Metcash Tanks, Blackstone Bids For Investa Office Fund
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Securities in property trust Investa Office Fund jumped more than 11% yesterday after it received a $3 billion takeover bid from funds managed or advised by Blackstone Singapore.
At the close, the units were up 11.2% to $5.15 which is the effective offer price. The $5.15 price is the highest the securities have been since the GFC in 2008
Under the deal, unit holders will be entitled to $5.25 cash per unit minus any distributions. This represents an effective offer price of $5.15 per unit.
Blackstone says it has not made a decision about the future management of IOF if the proposal is completed.
The directors of Investa Listed Funds Management Limited say the offer presents unit holders with an opportunity to realise their investment for significant value.
“Following finalisation of the Proposal, a binding Scheme Implementation Agreement will be entered into with Blackstone,” the directors say.
Blackstone has been conducting due diligence since April when it made a confidential offer of $5.05 per unit.
Investa has an office portfolio value of around $4 billion.
The directors of IOF manager Investa Listed Funds Management (ILFM) said they planned to unanimously recommend the offer.
ILFM's directors and Quartz Holding, a Blackstone affiliate, have entered a process deed setting out the offer's terms.
This is the third tilt at Investa in the past three year, following unsuccessful offers from Dexus Property and Cromwell Corporation.
Meanwhile investors took the long handle to shares in independent supermarkets group, Metcash yesterday after it revealed the loss of a major customer in South Australia.
At the close, the shares were down 17.6% to $3.03. The news nipped the solid rally in Metcash shares that has been going on now since early March. The shares closed at $3.66 last Friday.
The company says Drakes Supermarkets will not be making a commitment to have its supermarkets in South Australia supplied from Metcash’s proposed new distribution centre in the state.
Total sales to Drakes were $270 million in 2018.
Metcash has an agreement with Drakes Supermarkets in South Australia to supply its stores to June 2019. It also has a supply arrangement with Drakes in Queensland.
“Metcash is assessing the implications of this advice from Drakes Supermarkets,” the company told the ASX.
The company says current year earnings are expected to be in line with last year.
Metcash reported a 24% rise in first half net profit to $92 million despite a slump in sales at its IGA supermarkets.
The company is due to report full year figures next month.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.