abrdn Property Income agrees to merge with Custodian Property Income REIT
The merger, which is subject to shareholder approval, will create a larger portfolio with around 200 assets and a combined property value worth more than £1bn.
In a stock exchange notice today (19 January), the trusts said that under the terms of the deal, each CREI shareholder will hold 59.7% and API shareholders 40.3% in Custodian Property Income.
The transaction values each abrdn Property Income share at 62.1p, or £237m, and represents a premium of about 29.4% to the trust's closing price on 18 January.
CREI holds £615.2m in assets and is trading at a 14.8% discount to net asset value, according to the Association of Investment Companies, while API holds £454.6m and is running at a 41.7% discount.
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The merger, which is subject to shareholder approval, will create a larger portfolio with around 200 assets and a combined property value worth more than £1bn as of 31 December.
API directors intend to recommend unanimously that shareholders vote in favour of the deal, which is aimed at creating a «differentiated» REIT with «enhanced» diversification and share liquidity and a «fully covered and sustainable» dividend.
The board noted CREI's and API's shared income-focused approach to investing in diversified UK commercial property and the complementary nature of their two portfolios, with similar sectoral weightings and sustainability credentials.
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Once the merger is completed, Mattioli Woods subsidiary Custodian Capital will provide investment management, administrative and advisory services to the combined trust.
Custodian Capital will waive its management fee in relation to the net
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