Life Science REIT has agreed to an acquisition offer from British Land valued at £150m.

The offer represents a premium of 21% on the REIT’s closing price of 35.4 pence per share on 27 January. Under the terms, each Life Science REIT shareholder will receive 14.1 pence in cash and 0.07 new British Land shares for each Life Science share held.

Following completion of the acquisition, Life Science REIT shareholders will hold approximately 2.4% of the enlarged group, with existing British Land shareholders holding 97.6%.

The real estate investment and development company said that its acquisition of the REIT is an attractive opportunity to use its platform to deliver cost synergies and immediate earnings per share accreditation, as well as add value by using its platform to target a broader range of science and technology occupiers.

It also forms part of British Land’s strategy of targeting fast growing customers and it has doubled the number of innovation occupiers in its portfolio since 2022 through the development and delivery of its science and technology-focused campuses.

Chief executive at British Land, Simon Carter, said: "The acquisition of Life Science REIT represents an exciting opportunity for British Land to drive value from a well-located Golden Triangle portfolio. Our scalable platform will unlock significant synergies and attract a broader range of occupiers from the fast-growing science & technology sector than the previous life science mandate has allowed.

"The acquisition underlines our confidence in the long-term occupational fundamentals of the science & technology sector, and our ability to deliver attractive returns by focusing on sectors where we have deep expertise and a clear competitive advantage."

Following the acquisition announcement, shares in Life Science REIT increased by over 20%.

Investment director at AJ Bell, Russ Mould, said that British Land’s offer is “not a generous one” for Life Science REIT.

He concluded: "Its bid is pitched at a 26% discount to the investment trust’s net asset value, suggesting the property group is trying its luck or that it believes the assets are valued too highly in the REIT’s accounts.

"Life Science REIT carried out a strategic review last year and while it did attract bid interest, the offers were deemed too low and so it decided to wind down the business by selling assets. British Land’s bid approach is therefore unexpected, given the REIT said last September that it was no longer in an offer period.

"Certain investors might be glad of a bid as selling property assets can be a slow and painful experience, and at least British Land’s offer means they can move on from what’s been a disappointing investment."

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