Tchenguiz bids A$1.2bn for Packer infrastructure fund

Vincent Tchenguiz, the real-estate billionaire, launched an audacious A$1.22bn (£563m) takeover bid for control of the Sydney-based financial group Challenger's struggling infrastructure fund yesterday.

Mr Tchenguiz's private company Consensus Business Group offered an unsolicited A$3.50 per share for the Challenger Infrastructure Fund, sending the fund's shares soaring 23 per cent to $2.98 in the Australian markets on Tuesday morning. The move potentially puts Mr Tchenguiz head to head with the Australian media tycoon James Packer, who owns a 21 per cent stake in CIF's parent, Challenger Financial Services Group.

Challenger Infrastructure Fund already has a joint interest with Consensus over the UK water utility Southern Water. They were part of the Greensands Consortium that beat Goldman Sachs to a £4.2bn takeover last October. Challenger also holds stakes in the Cardiff-based gas and electricity network group Inexus, the UK transmission tower company Arqiva, Wales and West Utilities and LBC, an international storage tank company.

Consensus is already the second-largest shareholder in CIF, with a 19 per cent stake, behind Challenger Financial, which owns 33 per cent.

While the bid comes in at a 26 per cent premium to the fund's share price, which hit record lows last week, it is still lower than the value of the fund's tangible assets, rated at $4.05.

Consensus said in a statement to the Australian stock market that its "in principle" offer was subject to due diligence, financing, exclusivity and regulatory approvals. Challenger is set to convene a board meeting to consider the offer, and is looking to appoint a financial adviser.

Challenger Financial's shares also rose almost a third yesterday after a news story claimed it was the subject of a takeover bid. Challenger was forced to issue a swift denial on its website.

A spokesman for Consensus had no further comment, saying that the Australians were yet to react to the proposal given the time difference, and that the companies would talk further today.

Mr Tchenguiz, an Iranian-born entrepreneur, launched Consensus in 2001 to focus on his business interests outside commercial property. It is now the largest residential freeholder in the UK. It owns and manages about 600,000 residential freeholds throughout the region. As well as property it has a portfolio focused on the environment, and technology start-ups.

The group is understood to be considering shaking up its operations and is planning to refinance up to £700m worth of residential property.