THE independent directors of Thakral Holdings have informally advised shareholders to reject the $410 million takeover offer made by Canadian company Brookfield Asset Management late last week.
In issuing the advice, the newly formed committee of independent directors, including Albert Harris, Hugh Keller and Lim Swe Guan, said it was still reviewing the offer, which was made at a 30 per cent discount to the net tangible asset value.
Thakral's chief operating officer, Anthony Story, who is running the group after the retirement in December of John Hudson, said yesterday that subject to considering the views of independent experts, "the independent directors expect that they will recommend in the target's statement that Thakral security holders reject the Brookfield offer".
"The independent directors advise that Thakral security holders should take no action in relation to the Brookfield offer," Mr Story said.
Although not unexpected, the Brookfield offer pitched at 70? per security was still a surprise, given the Thakral net tangible asset value is 96?.
Investors said another plus to boost the price was the conditional approval Thakral has to redevelop its office and retail assets at Wynyard, valued at about $1.3 billion.
Thakral also owns the Menzies Hotel in Carrington Street, which will benefit from the proposed upgrade of the Wynyard railway station to form a walkway link to the $6 billion Barangaroo sites.
Brookfield had been mooted as a possible buyer of just the Wynyard area assets, but last year it secured a margin loan from the Government of Singapore Investment Corporation, which was covered by 38.6 per cent of the Thakral family's shares in Thakral Holdings. Once that loan is converted it will give Brookfield the stake with which to launch a takeover of the rest of the company and in return the Thakral family's debt will be resolved and it will be left with 4 per cent.
The other key shareholder is Allan Gray Australia, formerly Orbis Investments, with about 11 per cent. The group's managing director, Simon Marais, said: "These are all good income generating assets and would be attractive to any number of buyers so ... you could add at least 10? to 15? to the Brookfield offer price."
Maxim Asset Management's managing director, Winston Sammut, said he would reject the offer. "While the stock has been tightly held, the value to shareholders is over 90? ... so 70? is a cheap price. Now that Thakral has got conditional approval for Wynyard that value should start coming through."