Centuria Capital, Australia-based specialist investment manager, has reportedly signed a deal of over $600 million to merge with Primewest to form a property fund management platform with $15.5 billion in assets, spreading from coast to coast. It is further likely to join the ASX 200.
Centuria, led together by Jason Huljich and John McBain, agreed to implement the bid deed with Primewest, primarily through off-market takeover bid.
The shareholders of Australia-based holding company, Primewest, would receive consideration of nearly $1.51 per Primewest security, further consisting of 20¢ in cash as well as 0.473 Centuria securities.
The said merger brings a broader geographic spread to both the leading players, getting involved in their deep investor pools for unlisted property and is also offering each market exposure to asset areas that they lack, Primewest has a fast-growing agricultural business, while Centuria is extremely strong in healthcare sector.
The merger also speeds up the journey each firm is taking toward a property fund management platform and far away from conventional investment trusts.
The merged group will also have a market capitalization of around $2.2 billion, making it possible that it might be included in the S&P/ASX 200 Index.
On the side of Primewest, the numbers look great. The offer signifies a 3.1% premium to its last closing amount as well as a 7% premium to its trading amount over the last week.
Directors of Primewest, including founding directors Jim Litis, David Schwartz and John Bond, who jointly own 53% of overall securities in Primewest, confirmed that they would accept the merger. They are in fact contracted to work for nearly two years in the newly merged platform.
Both the sides would do much better after the merger, with an approximate earnings per security gain of 19% for Primewest and 4% for Centuria in fiscal 2021.
David Schwartz stated that the merger is about two leading groups having similar outlooks as well as vision and respect for its investors.