Centuria makes move on GPT metro

21 May 2016

Publication: Australian Financial Review (print)

Date: 21 May 2016

Author: Nick Lenaghan
A takeover battle is looming for the $300 million GPT Metro Office Fund after Centuria Capital took control of a 15.2 per cent stake in the suburban office fund. In lightning raids on the register, Centuria, led by John McBain, accumulated the largest portion of that stake – 12.6 per cent – alongside the listed suburban office fund it manages, Centuria Metropolitan REIT, which has 2.6 per cent.

It is expected the stake will be the springboard for Centuria to launch an outright bid within days, with a view to merge GPT’s fund with the suburban office it set up and floated in late 2014.

But Centuria is the interloper in a takeover that is already in full swing, with the GPT fund having entertained a cash-and-scrip bid from Growthpoint Properties Australia. 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.

As the market awaits the prospect of a Centuria offer, the fund manager issued a statement on Friday saying it was “considering various options in relation to a proposal”.

“Centuria Metropolitan REIT is seeking to engage with GPT. No decision concerning any proposal has yet been made,” it said, through the responsible entity for the Centuria Metropolitan REIT.

Growthpoint is advised by Goldman Sachs and is backed by deep South African pockets, including its Johannesburg-listed parent of the same name.

Led by Tim Collyer, the trust has climbed strongly to become one of the larger trusts in the market, after it was rescued from the debt-stricken Orchard funds platform.

In February this year Mr Collyer, who is in the process of buying a $160 million Melbourne office tower, first flagged his willingness to engage in corporate action to spur growth.

The GPT fund, which controls a portfolio of suburban office towers, had said it intended to recommend Growthpoint’s revised offer, in the absence of a superior offer.

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 scene is now set for an old-style takeover battle, with GPT, led by new chief executive Bob Johnston, a likely winner from any competitive bidding.

GPT, advised by Fort Street, retains a 12.4 per cent in the metro office fund it floated in late 2014.

Another large stake in the GPT metro fund, of 6.7 per cent, is held by APN Property, which could become a crucial player as the battle unfolds.

Key points

Centuria’s John McBain leads lightning raids on register.

Outright bid expected to be launched within days.