Cheers to Charter Hall bid

PROPERTY funds company Charter Hall will become the biggest pub landlord in the country through a $1.7bn takeover offer for ALE Property Group.

Charter Hall is teaming up with superannuation fund HostPlus to take over the listed fund, which owns famed hotels including Melbourne’s Young & Jackson, the Breakfast Creek Hotel in Queensland and Sydney’s Crows Nest Hotel.

The funds group will add ALE’s high-profile hotels to its existing collection of pubs, which are run by the Endeavour Group.

Charter Hall’s mixed cash and scrip offer with HostPlus will put it at the top of the pile of freehold pub owners.

The transaction shows the strong demand for long-leased properties even during the coronavirus crisis which has shut many pubs in Sydney and Melbourne.

ALE securityholders will receive the 0.4080 Long WALE REIT securities and cash of $3.673 for each ALE security and also the September quarter distribution of 5.5c.

Based on the closing price of Long WALE REIT securities last Friday the proposal has an implied value of $5.88 per ALE security, a 25.2 per cent lift on their last close on Friday of $4.70.

ALE securities jumped 98c to $5.68 on Monday as investors expected the deal to proceed.