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.
4 March 2024
Custodian
Property Income REIT plc
(the “Company” or
“CREI”)
Update on
recommended all-share merger with abrdn Property Income Trust
Limited (“API”) (the “Recommended Merger”)
CREI Board
reaffirms its conviction that its Recommended Merger with API
remains the optimal outcome for shareholders in both
companies
Further to the previous
announcement by the board of directors of CREI (the
“CREI
Board”) on 22 February 2024
regarding the recommended all-share merger of API and CREI, the
CREI Board provides an update reaffirming its belief in the
compelling strategic and financial rationale of the Recommended
Merger. The CREI Board also notes the announcement by Urban
Logistics REIT (“ULR”) on 20 February 2024 regarding its indicative
share-for-share offer for API (the “ULR Indicative
Offer”) and sets out below
what it believes are the key factors API Shareholders should
consider when assessing the credibility of the ULR Indicative Offer
and future of the API business.
Summary
highlights:
-
The Recommended Merger represents a
superior offer and premium to the ULR Indicative Offer on both an
undisturbed (+5%) and current share price (+6%) valuation.
Furthermore, over the twelve months prior to the announcement of
the Recommended Merger (the "Recommended Merger
Announcement")1,
CREI has traded at an approximate 11% discount to published net
asset value (“NAV”) compared with
approximately 27% for ULR2.
The CREI Board believes firmly that the current CREI share price
materially undervalues the Company and is confident in the
potential following completion of the Recommended Merger for a
restoration of the superior relative valuation at which the CREI
Shares have historically traded.
-
CREI and API have complementary
portfolios and the Recommended Merger will not require shareholders
in either API or CREI to undertake a shift in investment strategy
or risk-return profile.
-
The Recommended Merger provides API
Shareholders with a superior income proposition offering a 7.3%
uplift in their annual dividend, a fully covered quarterly
dividend3
and an aim of a growing dividend on
a sustainable basis as the earnings of the Combined Group grow.
ULR’s Indicative Offer implies a 10.9% reduction in annual
dividends for API Shareholders4
which would continue to be paid
semi-annually and is estimated on a recurring earnings basis to be
uncovered5.
-
The Recommended Merger does not
expose API Shareholders to the risk of value erosion and loss of
future rental reversion from the disposal of a significant quantity
of non-core assets indicated in the ULR Indicative Offer or a
wholesale sell down of the API portfolio.
-
The CREI Board believes the ULR
Indicative Offer, if made, introduces several material execution
risks for API shareholders both in the transaction itself and
subsequent strategy implementation.
-
ULR’s near term refinancing
requirements present a clear risk to earnings and dividend
growth.
-
The CREI Board expects that the
board of directors of API (the “API Board”) has appraised and
continues to appraise a managed wind-down of API as an alternative
to the Recommended Merger. The CREI Board believes that the returns
potentially available to API Shareholders from the Recommended
Merger are superior to those from a managed wind-down, with the
latter potentially involving value erosion from the sale of assets
into a suboptimal property market, deterioration in the share price
and share trading liquidity in light of declining investor
interest, reducing earnings, and an increasing cost burden and
portfolio concentration.
API has already
recommended the Recommended Merger following a comprehensive review
of strategic options
As detailed in the Recommended
Merger Announcement, in light of the challenges faced by API,
including its relatively small scale and low level of dividend
cover, the API Board undertook a comprehensive review of strategic
options in Q3 2023. During this review, the CREI Board was in
discussions with API Board and had been over the course of several
months. Having assessed a wide range of options in detail, the API
Board provided API Shareholders with a unanimous recommendation of
the Recommended Merger over alternative strategic options which the
CREI Board expects would have included a managed
wind-down.
The CREI Board
remains firm in its agreement with the outcome of the API Board’s
review and continues to believe that the Recommended Merger would
bring together two complementary portfolios, with aligned
strategies to create a differentiated REIT benefitting from
enhanced diversification, share liquidity, a fully covered and
sustainable dividend for the Combined Group's shareholders. The
CREI and API Boards set out the background to, and reasons for, the
Recommended Merger in previous documentation, which can be found
here
https://custodianreit.com/proposed-all-share-merger-with-abrdn-property-income-trust-limited/.
Conclusion
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, adjourned to 20 March
2024.
A video briefing in
support of this announcement is intended to be published on CREI's
website, https://custodianreit.com, in the coming
days.
