Singapore’s CapitaLand to Sell a Third of Australand Stake

Photographer: Munshi Ahmed/Bloomberg

CapitaLand Ltd.'s Capital Tower, the company's headquarters, stands in Singapore. Close

CapitaLand Ltd.'s Capital Tower, the company's headquarters, stands in Singapore.

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Photographer: Munshi Ahmed/Bloomberg

CapitaLand Ltd.'s Capital Tower, the company's headquarters, stands in Singapore.

CapitaLand Ltd. (CAPL), Southeast Asia’s biggest developer, is selling part of its 59 percent stake in Australand Property Group (ALZ) to raise as much as A$433.7 million ($408 million).

CapitaLand is offering 115.7 million shares, equal to about 20 percent of Australand’s outstanding securities, the company said in a filing through the stock exchange today. CapitaLand is offering the shares at A$3.685 to A$3.750 each, according to transaction terms seen by Bloomberg News, compared with a market price of A$3.75 before trading was halted.

The Singapore-based developer this year carried out a review of its businesses, which it concluded in July with a decision to keep its stake in Sydney-based Australand. During the review, several parties expressed an interest in all or part of Australand’s business. The Australian developer said yesterday that it expects impairments of about A$65 million in its commercial and residential development businesses.

The sale “is in line with what CapitaLand said earlier about their non-core assets,” Wilson Liew, Singapore-based analyst at Maybank Kim Eng Holdings Ltd., said in a phone interview. “If they get a good price, they would look to sell.”

CapitaLand is selling the stake through an accelerated book-build process underwritten by Citigroup Inc., according to the filing. The shares will be priced and allocated tomorrow, with terms of the sale announced following that, the developer said today.

Australand Bids

Australand shares were 3.4 percent lower today before trading was halted in Sydney and are up 10 percent this year. CapitaLand shares were down 1.3 percent at S$3.06 before the announcement.

GPT Group (GPT), Australia’s third-biggest diversified property trust by market capitalization, in December offered to buy Australand’s commercial and development units. The company dropped its pursuit in May after failing to agree on a price amid reports that rival Mirvac Group had also considered and decided against a bid.

CapitaLand -- which in January announced it was re-examining its stake in Australand amid a broader restructure of the company -- said at the end of the review that the Australian company remained a “key investment,” without saying whether or not it had abandoned plans for a sale.

Australand yesterday announced impairments on nine residential and commercial development projects as at Dec. 31, amid slow home sales in Queensland and subdued recovery in office and industrial property demand. It also said it expected operating profit after tax of A$148m in 2013, the upper end of its previous guidance.

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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