The independent board of Centuria Industrial REIT has rejected a $755 million bid from listed fund manager Propertylink, citing Propertylink’s own risk of being taken over as a reason why not to accept.
“Centuria believes that the current terms of the Proposal offered to Centuria unitholders are not sufficiently beneficial to Centuria unitholders to warrant exclusivity, due diligence, entering into a bid implementation agreement or a recommendation from the independent board,” a statement to the ASX said.
Last month Propertylink launched a $755 million takeover bid for listed Centuria Industrial REIT after seizing more than 12 per cent of its register in an overnight raid.
But then Asian logistics platform ESR Real Estate, controlled by US private equity giant Warburg Pincus, joined the flurry of corporate action by launching a $693 million cash takeover bid for Propertylink.
It is this takeover that has also influenced Centuria to reject the offer from Propertylink.
“Propertylink announced the receipt of a non-binding, indicative proposal from ESR Real Estate (Australia) to acquire all of the stapled securities of Propertylink… which is subject to a number of conditions including a condition that Propertylink not proceed with the proposal to acquire Centuria Industrial REIT.”
Centuria said there was now “material uncertainty” surrounding the proposal.
Centuria also holds a solid 19.9 per cent position in the industrial fund, potentially blocking any takeover.
The independent board also went further in its rejection noting that a large proportion of the offer is through scrip and as such that exposes Centuria unitholders to “considerable uncertainty” and reliance on the future value of Propertylink stapled securities.
The board also highlighted that the headline premium that Propertylink stated in its proposal was “inflated due to potential corporate activity within Propertylink” and that prior to this corporate activity commencing, Propertylink securities did not trade above their IPO issue price and traded at an average premium to net tangible assets of 0 per cent.