Announcement of off-market takeover offer

Charter Hall Retail REIT (ASX:CQR) has announced an off-market takeover offer, in collaboration with Host-Plus Pty Limited, to acquire all securities in Hotel Property Investments (ASX:HPI) that it does not currently own. The offer, subject to a 50.1% minimum acceptance condition and other limited conditions, involves a cash consideration of $3.65 per HPI Security.

Executive commentary on the proposed acquisition

The proposed acquisition of HPI alongside Hostplus is designed to deliver significant benefits to both HPI Securityholders and CQR Unitholders. It aligns with CQR's strategy to invest in high-quality, net lease retail assets, while partnering with leading convenience retailers to deliver resilient and growing income streams. The acquisition is expected to be operating earnings accretive for CQR Unitholders from completion, and it represents a strategic opportunity for CQR Unitholders to acquire an interest in a significant portfolio of net lease retail assets that are complementary to CQR's existing portfolio.

Summary of the off-market takeover offer and outlook

The off-market takeover offer by Charter Hall Retail REIT (ASX:CQR) for Hotel Property Investments (ASX:HPI) at $3.65 per HPI Security represents an attractive premium to HPI's historical trading levels. The offer provides HPI Securityholders with an opportunity to access liquidity at an attractive premium, without the need to pay brokerage fees, via all-cash consideration. Additionally, the proposed transaction is expected to be operating earnings accretive for CQR Unitholders from completion. The strategic rationale for CQR Unitholders includes acquiring an interest in a significant portfolio of net lease retail assets that are complementary to CQR's existing portfolio. The proposed transaction is also expected to be accretive to CQR's WARR, occupancy, and WALE, providing further strategic up-weighting to higher rent growth, lower capex retail assets. The Offer is expected to open on 23 September 2024 and close on 4 November 2024, subject to offer conditions as set out in the Bidder's Statement. Charter Hall Retail REIT aims to create and invest in places that support its customers, people, and communities grow.