Singaporeans Beat Stockland’s bid for Australand

Monday, June 9th, 2014
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A Singaporean-listed real estate company has issued a $2.59 billion offer for Australand Property Group, beating out the most recent takeover bid made by Stockland.

Singapore-listed real estate firm Frasers Centrepoint Limited is behind the new bid.

According to a regulatory filing made by Sydney-headquartered Australand, the offer from Frasers puts the value of shares in Australand at $4.48 apiece, beating out Stockland’s $4.43 all-share offer.

As a result of the offer, Australand shares logged their biggest gain since December 2012 in Sydney, closing up 5.6 per cent at $4.55 on the day the news broke.

Australand’s board has stated that the takeover bid from the Singaporean company provides a “superior outcome” for its shareholders, and has already entered into an exclusive consultation agreement with Frasers which will last for four weeks.

“The board concluded that the conditional proposal would deliver a compelling outcome for Australand security holders and is superior to the final and conditional proposal received from Stockland,” said Paul Isherwood, Australand’s company chairman.

The new offer also includes a 21 per cent premium to Australand’s estimated net tangible assets per share at June 30 of this year.

The offer comes just a week after Stockland, a key stakeholder in Australand, sweetened its takeover bid to value Australand at $2.5 billion.

Stockland acquired 19.9 per cent of Australand in March, at an average price of $3.78 per share.

According to analysts, the bid by Frasers gives a generous price for Australand. This will come as a boon for its shareholders, including Stockland, yet is unlikely to provide much additional value to the buyer.

In response to the news, Stockland said it would review its options with respect to the conditional cash proposal made by its Singaporean rival.

The takeover offer from Frasers is part of a concerted bid by the Singaporean realtor to expand into rapid-growth overseas markets in the region, with Australia and China designated as key destinations. Frasers is already building the Central Park project in the Sydney CBD – a mixed-use urban renewal project which will include 2,000 apartments.

The offer from Frasers remains subject to the approval of Australia’s Foreign Investment Review Board, as well as by Frasers’ own shareholders.

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