The majority of pub owner Hotel Property Investments' (ASX: HPI) board, including its CEO, have exited today after Charter Hall Retail REIT (ASX: CQR) and super fund Hostplus progressively took control of the company despite directors' objections until they had no other choice.

Charter Hall's joint venture trust first acquired a 14.8 per cent stake in the group in late March 2024, around a month after the passing of HPI CEO Don Smith, and six months later made a takeover offer for all remaining shares at $3.65 per share - a proposal that was swiftly rejected by the board as "opportunistic" and materially undervaluing HPI.

The board held tightly to this view as the bidders lifted the stakes and continued to pay out cash to snap up securities from shareholders, who ignored the directors' recommendations to take no action.

By 9 December the suitors almost owned a third of the company and by 20 December they crossed the majority threshold, forcing the board's hand to recommend that shareholders accept the offer which by then had reached $3.785 per share.

Amidst a slightly reduced offer in the new year due to the passing of a record date for interim distributions, Charter Hall and Hostplus continued to bump up their stakes, hitting 62.95 per cent on 17 January and 75.58 per cent by the end of the month.

As flagged in January, non-executive directors Lachlan Edwards and Anne Michaels have now stepped down, along with managing director and CEO John White, who only joined the company in September - just a week before the full takeover attempt began. 

Before White took leadership of the company, chief financial officer and company secretary Blair Strik had been acting CEO since the passing of Don Smith. Today Strik takes on the acting CEO role again.

At the company's annual general meeting (AGM) in November, White slammed the takeover as failing to compensate HPI security holders for an improved market outlook.

"This offer comes when the outlook for REITs (real estate investment trusts) is improving, with growing consensus that interest rates have peaked and that central banks worldwide may soon begin reducing official rates," White told the meeting.

"In an environment where rates are expected to decline, low-risk assets like HPI’s pubs, with long-term leases and attractive lease structures, are well-positioned to deliver robust performance and distribution growth."

The board now has several Charter Hall representatives as its group CEO David Harrison and non-executive director Greg Paramor AO both join the HPI board, while Charter Hall's retail CEO Ben Ellis has joined as an alternative director to Paramor.

In today's announcement, the board has extended its "sincere appreciation" to Edwards, Michaels and White for their dedicated service and valuable contributions, with strategic insights and commitment that have contributed greatly to HPI's success.

"Lachlan, Anne and John have demonstrated passion and dedication to HPI. I’d like to thank them for their contributions and wish them all the best for their future endeavour," says HPI chairman Giselle Collins.

Lachlan Edwards was an inaugural non-executive director of HPI when the company was listed on the ASX in November 2013, while Anne Michaels has been with the company since November 2022.

The group also announced its interim half-year results today with rental revenue up slightly by 1.77 per cent to $37.1 million across its 58 properties.

Largely driven by fair value adjustments, profit surged by 76 per cent to $16.65 million, and would have been higher if it weren't for $8.4 million in takeover defence costs. 

The results indicate net assets of $784.2 million and a portfolio value of $1.26 billion. HPI is currently sitting on a market capitalisation of $739 million. 

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