Irongate (ASX:IAP) share price slides as takeover rejected again

The third time has not been a charm in this acquisition attempt.

| More on:
A man wearing a face mask is stuck behind some closed steel gates.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Irongate Group (ASX: IAP) share price is in the red on Wednesday after the company rejected a takeover offer for the third time.  

360 Capital Group Ltd (ASX: TGP) and 360 Capital REIT (ASX: TOT) – together, 360 Capital ­– posed its most recent takeover bid of $1.72 in cash per share in mid-December.

It previously posed bids of $1.65 and $1.70, discounting a 4.5 cent dividend paid to Irongate shareholders in early December.

The market appears disappointed by today's rejection. At the time of writing, the Irongate share price has dropped 1.46% to trade at $1.69.

Let's take a look at what's driving the real estate investment trust's (REIT) share price down today.

Irongate share price slips on another rejected takeover bid

The Irongate share price is slumping after the trust rejected yet another takeover bid, stating it didn't "reflect [its] underlying value".

It said the bid didn't appreciate its office and industrial real estate portfolio, its portfolio's value-add upside potential, and the potential of its third-party funds management business.

Finally, the REIT commented if it believed a proposal did reflect maximum value for its shareholders, it would consider it.

Assumedly, that statement lands the ball squarely back in 360 Capital's court.

Each bid so far has been rejected for the same reason. Additionally, according to Irongate, each bid didn't come with any changed conditions.

Irongate didn't announce it had received the second bid to the market as it was immediately rejected. The wannabe acquiree criticised that decision at the time. And perhaps investors are responding now, considering the direction of Irongate shares today. 

In response to its second rejection, 360 Capital commented:

360 Capital is disappointed the IAP board has again chosen not to engage with 360 Capital despite the Improved Indicative Proposal representing an attractive premium across a number of valuation metrics…

On top of that, the company's managing director Tony Pitt noted:

360 Capital remains committed to working with the board and management of Irongate Group for a period of time, but will remain disciplined in its investment approach to assets, particularly given current uncertainties in this rising interest rate environment.

Since 360 Capital pitched its first bid, the Irongate share price has gained 12%. It is also currently nearly 5% higher than it was this time last month.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on REITs

a man sits on a ridge high above a large city full of high rise buildings as though he is thinking, contemplating the vista below.

Here are 4 ASX 200 REITs results catching the eye on Wednesday

A mixed set of results have been announced by these property companies.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.

2 ASX 200 shares making big moves on strong earnings

These two REITs are soaring, despite swinging to big losses.

Read more »

Rising real estate share price.

4 high-profile ASX REITS charging higher on half-year results

Investors have been buying these shares this morning.

Read more »

happy farming couple both with their thumbs up

This ASX 300 stock is my favourite way to invest in Australian farmland

I like this stock for growing wealth and investment income.

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price

This ASX Bunnings REIT is rocketing 40% today. Here's why

The ASX might be about to see a Bunnings REIT emerge.

Read more »

REIT written with images circling it and a man touching it.

'Bombed-out' ASX REITs are bargain shares, says expert

Morgan Stanley Australia's co-head of investment banking explains why REITS are looking 'decidedly good value'.

Read more »

a man with hands in pockets and a serious look on his face stares out of an office window onto a landscape of highrise office buildings in an urban landscape

Are Centuria Office REIT shares like buying $1 coins for 50 cents?

Is this REIT ridiculously cheap?

Read more »

An Australian farmer wearing a beaten-up akubra hat and work shirt leans on a fence with livestock in the background and a blue sky above.

'Highly compelling': The ASX 300 stock selling at a 29% discount

This could be a fruitful investment, according to one expert.

Read more »