Two major real estate platforms – the ASX-listed Centuria Capital Group and Primewest – are proposing to merge.
If successful, the vehicle would manage assets worth $15.5 billion and have a pro forma market capitalisation of c$2.2b – which would likely see it indexed on the S&P/ASX200.
The union would lift the value of Centuria’s portfolio 52 per cent.
Both groups have products competing for the same investors; Primewest is more diversified in terms of sector exposure – including agricultural and non-east coast healthcare and retail.
Each has been an active (counter-cyclical) purchaser since COVID.
Last June Centuria made a successful $130m takeover bid for New Zealand’s Augusta Capital.
Primewest bid details
Centuria’s off-market takeover offer is for 100pc of Primewest’s securities – worth $5b and held in a mix of listed and unlisted funds, and syndicates.
Under the merger terms, Primewest shareholders would receive $1.51 per allocation – consisting of 20c in cash and 47.4pc Centuria share; a $598.8 million valuation.
“The Primewest board unanimously recommends the merger, in the absence of a superior proposal and subject to an independent expert opinion that the merger is fair and reasonable to Primewest securityholders,” a statement said.
Primewest’s board members control 53pc of the securities and support the union.
If approved, its leaders, John Bond, David Schwartz and Jim Litis, will enter a two year employment contract – becoming Centuria senior managers (story continues below).
“Centuria’s current intention is to retain Primewest’s existing employees given the strong expertise across a range of geographies and sectors which are complimentary to Centuria,” a statement said.
The takeover would also open new retail distribution channels, it added.
It would enhance geographic diversification too.
“The proposed Centuria/Primewest merger is consistent with Centuria’s dual strategy of asset acquisitions and corporate M&A [Mergers and Acquisitions], where this is sympathetic to Centuria’s business model,” Centuria chairman Garry Charny said.
“Primewest is a high quality, well established fund manager”.
Colleague, joint chief executive officer, John McBain, added the platforms share similar philosophies and strong track records.
“Primewest has a strong distribution platform and expertise across a range of sectors and geographies which are complementary to Centuria”.
Jason Huljich, the other CEO, added the deal will allow the vehicle to further invest in agriculture and healthcare.
“The merger is conditional upon a number of matters…including minimum acceptance of at least 90pc of all Primewest securities, the entry into certain escrow arrangements by each of John Bond, Daid Schwartz and Jim Litis and their securityholder entities, and customary conditions”
More to come.