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API & CREI Recommended Merger

midgesgalore
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API & CREI Recommended Merger

#641264

Postby midgesgalore » January 19th, 2024, 1:02 pm

RECOMMENDED ALL-SHARE MERGER OF ABRDN PROPERTY INCOME TRUST LIMITED
with
CUSTODIAN PROPERTY INCOME REIT PLC


to be implemented by means of a Court-sanctioned scheme of arrangement under Part VIII of the Companies (Guernsey) Law, 2008 (as amended)

Summary and highlights

The boards of Custodian Property Income REIT plc ("CREI") and abrdn Property Income Trust Limited ("API") are pleased to announce that they have reached agreement on the terms and conditions of a recommended all-share merger pursuant to which CREI will acquire the entire issued and to be issued share capital of API (the "Merger"). It is intended that the Merger will be implemented by means of a Court-sanctioned scheme of arrangement under Part VIII of the Companies Law (the "Scheme").

Under the terms of the Merger, Scheme Shareholders will receive:

for each Scheme Share, 0.78 New CREI Shares


https://www.hl.co.uk/feeds/apps/rns?id=34035381

I wondered why the big jump earlier this morning. It seems ABRDN Property Income Trust (API) and Custodian Property Income REIT plc (CREI).

Dividends for Q4 (API) at 1p and Q3 (CREI) at 1.375 are expected to remain and paid by the end of February 2024.
My first interest is my holding in API and they will issue a circular (the "Scheme Document") which will include full details of the Scheme within 28 days.

It Makes for interesting reading and it looks like DREI have a similar dividend policy to API. We wait ...

midgesgalore

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Re: API & CREI Recommended Merger

#641307

Postby Laughton » January 19th, 2024, 3:16 pm

As a CREI holder I am, needless to say, less enamoured given the price reaction today.

Some arbitrage opportunity in buying API at current price?? Trouble is that I already have too many CREI.

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Re: API & CREI Recommended Merger

#641412

Postby PrefInvestor » January 20th, 2024, 9:21 am

This merger looks to me to be VERY advantageous to API shareholders who get paid a good premium on their shares, get a reduced discount and an increased dividend. All paid for by existing Custodian shareholders by the look of it to me ?!.

Share prices of both moved a lot on the 19/1/24, to the advantage of API shareholders. I find it hard to believe that Custodian shareholders would have seen this as a good deal if asked before the RNS came out. But the damage is now done it seems to me.....

Hmmmm

Pref (no holding in either)

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Re: API & CREI Recommended Merger

#641464

Postby SKYSHIP » January 20th, 2024, 1:30 pm

CREI very well-managed; but historically always rated too highly versus more than competent peers. Hence 2yrs ago the shares always traded at an NAV premium - for me a total No-No for any investment company.

The driving force here is the MD - Richard Shepherd-Cross. Used to walk on water; but reputation now trashed in a single day as the Market predictably slammed this all-share merger.

Didn't expect quite such harsh treatment, otherwise would have sold my API first thing! I didn't.

Now CREI have crashed to c69.5p where the discount is nearly 26% and the yield 7.9%. So IMO the fall well overdone. Would have bought Friday - but no cash on my a/c.

Both sets of shareholders likely to vote against - if it gets that far!

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Re: API & CREI Recommended Merger

#641602

Postby PrefInvestor » January 21st, 2024, 7:36 am

SKYSHIP wrote:Both sets of shareholders likely to vote against - if it gets that far!

Hi SKYSHIP, I don’t immediately see why API shareholders would vote against, the deal looks totally positive for them as far as I can see. But CREI shareholders look to be getting a poor deal, however will voting against put them back where they were ?. Maybe or maybe not.

Not sure how big a majority is required to approve the merger, likely both trusts will have got approval from some of their big institutional investors in advance. See this Citywire article about the merger that came in my email today. you may need a citywire account to read it, registering for an account is easy but will result in further regular emails….

https://citywire.com/investment-trust-i ... ider+Daily

Seems to me that ideally both sets of shareholders could have benefitted from selling out at 08:00 on 19th Jan, CREI shareholders to avoid the 12.8% loss and API shareholders to secure the maximum gain - which reduced during the day. But that ship has sailed now…..

ATB

Pref

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Re: API & CREI Recommended Merger

#641620

Postby richfool » January 21st, 2024, 11:00 am

There will also be rationalisation of holdings and cost saving efficiencies. I noted API's dividend will be maintained and likely later increased, so I'm relatively happy as a API holder.

