Elanor recommends to reject Lederer Group takeover offer for listed commercial property fund

The news: Elanor Commercial Property Fund’s (ECF’s) independent board committee has recommended securityholders to reject the Lederer Group’s takeover offer for the listed fund.

The context: Earlier this month, the family office made an unsolicited offer of 70 cents in cash per stapled security for the fund as it was dissatisfied with the managing and governance of the fund. On Wednesday, the Lederer Group published its bidder's statement.

The board said it recommended to reject the offer as:

• The price was opportunistic and materially undervalued ECF;
• The price represented a minimal 5.3% premium to the closing price $0.665 per security — the last traded price prior to the takeover announcement;
• The price represented a discount to the premium provided in comparable transactions; The price did not include an appropriate premium for control of ECF;
• The price did not reflect the fundamental value of ECF’s portfolio;
• There was uncertainty over the quality, capability and track record of Lederer Group’s senior management to manage the assets successfully, including if control is not achieved; and
• ECF’s securityholders would not be adequately compensated under the offer given the distribution and income stream it has provided.