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SYDNEY: Australian property firm Stockland is selling its stake in GPT as it sees little prospect of buying assets from the rival property firm and is shifting its focus to other opportunities, the company said. Stockland, the country's second-largest property trust, said on Wednesday, Oct 27 it would sell its 13.1% stake in GPT at A$2.75 per share, incurring a loss of A$208 million (RM630.25 million).
Deutsche Bank is a financial adviser and underwriter to the transaction.
GPT shares closed at A$2.85 on Tuesday and were trading down about 1% in morning trade on Wednesday, while Stockland shares rose 1.6%.
"Since we acquired the stake, GPT has restructured its balance sheet, strengthened its board and management and there is now little prospect of acquiring assets," Stockland Managing Director Matthew Quinn said in a statement.
"It is therefore in the best interests of our security holders to exit our position and focus on other growth opportunities."
One analyst at a brokerage firm said the move could indicate that Stockland may have another acquisition target.
"They do have A$1.9 billion, so the question is going to be why now," said the analyst who declined to be identified. "You'd think the alternative would potentially be another acquisition on the cards."
Stockland in August said that it has A$1.9 billion of cash and untapped debt facilities.
Stockland also said it would be "comfortable" holding a 14.9% stake in the retirement village operator FKP Property Group.
Shares of FKP jumped more than 8% in early trade on Wednesday.
"They have a stated intention to lift their exposure to retirement. Whether FKP and Stockland could agree on a price is the real issue," said John Freedman, an analyst at UBS.
Stockland launched a takeover bid for another retirement village operator Aevum offering A$1.80 per share, slightly below Aevum's net tangible asset (NTA) price. The offer is expected to close Friday.
"Aveum's valuations were different to FKP's and that may have implications for what SGP would be prepared to pay for FKP," added Freedman.
Stockland bought its GPT stake in November 2008 at an average entry price of A$3.60 and held it in an off-balance sheet derivative structure, the company said.
Stockland is seeking growth in three businesses, retail, retirement and residential.
Stockland said the asset sales has no impact on its 2011 guidance of 7% earnings per share growth. — Reuters
Deutsche Bank is a financial adviser and underwriter to the transaction.
GPT shares closed at A$2.85 on Tuesday and were trading down about 1% in morning trade on Wednesday, while Stockland shares rose 1.6%.
"Since we acquired the stake, GPT has restructured its balance sheet, strengthened its board and management and there is now little prospect of acquiring assets," Stockland Managing Director Matthew Quinn said in a statement.
"It is therefore in the best interests of our security holders to exit our position and focus on other growth opportunities."
One analyst at a brokerage firm said the move could indicate that Stockland may have another acquisition target.
"They do have A$1.9 billion, so the question is going to be why now," said the analyst who declined to be identified. "You'd think the alternative would potentially be another acquisition on the cards."
Stockland in August said that it has A$1.9 billion of cash and untapped debt facilities.
Stockland also said it would be "comfortable" holding a 14.9% stake in the retirement village operator FKP Property Group.
Shares of FKP jumped more than 8% in early trade on Wednesday.
"They have a stated intention to lift their exposure to retirement. Whether FKP and Stockland could agree on a price is the real issue," said John Freedman, an analyst at UBS.
Stockland launched a takeover bid for another retirement village operator Aevum offering A$1.80 per share, slightly below Aevum's net tangible asset (NTA) price. The offer is expected to close Friday.
"Aveum's valuations were different to FKP's and that may have implications for what SGP would be prepared to pay for FKP," added Freedman.
Stockland bought its GPT stake in November 2008 at an average entry price of A$3.60 and held it in an off-balance sheet derivative structure, the company said.
Stockland is seeking growth in three businesses, retail, retirement and residential.
Stockland said the asset sales has no impact on its 2011 guidance of 7% earnings per share growth. — Reuters
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