Frasers Property (formerly: Frasers Cpt (FCL))

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http://infopub.sgx.com/FileOpen/Chapter_...eID=303729

FCL is using Frasers Amethyst Pte. Ltd which is incorporated on 27 June 2014 as the vehicle for the purchase.

The impact of the acquisition has been summaried as follows on note 6:

Net Profit for FY9/13 to increase from S$401m to S$424m
NAV for FY9/13 to decrease from $2.12 to $2.08
NTA for FY9/13 to decrease from $2.09 to $1.80 (goodwill of Australand written off).

Will see the real market reaction on FCL post the formalised offer tomorrow. Good chance that FCL may be under pressured at least in the immediate term.

Vested
GG

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Tycoon has trump card in Australand race
BEN WILMOT, GREG BROWN, TAKEOVERS
434 words
2 Jul 2014
The Australian
AUSTLN
English
© 2014 News Limited. All rights reserved.
THAILAND’S third-richest tycoon, Charoen Sirivadhanabhakdi, stands to significantly boost his Australian property holdings as his Singapore-listed Frasers ­Centrepoint last night struck an implementation agreement advancing the group’s $2.6 billion takeover of Australand Property Group.

The move comes after four weeks of due diligence by Frasers, 88 per cent controlled by the property and liquor magnate, who has now formalised the offer at $4.48 per security.

It throws the heat back on to rival bidder Stockland, which found its sweetened $2.5 billion cash and scrip bid for Australand trumped by the Thai tycoon, despite the fact it has accumulated a near 20 per cent stake.

Australand, run by managing director Bob Johnston, has three operating divisions; commercial and industrial, residential and investment property, which holds a $2.4bn commercial and industrial portfolio.

The takeover gyrations come as a wave of foreign capital chases Australian office towers, shopping centres, industrial parks and hotels, with the Frasers Centrepoint play seen as the first of more whole of company plays by Asian groups looking to build a major presence in Australia.

While Stockland could come back with a further bid, it is constrained by the requirement of its own investors for any takeover to be earnings accretive and the preference of the hedge funds that now control much of Australand’s register for a cash bid.

The Frasers bid compared with Australand’s closing price yesterday at $4.44, ahead of the agreement being announced.

Stockland chief executive Mark Steinert had made his desire for Australand’s industrial and apartment development platform plain when he emerged with a stake in April, but since Frasers made its takeover move, Stockland has outlaid more than $200m building up its own development pipeline.

Stockland has also flagged the possibility of exiting its investment in Australand at a profit, rather than being drawn into an expensive takeover war.

Moelis analyst Simon Scott said: “Most people expected them to be in the box seat but until Frasers deals with Stockland’s 20 per cent stake they won’t be able to conclude a full takeover.” He added that Frasers had a number of options still on the table to mop up the Stockland stake, including splitting assets or potentially upping the bid.The offer is subject to Frasers getting acceptances from more than 50 per cent of Australand’s register and winning Foreign Investment Review Board approval. The offer closes on August 7. Australand chairman Paul Isherwood said the deal was a “milestone”.


News Ltd.

Document AUSTLN0020140701ea720005s

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FCL, cimb maintain ADD:

Offer for ALZ makes sense
FCL has confirmed its takeover offer of ALZ after completing due diligence.
We continue to believe that the offer makes strategic sense. Additionally, we
expect value creation to come from ALZ’s residential and industrial landbank,
with GDV of S$8.8b and S$2.1b respectively. While net gearing post the
transaction is expected to be high at 1x, we believe that FCL will be able to
lower it to ~0.7x by monetising industrial assets from ALZ. We maintain our
Add call as we believe that the transaction makes sense. Our target price (30%
discount to RNAV) and EPS forecasts remain unchanged as we have not yet
factored in the takeover.
What Happened
FCL has confirmed its 100% takeover offer for Australand (ALZ) after close to a
month of due diligence. The offer price is at A$4.48/stapled security, which
values ALZ at 1.2x NTA. FCL will fund the total consideration of A$2.6b
(S$3.1b) with a combination of external loan and internal funding.
What We Think
We continue to believe that the offer makes sense from a strategic
standpoint. The questions that come next are then what is the value creation
from ALZ and FCL’s high net gearing post the acquisition.
Possible value creations. ALZ books its residential portfolio at ~S$1bn, but
its total gross development value (GDV) amounts to ~S$8.8bn, with a weighted
average development life of 11.4 years. Using its historical development margin
of ~15%, we estimate that the value creation from its residential portfolio can
amount to ~S$0.6bn-0.8bn (based on NPV, using a discount rate of 8.5%),
about 20-30% of ALZ’s current NTA. Additionally, it has 2.55m sq m of
industrial landbank with a GDV of S$2.1bn, booked at a cost of ~S$0.36bn.
Net gearing of ~1x post the transaction. To lower net gearing to its
preferred level of 0.8x, we estimate that FCL will need to raise ~S$1bn. We
believe that FCL has an option to monetise industrial properties from ALZ,
valued at A$1.2bn (S$1.4bn), which will lower net gearing to ~0.7x. Another
option will be to raise equity. Conservatively assuming that FCL raises equity at
0.8x-1x its current share price (0.7x-0.9x its pro-forma book value), the
dilution impact would be limited to 2-5% of its NAV. (Fig 12)
What You Should Do
Add. FCL is trading at 38% discount to RNAV, below peers’ average of 30%.

