ECF calls in Takeover Panel over Lederer bid

Elanor Commercial Property Fund (ECF) has reached out to the Takeovers Panel regarding the takeover offer by family office Lederer Group. 

It was announced in early August that Lederer Group had made an off-market offer to take over the ECF for $0.70 cents per share and lodged a bidders statement on 20 August. This decision was taken by the family office as it was concerned the investment strategy of the fund would move beyond its Australian remit to focus on pan-Asian activities and alleged a lack of independence of the board as well as significant enhancements that could be made to the investment management.

The following day, ECF urged its shareholders via an independent board committee to reject the deal as it felt the price undervalued the fund, failed to reflect the fundamental value of the portfolio, that there was uncertainty about the track record of the Lederer management to run the fund and shareholders would be inadequately compensated.

Responsible entity Elanor Funds Management has now contacted the Takeovers Panel to resolve the matter. 
It stated the applicant submits that the bidder’s statement contains material information deficiencies relating to (among other things):

• The ownership, personnel, expertise and track record of Lederer, Lederer Family Office, and LDR Capital.
• Speculation of a change to ECF’s strategy or investments and the pursuit of new transactions by ECF.
• Misleading comparison of ECF’s management expense ratio (MER) with the MERs of various other externally managed REITs included in the ASX 300 A-REIT Index.
• The threat of delisting ECF from the ASX and the omission of the safeguards in respect of a proposed ASX delisting.

It requested Lederer Group to advise the market of the disclosure deficiencies and the nature of those as well as lodge a replacement bidders statement, approved by the panel.

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The Takeovers Panel said a sitting panel has not yet been appointed, and no decision has yet been made to conduct proceedings. 

Last year, financial advice licensee Sequoia Financial Group reached out to the Takeovers Panel over a potential takeover by a group of shareholders as it believed they had misled the market as to how many shares they owned in Sequoia. The panel ruled in Sequoia’s favour and made a declaration of unacceptable circumstances.

This verdict was given as the panel felt the acquisition of control over voting shares in Sequoia had not taken place in an efficient, competitive and informed market, and the holders of shares in Sequoia and the market in general did not know the identity of persons who have acquired a substantial interest in Sequoia.