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Cromwell board rejects ‘opportunistic’ takeover bid by Singapore’s ARA

Cromwell’s directors have rejected a $520 million takeover offer from Singapore’s ARA claiming it’s opportunistic and undervalues the Brisbane real estate company.

Jun 25, 2020, updated Jun 25, 2020
Confidence levels fell sharply in the property sector

Confidence levels fell sharply in the property sector

Under the offer from ARA, its bidding company would buy 29 per cent of the Cromwell stapled securities it does not already own at 90 cents each.

Cromwell said under the offer the price would actually fall to a fraction over 88 cents after distributions were accounted for.

ARA already owns 24 per cent of Cromwell.

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Cromwell’s directors said the offer presented a “negligible premium” of 1.3 per cent to its last closing price of 87 cents. It was also a 15.3 per cent discount to its net tangible assets.

“ARA is seeking to control Cromwell for minimal investment without paying an appropriate control premium,” the directors said.

If the offer was successful, ARA would hold 46 per cent which gave it effective control and potential to replace the board.

“ARA is a competitor to Cromwell and ARA’s performane as a manager is questionable. All of ARA’s managed real estate vehicles have materially underperformed their respective benchmark indices over an extended period of time,” the directors said.

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