Landsec to buy rival U+I Group in £190m deal

Property giant Land Securities has swooped to buy rival regeneration specialist U+I, in a £190 million deal.
"Landsec has tremendous potential and this transaction is an example of our ability to capitalise on our strengths." : Mark Allan.
// Land Securities agrees to buy property regeneration company U&I Group in a £190m deal
// The London property giant said it would now speed-up the development of three of U+I key sites

The property giant Landsec is set to buy urban regeneration specialist U+I in a £190 million deal, giving the property giant a significant new pipeline of mixed-use regeneration schemes in its London and Manchester markets.

In a vote of confidence that the capital will remain an attractive place for people to live and work in, FTSE 100 firm Landsec has proposed an all-cash offer at 149p per share, which U+I directors have recommended.

That marks a 73 per cent premium to the latter’s closing price of 86p per share on Friday.

Acquired through its newly-formed subsidiary LS Development, Landsec said it will see value “from combining U+I’s front-end development capabilities and portfolio of regeneration projects that need funding”, with Landsec’s development expertise and strong balance sheet.

The move comes a year after Landsec chief executive Mark Allan unveiled a strategy looking to exit retail parks, leisure and hotels to focus on projects in London and other regional cities.

The London property giant said it would now speed-up the development of three of U+I key sites, including the large Manchester Mayfield scheme, where work has already started on site.

Landsec will also bring forward Morden Wharf on Greenwich Peninsular, which has resolution for planning consent for 1,500 homes, 250,000sq ft of warehouses and retail.

The company today said in a statement: “Mixed-use developments with a clear sense of place are becoming a more important part of the fabric of cities.”

The firm added that U+I management team, which is led by Richard Upton, will “materially enhance Landsec’s placemaking skills”.

The U+I deal is part of Landsec’s key strategy to recycle investment to “drive growth and generate higher returns”, including through urban opportunities in London and other major regional cities.

“Developing truly world-class mixed-use communities that inspire and create opportunity is more important than ever,” said Allan.

“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.”

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