Custodian REIT and abrdn Property Income Trust Announce Merger and Improved Management Arrangements

Custodian Property Income REIT plc (CREI) provided an update on its all-share merger with abrdn Property Income Trust Limited (API), emphasizing the strategic and financial benefits of the merger. The CREI Board confirmed its commitment to the merger, hailing it as the best course for shareholder value in both entities.

Amendments have been made to the investment management agreement between CREI and its manager, Custodian Capital. These amendments include a termination clause allowing termination on 12 months’ notice post-merger and waiving a one-off project fee related to the merger. These changes are seen as enhancing the financial rationale behind the merger and ensuring better alignment between management and shareholders of the combined entity.

In addition, further to an agreement made in January, Custodian Capital will waive its management fee concerning API’s net asset value for nine months post-merger. This is coupled with a two-year reduction in management fees payable by the combined entity, which is anticipated to provide substantial cost savings.

The announcement also cautioned API shareholders against taking any action regarding an unsolicited indicative offer and recommended voting in favor of the merger proposal. The terms of the enhanced agreement have been communicated to the API Board, which recognizes the added value for shareholders.