Elanor Faces High Stakes: Takeover Rejected, Balance Sheet Stabilisation Critical
Elanor Investors Group advances its strategic alliance with Rockworth Capital Partners through a $125 million recapitalisation and Firmus acquisition, while rejecting an unsolicited takeover offer for its commercial property fund. The group also reports FY24 results highlighting stabilisation efforts amid high gearing.
- Rockworth commits $125 million investment and Firmus acquisition pending approvals
- Elanor Commercial Property Fund takeover offer unanimously rejected by independent board
- FY24 core earnings of $12.8 million with distributions of 4.9 cents per security
- Asset realisation program underway to reduce gearing from 66.9%
- Corporate governance reforms including new independent directors and CEO search
Strategic Alliance Expansion with Rockworth
Elanor Investors Group has announced a significant expansion of its strategic partnership with Rockworth Capital Partners. Rockworth has committed to invest $125 million to recapitalise Elanor and stabilise its balance sheet, alongside Elanor’s planned acquisition of the Firmus business. Both transactions remain subject to regulatory and securityholder approvals, with an Extraordinary General Meeting scheduled for early November 2025. This capital injection is designed to provide Elanor with a robust foundation to pursue growth opportunities in key real estate sectors across Australia and the broader region.
Defending Against Takeover Bid for ECF
In a notable development, Elanor is fending off an unsolicited off-market takeover offer from the Lederer Group for its Elanor Commercial Property Fund (ECF). The independent board committee representing ECF securityholders has unanimously recommended rejecting the $0.70 per security cash offer, citing insufficient benefits and risks associated with the proposed management change. Elanor’s board has also criticized the Lederer Group’s lack of transparency regarding their management team and strategy, reaffirming their commitment to ECF’s existing Australian-focused investment approach.
Business Stabilisation and Asset Realisation
Elanor continues to execute a comprehensive asset realisation program aimed at reducing its high gearing, which stood at 66.9% as of June 2024. Recent sales include the Stirling Street property, Bankstown Central shopping centre, and Panorama Retreat and Resort, with proceeds directed towards debt reduction and working capital. The group has also secured covenant waivers from noteholders and negotiated extensions on key debt facilities, underpinning its broader de-leveraging and stabilisation strategy.
FY24 Financial Performance
The group reported core earnings of $12.8 million (8.55 cents per security) for FY24, alongside distributions of 4.9 cents per security. Funds under management increased substantially to $5.9 billion, boosted by new portfolios from Challenger and Abu Dhabi Investment Corporation. However, the financial statements include an emphasis of matter regarding going concern risks if the recapitalisation and stabilisation plans are not successfully executed. Despite these challenges, Elanor’s funds management income rose 13.5% to $56.2 million, reflecting growth in management fees and successful capital raisings.
Corporate Governance and Leadership Changes
Elanor is advancing corporate governance reforms, including establishing a separate independent trustee and responsible entity board for its managed funds. The group is also actively searching for a new CEO, with an appointment expected by late November 2025. These changes aim to strengthen oversight and position Elanor for sustainable growth following the stabilisation phase.
Bottom Line?
Elanor’s next steps hinge on securing approvals for its recapitalisation and navigating the takeover challenge, setting the stage for its recovery and growth trajectory.
Questions in the middle?
- Will Elanor securityholders approve the Rockworth investment and Firmus acquisition at the upcoming EGM?
- How will the rejection of the ECF takeover offer impact Elanor’s fund management strategy and investor confidence?
- What are the potential risks if Elanor’s stabilisation and de-leveraging plans do not proceed as planned?
