Michelle McGagh, Citywire Investment Trust Insider, 21 Mar 2024:
Andrew Pegge, a former Laxey Partners activist, has urged Abrdn Property Income (API) to scrap plans for a highly discounted all-share merger with Custodian Property Income (CREI) and opt for a managed wind-down that he says will deliver a better result for shareholders.
Pegge, a former business partner of Laxey’s Colin Kingsnorth, with whom he battled Alliance Trust, British Land and 3i Group, among others, from 2003 to 2012, holds one million shares in API through Pop Investments, his Isle of Man investment company. This gives him a stake of 0.26% in the real estate investment trust, which has 381 million shares in issue, according to Refinitiv data.
While that makes him a small investor in API, Pegge remains an activist and holds a seat on the board of Cuban property fund Ceiba Investments (CBA), where he has a more commanding 10% position.
He is keen to have his voice heard, sharing with Citywire his correspondence with API’s board in the hope API will rethink its recommendation for shareholders to accept 0.78 new shares in Custodian for every API share.
Although pitched at a 26.5% premium to API’s three-month average share price, the decline in Custodian’s shares since its offer was made in January has seen its price fall from a discount of 20.8% to 28.2% below the value of API’s property at Tuesday’s close..
Pegge’s disenchantment has grown with API’s sale yesterday of two properties – an office building in London and an industrial estate in Warrington – for £16.6m, at a discount of just 0.3% to their 31 December valuation.
QuotedData analyst Richard Williams was also critical, saying the sales ‘prove that a managed wind-down would be of far greater value – even before the positive impact of any potential drop in interest rates later this year and into 2025’.
Williams calculated a wind-down would take about two years, ‘hopefully into an improving investment market’, and deliver almost 38% more for investors than the Custodian bid.
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