Foresight Sustainable Forestry receives a cash offer, abrdn Property Income shareholders vote for a new investment policy and Edinburgh cuts its fees. Which fund is on course to maintain AIC Dividend Hero status?

By
Frank Buhagiar
05 Jun

Foresight Sustainable Forestry the next alternative to head for the exit?
Foresight Sustainable Forestry (FSF) has agreed terms with Averon Park whereby Arizona Bidco Limited, a wholly-owned indirect subsidiary of Averon Park, will acquire the entire issued and to be issued ordinary share capital of FSF for 97p cash. That’s a 32.88% premium to the closing FSF share price of 73p on 28 May 2024, a 43.28% premium to the volume weighted average price of 67.7p per share for the three-month period ended 28 May 2024 and a 5.09% discount to FSF’s unaudited NAV per share as at 31 March 2024.

There is an alternative to the cash offer – qualifying shareholders can opt to receive one unlisted B ordinary share in the capital of the Bidco for each FSF Share. According to Averon’s press release, it has received commitments and indications of support for the deal representing, in aggregate, approximately 26.88% of FSF. Add that to the 29.64% Averon already owns and looks like FSF is on its way out.

Jefferies: ‘Despite the connected nature of the bidder (already owning 29.6% of the shares as Blackmead), we see this as a fair offer for the remaining shares given the narrow discount to NAV of 5%, the stable underlying portfolio valuation, and the sub-scale nature of the company.’

abrdn Property Income shareholders choose to wind down
abrdn Property Income (API) shareholders voted overwhelmingly in favour of the proposed New Investment Policy – to implement a managed wind-down. at the 28 May 2024 General Meeting.

In terms of timings, according to the accompanying announcement, the process of realising the company’s assets and returning the proceeds to shareholders is expected to take around 18-36 months. So, expect API to be around for a while yet. Be interesting to see if jilted suitors Urban Logistics (SHED) and Custodian Property Income REIT (CREI) pick up a few of API’s assets though.

Edinburgh cuts its fees
Edinburgh (EDIN) unveiled an 11% cut in fees. As announced in the recent Finals, a new lower fee scale has been agreed with the manager: 0.45% per annum on the first £500m market capitalisation; 0.40% per annum on the next £500m; and 0.35% on the remaining balance. Based on the year-end market capitalisation, that works out at an 11% pro-forma management fee cut.

Dividend Watch
CT UK Capital Equity & Income (CTUK) on course to maintain AIC Dividend Hero status. That’s because, as announced in the company’s interims, the 5.70p half-year dividend represents a 3.6% increase compared to a year earlier. Not only does this generate a yield of 3.9% but puts the fund on track to maintain its record of raising the dividend every year since launch in 1992 and in the process its AIC Dividend Hero status.

Finsbury Growth & Income (FGT) ups its interim dividend. As announced alongside the Half-year Report, the first interim dividend of 8.8p per share represents a 3.5% increase on 2023’s 8.5p.