Australia-based property investment company Irongate Group (IAP) board, after rejecting several initial offers, has unanimously recommended the company’s security holders vote in favour of the Charter Hall PGGM Industrial Partnership No 2 offer.
Through schemes of arrangement, security holders of IAP, formerly Investec Australia Property Fund and which is also listed on the JSE, will receive A$1.90 (R20.66) per IAP share cash, as well as the company’s distribution to March 31, 2022, of up to A$4.67 cents per security.
The share price traded at R20.62 on the JSE yesterday morning, but the deal strike price represents a 21 percent premium to the closing price of A$1.57 on January 28, 2022, the last trading day prior to announcement of the offer.
The offer also represents an 11.8 percent premium on the pro forma March 31, 2022 net tangible asset value of $1.70, and it represents a 10.5 percent premium to the highest of three offers from Australian asset management group 360 Capital Group and 360 Capital Reit, which was made on December 14, 2021.
IAP’s board had rejected all three initial offers by 360 Capital, until 360 Capital went into a partnership with Charter Hall on the A%1.90 offer.
To assist in evaluating the proposal, IAP had undertaken external valuations for 34 of its properties, representing 92 percent of IAP’s properties by number. These valuations would be part of the year-end reporting for March 31, 2022.
Two investment properties and one investment property under development had been internally valued.
The preliminary draft valuations had resulted in a portfolio uplift of A$105.4 million, representing an increase of 7 percent over the pro-forma property valuations as at December 9, 2021.
IAP’s full year results were expected to be released in early May.
IAP chairperson Richard Longes said: “The proposal is attractive for IAP security holders, as it reflects a premium to IAP’s historic trading prices and the revised updated independent valuation of IAP’s portfolio. After careful consideration, the directors of IAP have concluded that the proposal is in the best interests of IAP security holders.”
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