Australand Property Group shares rose by the most in a month after Frasers Centrepoint said it will move ahead with a A$2.6 billion ($3.1 billion) off-market takeover offer for the Australian developer.
Australand shares gained 0.9% to A$4.48 as of 11:58 a.m. in Sydney, set for the biggest advance since June 4. Frasers shares lost 0.3% to $1.895 in Singapore. Since proposing to bid for the Sydney-based company last month, Frasers has completed due diligence and will move forward with its A$4.48-a-share offer to acquire all Australand securities, the companies said in regulatory filings yesterday.
The acquisition would give Frasers control of Australand’s A$2.3 billion of office and industrial properties and A$9.3 billion of developments in Australia, where the Singapore company is building the 2,000-apartment Central Park project in downtown Sydney. For shareholders of Australand, it offers a better payout than bids from domestic competitors Stockland and GPT Group received over the past 18 months.
“Some of the other offers were reasonable, but the board of Australand was cognizant of growing demand,” said Tony Sherlock, Sydney-based head of property research at Morningstar Australasia Pty. “They’ve done a very good job extracting maximum value for investors.”
The bid’s success is still dependent on acceptances from more than 50% of Australand shareholders and approval from Australia’s Foreign Investment Review Board, according to the statement. The offer is scheduled to open on July 7 and close on Aug. 7 unless extended, Frasers said.
Under the proposal, Australand shareholders would retain their expected first-half dividend of 12.75 Australian cents per share, the statement showed.
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