It now cannot make offer in next 6 months unless SIC gives blessing
CAMBRIDGE Industrial Trust (CIT) has formally said that it does not have a current intention to make an offer for rival MacArthurCook Industrial Reit (MI-Reit).
Under the Singapore takeover code, this announcement means that CIT is now forbidden – unless it has the blessing of the Securities Industry Council – from making an offer within the next six months.
Chris Calvert, chief executive of CIT’s manager, said a takeover was ‘too premature’ and that statements carried in BT implying that CIT was considering a merger of the two Reits were ‘misinterpreted’.
Managers of both Reits have been vying for control of MI-Reit after MI-Reit’s manager announced a recapitalisation plan which it said would rescue MI-Reit from certain liquidation.
MI-Reit needs to refinance $226 million in loans and meet an obligation to buy a $90 million property at the International Business Park.
The rescue plan would see MI-Reit placing 221 million new units to AMP Capital Holdings, present sponsor AIMS Financial Group and other ‘cornerstone’ investors, at 28 cents a unit, and going through a rights issue before taking on a new term loan.
But CIT – a recent shareholder with just shy of 10 per cent of MI-Reit – is opposing the plan, saying that it destroys value because it is priced too far below net asset value. It is urging unitholders to reject the rescue plan at an extraordinary general meeting next Monday, and to appoint CIT’s manager to manage MI-Reit.
Yesterday, Nicholas McGrath, CEO of MI-Reit’s manager, said that CIT had yet to confirm if it could legally become the manager of two competing industrial Reits. ‘There’s a clear conflict of interest,’ he said. ‘If there’s a property to be bought, where would they allocate it to?’
He added that CIT has not confirmed if it has the ability to meet MI-Reit’s urgent funding needs.
There was speculation yesterday that CIT – which called a trading halt in the afternoon – had run into regulatory issues.
CIT had earlier released some details of a ‘value-accretive’ proposal to rescue MI-Reit.
It intends to refinance MI-Reit’s loans with takeout financing secured against the assets of both Reits, and said that it will also save costs and gain purchasing power from economies of scale.
A CIT subordinated loan facility could also be used to pay off MI-Reit’s $90 million International Business Park commitment, Mr Calvert said.
CIT was last traded at 42.5 cents and MI-Reit at 40 cents.
Source: Business Times, 20 Nov 2009
No comments:
Post a Comment