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http://www.theage.com.au/business/proper...zsstl.html

Australand, Frasers enter takeover agreement
Date
July 2, 2014 - 7:40AM

Carolyn Cummins.

The fate of diversified property group, Australand appeared to be sealed after an after market, formal offer was made by the Singaporean Frasers Centrepoint Ltd, and was endorsed by the prey's board.

Frasers first volley was made on June 4 as an indicative, informal cash $4.48 per Australand share, valued at $2.6 billion. It was considered a surprise bid and trumped the non-binding cash and scrip offer that was on the table from rival, Stockland.

Australand has been a target for the past two years, since GPT launched a partial, non-binding offer for the commercial and developmen assets, but excluding the residential component.

That was opposite to Stockland, whose chief executive Mark Steinert, said he wanted the housing market exposure and would likely sell the commercial office assets.

The offer, of successful, will give Frasers access to a significant exposure to the NSW and Victorian residential markets, as Australand is one of the biggest developers in the country. There is also about $2 billion of prime city-based office towers in Sydney and Melbourne as well as indudstrial property in the portfolio.

It was said the motivation by the directors of Frasers, which is 88 per cent-owned by the Thailand-based TCC Group, to make the play, was to expand its portfolio into the high yielding and high growth Australian market. Frasers associate has also co-developed the One Central Park mixed use residential and retail project in Sydney's Broadway area, and its associate recently bought the Sydney Sofitel Wentworth hotel.

At the time of the indicative offer, Australand's chairman, Paul Isherwood, said they would allow Frasers to undertake due diligence, and then assess any formal bid.

In the documents lodged just before the Australian Securities Exchange's daily deadline for documents, was Frasers's bidder's statement, which included its formal Bid Implementation Agreement, under which it has agreed to make an off- market takeover offer to acquire up to 100 per cent of Australand’s stapled securities.

The Fraser offer will also include the Australand half year distribution, of up 12.75 cents per Australand share.

It remained uncertain as to whether Australand's major shareholder, Stockland will make a counter offer or sell its 19.9 per cent stake to Frasers. If it sells, Stockland could make more than $20 million in profit.

''The Australand directors unanimously recommend that eecurityholders accept the offer and intend to accept in respect of all sSecurities they own or control, in the absence of a superior proposal and subject to the Independent Expert concluding that the Offer is fair and reasonable to Australand Securityholders,'' the Australand statement said.

Mr Lim Ee Seng, Group Chief Executive Officer of FCL said, in the statement accompanying the bidder's statement.

''The due diligence affirms the rationale and strategic fit for FCL to acquire Australand. FCL had planned on achieving several key strategic objectives over the medium term, including increasing the proportion of overseas earnings and recurring income, as well as enhancing our platform in Australia. This transaction ticks all the boxes and will allow FCL to achieve our targets in a much shorter period of time.”

“We have a high regard for the management of Australand and we are very excited for the future potential of the business.” Mr Lim added.

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Frasers Centrepoint’s $2.6 billion bid a ‘knockout’ blow
GREG BROWN AND SARAH DANCKERT THE AUSTRALIAN JULY 03, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
SINGAPORE-listed Frasers Centrepoint’s bid for Australand has won the backing of analysts and fund managers who have described the $2.6 billion deal as a “knockout” blow for rival bidder Stockland.

Frasers on Monday struck an implementation agreement to move forward on its all-cash bid for Australand.

Speculation is growing that Australand’s largest shareholder and rival bidder Stockland, which holds a 19.9 per cent stake, will ­either sell its stake into the offer or cut a deal with Frasers.

Frasers needs 50 per cent of shareholders to control Australand. But its likely preference would be to privatise Australand and then amalgamate it into its larger business on the Singapore exchange, according to sources.

