Alternative Income REIT’s directors have rebuffed Glenstone Property’s cash offer to acquire up to a quarter of the company.
The REIT’s board said the offer of 59.25p per share from Glenstone to its shareholders “significantly” undervalued the firm.
The offer represents a 29% discount to the net asset value per share of 83.58p on 30 June 2020, but a 12.9% premium to the closing price of 52.5p on 26 October.
The board added that it believed in the “resilience” of its existing portfolio, for which all rents due were collected for the September-to-December quarter.
In addition, the board said it expected that additional investment could provide shareholders with a strong performance and a “secure, progressive” dividend and that the REIT was well positioned, given the reduction in its overheads, to pursue its current strategy supported by its investment adviser, M7 Real Estate.
Glenstone is offering to acquire up to 20,125,000 ordinary shares in Alternative Income REIT, which represents 25% of its issued share capital.
The offer is conditional on Glenstone receiving enough acceptances from shareholders to acquire 20% of the REIT’s share capital.
Glenstone said it would seek representation on Alternative Income’s board following the successful purchase of the stake and would be “supportive” of a low operating cost base and other initiatives to maximise returns to shareholders.
Alternative Income REIT recently reported a pretax loss of £5.05m in its latest full-year results, for the period ended 30 June 2020, and saw its net asset value slip from £76.3m in 2019 to £67.3m.
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