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
|
Further
compelling rationale
The CREI Board sets out further
rationale below to support the Recommended Merger over alternative
strategic options available to the API Board, including the ULR
Indicative Offer and a managed wind-down.
Superior offer
valuation of the Recommended Merger
On an undisturbed
basis6
and using the closing prices per
CREI Share and per ULR Share of 72.7 pence and 116.6 pence
respectively on 1 March 2024 (being the last Business Day prior to
this announcement), the Recommended Merger implied offer valuation
is superior to the ULR Indicative Offer, as set out
below.
Implied
offer values
|
(i) undisturbed
basis
|
(ii) as at the
latest practicable date prior to the date of this
announcement
|
|
Recommended
Merger
|
ULR Indicative
Offer
|
Recommended
Merger
|
ULR Indicative
Offer
|
Implied offer
value
(per API
Share)
|
62.1p
|
59.2p
|
56.7p
|
53.5p
|
Implied premium
of the Recommended Merger to the ULR Indicative Offer
|
4.9%
|
5.9%
|
Over the twelve months prior to the
Recommended Offer Announcement1,
CREI traded at an approximate 11% discount to its published NAV
versus ULR which has traded at an approximate 27% discount to its
published NAV2.
The CREI Board believes that the current CREI share price
materially undervalues the Company and the short-term volatility is
not reflective of the expected medium and long-term value of the
Recommended Merger for the Combined Group. The CREI Board is
therefore confident in the potential for the Combined Group to
re-rate back to the historical premium share rating of CREI and,
over time, to trade at an improved rating following completion of
the Recommended Merger.
The Company was granted Shareholder
authority to repurchase CREI Shares at the 2023 AGM and the Company
confirms, in accordance with the disclosure in CREI's Combined
Circular and Prospectus, that the Company may seek to address any
significant discount to NAV at which the CREI Shares continue to
trade by purchasing its own shares in the market on an ad hoc
basis. Investors should note that the repurchase of CREI Shares is
entirely at the discretion of the CREI Board which would exercise
its authority to buy back CREI Shares only if it believes it would
result in an increase in earnings per CREI Share or an increased
NAV per CREI Share (or both) and would be likely to promote the
success of the Company for the benefits of CREI Shareholders as a
whole.
CREI and API have
complementary strategies
Based on API’s
stock market announcements and published investment policy, the
CREI Board believes that API Shareholders invested in API on the
basis that they desired access to a generalist UK property
portfolio, diversified across sectors, with an income-focused
strategy that is primarily achieved through exposure to below
institutional sized assets. This approach is highly aligned
with CREI and its intentions for the Combined Group. The CREI Board
considers that the enhanced diversification of the combined
portfolios will allow the Combined Group to better contend with the
significant challenges facing the wider real estate sector which
the CREI Board believes continue to impact investor sentiment, real
estate capital values, transaction volumes and equity market
liquidity, and which the CREI Board believes would pose a
significant risk to a specialist portfolio, like
ULR.
Based on ULR’s
stock market announcements and published investment policy, the
CREI Board believes that ULR shareholders invested in ULR on the
basis that they were targeting a ‘pure play’ on exposure to
logistics real estate, acquiring only ‘last mile’ assets which are
well located close to urban areas7
and the ULR
Indicative Offer states the combined group would
“focus
on the last-mile / last-touch mid-box area of UK
logistics”.
The ULR Indicative Offer also
references the retention of API’s retail warehouse portfolio and
the CREI Board notes that none of ULR’s half year report for the
six months ended 30 September 2023 dated 9 November 2023, its
Annual Report for the financial year ended 31 March 2023 dated 22
June 2023, or its published investment strategy mention an
intention to invest in this asset class.
The CREI Board notes the API
portfolio weighting to industrials is only 48% (as a % of API's
portfolio by income as at 31 December 2023)8.
The ULR specialist investment strategy for the combined group
therefore would reflect a material divergence from the current API
strategy.
The CREI Board notes that this
strategic shift would result in API Shareholders being invested in
a strategy that is different from the strategy which they
specifically invested in API to achieve.
The CREI Board considers the
continued diversified approach of the Combined Group to be a
fundamental attraction of the Recommended Merger and one that would
be a key differentiator for the Combined Group amongst the wider
sector of LSE listed REITs. The CREI Board believes the challenges
the wider listed property sector has faced over the last 18 months
highlight the merits of CREI's differentiated approach and
operational robustness, which has contributed to CREI's strong
historical performance relative to its peers9.
