JSE-listed real estate firm Irongate Group (IAP) yesterday rejected an unsolicited offer of A$1.1 billion (R12.4bn) by Australia-based 360 Capital to acquire the remainder of the shares it already doesn't own.
Two weeks ago, fund manager 360 Capital launched a daring takeover tilt for dual-listed (ASX and JSE) Irongate in a complex proposal by way of an agreed trust scheme.
Currently, 360 Capital, including its associated entities, holds between them 19.11 percent of the shares issued in Irongate.
Irongate yesterday said the proposed takeover significantly undervalued its net asset value, which was now valued at A$1.61 per stapled security following the revaluations undertaken as at September, 30, 2021.
“The IAP Board has carefully considered the Indicative Proposal in conjunction with its advisers and has unanimously concluded that the Indicative Proposal materially undervalues IAP and therefore does not represent a compelling proposition for securityholders,“ it said.
"The IAP Board is of the firm view that the Indicative Proposal does not adequately reflect the underlying value of IAP having regard to its high-quality office and industrial real estate portfolio, the value-add upside potential embedded in the portfolio, and the value and growth potential of its third party funds management business."
Irongate also said 360 Capital had not provided certainty on its ability to fund the Indicative Proposal, while IAP’s board would appropriately consider a proposal that is consistent with maximising securityholder value.
Assets under Irongate management have grown by 41.3 percent on an annualised basis since listing on the JSE to A$1.425bn through property acquisitions and valuation uplift, particularly within the industrial portfolio.
Irongate has diversified since listing on the JSE by growing its balance sheet portfolio from eight to 35 properties, and has delivered regular and growing distributions that had met or exceeded guidance.
Meanwhile, Irongate delivered strong financial results for the first half of 2022 financial year, delivering an interim distribution of 4.53 Australian cents per share.
Irongate chief executive Graeme Katz said the financial result was underpinned by the ongoing strong underlying performance of their property portfolio, an active balance sheet management and the progress made over the past six months.
“Despite the recent Covid related lockdowns experienced across Australia and New Zealand, our asset management team has delivered very strong leasing outcomes.
“We have maintained a tenant retention rate of close to 80 percent and pleasingly, we have collected 99.8 percent of rent for the period.
“This result demonstrates the quality and resilience of our underlying tenant base.”
siphelele.dludla@inl.co.za
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