Nick Lenaghan and Matthew Cranston
Fund manager Propertylink has launched a $755 million takeover bid for listed Centuria Industrial REIT after seizing more than 12 per cent of its register in an overnight raid.
The Propertylink offer is a combination of scrip and cash, with 2.5327 of its securities and $0.33 cash for each unit in the Centuria-run fund, known by its ticker as CIP.
Based on Propertylink’s September 12 closing price, the implied value of its proposal is $3.04 per CIP unit, valuing the equity of its takeover target at $755 million.
The full buy-out proposal follows heavy buying on Wednesday and Thursday orchestrated by JPMorgan after Propertylink expressed interest in amassing a 5 per cent stake.
That rose to 12.2 per cent, Street Talk reported, with Propertylink’s new stake – 30.2 million shares at $2.99 each – crossing on Thursday morning.
The Propertylink proposal is conditional on it acquiring at least 50.1 per cent of CIP units.
The fund manager, led by Stuart Dawes, is not proposing to make a facilitation payment to CIP’s responsible entity in connection with the proposal, it said.
Among the reasons backing the proposal, Propertylink noted that the Centuria-run industrial fund owns a $1 billion portfolio of industrial and logistics centres that would benefit from Propertylink ‘s management expertise.
“An acquisition of CIP would more than double the size of our wholly owned industrial portfolio, in particular providing our securityholders with greater exposure to the Sydney and Melbourne industrial markets,” Mr Dawes said in a statement.
In those markets, there are strong opportunities from the emerging themes of e-commerce and urbanisation, he said
“The strategic rationale for the acquisition is supported by attractive expected financial outcomes, with forecast increases to earnings and distributions on an annualised basis.”
Propertylink’s strike on the industrial fund, which is run within the Centuria stable of funds, is the latest move in a complex entanglement between the two listed fund managers.
Centuria had previously taken a stake in Propertylink but began to release its prey last month, when its industrial fund sold down its 6 per cent stake.
But the listed Centuria fund manager, led by John McBain, still holds a 9.28 per cent stake in Propertylink.
Centuria also holds a solid 19.9 per cent position in its industrial fund, while Financial Review Rich Lister Paul Lederer also holds a 9.4 per cent stake, potentially blocking a takeover by Propertylink.
Adding further complexity to the puzzle, Asia-based logistics platform ESR, which is backed by US private equity giant Warburg Pincus, has established sizeable stakes in both Propertylink and the listed Centuria platform, following dramatic raids on both local fund managers last year.