AUSTRALIA MARKET
Tuesday, May 23, 2017
Cromwell Property Group (CMW); Investa Office Fund (IOF) :
Investa Office Fund chairman Richard Longes has delivered a blistering ultimatum to suitor Cromwell Property Group over its failure to produce a binding takeover bid and to identify its backers. The tussle for control of the listed Investa fund, managed by Penny Ransom, has intensified before a crucial shareholder vote on May 31 over a proposal for IOF to take joint control of its management platform. Mr Longes released a scathing public statement on the status of the Cromwell offer, worth nearly $3 billion, which has not yet been formalised into a bid even though the Brisbane player began due diligence in early April. ‘‘Cromwell has had access to comprehensive IOF due diligence for over five weeks and is still unable to give any indication of its never-ending, nonforthcoming potential offer to acquire IOF,’’ Mr Longes said. Investa has now refused Cromwell’s request for direct property inspections with its equity backers unless its suitor provides written confirmation on the details of its takeover offer and the identity of its debt and equity funders.
Downer EDI Limited (DOW); Spotless Group Holdings Limited (SPO) :
Downer EDI has extended its $1.2 billion takeover offer for catering, cleaning and facilities management company Spotless by two weeks, with the contractor’s offer now due to close in mid-June as it battles to gain traction. Downer said yesterday the $1.15-pershare cash offer, which is final, would close on June 14 instead of May 31. The extension comes as Downer waits for a decision from the Takeovers Panel on its application calling for Spotless to release an additional target’s statement after claiming the initial statement had ‘‘information deficiencies’’. Spotless’ board has told investors to reject Downer’s bid, arguing it is confident ‘‘the fundamental strengths of Spotless’s core business, together with management’s execution of the strategy reset, will deliver greater value to Spotless shareholders than the Downer offer in the medium term’’. But Downer has questioned the Spotless board’s reasons for rejecting the offer and wants the services group to provide a supplementary target’s statement ‘‘remedying the submitted deficiencies’’. Spotless did not hire an independent expert to assess the Downer bid. A decision from the Takeovers Panel is expected this week. Downer is also concerned that Spotless may revise its full-year earnings guidance during the next few weeks as the financial year draws to a close. The takeover bid is conditional on no changes to Spotless’s earnings guidance. Spotless has forecast profits of $80 million to $90 million for 2016-17.
G8 Education Limited (GEM):
G8 Education will be cap in hand in front of fund managers on Tuesday morning, seeking to plug an equity hole left by its strategic Chinese investor. Street Talk understands the childcare centre owner has lined up stockbrokers UBS and Ord Minnett to oversee an institutional placement, which is expected to be worth about $100 million and done at a slight discount to the last close. Investors said they expected G8 Education to reaffirm consensus EBIT forecasts as part of the raising, only weeks out from its first-half balance date. The institutional placement comes after G8 Education’s strategic investor, China First Capital Group Limited, failed to stump up $149million at $3.88 a share as had been agreed in February. It means China First Capital Group will have only 16.5millionG8Education shares–or a4percent stake priority Tuesday’s placement–after earlier writing a cheque for $63.8 million.
Rio Tinto Limited (RIO);Yancoal Australia Limited (YAL) :
Yancoal’s $US2.45 billion ($3.29 billion) bid for Rio Tinto’s Hunter Valley coal assets has been deemed to be ‘‘fair’’ by accounting firm Ernst & Young, which believes Rio is unlikely to find a better offer. EY’s comments came in an independent expert’s report into the deal, which will be voted on by Rio shareholders in the final week of June. The report put the fair value of the thermal coal business at between $US1.8 billion and $US2.1 billion and deemed Yancoal’s higher offer to be ‘‘fair and reasonable’’. Yancoal already operates numerous coal mines in the Hunter Valley, and EY pointed to the potential synergies of combining those assets with Rio’s mines. ‘‘We expect there are few other potential acquirers who could extract the same value out of the Coal & Allied assets as Yancoal,’’ said EY in the report. ‘‘There is limited potential for alternative superior proposals to emerge.’’ That comment came despite EY acknowledging that Glencore, which has previously bid for the assets, was the biggest coal miner in the Hunter Valley. But EY said mine synergies weren’t the only attraction for Yancoal, which has significant deferred tax assets that could be deployed against a profitable business like Rio’s Hunter Valley assets.
