Activist Investor Eyes $4.5B Acquisition Of ‘Undervalued’ Industrial REIT

Land & Buildings Investment Management, an activist investor headed by Jonathan Litt, has said it is interested in buying industrial property specialist LXP Industrial Trust for $4.5B.

The expression of interest in such a deal came in the form of a letter Land & Buildings sent to LXP on Friday, which LXP released on Sunday. LXP, previously known as Lexington Realty Trust, owns about 56M SF of industrial properties nationwide that are 99.2% leased.

The letter doesn't represent a formal offer, but it does say that Land & Building is willing "to offer to acquire LXP Industrial Trust, through an appropriate acquisition entity by merger or otherwise, at a price equal to $16.00 per share in cash."

LXP closed on Friday at $14.41 a share. On Monday, the price spiked to as high as $15.26 a share in early trading before settling to a little less than $15.

Litt has criticized the 18-year tenure of LXP Chairman, CEO and President T. Wilson Eglin, arguing that other owners in the industrial sector have delivered stronger returns, Yahoo Finance reports.

In December, Litt nominated himself and another candidate to LXP's board of directors. His activist investing strategy typically involves taking a stake in a company he views as undervalued and then pressuring it to make changes, such as a leadership shake-up or a sale.

Last year, Land & Buildings took a stake in Monmouth Real Estate Investment Corp. and pushed for changes ahead of its $4B sale to Industrial Logistics Properties Trust.

“Once [Monmouth] was done, we were looking for another place to buy industrial in the public markets, and we realized Lexington, which was this mixed bag of assets, had gotten to a sufficient critical mass of warehouse properties, and it looked to us to be materially undervalued," Litt told Bisnow in December.

Land & Buildings said that an LXP deal wouldn't depend on obtaining financing, though the investor noted that it has had discussions with several debt and equity financing sources and that it is prepared to enter into a confidentiality agreement with LXP and commence due diligence immediately.