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Highlights
- Charter Hall Retail REIT has raised its offer to AU$3.85 per share, valuing Hotel Property Investments at AU$755.8 million.
- Hotel Property Investments rejected an earlier bid over valuation concerns, and is yet to respond to the new offer.
- Charter Hall’s revised offer is final, pending no competing bids, signaling a strategic push to consolidate its hold on pub and hotel properties.
Hotel Property Investments (ASX:HPI), a major Australian pub and hotel property landlord, has received an improved acquisition offer from its largest shareholder, Charter Hall Retail REIT (ASX:CQR). The revised bid values the company at AU$755.8 million ($506.16 million). The offer, announced on Friday, increases the bid to AU$3.85 per security, up from the initial AU$3.65 per share offer that was rejected by Hotel Property Investments last month due to concerns over valuation.
Charter Hall Retail REIT, which already holds a significant stake in Hotel Property Investments, confirmed that this improved offer is its best and final bid, stating that it "will not be increased, in the absence of a competing proposal."
Hotel Property Investments, which owns a portfolio of 58 pub and hotel properties across Australia, has yet to respond to the sweetened offer. The previous bid was turned down in September, with Hotel Property Investments citing that the offer undervalued the company. However, this latest offer may prompt a reconsideration from the board.
Charter Hall’s Strategic Play
Charter Hall Retail REIT’s pursuit of Hotel Property Investments underscores its strategy to strengthen its hold on the Australian hospitality and pub property sector. The raised offer indicates a commitment to completing the deal, as Charter Hall positions itself to capitalize on HPI’s asset portfolio and rental income from its pub and hotel properties.
The improved offer has sparked interest in the market, as investors and analysts await a formal response from Hotel Property Investments. If accepted, this acquisition would further consolidate Charter Hall's property portfolio and enhance its influence in the pub and hotel sector, a traditionally resilient area of the real estate market in Australia.
What's Next?
The next step rests with Hotel Property Investments' board, which must now evaluate the improved offer. While the company rejected the previous offer, the increased bid, along with a lack of alternative competing proposals, may compel HPI to reconsider. Given that Charter Hall has made it clear this is its final offer, the decision could be pivotal in determining HPI’s future ownership.
