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Troubles for Custodian as bidding war over Abrdn property trust escalates

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FTSE 250 member Tritax Eurobox, which invests in logistics assets in Europe, is currently being targeted by Brookfield Asset Management.
FTSE 250 member Tritax Eurobox, which invests in logistics assets in Europe, is currently being targeted by Brookfield Asset Management.

Two major shareholders in Abrdn’s Property Income Trust have withdrawn their support for the proposed merger Custodian Property Income REIT, it emerged today.

Custodian, who placed their bid for Abrdn’s trust last month, came face to face with a competing bid from the Urban Logistics REIT yesterday.

Now, Custodian has revealed that two of the Abrdn trust’s shareholders, Brooks Macdonald Asset Management and Wise Funds, have pulled their support for the proposed merger.

In a stock exchange notice this afternoon, Custodian admitted that the two managers, who hold 4.5 per cent of Abrdn Property’s shares, withdrew letters of intent to vote in favour of the Custodian merger following the bid from Urban Logistics.

The move makes the possibility of a Custodian buyout less likely, as Urban Logistics had initially offered a 13 per cent premium on the alternative bid.

However, Custodian noted today that after the share price movements after the Urban Logistics bid was announcement, their offer now actually held a 4.1 per cent premium, due to an eight per cent drop in Urban Logistics’ share price over the last week.

Following the bid, the Abrdn trust said this morning that it would be suspending its general meeting, set to be held on 28 February, to 20 March.

This was to allow its board to make an assessment around the offers and let Urban Logistics make a binding proposal.

Custodian added in the announcement today that it would also be postponing its general meeting to 19 March.

However, Custodian’s board still reaffirmed its belief that the merger would be worth pursuing, though it acknowledge the Abrdn trust’s requirement for time to assess the potential options.

“We firmly believe that the rational conclusion of this assessment would be to maintain its recommendation for the all-share merger,” said Custodian’s chair David MacLellan.

“This will benefit both sets of shareholders by creating a well-positioned REIT of enhanced scale, with the opportunity to participate in the returns from the two complementary portfolios, with a fully covered and sustainable dividend.”