(Alliance News) - Urban Logistics REIT PLC has made an offer for abrdn Property Income Trust Ltd, both companies confirmed on Tuesday.
The news follows the announcement on January 19 of an all-share merger agreement between abrdn Property Income and Custodian Property Income REIT PLC.
Urban Logistics is a UK-focused logistics real estate investment trust. abrdn Property Income or API invests in UK commercial properties across the industrial, office, retail and other sectors.
Urban Logistics said it approached abrdn Property Income on Friday regarding an indicative offer for the latter's entire share capital.
Urban Logistics said the indicative offer represents a value of approximately 59.2 pence per share, based on API's closing price of 128.6p on Monday.
It said this represents a premium of around 13% to Custodian's offer, which stood at around 52.4p per share based on Custodian's stock price of 67.2p at the close on Monday.
"Urban Logistics believes that there are compelling reasons for an Urban Logistics-API combination," the company explained, "and further believe that the indicative offer represents a superior proposal for API shareholders as well as an attractive strategic acquisition for the company."
The combined firm, Urban Logistics said, would benefit from substantial opportunities for rental growth and target secure, sustainable, high quality earnings growth.
It continued: "A combination of the two businesses would create a strong FTSE 250 constituent with a combined pro forma market capitalisation of approximately GBP830 million."
Later on Tuesday, API confirmed that it received the indicative proposal from Urban Logistics, following a period of preliminary due diligence by the latter.
API noted that there can be no certainty of a firm offer, but that it will make a further announcement on the matter in due course. It advised shareholders to take no action in the meantime.
Urban Logistics shares closed down 2.5% at 125.40p in London on Tuesday. Shares in abrdn Property Income closed up 3.0% at 52.00p each.
By Emma Curzon, Alliance News reporter
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Urban Logistics (SHED)
Abrdn Property (API)