article in todays fin review , page-13

The scenario that MIGHT be being planned for IIF, MDT, MCW among others is:

You have a bank which holds debt and equity in two REITs, one say at 35% gearing, one say at 55% gearing.

Bank pounds down the share price of the highly leveraged REIT, and 'suggests' a merger with the lower geared REIT due covenants 'or else'.

A merger is announced at a premium to the leveraged REIT which makes most of the by now desperate holders happy, because despite ICR they have come to believe the panic sell recommendation placed on them by the banks, brokers and the numerous press beat-ups.

The shareholders of the lower geared REIT are happy, as they get discounted assets, their gearing goes up manageably and the banks guarantee new finance.

The banks are happy, as they have a consolidated debt position and take some costs out of managing the underlying assets.

And the banks will no doubt expect us to thank them obsequiously.