Schroder REIT and LondonMetric Agree 404 Million Pound Joint Picton Takeover

Schroder Real Estate Investment Trust (SREIT) and LondonMetric Property have agreed terms for a £404 million all-share takeover of Picton Property Income, according to corporate announcements released by the bidding consortium. Under the agreed terms, Picton unitholders will receive 0.894 SREIT shares and 0.190 LondonMetric shares for every individual Picton share held. The offer values Picton at 78.7p per share, representing a 7% premium to its undisturbed share price prior to the strategic review announcement.

Asset division and valuation metrics

Reporting from Kalkine Media and Portfolio Adviser confirms that as of 30 June 2026, Picton Property Income recorded an EPRA net tangible asset (NTA) value of 101.5p per share, translating to a total Net Asset Value (NAV) of £518.4 million. Consequently, the £404 million transaction price reflects an implied EPRA NTA discount of approximately 8.2% against the reported asset base. On our reading, this transaction illustrates how mid-tier listed funds are accepting crystallised discounts to net tangible asset values to achieve liquidity and scale.

According to filings published on Investing.com, the physical real estate assets of Picton will be split between the two acquiring entities upon transaction completion. LondonMetric will acquire 46% of Picton's property assets by value, comprising £320 million across 22 properties, in addition to approximately £24 million in net cash. SREIT will acquire the remaining 54% of the real estate portfolio, taking ownership of £382 million across 22 properties.

Deal structure and management fee revisions

As reported by DirectorsTalk Interviews, the transaction is being executed through a joint takeover and court-sanctioned scheme of arrangement under Part VIII of the Companies Law of Guernsey. The legal framework requires approval at court and general meetings before formal sanctioning can take place. This dual-buyer scheme allows both listed acquirers to absorb specific real estate assets directly onto their respective balance sheets.

To facilitate the acquisition and satisfy investor demands for cost efficiency, SREIT's investment manager agreed to structural reductions in its fee arrangements, according to disclosures cited by Portfolio Adviser, Investing.com and Investment Week. SREIT will implement a 10 basis point reduction in its Investment Management Agreement fee rate across all operating tiers, bringing the revised fee range down to between 0.8% and 0.6%. In addition, SREIT's manager agreed to a one-year fee waiver spread across a 24-month period applied to Picton's allocated NAV post-completion.

Investor support and shareholding realignments

The transaction follows a formal process that began on 24 March 2026, when Picton publicly initiated a formal strategic review and sale process. Following that announcement, Schroders confirmed that LondonMetric and SREIT were considering a joint acquisition offer. Prior to the formal deal announcement, the consortium secured irrevocable undertakings representing approximately 12.02% of Picton's issued share capital. According to Investing.com, these irrevocable commitments include full support from Picton's board of directors and institutional shareholder TR Property Investment Trust PLC.

Cross-shareholdings between the acquiring firms will also undergo adjustments as part of the transaction. Reporting from Portfolio Adviser and DirectorsTalk Interviews notes that LondonMetric held an 11.1% voting stake in SREIT prior to the offer announcement. LondonMetric has signed a six-month lock-in agreement covering its SREIT equity holding, which will dilute to a 5.7% voting stake following the issuance of new shares upon completion.

The embedded discount to asset value

A central counterweight to the deal thesis lies in the exit pricing for existing equity holders. Prior to the public offer, Picton's shares traded at 71.1p, representing a 30% discount to its reported EPRA NTA of 101.5p per share as of 30 June 2026. While the acquisition price of 78.7p delivers an immediate 7% uplift over undisturbed trading levels, it permanently bakes in an 8.2% discount to net tangible asset value for selling shareholders.

On our reading, the acceptance of an 8.2% haircut against reported NTA by Picton's board indicates that mid-tier listed real estate entities face fundamental structural hurdles in closing share price discounts organically. For cross-border investors assessing UK listed property vehicles, the transaction demonstrates that manager fee cuts and outright corporate takeovers are becoming the primary mechanisms for addressing chronic trading discounts in funds lacking mega-cap scale.

Next steps and key regulatory dates

According to timelines published by Kalkine Media and Portfolio Adviser, the transaction is scheduled for completion in early September 2026 via court sanction under Guernsey company law. The transaction remains subject to shareholder approval at upcoming court and general meetings. The next operational milestone for investors and advisers will be the official publication of the scheme document, which will contain the formal Rule 29 valuation report detailing property level appraisals.