Property developer Stockland is ready to dump its stake and walk away from takeover target Australand.
The suitor stepped up pressure on fellow developer Australand on Wednesday to open its books for due diligence as part of its rejected $2.4 billion takeover offer.
Stockland also released a quarterly update on Wednesday, forecasting full year six per cent earnings per share (EPS) growth, compared to previous guidance of 5-6 per cent.
Stockland chief executive Mark Steinert said combining the two companies would create a value accretive, significant Australian real estate company.
Australand’s board has dubbed Stockland’s offer inadequate, for 1.111 of its securities for each Australand security, valuing them at $4.20 each.
The offer was a “real estate transaction” based on the underlying value of the asset and was a premium to that, Mr Steinert said.
“Unfortunately Australand has not engaged with us, denying investors the opportunity to see the firm proposal,” he told an analysts briefing.
“The due diligence information we’ve asked for is non-disruptive.
“We will remain disciplined and if the price expectations are at a level where the transaction would not be reasonably accretive to our earnings per share and enterprise value we will sell down our position.”
Stockland acquired a 19.9 per cent stake in Australand for $435.3 million last month.
The developer said sales of residential lots were strong with deposits for the year to the end of March the strongest in four years.
Its residential business collected 1,500 net deposits during the quarter, with particularly strong demand in Queensland and NSW and Western Australia weakening, indicating a recovering east coast.
The ASX top 50 company, whose other core businesses include shopping and industrial centres, offices and retirement homes, achieved a half year net profit of $298 million.
Stockland securities closed flat at $3.89.