Brisbane-based global real estate investment manager Cromwell Property Group has withdrawn its takeover bid for London-listed firm RDI REIT, after acknowledging that RDI's board thought its bid undervalued the company.
In a statement, Cromwell said: 'The RDI board considered the proposal to undervalue RDI and its prospects and, as a result, the RDI board has taken the decision not to support a further period of due diligence. Accordingly, Cromwell confirms that, pursuant to Rule 2.8 of the code, it does not intend to make an offer for RDI.'
At the end of March, Cromwell had confirmed media speculation that it was in discussions with RDI about a takeover, with a formal deadline for a bid stipulated at 17.00 UK time on April 23.
RDI said it a statement that it had 'recently received a conditional proposal from Cromwell' but both its board and its largest shareholder, Johannesburg-listed Redefine Properties, deemed the offer 'unacceptable'.
Media reports say that Cromwell launched a cash and scrip offer for the firm worth €1.85 per share for RDI. The offer price represented a 43% premium to the last closing price of RDI's shares pre-bid announcement.
Goldman Sachs has been acting as lead financial advisor to Cromwell through the process, with Morgan Stanley also advising.
RDI's shareprice fell in London and Johannesburg on the announcement of the Cromwell bid withdrawal, trading 4.7% lower in the UK and 14% lower in South Africa.
The UK-based REIT has since updated the markets on the proposed sale of four UK shopping centres it owns, which are acting as security for a debt facility provided by Aviva.
RDI said that a 'standstill' had been agreed with Aviva after RDI breached covenants across the assets. Aviva has agreed to not pursue RDI over the debt until October 11, buying RDI more time to sell the assets, or restructure the debt facility.
RDI said the occupancy of the portfolio in question is currently 94.5%, but the firm is struggling to divest the assets in the weakened UK retail climate.
