Centuria lobs $316m takeover offer for GPT fund, trumping Growthpoint bid

20 May 2016

Publication: Australian Financial Review

Date: 24 May 2016

Author: Nick Lenaghan

AFR photo
Centuria has launched a $316 million proposal to merge the listed suburban office fund it manages, Centuria Metropolitan REIT, with its $300 million peer, GPT Metro Office Fund.

The hotly-anticipated cash-and-scrip merger offer comes as Centuria and its suburban fund increased their hold on the GPT fund’s register from 15.2 per cent to 16.1 per cent.

Centuria’s bid also trumps the existing takeover offer for the GPT fund from Growthpoint Properties Australia, which had previously sweetened its offer from $295 million to $310 million.

The Centuria offer has an implied value of $2.46, compared to the Growthpoint offer of $2.41.

The bid comprises one Centuria Metropolitan REIT share for each unit of the GPT fund as well as a total cash payment of 27c. Centuria Capital, its listed parent, will contribute 4c to the cash total.

“We strongly believe that the Centuria proposal is superior to the Growthpoint Properties Australia proposal for GPT Metro Office Fund unitholders,” Centuria said.

In addition to the higher implied price, Centuria said its offer is better because the merged vehicle would have a lower gearing than a merger with Growthpoint.

As well, shareholders in the GPT fund would end up with a 93 per cent exposure to suburban office assets in a merger with the Centuria fund. Growthpoint by contrast has a significant weighting to industrial properties of around 40 per cent.

Growthpoint is midway through an exclusive due diligence on the GPT fund after improving its initial offer from $295 million to around $310 million.

Growthpoint had not amassed a stake before launching its offer and it would not usually be possible to do so during a due diligence period.

Centuria Capital’s listed real estate business is led by Nicholas Collishaw, a property veteran who previously headed Mirvac.

Centuria is advised by Moelis, while the GPT fund is taking advice from UBS, which has already pushed Growthpoint to improve its bid by 4.1 per cent.

The GPT fund’s independent board committee said it is considering the Centuria proposal and will update the market subsequently.

Centuria said it can complete a due diligence within 15 days and that its offer is indicative and non-binding.