14 March 2024
abrdn Property Income Trust Limited (“API”)
Update on the recommended all-share merger with Custodian Property Income REIT plc (“CREI”)
Summary
Further to the announcement by the API Board on 22 February 2024, the API Board provides an update regarding its assessment of the recommended all-share merger with CREI (the “CREI Merger“) and the possible all-share offer from Urban Logistics REIT plc (“Urban Logistics“) (the “ULR Possible Offer“) in the context of all of the strategic options available to API:
· The API Board has assessed the options available to API in detail with its professional advisers and, where appropriate, with input from API’s investment manager.
· The API Board continues to believe that there is a compelling strategic and financial rationale for the CREI Merger, taking account of the Combined Group’s prospects, notwithstanding the volatility in the CREI share price during the offer period.
· The API Board welcomes Urban Logistics’ interest in API and has reviewed the ULR Possible Offer and an indicative alternative structure proposed by Urban Logistics, but has confirmed to Urban Logistics that it would not recommend either proposal to API Shareholders, if a firm offer were made on the terms proposed.
· The API Board has also updated its assessment of a potential managed wind-down (“Managed Wind-Down“), which now appears more viable than at the time of the Board’s original review in light of increased visibility on property market conditions, but remains subject to risks relating to the quantum, value and timing of proceeds and associated returns of capital.
· Accordingly, and for the reasons outlined in this announcement, the API Board continues to believe that the CREI Merger represents the best outcome for API Shareholders, and reiterates its recommendation that API Shareholders vote in favour of the CREI Merger.
· Nevertheless, the API Board has decided that, while it continues to view a Managed Wind-Down as a less attractive option for API Shareholders than the CREI Merger, it intends to pursue such an option in the event that the CREI Merger is not approved by the requisite majorities of API and CREI Shareholders.
· While the API Board is keen to conclude this period of uncertainty for API Shareholders, the API Directors intend to adjourn the API Court Meeting and the API General Meeting which are currently convened for 20 March 2024 by one week, to 27 March 2024, in order to provide sufficient time for API Shareholders to assess the information contained in this and other recent announcements, and in light of the recent extension to the deadline for Urban Logistics to confirm its intentions.
James Clifton-Brown, Chair of API, said:
“The API Board has reviewed in detail the options available to API in the interests of all shareholders, including the competing merger proposals from CREI and Urban Logistics as well as a potential managed wind-down.
Having completed its comprehensive assessment, the API Board continues to believe that the CREI Merger represents a strategically consistent and significant enhancement to the status quo for API Shareholders. The CREI Merger offers continued exposure to a diversified, income-focused strategy as well as the growth prospects of the enlarged portfolio. Furthermore, the CREI Merger represents a premium to API’s undisturbed share price and brings an increase in dividends, full dividend cover and enhanced scale and liquidity for API shareholders.
Accordingly, the API Board unanimously reaffirms its recommendation that API Shareholders vote in favour of the CREI Merger at the shareholder meetings which will now be held on 27 March.”