Listed Australian property trust Hotel Property Investments (HPI) has rejected a A$718m (€433m) takeover offer from Charter Hall and superannuation fund Hostplus, stating that it significantly undervalues the company.
The bidders are offering to acquire all of the securities in ASX-listed HPI which Charter Hall and its entities currently do not own for A$3.65 per HPI security. Charter Hall, which is already the single largest shareholder in HPI, is making the offer through Charter Hall Reit REIT (CQR).
HPI’s property portfolio comprises hotels, pubs and motels located throughout Queensland, South Australia, New South Wales and Victoria.
Ben Ellis, fund manager of CQR and Charter Hall’s Retail CEO, said: “The proposed acquisition of HPI alongside Hostplus is attractive and designed to deliver significant benefits to both HPI securityholders and CQR unitholders.
“The acquisition is in line with CQR’s strategy to invest in high quality, net lease retail assets, whilst partnering with leading convenience retailers to deliver resilient and growing income streams.”
CQR and Hostplus will contribute 50% of the cash consideration for the offer for HPI and plan to own their holdings in directly through a fund.
Ellis said Hostplus was an existing partner through its investment in Long Wale Investment Partnership 2 fund. Charter Hall and Hostplus in 2021 took over ALE Properties for A$1.68bn to gain control of 78 pubs around the country.
Responding to the offer, HPI board said it had considered the unsolicited and conditional offer carefully having been verbally briefed on its terms over the weekend. “As a result, the board has unanimously concluded that the offer is opportunistic, not compelling and materially undervalues HPI as it represents.”
HPL said it intends to formally recommend that securityholders reject the offer.
The offer is subject to a 50.1% minimum acceptance and is expected to open two weeks.
To read the latest IPE Real Assets magazine click here.
