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To provide shareholders with an attractive level of income together with the potential for capital growth from investing in a diversified portfolio of commercial real estate properties in the UK.
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Take a look at the trades. It's mainly the funds playing with the shareprice and manipulating a profit pre merger. I reckon it will correct as soon as the merger goes through. Just my opinion. I have a good size holding in both shares and have voted for. It was an easy decision.
Why should shareholders approve this deal when the market has so strongly voted agains it via the share price, now below 70p? It just gives the manager a chance to perpetuate the long decline in the share price.
Forms are out with HL. You can vote on their website. Very easy!
I am very glad that I sold the bulk of my holding some years ago when the price was around £ 1.18. The path from there to here has been more than a little disappointing.
Definitely won’t be doing that- rightly or wrongly.
CREI down today while API up again. Market has had time to adjust and is still not showing enthusiasm for deal from CREI perspective. Market has even had a large and profitable property sale announcement to digest.
Pj14, just buy more. If the market is being dumb, take advantage.
Nice presentation on the CREI website
https://custodianreit.com/2024/01/recommended-all-share-merger-with-abrdn-property-income-trust/
I am over 30% down on CREIT now as lth-not impressed!!
Can't really see how you could go wrong buying more at these levels, for a long term hold. A near 8% yield and buying at well below NAV. Whilst not ultra low, the LTV is acceptable and doesn't pose inordinate refinancing risks. The manager, whilst not shy about making their fees, does a better job than most.
I am optimistic about CREI after losing a lot of money on Highcroft Investments (HCFT).
Be interesting to see what happens with both sp's next week once the financial papers have had chance to look at the detail. It still looks like a good deal for both parties to me. As an API shareholder I'm tempted to buy some CREI and/or more API ahead of the merger.
Quite Damian. I've just bought into CREI. When my API shares transfer it will make a nice holding for me, with a regular income. Now paying around 8% here, fully covered.
I love it when markets are irrational. Just topped up. Thank you Mr Market for delivering me this bargain of the decade.
CREI couldn't pick up equivalent property on the open market at anything like the deal they are getting with this merger. API could wind down and simply sell off their property and achieve more than 62p a share. Its a total bargain for CREI if they want to expand.
Is. It the 29.4% premium on API share price being paid? On the face of the share prices today market seems to think this is negative deal for Custodian shareholders and very good for API shareholders.
What is it that other shareholders are seeing justifying a 10% drop in share price?
The most simplistic way of thinking about it is as follows.
CREI are issuing 0.78 shares worth 93.7p (NAV) = 73p, in exchange for receiving API shares with a NAV of 78.5p.
9% discount to NAV.
OK matchbox. What you're saying is that you're only getting an additional 9% discount to the already 16% discount on NAV CREI is showing (at 79p). You're still getting API at a 25% discount to NAV.
Notionally paying 62p with reference to CREI's market share price (79.6p), yes.
CREI shareholders will be issuing 297.3m shares (0.78CREI to 1 API), which at September had a value of 95.9p per share, December now 93.7p. 297.3m x 93.7p (i.e. the NAV of the share you are issuing)= £278.6m
CREI will be absorbing API which did have a Sep23 val of £313m, but at the end of the Dec its £299m.
9% discount.
Matchbox. You're incorrect. September NAV per API share was circa 82p. Paying 62p a share is circa 25% discount. As CREI shareprice has fallen they are getting API closer to 30% discount. That said, as an API shareholder I approve as I'm here for the dividends. I have just bought more API as I think both share prices will rise, as the shorters in API exit. The enlarged company will definitely have synergies to capitalise on.
An interesting deal. I hold a small number of API shares. I will be voting in favour if my platform allows me to!
Re Damien's comment about CREI shareholders getting a 25% discount (at NAV) on the API properties, I'm not sure that it quite right. I make it more a 9% discount on the NAV.
Scheme will issue 0.78 CREI : 1 API share.
381.2m API shares in existence.
Meaning 297.3m CREI shares to issue.
The NAV value of each of those CREI shares totals 95.9p = c£285m.
API current NAV is £313m, so I believe the CREI shares are scooping up API at a discount of c.9% to its NAV.
CREI share price has taken a hit from the initial knee jerk reaction, but I'm not too concerned. The CREI managers are quite competent, and whilst they will benefit over time from higher management fee income, I don't believe this deal is motivated (purely) by greed.
I'm an API holder & I agree. There's a lot of synergy between the two and plenty of opportunity for price growth going forward. I'll be holding the CREI shares once the merger completes.
Initial impressions are it's a good idea. CREI shareholders get a share in the new property assets at approximately 25% discount to NAV, yielding well in excess of 7%. Economies of scale will reduce costs and increase the available cash flows for dividends. I think it's a win for everyone. I have been a CREI holder for many years.
Https://www.edisongroup.com/research/occupier-demand-continues-to-drive-income/33071/
Well this is the quietest board on LSE! I am attempting to crunch the numbers for this one and seems it is undervalued? is there a reason for this? have a missed a negative article somewhere? everything I am reading is positive and seems like this is a good buy. Is it the market in general that is dampening this stock?