Real estate firm Charter Hall and pension fund Hostplus have bumped up their bid for Australia’s Hotel Property Investments, now valuing the pub landlord at A$755.8 million ($506.61 million).
Charter Hall Retail REIT, managed by the property investor, and Hostplus have now sweetened the offer to A$3.85 from A$3.65 per Hotel Property share it does not already own.
The new offer reflects a 2.4% premium compared to the pub owner’s close on Thursday and is 10.6% higher than its close in Sept. 6, day before the offer was initially tabled.
In response to a Reuters request for comment, Property Investments — which owns 58 venues, mainly in South Australia and Queensland — said it plans to issue a formal response within the next few hours.
Earlier this month, Hotel Property Investments rejected the previous offer on valuation concerns and said that the bid does not recognize its significant growth prospects.
Charter Hall is already Hotel Property’s top shareholder and owns an over 18% stake in the pub owner.
As of last close, shares of Hotel Property Investments have gained about 8% in value since the first offer.
“I don’t think HPI will take this offer as they are under no pressure to do so, and they will be seeking a premium to the valuation in my opinion,” said Brad Smoling, managing director at Smoling Stockbroking.
Charter Hall has been making consistent efforts to diversify and expand its pub ownership with the A$1.68 billion deal to take over the then listed ALE Property Group.
It also emerged as Hotel Property’s top shareholder when it bought a near 15% stake in the firm in late March.
This acquisition would play into bidder’s strategy to secure more retail assets while partnering with convenience retailers.
($1 = 1.4919 Australian dollars)
Reuters