This article is from the Australian Property Journal archive
DEXUS is set to acquire APN Property after the groups struck a $320 million takeover agreement as the country’s largest landlord sets about expanding its funds under management.
The deal would take Dexus’ funds management portfolio to $23.9 billion, including institutional wholesale capital, listed REITs, real estate securities and a direct unlisted property business.
APN’s $2.9 billion funds under management portfolio includes $134 million of co-investments via managed vehicles, and will bring along ASX-listed pair APN Property Convenience Retail Trust and APN Industria REIT.
The Dexus cash offer of 91.5c per security by way of a scheme of arrangement and a trust scheme comes in well above APN’s closing price on Monday of 61.0c per security, and at premiums of 64.3% and 65.8% to its one and three month volume weighted average prices respectively.
APN’s share price skyrocketed yesterday to 90 cents per security, up 47.5%.
“This transaction 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 direct property funds,” Dexus chief executive officer, Darren Steinberg said.
“The transaction also expands our investor network to include retail and high net worth capital.”
Dexus has just been successful in securing a merger between its wholesale property fund and AMP Capital Diversified Property Fund, creating a $15 billion property player.
Dexus said the APN acquisition would give it “access to a complementary and scalable business with a high-quality team and like-minded investment philosophy” and a range of new growth opportunities via access to new investor groups and products, while it sees potential to drive growth and performance for new and existing APN funds, and realise cost and revenue synergies and achieve margin expansion across the platform.
The additional funds under management will be immediately accretive to adjusted funds from operations per security on completion of the transaction in FY22.
The schemes are not subject to any financing or due diligence conditions. Dexus will fund the deal using existing cash resources and undrawn debt facilities.
“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 our team members,” APN’s chairman Chris Aylward said.
Aylward, who founded APN in 1996, is also the group’s largest shareholder. He has granted a call option to Dexus over his 19.9% share.
APN was listed in 2005.
APN chief executive Tim Slattery said, “I’m very pleased to see the value of our business built up over many years recognised through this proposal and to recommend it to APN’s securityholders.
“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 APN board has backed the proposal. APN securityholder meetings to approve the proposal are expected to take place in mid July, with the scheme to become effective later that month.
Yesterday’s announcement also follows Centuria Capital and Primewest last month agreeing to a merger that will create a $15.5 billion platform.
