The ALE Property Group (ASX: LEP) share price is rocketing today, up 21% in late morning trade. And this for a company with a market cap north of $1.1 billion.
Below we take a look at the acquisition proposal that appears to be fuelling ASX investor interest.
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What is Charter Hall proposing?
ALE Property's share price is surging after reporting that Charter Hall Long WALE REIT (ASX: CLW) and a Charter Hall managed trust on behalf of Hostplus have entered into a Scheme Implementation Deed (SID) to acquire all of its shares.
The acquisition, via schemes of arrangement, remains subject to certain conditions being met. On completion, Charter Hall and Hostplus – CLW's existing capital partner in the Long WALE Investment Partnership – would each own 50% of ALE Property's assets.
The acquisition would see ALE investors receive $5.683 per share. That's right at the current ALE Property share price of $5.69, up 21% from the opening bell.
Investors would receive $3.673 cash along with 0.408 Charter Hall shares for each ALE Property share they hold.
ALE Property shareholders will still receive the September quarter distribution of 5.5 cents per share without impacting on that offer.
Commenting on the acquisition, Charter Hall's fund manager Avi Anger, said:
We believe the Transaction is attractive and designed to deliver significant benefits to both LEP and CLW securityholders. The transaction is consistent with CLW's strategy to invest in high quality real estate assets that are predominantly leased to corporate and government tenants on long term leases.
We are pleased to be able to continue our partnership with Hostplus, a leading Australian Superannuation Fund, in investing in high quality pubs and liquor retail outlets leased to Endeavour Group.
The total value of the acquisition, including transaction costs, is estimated at $1.68 billion.
The ALE Property Board unanimously recommended shareholders vote in favour of the transaction, barring a superior offer emerging.
ALE Property share price snapshot
The ALE Property share price has gained 24% year-to-date and is up 21% today.
By comparison the All Ordinaries Index (ASX: XAO) is up 9% in 2021 and down 1% today.
The Charter Hall share price is slipping today, down just over 1%.
