Elanor independent expert says Lederer acquisition bid is 'not reasonable'
Make us a preferred source
Make us a preferred source on Google
The news: Financial and risk adviser Kroll Australia has deemed family office Lederer Group’s offer to acquire listed Elanor Commercial Property Fund (ECF) as “neither fair nor reasonable” to non-associated shareholders.
The numbers: In August, Lederer offered to acquire the fund for 70 cents per share as it was dissatisfied with the accountability and oversight of the Elanor board.
In its independent expert report, released today, Kroll said it had determined the value of and ECF security was in the range of 73 to 75 cents per share and therefore, the 70 cent offer was “not fair”.
ECF shares were up 0.71% to 70 cents at 12:35pm AEST and over past 12 months have risen 15.57%.
The context: Kroll said its valuation was based on the value of its underlying properties and that ECF security holders would not be able to benefit from any future increase in ECF’s property values if the offer were to go ahead.
“We consider that there is relatively greater likelihood of upside in property values than downside over the medium term,” it said.
Today, Elanor also noted that ECF board committee directors Tony Fehon and Karyn Baylis, along with non-independent non-executive director of ECF and Elanor Investors Group Su Kiat Lim would not participate in making recommendations on the offer to mitigate any actual or perceived conflicts of interests. One of Lederer’s grievances was the conflicts of interest between the responsible entity of ECF and the Elanor board
With Fehon, Baylis and Lim not making recommendations this would leave just independent chair Ian Mackie and independent director Kathy Ostin as the only directors able to make a recommendation.
Elanor also pointed to the fact that a number of proposed executives of Lederer Capital, which is Lederer’s new real estate funds management platform, were former Elanor employees.
These employees included:
- David Burgess — former Elanor joint head of real estate and co-head of property from December 2017 to April 2025. He was also the fund manager of ECF from 2019 until February 2025;
- Myles Brookes-Garrett — former Elanor head of capital transactions during February 2016 and April 2025 and was on Elanor’s executive management committee; and
- Ryan Pittman — former Elanor executive director of head of living, former head of strategy and was on the Elanor executive management committee. Pittman previously was at MA Financial and advised on the IPO of ECF.
What they said: “These executives have less than one year of experience within the Lederer Group and as former Elanor employees are subject to various post-employment confidentiality obligations and restrictions,” Elanor said.
“Elanor Investors Group has not expressed a view on any non-compete clauses, or expressed a view on a possible dispute with any LDR Capital executives.
“However, ECF considers that there is a risk that Elanor Investors Group may decide to enforce any non-compete clauses which may apply to LDR Capital’s management team.
“If Lederer is successful in appointing LDR Capital as the manager of ECF, any such legal challenges could impact its ability to manage the Fund to the standard required of a listed investment fund.”
The source: ASX
