API & CREI Recommended Merger

[PrefInvestor]

Did anybody get less than expected for their API dividend yesterday?
I was expecting 1p per share but received 0.398p? This is on Hargreaves.

Assuming that APEI is a REIT it is quite possible that the dividend will come in two parts, a PID which is taxed and the ordinary dividend which is not. Sometimes paid on different days by some brokers.

Dod

You are correct Dod, holders should check the dividend declaration RNS which can be fund here:-

https://www.londonstockexchange.com/new ... n/16313203

It states that the dividend payment of 1p will be paid in two parts as follows:-

Property Income Dividend ("PID") 0.3980 pence per share
Ordinary Dividend ("Non PID") 0.6020 pence per share

This is pretty standard for UK REITs and is explained in this link:

https://monevator.com/how-property-inco ... are-taxed/

The PID Component is taxable unless held in a tax shelter (SIPP or ISA) and is usually made in a separate payment which arrives in an investors account at a different time to the non-PID Component.But any such time difference is usually only a day or so maximum in my experience.

ATB

Pref

[SPURLEY]

I am with Iweb and I have not yet received any dividend for API , I will see tomorrow .

[ukmtk]

I remembered that on Hargreaves you can check the income history of a holding.
I did so for API (which I have held since 2018).
It turns out that there have been a number of occasions where the dividend was split into 2 separate payments.
Bizarre. Ho hum.

[Dod101]

I remembered that on Hargreaves you can check the income history of a holding.
I did so for API (which I have held since 2018).
It turns out that there have been a number of occasions where the dividend was split into 2 separate payments.
Bizarre. Ho hum.

No it is not bizarre and happens with many REITS. For instance I had exactly the same situation with Primary Health Properties last week but even the taxed PID part was paid gross as my broker has got his act together and clearly gets the tax recovered early or anticipates recovery and pays gross. What sometimes seems odd is that with say Segro, another REIT, I am sometimes paid the PID net of tax and then up to six weeks later I will get the tax credit. That is of course just the time it has taken the broker to get the tax recovered.

It is as well to try to understand how these things work.

Dod

[ukmtk]

Apologies - I hadn't noticed perfinvestor's explanation.
I was a little confused. Over the last few years I had invariably received the 1 (or 2) payments on the same day.
Or I'd never noticed the split over 2 days (though the history says they were paid on the same day).
Many thanks to Dod+Perf for elucidating

[ukmtk]

I don't suppose there is any news on the rival SHED bid for API?
It sounds like it is more generous than the CREI bid.
Wasn't there a meeting due today for API/CREI?

[Brigadier]

Postponed to allow SHED time to complete due diligence and API to consider indicative offer.

SHED must make firm offer by 13 March 2024.

[PrefInvestor]

Really not clear ATM who API will end up merging with, some interesting points in the following articles:-

https://www.sharesmagazine.co.uk/articl ... le-for-api

In particular the better income characteristics apparently offered by the CREI deal and the 9% API share ownership by the Custodian Capital owner, that just might make a meaningful difference in the vote ?.

Custodian recently published the following RNS setting out what they see as the advantages of their offer:-

https://www.londonstockexchange.com/new ... d/16345282

This includes a table at the end implying that the CREI offer is superior. CREI shares have rallied considerably in recent days and this must also mhave an effect given that the offer is based on an Exchange Ratio of 0.78 CREI shares for each API share.

Good luck to all API shareholders in deciding which way to go.

ATB

Pref

[ukmtk]

Many thanks for the info Pref.

To be honest I bought API for the income - so dividend yield is important to me.
I also like quarterly dividends - this helps smooth out my future monthly drawdown.

[PrefInvestor]

Yet another extension to the deadline merger vote this time till 27th March and Urban Logistics (SHED) must clarify their intentions by 17:00 on 20th March. See RNS below:-

https://www.londonstockexchange.com/new ... n/16378612

Mr Market seems to me to be moving the share prices of the 3 players to the same sort of API target price in the region of 53-55p:-

As of the close on Friday 15th March the situation was:-
1. API closed at 53.4ph, down 3.78%, mirroring the CREI move by the look of it ?.
2. CREI closed at 71.2p, down 3.65%. Making their offer for API worth 0.78*71.2=55.5p. Were 78.x at one point last week !.
3. SHED closed at 118p, up 0.51p. Making their offer for API worth 0.469*118=55.3p. Down from high 12x's when all this started.

I hope those calculations are correct I did check them a couple of times but no guarantees !. DYOR etc.

Both contenders shares look to be suffering as a result of this competition to me, as per the comments next to the prices above. Right now it looks neck and neck in share price terms though CREI are offering a better dividend and the API board are recommending the CREI deal ATM (though I guess that might change when SHED put in their final offer....?).

Lets hope this gets sorted by 27/3 as per the current schedule.

ATB

Pref

[SKYSHIP]

Today's SHED new deal looks a total non-starter to me - wonder why they bothered with such an elaborate and clearly flawed proposition.

They should just have withdrawn and saved SHEDloads full of additional fees.

