Australand Property Group’s receipt of a surprise all-cash takeover offer from Singapore-listed Frasers Centrepoint has prompted hedge funds to pour on to the target’s register and they now account for about 20 per cent of investors.
Their interest has been prompted by Australand striking an agreement with Frasers to negotiate a binding deal within four weeks and the promise of the target’s first-half distribution being paid by June 24.
JPMorgan analysts have called the Frasers move a potential knockout blow for rival bidder Stockland which, despite holding 19.9 per cent of Australand, is tipped to walk away.
While Frasers does not own any Australand shares, the hedge funds are likely to favour its bid, evening out any advantage in Stockland’s holding.
AMP Capital’s quantitative fund was among the sellers to hedge funds and listed REIT fund managers are now expected to follow suit and reinvest elsewhere in the sector.
On JPMorgan’s reckoning, Stockland may struggle to lift its offer or inject more cash and still put together a value-accretive deal.