Twist in Aspen’s Eureka chase

FDC Construction managing director Ben Cottle.

The takeover battle for listed ­accommodation company Eureka has had another twist after builder and developer Ben Cottle upped his stake in the company to almost 16 per cent and the ­target laid out reasons for ­rejecting the overtures of rival Aspen Group.

Mr Cottle has yet to reveal his hand, but another 3.2 per cent of the register traded on Thursday afternoon, prompting speculation he had again lifted his holding.

Aspen will soon open its all scrip takeover bid for the company, aiming to create a $500m affordable housing company that will attract more of the institutions charging it into the area.

But Mr Cottle’s sharemarket raiding could see him with a stake of just under 20 per cent, leaving him calling the shots on Aspen’s bid.

Aspen is on the backfoot as its takeover offer is below the price at which Mr Cottle has been ­buying and he is unlikely to sell into its bid unless it is significantly sweetened.

Market trades have been struck at about 54.5c per share rather than the 46c per share value of Aspen’s scrip offer.

Eureka’s board on Thursday called out Aspen’s bidder’s statement for “misleading statements and material omissions”.

“A key area of concern for the Eureka Board is that Aspen has not recognised in the Bidder’s Statement the discount in the Aspen Offer consideration relative to recent Eureka share prices,“ it said.

It said Aspen’s offer was inadequate, undervalues Eureka and represents a discount or no meaningful premium over Eureka’s share price at any time in the past 12 months.

Aspen will hope that Eureka’s share price cools after Mr Cottle’s buying spree, but the outcome of the takeover battle will likely hinge on the attitude of large shareholders.

Cooper Investors, with a 22.08 per cent stake, is also a large holder in Aspen, and is thought to be supportive, while Tribeca Investment Partners, with 11.85 per cent, could hold out.

Another takeover contest in the property sector, BWP Trust’s takeover of a small retail fund run by Newmark, also remains in the balance, with the larger group announcing its intention to declare its offer unconditional on March 21, and extend it.

BWP has a stake of 36.46 per cent in the Newmark Property REIT, which owns Bunnings warehouses.

But there is still opposition to that takeover from dissident shareholder Euree Asset Management, with manager Winston Sammut reiterating his opposition to the takeover on the basis that it does not fully recognise the value of the company.

He says a $22.5m payment to Newmark Capital for transferring the management of the trust – to be made by Wesfarmers – is excessive and wants some of the value to go to shareholders.

Mr Sammut has received undertakings from more than 5 per cent of the register, backing his plans to call for an extraordinary general meeting to remove Newmark as manager of the trust.

Newmark has argued that management transaction has no bearing on the takeover price ­offered by the BWP Trust and the payment is coming from a Wesfarmers subsidiary, not the listed warehouse owner.