GAVIN LUMSDEN, Citywire Investment Trust Insider
The bid by Custodian Property Income (CREI) for Abrdn Property Income (API) has failed to gain the required 75% support of API shares meaning fund manager Abrdn will retain the £300m portfolio in a managed wind-down likely to last about two years.
David MacLellan, chair of CREI, said he was ‘disappointed’ that votes in favour from 60.8% and 61.4% of API shares at yesterday’s court and general meetings were insufficient for the merger to proceed.
API shares dropped 5.9%, or 3.2p, to 51p in early trading and CREI jumped 10%, or 7.7p, to 83p, close to the level before the proposed transaction was unveiled..
Critics of the scheme, including analysts at QuotedData and arbitrageur Andrew Pegge, pointed to this month’s sale of two properties at near asset value to argue that a wind-down would ultimately deliver better value for shareholders given the all-share transaction recently valued API at around a 30% discount to asset value.
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