Frasers Centrepoint's $2.6 billion offer for Australand has cleared another hurdle, the independent directors giving the offer a tick of approval in the target's statement, which was released late on Monday.
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Australand's directors also reiterated they would accept the $4.48 per security cash from Frasers. As a sweetener, Australand security holders will also be entitled to the expected second-half of 2014 distribution of 12.75¢ per Australand security.
In the target's statement, the independent expert, KMPG, concluded that the offer was fair and reasonable to Australand security holders, in the absence of a superior proposal.
The expert's report estimates Australand's equity value to be in the range of $4.22 to $4.54 per Australand security on a fully diluted basis.
This has led to market speculation as to whether rival Stockland will accept the Frasers offer for its 19.9 per cent stake, giving the company a $20 million profit on the investment.
Stockland bought its shares in Australand in March and launched a share and cash offer, which was then gazumped by Frasers. Last week, the Singaporean-based Frasers received approval from the Foreign Investment Review Board.
Frasers lodged its bidder's statement and, shortly after, Australand's directors recommended shareholders accept the offer, "in the absence of any superior offer".
The offer, if successful, will give Frasers significant access to the NSW and Victorian residential markets, as Australand is one of the biggest developers in the country. There is also about $2 billion of prime city office towers in Sydney and Melbourne, as well as industrial property, in the portfolio.
It was said that some of Australand's industrial and residential development assets could be offered to Stockland if the group accepted Frasers' offer.
