Urban Logistics REIT plc may have started a bidding war for Abrdn Property Income Trust Limited (API) with a rival “indicative” all-share offer a month after API agreed to merge with Custodian Property Income REIT.
Urban Logistics said after the market closed on Tuesday that it had approached the board of Abrdn Property Income Trust with an indicative counter bid.
API said: “The board of Abrdn Property Income Trust Limited notes the announcement by Urban Logistics REIT plc and confirms that on 16 February 2024 it received an indicative proposal from Urban Logistics regarding a possible all-share offer for API on the terms set out in the Urban Logistics announcement …
“The proposal follows a period of preliminary due diligence by Urban Logistics pursuant to Rule 21.3 of the Code, following the announcement of the recommended all-share merger of API and Custodian Property Income REIT plc on 19 January 2024.
“In accordance with Section 4(c) of Appendix 7 of the Code, the Panel on Takeovers and Mergers will announce the deadline by which Urban Logistics must clarify its intentions in relation to API.
“There can be no certainty that a firm offer by Urban Logistics will be made.
“A further announcement will be made by the board of API in due course. In the meantime, API shareholders are advised to take no action in relation to the possible offer from Urban Logistics.”
Urban Logistics REIT said it tabled an indicative proposal to API comprising an indicative offer exchange ratio of 0.469 Urban Logistics shares for each API share.
“The Indicative Offer represents an offer value of approximately 59.2p per API share based on the company’s share price of 128.6p as at close on 19 February 2024 (being the last business day prior to this announcement) adjusted downwards for the Urban Logistics Special Dividend.
“This compares to the current value of the Custodian Property Income REIT plc offer which stands at approximately 52.4p per API share based on the Custodian share price of 67.2p as at close on 19 February 2024.
“On the basis of the foregoing, the Indicative Offer represents a premium of approximately 13% to the Custodian offer.
“Urban Logistics believes that there are compelling reasons for an Urban Logistics-API combination and further believe that the Indicative Offer represents a superior proposal for API shareholders as well as an attractive strategic acquisition for the Company.
“In accordance with paragraph 4(c) of Appendix 7 of the Code the Panel will set the date by which the company must clarify its intentions with regard to any offer for API.
“Urban Logistics duly considered this position prior to making this announcement and decided on balance that the announcement should still be made so that API shareholders had the opportunity to review its contents.
“The board of Urban Logistics believes that a potential combination between the two companies would be attractive to both API and Urban Logistics shareholders, affording them exposure to a specialist last mile / urban logistics listed company of scale benefitting from substantial opportunities for rental growth and targeting secure, sustainable, high quality earnings growth.
“A combination of the two businesses would create a strong FTSE 250 constituent with a combined pro forma market capitalisation of approximately £830m.
“The combined group would focus on the last-mile / last-touch mid-box area of UK logistics which the Urban Logistics Board believes exhibits strong growth prospects in contrast with the API-Custodian combination which the company understands would pursue a generalist strategy across a number of segments of UK real estate, many with, in the view of the company’s directors, less attractive prospects than logistics …”