Supermarket Income (SUPR ) has set tongues wagging by clarifying the two-years of fees fund manager Atrato Capital would receive in the event of a bid.

With merger and acquisition activity increasing among real estate investment trusts after sharp share price falls caused by high inflation and rising interest rates, the long-lease specialist property fund said it had amended its investment management agreement to reflect the original commercial intentions of the two-year notice period agreed nearly three years ago.

As a result, ‘in the event of a takeover, delisting, or liquidation’, Atrato would receive two years of fees based on net asset value (NAV) in lieu of two-year notice. The revised IMA also gives Atrato the right to terminate its contract in such an event.

Atrato charges Supermarket Income a tiered, annual fee of 0.95% on assets up to £500m, 0.75% between £500m and £1bn, 0.65% at £1bn-£1.5bn, 0.45% up to £2bn and 0.4% above that.

With net assets of £1.125bn at 31 December, according to last month’s half-year results, Atrato would earn nearly £9.5m a year, or £18.9m in the event of a takeover, delisting or liquidation.

The amendment was announced alongside the Reit’s purchase of a Tesco store and petrol station in Stoke-on-Trent for £34.7m, on a net initial yield of 7.5%. The buildings on a 8.7 acre site come with an 11-year lease subject to annual RPI inflation-linked rent views capped at 4%. 

At 76.5p, down 1.5% today, SUPR stands on a 13% discount to their 88p NAV per share at 31 December and offer an 8% dividend yield. The shares have fallen 10% this year and, including dividends, have suffered a 15% loss over three years.