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Highlights:
- Major Portfolio Sale: Abrdn Property Income Trust is set to divest most of its properties to GoldenTree Asset Management in a £351 million deal.
- Strategic Shift: The sale follows shareholder rejection of a takeover and a subsequent decision to wind down the trust.
- Valuation Details: The agreement is at an 8% discount to the portfolio's external valuation, implying a net asset value of 64 pence per share post-transaction costs.
Abrdn Property Income Trust has confirmed plans to sell most of its portfolio to GoldenTree Asset Management, the U.S.-based owner of Travelodge. The transaction, valued at £351 million, involves the acquisition of Abrdn Property Holdings, the trust’s wholly-owned subsidiary, and includes 39 properties from its existing portfolio.
Notably, the only exception to the sale is a parcel of land located at Far Ralia in the Cairngorms National Park, which is currently being marketed for £12 million. This 1,462-hectare estate will remain with Abrdn as it seeks to maximize the asset's value through its own sales strategy.
Earlier this year, the trust's shareholders voted against a proposed takeover by Custodian Property Income Reit, prompting the management to pursue an alternative route. In May, investors supported a proposal to wind down the trust, leading to this strategic decision to divest the majority of its assets efficiently.
James Clifton-Brown, the chair of Abrdn Property Income Trust, expressed that since the shareholder vote, the board, in collaboration with the investment manager, evaluated the most effective methods for asset disposal. The primary objectives were to maximize returns for shareholders and facilitate prompt cash returns.
Clifton-Brown highlighted that the GoldenTree bid offered the best solution for shareholders when compared to the potential net present value of individual sales conducted over a protracted period. This deal is seen as a swift move toward the planned managed wind-down of the trust.
The agreement reflects an 8% discount to the external valuation of the portfolio, which stood at £381.6 million as of 30 June. After adjusting for transaction costs, the implied pro-forma net asset value of the trust amounts to £244 million, translating to approximately 64 pence per share.
GoldenTree has already provided a 10% deposit, with the remainder due upon completion of the sale. The transaction is scheduled to finalize on 29 November. Following the announcement, shares in Abrdn Property Income Trust rose by 2%, reaching 61.4 pence as of 12:45 BST.
