The $2.6 billion bid for property group, Australand (ALZ) from the Thai-controlled Singapore developer, Frasers Centrepoint, is closer to being a done deal after the target board endorsed the offer in a statement released on Tuesday night.
Frasers launched an indicative, informal cash $4.48 offer for each Australand security, topping the non-binding cash and scrip offer that was on the table from local rival, Stockland (SGP).
Barring a last minute higher cash offer from Stockland or some other group (GPT had a nibble in 2013, but withdrew) Frasers’ bid will succeed.
Stockland owns 19.9% of Australand and can sit out the bid and try and maximise its holding’s value by exchanging it for some property assets.
Or it can sell and make a profit of more than $20 million.
ALZ 1Y – Australand, Frasers deal a step closer
Assuming the bid is completely successful, Frasers will get Australand’s solid residential portfolio in NSW and Victoria and around $2 billion of prime city-based office towers in Sydney and Melbourne as well as a large industrial property.
Frasers could effectively liquidate the office and industrial portfolios and pay for the bid, thereby getting the residential business free.
Frasers is 88% owned by the Thailand-based TCC Group and its biggest current project is the One Central Park mixed use residential and retail project in Sydney’s Broadway area, and Sydney’s Sofitel Wentworth hotel which was recently purchased for $207 million.
In a filing with the ASX last night, Frasers released its bidder’s statement, including the formal Bid Implementation Agreement, under which it has agreed to make an off-market takeover offer to acquire up to 100% of Australand’s stapled securities.
The Fraser offer will also include the Australand half year distribution, of up 12.75 cents per Australand security.
”The Australand directors unanimously recommend that eecurityholders accept the offer and intend to accept in respect of all sSecurities they own or control, in the absence of a superior proposal and subject to the Independent Expert concluding that the Offer is fair and reasonable to Australand Securityholders,” the Australand statement said.
Australand securities closed at $4.44 on the ASX yesterday.
