Centuria Capital makes a bid for NZ’s Augusta Capital for $174.8 million

29 January 2020

ASX Listed Centuria Capital has made a $174.8 million ($NZ180 million) friendly takeover offer to New Zealand fund manager Augusta Capital, a property management platform with heavy exposure to the strong Auckland commercial property market. To help fund this acquisition Centuria seeks to raise $80 million from shareholders bringing their assets under management up by $1.9 billion, or 26 per cent, to $9.2 billion.

Augusta shareholders controlling 36.2 per cent of the target company’s equity had already agreed to the offer, including the 23.3 per cent stake of its founders, Mark Francis and Bryce Barnett, who would continue to head the business for at least three years after a takeover. “We are attracted to Augusta’s leading position in New Zealand, its strong distribution platform and its fund origination capability,” Centuria’s joint chief executives John McBain and Jason Huljich said in a statement.

“Centuria and Augusta have proven themselves as leading real estate fund managers in their respective countries and by combining them we see an opportunity to significantly grow the enlarged group in Australasia.” Centuria said the move had had been a matter of consideration for “some time” will increase the fund manager’s exposure to  NZ commercial property in a global low-rate, low-yield environment.

To fund the deal, Centuria is also undertaking an $80 million institutional placement underwritten by joint lead managers Moelis and UBS – increased from the original figure of $60 million due to demand – at an issue price of $2.34 per security which, along with existing cash reserves and a new debt facility, would fund the purchase. The issue price represents a 2.5 per cent discount to the five-day value weighted average price of $2.40 on 28 January. The newly issued shares will rank equally with existing securities and be entitled to the full distribution for the six months ending in June.

Augusta shareholders accounting for at least 90 per cent of the fund manager’s shares need to vote in favour of the deal and approval from New Zealand’s Overseas Investment Office – to ensure the deal complies with sensitive lands regulations – is also required.

Separately, Centuria said assets under management rose $1.2 billion in the six months to December, and it had returned a first-half operating earnings per share of 8.1¢. It reaffirmed its guidance for the year to June of 9.7¢ per security and operating EPS guidance of 12.5¢.