Alternative Income REIT mulls offer from ‘disappointed’ Glenstone

Glenstone REIT PLC on Friday announced a firm all-cash offer for fellow London-based real estate investor Alternative Income REIT PLC.

Glenstone and its concert parties currently hold around 26.36% of shares in Alternative Income REIT, or AIRE, it noted, having first invested through a tender offer in late 2020.

Glenstone, AIRE’s largest shareholder, is offering 70.0 pence in cash per AIRE share, which values the latter at approximately £56.4 million, and the shares not currently held by Glenstone at £42.8 million.

This is also 5.3% higher, Glenstone noted, than its prior indicative cash offer price of 66.5p per share, which AIRE rejected in November.

Shares in Alternative Income REIT were marginally lower at 68.97p on Friday morning in London. However, they had risen to 71.00p shortly after the market open.

Also, last month, AIRE said it is not in a position to ‘form a view on the merits or otherwise’ of a takeover proposal from Glenstone as it did not include an offer price.

‘In the light of AIRE’s performance and failure to grow since its IPO in 2017, Glenstone is disappointed that a transaction capable of delivering an exit for shareholders has yet to be achieved, during a period in which many other subscale REITs have consolidated with larger REITs or been taken private,’ the company said. ‘Given the level of its investment in AIRE and the apparent lack of any viable alternative liquidity opportunity for its investment, Glenstone would now like to have a more direct role in the management of AIRE and its assets.’

It said its proposals come after ‘a long period of attempted constructive engagement,’ and cited, alongside the lack of ‘a viable and attractive exit,’ concerns over ‘potential portfolio issues’ and AIRE’s board rejecting proposals to ‘meaningfully reduce’ operating expenses.

Later on Friday, Alternative Income REIT acknowledged the offer, saying the board will review it and revert to AIRE’s shareholders in due course.

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