Still in property and Mirvac Group has made the much forecast offer for one of its associated funds, Mirvac Real Estate Investment Trust, offering a deal valued at around 54 cents per trust unit.
Mirvac said yesterday that it was offering 50 cents per trust unit up to 20,000 units, plus one security of the merged entity for every three trust units above that level.
Mirvac Real Estate Investment Trust securities closed at 58 cents on Friday, rising two cents on the day.
Mirvac securities fell three cents on Friday to $1.66.
Yesterday Mirvac shares fell almost 4% to $1.595 and units in the trust dropped more than 5% to 55 cents.
While that is a cent above the suggested offer price, it is also a signal that the market thinks it’s a done deal, especially with Mirvac controlling more than 20% of the trust.
Mirvac signalled in August that it had started talking to the trust about a possible offer.
Yesterday it said the offer values the trust units at 54 cents, which it said was a 56% premium on the one month volume weighted average price of the units at the time the bidder announced in August that it was having talks with the trust.
The offer is proposed to be implemented by way of a trust scheme and requires the trust’s unitholder approval.
Mirvac said a subcommittee comprised solely of independent directors of the trust had recommended that unitholders vote in favour of the scheme in the absence of a superior proposal.
Mirvac, which currently owns 24.6% of the trust, believes the combination of the two portfolios and operations will create a stronger and more diversified property investment portfolio.
"The proposed transaction is expected to deliver 2.9 per cent earnings accretion to Mirvac Property Trust in the 2010 financial year and expands Mirvac’s ownership of Australian income producing assets by an additional $1.0 billion," Mirvac said in a statement to the ASX.
Mirvac said it will fund the $364 million transaction entirely from a combination of existing cash reserves and the issue of new ordinary stapled securities.
"We believe that the merger provides MRZ Unitholders the option to diversify their property exposure by investing in Mirvac – a leading Australian integrated real estate group underpinned by one of the lowest geared balance sheets in the A-REIT sector," Mirvac managing director Nicholas Collishaw said in the statement.
Office services group, Servcorp, is looking to raise $80 million to fund its growth and take advantage of depressed prices for real estate.
The company said yesterday it will raise $51 million from an institutional placement and $29 million from a one-for-11 accelerated non-renounceable entitlement offer.
Both components of the capital raising are fully underwritten at $4.00 a share, representing about a small, 3.6% discount to the closing price of its stock on Friday of $4.15.
Servcorp said it will use the proceeds, plus existing available cash reserves, to fund its expansion and roll-out at least 100 new floors over the next three to four years, the vast majority of which will be `virtual office’ floors.
"Servcorp management believes that the current market conditions represent an attractive opportunity for aggressive expansion," it said in yesterday’s statement.
"Depressed real estate prices and high vacancy rates in prime/A-grade CBD buildings are expected to allow Servcorp to enter into new leases in existing and new markets at attractive pricing."
The company’s largest shareholder, chief executive Alf Moufarrige, has committed to take up his entitlements in part, equivalent to an amount of $5 million.
Following the offer, Mr Moufarrige and his associated entities will hold approximately 50%.
“We are extremely excited about this opportunity. Difficult market conditions mean we are currently able to secure leases on very attractive terms.
"In addition to this, Servcorp’s systems and IT platform are now scalable, robust and able to accommodate our aggressive expansion plans for the Virtual Office model,” he said.
"Servcorp said it had identified a large number of sites and locations in existing regions and some in new markets such as North America, Canada, Scandinavia, parts of Europe and parts of the Middle East."
However, the company also said trading for the first two months of 2009-10 continued to be very difficult.
"The financial impacts of the new expansion plan means there will be a drag effect on profits into the medium term.
"These factors make it difficult to provide earnings guidance for the year ended 30 June 2010," the company said in the statement.
