Charter Hall calls for independent valuer in HPI takeover fight
Property giant Charter Hall and superannuation fund Hostplus have stepped up the pressure in their pursuit of ASX-listed pub landlord Hotel Property Investments, extending their takeover bid for a third time in an effort to get more investors onside.
The takeover battle began in September when ASX-listed Charter Hall and Hostplus first lobbed a bid to take over the listed landlord of over 58 venues.
Since then, HPI’s directors have recommended shareholders reject the takeover offer, even after it was increased to $3.85 per security – effectively $3.785 following payment of an interim distribution of 6.5¢ – last month, on the basis that it “materially undervalues” HPI’s $1.3 billion portfolio and its growth prospects.
But the takeover offer has gained more investor support. The proportion of HPI’s investors accepting the offer has increased from 19.75 per cent to almost 27 per cent over the past month. In the past week, however, the proportion of acceptances has risen by 0.27 percentage points.
The takeover offer requires acceptance from 50.1 per cent of HPI’s investors for it to be declared unconditional.
Charter Hall chief executive David Harrison upped the ante this week, calling on HPI’s directors to issue an independent expert’s report that would provide shareholders with a better gauge of the pub landlord’s portfolio value.
“I find it interesting that it’s virtually the only M&A deal I’ve seen where the target has not issued an independent experts report. So you’ve got to ask the question, because we know that they approached one,” Mr Harrison told The Australian Financial Review.
“Why haven’t they issued an independent experts report? It’s only one answer. They didn’t like the answer they got. So to date, all we’ve seen from the board is, ‘oh, it’s undervalued’. They haven’t said what it’s worth.”
Mr Harrison also said that extending takeover bids was not unusual. BWP Trust had extended its takeover bid four times before finally succeeding in acquiring smaller landlord Newmark Property REIT this year, he said.
An HPI spokesman hit back, saying the company did not seek an independent assessment because the takeover offer was at “such a material discount to the portfolio value and typical premiums for control in comparable transactions that [it] was not required to assist the board in recommending unitholders reject the offer”.
While HPI’s board defends against the proposed takeover, its managing director John White last week outlined an ambitious growth strategy to shareholders at the annual general meeting. The pub landlord plans to buy up to six assets for about $75 million and co-invest in hotels alongside “top tier” operators to defend against the takeover bid.
Following the extension announced on Tuesday, HPI shareholders have until December 3 to accept the Charter Hall offer, unless it is extended again.
Substantial shareholders of HPI include fund manager Yarra Capital.