To do this, it needs 90 per cent of shareholder acceptances, giving Stockland a deciding voice.

While some analysts argue that Stockland will use its position to leverage a portfolio of assets, Morningstar analyst Tony Sherlock expects Stockland to “walk away and take the (share) profits”.

“(Stockland has) got a very good return (on its share investment) in a very short period of time,” he said, adding that it may negotiate on properties that were not core to Frasers’ bid.

Mr Sherlock said 40 per cent of Australand’s shares had been picked up recently by institutional investors that would quickly accept the offer as they received quick returns.

Brett McNeill of Antares Capital Partners, which has a 2.65 per cent stake in Stockland, said the Frasers bid was a “knockout”.

“It is a significant premium to net tangible asset backing, and implies a large earnings multiple for the development business. Beating it would appear to require some very aggressive assumptions around future growth and value,” Mr McNeill said.

A spokeswoman for Stockland declined to comment on whether it would increase its bid or sell its stake into the Frasers deal.

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Stockland considers one last play
Matthew Cranston
385 words
3 Jul 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Analysts and investors expect Stockland to ­finally ­submit to Singaproean giant Frasers Centrepoint's $2.6 billion takeover offer for Australand ­Property Group.

However, Stockland could still play a high-risk game in order to increase the $85 million profit it already stands to make from selling its stake in Australand into the ­Frasers offer.

The bid implementation agreement, which was finalised by Frasers on Tuesday, notes a $26 million break fee will not be required if Australand receives a superior proposal and wants to ditch the one from Frasers.

It means Stockland could make a higher offer and if successful would not have to pay the break fee on behalf of Australand to Frasers.

It could then wait for Frasers to come back yet again, increasing the price and therefore the profit Stockland will make on the sale of its stake.

Stockland, which is being advised by Citigroup, ­Merrill Lynch and UBS, has been waiting to see the details of the implementation agreement before making any announcement of its intentions.

Morgan Stanley's trading desk suspects it is all but over. "We continue to believe it unlikely Stockland will counter with a higher outright offer," a Morgan Stanley note to clients said.

"Given Stockland made $210 million in acquisitions in the last two weeks they've clearly not been sitting on their hands awaiting an outcome."

"We believe it is likely they may attempt to negotiate with Frasers to swap some assets in exchange for acceptance of the offer."

Stockland managing director and chief executive Mark Steinert has remained disciplined during the bidding and has not indicated any intentions.

A Stockland spokesman said on Wednesday: "We will consider our options and make any further ­announcements in due course."

Mr Steinert said late last month the level of M&A likely to occur in the sector would not be as high as some expected.

"It's not going as hard as the direct market and that is because the offshore funds have a mandate that says they should not proactively drive market M&A for different reasons," he said.

"So that means you will have less players in that space but wherever you see a vehicle that trades inefficiently it will absolutely get taken out."


Fairfax Media Management Pty Limited

Document AFNR000020140702ea730000z

[Art or Science]

Frasers Centrepoint gets green light to buy Australand
A
A+
09 Jul 2014 21:35
SINGAPORE: Singapore property giant Frasers Centrepoint Ltd (FCL) has got clearance from the Foreign Investment Review Board of Australia (FIRB) to go ahead with plans to buy Australand Property Group in a deal worth around A$2.6 billion.

In a statement to the Singapore Exchange on Wednesday, FCL said it has received a "statement of no objections" from FIRB in relation to its proposed acquisition of up to 100 percent of Australand.

FCL, whose main shareholder is Thai billionaire Charoen Sirivadhanabhakdi, is one of the city-state's biggest property companies with total assets of around S$11.4 billion.

The Singapore-listed property giant earlier this month trumped a competing offer for Australand from Australia's Stockland Corp.

Australand, which was once majority owned by CapitaLand, is involved in a wide range of real estate-related businesses including residential, commercial and industrial.

Analysts said the purchase of Australand will help boost FCL's recurring income base and diversify risk from the Singapore residential market, which has been hit by a raft of government cooling measures. 
- CNA/xq

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http://www.businesstimes.com.sg/breaking...e-20140710

PUBLISHED JULY 10, 2014
Frasers-Keong Hong tie-up in top bid for Sembawang EC site
BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT


A tie-up between Frasers Centrepoint and Keong Hong Holdings has emerged as the top bidder for a 99-year leasehold executive condominium (EC) housing site in Sembawang Avenue.
Its top bid of S$214.08 million works out to S$320.11 per square foot per plot ratio (psf ppr).
Located next to the SkyPark Residences EC project, the 2.22-hectare site can be potentially developed into an estimated 620 EC units.
ECs are a public-private housing hybrid with initial buyer eligibility and resale conditions which are lifted 10 years after the completion of an EC project. Also bidding at Thursday's tender were City Developments unit Verwood Holdings, which partnered TID Residential to bid S$211 million.

