Glenstone REIT Lowers Alternative Income REIT Offer to 70p Per Share After Dividend Declaration

How the Dividend Declaration Triggered the Offer Price Reduction

The decrease in Glenstone’s offer price results from contractual provisions outlined in the acquisition framework disclosed in the offer document on 6 July 2026. The initial cash offer of 71.4p per ordinary share is subject to downward adjustment by the value of any dividend or distribution declared, paid, or made by AIRE during the offer period. This mechanism protects Glenstone from paying full consideration while AIRE distributes cash to shareholders. Following AIRE’s declaration of a 1.4p fourth interim dividend, the effective offer value is now 70.0p per share.

For shareholders, this adjustment is critical when assessing the total value of Glenstone’s offer. Although the dividend provides immediate cash returns, the acquisition price is correspondingly reduced. Investors receiving the 1.4p dividend should note the acquisition price has been lowered by the same amount. AIRE’s board has confirmed this adjustment in its latest update, acknowledging the effective offer price of 70.0p per share post-dividend declaration.

AIRE’s Business Model and Dividend Policy

Alternative Income REIT plc operates as a real estate investment trust focused on generating consistent income for shareholders through dividend distributions. The company maintains a steady approach to returning cash via interim dividends, as demonstrated by four interim dividend declarations for the fiscal year ending 30 June 2026. This approach aligns with the REIT sector’s model, which typically involves distributing rental income and property-related returns as dividends rather than retaining earnings.

The 1.4p fourth interim dividend declared alongside the Glenstone offer announcement highlights AIRE’s commitment to shareholder returns amid an acquisition proposal. However, this dividend declaration also triggered the contractual adjustment clause, reducing the headline offer price. This scenario illustrates a common tension during takeovers: while target boards aim to maintain distributions to demonstrate confidence, such payments can reduce the acquisition offer value due to adjustment provisions.

Details of Glenstone’s Acquisition Offer and Timeline

Glenstone REIT plc launched its cash offer for Alternative Income REIT with an offer document published on 6 July 2026, initially proposing 71.4p per ordinary share. The document detailed the acquisition terms, including the dividend-triggered price adjustment mechanism now in effect. This provision was clearly disclosed to shareholders and the market, ensuring transparency that the offer price could be reduced by dividends declared during the offer period.

AIRE’s July 2026 announcement covered multiple issues, including the dividend declaration that activated the price adjustment. The board has formally recognized the impact of this dividend on the offer price and communicated the revised 70.0p per share figure. This transparency supports shareholders in making informed decisions regarding acceptance of the Glenstone offer. The UK Takeover Panel’s regulatory framework mandates such disclosures, and AIRE’s board has complied fully.

Considerations for Shareholders Evaluating the Offer

Shareholders must consider the adjusted offer price of 70.0p per share alongside the immediate 1.4p dividend payment. Combined, these amount to a total value of 71.4p per share, matching the original headline offer. While mathematically equivalent, this structure may influence shareholder decisions differently, with some preferring separate dividend and acquisition payments and others viewing the reduction in headline price as significant.

Shareholders should also factor in personal tax implications, timing of cash receipts, and their outlook on AIRE’s future as an independent entity when deciding whether to accept the offer. The board’s transparent communication enables shareholders to assess the true economic value of the transaction.

Regulatory Compliance and Takeover Code Obligations

The Glenstone acquisition of Alternative Income REIT is governed by the UK City Code on Takeovers and Mergers, overseen by the Takeover Panel. This regulatory framework enforces strict disclosure, procedural, and investor protection requirements for both bidder and target. AIRE and its financial adviser, Shore Capital, confirm adherence to these rules and have issued this update to maintain full transparency regarding the dividend’s effect on offer value.

Under the Takeover Code, holders of 1% or more of AIRE’s shares must submit Opening Position and Dealing Disclosures. These rules apply to the bidder, target, and any parties acting in concert. The Takeover Panel offers guidance on these obligations, and parties unsure about disclosure requirements are encouraged to contact the Panel’s Market Surveillance Unit. AIRE’s announcement includes notices about these regulatory duties and directs shareholders to the Takeover Panel website for further details.

Role of Financial Adviser and Board Communication

AIRE has engaged Shore Capital as its financial adviser for the Glenstone offer. Shore Capital, authorised and regulated by the Financial Conduct Authority, provides expert advice to the board during the acquisition process. Their role includes advising on offer terms, liaising with Glenstone, and assisting with shareholder disclosures. This involvement assures shareholders that the board receives independent professional guidance.

The announcement on the adjusted offer price was issued under the authority of AIRE’s board, with Chair Simon Bennett as the contact for inquiries. This open communication underscores the board’s dedication to keeping shareholders informed of material acquisition developments. Investors seeking more information are invited to contact AIRE via Shore Capital, with contact details provided in the announcement.

Market Context and REIT Sector Overview

Alternative Income REIT operates within the UK real estate investment trust sector, comprising publicly listed companies that generate shareholder returns through property ownership, rental income, and capital appreciation. REITs benefit from tax efficiencies and must distribute at least 90% of taxable income as dividends, making dividend payments integral to the sector’s operating model.

The Glenstone acquisition fits within the sector’s ongoing consolidation trend, where REITs acquire peers to achieve portfolio synergies, cost savings, or geographic expansion. Glenstone’s cash offer with a dividend adjustment clause is a standard market approach to valuing targets and mitigating risks associated with dividend payments during offer periods.

Access to Information and Shareholder Resources

In line with the City Code on Takeovers and Mergers, Alternative Income REIT will publish this announcement on its investor relations website at www.alternativeincomereit.com/investors/ by no later than 12 noon (London time) on the next business day following the announcement. This ensures shareholders and market participants can access full details of the adjusted offer and the board’s stance on the acquisition.

The website will serve as a central hub for offer-related documents and updates throughout the acquisition process. Shareholders should note that content access may be restricted in certain jurisdictions due to securities law limitations. Investors are encouraged to consult the site regularly for the latest information, including any further announcements from AIRE or Glenstone.

Next Steps and Guidance for Shareholders

The adjusted offer price of 70.0p per share now represents the effective cash consideration available under Glenstone’s terms. Shareholders should carefully review Glenstone’s original offer document dated 6 July 2026, which outlines offer conditions, acceptance procedures, and material terms. AIRE’s board will provide further guidance and recommendations, with updates posted on the company’s website and regulatory news outlets.

Shareholders holding shares via brokers, nominees, or intermediaries should consult their representatives to understand acceptance procedures and any applicable deadlines. The Takeover Panel website offers comprehensive guidance on offer processes and shareholder rights. Shareholders are advised to seek independent financial advice before making decisions regarding the offer.