This article is from the Australian Property Journal archive
LONDON-listed RDI REIT has knocked back Cromwell Property Group’s $1.3 billion takeover offer, believing the bid undervalues the trust.
Cromwell confirmed an approach to the RDI board of late last month. RDI had a market value of $830 million – around £590 million – and last traded at £1.29 before Cromwell’s confirmation. RDI controls some £1.6 billion of property in the United Kingdom and Europe, including office buildings, shopping centres and hotels.
Cromwell was offering around £1.85 per share and submitted a conditional proposal following a period of due diligence, and was hoping to secure an extension beyond a four-week deadline that expired on Tuesday at 5pm, UK time.
“The RDI Board considered the proposal to undervalue RDI and its prospects and, as a result, the RDI Board has taken the decision not to support a further period of due diligence,” Cromwell’s statement said, in which it also declared it does not intend to make an offer for RDI.
“Cromwell remains focused on its ‘invest to manage’ strategy and will continue to leverage its ability to originate value enhancing opportunities across its businesses in Australia, Singapore and Europe,” it said. “Cromwell has identified several accretive value-add developments across the existing Australian balance sheet portfolio and is actively pursuing other opportunities across its funds platform in Australia and Europe.”
More than half of the Brisbane-based group’s $11.5 billion of assets under management is concentrated in Europe. It forged ahead with the float of its €1.354 billion European REIT on the Singaporean stock exchange late in 2017, with an initial portfolio of 74 office, industrial and logistic assets located in Netherlands, Italy, Germany, Denmark and France.
In November, it tapped investors for $300 million to fund the European trust’s recent €384 million acquisition spree of 23 properties across the continent, and to pay down debt.
Cromwell posted an interim statutory profit of $111.1 million, up 37.5% on the prior period, while its operating profit grew 7.6% to $82.6 million.
Australian Property Journal
