(Alliance News) - Custodian Property Income REIT PLC on Wednesday said that it believed the proposed merger with abrdn Property Income Trust Ltd had a "compelling strategic and financial rationale", as the pair agreed to extend the merger commitment date to Friday.
Custodian and abrdn are real estate investment trusts with a portfolio of properties in the UK.
In January, the pair agreed terms for an all-share merger, which would create a real estate investment trust with combined assets totalling GBP1.0 billion.
Per the agreement, abrdn Property Income shareholders will receive 0.78 new Custodian shares for each share in the company.
On Tuesday, Custodian reaffirmed its belief that the merger holds a "compelling strategic and financial rationale".
The company said that it would be waiving its one-off project fee in connection with the merger, which amounted to GBP350,000.
Custodian also announced a reduction in the management fees payable to its investment manager, Custodian Capital Ltd, for a period of two years following the merger's completion. This fee will now calculated as 0.75% of the combined group's net asset value less than or equal to GBP500 million, changed from 0.9% in respect of NAV up to GBP200 million and 0.75% up to GBP500 million.
Custodian said that thesee amendments "reinforce the financial rationale of the recommended merger and represents further alignment between CREI, Custodian Capital and the shareholders of the combined group".
Custodian urged abrdn shareholders to not take action regarding the separate offer by Urban Logistics REIT PLC for abrdn. In February, Urban Logistics offered abrdn shareholders 0.47 of its shares for each share in the company. Shares in Urban Logistics are currently flat at 118.00 pence each in London on Wednesday.
In a separate announcement, abrdn said that the deadline for Custodian to make a firm intention to continue with the merger or confirm that it does not want to participate in the scheme has been extended to Friday at 5pm. Both abrdn and Custodian have agreed to these terms.
Shares in Custodian were down 1.3% at 77.00 pence each. Shares in abrdn were down 0.2% at 55.00 pence each, both in London on Wednesday.
By Hugh Cameron, Alliance News reporter
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Cust Prop Inc (CREI)
Abrdn Property (API)
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