Former shareholders of Picton Property Income have begun trading in two new securities following the completion of the all-share takeover by LondonMetric Property and Schroder Real Estate Investment Trust (SREIT). As of Friday's close, the combined market value of these replacement shares stood at just under 70 pence per original Picton share, effectively matching the company's final trading price.
The scheme became effective on September 10, with new shares in both acquirers admitted to trading on September 11. For every Picton share held at the record time of 6 p.m. on September 9, shareholders received 0.190 new LondonMetric shares and 0.894 new SREIT shares. These ratios were fixed at the announcement of the deal, but the value of the consideration has fluctuated with the market prices of the two acquiring companies.
Market Value at Close
On September 11, LondonMetric closed at 178.0 pence, while SREIT ended the day at 40.45 pence on the London Stock Exchange. Applying the exchange ratios, the LondonMetric component contributed 33.82 pence per Picton share, and the SREIT component added 36.16 pence, bringing the total to 69.98 pence. This is nearly identical to Picton's final close of 70.0 pence on September 9, the last day of trading before the suspension.
For a holder of 1,000 Picton shares, the gross entitlement is 190 LondonMetric shares and 894 SREIT shares, worth approximately £699.82 at those closing prices. This represents a decline of about 11% from the value of the package when the offer was announced on July 31, when LondonMetric and SREIT traded at 198.0 pence and 45.9 pence, respectively. The drop highlights the inherent risk of all-share deals: the exchange ratios are fixed, but the market value of the consideration is not.
Account Crediting and Settlement
Picton shares were suspended before the market opened on September 10, and its listing was cancelled the following day. The new LondonMetric and SREIT shares were admitted at 8 a.m. on September 11, with CREST accounts expected to be credited at or shortly after admission. Paper certificates and settlement are due no later than September 24. Fractional entitlements are rounded down, with the aggregated fractions sold in the market and net proceeds distributed proportionately after expenses. Investors who do not see their new holdings by September 24 should contact their broker or registrar.
Two Distinct REIT Strategies
The transaction was not a simple merger into one entity. Instead, the consortium divided Picton's portfolio based on debt structure and asset fit. According to a Schroders presentation, LondonMetric is taking 46% of Picton's property value, including industrial-led assets charged to Canada Life. SREIT will hold 54%, comprising properties financed by Aviva, NatWest, and uncharged assets, with a total value of £382 million.
Management has highlighted a potential 39.4% uplift in earnings per former Picton share and a 47.4% increase in quarterly dividend income, based on the companies' last reported results. However, these figures are not forecasts and depend on future rent collection, vacancies, financing costs, and each board's dividend policy.
The primary benefits of the deal are increased scale and liquidity. SREIT's portfolio nearly doubles, while Picton investors retain exposure to the underlying assets through two larger listed trusts. On the downside, the combined entities remain vulnerable to UK property valuations and interest rate movements. SREIT's closing price of 40.45 pence sits about one-third below its June net asset value of 60.5 pence per share, reflecting market sentiment toward the sector.
Completion removes deal-closing risk, but it does not restore the July offer value. From here, former Picton shareholders should view their position as two distinct holdings: LondonMetric for its industrial-led consolidation strategy, and SREIT for its higher-yielding diversified portfolio with a focus on vacancy reduction and balance-sheet execution.
