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Brookfield bids for Australia's Multiplex
2007-02-04
Canada-based Brookfield Asset Management Inc. (Toronto:BAMA.TO) made an approach to buy out Australia's Multiplex Ltd. (MXG.AX), sending shares in the A$4 billion ($3 billion) construction and property firm up as much as 8 percent. The approach may lead to Brookfield and the Roberts family, which already holds 25.6 percent of Multiplex, offering to buy the rest of the company, Multiplex said in a statement on Monday. No value for the bid was given, but analysts suggested around A$5 a share might be the most offered for Multiplex, which has a market capitalization of A$4.04 billion. Shares in Multiplex, which is being advised by UBS (UBSN.VX) and Allens Arthur Robinson, were up 6 percent at A$4.82 at 0236 GMT. "You're probably talking a 10 percent premium to this (A$4 billion) valuation only," said Brent Mitchell, analyst at Shaw Stockbroking. "If the family ends up involved I can't see them wanting to pay over the odds for something they control already," he said. Brookfield manages assets of about $50 billion and owns half of Brookfield Properties Corp. (Toronto:BPO.TO), which has a real estate portfolio that includes the World Financial Center in New York and is one of Manhattan's biggest office landlords. Multiplex, which has struggled with the much-delayed Wembley sports stadium building project in London, said on January 25 it had received a potential bid. The stock is trading at a forward price to earnings ratio of 17.6, compared with 10.5 for rival GPT Group (GPT.AX). "For a bid to eventuate at the current share price, an acquirer would need to be able to reach a valuation of A$5.45 (a share) post cost synergies, transaction costs and profit margin ... requiring some extremely aggressive assumptions and/or valuation parameters for the components of Multiplex," said a report from Deutsche Bank. Any agreement would encompass Multiplex's property development, construction, property funds management and facilities management businesses. It must involve the Roberts family. "If nothing emerges out of this deal there's still a chance someone else will move in, with the family obviously willing to look at these things," said Mitchell of Shaw Stockbroking. "Clearly the Roberts family prefer, after the episodes of the last three years, to be under less of a microscope," he said. Multiplex's development of the Wembley stadium in Britain has been dogged by disputes and soaring costs and is way behind schedule. Multiplex founder John Roberts died in June after establishing the company in 1962. Chief Executive Andrew Roberts, his brother Tim Roberts and sister Denby Macgregor have taken a leave of absence from their executive roles. Multiplex stock rose as high as A$5.01 on January 25, when a bid approach was first revealed. ($1=A$1.29)
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