[PrefInvestor]

RNS dated 18/3/24 below contains what appears to be an updated proposal by SHED in respect of API:-

https://www.londonstockexchange.com/new ... e/16381096

My personal views on this deal (assuming I’ve understood it correctly) are as follows:-
1. There could be significant costs involved in the managed wind down of Portfolio 2. The sales might realise less than expected and the whole process could take a long time. Nowhere near as “clean” or simple a deal as the CREI merger from my perspective.
2. I’m also uncertain about SHEDs valuation of Portfolio 1. API might think this undervalues those properties I really don’t know. API might prefer to do a managed wind down of their whole portfolio if they wanted to go this route. Though this would have the same disadvantages as I pointed out in 1 above. Or perhaps SHED have included this element because they think that the API board are attracted to doing a managed wind down ?. Clear as mud ATM I have to say.
3. The SHED deal gets API holders shares in a bigger more valuable company and probably better property valuations than the CREI deal ?.
4.The CREI merger deal is simple, easy and quick AND provides a higher dividend yield – which income focussed API holders might find attractive.

If I was an API holder I’d prefer the CREI merger for the reasons I’ve given above. But I suppose anyone wanting to realise the maximum price for their API shares might prefer this new SHED proposal or a complete API managed wind down ?.

I haven’t seen anything from API on this SHED proposal as yet. If they were to switch to recommending it rather than the CREI merger then that might be significant ?.

All of the above are my personal deductions drawn from reading this new RNS.

BUT I COULD HAVE MISSED SOMETHING IMPORTANT SO DYOR ETC.

So it’s still all undecided right now it seems to me, Hopefully we will get a vote sometime soon that will provide some clarity as to how things are going to end up.

ATB

Pref

[Laughton]

Hargreaves Lansdown say they need to receive API holders votes before 6pm on Thursday 21 March 2024 on proposed CREI deal.

[PrefInvestor]

Seems that Custodian investors have already voted heavily in favour of the merger, see link:-

https://portfolio-adviser.com/98-custod ... ome-trust/

But a couple of sales of API assets at close to NAV have caused some to think that an orderly wind down might be the best option....?

https://portfolio-adviser.com/api-asset ... an-merger/

What will API holders vote for I wonder ?.

ATB

Pref

[ukmtk]

The man from Del Monte he says "yes" - as did I.
I have both API (large amount) and CREI (small amount).
I wanted a steady income stream for drawdown.

I like holding round numbers of things (e.g. 100's, 1000's and 10000's).

I bought the CREI in anticipation of the API merger.

[PrefInvestor]

Found this on searching for news on the SHED offer for API:-

https://propertyeu.info/Nieuws/Urban-Lo ... 04e8f52a99

Cant find any RNS to confirm this though as yet. Be good to see an RNS as positive confirmation. I personally wont consider this news confirmed until I see it in an RNS.

ATB

Pref

[ukmtk]

Thanks for that Pref.
I suspect that this rumour might explain the recent price movements of API + CREI.
Maybe some bought in expecting a bidding war and have now lost out.
Suits me.

[Brigadier]

It appears that I'm not permitted to post links. The RNS was released on 21 March 2024.

londonstockexchange.com/news-article/API/update-on-recommended-all-share-merger/16387797

[RockRabbit]

Found this on searching for news on the SHED offer for API:-

https://propertyeu.info/Nieuws/Urban-Lo ... 04e8f52a99

Cant find any RNS to confirm this though as yet. Be good to see an RNS as positive confirmation. I personally wont consider this news confirmed until I see it in an RNS.

ATB

Pref

SHED confirmed this via RNS on 20 March (although the RNS could have been phrased better IMO) - see the title of the RNS rather than the wording itself.

"Urban Logistics not proceeding with an Offer for abrdn Property Income Trust Limited ("API")"

https://www.londonstockexchange.com/new ... t/16387465

[RajK]

The vote to merge with CREI has failed to meet the required threshold.... oooooo pants!

On 14 March 2024, the Board of abrdn Property Income Trust Limited ("API") provided an update regarding its assessment of the recommended all-share merger with Custodian Property Income REIT ("CREI") (the "CREI Merger") and the proposal from Urban Logistics REIT plc ("Urban Logistics") in the context of all of the strategic options available to API, including a managed wind-down ("Managed Wind-Down").

The API Board reiterated its recommendation that API Shareholders vote in favour of the CREI Merger. It also confirmed that it intended to pursue a Managed Wind-Down in the event that the CREI Merger were not approved by the requisite majorities of API Shareholders, being 75% by value of API Shares voted at both the API Court Meeting and API General Meeting, and a majority in number of API Shareholders voting at the API Court Meeting.

The API Court Meeting and API General Meeting were adjourned to 27 March 2024, and accordingly the meetings were convened earlier today. The total votes in favour of the resolutions to implement the CREI Merger were 60.79% of API Shares voted at the Court Meeting and 61.37% of API Shares voted at the General Meeting, and 86.15% by number of API Shareholders who voted at the Court Meeting.

The proportions of API Shares voting in favour were below the minimum threshold needed to approve the resolutions. As such the CREI Merger has been terminated, the scheme of arrangement implementing the CREI Merger has lapsed and API is no longer in an offer period as defined by the City Code on Takeovers and Mergers.

Further to its announcements of 14 March 2024 and 20 March 2024, the API Board will now take steps to implement a Managed Wind-Down subject to the approval of API Shareholders at a general meeting. More information on this process will be set out in due course.