takeover speculation

Bartholemuez … the Business spectator has said

“GPT’s core franchise – its traditional blue-chip portfolio of Australian properties – continues to perform "very strongly" and the GPT balance sheet is only moderately geared. It has minimal debt-refinancing requirements this year and only about $700 million (within the scope of its undrawn facilities) next year.

With a cashed-up Lend Lease on the prowl again – it has approached retirement centre operator FKP Property Group and is building a stake in Babcock & Brown Communities – and Stockland busily reducing its gearing, this will be an anxious period for Lyons and his team.

They barely fought off Lend Lease and Stockland three years ago, and from a much stronger position than GPT finds itself in today.”

So the media is already talking takeovers here.

Here is the Stockland’s offer three years ago…..
“Stockland is offering 0.608 of its securities for one GPT unit, using a base price of $6 for the securities. That values GPT units at about $3.65.”
GPT’s bookvalue three years ago was $3.02. SGP valuations appears to be 20% above book value back then.
GPT’s bookvalue is now $3.80. However no one is buying property so bookvalue could be completely meaningless.
SGP is trading at about $4.88 at the moment.
.608 SGP would value GPT at $2.96

Lets assume that GPT isn’t worth 20% above bookvalue. Let’s assume GPT is worth book value.

If SGP were to offer $3.00 a share they would get the company at a discount of 20%.

Interest rates could go lower and that would change the whole dynamics of the REIT industry within seconds. Now would be the time to make such a low ball offer.