This article is from the Australian Property Journal archive
Becton Property Group has finally found a way to parachute founder and executive chairman Max Beck safely out of the company.
The group which has received a lukewarm response from the market since listing last year, has devised a new plan to staple its securities and raise $183 million to partly payout founder Beck.
Yesterday, Becton proposed to staple shares into a new trust, Becton Property Trust, to form stapled securities. Under the plan, Becton plans to consolidate four shares into one.
Becton said certain founding management shareholders intend to sell a portion of their holdings for a number of personal reasons totalling $47 million into the new trust – which will provide Beck with an exit strategy.
Beck currently owns 150 million shares in Becton bringing his shareholding to just over 50%.
In total, Beck and other directors hold shares worth well in excess of $100 million – this does not include private companies associated with its directors, families and friends – which must be held in escrow for between one and two years. More than 103 million shares are due to be released into the market with a further 104 million shares due to come out of escrow after the annual results for the June 2007 financial period.
In addition to the capital raising, the trust will also acquire interests in a number of the single property trusts and sector funds currently managed by Becton’s funds management business totalling $171 million.
In addition to the trust units, an amount of 1.5 cents per share will be paid in cash to existing shareholders.
The stapling proposal will be voted upon at the Annual General Meeting scheduled for October 18 2006. The resolution is likely to pass with Beck and the other directors vote alone.
Meanwhile, Becton has delivered its maiden net profit after tax of $24.9 million, stated under AIFRS, which includes $4.5 million in revaluation gains.
The group’s net profit after tax excluding revaluations was $20.4 million, exceeding prospectus forecast by 4%.
Over the year, the group’s revenue was $193.2 million.
Becton’s chief executive Hamish Macdonald has declared a fully franked dividend of 2.5 cents per share for the year, in line with prospectus forecasts.
Macdonald said the stapling and capital raising is expected to result in a 55% increase in the mix of recurring earnings to 60% for FY07 and a 71% increase in the total payout to security holders to 4.6 cents per security in FY07.
By Nelson Yap