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Re: API & CREI Recommended Merger

#641651

Postby SKYSHIP » January 21st, 2024, 1:11 pm

A useful "Merger" presentation over on the CREI website:

https://custodianreit.com/presentations/

I suspect CREI will open Monday at minimally 72p; and climb from there.

Why the house broker wasn't supporting CREI after breaking the news, is perhaps rather surprising.

midgesgalore
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Re: API & CREI Recommended Merger

#641676

Postby midgesgalore » January 21st, 2024, 2:36 pm

richfool wrote:There will also be rationalisation of holdings and cost saving efficiencies. I noted API's dividend will be maintained and likely later increased, so I'm relatively happy as a API holder.


Ditto

midgesgalore

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Re: API & CREI Recommended Merger

#645994

Postby Welshmidget » February 9th, 2024, 7:41 pm

Custodian REIT have made what looks like a derisory offer of 0.78 of a Custodian Property REIT share for each API share. Doing the maths, this looks like a very poor offer and I think I’m going to vote against it, yet wonder if I’m missing something. From my HL message:

Custodian Property Income REIT plc have made an offer to takeover Abrdn Property Income Trust Ltd offering 0.78 of a Custodian Property Income REIT plc share for every Abrdn Property Income Trust Ltd share held. Shareholders will vote on the takeover at meetings on 28 February 2024.

Is anyone out there more knowledgeable and able to cast any light on the matter? Please share your thoughts if so. Thanks.

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Re: API & CREI Recommended Merger

#646871

Postby PrefInvestor » February 14th, 2024, 10:55 am

Well back before the deal was announced and CREI was 79.x and API about 48.x the deal looked pretty great for API holders IMHO - price uplift and increased dividend.

But today 14/2/24 API is back at 49.x (so has lost most of its gains on the deal announcement) and CREI has now dropped to 66p (thats a 13p drop - gulp).

So nothing here is look great ATM IMHO. If the deal gets voted down I suspect that wont be good either.....?

Hmmmm

Pref

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Re: API & CREI Recommended Merger

#647212

Postby Gordon51 » February 15th, 2024, 7:55 pm

If the deal is voted down Custodian shares likely to rise surely ?

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Re: API & CREI Recommended Merger

#647360

Postby SKYSHIP » February 16th, 2024, 2:05 pm

Indeed, would be a positive for CREI whose shareholders have seen a 21% drop since the announcement of this crazy "deal"!

However, I'm pretty certain the deal will go through and CREI can then start to recover. A very well-managed company; but this has been a major short-term trip-up for them.

Buy API @ 50.9p = 65.26p into CREI v. current 67.3p...

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Re: API & CREI Recommended Merger

#647366

Postby PrefInvestor » February 16th, 2024, 2:43 pm

Try as I might I haven't been able to find a form to vote against, just emailed Custodian asking them to send me the necessary form. Couldnt find it anywhere with the merger RNS materials......?

ATB

Pref

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Re: API & CREI Recommended Merger

#647394

Postby PrefInvestor » February 16th, 2024, 5:31 pm

I bought CREI at 70.9 after the ~10% drop on the merger announcement, my holding has dropped since then and is now ~5.5% underwater. Not what I had in mind......... A re-rating to its pre-merger price would be good for me, I cant see it happening though. I'm not that lucky.......

ATB

Pref

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Re: API & CREI Recommended Merger

#647976

Postby ukmtk » February 20th, 2024, 6:16 am

I had a large holding in API (nursing a 35% drop). I voted in favour of the merger.
At least some of the red will disappear from my portfolio (which has more red than blue). :cry:
My only hope is that they buy out RGL (now "only" down 69% after I topped up). ;)

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Re: API & CREI Recommended Merger

#648124

Postby simoan » February 20th, 2024, 5:10 pm

Urban Logistics (SHED) enter the fray: https://www.londonstockexchange.com/new ... n/16341208

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Re: API & CREI Recommended Merger

#648861

Postby ukmtk » February 24th, 2024, 5:06 am

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.

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Re: API & CREI Recommended Merger

#648951

Postby gnawsome » February 24th, 2024, 3:43 pm

ukmtk wrote: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.

Mine came in two parts that equalled 1p

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Re: API & CREI Recommended Merger

#648971

Postby scottnsilky » February 24th, 2024, 5:51 pm

I got a lot less than some past payments, but I noticed they do vary a lot. Not sure what mine amounted to per share, but I am disappointed with the small addition to my account. I'm with HL too.

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Re: API & CREI Recommended Merger

#648988

Postby Dod101 » February 24th, 2024, 7:25 pm

ukmtk wrote: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


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