Propertylink Group (ASX: PLG) has made an announcement regarding its entry into a process deed in relation to its non-binding, indicative and conditional proposal by ESR Real estate (Australia) Pty Ltd (ESR) on October 16, 2018. The process deed was done to acquire all the securities of the Propertylink which is not owned by way of an agreed takeover proposal. The process deed has laid the terms and steps that are required to finalize the proposal including the satisfactory due diligence completion and Bid implementation agreement (BIA) negotiation.
On October 31, 2018, Propertylink announced the independent valuations of its wholly owned industrial portfolio and investment management platform. The company’s directors commissioned the independent valuations in response to the non-binding, indicative and conditional proposal from ESR Real Estate (Australia) Pty Ltd (ESR) to acquire all the Propertylink securities which it does not already own, by way of an agreed off-market takeover offer. On September 30, 2018 , 29 out of 31 properties in the wholly owned industrial portfolio were independently valued. The independent valuations resulted in 3.92% rise in book value up to $30.9 million as on September 30, 2018. 4 Independent valuations exclude 80 Mount Street, North Sydney NSW, which was divested in September 2018, with settlement expected to occur in November 2018 and two other properties within the Propertylink Enhanced Partnership (PEP).
The weighted average capitalization rate of the portfolio reduced by 17 bps to 6.49%. Portfolio weighted average capitalization rate excludes 14-16 Orion Road, Lane Cove NSW and 1-5 Lake Drive, Dingley VIC which have been classified as development assets. The independent valuations reported an increase in the carrying value of Propertylink’s co-investment external funds up to $8. 6 million. The net increase in carrying value of co-investments along with the net increase in the book value of the wholly owned industrial portfolio resulted in an increase of the net tangible assets of 6.6 cents per security.
On September 30, 2018, across the investment management platform, 25 of the 28 properties were independently valued. The three weeks from October 16, 2018 was granted to ESR to conduct its due diligence on Propertylink. The security holders were not supposed to take any action in relation to the proposal during the due diligence period. The initial 3-week implementation period for the completion of due diligence and finalization of Bid implementation agreement ended on November 5, 2018.
Propertylink and ESR have agreed to extend the implementation period allocated to the process deed. The period is further extended to November 9, 2018. Subject to the negotiations of a Bid Implementation agreement on the agreed terms and satisfactory completion of the due diligence by ESR, the Directors of Propertylink will continue to unanimously recommend that securityholders of Property link will accept a takeover bid from ESR at the proposed price of $1.201 per security. The Proposal price will be reduced by the cash amount of any dividends or distributions that Propertylink securityholders receive or become entitled to receive.
PLG last traded at $1.175 (up 0.427%), as on November 6, 2018.
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