has been agreed that Metric shareholders would own approximately 25% and London & Stamford shareholders approximately 75% of the enlarged group's share capital, based on an exchange ratio of 0.94 new London & Stamford ordinary shares for every 1 Metric ordinary share. In addition, a significant return of capital to both sets of shareholders following completion of the merger is planned.
An in principle agreement has been reached that Patrick Vaughan, Chief Executive of London & Stamford, would become Executive Chairman of the combined group and Andrew Jones, Chief Executive of Metric, would be appointed Chief Executive of the combined group. Martin McGann, Finance Director of London & Stamford would become Finance Director of the combined group.
Raymond Mould has advised the Board of London & Stamford that, upon completion of the merger, he intends to retire from his role as Chairman of London & Stamford. He will be available as a consultant to the enlarged group for a period. Similarly, Sue Ford has advised the Board of Metric that, upon completion of the merger, she intends to retire from her role as Finance Director of Metric.
Raymond Mould, Chairman of London & Stamford, said:
"This potential transaction merges two terrific companies both with well let property portfolios and reunites a highly experienced management team that has the proven ability to identify and crystallise value through opportunistic transactions.
"A combination of London & Stamford and Metric has the potential to create significant shareholder value for all parties and brings considerable benefits for both sets of shareholders. I am delighted to have this opportunity to hand over the keys of an excellent real estate portfolio to an experienced and well trusted team, chaired by Patrick Vaughan who has been my business partner and friend for over 40 years, and have no doubt that they will build upon the considerable success that has been achieved to date."
Andrew Jones, Chief Executive of Metric, said:
"The proposed merger will create a larger REIT with scale, diversity and liquidity and brings together deep real estate knowledge, financial resources and management skills. Organisations across the world are deleveraging and we believe that this will continue to bring attractively priced assets to the market. We are excited by the prospect of being strongly positioned, with London & Stamford, to exploit these opportunities as they arise across the market."
This announcement does not amount to an announcement of a firm intention to make an offer and there can be no certainty that an offer will be made nor as to the terms on which any offer will be made.
Source: FTI Consulting