The move will see the Terrace Hill name – which the Aim-quoted company has traded under for almost 30 years – disappear and the enlarged group move to the main market.
Nigel Hugill and Robin Butler, who founded Urban & Civic in 2009, will become executive chairman and managing director of the enlarged group, which will carry the name of their firm. Adair will become non-executive deputy chairman.
Terrace Hill said the combined company will use the proceeds of the placing to further develop Urban & Civic’s sites in Cambridgeshire and Rugby at a cost of £50m, with a further £30m going towards the development of current commercial projects. The rest of the funds will be used to purchase and develop other opportunities.
Urban & Civic’s existing residential land sites could see 11,200 houses developed with an estimated value of £2.7 billion.
Adair, executive chairman of Terrace Hill, said the deal was a “transformational and exciting step forward for us”.
He added: “I could not have wanted for a better and more promising outcome. As local economies and real wages outside central London begin to recover, the new business has good momentum and an excellent and skilled, combined management team to take us forward.
“Our shareholders should also benefit from the greater visibility and improved liquidity that the main market listing and larger capitalisation will provide.”
The fundraising will be carried out via a placing of 75.6 million shares at 225p per share, following a share consolidation.
Among other senior management changes, Philip Leech, current chief executive of Terrace Hill, will become property director, while Jon Austen, Terrace Hill’s finance director, will continue his role in the enlarged group.
Terrace Hill, of which Adair owns around 62 per cent, said it believed that the enlarged group will create a new “best in class” real estate company with a focus on large-scale strategic residential holdings and commercial development opportunities across central London and the UK.
The merged company plans to acquire plots of land for homes in prime locations and then sell them to housebuilders. The group will also look at developing private residential housing itself.
Terrace Hill was launched in 1986 by Adair, who had been a founding shareholder of Edinburgh-based Cairn Energy, with a one-office development in Tunbridge Wells in Kent.
Oil and gas explorer Melrose Resources was spun-out from the property developer and floated in late 1999. Melrose was bought by Irish rival Petroceltic in a reverse takeover in 2012.