Dexus is seeking to acquire APN Property Group for c$320 million.
The pair entered a scheme implementation deed yesterday.
Shareholders are expected to vote on the offer in July.
The buyer is offering 91.5 cents per security – a 50 per cent premium to APN’s May 10 closing price (61c).
“Dexus’ all cash proposal represents compelling value to APN securityholders including a material premium to APN’s trading price,” APN chairman Chris Aylward said.
“We believe the combination of the two businesses will provide incremental growth opportunities for the APN business as well as its underlying funds, investors and team members,” he added.
The deal includes two unlisted funds – APN Convenience REIT and APN Industria REIT, unlisted properties and securities funds.
“We are very proud of the APN platform and the value it has created not only for APN securityholders but for the investors in our property funds,” according to Mr Aylward.
APN chief executive officer added “Dexus’ property and funds management platform is very well regarded and in combination with APN’s capabilities, represents an excellent ongoing opportunity for our funds’ investors and our team”.
The seller has appointed KPMG Corporate Finance as an independent authority; it will table a report for shareholders before voting.
It is also represented by Grant Samuel (financial adviser); its legal representative is Gilbert+Tobin (story continues below).
If approved, the deal could settle by August, 2021.
Last month Dexus acquired the $5.4b unlisted AMP Capital Diversified Property Fund.
APN and Dexus
As of December 30, 2020, Melbourne based APN manages funds worth $2.9 billion.
Its vehicles co-hold $134m worth of real estate.
“On completion of the transaction, Dexus will have a funds management portfolio comprising $23.9b that includes institutional wholesale capital, listed REITs, real estate securities and a direct unlisted property business,” a Dexus statement said.
The group’s chief executive officer, Darren Steinberg, added the offer “supports our strategic initiative of expanding and diversifying our funds management business, increasing our suite of funds on offer outside of wholesale funds into listed REITs, real estate securities funds and unlisted property funds”.
It also expands the portfolio’s weighting with retail and high net worth capital, he added.
“We believe APN is a high quality real estate funds management business that complements our existing platform and we look forward to APN’s executives joining and strengthening the Dexus team while continuing to deliver strong results for investors”.
Of the ($320m) consideration, $308m is attributed to the enterprise.