London & Stamford Property is in 'advanced discussions' to takeover Metric Property Investments, it was announced on Tuesday.
London & Stamford, a FTSE-250 property company, has offered an all-share deal for Metric, which has a market cap of £176m.
In a joint announcement the companies said: "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."
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An in principle agreement has been reached, under which 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."
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