Charter Hall Retail REIT is unlikely to come back for Hotel Property Investments with a higher offer, according to chatter in the market, with a price well over $4 a share needed to get a transaction over the line.
HPI swiftly rejected the takeover bid from Charter Hall REIT and its backer, Host Plus, that emerged earlier this month, which was $718m or $3.65 a share – less than its net tangible assets at about $4 a security.
The bidders own about 19 per cent of the stock.
Charter Hall is already the largest pub landlord in the country after taking over the ALE Property Group for $1.7bn during 2021; the latest move diversifies its holdings, and that was at a premium of at least 40 per cent, although in a low interest rate environment.
The offer on the table is lower than Charter Hall Retail’s value of its own pubs in its portfolio.
Charter Hall-backed interests own pubs occupied by the Woolworths-backed Endeavour Group, while HPI is focused on pubs that operate next to Coles outlets.
As interest rates come down overseas, Charter Hall has clearly taken the position it is time to invest.
HPI owns a portfolio of 58 convenience hotel properties.
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