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SYDNEY-Australian property developer Multiplex is weighing up a A$1.26 billion ($900 million) takeover of rival Ronin Property. The two companies today halted trading on the stock exchanged and confirmed merger talks were in process but declined to disclose any details.

Shares in Ronin, which has specialized in office development in Australia and New Zealand and runs a property trust, slipped 1.6% before trading was stopped, valuing its equity at A$1.26 billion ($900 million). The shares had risen 3.3% during the week on speculation that it would become a takeover target.

Multiplex shares edged up 0.8% at A$3.67 before trading was halted, putting its market value at A$2 billion ($1.4 billion). The company, which is building London’s Wembley Stadium, says it will submit the merger proposal by next Tuesday.

A takeover will enable Multiplex to access steady income from Ronin’s property investment unit, which through a joint venture with AMP Capital NZ runs New Zealand-listed trust ANZO. It will boost the proportion of Multiplex’s income from property investment to more than 50% and make it eligible for the listed property trust sector.

There is also strong speculation in London that Multiplex could emerge as the frontrunner for the British-based Chelsfield retail portfolio. Analysts say Multiplex, while not having the same balance sheet capability as rival bidder Westfield, was a better strategic fit with Chelsfield.

The proposed deal follows a spate of consolidation in Australia’s A$55 billion ($39 billion) property trust sector, as companies seek to build capital for global expansions. Earlier this year, Westfield Holdings merged with the Westfield Trust and Westfield America Trust. The enlarged group will control A$34 billion ($24 billion) in assets with interests in more than 120 shopping centres in Australasia, the US and UK.

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