Charter Hall Office REIT reaches binding agreement on takeover bid
The takeover of the Charter Hall Office REIT by a consortium of international and local institutional investors is one step closer after the trust’s management entered into a “binding scheme implementation agreement” with the prospective new owners.
The independent directors’ committee that manages the trust has unanimously recommended that shareholders accept the offer and will vote in favour of the scheme at a shareholders’ meeting scheduled for March 15.
Charter Hall Office Management independent chairman Roger Davis says the offer represents “the most compelling and certain value proposition” to shareholders.
Should 75% of shareholders vote in favour of the takeover, the REIT will be sold to the consortium on March 30, subject to terms and conditions, including the completion of the sale of its
Shareholders will also be entitled to proceeds from the sales of the remaining
The consortium, made up the Government of Singapore Investment Corporation, Canada’s Public Sector Pension Investment Board and the trust’s head stock Charter Hall, has been seeking to acquire the REIT since the end of August last year following a failed attempt by a group of hedge fund investors to wrestle management control a month earlier.
The consortium made its first offer of $2.39 a share on August 29, sweetening the deal to $2.43 in October before raising it again to the current offer price of $2.49 per share.
The offer is a 4.2% discount to the estimated pro forma net tangible asset value of the Australian office portfolio of $2.60 per share.
The portfolio has been externally valued at $1.84 billion with
Other notable assets include
In its 2011 A-REIT Survey, accountanting firm BDO ranked the Charter Hall Office REIT its top performer of the year managing a total unit-holder return of 43%, the highest return of any of the S&P/ASX 200 Property Index members.
“Consistent with the strong performance exhibited by the office sub-sector through the year, the A-REIT delivered increased earnings, higher distributions, lower debt and strong portfolio management metrics,” noted BDO.
“Units in Charter Hall Office REIT (CQO) also demonstrated a high level of liquidity, with CQO being one of the most actively traded REITs on the ASX during the 2011 financial year.”
Among the key achievements noted by BDO include Charter Hall Office REIT increasing in statutory earnings to $69.2 million, up from a loss of $91 million in 2010 financial year, reducing look-through gearing from 45% to 43% and repaying, refinancing or removed all debt due to mature before the 2014 financial year.
At 3pm on Tuesday, January 3 shares in the REIT were up 0.71% for the day to $3.535 against a benchmark index rise of 1.14%.