AEW re-enters bidding process for Alternative Income REIT

(Sharecast News) - Real estate investment trust AEW announced on Thursday that it is once again mulling a potential all-share takeover offer for Alternative Income REIT at a price higher than Glenstone REIT's approach last month. Under the terms of the possible offer, AIRE shareholders would receive 0.725 shares in AEW for each share held, calculated at a 6% discount to AIRE's net asset value per share.

AEW is returning to the negotiating table after having walked away from an "indicative and non-binding" approach in April, after the offer deadline lapsed.

Glenstone REIT, AIRE's largest shareholder with a 24.8% stake, announced in June that it made an improved £56.3m cash offer for AIRE, valuing the firm at 71.4p.

After a 1.4p dividend, that would reduce to 70p - some 17% below its NAV per share of 84.4p as of 31 March - though AIRE said it was "considering" the offer.

The latest AEW potential offer, however, is 7.4% higher than Glenstone's.

In a statement to shareholders on Thursday, AEW said: "The possible offer could lead to the combination of two REITs with aligned portfolios, offering greater portfolio diversification, the benefits of increased scale, a reduction in operating costs and an attractive ongoing dividend per share, with AEWU currently paying an annual dividend of 8 pence. The possible offer would be expected to be earnings accretive for AEWU."

AIRE has not yet released a statement commenting on AEW's latest approach.

See the latest RNS on Investegate.