The interest builds and as per my post the other night Defab we...

The interest builds and as per my post the other night Defab we owe you CER will make us all a lot of $$$.

Cheers
Hotlegs


Takeover approach prompts Centro's asset sale Turi Condon and Bridget Carter From: The Australian November 05, 2010 12:00AM
An informal offer has been made by the Lend Lease consortium for the Centro business, which has about 700 Australian and US shopping centres. Source: Bloomberg Source: The Australian

A TAKEOVER approach for the Centro business is understood to have prompted yesterday's move to put the shopping centre group on the block.
It is understood the informal offer by the Lend Lease consortium, which includes Singapore's GIC and a US-based group for the entire Centro business, which has about 700 Australian and US shopping centres valued at $18.6 billion, was made about a month ago.

It prompted Centro Properties Group yesterday to launch a formal process to "test the market" for interest in individual Centro properties and portfolios, or the entire platform.

The sale process for more than $13bn of the Centro assets was first reported by The Australian online yesterday and later confirmed in a formal announcement by Centro.

Centro chief executive Robert Tsenin said parties had approached Centro on its businesses and a combination of its assets in Australia and the US, but he denied that any formal offers had been made.

"They have been very preliminary in nature and that is why we are embarking on a formal process now," Mr Tsenin said.

He denied the group's bankers were forcing it to sell the assets.

Market conditions had improved, and a number of feasible options had been narrowed down, he said.

" Let me just stress that -- and it's an important point -- we are not in a fire sale mode," he said.

"We are doing this because it happens to make sense. Our lenders are not forcing us to be doing this."

Flexibility would be offered on the properties available for sale, and Centro was "open to all options", he said.

One such portfolio is understood to be the Centro Galleria shopping centre in Perth, with a group of neighbourhood centres in a $750 million grouping.

A Centro Retail Group and Centro Australia Wholesale Fund combination could constitute another, and 500 of the group's 600 US centres could be offered. The wholesale fund has 27 properties worth $2bn and number of joint ownerships with CER.

The Australian portfolios could be offloaded in parcels that would deliver buyers 100 per cent of some centres.

"Those left over won't be the least saleable," Mr Tsenin said.

Among other possible contenders to secure Centro interests are Westfield Group, which this week announced it would spin off an Australian-listed property trust with assets of $12.2bn, as well as Stockland and Colonial First State Global Asset Management.

The security prices of both CER and CNP crashed spectacularly in December 2007, when former Centro Properties Group chief executive Andrew Scott announced the group was unable to refinance about $3.9bn worth of debt.

A refinancing deal was later struck with bankers -- which effectively gave them control of Centro operations -- and in December, JPMorgan, Moelis & Co and UBS were appointed to advise on a restructure.

Mr Tsenin said the final outcome of the sale-restructuring process launched yesterday was likely to be known next year.

He said there could be no assurance any agreement could be reached.

"In view of Centro Property Group's current negative equity position, we do not underestimate the challenge of delivering value to securityholders through this process."

Despite this warning Centro Retail's shares ended 3c higher at 21c and Centro Properties shares ended up more than 2c at 18c yesterday.

Mr Tsenin said the sale process would be complex, given the group's looming class actions and legal proceedings by the Australian Securities and Investments Commission against Centro's former and current board and executives in what was its first major case alleging negligence by corporate Australia during the crisis.

Joint ownership of properties by CER, Centro unlisted funds, and external parties would further complicate matters.

A stake in the group's syndicates business remained for sale, Mr Tsenin added. He signalled that the company would be wound up if most of the group's assets were sold. " I don't think we are going to be in that situation. I think there will be more sensible outcomes."

Lend Lease and GIC declined to comment last night on speculation on their bid. A Centro spokesman declined to comment, referring The Australian to the original statement.