Glenstone REIT Revises Debt Facilities to Boost Market Purchases of AIRE Shares Amid Takeover Bid

Original Offer Terms and Financing Structure

On 6 July 2026, Glenstone announced an increased final cash offer to acquire all issued and to-be-issued ordinary shares of Alternative Income REIT plc (AIRE) not already held by Glenstone, priced at 71.4 pence per share. The acquisition is conducted as a takeover offer under Part 28 of the Companies Act 2006. Alongside the announcement, Glenstone released an Offer Document detailing the transaction's full terms and shareholder acceptance procedures. The initial financing comprised an Acquisition Facility Agreement and a Revolving Credit Facility Agreement with Handelsbanken plc, both summarized in the Offer Document provided to AIRE shareholders.

The amendment, disclosed on 28 July 2026, aims to increase funds available for market purchases of AIRE shares during the offer period. Glenstone stated that shares acquired through market purchases or otherwise, whether via the formal offer or open market transactions, will count towards satisfying the Acceptance Condition, subject to the City Code on Takeovers and Mergers. This dual-track acquisition approach enables Glenstone to expand its shareholding through both formal acceptances and opportunistic market purchases.

Restructuring Acquisition and Revolving Credit Facilities

Per the Amendment Letter dated 24 July 2026, Glenstone and Handelsbanken implemented two main changes. First, the Revolving Credit Facility commitments were suspended as needed to ensure total commitments do not exceed the lesser of a313,100,000 or a345 million minus the outstanding Acquisition Facility principal. This creates a dynamic cap maintaining the combined facilities within the original a345 million limit. Second, the Acquisition Facility funds were adjusted to equal a345 million minus any amounts drawn on the Amended Revolving Credit Facility.

This amendment provides a flexible financing framework under a fixed total borrowing ceiling. By suspending parts of the Revolving Credit Facility rather than eliminating it, Glenstone preserves access to additional working capital post-share purchase period. Draws from the Amended Revolving Credit Facility must fund market purchases of AIRE shares during a "certain funds period" from 11 June 2026 until immediately after a Mandatory Cancellation Event occurs. After this period, funds drawn under the Amended Acquisition Facility may be used for general corporate purposes, offering operational flexibility beyond the acquisition phase.

Funding Cash Consideration for AIRE Shareholders

Glenstone confirmed that the cash consideration for AIRE shareholders under the takeover offer will be fully funded through draws up to a345 million from the Amended Acquisition Facility provided by Handelsbanken. Financial adviser J Goodwin & Co has issued a written confirmation that sufficient financial resources exist to meet the full cash consideration. This comfort letter, a regulatory requirement under the City Code, assures shareholders that Glenstone has adequate funds to complete the transaction.

All fees, costs, and expenses related to the acquisition will be covered by Glenstone’s existing cash or any unused portion of the Amended Acquisition Facility. This separation ensures that advisory, legal, regulatory, and administrative expenses do not reduce funds allocated to shareholder payments. The company did not disclose expected cost amounts in this announcement. This approach reflects prudent financial management prioritizing shareholder consideration.

Market Purchases and Acceptance Condition

A notable feature of the amended financing is Glenstone’s capability to acquire AIRE shares via open market purchases alongside formal offer acceptances. According to the Notes to Rule 10 of the City Code, any AIRE shares acquired or agreed to be acquired from the Offer Document publication date onward, whether through the offer or market purchases, count towards satisfying the Acceptance Condition. This aligns with modern takeover practices where offerors accumulate shares through multiple channels to secure control before offer closure.

The tiered financing structure supports this dual acquisition strategy by restricting the Revolving Credit Facility to market purchase funding during the certain funds period, creating a dedicated capital pool for opportunistic accumulation. This ensures tactical market purchases do not compromise Glenstone’s ability to fulfill formal offer obligations. The company did not disclose the number of AIRE shares acquired via market purchases to date or future purchase targets.

No Significant Changes to Core Financing Terms

Glenstone emphasized that aside from the 28 July 2026 amendments, no changes have been made to the core terms of the Acquisition Facility Agreement or Revolving Credit Facility Agreement, nor to the overall financing summarized in the original Offer Document. This reassures shareholders that the amendment is a technical restructuring enhancing flexibility within the existing financing limit rather than a fundamental financial overhaul. Routine clauses, pricing, margins, covenants, and other standard lending terms remain unchanged.

The announcement does not specify whether Handelsbanken required additional collateral, new covenants, or pricing adjustments for the amendments. Shareholders wishing to review the full Amendment Letter and facility agreements were directed to Glenstone’s website at www.glenstonereit.co.uk/possible-offer-for-aire by noon on the first business day after 28 July 2026, subject to restrictions for residents of certain jurisdictions.

