ESR closes in on $700m Propertylink takeover
Asian logistics group ESR, backed by US private equity giant Warburg Pincus, has taken major step towards sealing its near $700 million takeover bid for fund manager Propertylink.
The move will brings to a head a series of interlinked battles about $2 billion worth of industrial and office property.
On Monday Propertylink said it had entered into a binding bid implementation agreement with ESR for the deal, which has been struck at $1.20 per share.
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ESR already has a 19.9% stake in the target and its latest move comes after it completed due diligence on Propertylink.
The takeover price is 14.3% premium to Propertylink’s share price in September before ESR made an initial play for the company.
The takeover is conditional on ESR getting to a minimum acceptance of at least 50.1%.
Propertylink chairman Peter Lancken, says the offer is at an attractive premium to Propertylink’s trading price and its net tangible asset backing.
Propertylink has tapped KPMG Corporate Finance as the independent expert to prepare a report on whether the offer is fair and reasonable.
Propertylink confirmed that in light of the fact that ESR is proceeding with its takeover bid, it would not go ahead with its own proposal to acquire Centuria Industrial REIT.
Propertylink still faces an extraordinary general meeting requisitioned by Centuria, at which shareholders will be asked to vote on a board spill.
But ESR has said, so long as the takeover deal proceeds, it intends to vote its interest in Propertylink against the spill, effectively thwarting it.
The latest bid is part of a complicated set of moves between Propertylink, Centuria and ESR for control of properties in the hot industrial sector.
Propertylink in September lobbed a $755 million hostile bid for Centuria Industrial REIT but it gained little traction in the market.
Instead, the fund’s manager, Centuria Capital, built up its stake in Propertylink to about 19% stake and called for the board spill.
Centuria and ESR were reported to have held talks earlier this year to take over Propertylink but the Australian group said in August that it had no intention of making a bid.
But ESR raised concerns about Propertylink’s bid for the Centuria Industrial REIT, warning the deal would be 9% dilutive and increase gearing, saying it had “forced our hand” in making its own takeover for Propertylink.
ESR, which has more than $US13bn in assets under management, burst on to the Australian scene last year, taking a stake in Centuria — now at 14.9% — and it has since bought a development platform as well as making the move on Propertylink.
This article originally appeared on www.theaustralian.com.au/property.
