This article is from the Australian Property Journal archive
The Multiplex empire is likely to be divvied up and the construction business might even return back to the hands of the Roberts Family.
Yesterday, it has emerged that Canadian based Brookfield Asset Management and the Roberts Family Nominees have launched a $4 billion takeover bid for Multiplex.
Brookfield and RFN are looking to acquire 100% of the underlying businesses of Multiplex Limited, including Multiplex’s property development, construction, property funds management and facilities management businesses.
Brookfield is a $US50 billion asset manager listed on the Toronto and New York Stock Exchanges and has over $US50 billion of assets under management focused in property and infrastructure assets, including the $US7 billion US Core Office Fund; $US1.8 billion Canadian Core Office Fund; $US1 billion Real Estate Opportunity Fund; $US700 million Brascan Brasil Real Estate Partners and the Real Estate Finance Fund.
Multiplex’s company secretary Mark Wilson said at this stage Brookfield has provided no information in respect of valuation and limited information in respect of key terms.
“Brookfield has sought the Board’s approval to enter into discussions with RFN to develop a proposal and has indicated that any proposal put forward by Brookfield would be conditional on the involvement of RFN,” he added.
Property Investment Research’s head of research John Welch said the best outcome for Multiplex would be to separate the high risk construction arm (third party fixed bid construction contracts carry risk as evidenced by Wembley) from the low risk LPT/property income and the low risk high profit/value funds management arm.
“Their funds Management arm is becoming very active and is expected by me to do big things in 2007. Given that funds managers trade on very high multiples of well over 20 times, this arm of the business would appear to be undervalued,” he added.
Welch said likewise, the construction arm has been continuing to get construction contracts in Australia and the Middle East whilst Wembley has been draining the corporate coffers.
“So there is a good stream of business income coming in the future.
“It is possible that the Roberts family would like the construction business,” Welch concluded.
The Multiplex empire was built by the late John Roberts in Western Australia almost 40 years ago.
In 2004, the family floated the $2 billion company on the Australian Stock Exchange and had a majority shareholding of 46%. RFN later sold down its stake to 25.6% in Multiplex.
Yesterday, the Board consented to those discussions taking place and given the involvement of RFN, the Board has put in effect a number of protocols.
As a result of the protocols in place, Multiplex’s chief executive Andrew Roberts, executive director Tim Roberts have taken leave of absence from the Board of Multiplex, and Denby Macgregor has also taken leave of absence from his executive roles.
Ross McDiven, the currently chief operating officer and Bob McKinnon, the chief financial officer have been appointed by the board as acting joint managing directors.
“For the purposes of these preliminary discussions between Brookfield and RFN, no confidential information regarding Multiplex will be provided to Brookfield by RFN, Multiplex or the Roberts Family.
“If discussions between Brookfield and RFN advance to the development of a proposal capable of evaluation by the Board, confidential Multiplex information will only be provided through a formal due diligence process approved by the Board,” Wilson said.
The Board has been advised that Brookfield’s approach does not involve the participation of any other Board member or Multiplex executive.
Multiplex shares closed 5.5% or 0.25 cents higher at $4.80.
Australian Property Journal
