Propertylink Group’s (ASX: PLG) stock climbed up 0.593% on November 12, 2018 following the announcement of entering into a binding Bid Implementation Agreement with ESR Real Estate. This is in relation to ESR's proposal to acquire all Propertylink securities, which it or an associate does not already own by way of an agreed off-market takeover bid for cash consideration of $1.201 per share.
The offer price of $1.201 is 4.3% higher than the initial price of $1.15, and it represents a 14.3 percent premium to the closing price of Propertylink securities at 20 September 2018 of $1.05, being the day prior to the announcement of ESR’s initial proposal to acquire Propertylink. Further, the offer price also represents 15.2% premium to the 6-month volume weighted average price (VWAP) of Propertylink securities to 20 September 2018 of $1.04. The offer is subject to a number of conditions which includes minimum acceptance of at least 50.1% of all Propertylink securities, no material adverse change, no prescribed occurrences, no regulatory action or material acquisitions, disposals, capital expenditure or change in the conduct of business, amongst other conditions. As per the company’s announcement, ESR has already received notification from Foreign Investment Review Board (FIRB) that the Australian government has no objection to the offer in terms of its foreign investment policy and the Offer is therefore not conditional on obtaining foreign investment approval.
The board of Propertylink has unanimously recommended the securityholders to ACCEPT the offer, in the absence of a superior proposal. The company also informed in its announcement that Centuria has requisitioned an Extraordinary General Meeting of Propertylink (Holdings) Limited, at which Propertylink securityholders will be asked to vote on resolutions proposed by Centuria to remove all the current directors, other than the Managing Director, and replace them with six directors nominated by Centuria. ESR has confirmed that subject to the BIA not being terminated, the directors continuing to unanimously recommend the offer at the relevant time and there being no material change in circumstances, ESR plans to vote its 19.89% interest in Propertylink securities against all the resolutions proposed by Centuria at the meeting.
In FY 2018, the total revenue of Propertylink Group increased by 27.8 percent to $175.05 million as compared to last year. The company experienced a growth of 23 percent in distributable earnings which reached to $55.7 million in FY 2018. Further, the net tangible asset per security increased by 19 percent to $1.04. At the end of FY 2018, the company was having the gearing ratio of 29.6 percent which was below the target range of 30-40 percent.
In the last six months, the share price of the company increased by 13.46 percent as on 9 November 2018, traded at a very low PE level of 5.730x. PLG’s shares traded at $1.187 with a market capitalization of circa $711.28 million as on 9 November 2018 (AEST 3:08 PM).
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