Irongate rebuffs the R12bn takeover bid by 360 Capital
IRONGATE Group, formerly Investec Australia Property Fund (IAP), yesterday rejected an A$1.1 billion (R12.18bn) takeover offer from fund manager 360 Capital Group, saying the offer did not “reflect the underlying value of IAP having regard to its high-quality office and industrial real estate portfolio”.
On October 16, the group had received a “highly conditional” and “unsolicited” offer, which IAP’s board previously warned might make a predatory offer.
The offer was for all shares in Irongate that 360 Capital did not already own for A$1.6047 cash per security, which was made up of a headline price of A$1.65 less the anticipated distribution of A$0.0453 per IAP security for the half-year to September 30.
The proposal was conditional on ESR Real Estate (Australia) entering into an agreement with 360 Capital to purchase an undisclosed number of IAP’s assets on terms yet to be agreed, a statement from IAP said. 360 Capital already owns about 19.11 percent of IAP.
Yesterday, the IAP board said it was of the firm view that the indicative proposal did not adequately reflect the value-add upside potential embedded in the portfolio, and the value and growth potential of its third party funds management business. Following the revaluations undertaken as at September 30, 2021, IAP’s net asset value was now A$1.61 per stapled security, it said.
The IAP board also noted that 360 Capital had not provided certainty on its ability to fund the proposal.
IAP said it had engaged Macquarie Capital (Australia) and JP Morgan
Securities Australia as its financial advisers, King & Wood Mallesons as its Australian legal adviser and Cliffe Dekker Hofmeyr as its South African legal adviser.
The company made the announcement as it released its financial results for the half-year ended September 30, delivering an interim distribution of 4.53 Australian cents per share, which equated to 91 percent adjusted funds from operations.
IAP chief executive Graeme Katz said: “The financial result we are releasing today is underpinned by the ongoing strong underlying performance of our property portfolio, our active balance sheet management and the progress made over the past six months in building out our funds
management platform.
“We believe IAP is continuing to deliver on the business model and investment thesis that we have clearly articulated to the market.”
The fund’s portfolio had grown to A$1.425bn through property acquisitions and valuation uplift, particularly within the industrial portfolio.
During the period the fund acquired two industrial properties and two office properties for total consideration of A$130 million, maintaining the focus on acquiring industrial and office properties strategically located in specific markets and in close proximity to critical infrastructure.
Net asset value increased to A$1.61 per security – up from A$1.49 per security at March 31, it said.