Centuria is set to make an off-market takeover of rival Primewest, in a deal that will result in a real estate fund manager with more than $15 billion in assets under management.
The two ASX-listed groups have entered into a bid implementation deed, over an amalgamation.
Centuria will make a takeover offer for 100 per cent of Primewest, which manages $5 billion in assets across listed, unlisted and private funds.
The Primewest board, whose directors represent 53 per cent of the company’s securities, has confirmed they intend to accept the deal, subject to an independent review.
The merger will result in a combined group with $15.5 billion in assets under management (AUM) – a 52 per cent increase for Centuria.
The company also expects to open new retail distribution channels together with broader institutional mandates, as well as take advantage of greater geographic and sector diversification, to allow more acquisition opportunities.
Under the merger terms, Primewest shareholders will receive $1.51 per Primewest security, a combination of 20 cents in cash per share and 0.473 Centuria shares per Primewest security (which equate to a price of $1.31).
Primewest founders Josh Bond, David Schwartz and Jim Litis will enter into two-year employment contracts as senior executives of Centuria.
Centuria has signalled it intends to keep Primewest’s existing employees.
Centuria chair Gray Charny commented the proposed merger is consistent with the company’s “dual strategy of asset acquisitions and corporate M&A”.
“Primewest is a high quality, well established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria’s position as a leading Australasian property fund manager,” Mr Charny said.
Centuria joint chief executive John McBain added Primewest’s distribution platform and expertise across sectors and geographies are complementary to his company.
“Joint CEO Jason Huljich and I will be delighted to welcome the Primewest executives to the Centuria group and look forward to working closely with them to grow the combined platform,” Mr McBain said.
“We believe the merged group will be strategically poised for further growth in the healthcare and agricultural sectors in particular, as well as the traditional real estate sectors.”
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].