Singaporean Frasers Centrepoint has declared it will not raise or change conditions for its $2.6 billion offer for Australand, leaving investors a week to accept or see the deal disappear.
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In a new supplementary document, Frasers will not increase the price from the current $4.48, plus the interim dividend, per Australand security.
It says that unless Frasers achieves acceptances for more than 50 per cent of all Australand Securities by Thursday, August 7, the offer will lapse and Australand security holders will no longer be able to accept the offer, and any acceptances received under the offer will be of no effect.
At the last notice, Frasers held 2.9 per cent, but Australand’s managing director Bob Johnston has indicated he and the board intend to accept the offer, ‘‘in the absence of a superior offer’’.
Australand’s shares have traded at $4.50, amid continued speculation that rival Stockland, which owns 19.9 per cent of Australand and has a scrip and cash offer on the table, could re-enter the battle.
However, most real estate investment trust analysts are sceptical that Stockland’s chief executive, Mark Steinert, will make such a move.
‘‘The Australand Directors unanimously recommend that Securityholders accept the Offer in the
absence of a superior proposal. If Securityholders wish to receive the Offer consideration they should
accept now,’’ Mr Johnston said in a letter to shareholders.
Adam Fairfax, a REIT trader and director at JP Morgan has said, that after many questions as to whether a new offer would come from Stockland, ‘‘I think the chance of this is nil, and itself fraught with danger.
‘‘I say this because equity remains inferior to cash always, meaning Stockland’s comparable price would need to be about 10 per cent higher than Fraser’s, the point at which metrics might be marginal at best, and Fraser’s first bid was all cash, which again tells me that if necessary this would likely rise if provoked,’’ Mr Fairfax said.
‘‘Assuming Stockland was to lift its bid, I should expect the stock price to plummet, thereby eliminating itself. I prefer the option that Stockland sell into the Fraser’s deal and use their $80 milion pre-tax gain to acquire or develop organically in either the industrial or medium density residential sectors.’’
It has been suggested that Stockland could use the cash as part of a play for the Devine interest, being marketed by the owner, Leighton Properties.
