cer ann: marathon oppose amalgamation, page-13

MORE NEWS TO VALIDATE "NO" VOTE.

Centro survival plan hits snag Carolyn Cummins
November 17, 2011


CENTRO Properties' last-ditch survival plan hit a hurdle yesterday with two key investors in Centro Retail Trust indicating they could block a restructure proposal at next Tuesday's meeting.

New York hedge fund Marathon Asset Management weighed in at the 11th hour and lodged proxies against the aggregation of the two Centro vehicles, which could cause administrators to be appointed.

Through its Sydney-based adviser Castle Partners, Marathon went public yesterday to declare it would vote its 8.68 per cent stake in Centro Retail Trust against the merger resolutions.

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Simon Marais, boss of Orbis Fund Management which owns 4.91 per cent, also said yesterday that while he was yet to lodge his proxies, he could not see much virtue in the deal.

Centro Properties holds 51 per cent of Centro Retail Trust but it cannot vote in the ballot on November 22.

That increases the hedge funds' voting power. Most ballots need 50 per cent of votes cast to be accepted.

If the deal is approved, Centro Properties investors will get a cash payment of 5.03¢, while Centro Retail Trust will swap debt and get shares in the proposed $3 billion Centro Retail Australia Trust.

''I am still considering my vote, but I do not think it will be positively disposed to the deal,'' Dr Marais said.

''Why should Centro Retail Trust put up with this proposal?''

Marathon, through Castle managing director David Cooper, claimed there were other investors holding a combined 3 to 4 per cent of Centro Retail Trust that had also lodged proxies against the merger.

Local proxy advisers CGI Glass Lewis and ISS have recommended investors approve the plan.

But the hedge funds want a bigger slice of shares in the new vehicle and think the merger will devalue the net asset backing of Centro Retail Trust.

Centro Retail Trust chairman Peter Day was disappointed at Marathon's position.

''We sincerely hope that other security holders take a more positive view,'' he said.


Read more: http://www.smh.com.au/business/centro-survival-plan-hits-snag-20111116-1nj6s.html#ixzz1duoN1b7B