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MacarthurCook Industrial REIT Requests NAB Disclosures-Filing

Source: The Wall Street Journal
Edited By:Sam Holmes, Dow Jones

SINGAPORE (Dow Jones)--Singapore-listed MacarthurCook Industrial REIT Ltd. (BU5U.SG) has requested two National Australia Bank Ltd. (NAB.AU) investment managers disclose whether they used information gained from the bank in its capacity as a financier and equity adviser to the REIT to help Cambridge Industrial Trust Ltd. (J91U.SG) launch a hostile takeover bid for the REIT's management earlier this month.

NAB, one of Australia's largest banks by assets and market capitalization, through its wholly owned unit nabInvest acquired a 56% stake in CIT in August 2008 and has acted as a financier to the group.

It is also serving as a financier, adviser and underwriter to rival MI-REIT on a number of recapitalization transactions to help address the REIT's critical funding issues.

MI-REIT's request for information, released on the Singapore Stock Exchange on Saturday, follows a report by Dow Jones Newswires last week, which said CIT was in talks with NAB about potentially funding any recapitalization of MI-REIT if its bid for the REIT's management was successful and if a current recapitalization proposal by MI-REIT failed to gain unit holder approval at an extraordinary general meeting Monday.

CIT said Friday its bid for management has been blocked by the Monetary Authority of Singapore "in view of potential conflicts arising from the competing interests of unitholders in CIT and MI-REIT" but that as a 9.8% stakeholder in the REIT it still planned to vote against the S$217.1 million recapitalization proposal at the EGM Monday.

NAB last week said while the bank does have lending, underwriting and bookrunning relationships with MI-REIT it has "appropriate conflict management arrangements between the business supporting MacarthurCook Industrial REIT and any NAB personnel involved with Cambridge Industrial Trust."

MI-REIT has requested two non-executive directors of the CIT Management board currently employed by nabInvest, Ian Smith and John Wood, confirm they "did not use their position at nabInvest to obtain information about MI-REIT from NAB (in its capacity as debt financier, equity adviser and equity underwriter to MI-REIT)."

It has also requested NAB disclose whether its current conflict resolution arrangements allowed two directors to participate in CIT's board discussions relating to the trust's actions relating to MI-REIT.

CIT Chief Executive Chris Calvert last week told Dow Jones Newswires CIT was talking with NAB and other banks about prospective funding arrangements for a recapitalization of the REIT.

"They (NAB) are an existing lender to our CIT Cambridge portfolio and they are also an existing lender to the MI-REIT portfolio," Calvert said.

"We would obviously like them to be part of the debt solution for our alternative and we would look to engage with them post this EGM to reach an appropriate solution.

"There have been discussions with the existing banks and we have no reason to believe that they wouldn't want to enter into discussions with us to refinance the portfolio should this (recapitalization) EGM get voted down."

MI-REIT in its statement said Calvert's comments contradict what NAB had confirmed to MI-REIT in writing Oct. 2 that "'it has a principled view of not funding hostile takeover bids against client entities'."