Charter Hall closes Mac shares deal

CHARTER Hall Group has mopped up the remaining shares in the former Macquarie real estate platform for $14.3 million, while its directors await news on a possible sweetener to the offer for the management rights to its office trusts.

By InvestSMART · 1 Oct 2011

By InvestSMART ·
1 Oct 2011

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Charter Hall took over the management of the listed Macquarie Office Trust and Macquarie CountryWide Trust in March 2010, which included the purchase of securities in the trusts over a staged period, which ended yesterday.

Last year's deal marked the end of Macquarie Bank's interest in the real estate investment trust (REIT) sector, which under the guidance of former director Bill Moss founded the model. Mr Moss joined with US hedge funds Orange Capital, Point Lobos and Luxor Capital in a failed attempt to oust Charter Hall as manager of the Charter Hall Office REIT.

In August a separate Macquarie-led consortium of funds launched an offer for the office fund, valued at $1.7 billion.

Charter Hall's advisers, Bank of America/Merrill Lynch and the office funds' independent directors are now in discussions to lift the offer price from $2.39 a unit, which rises to $3.52 after an addition $1.13 capital return from the proceeds of the US asset sales to Beacon Capital Partners.

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Frequently Asked Questions about this Article…

What did Charter Hall buy in the deal with the former Macquarie real estate platform?

Charter Hall Group purchased the remaining shares in the former Macquarie real estate platform for $14.3 million, completing the staged purchase of securities that began when it took over management of the trusts.

When did Charter Hall take over management of Macquarie Office Trust and Macquarie CountryWide Trust?

Charter Hall took over management of the listed Macquarie Office Trust and Macquarie CountryWide Trust in March 2010, and the staged purchase of securities tied to that takeover finished recently.

How did last year’s deal affect Macquarie Bank’s involvement in the REIT sector?

Last year’s deal marked the end of Macquarie Bank’s interest in the real estate investment trust (REIT) sector, closing a chapter on the model that had been developed under former director Bill Moss.

Who attempted to challenge Charter Hall’s management of the office REIT and what happened?

Former Macquarie director Bill Moss joined with US hedge funds Orange Capital, Point Lobos and Luxor Capital in an attempt to oust Charter Hall as manager of the Charter Hall Office REIT, but that effort failed.

What is the Macquarie-led consortium offer for the office fund and how large is it?

In August, a separate Macquarie-led consortium launched an offer for the office fund valued at $1.7 billion.

What is the current offer price per unit and how could it rise with the capital return?

The offer price under discussion is $2.39 per unit, which would effectively rise to $3.52 per unit after an additional $1.13 capital return funded by proceeds from US asset sales to Beacon Capital Partners.

Who is advising Charter Hall on the offer and what are the advisers discussing?

Charter Hall’s advisers are Bank of America/Merrill Lynch. They and the office funds’ independent directors are in discussions about lifting the offer price from $2.39 a unit.

How do the US asset sales to Beacon Capital Partners affect investors in the office fund?

Proceeds from the US asset sales to Beacon Capital Partners are expected to provide a $1.13 capital return, which would increase the effective value of the current $2.39 offer to $3.52 per unit for investors if implemented.