Frasers heightens Australand pressure

The Singaporean company yesterday declared its offer final and announced the offer period would not be extended if it did not win the support of 50 per cent of shareholders by August 7.

Acceptances for Frasers’ $4.48-per-share cash offer are remaining stubbornly low at below 3 per cent, despite the company and independent experts backing the deal.

One fund manager described the move as “very surprising”, and adding: “It’s really hardball stuff.”

Another fund manager said such a move could be designed to force Stockland — which saw its scrip-and-cash offer trumped by Frasers — to “put up or shut up”.

The only way Frasers can now extend the offer is if Australand receives a separate offer from a rival suitor, potentially raising the stakes that Stockland will return with an improved bid.

Stockland holds 19.9 per cent of Australand while the rest of the register is now mainly made up of hedge funds with a hankering for the accrued dividend available in the Frasers offer.

Sources expect the deal to go down to the wire with hedge funds expected to start accepting next week and Stockland following suit just ahead of the close date. However, another scenario could see the hedge funds and Stockland hold out, meaning the deal will lapse.

Such a move would allow Stockland to make another offer in the months following, sources said. But it is understood that any future offer by Stockland would have to be superior to the one presented by Frasers and Stockland’s investors are wary of the company overpaying for its rival. Stockland declined to comment, though it has previously said it was still considering its options.

Most analysts believe that Stockland won’t return with a higher bid, but CLSA analysts think it could have another tilt.

Stockland is also thought to also be looking at Leighton Properties.