Macquarie leads $1.1 billion bid approach for Charter Hall

Australia’s Charter Hall Office REIT, which defeated a management takeover bid from U.S. hedge funds last month, has received a A$1.06 billion ($1.12 billion) bid approach for its Australian portfolio by a consortium led by Macquarie.

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(Reuters) – Australia’s Charter Hall Office REIT, which defeated a management takeover bid from U.S. hedge funds last month, has received a A$1.06 billion ($1.12 billion) bid approach for its Australian portfolio by a consortium led by Macquarie.
The consortium was considering an offer of A$2.39 per trust unit, which would give unit-holders a total of A$3.52 after adding the proceeds from the recently announced sale of Charter Hall Office’s U.S. assets, the target company said on Monday.
Units of Charter Hall Office jumped 15 percent in early trade to A$3.33 each, though lower than its net tangible asset value of A$3.76 per unit as of June 2011.
Shares of many Australian property trusts have long been trading at a discount to their net asset values, offering opportunities for some activist hedge funds to scoop up cheap stocks and demand the sale of assets at or above market prices.
Macquarie Group originally sold management rights over the trust to Charter Hall in 2010 as Macquarie unwound its listed-funds model. That model, which relied on packaging assets into listed funds from which it earned management fees, came under pressure during the global financial crisis of 2008-2009.
Charter Hall Office said its independent directors had not formed a view on the bid approach at this stage, nor agreed to allow the consortium to undertake due diligence.
In July, Charter Hall Office unit-holders voted against a resolution proposed by U.S. hedge funds to replace Charter Hall Office Management Ltd as manager of the trust.
Charter Hall Office Management is a unit of Charter Hall Group which holds about 10 percent of the trust’s units and also has voting rights over a further 3.3 percent stake.
The Macquarie consortium is proposing to buy all the units except those held by Charter Hall Group and to leave Charter Hall as responsible manager of the trust, Charter Hall Group said.
(Reporting by Eriko Amaha; Editing by Mark Bendeich)