Elanor Commercial Property Fund Offer Prices at $0.70, Premium to NTA and Market

Background and Offer Details

LDR Assets Pty Ltd, acting as trustee for the LDR Assets Trust and controlled by the Lederer Family Office, has lodged a replacement bidder’s statement for its off-market takeover bid of the Elanor Commercial Property Fund (ECF). The offer values each stapled security at $0.70 cash, representing a premium to ECF’s recent trading prices and net tangible asset backing (NTA).

This bid follows the release of ECF’s FY2025 financial results, which revealed a 17.7% decline in NTA per security and a 10% fall in funds from operations (FFO). The offer price represents a 1.9% premium to the NTA as at 30 June 2025 and a 5.3% premium to the closing price on the last trading day before the announcement.

Rationale Behind the Bid

The Lederer Family Office, led by Paul and Eva Lederer, cites several concerns motivating the takeover bid. These include deteriorating portfolio occupancy rates, a decline in weighted average lease expiry (WALE), and a significant drop in distributions forecasted by ECF’s responsible entity. Additionally, the Lederer Group highlights risks related to ECF’s exposure to potential asset acquisitions from related parties and the elevated management expense ratio compared to industry peers.

Further, the financial distress of Elanor Investors Group, the responsible entity’s parent company, raises questions about the ongoing viability and governance of ECF. Elanor’s FY2024 results indicated a 74% drop in its own NTA per security and material uncertainty about its ability to continue as a going concern, which could impact ECF’s management and operations.

Bidder’s Intentions and Strategic Plans

Should the offer succeed, the Lederer Family Office intends to conduct a comprehensive review of ECF’s portfolio, management arrangements, debt structure, and capital management policies. The bid document outlines plans to potentially replace Elanor Funds Management Limited as the responsible entity with an independent trustee, Evolution Trustees Limited, and to appoint LDR Capital, the Lederer Group’s funds management platform, as the new investment manager.

If the bidder acquires 90% or more of ECF securities, compulsory acquisition will be pursued, followed by delisting ECF from the ASX and possible destapling of securities. The Lederer Family Office emphasizes that these steps aim to enhance governance, reduce costs, and improve capital efficiency.

Offer Mechanics and Funding

The offer is unconditional except for the absence of prescribed occurrences, with no minimum acceptance condition. It is fully funded by the Lederer Family Office’s internal cash reserves and a $300 million loan facility earmarked for this purpose. The maximum cash consideration payable, assuming full acceptance, is approximately $285 million.

Securityholders are encouraged to seek independent advice before accepting. The offer includes detailed instructions for acceptance, including online and paper options, and clarifies tax implications for Australian residents.

Market and Governance Implications

The bid comes amid a backdrop of governance uncertainty at Elanor, with recent board changes and the influence of major shareholders such as Rockworth and Su Kiat Lim. The Lederer Family Office questions the independence of the current responsible entity’s board and highlights potential conflicts of interest.

Investors face a choice between accepting a cash premium now or remaining exposed to operational and financial risks, including potential liquidity reductions and minority shareholder status if the bid succeeds but compulsory acquisition thresholds are not met.