AOF Takeover Fails for Charter Hall & Abacus

21 November 2019

The proposed take over of AOF by Charter Hall & Abacus has failed to gain the required support from unit holders.


At the meeting of unitholders, the proposal required 2 resolutions to pass, one to amend the constitution and a second to approve the Scheme. The first resolution required a 75% majority of unitholders however received support from only 60%. The second resolution required support from at least 50% and also received support of 60%.


The deal began to face resistance after one of the trusts major shareholders Hume Partners increased its stake to 11.4%. With the support of others investors, it was enough to block the takeover.


Steven Sewell, Managing Director of Abacus, and David Harrison, Managing Director and Group CEO of Charter Hall, commented: “It is disappointing that, despite over 60% of eligible votes cast being in favour of the resolutions, the Scheme will not proceed and AOF unitholders have lost the opportunity to receive $3.04 per unit cash consideration.”


Charter Hall & Abacus had earlier disposed on their 19.9% interest in the Trust in an effort to avoid being ineligible to vote. JP Morgan managed the sale of the stake at $2.95 per unit.


Following the announcement that the takeover was not proceeding, the stock fell to a low of $2.72 per unit before regaining some ground, leaving the acquiring party in a worse position.


AOF confirmed the announcements made by Charter Hall and Abacus on 11 November 2019 that ‘CHAB has no current intention of making a further offer for all of the units in AOF’ and its further announcement on the 17 November that ‘CHAB’s acquisition of AOF will not be proceeding’.


Thus takeover battles do not always succeed.