The board of U+I has agreed a proposed £190m sale of the company to LS Development Holdings, a newly formed wholly-owned indirect subsidiary of Land Securities Group.
Landsec is offering U+I shareholders 149 pence for per share. U+I shares closed at 86 pence on Friday 29th October and have averaged 87.8 pence over the past three months.
U+I directors are recommending that shareholders vote in favour of the takeover offer as U+I does not have the balance sheet or market capitalisation to finance its pipeline of regeneration schemes without outside partners.
The acquisition is expected to go through in December 2021 or January 2022.
Landsec said that U+I provided access to a significant pipeline of mixed-use development schemes, of which two are well-progressed through planning – Mayfield, Manchester and Morden Wharf, Greenwich Peninsula.
Mayfield is a 24 acre site in Manchester city centre, next to Manchester Piccadilly railway station, which comprises approximately 2 million sq ft of office, retail and leisure space and 1,500 new homes set around a 6.5 acre public park. U+I has a 50 % share in the Mayfield JV and acts as development manager for the site. Its partners are Manchester City Council, Transport for Greater Manchester and London & Continental Railways.
At Morden Wharf, U+I has a conditional development agreement with Morden College, a charitable trust with significant land holdings on the Greenwich Peninsula. U+I has achieved a resolution to grant planning consent for a £770m development of 1,500 new homes, 200,000 sq ft of warehouses and 50,000 sq ft of retail across a 19 acre site on the western edge of the Peninsula.
U+I also has planning permission for a £240m scheme, Landmark Court, near London Bridge in joint venture with Transport for London.
Landsec chief executive Mark Allan said: "Developing truly world-class mixed-use communities that inspire and create opportunity is more important than ever. The combination of Landsec and U+I is compelling and will help us accelerate our strategy, both by introducing exciting new Urban development opportunities and by further strengthening Landsec's front end development capabilities and placemaking skills. Landsec has tremendous potential and this transaction is an example of our ability to capitalise on our strengths and create future value for all of our stakeholders - investors, employees, communities and partners alike."
U+I chief executive Richard Upton said: "This acquisition represents a compelling opportunity to bring together two companies with strong and clear complementary value systems. U+I's core portfolio of large, mixed-use regeneration schemes can now achieve its full potential with the capital, experience and market positioning that Landsec can provide. U+I's purpose to effect valuable social and economic changes through authentic, inclusive regeneration is an important proposition for Landsec and the wider industry. This acquisition demonstrates confidence in our highly skilled and valuable team and for our many joint venture partners. Our strategy to re-focus on what we do best has proved to be highly effective in capturing value for our existing shareholders and providing Landsec with an opportunity to unlock future value from our regeneration pipeline. We look forward to a hugely productive and exciting new future with Landsec."
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