Abrdn Property Income Share Discussion Threads

[mindthestash] 08/2/2024 16:45

As API shareholder voted against merger.
At the time of the offer custodian thought API was worth 62ish.
looking at the market price for custodian now the market appears to be saying there's a marriage value of 2+2 = 4.5
Best stay divorced and wait for a better cash offer or sell out after the vote

[arbus5000] 07/2/2024 16:04

It's not treated as a disposal, so the purchase price should carry fwd

[garbetklb] 07/2/2024 15:29

More of a tax question..... If the merger goes through, is the share swap a capital gains tax event? And, if so, how is the gain calculated? Or is the original purchase cost simply carried forward?

Thanks in advance for help!

[joey52] 07/2/2024 07:59

Nexusltd, Thanks for clarifying that for me, I get it now. Not as good as I initially thought it was going to be.

[nexusltd] 07/2/2024 00:00

@joey52 The API share value of 62.1p is only illustrative.
The negotiated merger ratio is: 1 API share = 0.78 CREI share.

[joey52] 06/2/2024 23:19

As an API holder, the merger document values API at 62.10p based on CREI price of 79.6p on the 19th January. Now as the CREI price is 69.10p at 6th Feb, does the value of API go down accordingly or does it stay at 62.10p.
First time I have been involved in a merger and don't know.

[nickrl] 05/2/2024 19:02

@pavey ark the manager has a plan not sure that the board has!!

[pavey ark] 05/2/2024 15:23

Double post

[pavey ark] 05/2/2024 15:07

The RCF is effectively removed c £18m ....in addition a (large?)logistics unit is under offer and the Scottish forest is being considered for sale.

Even at a RCF of £20m I get the weighted debt at 4.5% interest......hardly onerous.

If the LTV was 30% at £142m debt then it falls to 24% after these sales.

As I said before, the board appear to be working to some sort of an agenda but it doesn't look like the shareholders of API feature anywhere in their thoughts.

Unlike UKCM I don't think any major shareholder will step in this time.

[nexusltd] 03/2/2024 19:26

@ skyship. On my charts SMA50 X with SMA200 occurs on Jan 22; after the fall to 48p on the 18th. The above plots, as you correctly point out, are arithmetically unlikely since moving averages by definition are bandwidth reducing filters thus delayed wrt RT, and certainly not predictive.

[skyship] 03/2/2024 13:30

Indeed it is. Funny that it should immediately have instigated a 9% fall; but subsequently well on its way; and will move higher as the bid goes though and CREI recovers.

[pillion] 03/2/2024 12:06

Is this a genuine Gold Cross ?

[nickrl] 02/2/2024 18:07

@paveyark the sales will significantly reduce the RCF but not eliminate it my guestimate is c20m once all the sales gone through. Would have been helpful to tell us the yield on the sales their forgoing rental income unless they are vacant of course.
So does CREI proposed merger price reflect these disposals?

[pavey ark] 02/2/2024 09:07

This is a biodiverse, mixed deciduous plantation.....not a singe species conifer monoculture.
These trees were planted principally for their carbon offset potential and as a commercial / profitable investment.
As grants were available the project was attractive and showed the long term thought that Jason Baggaley puts into these things.
If this merger was not happening this sale would not be happening.
Couple of fairly silly comments above but the forest will be there after we are gone so that pleases me.

Re: merger.....would anyone like to hazard a guess at the API share price this morning if the merger was not going ahead ??
By my calculations the expensive RCF has been effectively removed!!??

[garbetklb] 02/2/2024 01:31

Forest is a bit of a misnomer; bleak moreland is more correct. Fine for ESG, but really grant farming. Would be far greener in reality to deer fence and let the trees regenerate themselves, rather than dig the plsce up. But that doesn't attract the subsidy.

[nickrl] 01/2/2024 22:42

The forest was the centrepiece of their green credentials that didn't last long.

[pavey ark] 01/2/2024 20:52

I had taken API from my alerts list so missed this.

The fund managers have effectively removed the RCF debt !!!???

These sales are at above the September valuations and the LTV (already low) falls even further.

The remaining term debt £85m is fixed at 4% until April 2026.

I have always liked this REIT and the fund manager, Jason Baggaley and his team, have always impressed me.

I Agree with SKYSHIP ....the BoD have shafted us all !!!

There may be reasons for the BoD decision but they have NOTHING to do with the interests of API Shareholders.

[skyship] 01/2/2024 13:18

Baggaley continuing to manage things well; but being sold down the river by the BoD:

"Despite having one of the lowest debt margins in the sector (150bps) the Company is exposed to the high Sonia rate. The all-in cost of debt for Q4 was 6.7% (Q3 6.7%). With expectations of lower interest rates the value of the interest rate cap the Company holds on its term loan fell over the quarter by £1.2m and although there are expectations of further falls in interest rates the focus has been to reduce borrowings. We completed the sale of a small industrial estate in Livingston Scotland in December for £6.25m. The sale price was £300,000 below valuation. Terms were also agreed for the sale of our City of London office and Manchester Office for a combined £14.75m (year-end valuation £15.35m) reducing office exposure by 3.5% to 13%. Sales have also been agreed of two industrial assets for a total of £24.4m (year-end valuation £22.4m). We are also exploring the sale of the open moorland at Far Ralia with encouraging indications of value above the year-end valuation (£8.25m)."

[riverman77] 01/2/2024 12:55

It's a tricky one - CREI used to trade on a tight discount, while API on a very wide discount. However, this mainly reflected negative view of the API manager (specifically the botched refinancing). In terms of the underlying properties, there's no reason why there should be any difference. Hard to say where the discount will settle once it all goes through, but have a feeling it will take a while to get back to say a 10-15% discount.

[dr biotech] 01/2/2024 12:40

Missed todays announcements, the fall in NAV, timetable for the merger and the possible sale of the moorland and other assets. Guess its all about what the discount to NAV will be, should the merger proceed which it appears it will.

[spectoacc] 26/1/2024 15:41

CREI seem to be showing no signs of listening to what their share price has said, so is looking like it may well go ahead. I'd fancy the combined entity to do better than API.

[giltedge1] 26/1/2024 15:23

Nice 2.5% day gain, even at 60p would yield 7%, good income stock.

[dr biotech] 23/1/2024 10:11

I think the Moorland represents c2% of the assets. About 3500 acres. Even if they had to take a 50% hit on that its not going to make a huge difference. Personally I thought it was great to see a company take ESG seriously rather than just green washing themselves. I can understand why others didn't like it. But its not going to shift the needle a lot either way.

[garbetklb] 23/1/2024 09:55

I suspect a wind down might find the Scottish moor quite difficult to sell at anything like the valuation. I was staggered to see how much they paid for a bit of unproductive land.

All down to value distorting subsidies - Scottish Govt subsidising owners of estates.......

I know someone who sold 11,000 acres, albeit 25 years ago and in a more remote location - they were happy to get £80k as, to them, the land had no value. Yep £8 per acre.

[giltedge1] 23/1/2024 09:33

We are of course much better off than last week new floor on share price & in play. Would prefer another stronger suitor LMP springs to mind. Don,t think managed windown is good idea in current market. Industrial assets would sell quickly, other 50% would take time, years maybe. 10yr Gilts now 4%, so should be higher.