360 Capital fund to merge with URB Investments

The implied value of the offer is about $1.16 per URB share.

James Storey, head of real assets at 360 Capital, said the proposed merger would give shareholders in the two listed funds “an enhanced investment proposition relative to each vehicle on a standalone basis”.

“The combined group of URB and 360 Capital Total Return Fund would have a market capitalisation of approximately $170 million and a diverse security holder base with over 3500 individual investors,” he said.

On its side, the board of URB has recommended the merger which it views as “an appropriate opportunity to redress the substantial discount to net tangible assets” at which its stock has traded since last year.

The deal would also enable URB to capitalise on the increased distribution profile generated by the 360 Capital-run fund while benefiting from the increased sharemarket liquidity and resources of a larger platform, it said.

The combined group will focus its investment activity on direct real estate, indirect real estate, real estate debt and non-performing real estate debt.

Its major shareholder Washington H. Soul Pattinson, which holds 12.45 per cent of the register, also backs the merger subject to a “fair and reasonable” opinion from an independent expert and no superior proposal emerging.

As part of the arrangements, 360 Capital, which is led by Tony Pitt, has struck a $2.5 million deal to take over the management rights to URB.

As well, the 360 Capital Total Return Fund has launched a $10.8 million equity raising, underwritten by Moelis Australia and Shaw and Partners.

The 360 Capital fund recently reached financial close on $32.8 million of senior first-mortgage debt transactions, including the $23.1 million first-mortgage financing of seven childcare centres leased to Affinity Education and a $9.7 million first-mortgage construction facility at Greenway in the ACT.