Goodman's stake on ING, a defensive move

THE GOODMAN Group's "non-aggressive" purchase of a stake in the ING Industrial Fund is defensive move to ward off potential bidders, analysts said.

Yesterday, Merrill Lynch said GMG’s $261 million exercise for a 9.4% stake in IIF is not part of broader strategy to takeover the fund, despite shares in IIF jumping 11% and GMG up 4%.

ML said GMG’s purchase is rather a passive and defensive stake, following the recent acquisitions of Investa Property Group by Morgan Stanley, Multiplex Group by Brookfield Asset Management and Macquarie ProLogis by ProLogis.

ML analysts said GMG was concerned that IIF could have eventually ended on the menu to one of GMG’s main competitors, ProLogis or AMB.

“GMG’s plate is full with growth in other regions… while IIF owns high-quality Australia assets and the largest platform in Canada, we do not see these as growth markets for Goodman.

“GMG is more focused on China ($2-3 billion over next 3-5 years), Japan (J-REP), Europe and UK, Singapore (potentially aligning itself with JTC), and the US, where the REIT market’s performance, down 17% since February, we believe this may facilitate acquisition opportunities,” ML added.

In conclusion, ML said GMG’s stake provides an extra merger and acquisition barrier, with minimal impact to earnings.

Australian Property Journal