The Motley Fool

Cromwell share price down on potential takeover confirmation

The Cromwell Property Group (ASX: CMW) share price has traded marginally lower this morning after the company responded to media speculation about a potential takeover transaction.

What did Cromwell announce?

Cromwell noted recent press speculation regarding London-listed RDI Reit and confirmed that it has made an approach to the board of RDI regarding a potential transaction.

The company insists any transaction would be aligned with its strategic goal of growing funds under management and expanding its investment footprint in the UK and Europe, with half of the group’s $11.5 billion of assets under management concentrated in Europe.

Discussions are ongoing between RDI and Cromwell about the potential takeover bid, with Cromwell not guaranteeing any certainty of a formal offer or terms of any offer to be made.

How has the Cromwell share price performed in 2019?

The Cromwell share price is up 10% so far this year as it has marginally underperformed the S&P/ASX200 Index (ASX: XJO).

The diversified real estate investor and manager has also underperformed the ~17% return on the S&P/ASX200 Real Estate Index (ASX: XRE) despite outperforming some of its real estate peers including Shopping Centres Australia Property Group Re Ltd (ASX: SCP) and Scentre Group (ASX: SCG) this year.

The real estate sector domestically has been undergoing a correction for the best part of a year now which has sent several of the major real estate investment trust (REIT) unit prices plunging lower.

The big positive for Cromwell at this point in the domestic cycle is its significant weighting to offshore real estate, which has arguably protected it from the losses seen by some of its peers in net tangible asset (NTA) value.

Given the typical reaction to market acquirer’s, I wouldn’t be buying any of Cromwell’s shares until a takeover offer is either confirmed or ruled out by the real estate group.

However, I am of the belief that commercial real estate (CRE) can offer a good portfolio income hedge as the economic growth tide begins to turn in 2019.

For those who value growth over income, I’d check out this buy-rated stock which is well-positioned for substantial growth as it captures a big stake in this booming $22 billion industry.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click here to learn more on how you can profit from the coming cannabis boom.

Motley Fool contributor Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.