Merger agreement reached between London & Stamford and Metric (UK)

The boards of directors of London & Stamford and Metric are pleased to announce that they have reached agreement on the terms of a recommended merger pursuant to which London & Stamford will acquire the entire issued and to be issued ordinary share capital of Metric. The Merger is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

Under the terms of the Merger, Metric Shareholders will be entitled to receive 0.94 new ordinary shares for each Metric Ordinary Share, resulting in Metric Shareholders owning 25% and London & Stamford Shareholders owning 75% of the Enlarged Share Capital.

On the basis of the Closing Price per Ordinary Share of 117 pence on November 5, 2012, the Merger values each Metric Ordinary Share at 110 pence and the entire issued and to be issued share capital of Metric at approximately £209.0 million (approx. €261 million).

The Merger represents a premium of approximately:
- 18% to the Closing Price per Metric Ordinary Share of 93 pence on November 5, 2012(being the last Business Day prior to the commencement of the Offer Period); and
- 24% to the six-month average price per Metric Ordinary Share of 89 pence (being the average Closing Price for the six-month period ended on November 5, 2012, being the last Business Day prior to the commencement of the Offer Period).

Following completion of the Merger, London & Stamford and Metric intend to merge their operations into a single unified business, under a unified board structure and senior management team. London & Stamford and Metric have conducted a general review of the operations, assets and employees of the other and this has led to the identification of potential synergies resulting from the Merger, based on the centralisation of London & Stamford's and Metric's operating functions, which is expected to yield annual cost savings.

Following completion of the Merger, the Enlarged Group will have gross property assets (including its shares in joint ventures) of £993 million (approx. €1.24 billion) (based on September 30, 2012 property valuations). Upon completion of the Merger and assuming the Tender Offer is taken up in full (at 112.9 pence per share for illustrative purposes), the pro forma net asset value of the Enlarged Group, as at 30 September 2012, is £711 million (approx. €890 million). The Pro Forma EPRA NAV per share is 114.3 pence.

It is intended that, following completion of the Merger, the Enlarged Company will operate under a new name, London Metric Property Plc, will remain listed on the London Stock Exchange and have a new ticker, LMP.L. on the London Stock Exchange.

Commenting on the Merger, Raymond Mould, Chairman of London & Stamford, said: "This 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."

Commenting on the Merger, 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."

Source: FTI Consulting

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