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Centuria makes play for Kiwi fundie

3 minute read

Centuria Capital Group has made a full takeover offer for New Zealand property fund manager Augusta Capital for NZ$130 million ($121.3 million).

Centuria has made the bid after it gained a 23.3 per cent stake in Augusta in May, through a capital raising by the NZ group at NZ$0.55 a share.

If the new bid for the remaining shares is successful, Centuria’s assets under management (AUM) will increase by 24 per cent to $8.9 billion. Further, Centuria stated it would “reinforce its position as one of the leading funds management platforms in the Australasian region”.

The acquisition is part of a long-term strategy for Centuria, it stated, because with around 72 per cent of Augusta’s AUM invested across the office and industrial markets, it would complement its existing business in the two sectors.

The takeover would also diversify Centuria’s funds management revenue through an exposure to the New Zealand market.

John McBain, Centuria joint chief executive said the two groups are “extremely compatible”.

“This strategy is based on a positive [post-COVID-19] outlook and Centuria will benefit greatly from a 24 per cent increase in AUM as well as a broad Australasian footprint,” Mr McBain said.

“Recently, the Augusta board and management team took decisive action to minimise the impact of COVID-19 by significantly reducing corporate debt and releasing surplus cash to aid growth in the core businesses.

“Accordingly, its NZ platform is now well placed to take advantage of opportunities as COVID-19 unwinds.”

Centuria reported the transaction will be funded by company scrip and cash reserves.

Augusta shareholders that accept the offer will receive NZ$0.20 in cash and 0.39 per cent of a Centuria stapled security in exchange for each of their shares in the NZ group.

The issuance of the scrip consideration would increase Centuria’s market capitalisation to more than $1 billion, the company stated, eyeing the potential to be included in the ASX 200.

Augusta founding shareholders managing director Mark Francis and fellow founder Bryce Barnett have supported the offer, along with other shareholders and Centuria’s holding, representing 42.2 per cent of the total shares on issue.

The implied offer price is NZ$1 per share, which Centuria said represents a 46 per cent premium to the closing price of Augusta shares of NZ$0.69 on Friday, the last trading day before the offer was declared – despite the NZ group’s shares trading at NZ$1.94 in February, prior to the mid-March crash.

The offer is subject to Augusta shareholders accepting it for at least 90 per cent of the company’s shares and other customary conditions including prohibitions on changes to Augusta’s capital structure and requirements to operate the Augusta business in the ordinary course.

But it is not conditional on receipt of New Zealand Overseas Investment Office (OIO) consent, as it has been obtained already.

Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].