Alternative Income REIT (AIRE) has urged shareholders to reject Glenstone REIT’s cash offer, arguing that it materially undervalues the company and could leave minority investors trapped in an illiquid, unlisted vehicle.
Glenstone has offered 71.4p per AIRE share, but AIRE’s board says the headline figure overstates the value being offered. Should AIRE declare a fourth interim dividend of 1.4p per share to meet its previously stated dividend target for the year, Glenstone is entitled to reduce its offer by the same amount. The effective cash consideration would therefore be 70p per share.
This represents a discount of approximately 17% to AIRE’s unaudited net asset value of 84.4p per share at 31 March 2026. The board also noted that the offer represents only a negligible premium to AIRE’s share price before Glenstone’s interest emerged and does not include what it considers to be an appropriate premium for taking control of the company.
AIRE believes shareholders may be presented with a more attractive alternative. AEW UK REIT (AEWU) is considering an all-share offer that, based on its closing share price on 15 July 2026, implied a value of approximately 77.4p per AIRE share. This was 10.6% above the effective value of Glenstone’s proposal and would allow shareholders to retain exposure to a listed, income-producing property company. However, AEWU has not yet made a firm offer and the value of any share-based proposal would move with its share price.
The board has also raised governance concerns about Glenstone’s plans. Glenstone intends to appoint its own executives to AIRE’s board and may seek to delist the company from the London Stock Exchange, potentially moving its shares to The International Stock Exchange. AIRE argues that this would reduce independent oversight at a time when decisions would be required over asset sales, dividend payments and the management of potential conflicts of interest.
Glenstone intends to conduct a managed wind-down of AIRE’s portfolio, which it currently expects to complete within three years, subject to property market conditions. However, AIRE says the absence of a firm timetable means remaining shareholders could be locked into an illiquid company for a prolonged period.
The acceptance threshold for Glenstone’s offer is set at more than 50% of AIRE’s voting rights. This is substantially below the 90% threshold required to compulsorily acquire the remaining shares. As a result, Glenstone could gain control without providing all shareholders with a clean exit, leaving those who do not accept the offer holding shares for which there may be little or no market.
AIRE also rejected Glenstone’s suggestions that there may be problems within the property portfolio, stating that it is not aware of any material undisclosed issues. It highlighted that the portfolio is fully let, substantially index-linked and has a long-income profile, with strong rent collection.
The board unanimously recommends that shareholders do not accept Glenstone’s offer. It has also urged those who have already accepted to withdraw their acceptances as soon as possible, where they remain entitled to do so.
Glenstone rejects AEWU alternative
In a separate statement, Glenstone reiterated its support for its cash offer and confirmed that it would not back any renewed proposal from AEW UK REIT . Glenstone, which held 24.91% of AIRE’s issued share capital at 17 July 2026, said its opposition means any AEWU bid would proceed without the support of AIRE’s largest shareholder.
Glenstone had supported in principle the terms of AEWU’s previous proposed combination with AIRE in March 2026. However, it said subsequent developments within both companies’ property portfolios and a changing macroeconomic backdrop had led it to adopt a more cautious view of becoming AEWU’s largest shareholder following a merger. AEWU abandoned the earlier proposal on 21 April 2026, and Glenstone said it had since made clear to both companies that it would not support a renewed offer.
Glenstone continues to argue that its 71.4p-per-share cash proposal provides AIRE shareholders with certainty of value and immediate liquidity. The financial terms have been declared final, although Glenstone has reserved the right to improve them should AEWU or another third party announce a firm intention to make an offer.
AEWU has until 5pm on 28 August 2026 to announce a firm offer or withdraw. Glenstone’s offer is currently due to become unconditional on 4 September 2026, although this timetable may change should AEWU proceed.
Glenstone also said it intends to continue buying AIRE shares in the market, subject to takeover rules and applicable law. This could strengthen its position ahead of any competing offer and further complicate AEWU’s prospects of securing sufficient shareholder support.
Matthew Read, senior analyst at QuotedData, said: “While Glenstone’s opposition and significant shareholding in AIRE makes it harder for AEWU to complete a deal, this does not make Glenstone’s offer attractive. As AIRE’s board point out, once the expected fourth interim dividend is taken into account, the effective value falls to 70p, which is a sizeable discount to NAV and offering little premium for control. At this stage, we think AIRE shareholders should sit tight and see whether AEWU converts its interest into a firm offer. Its proposed all-share terms currently imply a meaningfully higher value and would allow investors to retain exposure to a liquid, income-producing REIT with a strong track record. Of course, there is no guarantee that an offer will emerge, but shareholders lose little by waiting for greater clarity and we’re inclined to agree with AIRE’s board that Glenstone’s bid is coming at too wide a discount.”
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