Greg Woolley is doing his best to scare RCU investors into handing their units to him at a massive discount to NTA. His latest supplementary bidder’s statement informs us that he is going to keep at least 10.1% so that another bidder ‘would be unable to acquire RCU’.
True. No one is going to be able to acquire 100%. And, with Woolley controlling 31%, no one else is going to get the 75% required for a scheme of arrangement.
But it’s also irrelevant. Most non-Woolley buyers won’t want to buy RCU. For North American property investors, the logical owners of these assets, owning US commercial property via an Australian REIT is horribly inefficient. RCU owns two US REITs, which in turn own the underlying assets, and it’s either these or the underlying assets themselves that potential purchasers will want to buy.
To sell one or all of those, we’ll only need a 50% vote. And that, based on the register as it stands today, should be relatively straight forward at any reasonable price.
Defence advisors Macquarie have some of their best bankers on the job (an indication of how tough things are in investment banking but good news for us). Woolley can make as much noise as he wants. If our advisors do their job well, we’re going to end up with a lot more than $0.46.
My take on this (but I could be wrong) is that 57c is the expected proceeds from a fire sale, so that to have any chance of success Woolley would need to match this in his offer price. Further upside for holders however may exist under certain ‘potential longer term options’ which are under consideration according to Steve. Therefore, hold on for a higher offer of 57c + and / or more favourable options for shareholders.
This seems to be a mistake??? or a bad dream???
But, this is only 50c, not 57c – 6m MORE fees for what these people are doing is ludicrous.
You said these people were Macqurie’s best people and this is the outcome!
im not sure, i am interpeting all of this properly, but the way I see it:
Bidder for 46c, with cash certainty
Board and Expert saying reject, as value $1+
One week later : full process conducted by best advisors at Macquarie Bank and highly conditional offers supposedly receeived which MAY get indicative 50c for shareholders
bidder about to go away
millions of shareholders funds wasted in a process that tells us what w ehave isnt worth what we have lways been told, in the real world
a lot of questions to be asked here………. why anyone would stay in now is beyond me
good luck Steve, i think youre going to need it
Thanks for the update Steve. I wonder if an alternative option will persuade Woolley to increase his bid to around the price of the possible alternative. If he really wants the assets for the long term he may be prepared to do that rather than see them sold off (cheaply) to other unrelated parties. While I had hoped for more I would be happy to get my money back with a smaller loss at around .57 cents and move on to greener pastures. Fingers crossed.
I wouldn’t get too excited. This is just an alternative “worst case scenario valuation” which is more than Woolley is offering. I can’t see him increasing the bid either. Not at the moment. Why would he? Just let us sweat and a few more nervous types might sell to out.
Given more than 1 entity holds a greater than 10 % stake he cannot get full control and if the rest of us stand firm we should do “ok” (NTA is unrealistic anyway in current market). I would ignore the macro swings and sit tight and see what happens.
I was quite surprised to read the content of the supplementary bidders statement this morning. The wording is aggressive and it clearly seems designed to push unit holders to sell their units by alluding to another capital raising and the prospect of little return for 5-10 years. This seems like intimidation and I wonder if there is a law against it, and/or whether this behaviour is of interest to ASIC. Any thoughts?
We eat nails for breakfast, and we have no shit left to be scared out of.
For North American property investors, the logical owners of these assets, owning US commercial property via an Australian REIT is horribly inefficient. http://www.aspectenterprises.com.au/