AIRE Board Favors AEW UK REIT's Potential All-Share Bid Over Glenstone Offer, Highlighting Better Valuation and Governance

Details of AEWU's Potential Offer and Valuation Metrics

On 16 July 2026, AEW UK REIT plc revealed a potential all-share offer for all issued and to be issued shares of Alternative Income REIT plc. The proposed terms would grant AIRE shareholders 0.725 AEWU shares per AIRE share held. This exchange ratio was calculated by referencing both companies' net asset values, adjusted for estimated transaction costs and the latest dividend paid, incorporating a 6% discount to AIRE's net asset value per share.

Using AEWU's closing share price of 106.8 pence on 15 July 2026—the last trading day before the announcement—the offer implies a value of approximately 77.4 pence per AIRE share. The AIRE board cautions that since the offer is entirely share-based, its value will fluctuate with AEWU's share price, introducing currency risk and differing from a fixed cash offer.

AIRE Board's Comparison with Glenstone's Proposal

The board believes AEWU's potential offer could provide AIRE shareholders with a superior outcome in terms of price and governance compared to Glenstone REIT plc's current bid. Additionally, the AEWU offer allows shareholders to remain invested in an income-generating REIT, unlike Glenstone's offer which would alter the investment structure.

Valuation analysis shows the AEWU implied value of 77.4 pence per share represents a 10.6% premium over Glenstone's 70.0 pence offer, contingent on AIRE declaring a 1.4 pence fourth interim dividend to meet its annual target. Glenstone would be required to reduce its offer accordingly if this dividend is declared. This supports the board's view that AEWU's proposal may offer greater shareholder value, subject to AEWU advancing to a firm offer stage.

Board Advises Shareholders to Withdraw Glenstone Acceptances

Given AEWU's announcement and prior concerns about Glenstone's offer, the AIRE board strongly recommends shareholders refrain from accepting Glenstone's bid and to withdraw any acceptances already made where possible. Withdrawals should follow the procedures outlined in paragraph 3 of Part C of Part II of Glenstone's offer document dated 6 July 2026.

The board will also send a detailed letter to shareholders on the announcement date explaining why it advises against accepting Glenstone's offer, ensuring shareholders are fully informed of the rationale behind its recommendations.

Background on AEWU and Glenstone's Previous Discussions

The board noted that Glenstone REIT plc had previously expressed in-principle support for an earlier AEWU proposal, referred to as the "Previous Proposal." During that process, AIRE's financial adviser informed AEWU's adviser of Glenstone's support, leading to efforts to arrange discussions between Glenstone and AEWU. Although that proposal did not progress, the board welcomes AEWU's renewed interest and intends to engage with AEWU to explore whether a firm offer can be developed.

Regulatory Deadline for AEWU's Firm Offer Decision

Under Rule 2.6(d) of the City Code on Takeovers and Mergers, AEWU must announce by 5.00 pm on 28 August 2026 either a firm intention to make an offer or a decision not to proceed. This deadline is 53 days after Glenstone's offer document publication on 6 July 2026 and can only be extended with Takeover Panel consent.

This deadline provides clarity for shareholders and the market regarding the status of competing bids within a defined timeframe, ensuring a transparent and orderly process.

Uncertainties Surrounding AEWU's Possible Offer

The AIRE board emphasizes there is no certainty AEWU will make a firm offer, which would be subject to conditions being met or waived. The current possible offer is preliminary, and AEWU has not committed to final terms. Shareholders are advised to take no action regarding AEWU's proposal until further details emerge.

The board will assess the detailed terms of any firm offer to determine whether it can recommend it to shareholders, highlighting the speculative nature of the current stage.

AIRE's Business Model and Dividend Strategy

Alternative Income REIT plc is a listed real estate investment trust focused on generating dividend income for shareholders. The company targets dividend payments and is considering a fourth interim dividend of 1.4 pence per share to meet its financial year objectives. The AEWU offer would allow shareholders to stay invested in an income-producing REIT, aligning with AIRE's core investment appeal.

At the announcement date, AIRE had 80,500,000 ordinary shares outstanding with a nominal value of 1 pence each and no treasury shares. These shares carry the ISIN GB00BDVK7088. The company's dividend-focused model is a key factor in the board's preference for AEWU's structure over Glenstone's.

Board Issues Statement Without Bidders' Consent

The announcement was made without prior consent from AEWU or Glenstone, demonstrating the AIRE board's independent evaluation of the competing offers based on its fiduciary duty to shareholders. This unilateral communication aligns with City Code practices, ensuring shareholders receive timely and clear guidance.

The board also plans to send shareholders a detailed letter explaining its recommendations on the same date.

Market Abuse and Disclosure Obligations

The announcement contains inside information as defined under Article 7 of the Market Abuse Regulations (EU) No. 596/2014, incorporated into UK law. It was released via a regulatory information service, making it publicly available simultaneously to all market participants.

Persons holding 1% or more of AIRE or AEWU securities must comply with Opening Position and Dealing Disclosure requirements under Rules 8.3(a) and 8.3(b) of the Takeover Code. These rules apply to individuals and concert parties, with specific deadlines and procedures detailed in the announcement. Investors uncertain about their obligations are advised to contact the Takeover Panel's Market Surveillance Unit.