Singapore’s Frasers Centrepoint launches A$2.6 bn bid for Australand

Frasers Centrepoint Ltd, a Singapore-based property developer backed by Thai billionaire Charoen Sirivadhanabhakd, yesterday launched a A$2.6 billion ($2.41 billion) bid for Australand Property Group, topping an offer from Australia's Stockland Corp Ltd.

Frasers Centrepoint is offering $4.48 per share in cash, and allows Australand shareholders to keep an expected 12.75-cent-per-share interim dividend payment, taking the total offer value to $4.60 per share or A$2.6 billion.

The bid trumps Stockland's sweetened offer of 1.124 of its stock for each Australand share and $250 million in cash taking the deal value to $4.35 per share or A$2.5 billion.

Australand had rejected Stockland's initial all-share offer of A$4.20 as inadequate.

Although Frasers' offer is only higher by A$100 million, but its all cash component looks far more attractive to investors than Stockland's majority share bid.

Australand has granted Frasers four weeks of exclusivity to conduct due diligence, and said in a statement that it will recommend Frasers proposal to its investors if no superior offer is tabled.

"The board concluded that the conditional proposal would deliver a compelling value outcome for Australand security holders and is superior to the final and conditional proposal received from Stockland," chairman Paul Isherwood said.

Frasers, 59-per cent owned by Sirivadhanabhakdi's investment company TCC Assets Ltd and 29 per cent by his Thai Beverage, Frasers develops property, invests and manages commercial property, serviced residences and property trusts.

Frasers was listed on the Singapore Stock Exchange earlier this year after it acquired the property division of Fraser & Neave Ltd for $11 billion.

Centrepoint has a portfolio of residential, commercial and hospitality properties in Singapore, Australia, Japan, and China valued at more than S$10 billion ($7.9 billion).

Listed on the Australian Securities Exchange, Australand is one of Australia's leading diversified property groups.

Australand's operations, which include development of residential land, housing and apartments, development of, and investment in income producing commercial and industrial properties, and property management, are located in Sydney, Melbourne, South East Queensland, Adelaide and Perth.

As at 31 December 2013, Australand had a total portfolio of 68 investment properties valued at A$2.4 billion and generated operating profit after tax of A$147.9 million in 2013.