Singapore GIC on property spree in Australia?

source : The Australian newspaper





DIRECTORS of $1.7 billion Australian office landlord Charter Hall Office REIT have reached a conditional agreement to privatise it after a consortium of global funds again raised their offer.

Charter Hall Office REIT directors confirmed last night that the Macquarie Group-advised consortium comprising the Government of Singapore Investment Corporation and the Public Sector Pension Investment Board of Canada had agreed to offer unitholders $2.47 per unit plus a 2c per unit special dividend.

The offer for the Australian business equated to $1.23bn.

It excludes proceeds of the $US1.7bn ($1.66bn) sale of the US portfolio, which is expected to be finalised by March when unitholders will vote on the consortium's takeover proposal.

The consortium made its initial approach for the company in August and has twice sweetened its bid after the trust's directors suggested they would not support earlier offers.

However, last night, one Charter Hall Office REIT shareholder said he would not back the deal, as it reflected a 4.2 per cent discount to the net tangible asset backing of $2.60 for the Australian business.

Major shareholders include activist hedge funds led by US-based Orange Capital.

The hedge fund tried to oust Charter Hall as the trust's manager this year in protest against perceived conflicts of interest on corporate governance issues and management fees. Charter Hall Office REIT's shares have been in a trading halt since Friday at $3.42.

The trust's 19 Australian office properties were last valued on the books at $1.9bn.

Among its best assets are 50 per cent stakes in three Sydney buildings: 1 Martin Place, 2 Park St and 2 Market St.

The consortium will buy all units of the trust, excluding the 15 per cent held by headstock Charter Hall group, which will manage the entity as an unlisted wholesale fund should the deal proceed.

As part of the proposal, unitholders would be paid out a 7.2c per unit dividend.


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