Singapore's Frasers Centrepoint $2.6 billion bid for Australand Property Group (ALZ) looks set to advance, after receiving unanimous backing from the target’s directors.
The off-market cash offer, which values Australand at $4.48 per security, stymies an earlier all-scrip, $4.35 per security bid from Stockland Property Group, which the rival lifted from a previous $4.20.
Frasers’ offer, which remains subject to shareholder and Foreign Investment Review Board approval, is scheduled to open on July 7 and close on August 7.
It has been unanimously backed by Australand’s directors in the absence of a superior bid, conditional on independent expert approval.
It follows Frasers’ late entry into merger discussions between the two Australian property groups in early June, when the buyer trumped Stockland with access to an exclusive due diligence period.
“The due diligence affirms the rationale and strategic fit for Frasers to acquire Australand,” Frasers chief executive officer Lim Ee Seng said late on Tuesday.
“Frasers had planned on achieving several key strategic objectives over the medium term, including increasing the proportion of overseas earnings and recurring income, as well as enhancing our platform in Australia. This transaction ticks all the boxes and will allow Frasers to achieve our targets in a much shorter period of time.”
Frasers, one of Singapore’s largest property groups, with assets of around $S11.4 billion ($9.68 billion) across Asia, Australasia, Europe and the Middle East, will fund the transaction with financing from Deutsche, Standard Chartered and Sumitomo Mitsui Banking Corporation.