MIRVAC, the property developer, has lost its largest shareholder after Dubai group Nakheel dumped its final holding on the market yesterday in a $206 million deal.
Nakheel emerged as Mirvac's cornerstone investor less than two years ago and steadily built up its stake in the group to 12 per cent. But the group has been gradually selling down its shareholding over the past year, even though it spent $95m to participate in Mirvac's recent $1.1billion equity raising.
It made the surprise decision yesterday to quit the remaining 6.1 per cent of stock on market, prompting speculation a deal was needed to address Nakheel's financing issues in its home market.
A block trade of the Dubai company's remaining stock, 172 million shares, was carried out by Deutsche Bank, which placed the stock with a range of institutional investors at $1.20.
The trade was done at a marginal discount to the $1.25 to $1.27 range in which it was trading before the placement was carried out.
The transaction will earn Nakheel about $206m and effectively ends the group's ambitious foray into the Australian commercial property market.
Mirvac chief executive Nicholas Collishaw last night told The Weekend Australian the property group would not, with the exit of its largest investor, lose its firepower in pitching for developments. "It means for us, from our point of view, business as usual," Mr Collishaw said.
"It has come as a surprise. If there is a range of institutions that have taken over the big line of stock that has gone through, then I think we will end up with a more stable investor base."
Nakheel emerged as a potential player in January last year when the group, which is part of the state-owned Dubai World Group, paid $680m to take a 12 per cent stake in Mirvac.
Its initial ownership purchase was done at $5.20 a share.
The Dubai property developer has been a mixed shareholder for Mirvac, after it refused to participate in a capital raising in November last year that effectively diluted some its stock holding.
The group did, however, buy into the June deal when Mirvac raised $1.1bn to strengthen its balance sheet.
Nakheel spokesman Natasha Boukhary refused to respond to written questions from The Weekend Australian last night.
The group had originally planned to compete for the right to develop the Barangaroo site on the western fringe of Sydney Harbour.
Nakheel had flagged its looming debt issue in Dubai, with the property division facing refinancing commitments of $US3.5bn due this year.
Dubai World has been forced to sell assets globally, with one of its cornerstone investments, the Queen Elizabeth 2 luxury ship, expected to be sold.
Source: The Australian News
Saturday, August 22, 2009
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