Hotel Property Investments Limited (HPI) has decisively turned down the revised cash offer of $3.85 per security from Charter Hall and Hostplus, labelling it insufficient to reflect the true value of its assets.
HPI’s rejection follows the previous bid of $3.65.
In an ASX filing late last week, HPI’s board reiterated that the offer does not provide securityholders with any premium over the company’s net tangible assets (NTA). This lack of a premium contrasts sharply with precedents set by other ASX-listed REIT transactions, as outlined in HPI’s target statement, it said.
Moreover, the board said that the offer fails to recognise the intrinsic value of HPI’s portfolio.
“HPI owns a high quality portfolio that is well positioned for future growth; and HPI’s business is in a strong position and delivering growing returns,” it said.
“HPI continues to execute on initiatives to drive growth in earnings, distributions and the underlying properties.”
The firm said that on 10 October 2024, it announced a debt refinance, which resulted in an increase in the financial year 2025 distribution guidance to at least 19.7¢ per security, an increase of 3.7 per cent from FY24.
Labelling the offer “opportunistic”, HPI said its directors continue to recommend that securityholders take “no action in relation to any correspondence from Charter Hall Retail REIT and Hostplus”.
In a separate statement, Charter Hall said the improved offer price has been declared “best and final” and “will not be increased”.
Charter Hall also said that the offer price represents a 17.7 per cent premium over its undisturbed trading level of $3.27 per security and is fully funded, providing cash certainty amid economic uncertainty, while also ensuring liquidity without brokerage costs and low execution risk from an Australian-based bidder.
