Valad board backs Blackstone buyout

IT TOOK investors just over 30 minutes yesterday to pass control of the now-defunct Valad Property Group to the US Blackstone Group.

By InvestSMART · 2 Aug 2011

By InvestSMART ·
2 Aug 2011

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IT TOOK investors just over 30 minutes yesterday to pass control of the now-defunct Valad Property Group to the US Blackstone Group.

At the meeting, attended by more investment bankers and advisers than Valad unit holders, 95 per cent of the register voted "yes" to the scheme of arrangement.

Helping to push the deal over the line was the report by independent expert, KPMG, which concluded that, in the absence of a superior proposal, the "scheme is not fair, but is reasonable and is in the best interests of Valad security holders".

Yesterday, Valad's independent chairman Trevor Gerber told the meeting the Blackstone deal had the unanimous backing of the board and senior management. Blackstone will take the scheme to the New South Wales Supreme Court for final approval. Once that has been received, Valad will cease trading on August 12.

Valad was founded by Stephen Day and Barry Wynne in 1995. Shortly afterwards Peter Hurley joined as chief executive.

The company was floated in 2002 by Macquarie Bank at $1. During its rise, Valad's shares hit a high of $42.92 (before last year's 20-1 share consolidation, making it equal to $2.14 ) and then plummeted to a low of $1.78 (8? before the consolidation).

In April, Blackstone offered investors $1.80 after the consolidation. The deal was pre-empted by Blackstone buying out $165 million of Valad's convertible notes from Kimco Realty.

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Frequently Asked Questions about this Article…

What happened in the Valad Property Group buyout by Blackstone?

Investors voted quickly to pass control of Valad Property Group to US buyout firm Blackstone. The scheme of arrangement was approved in just over 30 minutes, with about 95% of the register voting "yes." The Valad board and senior management gave unanimous backing, and Blackstone will now seek final approval from the New South Wales Supreme Court.

Why did Valad security holders accept the Blackstone scheme of arrangement?

An independent expert report from KPMG concluded that, in the absence of a superior proposal, the scheme "is not fair, but is reasonable and is in the best interests of Valad security holders." That finding, plus the unanimous support of Valad's board and management, helped push the deal through.

When will Valad stop trading and what are the next steps for the Blackstone buyout?

Once Blackstone obtains final approval from the New South Wales Supreme Court, Valad will cease trading on August 12. The court approval is the final procedural step before the scheme is implemented.

How much did Blackstone offer Valad investors and what happened with Valad's convertible notes?

Blackstone offered Valad investors $1.80 per share in April (after last year's 20-to-1 share consolidation). Blackstone also pre-empted part of the deal by buying $165 million of Valad's convertible notes from Kimco Realty.

Who founded Valad and who were the key executives mentioned in the buyout coverage?

Valad was founded in 1995 by Stephen Day and Barry Wynne. Peter Hurley joined shortly afterwards as chief executive. At the meeting approving the deal, independent chairman Trevor Gerber said the transaction had unanimous backing from the board and senior management.

What is notable about Valad's share price history leading up to the Blackstone buyout?

Valad was floated in 2002 by Macquarie Bank at $1. During its history the shares reached a high of $42.92 (before last year's 20-to-1 consolidation, equivalent to about $2.14 after adjusting) and later fell to a low of $1.78 prior to the buyout.

How decisive was the investor vote on the Valad scheme of arrangement?

The vote was highly decisive: about 95% of the register voted "yes" at a meeting that lasted just over 30 minutes. The meeting was noted for having more investment bankers and advisers in attendance than Valad unit holders.

Did Valad's board publicly back the Blackstone takeover and how did that influence investors?

Yes. Independent chairman Trevor Gerber told the meeting the Blackstone deal had unanimous backing from the board and senior management. That public endorsement, together with KPMG's report, helped reassure security holders and influenced the strong "yes" vote.