Custodian REIT plc : Possible offer for DRUM Income Plus REIT plc

Custodian REIT plc (CREI) Custodian REIT plc : Possible offer for DRUM Income Plus REIT plc 04-Aug-2021 / 07:00 GMT/BST Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. -----------------------------------------------------------------------------------------------------------------------

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

For immediate release

4 August 2021

Custodian REIT plc

("Custodian REIT")

Possible offer for DRUM Income Plus REIT plc

Custodian REIT (LSE: CREI), the UK property investment company, notes the announcement made today by DRUM Income Plus REIT plc ("DRIP") regarding a possible securities exchange offer by Custodian REIT for the entire issued share capital of DRIP, which is repeated below:

Drum Income Plus REIT plc ("DRIP" or the "Company")

Possible Offer for the Company

The Board of DRIP announces it is in discussions regarding a possible securities exchange offer by Custodian REIT plc ("Custodian") for the entire issued and to be issued share capital of the Company (the "Possible Offer"). There can be no certainty that any firm offer will be made.

The Possible Offer under consideration and evaluation by Custodian is a securities exchange offer at a ratio of 0.535 Custodian ordinary shares for each DRIP ordinary share (the "Exchange Ratio") (subject to the reservations set out below). The Exchange Ratio would give an implied value for the entire issued and to be issued share capital of DRIP of approximately £21.6 million (based on a closing price of 105.80 pence per Custodian share on 3 August 2021, being the latest practicable date prior to this announcement).

At the value implied by the Exchange Ratio, the Possible Offer represents a premium of approximately: -- 8.8 per cent. to the bid market closing price of 52.00 pence per DRIP share on 3 August 2021; and, -- 11.2 per cent. to the volume weighted average price for DRIP shares of 50.85 pence over the 12 month period ended

on and including 3 August 2021.

Custodian will adjust the Exchange Ratio in the event that: (a) either Custodian or DRIP announces, declares, makes or pays any one or more dividends or other distributions on or after the date of this Announcement and prior to completion of the Possible Offer (save in relation to the making or payment of any dividend or distribution that was announced or declared prior to the date of this Announcement) that is in aggregate in excess of 1.25 pence per Custodian share or 0.75 pence per DRIP share respectively (the amount of such excess in each case being the "Excess"), in which event the adjustment to the Exchange Ratio shall be to take account of the Excess; and/or (b) at the time of completion of the Possible Offer, either Custodian or DRIP has announced, declared, made or paid its regular quarterly dividend of 1.25 pence per Custodian share and 0.75 pence per DRIP share as applicable, but the other has not announced, declared, made or paid such dividend (a "Dividend Discrepancy"), in which case the adjustment to the Exchange Ratio shall be to take account of the Dividend Discrepancy.

The Board of DRIP has confirmed to Custodian that the Possible Offer is at a value the Board of DRIP would be minded to recommend, should a firm intention to make an offer pursuant to Rule 2.7 of the Code be announced on the terms contained in the Possible Offer, and has therefore agreed that Custodian should be provided with access to due diligence materials.

Custodian has received an irrevocable undertaking from DRIP's largest shareholder, Seven Investment Management LLP ("7IM") to support the Possible Offer, should a formal offer be made. The irrevocable undertaking is in respect of 26,266,690 ordinary shares, representing approximately 68.76 per cent. of DRIP's issued ordinary share capital, in respect of which 7IM has investment management discretion and can procure the exercise of the voting rights attaching to such shares in favour of a scheme or to accept an offer. Further details regarding the irrevocable undertaking are set out in the Appendix.

Custodian believes that on successful completion of the Possible Offer, if made, DRIP shareholders would benefit from, inter alia, gaining exposure to a larger portfolio with more diversity by sector and geography with a property strategy consistent with that of DRIP, and a holding in a significantly larger company offering accessible liquidity and lower ongoing charges as a percentage of net asset value. In addition, DRIP shareholders would hold shares in a company that has predominantly traded on a premium to net asset value since IPO and has managed to grow through the issuance of new shares, whilst current Custodian shareholders would benefit from exposure to DRIP's portfolio with low purchaser's costs.

In accordance with Rule 2.6(a) of the Code, Custodian is required, by not later than 5.00 pm on 1 September 2021, either to announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended only with the consent of the Panel on Takeovers and Mergers ("Takeover Panel") in accordance with Rule 2.6(c) of the Code.

As a consequence of this announcement, an offer period has now commenced in respect of DRIP in accordance with the rules of the Code and the attention of shareholders is drawn to the disclosure requirements of Rule 8 of the Code, which are summarised below.

This announcement has been made with the consent of Custodian and 7IM.

For the purposes of Rule 2.5(a) of the Code, Custodian has reserved the right to make an offer on less favourable terms than those set out in this announcement: a. with the agreement or recommendation of the Board of DRIP; and/or b. if a third party announces a possible or firm intention to make an offer for DRIP on terms less favourable than the

value implied by the Exchange Ratio; and/or c. following an announcement by DRIP of a whitewash transaction pursuant to the Code.

A further announcement regarding the Possible Offer will be made in due course as appropriate.

Enquires:

DRIP Hugh Little, Chairman DRIP.REIT@jtcgroup.com

Dickson Minto W.S. (Sponsor and Rule 3 Adviser to DRIP)

Douglas Armstrong +44 (0) 20 7649 6823

Custodian

Richard Shepherd-Cross / Ed Moore/ Ian Mattioli MBE +44 (0) 116 240 8740

Numis Securities Ltd (Financial Adviser and Broker to Custodian)

Hugh Jonathan / Stuart Ord +44 (0) 20 7260 1000

Camarco (Communications adviser to Custodian)

+44 (0) 20 3757 4984

Ed Gascoigne-Pees

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014 as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Disclaimer

Dickson Minto W.S., which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for DRIP and for no one else in connection with the Possible Offer and will not be responsible to anyone other than DRIP for providing the protections afforded to its clients or for providing advice in connection with the Possible Offer referred to in this announcement.

Numis Securities Ltd, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Custodian and for no one else in connection with the Possible Offer and will not be responsible to anyone other than Custodian for providing the protections afforded to its clients or for providing advice in connection with the Possible Offer referred to in this announcement.

The release, publication or distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by laws of the relevant jurisdictions and therefore persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

This announcement is for information purposes only, and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction.

Disclosure requirements of the Code

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