The Recommended
Merger is a superior income proposition for API Shareholders with a
7.3% uplift in dividend
In the view of the CREI Board, CREI
and API share an income-focused investment strategy with an
emphasis on regional, below-institutional sized assets that are
well-positioned to capture the rental growth and yield advantage
available in order to generate higher income returns and capital
growth for shareholders. CREI currently pays a quarterly dividend
at an aggregate annualised level of 5.5 pence per share
(representing a 5.9% yield on NAV10)
which is fully covered by recurring earnings, with cover of
approximately 102% for its financial year to 31 March
202311.
Following the Recommended Merger, CREI is expected to continue
paying a fully covered quarterly dividend in line with CREI's
existing policy and practice since IPO, which would result in a
7.3% uplift in annual dividends payable to API
Shareholders4.
ULR currently pays a semi-annual
dividend at an aggregate annualised level of 7.6 pence per
share12
(representing a lower yield on NAV
of 4.7%13)
which is not covered by recurring earnings, with cover of
approximately 91% for its financial year to 31 March
202314.
The CREI Board notes that continuation of the existing ULR dividend
policy following completion of the ULR Indicative Offer would imply
a 10.9% reduction in annual dividends payable to API Shareholders
which would continue to be paid on an uncovered basis, and a 20.4%
reduction compared to annual dividends expected to be payable to
API Shareholders following the Recommended Merger. Furthermore, the
ULR Indicative Offer includes a 2.45 pence per share special
dividend payable to ULR shareholders for the 3-month period to 31
December 2023. This payment reflects a greater than pro-rata
dividend expected for the relevant period which API Shareholders
would not benefit from as it is payable only to existing ULR
shareholders15.
ULR’s near term
refinancing requirements present a clear risk to earnings and
dividend growth
The two principal drivers of
earnings per share in a property investment company are rental
income and cost of debt. The CREI portfolio delivered an EPRA
topped up net initial yield (“NIY”)16
of 6.4% as at 30 September 2023,
which is comfortably in excess of its weighted average cost of debt
of 4.2%17,
thereby enhancing earnings. The near-term expiry of fixed rate debt
at CREI is limited to a £20m fixed rate loan that expires in 2025.
The CREI Board believes that based on current gilt rates it would
be possible to re-finance this quantum at a rate below the EPRA
topped up NIY of the portfolio, which would maintain the
aforementioned accretion to earnings.
By contrast, the ULR portfolio
delivered an EPRA topped up NIY of only 5.0% as at 30 September
2023, which is also in excess of its weighted average cost of debt
of 4.1%18,
thereby enhancing earnings albeit insufficiently to cover the
prevailing rate of dividend. The near-term finance cost risk of ULR
also occurs in 2025 when its £151m term loan facility and
associated interest rate swaps expire. This is a significantly
greater amount of borrowing that needs to be refinanced and
potentially hedged and the CREI Board believes that based on
current re-financing rates this would present a risk to the
earnings of ULR given that it is likely that a market rate hedge
for this portion of ULR’s debt would be at a higher rate than the
EPRA topped up NIY of 5.0%.
Potential value
erosion from “value optimising” asset disposals
The CREI Board believes the
continuation of its diversified approach will allow the Combined
Group to undertake sales and acquisitions across all sectors, in
line with the ongoing routine disposal programmes of both
companies, where and when there are opportunities to optimise
shareholder value, as evidenced by CREI’s most recent disposal
update on 28 February 2024. The CREI Board believes this will
prevent potential value erosion from required sale of assets in the
near or medium term, where conditions may be suboptimal for such
activity in certain sectors of the market.
In contrast, the ULR Indicative
Offer is stated to involve a “value optimisation approach
for all of the assets outside Logistics and Retail
Warehouses” and such assets
represented 41% of API’s portfolio by income as at 31 December
20238.
Given the current challenging conditions for the UK real estate
sales market, the CREI Board believes that such an approach would
be unlikely to maximise value for API Shareholders, particularly by
reference to the office sector which comprised approximately 25% of
API’s portfolio by income as at 31 December 20238.
Furthermore, the CREI Board notes
the estimated rental value of the API portfolio is £7.0m above the
current contracted rent, representing significant reversionary
potential in the portfolio19.
