Singapore-listed property firm Frasers Centrepoint, which is controlled by Thai tycoon Charoen Sirivadhanabhakdi has entered a bidding war for Australian developer Australand, illustrating how a change in ownership has transformed the company's appetite for major acquisitions.
On Wednesday, Frasers Centrepoint put in a A$2.6 ($2.4 billion) bid for Australand, trumping an offer from Australia's largest property group Stockland. The former made an all-cash offer of A$4.48 per share for all of Australand compared with Stockland’s A$4.35 offer, a mixture of cash and stock.
The deal is the second time the deep-pocketed Thai tycoon has entered a bidding war, the first time being its high-profile acquisition in 2013 of Fraser & Neave, Frasers Centrepoint's former parent. Sirivadhanabhakdi holds a 59.4% stake in Frasers Centrepoint, which was spun off from F&N in January.
“I don’t think under the old ownership, Frasers Centrepoint would have made a bid,” one source familiar with the company said.
Southeast Asia's largest developer CapitaLand previously held a 39.1% stake in Australand but exited the company in March when it sold a 19.9% stake in Australand to Stockland at an average price of A$3.78 per share. It sold the remainder in a block trade at an average price of A$3.75.
Frasers Centrepoint's offer is conditional upon receiving 50.1% of acceptances and, as such, Stockland's 19.9% stake would not be sufficient to block it. It is also conditional upon approval by Australia’s Foreign Investment Review Board. Frasers Centrepoint has an exclusive four-week period to conduct due diligence.
In a statement to the Australian stock exchange, in the wake of the new offer from Frasers Centrepoint, Australand said its board "intends to recommend the proposal, in the absence of a superior proposal and subject to an independent expert opinion concluding the proposal is fair and reasonable."
Australand is one of Australia's major property groups with a total portfolio of 68 investment properties valued at A$2.4 billion. Frasers Centrepoint entered the Australia market over a decade ago and the deal will offer the company an opportunity to scale up.
Deutsche Bank and Standard Chartered are joint advisors to Frasers Centrepoint and are financing its bid.
Australia has proven to be fertile hunting ground for Asian buyers this year -- with the volume of Asia ex Japan acquisitions in Australia chalking up to a year-to-date record of $12.3 billion, compared with $15.8 billion for the whole of 2013, according to Dealogic data.
Recent deals include Chinese steel maker Baosteel's hostile bid for Aquila and Singapore agribusiness firm Wilmar and First Pacific's bid for Australian food company Goodman Fielder.