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.
13 March
2024
Custodian
Property Income REIT plc (the "Company" or “CREI”)
Update on
recommended all-share merger with abrdn Property Income Trust
Limited (“API”) and improvement in management arrangements and fees
for the Combined Group
Further to the previous
announcements by the board of directors of CREI (the “CREI Board”)
regarding the recommended all-share merger of API and CREI (the
“Recommended Merger”), the CREI Board provides an update
reaffirming its belief in the compelling strategic and financial
rationale of the Recommended Merger and announces further
improvements to the management arrangements and fees for the
Combined Group.
CREI Board
reaffirms its conviction that its Recommended Merger with API
remains the optimum outcome for shareholders in both
companies
On 4 March 2024,
the CREI Board announced the reaffirmation of its belief in the
compelling strategic and financial rationale of the Recommended
Merger. The CREI Board urges CREI Shareholders and API Shareholders
to review the detail set out in that announcement in their
consideration of the Recommended Merger, which can be found
here
https://custodianreit.com/proposed-all-share-merger-with-abrdn-property-income-trust-limited/.
Improvement in
management arrangements and fees for the Combined Group
The CREI Board announces today that
it has agreed with Custodian Capital further amendments to the
existing investment management agreement between CREI and its
investment manager, Custodian Capital (the “Amended and Restated
Investment Management Agreement”), to the benefit of all
shareholders of the Combined Group, as follows:
-
the removal of the previously
agreed extension to the term of Custodian Capital's appointment
pursuant to the terms of the Amended and Restated Investment
Management Agreement until the conclusion of the Transition Period.
Consequently, following completion of the Recommended Merger,
Custodian Capital’s appointment shall be terminable on 12 months’
written notice consistent with the terms of its current appointment
by CREI; and
-
Custodian Capital will waive its
one-off project fee in connection with its additional work on the
Recommended Merger, which was equal to £350,000 (exclusive of VAT)
(and would have been reduced to £75,000 (exclusive of VAT) if the
Recommended Merger does not become Effective).
These amendments are in addition to
changes to the terms of the Amended and Restated Investment
Management Agreement agreed between CREI and Custodian Capital,
with effect from completion of the Recommended Merger, as set out
in the announcement of the Recommended Merger on 19 January 2024,
the terms of which provide that:
-
Custodian Capital will waive its
management fee in relation to the NAV attributable to API for the
first nine months following completion of the Recommended Merger;
and
-
there will be a reduction in the
management fees payable by CREI to Custodian Capital for a period
of two years following completion of the Recommended Merger (the
“Transition Period”). This will be implemented through the
consolidation of the first two fee tiers into one fee tier, such
that the consolidated fee tier will be calculated as a fee of 0.75
per cent. in respect of the NAV of the Combined Group which is less
than or equal to £500 million (rather than a fee of 0.90 per cent.
in respect of NAV up to £200 million and 0.75 per cent. up to £500
million).
The CREI Board believes these
additional amendments to the terms of the Amended and Restated
Investment Management Agreement reinforce the financial rationale
of the Recommended Merger and represents further alignment between
CREI, Custodian Capital and the shareholders of the Combined
Group.
The CREI Board has relayed the
terms of these agreed further amendments to the Amended and
Restated Investment Management Agreement to the API Board which
recognises the additional value that this would provide to
shareholders of the Combined Group in the event of the Recommended
Merger proceeding.
The CREI Board strongly advises API
Shareholders not to take any action with regards to the ULR
Indicative Offer and to vote in favour of the Scheme at the API
Court Meeting and API General Meeting.
Capitalised terms used in this
announcement, unless otherwise defined shall have the meanings
given to them in the Scheme Document in relation to the Recommended
Merger published by API on 1 February 2024.
Enquiries
Custodian
Property Income REIT plc
David MacLellan (Chair)
|
via Deutsche Numis
|
Deutsche
Numis
(Financial
Adviser and Corporate Broker to CREI)
Nathan Brown
Stuart Ord
Alexander Kladov
George Shiel
|
+44 20 7260 1000
|
FTI
Consulting
(Financial PR
Adviser to CREI)
Richard Sunderland
Andrew Davis
Oliver Parsons
|
+44 20 3727 1000
|
Important
Notices
Numis Securities
Limited (which is trading for these purposes as Deutsche Numis)
("Deutsche
Numis"),
which is authorised and regulated by the Financial Conduct
Authority in the United Kingdom, is acting exclusively for CREI and
for no one else in connection with the Recommended Merger and/or
any other matter referred to in this announcement and will neither
regard any other person as its client nor be responsible to anyone
other than CREI for providing the protections afforded to its
clients or for providing advice in connection with the Recommended
Merger, the contents of this announcement, or any other matters
referred to in this announcement. Neither Deutsche Numis nor any of
its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Deutsche Numis in connection with
this announcement, any statement or other matter or arrangement
referred to herein or otherwise.
