Centuria’s takeover of 360 Capital a $50m payday for Pitt

25 November 2016

Publication: The Australian
Sydney, 24 November 2016
Author: Bridget Carter


Centuria’s takeover of 360 Capital a $50m payday for Pitt

Tony Pitt, founder of 360 Capital, stands to make at least $50 million from Centuria’s latest takeover of his fund manager and the stakes he owns within the vehicles.

Centuria yesterday announced its planned takeover of the 360 Capital business, which was earlier flagged in The Australian’s DataRoom, involving the purchase of the funds management business and the co-investments in the funds for $217m.

Overall, the transaction will see Centuria’s funds under management increase by 63 per cent to $3.6 billion and its market value lift to $230m from about $80m.

However, part of the deal hinges on a critical shareholder vote by investors in 360 Capital’s office fund, with Centuria only agreeing to its plan should the office fund investors back the deal.

Some have suggested that there could be investors unprepared to support moves to appoint a new manager for their fund when they are happy with the incumbent.

A more favourable deal for investors could be a straight cash and scrip merger between the two businesses, which may be put forward if Centuria fails to win support from the office fund investors, more in favour due to the cash component.

Moelis is advising both firms on the transaction, which will see Centuria raise $150m through Moelis and Shaw and Partners through conditional and unconditional placements, and a one- for-one accelerated non-renounceable entitlement offer, all of which will be fully underwritten.

Meanwhile, the staged exit by investors Mark Carnegie, Geoff Dixon and John Singleton from the Australian Pub Fund may provide an opportunity for hedge funds Varde and York Capital to swallow the assets for their new pub vehicle.

Already, the Marly and the Marlborough hotels in Newtown and Kinselas in Sydney’s Darlinghurst are on the market. Plans for a sale of the Australian Pub Fund have been previously flagged by this column.

Both Varde and York own part of Redcape, and it will be interesting to see if the Goldman Sachs-advised business also eventually opts for a listing or if veteran investor Nelson Meers returns to the negotiating table after initial attempts to buy the business.

Goldman Sachs yesterday announced leadership changes to its equity research team in Australia, with Andrew Lyons and Matthew Ross joining Matthew McNee as co-heads of Australian Equity Research.They will oversee the Melbourne and Sydney research business.