Abrdn Property Income Share Discussion Threads

[essentialinvestor] 19/1/2024 16:44

API is now arguably in play, whatever happens,

[cwa1] 19/1/2024 16:31

Taken a modest punt on CREI at 69p based on the assumption that if it falls through the price SHOULD rebound and if not then there still should be enough in it for CREI to make the deal work and they should benefit from that instead...

[rimau1] 19/1/2024 16:31

I did too (see post 288), win-win for Crei at 68p, 8% yield benefits from the economies of a merger and yet it shoots up 10% if the deal gets canned.

[essentialinvestor] 19/1/2024 15:56

If anyone sees this differently would be interested to hear, thanks.

[essentialinvestor] 19/1/2024 15:46

I bought a few CREI on the basis the deal may be dead, but IF not, then longer term the API merger looks fair risk/reward.

[pavey ark] 19/1/2024 15:28

yes giltedge1 a lot of pearl clutching indignation here but you could buy yesterday at 48p ....41% discount and over 8% yield.

Not bothered either way as I was always happy to hold API but at the end of the day this bid puts a greater value on API than the market has......If it isn't considered good enough then let's see another.

[giltedge1] 19/1/2024 14:39

I am not complaining good to wake up to 12% capital gain & 8 % dividend increase. May not get voted through by crei shareholders, but reit sector needs mergers/takeovers to reduce stock. All ships rise in a rising tide.

[rimau1] 19/1/2024 13:50

At 0.78 CREI shares to 1 API this is worth 54p now? If you think the deal is dead buy CREI shares!

[marketmuser] 19/1/2024 13:26

I think you are correct!Quite why the Board would recommend a take out at 61p v a NAV of over 80p is a bit of a mystery to me.Throwing in the towel at the low point in the cycle seems a rather odd move.

[skyship] 19/1/2024 13:21

Garbet

# CREI - Shares down 11% on this news. Shareholders will assuredly vote against

# API - Receive a bid but up a mere 10% and Discount still 31%. Yield still 7.4%. Shareholders will assuredly vote against

I don't hold CREI; I do hold API. I will naturally vote against such a cr#p deal. Though I suspect we won't get that far.

[cwa1] 19/1/2024 12:07

I don't follow CREI at all, so not really in much of a position to comment...but at a near 11% discount to yesterday's price, is it worth a look in investment terms?

Question posed form a position of complete ignorance :-))

[yump] 19/1/2024 11:27

So is this two mediocre businesses merging to give a potentially better one - I can’t figure it out. CREI constant share price decline doesn’t exactly inspire confidence. API looks to have bottomed out for some time.

If share prices are a reflection of the businesses…

[yump] 19/1/2024 11:22

Nickrl

“they can get assets cheaper this way thean keep trying to find individual assets which often command a better price than a portfolio do”

Do you think that’s because for an individual asset there will be more competition from different intersted parties ? - not just funds

[fordtin] 19/1/2024 11:14

Skyship - any chance of adding a CREI chart to the header?

[garbetklb] 19/1/2024 11:13

SKYSHIP - why do you say dead in the water??

[pavey ark] 19/1/2024 10:39

Well, two sides to every deal.

Had a look at the figures and it looks like the dividend to API holders goes from 4p to the equivalent of 4.3p (open to correction here)

Given the CREI dividend was covered and my expectation is that the API cover is getting better it looks like API investors could now have a covered dividend.

Gearing much the same.
Debt pushed out from 2.25 years to 3.8 years and weighted debt at 5%.

A deal like this has to give something to both sides but there may be others who think they can offer more and still make money from API.

EDIT: nickrl, thanks for the background info.
So good deal /bad deal for API holders or a bit of both.
If a good deal for CREI the price should return to just under 80p or equivalent to 62p for API holders .....c.7% covered dividend and nice capital gain....don't get me wrong I'll take more if anyone offers.

[nickrl] 19/1/2024 10:11

CREI is dominated by Ian Mattioli and Mattioli Woods is the fund mgr so you can be sure they are in. They were regularly selling shares at premia pre covid so i suspect a lot are locked up in the wealth mgt arena which Mattioli will be able to influence. Only Black Rock shown as a major holder so looks like a diversified shareholder base which means apathetic holders who won't be bothered to vote or will leave it to wealth mgr. A good deal for CREI but its not entirely strategic fit with their usual lot size but they've no doubt worked out they can get assets cheaper this way thean keep trying to find individual assets which often command a better price than a portfolio do. Surprised the board (mind you EPIC were the same) what to give it a way unless they are trying to provoke wider interest.

[skyship] 19/1/2024 10:09

Re management. Yes, Specto has that wrong. Jason Baggaley a highly respected property manager. It was ABRDN who had it so wrong on interest rates and resulted in the debt car crash!

[skyship] 19/1/2024 10:07

So called deal dead in the water Day 1....

[riverman77] 19/1/2024 09:42

I think harsh to say API have poor managers - the people looking after the actual property side have done a pretty good job. The refinancing fiasco was (I am almost certain) forced on to them by some internal risk department who saw some numbers flashing on their spreadsheets.

[arbus5000] 19/1/2024 09:38

i'm going to keep holding until after the dividend....

[pavey ark] 19/1/2024 09:21

My largest REIT and the best performer in my income portfolio.

I have always done well with API (buying /selling at the right time ....not always for sound reasons though !!).

I have always rated the management (refinancing aside) and consider things to be on the up.

The large discount and high dividend are a result of the lack of dividend cover but given the recent improvements in the lettings I see this improving.

8% yield , a 40% discount (before today) and gearing of 29% looked attractive to me.

Will wait and see but happy with API and the management but if the CREI deal falls through I suspect someone else will come along.

(I did top up by 25% at 46p in November.....may sell that if things heat up but on balance happy to hold.....I may have a new REIT holding by default !!?? )

[hindsight] 19/1/2024 09:06

2nd largest reit here, so be a result aka wreckage recovery if goes through

[spectoacc] 19/1/2024 08:31

They've been up for sale since the fiasco with the debt :)

Good chance CREI shareholders won't want this tho, then wouldn't rule out someone else for API.

[skyship] 19/1/2024 08:25

"Why would they, when they haven't previously."

Because API have today shown they are up for sale with ABRDN's blessing.