On December 5, 2018, Charter Hall Long WALE REIT (ASX: CLW) came forward and issued a press release. As per the press release issued, Charter Hall WALE Limited, which happens to be the Charter Hall Long WALE REIT’s responsible entity, has made an announcement that an agreement has been signed which focuses on the information about the acquisition for which it will be shelling out $207 million. Charter Hall WALE Limited would be acquiring full interest (100%) in the portfolio which is having 27 agri-logistics properties. It would also be undertaking an entitlement offer which is focused on raising around $125 million so that the said acquisition can be financed partially as well as the costs which are related to the transaction. This entitlement offer is accelerated non-renounceable which would be underwritten fully.
Charter Hall Long WALE REIT has also raised the expected EPS range. It stated that after considering the effects of entitlement offer as well as acquisition and also by excluding the unforeseen circumstances and by assuming there wouldn’t be any major change with respect to the market conditions, Charter Hall Long WALE REIT is expected to post operating EPS between 26.8-26.9 cents per share. This updated operating EPS guidance reflects a 1.3% rise as compared to the expected range which was announced earlier.
Let us now have a quick look at the entitlement offer. Charter Hall Long WALE REIT is expected to undertake accelerated non-renounceable entitlement offer which would be underwritten fully. The company who would be underwriting fully will be the Australian branch of UBS AG. The shareholders which are eligible would be getting one new share in Charter Hall Long WALE REIT for every 8.1 present shares. They would be receiving this at A$4.05 per share which is fixed issue price. The shares which would be given as a result of entitlement offer would be placed in an equal position when compared to the present shares of Charter Hall Long WALE REIT. Additionally, these shared would also be eligible for distribution in regard to December 31, 2018 quarter. This distribution would be amounting to 6.5 cents per share.
As per the presentation which was issued, because of acquisition, Charter Hall Long WALE REIT would be witnessing a rise in the weighted average lease expiry and it would also be exposed to agri-logistics sector. Additionally, the sector diversification would also be improved. The entitlement offers which has been mentioned would be consisting of the retail entitlement offer and institutional entitlement offer.
Let us now have a look at the performance of the company’s stock. In the time-span of six months, the stock has delivered the return of -0.70%. In the past three months, the stock price of Charter Hall Long WALE REIT delivered -0.24% return. However, the last traded price of the company’s stock was A$4.240 per share. However, the market capitalization of Charter Hall Long WALE REIT stood at $1.06 billion. In the past one month, the stock delivered the return of 6.80%.
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