Australian-listed Astro Japan Property (AJA) Group has rebuffed an offer from New York-based Lone Star Funds to take over Japanese real estate assets valued at Β₯84.5bn (β¬702m).
In a statement to the Australian stock exchange, Astro said: βThe board did not consider that the initial proposal would deliver acceptable value for AJA security-holders, and accordingly, determined not to grant due diligence access to Lone Star Funds.β
Lone Star made a revised offer this week, extending an all-cash offer for all of Astroβs portfolio of diversified real estate assets in Japan at Astroβs 31 December 2016 book value.
The US private equity group said it was ready to commence due diligence immediately if the company agreed to its conditions.
The conditions include an agreement between Astro and the trustβs manager, Spring Investment, to terminate Springβs external management agreement.
In response, the board said that, taking into consideration all of Lone Starβs conditions, the offer to purchase its property interest at book value was βunremarkableβ.
it cited the trustβs performance, the strength of the Japanese property market and the scarcity of large-scale and diversified property investment opportunities in Japan.
Astro said the board and its asset manager Spring Investment regularly assess the trustβs portfolio and value initiatives.
βFrom time to time this assessment involves discussions with parties interested in acquiring the portfolio, or part of the portfolio, to determine if such a transaction would deliver a superior value proposition for AJA investors,β the statement said.
Market sources believe the biggest hurdle to a successful bid for Lone Star will be its condition that AJA removes Spring Investment as the trustβs asset manager.
