HPI's Firm Stance Against Charter Hall's Takeover Bid
HPI (HPI) Share Update November 2024 Thursday 21st
HPI Urges Securityholders to Reject Charter Hall's Takeover Bid
Hotel Property Investments Limited (ASX: HPI) has issued a second supplementary target's statement urging its securityholders to reject the takeover offer from Charter Hall Retail REIT and Hostplus.
Instant Summary:
- HPI recommends rejecting Charter Hall's takeover offer.
- The offer is considered opportunistic and undervalues HPI.
- Securityholders advised to take no action.
- HPI emphasizes its strong pub portfolio and growth prospects.
Background of the Offer
Hotel Property Investments Limited (HPI) has been the target of an off-market takeover bid by Charter Hall Wholesale Management Limited, acting on behalf of Charter Hall Retail REIT and Hostplus. The offer was initially announced on 9 September 2024, and has been open for acceptance since 25 September 2024.
As of 20 November 2024, the Bidders have acquired an aggregate interest of 26.94% in HPI securities, an increase from their initial interest of 18.56%. The offer remains conditional, with the Bidders requiring at least 35% acceptance by 9 December 2024 to declare it unconditional.
HPI's Response
HPI's Directors have unanimously recommended that securityholders reject the offer, describing it as opportunistic and materially undervaluing HPI's assets. They argue that the offer does not adequately compensate for HPI's unique pub portfolio and its strong business outlook.
In a letter to securityholders, HPI's Chairman, Giselle Collins, emphasized the high quality of HPI's pub portfolio and its potential for future growth. The Directors believe that the current offer price of $3.785 per security, post-distribution, does not reflect the true value of HPI's assets.
Strategic Vision
At the recent Annual General Meeting, HPI's CEO, John White, reiterated the company's strategy to be Australia's premium ASX-listed owner of pub assets. The strategy focuses on secure income, growth levers, and portfolio optimization to deliver long-term value to securityholders.
HPI's Board is confident that its existing strategy and asset portfolio offer greater value than the current takeover bid. Securityholders are encouraged to review the full AGM presentation available on HPI's website.
The rejection of Charter Hall's offer by HPI's Directors suggests confidence in the company's current strategy and asset valuation. This stance may reassure investors about the stability and potential growth of HPI's stock. However, the ongoing takeover attempt could introduce volatility as the market reacts to developments.
Investor Reaction:
Analysts are likely to view HPI's rejection of the offer as a sign of strength in its asset portfolio and future growth prospects. However, some investors may be cautious due to the conditional nature of the takeover and the potential for market fluctuations.
Conclusion:
Investors should closely monitor the situation as the deadline for the offer approaches. HPI's strategic focus on growth and asset optimization could provide significant long-term benefits, making it crucial for investors to consider the broader implications of the takeover bid.