Abrdn Property Income chair blasts ‘misleading’ comments in bidding war
Urban Logistics REIT has backed down from its bidding war over Abrdn Property Income trust after failing to make a formal offer for the real estate investment trust.
Less than an hour before the 5pm deadline yesterday set out by the UK takeover code, the trust announced that it would not be proceeding with an offer for the Abrdn trust.
Following the news, the Abrdn trust’s board reaffirmed its commitment this morning for the original bid from Custodian Property Income REIT.
Despite Urban Logistics backing down, leaving Custodian as the only bidder, fractures have continued to emerge over the potential deal.
For one, if the buyout offer from Custodian fails to pass among Abrdn trust shareholders, leaving it looking to sell the portfolio, Urban Logistics would certainly seem like a willing buyer, even if it didn’t make a formal bid.
Secondly, Quoteddata property analyst Richard Williams argued yesterday that the Custodian merger no longer represented the best option for Abrdn trust shareholders.
He pointed to the sale of two Abrdn trust properties yesterday, which bagged the trust £16.5m at only 0.3 per cent less than what they had been valued in December.
Compared to the proposed buyout from Custodian, which would see Abrdn shareholders receiving shares that currently sit on a 26.1 per cent discount, Williams was bullish that a full selloff of the portfolio would be a better deal.
“We are not sure why Abrdn Property Income shareholders would vote for a merger with Custodian at this current price when these sales prove that a managed wind-down would be of far greater value – even before the positive impact of any potential drop in interest rates later this year and into 2025,” said Williams.
“We believe it would take around two years to sell its portfolio – hopefully into an improving investment market,” he added.
However, James Clifton-Brown, chair of Abrdn Property Income, told City PM that comments like these were “misleading to shareholders”.
“It’s one thing to sell properties in the course of normal business, but it’s quite another to sell off an entire portfolio as part of a publicly announced wind-down process,” explained the chair.
“Our view is there are considerable risks, both as to the proceeds we’d actually receive, and to the amount of time it would take,” he added.
Clifton-Brown also pushed back against the original Urban Logistics bid, arguing that the more diversified portfolio presented by Custodian would have allowed the trust’s dividend to continue to increase.
“I don’t think it gained much traction with our shareholder base,” he said about the Urban Logistics bid.
Abrdn Property Income shareholders will be voting on the merger next week (27 March).