ING's new offer wins Urbus approval

The on-again, off-again takeover of Urbus Properties by ING Property Trust was on again yesterday after ING upped its offer price on the $400 million deal.

But exactly how much extra ING will offer Urbus shareholders to change the board's mind was being kept a secret, as Urbus chairman Denis Thom and the trust's managing director, Andy Evans, refused to stipulate the terms of the original script deal.

All that was being said was that Urbus shareholders would get one ING unit for every 1.02 Urbus shares they held.

ING units closed down 2c at $1.19 yesterday, while Urbus closed up 5c at $1.12 after climbing to $1.15 during the day.

Thom and Evans said yesterday that the new entity would be the country's second-largest listed property owner, with assets worth about $770 million and a market capitalisation of $550 million.

Talk of a takeover first emerged on September 17, when the parties said they were in talks, following the Hodge family's sale of the Urbus management rights to a joint venture owned by ING NZ and Symphony Group on August 11.

No formal offer was made and no price put on the Urbus shares at the time. But the deal appeared to be off just before Christmas under circumstances that were never clarified.

On December 23, Thom said formal discussions with ING had been terminated.

"The boards had not been able to reach agreement on the terms of the merger," he said then, but gave no details.

Yesterday, Thom said price was the issue, and "what happened is that ING came back with a higher offer".

Evans said the December 23 announcement was made because of the time that had elapsed since the market was first told talks were on.

The parties had to keep the market informed of progress, even though no deal had then been struck.

Urbus and ING jointly said yesterday that they had a revised merger proposal and that ING was making a full offer for all Urbus shares, convertible notes and mandatory convertible notes.

A formal offer would be made to Urbus shareholders either next month or early in April, after due diligence by both parties and the finalisation of certain matters.

Thom said the price was so good the board was backing the offer before it had received an independent appraisal report being written by Horwath Porter Wigglesworth.

"We believe it represents fair value for our shareholders and noteholders," he said.

Evans said Urbus shareholders were being offered an 8 per cent premium above market price. The reason the deal was not resolved before now was an inability between the parties to agree on the "relative exchange ratio" between the Urbus shares and ING units.

Urbus owns property worth about $400 million and ING has real estate valued at about $350 million.