Propertylink Group (ASX:PLG) (Propertylink or the Group) announces that on 22 September 2017 it received an unsolicited, indicative, conditional and non-binding proposal from Centuria Capital Group (ASX:CNI) (CNI) and Centuria Property Funds No. 2 Limited as Responsible Entity of Centuria Industrial REIT (ASX:CIP) (CIP) (collectively Centuria) to acquire 100% of the outstanding securities in Propertylink by way of Propertylink schemes of arrangement (the Indicative Proposal).
This Indicative Proposal follows an initial approach (Initial Approach) received by Propertylink from Centuria on 15 September 2017. The Propertylink Board reviewed the Initial Approach, and together with its advisers, determined that there was insufficient information to assess value and accordingly sought further detail. Centuria responded with the Indicative Proposal.
The Indicative Proposal involves a de-stapling of Propertylink Australian Industrial Partnership (PAIP), Propertylink Trust (PT) and Propertylink (Holdings) Limited (PHL). The Indicative Proposal contemplates that:
- CNI would acquire Propertylink’s funds management business and coinvestment stakes via an acquisition of PHL and PT; and
- CIP would acquire Propertylink’s balance sheet industrial portfolio via an acquisition of PAIP. Under the Indicative Proposal, Propertylink securityholders would receive the following consideration per Propertylink security:
- $0.055 cash (6% of total implied consideration); • 0.23 CNI securities (32% of implied total consideration); and
- 23 CIP units (62% of total implied consideration). Adopting the five day Volume Weighted Average Price (VWAP) for both CNI and CIP the offer consideration implies an offer value of approximately $0.95 per Propertylink security.
The Propertylink Board, having reviewed the Proposal with its advisers, has unanimously rejected the Indicative Proposal for the following reasons:
- It undervalues Propertylink taking into account the nature of consideration, the underlying value of Propertylink’s investment portfolio, co-investment stakes and institutional wholesale funds management platform; • The Indicative Proposal contemplates a control transaction; however, offers no premium for control;
- The predominantly scrip offer consideration leaves Propertylink security holders owning two entities with significantly increased balance sheet and look through leverage;
- It exposes Propertylink security holders to significant value risk arising from change of control and key person provisions in Propertylink’s wholesale funds management arrangements; and
- It exposes Propertylink security holders to significant value risk due to the nature of CNI’s listed funds platform, should those management arrangements be challenged.
The Propertylink Board believes the Group is well positioned for continued growth given the strength in its industrial and logistics balance sheet portfolio, several initiatives currently underway in the funds management business and the strong capital position of the platform.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.