Glenstone has seen support for its £56m cash bid for Alternative Income REIT (AIRE) rise to over 44%, improving its chance of securing control by tomorrow’s 1pm deadline. 

As of 6pm yesterday, on the 58th day of its its 70p per share offer, Glenstone said it had acceptances from over 35.7m AIRE shares, 44.4% of the total, leaving it 5.6% short of the 50% level it needs.

This is an increase from the 37.8% level it had on Tuesday and reflects an increase in acceptances from independent shareholders, which rose from 2.25% to 8.8%.

This is on top of Glenstone’s stake, which it has recently lifted from 24% to 27.6%, plus the 2.4% held by its director Adam Smith, who resigned from AIRE’s board in July, and the 5.6% of shares subject to a letter of intent to accept the deal from Hawksmoor Investment Management.

Panel intervenes

In addition to seeing its cause advance, Glenstone also enjoyed the discomfort of AIRE’s board after the Takeover Panel forced it to withdraw a statement yesterday morning thanking shareholders who had supported its recommendation to reject Glenstone’s offer which is priced at a 16% discount below net asset value. 

In an update yesterday afternoon, chair Simon Bennett said the Panel had asked AIRE to clarify that its announcement that the board was “grateful” for the shareholder support it had received was not in accordance with the Takeover Code and was withdrawn. 

AIRE wanted AEW UK REIT to pursue an all-equity merger but it withdrew last month, citing Glenstone’s opposition. AEWU could return if Glenstone were to change its view if its offer fails to win majority support.

Our view

James Carthew, head of investment company research at QuotedData, said: “With a few more shares in the bag, it is touch and go whether Glenstone’s bid will make it across the line. It looks unlikely that it will secure enough shares to force through a liquidation of AIRE (needs approval of 75% of those voting) or squeeze out minority investors (Glenstone would need to own 90% of AIRE for that). If it wins control, it can adopt a managed wind-down strategy. That could provide a better outcome for AIRE investors than accepting the 70p bid, but we still think the best outcome is if Glenstone loses and AIRE ploughs its own furrow.”