Australand Property Group rejected a bid from GPT Group for its industrial and commercial property assets and development business, saying the offer “does not provide a compelling value proposition.”
Australand’s board won’t engage with GPT, whose proposal doesn’t pay a sufficient premium or compensate shareholders for the transaction costs and risks involved with the deal, Sydney-based Australand said in a statement to the Australian stock exchange today. GPT, Australia’s second-biggest diversified real estate trust, responded in a separate statement that the offer provides a compelling value.
Australand shares jumped 3.4 percent to A$3.31, the highest since July 2008, at the close of trading in Sydney, bringing this year’s gains to 38 percent. GPT shares fell 1.1 percent to A$3.56, paring this year’s increase to 16 percent.
GPT’s offer involved Australand, controlled by Singapore’s Capitaland Ltd., keeping its residential business and remaining a listed entity. Australand’s industrial and office investment properties were valued at A$2.3 billion ($2.4 billion) at June 30. GPT offered a premium of A$140 million to the assets, Australand said in today’s statement.
GPT’s offer represents a premium of 24.3 Australian cents a share, 7 percent higher than Australand’s A$3.46 a share net tangible asset backing, GPT said.
“GPT is committed to advancing a proposal, which it believes is in the best interests of Australand’s and GPT’s securityholders,” it said.