AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
Hotel Property Investments (ASX:HPI) has advised its shareholders to approve a $760 million acquisition offer from Charter Hall (ASX:CHC) and superannuation fund Hostplus. Despite acknowledging that the bid undervalues its portfolio, the board sees fewer risks in accepting the offer than maintaining minority shareholding.
In a notice issued to shareholders, the board disclosed that the bidders' combined stake in Hotel Property Investments has climbed by about 10% since December 20, reaching a majority 63% control of the company. The increased stake signifies strong support for the acquisition plan led by the property management giant and the superannuation fund.
The board initially rejected both the original and revised offers from Charter Hall and Hostplus, citing material undervaluation of its strategic growth potential and its existing portfolio of pub-focused properties. However, in December, the board reversed its stance following persistent efforts by the bidding parties to secure control.
Hotel Property Investments explained its reasoning in the investor notice, stating that the risks associated with minority shareholding in the company now outweigh any potential benefits. Majority control by the bidders places significant influence over decisions in their hands, potentially impacting minority stakeholders' interests.
The acquisition bid comes after a months-long campaign by Charter Hall and Hostplus. Their consistent push for the deal was strengthened by a sweetened offer following the initial proposal. The bidders argued the deal aligned with their long-term investment strategy and added value to their extensive property portfolios.
While recommending shareholder approval, Hotel Property Investments remains consistent in its stance that the offer undervalues the company's assets and growth potential. Despite this, the board has prioritized minimizing risks associated with minority stakeholder positions, advising investors to consider the changed dynamics of the ownership structure.
The decision comes as Charter Hall continues to assert its dominance in the Australian property investment space, leveraging strategic acquisitions to consolidate its position. Hostplus, on the other hand, focuses on diversifying its investment portfolio through stable real estate assets.
Shareholders now face a decision: consider the risks associated with retaining minority stakes or align with the board’s recommendation to approve the transaction.
