MacarthurCook’s board has convinced shareholders that it needs the strategic alliance with IOOF to cut debt and boost distribution of its funds through advisers.
The property investment manager’s shareholders overwhelmingly agreed to the deal at a general meeting yesterday.
MacarthurCook was ordered to hold the meeting by the Takeovers Panel, as it had previously made the IOOF alliance without seeking shareholder approval.
Under the deal, IOOF will pump $4 million in cash into MacarthurCook by purchasing 3.45 million of its shares.
MacarthurCook managing director Craig Dunstan signalled to shareholders the cash injection was badly needed to reduce the company’s gearing level from 52 per cent to 35 per cent.
“Clearly the property funds management industry is going through its biggest challenge since the property recession of the early 1990s,” Dunstan said.
He added the deal would allow MacarthurCook to better distribute its funds to advisers because of IOOF’s platform and financial advisory business, Consultum.
In the agreement, MacarthurCook would become IOOF’s direct property manager and assume responsibility for IOOF’s new direct property fund.
Separately, IOOF yesterday reported its underlying net profit after tax had fallen 12 per cent to $25.9 million for 2008, following weak inflows and lower investment returns.
Consultum had flat funds under advice (FUA) of $2 billion for the year, while revenue remained steady at $31.4 million.