(Source: AIMS)
Tuesday, May 23, 2017
Cromwell Property Group (CMW); Investa Office Fund (IOF) :
Investa Office Fund chairman Richard Longes has delivered a blistering ultimatum to suitor Cromwell Property Group over its failure to produce a binding takeover bid and to identify its backers. The tussle for control of the listed Investa fund, managed by Penny Ransom, has intensified before a crucial shareholder vote on May 31 over a proposal for IOF to take joint control of its management platform. Mr Longes released a scathing public statement on the status of the Cromwell offer, worth nearly $3 billion, which has not yet been formalised into a bid even though the Brisbane player began due diligence in early April. ‘‘Cromwell has had access to comprehensive IOF due diligence for over five weeks and is still unable to give any indication of its never-ending, nonforthcoming potential offer to acquire IOF,’’ Mr Longes said. Investa has now refused Cromwell’s request for direct property inspections with its equity backers unless its suitor provides written confirmation on the details of its takeover offer and the identity of its debt and equity funders.
Downer EDI Limited (DOW); Spotless Group Holdings Limited (SPO) :
Downer EDI has extended its $1.2 billion takeover offer for catering, cleaning and facilities management company Spotless by two weeks, with the contractor’s offer now due to close in mid-June as it battles to gain traction. Downer said yesterday the $1.15-pershare cash offer, which is final, would close on June 14 instead of May 31. The extension comes as Downer waits for a decision from the Takeovers Panel on its application calling for Spotless to release an additional target’s statement after claiming the initial statement had ‘‘information deficiencies’’. Spotless’ board has told investors to reject Downer’s bid, arguing it is confident ‘‘the fundamental strengths of Spotless’s core business, together with management’s execution of the strategy reset, will deliver greater value to Spotless shareholders than the Downer offer in the medium term’’. But Downer has questioned the Spotless board’s reasons for rejecting the offer and wants the services group to provide a supplementary target’s statement ‘‘remedying the submitted deficiencies’’. Spotless did not hire an independent expert to assess the Downer bid. A decision from the Takeovers Panel is expected this week. Downer is also concerned that Spotless may revise its full-year earnings guidance during the next few weeks as the financial year draws to a close. The takeover bid is conditional on no changes to Spotless’s earnings guidance. Spotless has forecast profits of $80 million to $90 million for 2016-17.
G8 Education Limited (GEM):
G8 Education will be cap in hand in front of fund managers on Tuesday morning, seeking to plug an equity hole left by its strategic Chinese investor. Street Talk understands the childcare centre owner has lined up stockbrokers UBS and Ord Minnett to oversee an institutional placement, which is expected to be worth about $100 million and done at a slight discount to the last close. Investors said they expected G8 Education to reaffirm consensus EBIT forecasts as part of the raising, only weeks out from its first-half balance date. The institutional placement comes after G8 Education’s strategic investor, China First Capital Group Limited, failed to stump up $149million at $3.88 a share as had been agreed in February. It means China First Capital Group will have only 16.5millionG8Education shares–or a4percent stake priority Tuesday’s placement–after earlier writing a cheque for $63.8 million.
Rio Tinto Limited (RIO);Yancoal Australia Limited (YAL) :
Yancoal’s $US2.45 billion ($3.29 billion) bid for Rio Tinto’s Hunter Valley coal assets has been deemed to be ‘‘fair’’ by accounting firm Ernst & Young, which believes Rio is unlikely to find a better offer. EY’s comments came in an independent expert’s report into the deal, which will be voted on by Rio shareholders in the final week of June. The report put the fair value of the thermal coal business at between $US1.8 billion and $US2.1 billion and deemed Yancoal’s higher offer to be ‘‘fair and reasonable’’. Yancoal already operates numerous coal mines in the Hunter Valley, and EY pointed to the potential synergies of combining those assets with Rio’s mines. ‘‘We expect there are few other potential acquirers who could extract the same value out of the Coal & Allied assets as Yancoal,’’ said EY in the report. ‘‘There is limited potential for alternative superior proposals to emerge.’’ That comment came despite EY acknowledging that Glencore, which has previously bid for the assets, was the biggest coal miner in the Hunter Valley. But EY said mine synergies weren’t the only attraction for Yancoal, which has significant deferred tax assets that could be deployed against a profitable business like Rio’s Hunter Valley assets.
(Source: AIMS)
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