THE DISTILLERY: GPT offensive

Jotters unpack GPT boss Mike Cameron's plans for a raid on Australand's prized assets.

Much of the focus on GPT’s bid to prize some of Australand's finer assets has centred on the two parties that, in the end, call the shots. At GPT it’s chief executive Mike Cameron. At Australand, it’s Singaporean majority shareholder CapitaLand.

The Australian Financial Review’s Chanticleer columnist Mike Smith, who’s filling in for Tony Boyd, says the writing was on the wall back in June as to what Cameron wants to do with GPT. The question was quite how he would go about it.

"Cameron, the former St George Bank finance chief who cut his teeth on the property sector at Lend Lease, made it clear at the company’s strategy day in June that change was coming. GPT wanted to rebalance its $8.2 billion property portfolio away from structurally challenged retail towards the office and industrial sectors, which are now forecast to generate superior returns. Achieving this was never going to be easy. Beyond growing organically, there were few obvious targets and Australand looked like a no-go zone due to the residential assets in its portfolio.”

The Australian’s John Durie speculates on what Cameron could be up to more broadly, as well as who he really needs to convince to get the Australand bid over the line.

"Michael Cameron must have a wider agenda at play behind his audacious offer to relieve Australand's chief of his best assets, because at first glance Robert Johnston would be excused for simply hanging up. The deal, possibly worth up to $2.8 billion, for two-thirds of the assets in a company now valued at $1.9 billion, shows you the board, on paper, is under some pressure to justify rejecting the move. The conspiracy theory starts with a very long bow in Singapore, given CapitaLand owns 59 per cent of Australand and GIC owns 11.6 per cent of GPT. Could this be Singapore Inc at play here, given CapitaLand has the final say on the GPT move and the government investment arm has a sizeable stake in GPT?”

Business Spectator’s Stephen Bartholomeusz looks at the implications for Australand, given that Cameron would be plucking so many of its best assets.

"The approach to Australand last Friday would, if successful, add about $2.3 billion of office and industrial properties to GPT’s portfolio, as well as its commercial and industrial development business. It would also, however, gut Australand. The assets targeted by GPT represent more than 70 per cent of the group’s asset base and would essentially leave it with only its residential property business, which generated $38 million of Australand’s $123 million of earnings before interest and tax in the June half. A decision to sell the assets GPT is seeking would therefore represent a major strategic call by Australand’s controlling shareholder, Singapore’s CapitaLand.”

Meanwhile, Fairfax’s Adele Ferguson explains how the power of social media that’s currently unleashing all manner of hell on 2Day FM owner Southern Cross Media Group, became apparent when Starbucks paid the British government "voluntary” tax to get those forces off its back.

And finally, The Australian’s Barry Fitzgerald says smaller mining companies have an opportunity ahead of them, with BHP Billiton and Rio Tinto cutting back on their exploration budgets.

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