Macquarie offers $1.7 billion to buy Charter Hall Office REIT

Having survived a hedge fund management takeover bid, Charter Hall Office REIT is now the subject of a $1.7 billion offer from a Macquarie Group-led consortium of “global institutional investors”.

The offer follows soon after the listed property trust posted net annual profits of $69.4 million in the 12 months to June 30, compared with a $90.7 million loss in the previous 12 months.

The offer equates to $3.52 per unit and is subject to a number of conditions being met, including the consortium reaching agreement with Charter Hall on the “appropriate terms” that the existing management team continues to manage the trust.

The Charter Hall Office REIT share price closed at $2.90 on August 26 – a 27% discount to its net tangible assets.

Directors of the REIT received the conditional, non-binding proposal following the close of trading on August 26. The offer excludes the 13% of the REIT held by Charter Hall.

Macquarie has also requested a six week period to undertake due diligence of the REIT’s Australian assets.

Another condition is that the REIT concludes the sale of its US assets.

The $3.52 per unit offering includes $1.13 in expected capital earnings from divestment of its US assets.

Directors will now undertake discussions with Macquarie with the aim being to decide whether to grant the investment bank due diligence access.

On July 27, shareholders voted against a resolution to replace the management of the REIT following a campaign from three US hedge funds.