Commercial property group British Land (BLND) has agreed to buy ailing Life Science REIT (LABS) for a small premium. The deal comes after LABS shareholders agreed to a managed wind-down of the company last November.
| BLND share price: 406p (-0.9%) | PE: 7.4x |
| Market cap: £4.1bn | Yield: 5.6% |
ASSETS SUIT ‘CAMPUS’ STRATEGY
In September 2025, Life Science REIT began a strategic review and formal sale process. The firm blamed high inflation and interest rates for a slowdown in leasing activity and negative investor sentiment.
The slowdown in leasing was a ‘significant’ challenge as LABS had planned a high level of capex to drive up rents. Meanwhile, the shares continued to trade at a significant discount to NAV (net asset value) making raising capital difficult.
British Land is offering 14.1p in cash plus 0.07 new shares for each LABS share. Based on British Land’s 410p closing price, that values LABS at 42.8p/share or a 21% premium to yesterday’s close.
The LABS portfolio is located in the ‘Golden Triangle’ of London, Cambridge and Oxford and is a good fit with British Land’s ‘campus’ strategy. Moreover, British land already has a roster of science and technology clients who could take up space.
This looks like a great deal for British Land, and it provides an exit for LABS shareholders at a small premium. In addition, investors who want a continuing stake can hold onto their new British Land shares.
It’s never ideal having to crystalise a loss, which most LABS shareholders will when the deal goes through. However, it bring closure, and sometimes as investors we just have to bite the bullet and move on.
Presumably one shareholder who won’t be taking a hit is our old friend Saba Capital, which owns a 14.5% stake. Saba has committed to supporting the deal so it can look forward to decent payday once it goes through.
Read the press release here: https://lifesciencereit.co.uk/investors/
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