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MacarthurCook dynamics change in stake sale
Michael Hobbs and Ainslie Chandler
A new player has emerged in CommonWealth REIT’s bid for MacarthurCook Industrial Property Fund, after MacarthurCook Property Securities Fund sold down its stake in the company.
The Property securities Fund would not have been allowed to vote its 15.53 per cent stake because of its related-party status. But the new owners of the shares are free to vote on the takeover bid at a unit holder meeting next week.
On Wednesday, MacarthurCook Fund Management, as responsible entity of the Property Securities Fund, sold its 15.53 per cent stake or 15.23 million units in the Industrial Property Fund for $5.79 million.
Sydney-based Rotarn bought 14.9 million of the securities for 38¢a security, giving the company a 15.2 per cent voting stake.
Rotarn’s directors include Fairfax & Roberts chairman Morris Symonds and former Babcock & Brown manager Paul Platus and staffer Kevin Wunsh.
Mr Symonds and Mr Wunsh also work at boutique advisory and investment firm Alceon, which was set up by former Babcock & Brown global head of capital markets Trevor Loewensohn.
Rotarn stands to be a big winner if the deal proceeds, making close to $900,000 on its stake in the company.
Real Estate Capital Partners is a substantial holder in the Industrial Property Fund and favours the takeover proposal.
Real Estate Capital Partners chief executive Andrew Saunders said Rotarn’s holding could decide the outcome of next week’s meeting.
“Previously those votes would not be counted but now they’re – it could impact our philosophy in the meeting. It’s a pretty significant change,” he said.
Meanwhile, Wilson Asset Management bought 6.5 million securities at 40¢, giving the fund manger a 6.6 per cent voting stake in the Industrial Property Fund on Wednesday.
Wilson could make a $260,000 profit if the takeover occurs.
“We’ll be voting for the takeover and there’s a high probability the takeover will succeed,” Wilson founder Geoff Wilson said.
US-Based Commonwealth REIT (previously the HRPT Property Trust) proposed buying all outstanding units of the MacarthurCook Industrial Property Fund for 44¢a unit in May.
This offer is 7 per cent more than its previous offer of 40¢ and a special distribution of 1¢.
The Industrial Fund’s board committee unanimously recommended Commonwealth REIT’s proposal at the end of August.
MacarthurCook Fund Management said that it would use the proceeds of its share sale to meet the $7 million amortization program that is due on December 31.