LondonMetric and Schroder Real Estate raise bid for Picton Property

LondonMetric Property PLC and Schroder Real Estate Investment Trust Ltd on Friday raised their potential takeover offer for Picton Property Income Ltd, which said it would be minded to recommend the sweetened bid.

Picton is a Guernsey-registered real estate investment trust. Its shares were up 0.9% to 72.72 pence on Friday morning in London, giving a market capitalisation of £372.8 million.

Shares in London-based peer SREIT, which is managed by Schroders PLC, were up 0.6% to 46.450p each, giving it a £230.6 million market cap. LondonMetric stock was up 0.4% to 189.11p for a market cap of £4.53 billion.

The consortium's latest offer is for 0.190 of a LondonMetric share and 0.894 of a SREIT share for each Picton share, valuing Picton at 77p per share and £397.0 million in total.

The previous offer was for 0.190 of a LondonMetric share and 0.881 of a SREIT share, valuing Picton at 76.9p per share or £396 million in total.

Should a firm offer proceed, Picton shareholders will also be entitled to a dividend of 0.95p per Picton share for the quarter ended in March. The suitors have the right to reduce the exchange ratio of the offer to reflect dividend payments.

The consortium says the deal would lead to an uplift of about 47% in dividend income for Picton shareholders and earnings accretion of 39%. It sees "marginal earnings accretion for LondonMetric and earnings accretion for SREIT in the first full year" of ownership.

Picton on Friday said its board would be minded to unanimously recommend the revised offer. LondonMetric and SREIT still need to confirm their intention to make a firm offer, but the suitors said that due diligence to that end is progressing while, as consents, waivers and approvals are being sought from Picton's lenders.

The UK Takeover Panel has granted LondonMetric and SREIT an exemption from the usual 28-day deadline required for a firm offer.

TR Property Investment Trust PLC has committed to vote in favour of the takeover, in respect of its 11.4% stake in Picton.

Separately on Friday, SREIT reported results for the year ended March 31.

The company's net asset value per share stood at 60.9 at the end of March, down from 61.6p. NAV total return for financial 2026 was 4.8%, slowing down from 11.0% the year prior.

Net rental and related income ticked up to £25.3 million from £25.0 million, but pretax profit halved to £14.1 million from £31.1 million, which SREIT attributed to lower valuation gains.

In financial 2026, SREIT's total dividend per share was 3.6p, up from 3.5p on-year.

Looking ahead, the company sees itself as well-positioned to take advantage of the current market backdrop and the lack of "good quality space".

"Despite uncertainty around the cost of energy and the impact on inflation, persistent construction cost inflation means we expect a continued shortage of good quality space," said Nick Montgomery and Bradley Biggins of Schroders Capital.

"This should lead to sustained rental growth for new developments and existing assets that can be repositioned to capture occupational demand, particularly in the more structurally supported sectors such as multi-let industrial, retail warehousing and certain alternative sectors. The company is well placed to benefit in this environment due to our exposure to higher growth sectors, low-cost long-term debt, and significant potential to drive earnings growth from active management and a higher reversionary income profile

compared with peers," they added.

Also on Friday, SREIT reported that its Chair Alistair Hughes will not stand for re-election at the company's annual general meeting on September 22. He steps down after nine years on the board.

SREIT has promoted Priscilla Davies, currently a senior independent director, to the role of chair. Alexandra Innes, currently a non-executive director, will take over as senior independent director.

Richard Dakin, who serves on the board of Berkley Group Holdings PLC and previously at Derwent London PLC, will join SREIT as a non-executive director.

Copyright 2026 Alliance News Ltd. All Rights Reserved.