Australand running out of options as Blackstone joins GPT at the exit gates

US private equity giant Blackstone has reportedly pulled out of its takeover bid for listed property trust Australand following GPT Group’s formal withdrawal yesterday.

Blackstone had put in a bid for the entire Australand business at around a 10% discount to the trust’s $3.46 a security net asset backing, The Australian Financial Review’s StreetTalk gossip column reported.

However, it withdrew its bid via email a few hours after the GPT statement was issued yesterday.

GPT’s $2.8 billion December offer (StreetTalk quotes a $2.95 billion offer) was for only the non-residential businesses of Australand.

Analysts John Kim from CLSA and Jason Weate from Deutsche Bank continue to back Australand despite the withdrawal of GPT and Blackstone after its share price fell 18 cents to $3.35 (a 5.3% fall) in morning trading today.

The option still remains for a block trade of Singapore-based majority shareholder CapitaLand’s $1.2 billion stake, but according to StreetTalk, this would represent a worse outcome for shareholders than the Blackstone offer and would be difficult to accomplish.

In a statement released yesterday, Australand confirmed that it had been unable to reach agreement with GPT on the sale of its investment portfolio and commercial and industrial businesses that would be a “superior outcome than business as usual”.

It also said it was not in receipt of any formal proposals, but that process had not yet concluded.

Clearly Australand was eager to sell to GPT, but the two parties could not agree on a fair price.

StreetTalk reported that a high-ranking CapitaLand executive flew into Sydney on Monday to try and help thrash out a deal with GPT, but could not get the property group to budge on its offer.