Cromwell Approached RDI’s Board Regarding a Potential Transaction

  • Mar 27, 2019 AEDT
  • Team Kalkine
Cromwell Approached RDI’s Board Regarding a Potential Transaction

Diversified real estate investor and manager, Cromwell Property Group (ASX: CMW) has responded to a media speculation in which the company has confirmed it has made an approach to the board of RDI regarding a potential transaction.

The company has confirmed that discussions are going on between the parties and a further announcement will be made in due course.

Further, the company has also assured that any transaction that is going to happen, will be in line with the company’s strategy of working with its capital partners to grow funds under management and expand its investment footprint in the UK and Europe. Currently, there is no surety that a formal offer will be made nor as to the terms of any offer.

Over half of Cromwell’s A$11.5 billion of assets under management as at 31 December 2018 is concentrated in Europe.

As per the Rule 2.6(a) of the UK City Code on Takeovers and Merger, the company is required, by not later than 5.00pm BST on 23 April 2019, being 28 days after today’s date, to either announce a firm intention to make an offer for RDI  or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

In its outlook for 2019, the company had confirmed that it is planning to deploy capital and execute transactions when there are opportunities to do so. Further, the company is always with a focus on long-term value creation.

For the half-year ended 31 December 2018, the company reported a profit of $111.1 million as compared to the profit of $80.8 million in the previous corresponding period (pcp), representing an increase of 38%.

Recently the company declared a quarterly dividend of AUD 0.0181 per share for the period ending ended March 31, 2019. The dividend is having Ex-date of March 28, 2019, Record date of March 29, 2019 and Payment date of May 24, 2019.

The year 2019 started with increasing economic uncertainty in the world. Global trade tensions, Brexit and the possibility of slower economic growth in China, Europe and the US have resulted in downward revisions to global growth forecasts. In Australia, there is a lot of uncertainty around the upcoming federal election and the potential changes to taxation policy following a change in government. Further, the residential market downturn, as well as implications for the financial service sector from the Hayne Royal Commission, have contributed to significant falls in Australian consumer confidence and business conditions generally.

The CMW’s stock is trading at a price of $1.105, down by 0.45% during the day’s trade with a market capitalisation of ~$2.48 billion as on 27 March 2019 (AEST 12:45 PM). The stock has provided a year till date return of 12.69% & also posted returns of 2.03%, 11.00% & 1.37% over the past six months, three & one-month period respectively. It has a 52-week high price of $1.153 and touched 52 weeks low of $0.980, with an average volume of ~ 4,299,058.


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