Glenstone, the largest shareholder in Alternative Income REIT (AIRE), has raised its bid for the company to 71.4p per share in cash.

The 1.4p, or 2%, increase from the 70p per share, or £56.3m, offer Glenstone made on 12 June is the equivalent of the fourth quarter dividend AIRE shareholders could expect to receive next month.

Glenstone, a Guernsey-listed real estate investment trust, is financing the £57.4m bid with a £45m loan from Swedish bank Handelsbanken.

It described its new offer as “final” but reserved the right to raise it again if a counter bid emerged. It first made an offer of 66.5p per share in November but that was rejected by the board of the £56m company whose shares closed at 69.5p last week.

Last week, AEW UK REIT (AEWU) said it was “monitoring” the situation having previously had an all-share approach 3% below the then net asset value (NAV) rejected by the board.

Glenstone’s latest offer is 15.4% below AIRE’s NAV of 84p per share at 31 March compared to the 17% discount of its first offer.

It has set a deadline of 20 July for AIRE shareholders to accept. Glenstone holds a 24% stake and has commitments and expressions of support from holders of a further 7.97%. These include Adam Smith, a Glenstone director who also sits on AIRE’s board, and Hawksmoor Investment Management in relation to over 4.5m of the shares it holds.

Our view

James Carthew, head of investment company research at QuotedData, said: “I described the previous Glenstone bid as a bit mean, today’s uplift doesn’t do much for AIRE shareholders beyond giving them the dividend they would have been entitled to in a few weeks anyway. It may have been a response to AEWU’s statement that it was monitoring the situation. I still feel as though there is room for someone to counterbid.”

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