Australand keeps takeover talk at bay
Australand has staved off takeover rumours, following a decision by major shareholder CapitaLand to remain on the register after an extensive review of the business.
In January, CapitaLand, which owns 59 per cent of Australand, revealed it was undertaking an investigation to divest the interest, as part of a general revision of the group's investment strategy.
That was seen as the starter gun for a new round of mergers and acquisitions among the Australian real estate investment trusts, of which none have occurred.
Rumours of potential tie-ups have all been discounted by the REITs, with the managers preferring to focus on their own businesses during a volatile six months.
Many of the REITs' security prices are back to parity or at only marginal discounts to the net tangible asset values, which is considered the benchmark for the sector.
Analysts say chief executives of the REITs would be unpopular to launch aggressive takeovers at a time when the outlook for the office and retail property leasing markets is not as positive as a year ago.
One analyst said the managers needed to restore balance sheets and investor confidence before making moves on others.
GPT Group triggered the speculation when chief executive Michael Cameron revealed he was looking at a potential takeover of Australand.
Some of Australand's key assets include Building F at Rhodes Corporate Park in Sydney, where Citigroup has signed a six-year lease over 3500 sq m. But after months of discussions, which also saw the opening of a data room, no viable buyer came forth, leaving CapitaLand as a long-term shareholder. GPT pulled out of the running in late May.
In a statement released late Monday, CapitaLand and Australand's directors advised that the status quo had been maintained.
"Several indicative proposals were received from various parties for parts and all of the business during the process, which commenced in early 2013. However, no proposal was able to be developed, that was superior to business as usual," the statement says.
"CapitaLand has completed the strategic review of interest in its subsidiary Australand and concluded that Australand will continue as a key investment."
This was announced on the eve of Australand's interim result, which is being released on Wednesday. The diversified group has a December balance date.
According to analysts, the Australand result would be the benchmark for the upcoming reporting season for any impairments in the residential division.
Simon Wheatley, the head of REIT research at Goldam Sachs, said he expected Australand's net profit after tax to be $71.5 million, up from $68.2 million in the previous corresponding period.
Australand has confirmed a 10.5¢ interim dividend. The guidance for the full year is 21.5¢ per security.