Sale on cards for Multiplex fund
MULTIPLEX Prime Property Fund’s manager, Brookfield Multiplex, has not ruled out selling the fund’s assets in the long term or delisting the entity.
This approach is in response to a Takeovers Panel ruling yesterday that allowed Brookfield Multiplex to proceed with its $50million equity raising.
That move may put an end to a hostile takeover offer for the fund by a consortium backed by Grocon.
Yesterday, the fund’s non-executive chairman Peter Morris said the strategy for MPPF would be settled once the entitlement offer had been achieved.
"The assets we have in the fund — there are boundless opportunities in the future — it is just a question of which one is best," he said.
Asked if any of the fund’s buildings were for sale, Mr Morris said: "Anything is for sale at a price, but there is no offer on the table."
Delisting the fund was not an immediate option, he said, but nothing could be ruled out in the future.
The fund owns four office towers in Sydney and Melbourne and is struggling under a mountain of debt, with a waiver on a loan covenant breach expiring next month.
The Takeovers Panel’s decision yesterday is the latest development in a prolonged saga surrounding MPPF.
The Takeovers Panel said it found that the $50m capital raising proposed by Brookfield Multiplex was undertaken in acceptable circumstances.
Shareholder Nicholas Bolton’s company, Australian Style Investments, earlier argued the Brookfield Multiplex proposal to raise capital should not proceed.
Mr Bolton has maintained that the highly dilutive offer by Brookfield Multiplex was not in the best interests of shareholders and was a "takeover by stealth".
The panel found in favour of Brookfield Multiplex’s claim because the fund had breached a loan covenant and a temporary waiver from lenders expired on November 16 and said there was a clear and pressing need for funding. "This was a very significant factor for accepting the undertaking," the panel said. A Grocon spokesperson said other options were now being investigated.
Grocon and US private equity player Oaktree have made a $109m play for control of MPPF and it also approached the Takeovers Panel this month to scupper Brookfield Multiplex’s $50m rights issue.
The Takeovers Panel considered both applications together when making yesterday’s decision.
Mr Bolton owns more than 19per cent of the fund and could walk away from a $22m second instalment liability and make a $1m profit from his stake if Grocon gained control.
In the BrisConnections tussle earlier this year, Mr Bolton sold his interest for $4.5m, scuttled his own wind-up motion and walked away from a $77m second-instalment liability.
Investors bought into MPPF at 60c a security when the fund was launched in September 2006 and are obliged to pay a second 40c instalment in June 2011.