HPI Takeover Offer Fixed at $3.752 per Security as Charter Hall Secures Majority Stake
Charter Hall Wholesale Management Limited has secured majority control of Hotel Property Investments (HPI) with a 63.7% voting stake and the HPI board now recommends acceptance of the all-cash takeover offer valued at $3.752 per security.
- Charter Hall holds 63.7% voting power in HPI
- HPI board and chairman recommend accepting the all-cash offer
- Offer price fixed at $3.752 per security, best and final without competing bids
- Offer closes on 31 January 2025 unless extended
- Board changes planned with bidder’s nominees to replace departing directors
Charter Hall Secures Majority Control
Charter Hall Wholesale Management Limited, acting as trustee for the CH Investment Trust and CH Investment Co Trust, has announced it now holds a commanding 63.7% voting power in Hotel Property Investments (ASX: HPI). This milestone marks a significant step in Charter Hall’s off-market takeover bid, effectively granting it control over HPI’s strategic direction and board composition.
The takeover offer, initially launched in September 2024, has been supplemented multiple times, with the latest fifth supplementary bidder’s statement confirming Charter Hall’s dominant position. The bidder’s control enables it to pass ordinary resolutions and influence key operational and capital management decisions within HPI.
Board Endorsement and Changes Signal Confidence
In a notable development, the HPI board has reversed its earlier stance and now formally recommends that all securityholders accept the all-cash offer. This endorsement is underscored by the acceptance of the offer by HPI’s chairman, Giselle Collins, and Lachlan Edwards, a director and the largest securityholder on the board.
Further board changes are imminent, with two non-executive directors, Lachlan Edwards and Anne Michaels, set to step down after the 6 February 2025 board meeting. They will be replaced by Charter Hall’s nominees, David Harrison and Greg Paramor, consolidating the bidder’s influence over HPI’s governance.
Offer Terms and Strategic Implications
The all-cash offer values each HPI security at $3.752, supplemented by distributions totaling $0.098, bringing the total effective consideration to $3.85 per security. Charter Hall has declared this offer as best and final, with no planned increases unless a competing proposal emerges, a scenario deemed unlikely given the bidder’s substantial voting power.
Securityholders are urged to accept promptly to secure payment within five business days of valid acceptance. The bidder warns that rejecting the offer could expose holders to price declines post-offer closure, reduced liquidity, and minority status in a Charter Hall-controlled entity. Additionally, if Charter Hall’s stake surpasses 90%, it may compulsorily acquire remaining securities, potentially delaying payment to dissenting holders.
Market and Investor Considerations
The takeover bid’s progression signals a consolidation phase in the real estate investment sector, with Charter Hall expanding its footprint through HPI. Investors face a clear choice: accept a guaranteed premium cash price or risk diminished market value and liquidity. The board’s recommendation and the bidder’s control tilt the scales toward acceptance.
As the offer deadline of 31 January 2025 approaches, market participants will be watching closely for acceptance rates and any unexpected competing bids. The outcome will shape HPI’s future governance and strategic direction under Charter Hall’s stewardship.
Bottom Line?
With control secured and the board’s backing, Charter Hall’s takeover of HPI is poised to close soon—securityholders must decide whether to accept the final cash offer or risk minority status and market uncertainty.
Questions in the middle?
- Will any competing takeover proposals emerge before the offer closes?
- How will the new board nominees influence HPI’s strategic priorities post-takeover?
- What impact will reduced liquidity and potential delisting have on remaining minority securityholders?