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FCL has been under pressured by the expected closure of Australand deal. The market is basically negative on FCL's pursuit of Australand. However, the market does not appear to be factoring in any value extraction by FCL from Australand such as the breaking up and cherry picking and a potential dilution of a wholly owned Australand. Purely focusing on "indigestable" acquisition may have under-estimated Towkay Charoen's deal making ability after he has successfully extracted value from F&N...

Vested
GG

Expert OKs Singaporean pursuit
THE AUSTRALIAN JULY 15, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne

AUSTRALAND’S takeover by Singaporean group Frasers ­Centrepoint has been declared fair and reasonable by independent expert KPMG.

Frasers, which counts Thailand’s Chang Beer billionaire Charoen Sirivadhanabhakdi as its largest shareholder, is widely expected to succeed with its bid.

The independent expert’s report will be seen as another positive for Frasers’ all-cash offer of $4.48 per share, which values the local residential developer and property investor at $2.6 billion.

KPMG found that Australand’s shares should be valued at between $4.22 and $4.54.

“Directors have recom­mended security-holders accept the offer in the absence of a superior proposal,” Australand in­dependent chairman Paul Isher­wood said in a statement.

Rival suitor Stockland now appears to be well and truly out of the race after its second scrip-and-cash offer for Australand, equivalent to $4.35 per share, was trumped by Frasers early last month.

Stockland, which holds 19.9 per cent of Australand’s shares, has kept its powder dry since being outpaced by Frasers.

Responding to the release of the target’s statement and independent expert’s report yesterday, a Stockland spokeswoman said: “We’ll consider our options and will make further announcements in due course.”

Stockland is expected to reap a profit of $80 million if it sells its stake into the Frasers offer. The offer closes on August 7, unless extended.

Frasers plans to take Australand private once its takeover reaches 90 per cent. Its offer is dependent on securing 50.1 per cent of Australand’s shares.

Frasers has already received approval for its bid from the Foreign Investment Review Board.

Frasers surprised the market in early June with its bid for Australand, the third offer for the local developer in the past three years, following an earlier tilt by GPT and Stockland’s more recent offer.

The flurry of activity was spurred by Australand’s long-time 60 per cent shareholder, Singapore’s CapitaLand, divesting its stake in the company.

Frasers has been building a significant Australian business through its acquisitions of Central Park project in Sydney with its co-investment partner, Japan’s Sekisui House.

It also snared the $200 million-plus Sofitel Wentworth Hotel in Sydney as well as other residential holdings in Sydney.

Australand’s shares closed up 1c at $4.48.

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http://www.theage.com.au/business/fraser...zt76f.html

Frasers Centrepoint closer to winning $2.6b bid for Australand
Date
July 14, 2014 - 11:45PM

Carolyn Cummins
Commercial Property Editor


Frasers Centrepoint's $2.6 billion offer for Australand has cleared another hurdle, the independent directors giving the offer a tick of approval in the target's statement, which was released late on Monday.

Australand's directors also reiterated they would accept the $4.48 per security cash from Frasers. As a sweetener, Australand security holders will also be entitled to the expected second-half of 2014 distribution of 12.75¢ per Australand security.

In the target's statement, the independent expert, KMPG, concluded that the offer was fair and reasonable to Australand security holders, in the absence of a superior proposal.

The expert's report estimates Australand's equity value to be in the range of $4.22 to $4.54 per Australand security on a fully diluted basis.

This has led to market speculation as to whether rival Stockland will accept the Frasers offer for its 19.9 per cent stake, giving the company a $20 million profit on the investment.

Stockland bought its shares in Australand in March and launched a share and cash offer, which was then gazumped by Frasers. Last week, the Singaporean-based Frasers received approval from the Foreign Investment Review Board.

Frasers lodged its bidder's statement and, shortly after, Australand's directors recommended shareholders accept the offer, "in the absence of any superior offer".

The offer, if successful, will give Frasers significant access to the NSW and Victorian residential markets, as Australand is one of the biggest developers in the country. There is also about $2 billion of prime city office towers in Sydney and Melbourne, as well as industrial property, in the portfolio.

It was said that some of Australand's industrial and residential development assets could be offered to Stockland if the group accepted Frasers' offer.