Propertylink rejects Centuria’s proposal
Propertylink Group has rejected a non-binding and unsolicited proposal from Centuria Capital Group and Centuria Property Funds, as responsible entity of Centuria Industrial REIT (CIP), to acquire 100 per cent of the company’s outstanding securities due to insufficient information to assess value.
The proposal involved a de-stapling of Propertylink Australian Industrial Partnership (PAIP), Propertylink trust (PT) and Propertylink (PHL).
Under the proposal, Propertylink’s securityholders would receive the following consideration per Propertylink security:
- $0.055 cash 9six per cent of total implied consideration)
- 0.23 CNI securities (32 per cent of implied total consideration)
- 0.23 CIP units (62 per cent of total implied consideration)
However, the Propertylink’s board said that upon the reviewing the proposal, it rejected it for the following reasons:
- It undervalues Propertylink, taking into account the nature of consideration, the underlying value of Propertylink’s investment portfolio, co-investment stakes and institutional wholesale funds management platform
- The indicative proposal contemplates a control transaction, however, offers no premium for control
- The predominantly scrip offer consideration leaves Propertylink security holders owning two entities with significantly increased balance sheet and look through leverage
- It exposes Propertylink security holder to significant value risk arising from change of control and key person provisions in Propertylink’s wholesale funds management arrangements
- It exposes Propertylink security holders to significant value risk due to the nature of CNI’s listed funds platform, should those management arrangements be challenges.
AUTHOR
Oksana Patron
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