Update: Simon Bennett, chair of Alternative Income REIT (AIRE), has resigned after Glenstone director Adam Smith returned to the real estate investment trust’s board after winning control of the company last week.
Smith, who stepped down from the AIRE board in July as Glenstone’s bid grew increasingly hostile, returns as a non-executive director with Stephanie Eastment, the only other director, temporarily taking the role of independent chair.
Bennett, who dropped his opposition to Glenstone’s 70p per share cash offer after it received acceptances from over 50% of shareholders last week, said: “It has been a pleasure to serve as chair of Alternative Income REIT over the last three years, but with Glenstone now having achieved voting control of the company, I believe that this is the right time for me to step down from the Board. It is good to welcome back our former colleague, Adam Smith who I know will be working assiduously for the benefit of all shareholders in the future.”
The announcement came as Glenstone revealed the level of acceptances had risen to just over 61%. The offer remains open to acceptances and Glenstone has said it will give at least 14 days’ notice before closing it.
Since Glenstone’s declaration, AIRE’s board has changed its position. It now recommends shareholders accept the offer saying that although it undervalues AIRE, the certainty of 70p per share cash is better than the uncertainty of remaining a shareholder in a company controlled by Glenstone as it embarks on a three-year managed wind-down.
Eastment said she intended to sell her 55,000 AIRE shares. The shares stood at 68.3p at yesterday’s close.
Glenstone has had representation on the AIRE board since the Guernsey-listed real estate investment trust bought a 14.7% holding through a targeted tender offer in 2020. It lifted the position to 29.9% last month as it sought to push through its £56m bid in the face of opposition from AIRE which was disappointed when AEW UK REIT (AEWU) withdrew a superior equity offer it had considered making for the long-lease portfolio it previously ran.
The boardroom changes came after HSBC, lender to AIRE, told the investment trust’s board it is not longer obliged to fund its £41m credit facility following Glenstone acquiring control.
In a “reservation of rights” letter the bank said the change of control invalidated the lending agreement. This gives HSBC the right to request repayment of money drawn under the facility, although AIRE said yesterday no such request had been made.
Before he stepped down, Bennett said he had introduced HSBC to Glenstone to let the two sides discuss the situation.
