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09-08-2014, 08:02 PM
Big or small (Greenland, City Dev, Suntec, Ho Bee, St******, Aspial, Fragrance, CES), many cashed up Asian developers have been making or looking to make a beeline for Aussie real estate assets. Securing Australand for its large and established platform will tap into established local management that will help minimise the incidence of regulatory red tapes...
Australand takeover first of a wave
SARAH DANCKERT, TAKEOVERS
485 words
9 Aug 2014
The Australian
AUSTLN
English
© 2014 News Limited. All rights reserved.
THE looming $2.6 billion takeover of Australand by Singapore’s Frasers Centrepoint could mark the first of a wave of corporate plays by cashed-up Asian groups looking to launch into Australia as their home markets slow.
The bid has been well-received by local analysts and fund managers, who praised rival bidder Stockland’s discipline in not overplaying its hand. Others said there was still a chance for Stockland to pick up some assets out of the Australand portfolio if it was able to negotiate an asset-for-equity swap with Frasers.
BT Investment Management head of property securities Peter Davidson said Stockland would look to do a carve-out in exchange for its 19.9 per cent stake in the company. “Basically it’s two major investors sitting in a room playing poker with each other over the assets,” Mr Davidson said. “There is a conga line of buyers for high-quality assets. The only question is which trust, which collection of high-quality assets, is next?” The prizes in Australand’s portfolio from Stockland’s perspective are its apartments business and several of its commercial and industrial assets and development opportunities.
JPMorgan analyst Richard Jones said the takeover provided a very good pricing comparison for the two listed companies considered comparable to Australand — Stockland and Mirvac.
“We’re pleased to see some discipline shown by Stockland management and we would expect that they will sell into the offer and take their profit,” Mr Jones said.
Stockland stands to make $85 million from the sale of its stake in Australand into the Frasers offer.
Antares Equities investment manager Brett McNeill, whose company owns a stake in Stockland, said Stockland should now prove up the value of its underlying business.
“They can do this by demonstrating a focused strategy and strong cost control, while delivering improved profitability in the residential and retirement divisions, as well as hitting their target yields on the retail development projects,” Mr McNeill said.
Phoenix Portfolios managing director Stuart Cartledge also praised Stockland’s discipline, saying the sector had a “sorry” track record of overpaying and underdelivering.
“I guess it means Stockland is on the slow road to glory and not the fast road,” he said.
“They can now build the high-density development capability in-house and while it will take longer, I expect the risks associated with it will be materially lower.” Analysts in Singapore covering Frasers also praised the deal. CIMB analyst Tan Xuan said Frasers was expected to undertake a strategic review of Australand and would possibly shed more light on its future plans thereafter.“This can be a key catalyst, allowing investors to understand its rationale as well as its future plans to unlock Australand’s value,” Ms Tan said. She said the acquisition would allow Frasers to replenish its recently depleted land bank.
News Ltd.
Document AUSTLN0020140808ea890002t
Australand takeover first of a wave
SARAH DANCKERT, TAKEOVERS
485 words
9 Aug 2014
The Australian
AUSTLN
English
© 2014 News Limited. All rights reserved.
THE looming $2.6 billion takeover of Australand by Singapore’s Frasers Centrepoint could mark the first of a wave of corporate plays by cashed-up Asian groups looking to launch into Australia as their home markets slow.
The bid has been well-received by local analysts and fund managers, who praised rival bidder Stockland’s discipline in not overplaying its hand. Others said there was still a chance for Stockland to pick up some assets out of the Australand portfolio if it was able to negotiate an asset-for-equity swap with Frasers.
BT Investment Management head of property securities Peter Davidson said Stockland would look to do a carve-out in exchange for its 19.9 per cent stake in the company. “Basically it’s two major investors sitting in a room playing poker with each other over the assets,” Mr Davidson said. “There is a conga line of buyers for high-quality assets. The only question is which trust, which collection of high-quality assets, is next?” The prizes in Australand’s portfolio from Stockland’s perspective are its apartments business and several of its commercial and industrial assets and development opportunities.
JPMorgan analyst Richard Jones said the takeover provided a very good pricing comparison for the two listed companies considered comparable to Australand — Stockland and Mirvac.
“We’re pleased to see some discipline shown by Stockland management and we would expect that they will sell into the offer and take their profit,” Mr Jones said.
Stockland stands to make $85 million from the sale of its stake in Australand into the Frasers offer.
Antares Equities investment manager Brett McNeill, whose company owns a stake in Stockland, said Stockland should now prove up the value of its underlying business.
“They can do this by demonstrating a focused strategy and strong cost control, while delivering improved profitability in the residential and retirement divisions, as well as hitting their target yields on the retail development projects,” Mr McNeill said.
Phoenix Portfolios managing director Stuart Cartledge also praised Stockland’s discipline, saying the sector had a “sorry” track record of overpaying and underdelivering.
“I guess it means Stockland is on the slow road to glory and not the fast road,” he said.
“They can now build the high-density development capability in-house and while it will take longer, I expect the risks associated with it will be materially lower.” Analysts in Singapore covering Frasers also praised the deal. CIMB analyst Tan Xuan said Frasers was expected to undertake a strategic review of Australand and would possibly shed more light on its future plans thereafter.“This can be a key catalyst, allowing investors to understand its rationale as well as its future plans to unlock Australand’s value,” Ms Tan said. She said the acquisition would allow Frasers to replenish its recently depleted land bank.
News Ltd.
Document AUSTLN0020140808ea890002t