Becton surges on takeover bid AdvertisementEmail Print Normal font Large font AdvertisementNatalie Craig, Property Reporter October 28, 2008 - 11:22AM
Shares in embattled Melbourne developer Becton have soared by more than 50% in early trading after the company confirmed it had received ''a number of incomplete and conditional proposals from industry participants'' in relation to its business.
Becton shares soared by as much as 56.67%, up from 15 cents to 22.5 cents, after their release from a trading halt imposed on Friday because of the rumoured takeover proposals.
The company said it could be recapitalised or bought-out _ in whole or in part. It said it hoped the outcome would strengthen its balance sheet and reduce the gap between its underlying net asset value and the current market trading price.
But shareholders at yesterday's annual general meeting in Melbourne bucked against the suggestion of a takeover.
''I really don't want to dilute my equity at the hands of a predator,'' said one. ''I don't want us to be bought out by others.''
Chairman Brian Pollock responded that the company was simply considering its options, and wanted its share price to better reflect its asset value and earnings potential.
Chief executive Matthew Chun said net tangible assets had increased since June 30, from $280 million to $297 million, and the company had reduced total debt by $275 million. Gearing, or the ratio of debt to assets was lower than the 49% reported on June 30.
However, Becton's funds management boss James Goodwin was wary about the company's retail fund breaching its loan rules as values continue to slump. The covenant kicks in with a loan-to-value ratio of 65%, the fund is currently at 62%.
''There will be further revaluations in December . . . we believe [the loan] should be OK for that quarter,'' Mr Goodwin said. ''We're think we're OK through December. Through March it's difficult to know where revaluations will be.''
Mr Chun said about eight assets worth a total of about $50 million had been sold above cost to improve the condition of the retail fund.
But he admitted the company may not break even on the sale of the Beaumaris Hotel on Beach Road, which it nabbed amid tough competition for $11 million last year.
Mr Chun said he was positive earnings growth in the residential and retirement sectors, which were supported by strong fundamentals, and would suffer less from the credit crunch.
BEC Price at posting:
$46.00 Sentiment: None Disclosure: Not Held
