Custodian Property on brink of £237m merger with Abrdn Property
Custodian Property Income REIT (CREI) is on the verge of a £237m merger with Abrdn Property Income Trust (API), creating a new trust holding £1bn in property.
Both groups have recommended an all-share merger, combining their 200 different property assets together, but will still need to be voted on by shareholders.
The CREI board and the API board argued that the merger would bring together the two “complementary” portfolios to create a differentiated REIT with enhanced diversification and share liquidity and a fully covered and sustainable dividend for shareholders.
The deal outlined this morning stated if the merger was to complete, existing CREI shareholders will hold approximately 59.7 per cent of the company while API shareholders approximately 40.3 per cent.
The new CREI board will comprise eight directors, with the addition of two of the existing API directors, Jill May and Sarah Slater.
It is intended that the merger will be implemented by means of a court-sanctioned scheme of arrangement under Guernsey law.
Commenting on the planned merger, David MacLellan, chairman of CREI said: “The board is pleased to announce the merger of CREI and API which it firmly believes will benefit both our existing and new shareholders.”
“This transaction creates a well-positioned REIT of significant scale, giving the combined group’s shareholders the opportunity to participate in the returns from the complementary API and CREI portfolios, with a fully covered and sustainable dividend and a focus on ESG,” he added.
James Clifton-Brown, Chair of API said: “API has always sought to focus on delivering attractive, income-driven returns for shareholders. Over the years, API’s manager, abrdn Fund Managers, has assembled an attractive portfolio on the company’s behalf, with a weighting to more favoured areas of the market, a diversified tenant base and a focus on ESG.”
He added: “The board of API would like to thank the management team for the important role they have played in assembling and managing the portfolio.