Propertylink has rebuffed an approach from the Centuria Capital to buy all the units it does not own in an AUD573m (€384m) cash-and-scrip offer.
Centuria increased its stake in the company to 17% earlier this month for AUD97m, prompting speculation about a potential merger.
In a statement to the Australian Securities Exchange today, Propertylink said its board rejected what it called an “unsolicited, indicative, conditional and non-binding” proposal from Centuria.
Centuria is proposing a scheme of arrangement valuing Propertylink’s securities at AUD0.95 each, made up of cash and scrip from two Centuria vehicles.
The Propertylink board said the Centuria offer undervalues its business, including its co-investment stakes and institutional wholesale funds management platform.
Its balance sheet portfolio had a book value of AUD695m at the end of June, with AUD1.2bn in external assets under management, of which AUD63m was in co-investments. Its wholesale investors include Goldman Sachs and Grosvenor.
Propertylink’s last stated net tangible asset was AUD0.87 per security.
The bid offers no premium for control of Propertylink and would leave Propertylink investors owning scrip of two entities with “significant increased balance sheet and look-through leverage”, the Propertylink board said.
Propertylink was well-positioned for continued growth, the board said, given the strength of its industrial and logistics balance sheet portfolio.
Analyst Peter Zuk said today that a “friendly” transaction via a scheme of arrangement would be the sensible way forward for Centuria in its quest for Propertylink.
He wrote: “With takeover defence 101 now having been activated, what remains to be seen is when Centuria comes back with a revised bid.”
Others in the market still believe a merger, rather than a takeover, is the likely scenario.