Cash Flow May Attract Ale To Hedley
The Age
Thursday March 20, 2008
LIMPING pubs company Hedley Leisure & Gaming Property Fund has attracted a cast of vultures due to its poor share performance since January and concerns about its gearing.
The company admitted yesterday that it had received approaches from several potential buyers.One is believed to be the publicly listed ALE Property Group, which is keen to pick off some of the higher-quality pub assets that make up HLG's $1.2 billion property portfolio.HLG owns 91 pubs, 16 bottle shops and several development sites. It also holds a 23.7% stake in ALE."ALE does not comment on potential acquisitions," said managing director Andrew Wilkinson, "but we remain interested in high-quality, low-risk and long-term cash-flow pub assets." Another party believed to be interested in HLG is ING.HLG shares rose 6?, or 7.1%, to 90? yesterday. The stock has fallen 65% since the start of the year, touching a low of 80? earlier this month. When HLG was floated last August, it offered shares to the public at $3.50 each.HLG announced yesterday that, following approaches in respect of several pubs, it had inked in a deal to sell one property for $17 million and another pub for $8 million.Chairman Colin Henson and company founder Tom Hedley declined to comment but, through an announcement to the ASX, denied HLG had been forced by its lenders to dispose of the pubs to comply with covenants in its bank-debt facilities.At its float, HLG was carrying gearing of 68% and must maintain its loan-to-valuation ratio across its $1.2 billion portfolio at less than 75%. ANZ leads a syndicate of banks owed more than $805 million.HLG has appointed ANZ's mergers and acquisitions division, along with Minter Ellison, to review its strategic options, including looking into approaches from several parties to buy part of or all the group.
© 2008 The Age
