In an announcement to ASX, Centuria Industrial REIT said that the Independent Board Committee (IBC) of its entity Centuria Property Funds No. 2 Limited (CPF2L) has refused the takeover proposal of Propertylink Group (ASX: PLG).
The offer was received by CIP on 13 September 2018, under which Australian Real Estate Investment Trust Propertylink Group proposed to acquire all outstanding CIP unit via an off-market takeover at a premium price of $3.04 per CIP unit. As per the non-binding proposal, PLG offered an exchange ratio of 2.5327 PLG stapled securities for every 1 unit of CIP which comprises of 90% of purchase consideration. Whereas remaining 10% of the consideration was proposed to be paid in cash with $0.33 per CIP unit.
But later, on 2nd October 2018, Matthew Hardy led CPF2L’s committee decided not to accept the acquisition bid offered by Propertylink Group due to uncertainty hovering around the future value of PLG securities. After a detailed analysis of the proposal, Independent Board Committee (IBC) concluded that pertaining to the material risk underpinned by ESR Real Estate (ESR) proposal to acquire the Propertylink Group, PLG bid is not in the best interest of the CIP unitholders.
Besides the uncertainty associated with PLG’s future value, CIP’s largest unitholder Centuria Capital Group (CNI) publicly stated that it holds 22.9% of CIP units and intends not to accept the PLG proposal. The rationale for rejection further reads that prior to commencement of corporate activities in September 2017, PLF stapled securities did not trade higher than the IPO issue price. Further, the acceptance of proposal may reportedly change the fundamental nature of CIP unitholder’s investment which could potentially result into the increased volatility in earnings and possible future losses.
The share price of Centuria Industrial REIT continues to move up today. CIP’s stock has surged by 0.707% to last trade at $2.850 on 3rd October 2018. The stock has seen a performance change of +14.57% over the past one year while it recently traded at a PE of 6.970 x with market capitalization of $702.85 million.
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