Duo take shine to Sun

Soheil and Sahba Abedian have been gradually boosting holding in property group to 38 per cent

SUNLAND Group co-founder Soheil Abedian and son Sahba are going through what those in the sharemarket might call a long case of the “creeps” – with a difference.

Since 2008, their combined holding in the listed property group has climbed from less than 18 per cent to nearly 38 per cent – and at little personal cost.

Sunland, which at one time counted James Packer as a major investor, has spent some $120 million of shareholder funds buying back its own shares and cancelling them, a process still under way.

The Abedians appear to have sat tight and not sold into the buybacks, and today are sitting on shares that, on an asset-backing basis rather than market price, are ostensibly worth more than $140 million.

The Abedian creep up the Sunland register is quite different to the normal type of sharemarket creep.

The term traditionally applies when a shareholder has reached the 19.9 per cent takeover threshold and is then allowed to buy a further 3 per cent of a company’s capital every six months without making a full bid.

As the GFC loomed nine years ago, Sunland – cashedup after astute price-cutting to quit overhanging property stock – embarked on a “capital management strategy”.

It launched a sharebuyback program, picking up its first tranche of shares at 50c and over time lifting the average buyback price to 93c.

The number of shares on issue has fallen from 291 million to 156 million, with the Abedians’ holding standing today at 58.5 million. A couple of million of those were added through their own on-market buying.

The buybacks haven’t just benefited them. As the number of shares on issue has fallen, every shareholder who stayed along for the ride has seen both asset backing and earnings per share rise.

Each Sunland share today is rated in the company’s accounts as being backed by $2.39 of assets, a figure that might well be conservative.

The shares have been selling for about $1.70-plus and in the latest year came with an annual fully franked dividend of 10c, which in the Abedian case is worth $5.85 million before the franking benefit.

The Abedians’ rise to a 38 per cent holding raises the question – is a privatisation of Sunland likely down the track?

Or, if the right buyer came along, would they cash in their chips? They have made the company virtually takeover proof – anyone eyeing it would need to get them on board to be sure of success.

Meanwhile, Mr Packer might be an interested observer of the Sunland story.

He unloaded 37.5 million shares at a $40 million loss in 2009, not long after the buybacks started.

THE ABEDIANS’ RISE TO A 38 PER CENT HOLDING RAISES THE QUESTION — IS A PRIVATISATION OF SUNLAND LIKELY DOWN THE TRACK?