A couple of possible takeover situations appeared on the ASX yesterday.
The first involved Australand (ALZ), the Singapore-controlled property developer and manager, with Stockland (SGP) grabbing a 19.9% stake yesterday.
Australand is 39.1% owned by CapitaLand of Singapore, which sold off a 19.9% stake last year.
Those shares were sold into the market and Stockland has now grabbed part of the Singapore group’s remaining 39.1% stake.
That means CapitaLand is a probable seller of the remainder of its stake (around 19%), with Stockland the most obvious buyer – if it launches a takeover offer.
The news didn’t thrill investors in Stockland, its securities fell 2.6% to $3.75.
The company doesn’t have a great track record in takeovers and market raids. It had a stake in FKP for a while and couldn’t go further to a full bid. Those shares were sold in October of last year.
But it did buy retirement group Aevum back in 2010.
GPT Group made a grab for Australand in December 2012, but the offer failed to proceed.
In July of last year there was talk that Stockland was eyeing Australand and might buy CapitaLand’s 59.% stake.
But the Singapore group decided to sit on, but then decided to sell down by 19.9%.
Stockland was trading around $3.75 last July and Australand was trading around $3.50.
Yesterday, Australand securities closed at $3.98, up 2.3%. So Stockland’s foray will end up costing much more if it launches a full bid.
SGP vs ALZ 1Y – Stockland swoops on Australand, at last
The two real estate investment trusts mirror each other with a diversified portfolio of residential, office and industrial assets.
In a statement yesterday, Stockland’s chief executive Mark Steinert said Stockland bought the 19.9% equal to 115.2 million securities stake in Australand at an average price of $3.78 (which raised eyebrows).
It comprised a 15.7% direct holding and 4.2% indirect interest. The cost is around $436 million.
“Australand has a diverse and complementary portfolio of assets, including a quality industrial portfolio and medium density residential projects that are well aligned with our strategy,’’ Mr Steinert said.
‘‘Over time this holding will enable us to explore strategic opportunities with Australand.”
He said the stake will be funded through cash and debt facilities. Gearing will remain within the target range with pro forma gearing at 26.7%.
Stockland said the transaction was expected to be broadly earning per security neutral.
Investor Snapshot Video: Stockland makes investment
