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Stockland enters property fray
By CNN's Geoff Hiscock, Asia Business Editor
SYDNEY, Australia (CNN) -- Australia's listed property trust sector is in the midst of a major realignment after the third takeover bid in a week, the latest from fourth-ranked Stockland Trust. On Wednesday, Stockland launched an unconditional Aust. $1.6 billion ($1.05 billion) bid for AMP Diversified Trust (ADP), which owns a string of commercial, retail and industrial property in Australia -- mainly in New South Wales state -- and New Zealand. Stockland's offer follows a hostile $1 billion cash and share bid on Monday by the Investa Property Group for the Australian office property trust of U.S.-based Principal Financial Group. Last week, Australia's largest listed property trust, Westfield Trust, launched a cash takeover for AMP Shopping Center Trust (ART) that valued it at $1.2 billion. That offer pitted Westfield against Centro Properties Group, which launched its own cheaper bid for ART on March 18. But on Wednesday, Westfield Trust announced it had reached a conditional agreement for the $485 million sale of three properties to Centro, assuming Westfield's bid for ART succeeds. Two of the properties, in Perth and Brisbane, are already owned by Westfield. The third, in Adelaide, is part of the ART portfolio. When it announced its takeover bid on May 20, Westfield said it planned to sell a number of properties from the combined Westfield/ART portfolio. Westfield and Centro both held 19.9 percent of ART at the time Westfield launched its offer. With Centro now buying the three properties, it will likely sell its ART stake for a profit of about $20 million. Stockland's formal bid for ADP has been expected for some time, after its acquisition of a 15 percent stake on March 28. It said on Wednesday it now owns 17.3 percent of the issued units in ADP and had an option agreement to acquire a further 2.65 percent from AMP Life. Stockland said its offer was priced at a 16.3 percent premium to the weighted average price of ADP units in the three months before March 28. Stockland managing director Matthew Quinn said ADP's property portfolio would be an "excellent fit" in terms of size, geography and sector. He said the deal would add immediately to Stockland earnings. Recent troubles at the AMP Ltd insurance and funds management group has been seen as a buying opportunity by other Australian listed property trusts for those trusts in which AMP Life has an interest. AMP is concentrating on splitting its Australasian businesses from its unprofitable units in the U.K. AMP shares closed 2.4 percent lower Wednesday at A$4.88, a record low.
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