Propertylink Group Intends To Accept Revised Proposal By ESR, Withdraws CIP Acquisition

  • Oct 16, 2018 AEDT
  • Team Kalkine
Propertylink Group Intends To Accept Revised Proposal By ESR, Withdraws CIP Acquisition

Real estate manager Propertylink Group (ASX: PLG) backs out its proposal to acquire Centuria Industrial REIT (ASX: CIP) while it intends to accept the revised ESR’s bid proposed in relation to the acquisition of 100% Propertylink.

In an announcement to Australian Securities Exchange, Propertylink Group (ASX: PLG) intends to enter into Bid Implementation Agreement with ESR Real Estate Australia Pty Ltd to sell-off PLG’s 100% stakes to ESR at a revised offer price of $1.20 cash per Propertylink security, 4.3% higher than ESR’s initial proposal price of $1.15 as announced on 21 September 2018.

At an alluring premium of 14.3% to the PLG’s last close on 20 September, bidder ESR has successfully attracted Propertylink to get involved in the process of finalization to close the all-cash acquisition proposal, subject to satisfactory completion of due diligence by ESR. 

Currently the proposal stands incomplete but PLG’s Board of Directors pose to have strong recommendation that shareholders should accept the ESR’s revised bid of $1.20 per security as there is no better offer lying with Propertylink and that Independent Expert are also expected to find this offer fair and reasonable to the best interest of the shareholders. Subsequently, directors have allowed ESR to conduct confirmatory due diligence on Propertylink for a period of three weeks, which coupled with BIA terms will form the due basis to Directors’ unanimous recommendation.

Further, Propertylink Group has given clarification on its decision for Centuria Industrial REIT (CIP) acquisition, it proposed on 13 September 2018. It stated that PLG has decided not to go ahead with the takeover of Centuria Industrial REIT (CIP) unless ESR’s deal does not goes through. But this did not come as a surprise as before the Propertylink could withdraw, Centuria Industrial REIT (CIP) has rejected the PLG’s takeover bid on 2 October 2018.

In a market release, Centuria Industrial REIT (ASX: CIP) stated that Matthew Hardy led committee of Centuria Property Funds No. 2 Limited has come up with the decision to refuse the acquisition bid offered by Propertylink to acquire 100% stakes in CIP at an offer price of $3.04 per CIP unit. The committee supported its not acceptance decision on the ground of uncertainty hovering around the future value of PLG securities ahead of its takeover by ESR.

As of now, the negotiation of terms for Bid Implementation Agreement is underway between Propertylink Group and ESR Australia. If the deal goes through ESR will clutch the complete ownership of Propertylink ahead of its existing 19.9% interest in it.

Ahead of indicating a clearing intention towards the acceptance of ESR proposal, Propertylink moved up on Australian Securities Exchange. Before settling to close at $1.165, PLG surged 1.747% or $0.020 on 16 October 2018. Since its inception in August 2016, the stock price of Propertylink Group has gone up by 33.14% while in the last one year it has witnessed a performance change of +15.08%. Today, PLG traded at a PE of 5.560 x with market capitalization of $690.18 million.

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