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valad dismisses takeover talk

  1. 2,922 Posts.
    This would explain the traders exiting yesterday.


    THE embattled Valad Property Group has denied a rumour it may be about to be taken over in a three-way split, as it prepares for the anticipated drubbing at its annual general meeting today over executive pay.

    Speculation in the market has suggested that the company will be delisted and broken up after the property trust's share price has hovered around 7c.

    It reached highs of more than $2.35 in May last year.

    One theory is that Dexus Property Trust would take a stake, US-based Kimco Realty Corp, which has a strategic alliance with Valad, would take a share, and European-based Scarborough Group would buy the European assets after the Kevin McCabe-backed company was bought by Valad for $2 billion last year at the height of the property market cycle.

    Valad managing director Peter Hurley has dismissed the takeover claims.

    Dexus Property Group said it would not confirm or deny the rumours.

    It comes as Valad's board is expected to face a backlash at its annual general meeting in Sydney today over executive pay.

    The corporate governance advisory firm RiskMetrics Group has taken exception to what it has described as excessive termination payments for executive directors, unexplained increases in fixed pay, the firm's long-term incentive scheme and guarantee of bonuses, where Valad decided this year to guarantee 75 per cent of bonuses in the 2008 and 2009 years in order to retain key executives.

    RiskMetrics says chairman Stephen Day received a 58 per cent increase in fixed pay to $990,000, with a cash bonus of $743,000 and $1.1 million in options after the firm booked a $248 million 2008 financial year loss.

    Mr Hurley, who was then the executive director, received a 57 per cent increase in fixed pay to $904,000 and a cash bonus of $675,000 for the 2008 financial year. RiskMetrics has urged institutional shareholders and investors to vote against the remuneration report.

    Analysts said it had been well known that Dexus had been trawling through the books of Valad earlier this year.

    They said a three-way split of the company "made sense".

    One analyst said Valad was "priced for extinction" on the share market.

    Another analyst said it had been known that Valad had a desire to sell Valad Capital Services, which has at least a $30 million exposure to three failed projects by private property developer Petrac.

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