Singapore Fund Manager Finalises $405m Bid for Cromwell Shares

The deal to acquire 19.5 per cent of Cromwell Property Group by Singapore-based ARA Asset Management has been finalised with a $405 million parcel of shares traded on Wednesday with settlement due on Friday June 1.

ARA announced the purchase of the stake in March, subject to conditions including Foreign Investment Review Board approval, from South Africa’s Redefine Properties which has been a long-term backer of the Brisbane-based Cromwell.

Redefine will still hold around three per cent of Cromwell stock as it said the sale proceeds will be used to strengthen its balance sheet.

The sale of the stake to ARA is a strategic move which should help both companies achieve their ambitions.

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Cromwell has been turning its attention to Europe and Asia, forming a strategic partnership with Linkcity, a subsidiary of global construction company Bouygues Construction, to invest in the roll-out of a $792 million portfolio of logistics and light industrial assets in Central and Eastern Europe.

Cromwell last October abandoned its plan for a $3 billion takeover of the Investa Office Fund after being thwarted in being able to secure additional funding to go beyond its 10 per cent stake.

It sold the stake – for a 10 per cent profit – to Investa Commercial Property Fund for $4.65 per share.

“The investment in IOF has been a profitable one for Cromwell,” Cromwell chief executive Paul Weightman said at the time.

“We would have liked to have been able to complete a deal, but as I have said previously, it became obvious to us that a friendly transaction was unlikely to proceed, regardless of the price that we offered.”

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The Investa Office Fund has since been the target of an unsolicited $3.14 billion cash bid from US funds giant Blackstone.

Blackstone made the bid on Monday which is the third takeover offer for the listed office fund in as many years.

The Blackstone offer at $5.25 cash per share represented a 13.2 per cent premium on the fund’s last closing price.

Property group Dexus also made a failed attempt at bidding for the Investa fund.


Featured in the image above is John Lim, Group CEO, ARA Asset Management Limited