PUBLICLY listed newbie and retirement village company Prime Trust has made a play for Babcock & Brown Communities left vulnerable following its separation from investment bank Babcock & Brown.
But the $264 million company might be biting off more than it can chew in its bid for the $323 million BBC.
Analysts have described the offer as “laughable” and “pointless”.
Australian Property Custodian Holdings the responsibility entity of Prime Trust has made a 40% proportional offer with one PTN unit being offered for each BBC security.
That offer is a discount based on BBC’s trading price of 50 cents yesterday and PTN’s share price of 43.5 cents.
One analyst who did not wish to be named pointed out that BBC also has major shareholders like Lend Lease which are unlikely to “handover” BBC.
Lend Lease’s finance director Steve McCann recently said the group is looking at potential merger and acquisition opportunities adding that the purchase of interest in BBC has given it a seat at that table.
PTN will seek approval from BBC for the release of the bidder’s statement to BBC security holders.
“The directors of Prime Trust believe that if they can secure a strategic holding in BBC, they will then pursue a full merger, probably by way of a Scheme of Arrangement which staples Prime Trust and BBC securities,” a wishful PTN’s joint managing director Philip Powell said.
“The recent decision by Babcock & Brown Ltd to sell their management rights to BBC has encouraged Prime Trust to offer for a strategic stake. We see the offer as being an attractive option for BBC Security holders who are awaiting the outcome of the ‘price discovery process’ currently in progress,” he added.
PTN and BBC have a number of long term management agreements in respect of 25 facilities which Prime Trust either leases to BBC or are managed by BBC.
Powell said the trust has a number of concerns and issues about how these agreements are being interpreted and managed by BBC.
“Merging the assets and operations together will assist in removing such concerns and provide improved operational outcomes,” he added.
PTN first listed in August last year and in the following month, its joint managing director Bill Lewski was forced by the Australian Securities and Investments Commission to wind up an unregistered property scheme.
Prior to listing the trust, formerly known as Prime Retirement & Aged Care Property Trust, utilised the fund raising services of Kebbel Investment Bank, which was associated Richard Beck, a director of the disgraced Westpoint Corporation.
Beck was also chairman of the unlisted trust at the time.
And one of the former directors of Kebbel, Neil Burnard, was recently sentenced in the New South Wales District Court on a 12 months imprisonment suspended on condition he be on good behaviour.
Meanwhile Lewski’s unregistered managed investment scheme associated with the Princeton View retirement village in
ASIC has also accepted an enforceable undertaking from Lewski and three companies which are linked to him and, it is alleged, were connected to the promotion and operation of the scheme.
The enforceable undertaking accepted by ASIC arose out of concerns ASIC had in relation to offers made by Lewski and the three companies, Brighton RV Syndication Pty Ltd, Brighton RV Holdings Pty Ltd and Australian Commercial Property Syndication Pty Ltd, to buy back members’ interests in the scheme in January 2006.
ASIC was concerned that the offers were made without providing members with adequate information in relation to the value of the offers and were made at a time where ASIC already had proceedings on foot to wind up the scheme.
Australian Property Journal
