ESR to commence compulsory acquisition of PropertyLink shares

The PropertyLink Group (ASX: PLG) share price could see some movement today after it announced that ESR Australia has acquired a more than 90% interest in Propertylink and will proceed to compulsory acquisition of the remaining shares.

What are the terms of the acquisition?

The compulsory acquisition will be on the same terms as under the accepted takeover offer, meaning shareholders will receive $1.164 cash per Propertylink security. ESR expects to complete the compulsory acquisition and formalise the takeover within 5-6 weeks in accordance with the Corporations Act 2001.

The ESR off-market takeover bid was unanimously accepted by the Propertylink Board of Directors on 6 December 2018 for $1.20 per security cash offer given its significant premium to the trading price of Propertylink, the lack of a superior proposal and certainty provided by the consideration offered.

The offer was declared unconditional on 20 February 2019 and this latest step brings to a close the Propertylink takeover speculation that has plagued the company for the last 12-18 months.

Propertylink launched a $755 million bid for the Centuria Capital Ltd’s (ASX: CNI) Industrial REIT in September 2018 before Centuria, a major shareholder and rival fund manager, called for the Propertylink board to be spilled.

What other options are there in real estate?

While Propertylink is set to be compulsorily acquired in the coming weeks, investors looking for exposure to industrial real estate could look at other industrial REITs including Centuria Industrial REIT (ASX: CIP) or Scentre Group (ASX: SCG).

Industrial and commercial REITs tend to be less cyclical than those with retail or residential exposure given rental agreements are traditionally longer and more stable in the commercial and industrial sectors throughout the economic cycles. While property values remain subject to monetary policy and other economic conditions, the pass-through to REIT investors in these sectors can serve as a reliable income source in an economic downturn.

For those who aren’t so bullish on the Aussie REITs, I’d check out these top growth shares that have been tipped as market beaters.

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