Why Charter Hall Long (ASX:CLW) is trading higher on ASX?

Highlights

  • Trust Charter Hall Long announces that 96.7% of the ALE security holders have casted their vote in favour scheme of arrangement deal.
  • The transaction aligns with CLW’s strategy to invest in high-quality real estate assets.

ASX-listed Australia-based Real Estate Investment Trust Charter Hall Long WALE REIT (ASX:CLW) revealed via an exchange filing on Thursday that ALE Property Group (ASX:LEP) has received massive support from its security holders for the proposed scheme of arrangement deal. 

The Company held as per LEP the scheme resolutions were passed by at least 96.7% of the ALE security holders as they cast their vote in favour of the deal. Noticeably, the LEP shareholders are now awaiting the approval of the schemes by the court. 

What next?

If the Court approves the Schemes, the Schemes are slated to be effective from 8 December 2021. Thereafter, the implementation of the schemes is likely to take place on 17 September 2021. 

Share of CLW were trading 0.62% higher at AU$4.85 each on ASX at the time of writing this article. On the other hand, today, the stock LEP stock was trading at AU$5.64 each, a 0/53% higher.

What is this ALE deal all about?

In an announcement dated 20 September 2021, the Company had announced that CLW and a Charter Hall managed trust on behalf of Hostplus have entered into a Scheme Implementation Deed (SID) with ALE Property Group to acquire all of the LEP Stapled Securities through the schemes of arrangement. As per the SID, each Consortium member will hold 50% of LEP’s assets post transaction. The acquisition involves a total enterprise value consideration of roughly AU$1.68 billion.

Bottom Line:

The transaction aligns with CLW’s strategy to invest in high-quality real estate assets. It brings an attractive opportunity for CLW Securityholders to acquire a large scale, materially under-rented portfolio of high-quality hospitality assets. Post Transaction, CLW will remain Australia’s largest and most diversified long WALE REIT with an anticipated pro forma market capitalisation of approximately AU$3.8 billion. 

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