Frasers Centrepoint Ltd’s share price down, makes a 2.4-billion dollar bid for the acquisition of Australand

Frasers Centrepoint Ltd, which is a property company based in Singapore, made a bid for the acquisition of the Australian residential developer and office landlord Australand Property Group. Australand Property Group itself made a regulatory filing today, revealing that the price of the deal amounts to 2.6 billion Australian dollars (2.4 billion dollars). This is so far the largest proposed acquisition offer for the company.

According to the information revealed in the Australian companys regulatory filing, the bid of Frasers Centrepoint Ltd amounts to 4.48 Australian dollars a share. This offer is the highest one made to the company so far and surpasses the all-share bid of 4.43 Australian dollars a share offered by Stockland Group.

The takeover offer is the second-biggest foreign venture of Frasers Centerpoint. Australand explained that it intends to allow Frasers to conduct exclusive due diligence over a four-week period.

As reported by the Financial Times, the Chairman of Australand Property Group – Mr. Paul Isherwood said: “The board concluded that the conditional offer proposal [from Frasers] would deliver a compelling value outcome for Australand securityholders and is superior to the final and conditional offer from Stockland.”

If the takeover is finalized, Frasers would get control of the office and industrial properties of Australand, which are estimated at about 2.4 billion Australian dollars. The acquisition would also bring Frasers Australands home market developments that amount to 9.3 billion Australian dollars.

The bid for the Australian company is provoked by Frasers attempt to increase its operations in a faster-growing foreign market. Foreign operations generated 38% of the companys earnings as of March 31st in comparison to 10% of the earnings generated for the same period last year.

As reported by the Financial Times, Frasers Centrepoint Ltd described the eventual deal as a “transformational transaction and catalyst for Fraser to deepen its roots and further its growth in Australia”. The company also added that such a transaction would also bring “immediate scale in commercial and industrial business segments whilst expanding residential capability”.

Frasers Centrepoint Ltd was 3.90% down to close at 1.85 Singapore dollars per share yesterday. According to the information published on the Financial Times, the 3 analysts offering 12-month price targets for Frasers Centrepoint Ltd have a median target of 208.00, with a high estimate of 219.80 and a low estimate of 207.00. The median estimate represents a 8.05% increase from the last price of 192.50.