Thakral board likely to reject Brookfield’s $424m buyout offer
The board of Thakral Holdings, the Australian hotel, retail and commercial property investor, is expected to reject a A$409.8 million ($424.2 million) takeover bid from Brookfield Asset Management. The Canadian private equity firm already owns a substantial part of Thakral after the family owners defaulted on a loan.
Anthony Story, Thakral's COO, told The Australian that a response would come on Tuesday, adding that the offer was unlikely to be accepted.
Brookfield is offering A$0.70 per share, which represents a 31% premium to last Wednesday's closing price, but Thakral's net tangible asset backing is A$0.96 per share. The company's assets include Melbourne's Hilton on the Park, The Menzies in Sydney, and a string of Sofitel and Novotel properties on Australia's eastern seaboard.
In December 2011, Brookfield International Finance Australia, a local subsidiary of the private equity firm, acquired a debentures issued by Replay Investments, a company controlled by the Thakral family. The debentures were originally issued to Reco City, an affiliate of Government of Singapore Investment Corp's (GIC) real estate division in December 2008.
The maturity date was October 31, 2011 but an extension was granted to February 28, 2012 to allow for refinancing or restructuring negotiations. Brookfield enforced its security rights on April 19, taking nearly 226 million fully paid and 40 million partly paid Thakral securities, which together represent a 38.6% stake.
Prior to Brookfield enforcing its rights, the Thakral family owned 42.5% of the company. Orbis Investment Management and CIG continue to hold 10.98% and 13.9%, respectively.
Brookfield Financial and Clayton Utz are advising Brookfield, while Goldman Sachs advised GIC on the sale of the debentures in December.
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