Trust now keen on buying two Asian properties, not 10
THE manager of Singapore-listed MacarthurCook Industrial Reit, a subject of takeover speculation, said yesterday that it will fight any hostile bid to acquire the trust.
'I can guarantee you that it will be contested. We certainly won't let somebody just walk in the door and take over management,' Craig Dunstan, managing director of Australia's MacarthurCook Ltd, told Reuters in an interview. He said the Australian property manager now controls 13.2 per cent of MacarthurCook Industrial, raising its stake from an initial 2.3 per cent when the trust was listed last April.
Singapore's real estate investment trust (Reit) sector is expected to consolidate in the short term, and brokerages such as Goldman Sachs have cited MacarthurCook Industrial as a potential takeover target due to its diffuse shareholding structure.
The absence of a large controlling shareholder makes it easier for predators to buy a majority stake.
MacarthurCook Industrial's share price fell 2.9 per cent yesterday, while the broader Singapore market was flat.
MacarthurCook Industrial and other Singapore Reits controlled by Australian firms have suffered the most in the current weak market due to concerns over their ability to raise debt or equity.
Allco Commercial Reit, which is planning to sell its Australia properties as embattled manager Allco Finance Group struggles to repay its debts, fell 8.1 per cent after Moody's downgraded its credit rating further on Tuesday.
Mr Dunstan said MacarthurCook Industrial, which owns about $620 million worth of factories and warehouses, mainly in Singapore, will not meet its annual asset growth target of $500 million for the fiscal year to end-March 2009.
'We're not going to raise equity in today's market at today's prices, because that's not the right thing to do for our current investors,' he said.
MacarthurCook Industrial currently trades at around a 24 per cent discount to its net asset value of $1.30 a share.
The property trust dropped a $200 million equity fundraising exercise in January citing poor market conditions, and is now looking to buy two properties in Asia instead of the 10 it was considering initially, Mr Dunstan said.
'Our responsibility is to generate good risk-adjusted returns for our current investors. They will continue to get a good return whether we buy another asset in the next 12 months or not,' said Mr Dunstan, a former lawyer who founded MacarthurCook in 2002. -- Reuters
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