Last week, Glenstone, its largest shareholder, made a final cash offer of 71.4p per share to acquire the roughly 75% of the share capital it does not already own in the specialist portfolio of long-lease investments.

The offer, valuing the portfolio at £57.5m, is open until September 4, although shareholders of AIRE have been advised not to accept the offer, with the board backing AEW UK’s offer of 0.725 AEW UK shares, with an implied value of 77.4p per share.

However, Glenstone has confirmed it will use its stake of around 25.3% in AIRE to reject the higher offer, leaving investors facing uncertainty.

Head of investment trusts at Winterflood, Emma Bird, said the deadline for AEW UK to make a firm offer for AIRE is August 28, adding: “But we would not be surprised to see the fund decide to step away from the deal given Glenstone’s statement that it would not support the offer”.

She told Citywire the reit could vote against the proposals or “make it a more complicated or unappealing deal for AEW UK” by failing to submit its shares for acceptance.

Ms Bird added that it was likely that “some shareholders may decide to accept the Glenstone offer instead”, if AEW UK walks away, despite AEW UK’s offer being the better outcome for AIRE shareholders, explaining that they will move into a “larger and more liquid vehicle, with a strong long-term performance record and a history of trading at one of the tightest discounts in the property investment trust sector”.

She explained that AIRE’s fate will come down to the numbers: Glenstone needs 90% acceptance to unconditionally acquire the remaining shares.

Glenstone will be able to gain control of AIRE if it receives between 50% and 90% of the vote, but it will not be able to force out minority shareholders. Ms Bird pointed out that if Glenstone receives 50%, the board of AIRE may change its recommendation “otherwise minority shareholders will be stuck in a company with limited rights and may be delisted. This is particularly so if Glenstone gets to 75%.”

She noted that if it fails to receive 50% of acceptances, the offer will lapse and will lead to the board renewing support for a managed wind-down of AIRE.