LONDON (ShareCast) - Property group Segro (LSE: SGRO.L - news) has reached agreement with Brixton on the financial terms of
a possible recommended all-share offer, which could be accompanied by the issue of new shares to raise up to £250m.
The possible offer for each Brixton share is 1.750 Segro shares.
Segro said it currently envisages the offer will be accompanied by a further issue of new shares in order to raise additional capital of up to £250m in cash.
The group said the offer is subject to the completion of a final due diligence by Segro. It also said it reserves the right to vary the form of the consideration with the recommendation of the Brixton board.
It added that the announcement does not amount to a firm intention to make an offer.
Brixton today said it continues to progress its options to provide the group with the additional financial flexibility it requires to mitigate the risk of breaching its balance sheet covenants. "These options include a refinancing of the group's debt arrangements, a potential equity raising, discussions with third parties about possible offers for the Company and further asset disposals," said Brixton.
It said it is in negotiation with its banks to refinance its banking facilities and has secured a waiver of any potential breaches of the asset cover ratio covenants under those facilities prior to 31 July 2009.
Total space returned due to expiries, breaks, surrenders and insolvencies up to 31 May 2009 equated to an annualised loss of rent of £6.2m.
New tenant insolvencies up to 31 May 2009 represented an annualised loss of rent, net of re-lettings, of £1.2m per annum
As expected the headline vacancy rate by income rose to 21.1% at 31 May 2009.
Since the beginning of March Brixton has disposed of six properties at a value of £81.9m at an average discount to the December 2008 value of 17.6%.
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