Frasers Centrepoint

DMG & Partners Research, June 5

FRASERS Centrepoint Limited (FCL) has tabled a takeover offer of the issued stapled securities of ASX-listed Australand Property Group for cash consideration of A$4.48 per stapled security or A$2.6 billion (S$3 billion) of FCL's current market cap.

While pro-forma impact of this acquisition will see FCL's current gearing double to about 65 per cent and possibly explain the 4 per cent correction in FCL's price on Wednesday, we believe this acquisition can only enhance FCL's positioning at a time when the Australian economy is on the upswing.

The offer price at A$4.48 is 22 per cent premium to Australand's net tangible asset of A$3.68 and 4 per cent premium over the last closing price.

NOT RATED