While Tony Pitt’s 360 Capital has come out publicly with his interest in Allan Fife’s Australian Industrial REIT, there’s talk in the market that his company may not be the only one sounding out the logistics property owner for a potential takeover.
Apparently, Mr Fife’s real estate company, Fife Capital, has been talking to other parties about some sort of corporate transaction relating to the $214 million real estate investment trust, and while the names of the mystery suitors or the nature of their interest are unclear, they are understood to be both locally-listed companies and wealthy private investors.
Mr Pitt’s company is mooting a scrip deal where 360 Capital Industrial Fund buys AIR for 0.89 of its own units for every share, valuing the target at around $2.20 per share.
But the board has cited concerns about a lack of compelling strategic benefits as to why it will not engage with its suitor.
The motivating factor for a takeover by Mr Pitt’s camp is his aspirations to turn the 360 Capital Industrial Fund into a company that sits among the top 200 within the Australian Securities Exchange. The businesses are also very similar, and the fund had excess cash on the balance sheet that has needed to be put to work.
Yesterday, AIR, which is working with Fort Street Advisers, announced the revaluation of nine properties, which took their value about 5 per cent higher, increasing the trust’s net tangible assets of the fund to $2.04 per unit as at December from $1.94 as at June.
Some see AIR’s uplift in the value of those properties as justification for its rejection of a recent takeover bid by Tony Pitt’s 360 Capital Group and the company will also revalue the remaining assets in the portfolio.
Industry analysts say it offers suggestions as to what is to come for other real estate groups during next month’s reporting season, where their net tangible assets are also set to increase across the board.
The significance is that it will potentially create more opportunities for the landlords to either borrow more funds at a time of low interest rates or issue scrip for more takeover activity in the sector during the year.
Mr Pitt’s 360 last month secured 12.9 per cent of AIF, and its board is citing concerns over a lack of compelling strategic benefits as to why it won’t engage surrounding the approach.
Still, 360 Capital, advised by Moelis, will lodge a formal bidders’ statement in the next few weeks for its offer, which is for 0.89 units in the 360 Capital Industrial Trust for each share.
Shares in the target yesterday closed at $2.23.