ARA ups stakes in Cromwell battle

Singapore funds powerhouse ARA Asset Management has upped its stake in property group Cromwell.

Paul Weightman, CEO of Cromwell Property Group. Picture: Renee Nowytarger

Singapore funds powerhouse ARA Asset Management has upped its stake in property group Cromwell and requested a copy of its share register in the opening salvo of a battle about the company’s direction.

The move comes after reports that ARA would consider a takeover of the Australian listed group and reflects sharp differences that have opened up since ARA snapped up a 19.5 per cent stake in Cromwell from Redefine Properties for about $405 million in March last year.

ARA has edged up the register of the Paul Weightman-led company, lifting its stake to 20.09 per cent under creep provisions, and is angling for greater say in its strategy after it made a failed play for British group RDI REIT.

Cromwell’s approach faltered when its approach became public in late March and its deal was rejected by both its target and major shareholder Redefine.

Cromwell had been keen on RDI, which controls a £1.6bn ($2.92bn) portfolio in Britain and Germany, and the play was in keeping with its plans to increase funds under management.

But Cromwell’s offer for RDI involved a hefty premium and came at a time when British retail real estate values are sliding.

Differences in strategy may not be confined to the British takeover, with ARA probably wanting greater scrutiny of Cromwell’s strategy in Europe and its Singapore-listed real ­estate investment trust.

Once it has the share register, ARA may seek to call a meeting to change the composition of the board, potentially boosting its representation from its local head, David Blight.

While ARA is understood not to have locked in a strategy, a takeover is not on the cards at present.

Cromwell reiterated that it had not received a takeover offer from ARA and noted its earlier support, particularly from ARA chairman John Lim, who said the group invested in Cromwell, in part, for its “strategy, platform and strong corporate governance”.

In a nod to the split that has emerged with its major shareholder, Cromwell said that if investors received any “unsolicited communication” from ARA, it encouraged them to treat it with “circumspection”.

“ARA may have its own agenda, which might not be consistent with the best interests of all Cromwell securityholders,” Mr Weightman wrote.