Deep dive into Argan deal

Research evidence excerpt

Deep dive into Argan deal

the 12/26E 1.60 1.64

merger creates the leading logistics platform in France and strengthens WDP’s ability to 12/27E 1.70 1.79

serve pan-European occupiers seeking scale, power availability and ESG-ready

infrastructure. The principal risk is valuation sensitivity to further outward yield Charles Boissier, CFA

Analystmovement in French logistics real estate, which could reduce the apparent NAV

charles.boissier@ubs.com

accretion by the time shareholders vote. Nevertheless, we believe WDP has structured +44-20-7568 4415

the transaction with sufficient valuation buffer and see the deal as a strategically

attractive deployment of equity that enhances long-term growth, diversification and Zachary Gauge

Analystcapital markets relevance.

zachary.gauge@ubs.com

+44-20-7901 5534

Three topics outside of our scope, but still relevant

Nadir Rahman

(1) The investment case relies on the 750k sqm Argan landbank and combined 3.2m

Analyst

sqm development potential, which we see as longer-term and optional; (2) Detailed nadir.rahman@ubs.com

French portfolio underwriting (e.g. lease expiry schedule, capex requirements, +44-20-7567 1750

etc.) although we assess the portfolio at a regional level; and (3) alternative capital

allocation analysis, i.e. rationale of Argan versus direct French acquisitions and

opportunities in Germany, Italy or Spain, although we do refer to recent transactions

(e.g. Asphalte portfolio, Proudreed).

Valuation: trades at a 2.9% spot discount to NAV

Our PT is economic-profit based and implies a 11.2% premium to t+1 NAV

Highlights (€m) 12/22 12/23 12/24 12/25E 12/26E 12/27E 12/28E 12/29E

Net rental income 281 321 369 429 465 508 540 600

EBITDA (UBS) 308 352 403 459 494 535 569 628

EPS (UBS) (€) 1.25 1.40 1.50 1.53 1.60 1.70 1.75 1.91