Custodian is considering a share swap offer for Drum property group’s investment REIT.
Custodian REIT has pitched the prospect of a securities exchange offer for DRIP, Drum’s income-plus REIT, although there is no guarantee that a firm offer will be made.
Custodian is mulling an offer at a ratio of 0.535 of its shares for each DRIP share, giving DRIP an implied value of £21.6m. The offer would be 8.8% above the current 52p market rate for DRIP’s shares.
Custodian said it had received an irrevocable undertaking from DRIP’s largest shareholder, Seven Investment Management, to support a formal offer. Seven holds just over two-thirds of DRIP’s ordinary shares.
DRIP has a portfolio of 10 properties, largely concentrated in Scotland and the North of England. Its net asset value was £26.3m as of March 2021, with an annual rent roll of £4.21m.
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