GPT board says no to Lend Lease

The board of General Property Trusr (GPT), the Australian real estate giant considering a £2.6bn takeover bid from Lend Lease, has turned down its rival''s offer as it remains wary of the group''s construction and offshore operations.

In a statement to the Australian Stock Exchange, GPT''s board said: "The board, its management and advisers have given detailed consideration to Lend Lease''s merger proposal and undertaken a rigorous evaluation of the Lend Lease strategy, forecast financial performance and business plans, including its construction and development businesses and offshore operations.

"It has become clear to the board that the proposal advanced by Lend Lease does not adequately compensate GPT unitholders for their high quality property portfolio and for the increase in risk they would face as investors in the merged entity."

GPT did ask Lend Lease for an increased bid to cover the perceived increased risk, but Lend Lease''s revised offer was not enough.

Lend Lease chief executive Greg Clarke defended the offer and the group''s businesses: "We see great merit in the merger with GPT, but not at any price and only on the basis where Lend Lease shareholders participate reasonably in the value upside from such a merger."

Lend Lease has reminded GPT shareholders that its bid is the only offer on the table.

It was feared that GPT''s board would play hard ball and tell Lend Lease that if it really wanted the merger to go ahead, the latter would have to sell its Bovis-branded construction business. This threat seems to have passed.

Clarke said: "The market has become increasingly aware of and positive about the strength of Lend Lease''s businesses and our growth outlook. The market has taken a closer look at the company and our depth of management talent, as well as the significant growth opportunities available through the various retail and urban communities development businesses and Bovis Lend Lease operations in Asia Pacific, the UK and the US."