This article is from the Australian Property Journal archive
HOSTPLUS and Charter Hall Retail REIT’s $717.5 million off-market joint takeover bid has been rejected by the board of Hotel Property Investments (HPI).
Charter Hall already holds a 14.8% stake in the hotel group, with the joint venture proposing to acquire all shares in the group for $3.65 a pop.
This represents a premium of 11.6% to the group’s 27 March closing price of $3.27 and 7.3% premium to the 30-day volume-weighted average price of $3.40.
The proposed acquisition of HPI alongside Hostplus is attractive and designed to deliver significant benefits to both HPI Securityholders and CQR Unitholders,” said Ben Ellis, fund manager of CQR and Retail CEO at Charter Hall.
“The acquisition is in line with CQR’s strategy to invest in high quality, net lease retail assets, whilst partnering with leading convenience retailers to deliver resilient and growing income streams. Hostplus is an existing partner through our investment in LWIP 2 and we are pleased to extend our partnership through the proposed acquisition of HPI.”
Just an hour after the unsolicited takeover bid was announced, HPI’s board unanimously rejected the offer and recommended securityholders follow suit.
The board believes the offer “is opportunistic, not compelling and materially undervalues HPI”, particularly due to its being at a 10% discount to the value of the group’s net tangible assets at the close of the financial year.
“HPI has a unique high quality portfolio of pub assets with long term leases and strong investment fundamentals providing reliable distribution with forecast distribution growth of 2.6% in FY25,” read a statement from the HPI board.
“The board intends to formally recommend that securityholders REJECT the Offer. HPI believes that its existing portfolio and current strategy, including its organic growth initiatives, offer significantly greater value to HPI securityholders.”
The offer came after Charter Hall Retail REIT profits were cut back by more than a half over the FY24 period at $17.2 million, down from $37.8 million in FY23.