Financial Adviser Confirmation and Market Assurance

J Goodwin & Co LLP, an FCA-authorized financial adviser exclusively representing Glenstone, confirmed in writing that adequate financial resources exist to satisfy the full cash consideration payable to AIRE shareholders. This confirmation, required under the City Code, reflects an independent professional assessment of Glenstone’s financing robustness. The adviser’s consent to name publication and inclusion in this announcement highlights regulatory compliance and transparency. Their involvement signals to the market that the transaction financing has undergone thorough professional scrutiny.

The amendment occurring within 22 days of the offer launch (6 to 28 July 2026) may indicate emerging market purchase opportunities or a strategic recalibration prompted by initial conditions or shareholder feedback. The total commitment remains a345 million, with no indication of financing shortfall, but reflects Glenstone’s intent to optimize capital allocation between formal offer and market purchases. The company did not disclose specific reasons or triggers for the amendment timing.

AIRE’s Position as a Real Estate Investment Trust

Alternative Income REIT plc is a UK-listed investment company focused on real estate, operating under REIT regulations that encourage property investment through rental income and capital returns. The takeover offer price of 71.4 pence per share reflects Glenstone’s valuation of AIRE’s asset base, earnings potential, and strategic market position. Glenstone’s commitment of up to a345 million and pursuit of additional market purchases suggests confidence in AIRE’s value or anticipated synergies from the combined entity. The announcement does not disclose Glenstone’s own financial metrics or strategic rationale, limiting investor insight into the deal’s fit.

Regulatory Compliance and City Code Obligations

This announcement complies with Note 5 to Rule 26 of the City Code on Takeovers and Mergers, requiring disclosure of material financing amendments during an offer. The City Code, administered by the Takeover Panel, ensures shareholder fairness and market transparency in UK-listed company takeovers. Glenstone’s prompt disclosure fulfills its obligation to keep shareholders and the market informed of significant developments, enabling assessment of any new risks or changes in offer attractiveness.

Glenstone also confirmed that all acquisition-related fees and expenses will be funded from existing cash or available facility funds, with no additional external financing beyond the Amended Acquisition Facility. The acquisition remains subject to applicable laws and regulatory bodies including the Companies Act 2006, the City Code, the Takeover Panel, the FCA, the London Stock Exchange, and the Registrar of Companies. No concerns from regulators regarding the financing amendment or transaction structure were disclosed.

Certain Funds Period and Mandatory Cancellation Event Timing

The amended financing includes a "certain funds period" from 11 June 2026 until immediately after a Mandatory Cancellation Event occurs or first exists. While the announcement does not fully define "Mandatory Cancellation Event," under the City Code it typically includes events such as a superior competing offer, the offeror’s withdrawal, or offer expiry. This structure limits market purchase funding availability to the active acquisition phase, after which borrowing flexibility shifts to general corporate use.

The 11 June 2026 start date, preceding the formal offer announcement on 6 July, suggests Glenstone’s preparatory activity before public disclosure. The announcement does not clarify whether Glenstone acquired AIRE shares prior to the offer announcement. Upon a Mandatory Cancellation Event, the certain funds period ends, and funds drawn under the Revolving Credit Facility may only be used for general purposes, marking the conclusion of intensive share acquisition.

Immediate Market and Investor Implications

Public information did not clarify the immediate share price impact. AIRE shareholders must decide whether to accept the 71.4 pence offer or risk potential value decline if the deal fails or market conditions worsen. Glenstone’s enhanced capacity for market purchases may signal strong intent to secure control regardless of formal acceptance levels, which could be viewed positively as financial commitment or negatively as reliance on market accumulation. Shareholders holding 1% or more were required to disclose positions under Rule 8.3(a) by 3:30 p.m. London time on the tenth business day after the offer commenced, with subsequent dealings subject to prompt disclosure. Investors are advised to seek independent financial, legal, and tax advice before accepting, considering potential tax implications especially for UK and US shareholders.

Documentation Access and Shareholder Support

Glenstone confirmed that the Amendment Letter, Acquisition Facility Agreement, Revolving Credit Facility Agreement, and J Goodwin & Co’s written consent would be available on its website at www.glenstonereit.co.uk/possible-offer-for-aire by noon on the first business day after 28 July 2026, subject to restrictions for residents of Restricted Jurisdictions. Shareholders may request free hard copies of all offer documents by contacting MUFG Corporate Markets, Glenstone’s Receiving Agent, at 0371 664 0321 (UK) or +44 (0) 371 664 0321 (international), available Monday to Friday, 9:00 a.m. to 5:30 p.m., excluding English and Welsh public holidays.

MUFG Corporate Markets clarified it does not provide financial, legal, or tax advice and that calls may be recorded for security and training. The announcement reiterated that the Offer Document and Form of Acceptance contain full transaction terms and that shareholders should base decisions solely on these documents, seeking independent advice if uncertain.