Pub owner Hotel Property is asking shareholders to reject the takeover bid from a consortium led by top investor Charter Hall, saying that the offer undervalues the firm and its prospects while questioning its timing.
The Australian firm said on Tuesday that the new offer from a group comprising Charter Hall’s retail unit and pension fund Hostplus – which values it at A$755.8 million ($502.98 million) – materially undervalues its portfolio and that it is not compelling.
Shares of Hotel Property, which has 58 venues primarily in South Australia and Queensland in its portfolio, rose as much as 3.7% to A$3.63 and were set for their best trading session since Sept. 9.
“HPI has a unique, difficult to replicate portfolio of pub assets with long term strategic value. Our portfolio is well positioned to benefit from strong ongoing rental growth given our attractive lease terms,” it said.
Charter Hall and Hostplus did not immediately respond to Reuters’ requests for comment.
Hotel Property also indicated that the new offer’s timing was “opportunistic” given the improving market outlook for real estate investment trusts amid falling global interest rates and easing inflation.
“The board believes that its existing portfolio and strategy offers significantly greater value to HPI securityholders,” it said.
The firm flagged that the new A$3.85 apiece offer does not provide any premium to its net tangible assets, which has generally not been the rule for ASX-listed REITs where control has typically passed at substantial premiums.
It also acknowledged the connected volatility that might occur in its share price once investors including Charter Hall may sell their stake in Hotel Property.
Source Homevior.in
