Leicester-based Custodian Property Income REIT (CREI) is on the verge of a merger with abrdn Property Income Trust (APIT), it announced this morning (January 19).
Both companies’ boards have recommended the deal, which will now be voted on by shareholders.
Under the terms of the proposed deal, CREI will own 59.7% of the company, while API will hold 40.3%.
Following the deal, it is expected that the CREI board will comprise eight directors, with the addition of two of the existing API directors, Jill May and Sarah Slater.
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.
“Shareholders in the combined group will benefit from material cost savings and efficiencies along with benefitting from significant future growth opportunities to enhance shareholder returns”.
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. The board of API would like to thank the management team for the important role they have played in assembling and managing the portfolio.
“The merger will enable API Shareholders to retain exposure to the portfolio and its growth prospects at a significant premium to API’s share price, with the prospect of superior share liquidity and an enhanced and fully covered dividend. The API board believes that, with increased scale and an enhanced capital structure, the combined group will be well positioned for the future. The API board is therefore pleased to recommend the Merger to API chareholders.”