abrdn European Logistics Income (ASLI) has launched a strategic review into the future of the company that could result in its sale or merger with another company.
The company, which invests in mid-box and urban logistics real estate in Continental Europe, said that it is “facing a number of challenges, at both a macro and company specific level”.
The board added that the company’s annual target dividend of 5.64 euro cents per share remains materially uncovered, and a reduction in this target level would be required to achieve a fully covered, sustainable dividend in the foreseeable future.
Like many of real estate companies, the company has suffered from negative shareholder sentiment towards the sector in the high inflation, high interest rate environment – seeing its discount to NAV widen to almost 40%. With both inflation and interest rates looking like they have peaked an improvement in sentiment should follow [which makes the timing of this odd].
With a continuation vote due at its AGM next year (in line with its constitutional terms as set out on launch in December 2017), the board said that it believed now was the time to look at its future.
It said that it will consider all options including, undertaking some form of consolidation, combination, merger or comparable corporate action, selling the entire issued share capital of the company, and selling the company’s portfolio and returning monies to shareholders.
[The obvious outcome would be a merger with Tritax EuroBox, which also invests in continental logistics real estate and whose manager is majority owned by abrdn.]
There is no certainty that any changes will result from the strategic review and, a continuation of the company’s current investment strategy with a rebased target dividend level is a potential outcome, it added.
Tony Roper, chairman, said: “The board’s priority at all times is to act in the best interests of shareholders. Whilst we retain a strong conviction in the strategy, today’s proactive decision to launch a strategic review largely reflects the unprecedented macro backdrop that real estate companies are operating against and provides greater optionality to deliver shareholder value.”
ASLI : abrdn European Logistics Income launches strategic review into future