Custodian Property Income REIT PLC and abrdn Property Income Trust Ltd on Friday said they have agreed to an all-share merger to create a real estate investment trust with combined assets of £1.0 billion.

It will mark yet another absorption of an abrdn fund, after Fidelity China Special Situations PLC took over abrdn China Investment Co Ltd, Asia Dragon Trust PLC took over abrdn New Dawn Investment Trust PLC, and Shires Income PLC took over abrdn Smaller Companies Income Trust PLC in the second half of last year.

abrdn Property Income shareholders will receive 0.78 of a new Custodian Property Income share for each share held. Based on Custodian’s closing share price on Thursday of 79.6 pence, the deal values abrdn Property Income shares at 62.1p and the entire company at £237 million.

Custodian Property Income shares were down 5.3% to 75.40p in London early Friday, while abrdn Property Income shares were up 17% to 56.20p.

Custodian Property Income said it has 3.1% acceptances already for the offer from abrdn Property Income shareholders.

The two companies will keep their current dividend policies, and shareholders still will be entitled to upcoming dividend payments. abrdn Property Income will pay a fourth-quarter final dividend of up to 1.0p per share, while Custodian Property Income will pay a third-quarter interim dividend of up to 1.375p.

‘The CREI board and the API board believe that the merger would bring together two complementary portfolios to create a differentiated REIT with enhanced diversification and share liquidity and a fully covered and sustainable dividend for the combined group’s shareholders,’ the two companies explained.

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