Cromwell labels $518m ARA takeover bid "opportunistic"

Cromwell labels $518m ARA takeover bid "opportunistic"

A $518 million takeover bid from ARA Asset Management has been launched today that would see the fund manager take control of Cromwell Property Group (ASX: CMW).

ARA via its wholly owned entity ARA BidCo intends to acquire 29 per cent of all Cromwell securities that ARA does not already hold an interest in for $0.90 per share.

If successful, ARA would be increasing its shareholding in the property group to 53 per cent, giving the Singapore-based company control over the property group.

Cromwell has advised shareholders today to take no action, noting the "unsolicited and opportunistic" nature of the offer.

On the other side of the bid ARA is being backed by corporate raider Dr Gary Weiss (pictured) who attempted to secure a seat on the Cromwell board two times, once in November 2019 and again in March 2020.

ARA says its bid is compelling, with the offer price coming in at a 3.4 per cent premium to Cromwell's last closing price of $0.87 on 22 June and would provide investors certainty of value during this current period of economic anxiety caused by the COVID-19 pandemic.

Further, ARA highlights how it believes Cromwell will attempt to undertake a material equity raising at a discount to the ARA offer price.

It is likely that if successful ARA would seek, yet again, to install Weiss as a director.

"ARA has become increasingly concerned with the poor operational performance, increased complexity, erratic strategy, overall governance and risk management protocols at Cromwell and has chosen to present an Offer directly to Cromwell securityholders," says ARA.

"As Cromwell's largest securityholder ARA has, on a number of occasions, sought to constructively engage with the Cromwell Board in order to ensure securityholder value is protected and maximised.

"It is ARA's view that a reinvigorated Board, with appropriate experience and a clear proprietorial focus, will bring necessary expertise and provide appropriate oversight of Cromwell management, to drive a clear and considered strategy and improved operational performance of the business."

Cromwell says it intends to make a further announcement in due course when it has assessed the terms of ARA's offer.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Australian pokies maker Aristocrat Leisure (ASX: ALL) is looking to...

GPT logistics portfolio worth $4.1 billion following Ascot Capital asset acquisition

GPT logistics portfolio worth $4.1 billion following Ascot Capital asset acquisition

Real estate investment trust GPT Group’s (ASX: GPT) portfolio...

Superloop shares up 20 per cent on HK, Singapore asset sales

Superloop shares up 20 per cent on HK, Singapore asset sales

Brisbane-based connectivity services company Superloop (ASX: SLC) h...

Melbourne to leave lockdown on Friday with state set to hit vaccine milestone early

Melbourne to leave lockdown on Friday with state set to hit vaccine milestone early

High rates of vaccine take-up have put Victoria in a position to le...