The CREI Board expects a sector-led disposal programme of API
assets by ULR to restrict the extent to which API Shareholders
would be able to capture this potential latent value.
Significant
execution risk in the ULR Indicative Offer
The CREI Board believes the ULR
Indicative Offer introduces material execution risks for API
Shareholders, including:
Material change
in investment strategy for ULR shareholders – the CREI Board notes that 52% of the API
portfolio (as a % of API's portfolio by income as at 31 December
20238)
does not represent industrial properties and therefore is not
within the scope of the ULR published investment
policy20.
Furthermore, the ULR Indicative Offer suggests that following the
transaction, the ULR strategy will not solely focus on industrial
properties but will also incorporate retail warehousing (noting the
change to investment strategy retail warehousing presents in itself
referred to above). The CREI Board believes execution of the ULR
Indicative Offer is therefore likely to require a material change
to ULR’s published investment policy to broaden its remit beyond
industrials assets only, which will require FCA and ULR shareholder
approval. In contrast the Recommended Merger is within the scope of
CREI’s investment policy and CREI only requires its shareholders to
vote in favour of the single share allotment resolution to be
proposed at the adjourned CREI General Meeting to implement the
Recommended Merger.
Cost and
transaction risks – The CREI
Board considers the additional reciprocal due diligence and
documentation requirements in considering and implementing the ULR
Indicative Offer would incur unnecessary significant additional
costs for API Shareholders, particularly given that the Recommended
Merger followed a thorough strategic review of API's options by the
API Board.
Furthermore, the CREI Board
believes the Recommended Merger represents a superior strategic and
financial fit for API Shareholders in comparison to the ULR
Indicative Offer. The CREI Board believes that further execution
risk will be introduced through the requirement for extensive
shareholder documentation, including the potential requirement for
a prospectus and circular from ULR, significant additional
transaction costs and the requirement for ULR shareholder
approvals.
API shareholder
returns potentially available from a managed wind-down of API are
inferior to those from the Recommended Merger
The CREI Board believes that the
API shareholder returns potentially available from a managed
wind-down of the API portfolio are inferior to those from the
Recommended Merger, with the managed wind-down potentially
involving the following:
Value
erosion from the sale of
assets in the near term where conditions may be suboptimal for such
activity. Consistent with the above observations about the asset
disposals in the ULR Offer, the CREI Board believes that current
and anticipated market conditions are not conducive to a wholesale
programme of disposals, with the offices sector being a particular
area of concern. While the CREI Board acknowledges that the
property market is cyclical and an orderly managed wind-down may
therefore over time be seen as a route to fair value, it believes
that the below-institutional sized property segment in which API’s
portfolio is invested does not tend to benefit from the early
stages of a cyclical recovery phase. Typically, this segment of the
market is dominated by debt funded buyers, so the CREI Board would
not consider it an optimal time to dispose of properties until
interest rates have fallen and commercial property debt costs look
more attractive. Additionally, operating such a programme for API
as a public investment company may be particularly challenging
given its transparency to the market and the likelihood therefore
of opportunistic buyers seeking to extract value.
Potentially
prolonged process. The CREI
Board anticipates that a prolonged period would be required for a
wind-down to deliver material distributions to API Shareholders.
Factors in this assessment include the practical processes to
realise assets even where such assets are deemed saleable
(including preparation of property for sale, appointment of agents,
coordination of auction process, and completion conditions
including financing), the requirement for a market recovery in
respect of certain sectors to which API’s portfolio is
significantly exposed, and the fact that distributions to API
shareholders are likely to require consent from API’s bank lender
given that API’s £85 million term loan is due to expire in 2026 or
would have been refinanced before a managed wind-down is completed.
Additionally, the CREI Board anticipates that API would through a
wind-down process be exposed to increasing portfolio concentration
with a growing focus over time on a rump of residual assets which,
often regardless of their ability to produce income, have proven
unsaleable for fair value.
Potential for
reducing income in the medium term. The CREI Board anticipates that this could
occur, for example, due to an increasing expense ratio as the costs
of administrating a public company are to a significant extent
fixed, and also earnings being depleted by proceeds of disposals
being used to pay down attractively priced debt.
API’s current disposal pipeline is
estimated to be sufficient to repay the majority of its relatively
expensive RCF21,
and the CREI Board believes that this may act as an impediment to
significant capital returns in the meantime as disposal proceeds
will likely need to be retained to maintain loan covenant
compliance.
