After a brief halt in trading, AMP on Friday confirmed it has received notice from the majority unitholders in AMP Capital Retail Trust (ACRT) of their intention to move management of the trust to an external entity.
ACRT’s assets under management stood at $2.7 billion on 31 July.
AMP confirmed that the decision to change manager “does not impact” the completion of the sale of the real estate and domestic infrastructure equity business to Dexus, which is now expected to complete by November 2022.
However, the earnout payable to AMP under the sale terms will now reduce to approximately $20 million as a result of the ACRT management rights not transitioning to Dexus.
“AMP respects the decision of the unitholders and will now be working with them to effect the transfer of the management rights,” it said in a filing with the ASX.
In July, Mirvac took control of the $7.7 billion AMP Capital Wholesale Office Fund (AWOF) after most unitholders voted to replace AMP Capital Investors as trustee.
A proposal to change management of the fund was originally put forward last year before AMP entered into an agreement to sell Collimate Capital’s real estate and domestic infrastructure equity business to Dexus Funds Management.
Although noting at the time that this decision would not impact the completion of the sale, AMP explained that the maximum earnout payable to the company under the sale terms had been reduced to approximately $75 million.
At the time, it was also reported that GPT and Vicinity Centres were possibly eyeing ACRT.
In April, AMP announced it had agreed to sell its real estate and domestic infrastructure equity business to Dexus Funds Management for $250 million.
In a statement following AMP’s announcement, Dexus said it remains focused on completing the transaction.
Touching on the financial implications of ACRT’s move, Dexus said further information will be provided as the two companies progress towards completion of the transaction.
“The structure and pricing of the SPA [Share Sale and Purchase Agreement] were agreed having regard to the final assets under management that will be transitioned to Dexus. As a result of ACRT exiting the AMP platform, the earn out amount payable under the SPA will reduce to a maximum of approximately $25 million, taking the maximum potential price to approximately $275 million including the $250 million upfront cash payment.
“The maximum potential AUM that will transition across to Dexus is approximately $18 billion”.
