Australand Property Group has received an unsolicited, highly conditional offer from GPT Group to acquire parts of its business, including the investment property portfolio.
Australand shares jumped as much as 10.6 per cent and are now up 5.3 per cent at $3.18. GPT are 0.1 per cent higher.
The proposal involves Australand, controlled by Singapore’s Capitaland, keeping its residential business and remaining a listed entity, Australand said in a statement this morning.
The bid, whose pricing was not disclosed, is incomplete, conditional and subject to due diligence, it said, advising shareholders to take no action.
Australand’s industrial and office investment properties, valued at $2.3 billion at June 30, will provide about 70 per cent of earnings this year, it forecast on November 2. The residential business, experiencing weakness in Melbourne and southeast Queensland, will see lower volumes, it said.
‘‘It wouldn’t make sense for Australand to sell its crown jewels, which are helping support its residential business,’’ says Stuart Cartledge, managing director of Phoenix Portfolios.
‘‘I can understand why GPT don’t want to buy the whole thing because the last thing they want is to get into residential development, but I don’t think they can extract the best bits of Australand without paying a premium.’’
Australand said it has not formed a view at this stage on the proposal, which is for its investment property portfolio and commercial and industrial business.
In a separate statement, diversified property trust GPT said it wanted to begin talks with Australand over its cash offer.
The investment property division had a total portfolio value of $2.3 billion with 70 properties at June 30, according to the company's website.
Under the proposal, Australand would retain the residential business and remain listed on the Australian Stock Exchange.
The trust is 59 per cent owned by Singapore-based property group CapitaLand Ltd.