Charter Hall Group and a Dutch pension fund have together made a bid for fund manager IAP, which if successful will add another $1.5bn of funds under management, Macquarie notes.
The stock has recently de-rated as the market has questioned the strategic rationale of the Paradice Investment Management acquisition and the potential negative signal regarding the outlook for growth in the real estate platform, the broker suggests.
But the IAP the proposal highlights the breadth of the opportunity set that still remains for Charter Hall as well as the ability of the group to execute ahead of market expectations, in the broker’s view. Outperform and $22.68 target retained.
Sector: Real Estate.
Target price is $22.68.Current Price is $16.91. Difference: $5.77 – (brackets indicate current price is over target). If CHC meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).
