Stockland finally ups Australand offer to $4.35 per security

Stockland has upped its Australand offer to $4.35 per security.

Stockland’s first $2.4 billion offer in April for the diversified property developer equated to around $4.20 a security, or around $2.5 billion. It was rejected by Australand.

Stockland purchased a 19.9% stake in Australand in March.

“This compelling final offer represents a substantial premium against a range of measures and would bring together two high calibre companies with complementary assets and cultures," the Stockland managing director, Mark Steinert, suggested.

"The combined group would be the leading residential developer in Australia, including medium density, the leading owner and manager of shopping centres in regional locations and a top two logistics and business park owner/developer.”

The latest proposal to Australand security holders reflects:

• 22.2% premium to Australand's NTA;
• 18.0% premium to the price at which CapitaLand sold (and institutional investors purchased) 20% of the outstanding securities on issue on 21 November 2013;
• 16.9% premium to the price at which CapitaLand sold (and institutional investors purchased) 23.4% of the outstanding securities on issue on 19 March 2014; and
• A 12.1% premium to the volume weighted average price ('VWAP') of $3.88 for the three month period up to and including 18 March 2014, the day prior to Stockland acquiring an interest in 19.9% of Australand.

As an alternative form of consideration, Stockland is prepared to offer a reduced scrip ratio, together with a cash component up to an aggregate of $250 million, with the structure to be agreed with the Australand Board.

"We have made this final offer following dialogue with Australand," Mark Steinert said.

Stockland reconfirmed its guidance of 6% EPS growth in FY14, assuming there is no material decline in market conditions and targeted 5% annual average EPS growth through the cycle.