Centuria trumps Growthpoint in GPT Metro Office Fund fight

26 May 2016

Publication: The Australian

Date: 26 May 2016
Author: Maggie Lu Yueyang & Gretchen Friemann

THE AUSTRALIAN |  MAY 26, 2016  12:00AM

The Australian pic 26-5
Timothy Collyer, managing director of Growthpoint Properties Australia, pictured in Melbourne.

Growthpoint Properties Australia is set to change its merger proposal for the GPT Metro Office Fund into a takeover bid in the battle against rival bidder Centuria Capital, which has accumulated a 16.1 per cent stake in the target.

Centuria and its listed Centuria Metropolitan REIT unveiled a cash-and-scrip takeover bid for GMF this week, seeking to combine the portfolios of the two REITs to create a $850 million vehicle.

Growthpoint will complete the four-week exclusive due diligence on GMF next week.

It stood a slim chance of winning an approval of its proposed merger via scheme of arrangement, which requires 75 per cent of the vote, industry sources said.

The company, which had revised its proposal once, is very likely to launch a takeover bid, which only requires 50 per cent acceptance.

Growthpoint was not available to comment and GMF was not commenting.

Growthpoint’s proposal could be appealing with a higher cash component, said Winston Sammut, managing director at Folkestone Maxim Asset Management.

Based on yesterday’s closing price, Centuria is making a $2.43-a-unit offer for GMF, 89 per cent funded by scrip.

It compares with the $2.42-a-unit bid from Growthpoint, which is 50 per cent funded by cash or up to 65 per cent cash via a mix and match.

“Growthpoint’s offer has a much higher cash component with a lower market risk whilst Centuria’s offer is the opposite — more market risk, less cash,” Mr Sammut said. “Given that the two offers are close, I would suspect that GPT would prefer the more cash, less stock option.”