Aqualand Eyes McGrath Takeover


Chinese-backed developer Aqualand has raised its stake in ASX-listed real estate agency McGrath, bringing its holding in the company to 18.53 per cent.

The move to secure further equity in the embattled real estate agency manoeuvres the developer closer to a the ASX takeover threshold of 20 per cent.

Aqualand bought its initial shares when the shares were trading at around $0.425 per share.

The increase in its stake follows the Aqualand's acquisition of an initial 15 per cent in McGrath in June last year. Aqualand currently has a director on the McGrath board, Wayne Mo.

The initial capture was made through Aqualand's investment arm AL Capital making the company the second-largest shareholder, behind the real estate agency's founder John McGrath, who holds a 22 percent stake.

▲ According to ASX rules, any interests in a listed company of more than 20 per cent would trigger a takeover bid.
▲ According to ASX rules, any interests in a listed company of more than 20 per cent would trigger a takeover bid.

Aqualand is a subsidiary of Shanghai-based developer Shenglong, which is chaired by the father of Aqualand’s managing director Jim Lin.

The company was established in 2014 in Australia and has a collective development value of $5 billion over a portfolio of 18 sites.

The developers high profile developments include the the $173 million REVY apartments at Pyrmont and the Blue residential project at Lavender Bay valued at $418 million.

Aqualand, along with Grocon and Scentre Group, was selected to deliver the $2.6 billion Central Barangaroo precinct.

Last month Aqualand secured the development stake of Barangaroo Central from Oxford Properties.

ASX-listed real estate agency McGrath has experienced a trying year struggling to lift the company's performance amid the housing downturn that has flummoxed the real estate agency industry over the last two years.

Despite its poor performance since the company floated in 2015, most of the company's sunk costs have already been accounted for.

But McGrath has continued to run into weak trading conditions, creating new challenges fuelled by weak sales commissions.

Investor reaction to the merger news was positive with the share price up 6.9 per cent to 23 cents.

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