The CREI Board believes that the
above are explanatory factors for the market trend for property and
other alternative asset investment companies which are placed into
a managed wind-down process to trade at relatively wide discounts
to NAV and for their shares to experience declining secondary
market liquidity.
Sources and Bases
of Information
-
The API Board and CREI Board made the Recommended Merger
Announcement on 19 January 2024. Data for the twelve months to 18
January 2024 (being the latest practicable date prior to the
Recommended Merger Announcement).
-
Source: Latest company announcements and
Bloomberg.
-
Based on the 0.78 Exchange Ratio and CREI's target dividend
of 5.5 pence per share compared to API’s current annual dividend of
4.0 pence per share. The dividends referred to above are not
intended as a profit forecast or estimate for CREI or API for any
period and no statement in this document should be interpreted to
mean that earnings or earnings per CREI Share or per API Share for
the current or future financial years would necessarily match or
exceed the historical published earnings or earnings per CREI Share
or per API Share.
-
Based on the 0.469 exchange ratio and ULR's target dividend
of 7.6 pence per share compared to API’s current annual dividend of
4.0 pence per share.
-
Based on historical ULR adjusted earnings and
dividends.
-
Based upon the closing price per CREI Share of 79.6 pence on
18 January 2024 (being the latest practicable date prior to the
announcement of the Recommended Merger) and the closing price per
ULR Share of 128.6 pence on 19 February 2024 (being the date prior
to the announcement of the ULR Indicative Offer) adjusted downwards
for the ULR special dividend of 2.45 pence per ULR
share.
-
Source: https://www.urbanlogisticsreit.com/about-us/our-unique-business-model/.
-
Data as per the Scheme Document in relation to the
Recommended Merger published by API on 1 February 2024. Income
relates to aggregate of passing rent for occupied assets and
estimated rental value for vacant assets.
-
Data as per the CREI Rule 2.7 presentation.
https://custodianreit.com/proposed-all-share-merger-with-abrdn-property-income-trust-limited/.
-
Based on 31 December 2023 NTA of 93.3 pence per CREI share
and annualised dividend target of 5.5 pence per CREI
share.
-
Based on CREI FY2023 earnings per share of 5.60 pence and
dividend per share of 5.50 pence.
-
Source: ULR results for the six months ended 30 September
2023. Based on 3.25 pence per share dividend for 6-month period
ended 30 September 2023 and expected 4.35 pence per share dividend
for 6-month period ending March 2024.
-
Based on 30 September 2023 NTA of 161.69 pence per ULR share
and annualised dividend target of 7.6 pence per ULR
share.
-
Based on ULR FY2023 adjusted earnings per share of 6.93 pence
and dividend per share of 7.60 pence.
-
ULR target dividend for the 6-month period ending 31 March
2024 is 4.35 pence per ULR share. ULR special dividend for the
3-month period ended 31 December 2023 is 2.45 pence per ULR
share.
-
The current annualised rent, net of costs, adjusted for the
expiration of rent free periods and other unexpired lease
incentives, expressed as a percentage of capital value (adding
notional purchasers costs), calculated in line with EPRA
Guidance.
-
Source: CREI results for the six months ended 30 September
2023
-
Source: ULR results for the six months ended 30 September
2023.
-
Source: API ‘Unaudited Net Asset Value as at 31 December
2023’ RNS announcement published on 1 February 2024. Based upon
portfolio value as at 31 December 2023.
-
“The Company intends to achieve the
investment objective by investing in and growing a diversified
portfolio of primary and secondary grade industrial and logistics
properties within the UK, and by engaging in active asset
management to leverage and enhance returns. The Company will invest
in assets that comprise an interest in freehold or leasehold
property (other than by way of security), which meet the following
criteria:
-
UK industrial or
logistics properties (typically single let);
-
modern
(typically post-1980) constructions; and
-
representing
average lot value across the portfolio at acquisition of up to £15
million (increased by RPI from admission)”
Source: ULR annual report (2023)
p136.
-
Relative to API’s term loan facility. The margin on both
API’s RCF and term loan is 150bps (over SONIA) and API entered into
an interest rate cap of 4% on the SONIA rate applied to the term
loan portion. Source: API ‘Unaudited Net Asset Value as at 31
December 2023’ RNS announcement published on 1 February
2024.
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
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.
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.
Rounding
Certain figures
included in this announcement have been subjected to rounding
adjustments.