Abrdn Property Income Trust is preparing to wind down after a planned merger was not backed by shareholders.
A vote on a proposed takeover by Custodian Reit took place on Wednesday (March 27).
The 61 per cent of shareholders in favour fell short of the 75 per cent majority needed.
James Clifton-Brown, chair of API, said: “In view of these results and the challenges that API would continue to experience as a standalone company, the board will now take steps to implement a managed wind-down, subject to API Shareholder approval, building upon the work already undertaken by the API board and the company's investment manager and advisers, with the objective of delivering enhanced returns for API shareholders."
On March 14, the API board said it backed the takeover and called the managed wind-down a "less attractive option" for shareholders should the merger not go ahead.
Custodian chairman, David MacLellan, said he was disappointed by the result, and held firm that the proposal would have been beneficial for API.
He claimed many of the votes against the deal came from institutional investors who believe a managed wind down would better protect shareholder value.
MacLellan said: "The CREI board believes it is important to note that it viewed the transaction as an augmentation of, rather than critical to, the strategy that CREI has pursued successfully over the 10 years since it launched in 2014.
"Instead of gaining a jump in scale via the recommended merger, CREI will maintain its strategy of incremental growth and, most importantly, continue to offer CREI shareholders an attractive dividend from a highly diversified portfolio, significant rental growth potential, low costs relative to its peers, as well as a strong balance sheet with a low cost of debt.
"We also maintain our conviction as to the merits of the company's income-focused investment strategy with an emphasis on regional, below-institutional sized assets that are well-positioned to deliver rental growth."
tara.o'connor@ft.com
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