Further
information
This
announcement is not intended to and does not constitute an offer to
sell or the solicitation of an offer to subscribe for or buy or an
invitation to purchase or subscribe for any securities or the
solicitation of any vote in any jurisdiction.
No person should
construe the contents of this announcement as legal, financial or
tax advice. If you are in any doubt about the contents of this
announcement or the action you should take, you are recommended to
seek your own independent financial advice immediately from your
stockbroker, bank manager, solicitor, accountant or from an
independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom, or another appropriately authorised
independent financial adviser, if you are in a territory outside
the United Kingdom.
The release,
publication or distribution of this announcement in jurisdictions
outside the United Kingdom may be restricted by law and therefore
persons into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to
comply with such restrictions may constitute a violation of the
securities law of any such jurisdiction.
Forward-looking
statements
This
announcement, oral statements made regarding the Recommended
Merger, and other information published by CREI and API contain
statements about CREI, API and/or the Combined Group that are or
may be deemed to be "forward-looking statements". All statements
other than statements of historical facts included in this
announcement, may be forward-looking statements. Forward-looking
statements are prospective in nature and are not based on
historical facts, but rather on current expectations and
projections of CREI and API about future events, and are therefore
subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied
by the forward-looking statements.
The
forward-looking statements contained in this announcement include
statements relating to the expected effects of the Recommended
Merger on CREI and API, the expected timing and scope of the
Recommended Merger and other statements other than historical
facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Forward looking
statements include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies,
economic performance, indebtedness, financial condition, dividend
policy, losses and future prospects; and (ii) business and
management strategies and the expansion and growth of CREI's or
API's or the Combined Group's operations and potential synergies
resulting from the Recommended Merger.
Although CREI
and API believe that the expectations reflected in such
forward-looking statements are reasonable, neither CREI nor API can
give assurance that such expectations will prove to be correct. By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will occur in the future.
There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by such
forward-looking statements. These factors include, but are not
limited to: the ability to complete the Recommended Merger; the
ability to obtain requisite regulatory and shareholder approvals
and the satisfaction of other Conditions on the proposed terms;
changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future
exchange and interest rates; changes in tax rates; future business
combinations or disposals; changes in general economic and business
conditions; changes in the behaviour of other market participants;
the anticipated benefits from the Recommended Merger not being
realised as a result of changes in general economic and market
conditions in the countries in which CREI and API operate; weak,
volatile or illiquid capital and/or credit markets; changes in the
degree of competition in the geographic and business areas in which
CREI and API operate; and changes in laws or in supervisory
expectations or requirements. Other unknown or unpredictable
factors could cause actual results to differ materially from those
expected, estimated or projected in the forward-looking statements.
If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual
results may differ materially from those expected, estimated or
projected. Such forward-looking statements should therefore be
construed in the light of such factors.
Neither CREI nor
API, nor any of their respective associates or directors, officers
or advisers, provides any representation, assurance or guarantee
that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur. Given the risks and uncertainties, you are cautioned not to
place any reliance on these forward-looking statements. Other than
in accordance with their legal or regulatory obligations, neither
CREI nor API is under any obligation, and each of CREI and API
expressly disclaim any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Disclosure
Requirements of the Code
Under Rule
8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the Offer Period
and, if later, following the announcement in which any securities
exchange offeror is first identified.
An Opening
Position Disclosure must contain details of the person’s interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day (as
defined in the Code) following the commencement of the offer period
and, if appropriate, by no later than 3.30 p.m. (London time) on
the 10th business day (as defined in the Code) following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule
8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person’s interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b)
of the Code applies must be made by no later than 3.30 p.m. (London
time) on the business day (as defined in the Code) following the
date of the relevant dealing.
If two or more
persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in
relevant securities of an offeree company or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3 of the Code.
Opening Position
Disclosures must also be made by the offeree company and by any
offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with
any of them (see Rules 8.1, 8.2 and 8.4 of the Code).
Details of the
offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures
must be made can be found in the Disclosure Table on the Panel’s
website at www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the Offer Period
commenced and when any offeror was first identified. You should
contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129
if you are in any doubt as to whether you are required to make an
Opening Position Disclosure or a Dealing Disclosure.
Publication
on Website
In accordance
with Rule 26.1 of the Code, a copy of this announcement will be
made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on CREI's website at
https://custodianreit.com/proposed-all-share-merger-with-abrdn-property-income-trust-limited/
by no later than 12 noon (London time) on the first Business Day
following the date of this announcement.