Brokers at odds on Capital offer
The takeover tussle for Capital Properties is turning into the battle of the brokers as analysts express different views on whether the Wellington landlord should accept AMP Property Portfolio's takeover bid.
Thursday, October 13th 2005, 7:49AM
by The Landlord
Reports came out this week from Macquarie Research Equities, UBS Investment Research and Citigroup, all debating valuations in the independent advisers' report from Deloitte issued in response to AMP Property Portfolio's $1.42-a-share offer for Capital. Deloitte valued Capital at $1.48 to $1.72.UBS' Stephen Freundlich advised investors to take up the offer and sell to AMP.
Although the property market was in "a sweet spot", inflation and the cost of raising money could cause an adjustment and Capital's share price could plummet.
"The Deloitte report highlights the large degree of variability around the Capital valuation," he wrote. "Relative to what the market is implying for other listed property trusts, the Deloitte base case valuation appears aggressive, in our view. We recommend investors sell into the offer."
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