This article is from the Australian Property Journal archive
THE Roberts Family will not seize back some control of the Multiplex empire the late John Roberts built more than 40 years ago. Instead, it has thrown weight behind Canada's Brookfield Asset Management's $4.22 billion bid for Multiplex.
Earlier this year, Brookfield and the Roberts Family Nominees including Andrew Roberts, Tim Roberts and Denby Macgregor made a joint takeover bid for Multiplex.
But it has emerged yesterday that RFN will back Brookfield’s bid by agreeing to sell its 25.6% holding in Multiplex. In addition, Andrew, Tim and Denby have resigned from their executive positions, effective immediately.
Brookfield has offered to buy 100% of Multiplex securities, which includes Multiplex Limited and units in Multiplex Property Trust at $5.05 per stapled security – 5 cents above Multiplex’s closing June 08, 2007 closing price of $5.00.
The bid might be a 65% premium over Multiplex’s December 31, 2006 share price of $3.13, which was during the Wembley Stadium debacle. But the offer price is still $1.05 shy of Multiplex’s IPO price of $6.15 in 2004.
Although, Multiplex had traded as low as $2.56 at May 31, 2005.
Brookfield announced that securityholders will be entitled to receive the distribution for the six months ending June 30, 2007 of up to 10 cents per stapled security – valuing Multiplex at approximately $7.3 billion on an enterprise value basis.
Brookfield’s managing partner Jeff Blidner said under the terms of the arrangements, RFN will receive the same price for its securities as is being offered to the other securityholders of Multiplex. RFN will pocket approximately $1.06 billion from their shareholding.
In a short statement, Multiplex’s company secretary Mark Wilson said, “Brookfield have advised that they view Multiplex as an integral part of their international growth strategy and intend to use Multiplex… to grow in the regions which in Multiplex operates,”
Brookfield already approximately 4.2% of the stapled securities of Multiplex either directly or through cash settled equity swaps.
Combined, Brookfield has just under 30% holding in Multiplex, which means it is more than half way to achieving the minimum acceptance condition of 50.1% set out in the implementation deed.
The bid has received support from the Multiplex board of directors, who have indicated that subject only to receiving an independent expert report that concludes that the offer is both fair and reasonable and there being no superior offer, they each will recommend securityholders accept the offer, and each of the directors will accept the offer for their own securities.
There is a $20 million break fee if the board decides to accept a superior offer.
“We are delighted that Multiplex Group’s directors will recommend our offer… We believe that this offer maximises value for all Multiplex securityholders in a structure which provides the certainty of an all-cash offer at a significant premium.
“This proposal is the product of a considered and constructive dialogue with the Multiplex Board and the result, we believe, is a compelling offer which is in the best interests of all securityholders,” he added.
Blidner said retention of the management expertise within Multiplex will be a priority for Brookfield.
Citigroup, which advised Brookfield on the bid, last week upgraded its target price for Multiplex to $4.73 despite shares closing at $4.97 at June 07, 2007 – following the new Australian office cap rates set by Morgan Stanley’s Investa bid.
Multiplex currently has a market cap of $4.13 billion.
In 2006, Multiplex delivered a core net loss of $50.9 million.
In 2007, the company posted a net profit of $181.7 million, and is expected to post $227.3 million in 2008 and $250.2 million in 2009.
Australian Property Journal
