Singaporean property development giant Frasers has launched a $2.6 billion takeover for Australand.

Frasers Centrepoint Limited is offering $4.48 per share cash per Australand security, and will also allow Australand shareholders to keep an expected 12.75-cent-per-share first-half dividend payment.

The bid trumps Australian developer Stockland’s offer of 1.124 of its shares per Australand security, which carried a value of around $4.35 per Australand share and valuing the company at more than $2.5 billion.

While Frasers offer is not significantly higher in implied value, it is an all cash offer which tends to be far more attractive to investors than Stockland’s mostly share-based bid.

The Frasers bid required Australand to enter into a period of exclusive due diligence, where the Singaporean company can look at its books, and the Australian company has agreed to do so for four weeks.

Australand says the Frasers proposal is better than Stockland’s bid, and its board currently intends to recommend its acceptance.

“The board concluded that the conditional proposal would deliver a compelling value outcome for Australand securityholders and is superior to the final and conditional proposal received from Stockland,” said Australand’s chairman Paul Isherwood in a statement.

“Accordingly, the board has determined to progress the proposal with Frasers to determine whether an offer that is capable of acceptance can be presented to Australand securityholders.”

Australand says the takeover is worth 21 per cent more than the company’s estimated net tangible assets, 19 per cent more than its weighted average price for the three months before Stockland taking a large stake in the firm in March, and 7 per cent above yesterday’s closing price.

The Frasers bid will be subject to approval by the Foreign Investment Review Board, and is also subject to at least 50.1 per cent of Australand shareholders supporting it and no material change to Australand’s senior management team.

Stockland’s offer was declared as being final in the absence of a higher bid being lodged, which leaves it the option of launching a third offer to trump Frasers.