Glenstone Property has announced its intention to acquire 25% of Alternative Income REIT (AIRE).
The tender offer of up to 20,125,000 shares at a price of 59.25p represents a premium of 12.9% on the closing price on 26 October 2020, but a 29% discount to the 30 June 2020 net asset value (NAV) per share of 83.58p.
Glenstone, which is a UK real estate investment trust (REIT) listed on The International Stock Exchange (TISE) in Guernsey, said the offer provides AIRE’s shareholders with a liquidity event against the background of the prevailing macro-economic uncertainty caused by COVID-19 and Brexit.
AIRE said the proposed offer price significantly undervalues the company, at a 29% discount to its NAV that it said is underpinned by the robust rent collection data, details of which can be found here.
The group said it was well positioned to pursue its proposed enhanced investment strategy, details here, supported by its new investment adviser M7 Real Estate.
Glenstone said it does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of AIRE nor does it intend to seek a direct role in the management of AIRE’s portfolio or any combination of its own assets with those owned by AIRE.
In the event that the tender offer is accepted in full, Glenstone will seek representation on AIRE’s board.
[QD comment: The tender offer is tempting for shareholders that have seen one thing after another go wrong for the company. However, the appointment of M7 Real Estate as investment advisor and the new investment strategy, which will be voted on by shareholders at an AGM on 26 November, do point to a brighter future. The tender price is well below the pre-COVID price, and judging by the strong rent receipts and taking into account the new investment strategy, it does feel under value.]
AIRE : Glenstone looks to acquire 25% stake in Alternative Income REIT