Abrdn logistics trust delays dividend amid potential takeover
The £249m Abrdn European Logistics Income trust has delayed the payout of its fourth quarter dividend amid a number of proposals to buy the trust.
In a stock exchange notice, the trust’s board said it had received a number of “broad ranging preliminary, indicative non-binding proposals” to purchase or merge the trust.
It added that while there “can be no certainty” that any final satisfactory deal will be reached, it was encouraged by the progress that had been made.
In November, the Abrdn trust announced it would be pursuing a strategic review due to its “significant and persistent discount” and small size.
The trust has sat at a double-digit discount since September 2022, and is currently at a 31 per cent discount.
Due to the trust wanting to be “optimally positioned” and maintain “maximum flexibility”, it said it would be forgoing its dividend for the previous quarter, which is usually declared in February and issued in March.
The trust had warned that when the strategic review was launched that its discount was “materially uncovered” and that a target reduction would be required.
Numis analyst Andrew Rees said that while the announcement may be “a source of disappointment” for income-oriented shareholders, it was not “a great surprise that the fund is seeking to retain capital flexibility”.
“Ultimately the outcome of the strategic review will be of far greater importance to shareholders and although today’s announcement cites interest from “a number of” parties, the proposals are described as preliminary, indicative and non-binding, which will likely cast some uncertainty in investors’ minds,” he explained.
Rees added that after almost three months since the strategic review was launched, “we expect many will have been hoping for today’s update to include more concrete indications of progress”.
The trust’s share price is up 4.1 per cent this morning on the news.