Calan sees bid as healthy respect

ING's moves this week to increase its stake in medical landlord Calan Healthcare Properties Trust was recognition of two years' hard work to improve the property investor's future, Calan directors said yesterday.

Bruce Davidson, chairman of Calan's manager, welcomed "an endorsement of our achievements", saying ING Property Trust's offer for an extra 9.7 per cent of Calan showed the quality of assets and strength of distributions.

On Wednesday, ING moved to increase its 10.3 per cent stake in Calan with a stand in the market and said if it succeeded with that bid it would make a full takeover bid for the trust.

Davidson stopped short of endorsing the bid.

"Given the short period of time directors of Calan have been aware of the approach, the board is currently not in the position to make a formal recommendation in regard to the bid," he said. In the meantime, everything was in place for a possible takeover.

"The board has appointed Macquarie NZ as financial adviser, Bell Gully as the trust's legal adviser and if, following the stand in the market, a written offer is made for all the remaining units, an independent appraisal report will be commissioned," Davidson said.

Yesterday Dutch-owned ING cancelled its stand in the market for the 13.4 million Calan shares it is seeking when it discovered its Australian arm had expressed an interest in Calan and was in preliminary discussions with it.

The Australian arm of ING is interested in the $63 million hospital Calan has just finished in Melbourne.

ING immediately launched a new on-market offer, at the same price of $1.25 per unit, for up to five days. It is seeking 9.7 per cent of Calan, worth $16.7 million.

ING also confirmed it plans to launch a full takeover offer for Calan at an offer price of $1.25, through a mixture of cash and ING Property Trust units.

Calan Healthcare units shot up more than 10 per cent to a record high of $1.27 on Wednesday on news of the stand. Brokers said the price surge suggested the market didn't think ING's offer fully reflected the potential upside for Calan from revaluations in the healthcare sector after recent consolidation in the industry.

Calan yesterday announced a gross dividend of 2.3c a unit for the second quarter, to be paid on March 1.

Late last year, brokers were divided about the trust's attractions, with recommendations ranging from buy to sell.

* A report on Calan in yesterday's Business Herald referred to the trust as "ailing". This is incorrect and the error occurred during the production process.

- ADDITIONAL REPORTING NZPA