Singapore’s ARA Asset Management has fired the starter’s gun in the increasingly bitter contest for the future of Cromwell Property by asking the target company for a copy of its share register.
The play is considered a standard move in any battle for control of a company and suggests that in addition to not intending to table a takeover bid ARA is also unlikely to call an extraordinary general meeting.
Instead it will likely focus its energies in trying to get corporate raider Gary Weiss elected to the board at next month’s annual meeting.
The under-pressure Cromwell Property is not standing still. It has just signed a deal that will plunge it further into Poland’s retail sector, a likely bone of contention with ARA, wary of the company growing its exposure to Europe.
ARA took a dim view of Cromwell’s $1.3bn takeover play for British-listed RDI REIT that collapsed earlier this year and the Polish foray may attract its ire even though Cromwell knows the market well and has been buying office assets there via its Singapore-listed REIT.
Cromwell has signed formal agreements to acquire all third party investor interests in the Cromwell Polish Retail Fund, which owns $1bn worth of shopping centres.
The Polish fund contains seven shopping centres and Cromwell wants to get them in shape and then spin them back out to investors.
Tension is rising about the company’s future with the ARA and Cromwell camps meeting with proxy houses before the company’s annual meeting.
The meeting will vote on the appointment of Dr Weiss, who could draw wider support than the near 20 per cent stake held by ARA.
But Cromwell has recommended against his appointment, saying he would be saddled with the same conflicts of interest as previous ARA representative, David Blight.
Tensions boiled over earlier this year as Cromwell and ARA bid for the same assets in Australia and the Singaporean company was cut out of an equity raising even though it holds nearly 20 per cent of the company.
The Singaporean company had pressed for the local trust to shift more towards an “asset light” model by selling assets.
Cromwell chief executive Paul Weightman instead bought a $525m Brisbane building and made the move in Poland as part of what he calls the company’s “invest to manage” strategy.
Under this scheme Cromwell buys assets to improve them with the ambition of creating new funds to attract capital partners.
Cromwell would then keep minority stakes in each fund, manage the assets and recycle the capital into new initiatives.
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