Brookfield Asset Management Inc. increased its offer for Thakral Holdings Group, seeking ownership of a development site in central Sydney and hotels, malls, offices and apartments across Australia’s east coast.
Brookfield raised its cash bid to 81 Australian cents a share, from an initial, rejected offer of 70 cents, Thakral and Brookfield said in a joint statement to the Australian stock exchange. Thakral shares surged 7.3 percent to 80.5 Australian cents at the close in Sydney, the highest since October 2008.
Brookfield, a Toronto-based asset manager overseeing about $150 billion of assets, is the parent of Brookfield Multiplex, which last year sought to buy Thakral’s A$250 million ($261 million) Wynyard Center. The redevelopment, which could be worth as much as A$1.3 billion according to local media, has drawn interest from groups including Grocon and Westfield Group.
“Wynyard is the jewel in the crown, a wonderful site in the best part of Sydney,” Stuart Cartledge, Melbourne-based managing director of Phoenix Portfolios, said in a telephone interview. “If Brookfield can buy the whole of Thakral, and sell the bits they don’t want and be left with what they were after in the first place, they could end up buying the development site cheap.”
Thakral shares have soared 49 percent this year, compared with a 7.9 percent gain in the benchmark S&P/ASX 200 Index.
Brookfield’s sweetened bid -- while a 51 percent premium to Thakral’s closing share price on April 18, a day before Brookfield’s first approach -- is a 15.6 percent discount to the value of its assets per security as of Dec. 31, according to data compiled by Bloomberg from company statements.
Independent advisory firm Grant Samuel & Associates said the offer -- which values Thakral at A$474 million according to data compiled by Bloomberg -- while reasonable, is not fair, according to the statement. Thakral’s directors unanimously recommended the bid, subject to no better proposals being received.
Thakral’s independent directors had recommended shareholders reject Brookfield’s earlier A$410 million offer, saying it undervalued the company.
The revised bid is conditional on acceptances from shareholders representing at least 90 percent of Thakral’s issued securities, according to the statement. Brookfield extended the offer period until Sept. 11.
Thakral in April received approval for its concept plan for the Wynyard redevelopment, the company said on April 5. Melbourne-based Grocon submitted a bid for the site, which includes the 446-room Menzies Hotel, an office building, a retail concourse and 335-bay car park, two people familiar with the matter said in June. Westfield was also considering a bid and gained access to Thakral’s data room, the Australian Financial Review reported on July 19.