Charter Hall share price jumps as trading resumes
Investors have responded favourably to management of the Charter Hall Office REIT conditionally accepting a higher takeover proposal from an international investor consortium made up of Reco Ambrosia Pte Ltd (an affiliate of the Singapore Investment Corporation Pte Ltd) and the Public Sector Pension Investment Board of Canada.
Charter Hall Office REIT shares resumed trading this morning after being suspended at close of trading on Thursday , jumping nearly 5% in the first half hour to $3.58 (from $3.42 a share).
Under the privatisation proposal, shareholders will receive $2.49 per share; 6¢ more than the revised October 5 offer $2.43 and 10¢ up on the $2.39 per share) offered on August 29 for the $1.5 billion Australian office portfolio.
The revised offer represents a 4.2% discount to net tangible assets of $2.60, up from the 9.1% discount in the original August offer and values the trust at around $1.88 billion.
The Charter Hall Group, which owns 15% of the office REIT (equating to $141 million) says it will join the consortium subject to final documentation being agreed and executed.
Shareholders will remain entitled to net proceeds and accrued earnings from the sale of the US portfolio, which is currently underway.
Under the agreement, the current Charter Hall management team will retain control of the office trust, a condition to the proposal proceeding to implementation.
In July the current management of Charter Hall Office REIT saw a challenge from a consortium of US hedge funds to replace it with a team from Bill Moss Capital Management and liquidate the trust.
Other conditions that need to be met include implementation of an implementation agreement by December 22 and is subject to the consortium completing a satisfactory due diligence of the trust and its assets.
Should all go according to plan shareholders will meet in March to consider the proposal.
Roger Davis, independent chairman of the Charter Hall Office management, says that in the current environment of instability of capital markets both locally and globally, the new offer is the most “compelling and “certain value proposition” for the trust.