ING needs to increase Calan bid by 11c a unit, says analyst's report

ING Property Trust needs to increase its bid for Calan Healthcare Properties Trust by 11c a unit but is unlikely to pay as much as the value put on it by Ferrier Hodgson, an analyst's report says.

Jeremy Simpson, of Forsyth Barr, says Ferrier's $1.48-a-unit valuation on Calan is aggressive and ING will not pay that much.

"We remain with the view that ING will need to pay more than its current offer to be successful," he said. The offer needed to be raised from $1.25 to $1.36. Simpson recommended that Calan investors wait to see what ING did next.

His report has come after two others last week, by UBS and Citigroup analysts, rejecting Ferrier's valuations for being too high. ING's offer is a mixture of scrip and cash.

Last Monday, ING chief Andy Evans disagreed with the Ferrier valuation, saying he might pull out of the proposed takeover as a result.

Simpson questioned Ferrier's report, particularly the use of net tangible asset value comparisons that were up to a year old. The $1.48 valuation put Calan at a significant premium to the listed property trust sector, although Simpson agreed with Ferrier that ING and Calan were very different trusts.

"However, we disagree that ING is a riskier investment than Calan," he wrote.