This article is from the Australian Property Journal archive
THE hunter has become the hunted with Propertylink turning the table and mounting a $755 million takeover bid for Centuria Industria REIT, after Centuria made unsuccessful $573 million offer.
Propertylink has offered $3.04 per CIP unit, which is a premium to CIP’s 12 September 2018 trading price of $2.72 and 52-week high price of $3.00.
CIP’s share price jumped almost 10% or 27 cents to close at $2.99 on news of the proposed takeover. Propertylink currently holds a 12.3% strategic interest in CIP.
Propertylink CEO Stuart Dawes said the acquisition of CIP is consistent with Propertylink’s stated strategy of being a leading owner and manager of Australian industrial real estate; growing the investment management business by establishing new funds; and providing securityholders with superior risk adjusted returns via its active approach to asset management.
“Acquiring CIP is a logical progression in the execution of Propertylink’s strategy and the rationale is compelling for CIP unitholders and Propertylink securityholders. CIP owns a A$1.0 billion portfolio of industrial and logistics centres that will benefit from Propertylink ’s management expertise and has the potential to deliver increased returns to Propertylink securityholders and CIP unitholders who accept the proposed offer,” he added.
Dawes said a successful takeover will make Propertylink the largest AREIT focused on the ownership of Australian industrial real estate with a combined portfolio of A$1.8 billion.
He added that it will also significantly improve its market position, scale and liquidity, with the combined group likely to be eligible for inclusion in the S&P/ASX 200 Index.
“While it is Propertylink’s intention to secure a 100% interest in CIP, it has also considered the commercial logic if it were to secure an interest of at least 50.1%. Under this scenario both Propertylink securityholders and CIP unitholders who accept the proposed offer would participate in many of the expected benefits achieved by acquiring 100% of CIP,” he continued.
By acquiring 50.1% of CIP, Propertylink will seek to replace Centuria Industrial REIT’s responsible entity, Centuria Property Funds No. 2 Limited, as the manager of CIP with a Propertylink group member.
Propertylink is expected to increase the management of Australian industrial real estate to A$2.2 billion and lift external funds under management by A$1 billion. As a result, Propertylink will earn investment management fees in addition to property management, development management and other transaction based fees from the management of the CIP portfolio.
“An acquisition of CIP would more than double the size of our wholly owned industrial portfolio, in particular providing our securityholders with greater exposure to the Sydney and Melbourne industrial markets where we are seeing strong opportunities from the emerging themes of e-commerce and urbanisation,” he added.
Centuria has advised investors to take no action whilst an independent board reviews the proposal.
Centuria made an unsuccessful takeover bid for Propertylink in September last year. The $573 million proposal was unanimously rejected. Last month, Centuria announced it sold its 7.7% interest in Propertylink after decided not to pursue Propertylink any further.
Australian Property Journal
