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AMP Capital Investors NZ Ltd has waived its pre-emptive right to buy the units Australian takeover target Ronin Property Trust holds in the AMP NZ Office Trust.

The pre-emptive rights are among numerous pre-emptive clauses in a deed settled when AMP Capital & Ronin became 50% shareholders in AMP Ronin Management Ltd in January.

Multiplex Ltd is most of the way towards succeeding in its takeover offer for Ronin – it had 78.92% on Friday – and will be able to assume ownership of the units plus Ronin’s management role at the AMP office trust.

AMP Capital had previously owned the whole of the management company.

The deed required Ronin to hold no less than 19.9% of AMP NZ Office Trust for 2 years – to 15 January 2006 – and at least 15% after that. If it went below the thresholds it would have to offer the remaining units to AMP Capital.

Given that Multiplex began its bid by acquiring the 15.7% interest of AMP Life Ltd, the pre-emptive rights hardly seemed an issue. Last year it was a different story: AMP Life fought Centro Property Group’s bid for the AMP Shopping Centres Trust in Australia, disclosing after the bid began that it held various pre-emptive rights which it was unwilling to give up.

Centro eventually lost that bid, but got some shopping centres in the wash-up after Westfield Group bought the AMP trust.

Earlier stories:

5 November 2004: Multiplex goes unconditional on Ronin bid  

28 September 2004: NZ assets a major feature of Multiplex bid for Ronin

18 December 2003: Ronin to take most of National Provident’s AMP NZ Office stake, half of trust management

20 May 2003: AMP Life throws another spanner at Centro takeover bid

Multiplex Group’s takeover of Ronin Property Group is well on the way to completion.

Multiplex reported today that it had acceptances for 74.36% of Ronin’s stock.

It also said Standard & Poor’s intended to reclassify Multiplex securities for inclusion in the S&P/ASX 200 property index from tomorrow – Wednesday 17 November.

Multiplex Ltd picked up nearly 12% of Ronin Property Group on Thursday, taking its stake in the AMP property trust to 47.02%.

Multiplex started its bid by acquiring the 15.7% of Ronin still held by AMP Life Ltd and declared its offer unconditional a week ago.

Paladin Australia co-founder Rod Leaver formed Ronin Property Group at the beginning of 2003, and AMP – after losing 3 of its 4 property trusts in takeovers – entered a deal in August 2003 to internalise the AMP Office Trust (Australia)’s management at Ronin, keep AMP Life as a 21% unitholder and take $A29.7 million from Ronin as a procurement fee for the management.

Ronin became a significant player in the New Zealand property market in December 2003, when it agreed to buy the National Provident Fund’s stake in the AMP NZ Office Trust and to join a new management company for that trust with AMP Capital Investors (NZ) Ltd, which previously had 100% management control.

Multiplex, too, has become a significant player in New Zealand, first through its construction activities, more recently by forming a development division and through the launch of an unlisted $265 million New Zealand property fund whose main asset is the ASB Centre in Auckland, a $102.5 million acquisition which the AMP NZ Office Trust had elected not to pursue.

Earlier stories:

5 November 2004: Multiplex goes unconditional on Ronin bid

28 September 2004: NZ assets a major feature of Multiplex bid for Ronin

5 September 2004: Multiplex launches NZ unlisted fund

Multiplex Group declared its takeover bid for Ronin Property Group unconditional on Thursday, when it had 17.46% of Ronin stock.

Multiplex took possession of AMP Life Ltd’s 15.7% holding in Ronin before announcing details of its takeover proposal at the end of September.

The consideration is 0.274 of a Multiplex security plus A8c cash for every Ronin security.

Earlier stories:

28 September 2004: NZ assets a major feature of Multiplex bid for Ronin

25 September 2004: Multiplex talking Ronin takeover

A feature of Multiplex Group’s proposed takeover of Ronin Property Group (containing the former AMP Office Trust in Australia) is that it will take the combined portfolio of the 2 groups in New Zealand over the $A1 billion level.

Multiplex Group took possession of AMP Life Ltd’s 15.7% holding in Ronin Property Group before announcing details on Monday of its takeover proposal.

Multiplex has offered 0.274 new security for every one existing Ronin security, plus A8c cash, worth $A1.33 – a 9.9% premium to the price on 21 September, the day before speculation on Ronin’s future began, and a 17.7% premium to Ronin’s asset backing.

The combined group would have $A5.5 billion of assets, $A1.6 billion debt for 29% gearing. That raises Multiplex’s gearing by 3 points and reduces gearing on the Ronin portfolio from 34%.

Multiplex’s property portfolio would double to $A3.2 billion, comprising 30 assets & 3 investments, and its $A3.7 billion market capitalisation would make it Australia’s 4th largest listed property trust.

The family of Multiplex chairman John Roberts will be diluted from 38% to 27%, and the Hawaiian and Wylie Holdings stakes in multiplex will both fall below 5%.

Ronin holds 30% of the AMP NZ Office Trust plus half of its management company, acquisitions begun in December & completed in January. Multiplex, meanwhile, has just launched its own $A290 million New Zealand property fund.

Ronin asked for the Monday trading halt to be extended because it had received an approach from another party. The trading halt was lifted late on Monday.

But Multiplex isn’t waiting for the competition to gather strength. With 15.7% in its pocket, it said it would go unconditional on 50.1% acceptance.

Trading in Multiplex Group and Ronin Property Trust stock in Australia was halted late on Friday, expected to resume on Tuesday.

Mirvac Group denied it was talking takeover with Ronin on Thursday, while neither Multiplex nor Ronin has made any comment.

The Australian activity has a bearing on property ownership in New Zealand. Ronin bought the National Provident Fund’s 30% stake in the AMP NZ Office Trust last summer, plus 50% of the trust’s management company.

Multiplex, primarily a commercial builder, has had a growing New Zealand presence, setting up a development arm and recently a listed fund holding New Zealand assets.

Mirvac Group managing director Robert Hamilton said today Mirvac “is not currently involved in corporate activity regarding Ronin Property Group.”

He was responding to media speculation that Ronin (which contains Ronin Property Trust, the former AMP Office Trust in Australia) was a takeover target for either Mirvac or Multiplex Ltd.

Despite his denial, Mr Hamilton didn’t rule the idea out. He said Mirvac had a strategy to increase the scale of its property investment & management operations and continued to investigate opportunities.

Neither Multiplex nor Ronin has issued any statement on the speculation.

Ronin’s share price began to rise at the start of August, but has put on A7c to $A1.29 this week.

What happens to Ronin affects investment ownership in New Zealand. Ronin bought the National Provident Fund’s 30% stake in the AMP NZ Office Trust last summer, plus 50% of the trust’s management company.

Up to $A1 billion of securities on offer

AMP Ltd subsidiary AMP Henderson Global Investors Ltd lodged the prospectus today for an offer of about $A750 million of reset preferred securities (RPS), aimed at increasing the overall efficiency of the group’s capital base. Up to $A250 million in over-subscriptions may be accepted.

AMP chief executive Paul Batchelor said the funds would be used to reduce short-term debt, increase capital resources and generally reinforce the group’s financial strength.

“Hybrid capital is efficient from a risk capital, ratings and regulatory point of view, which means this issue will improve our financial profile without increasing the shareholder capital within the group,” Mr Batchelor said.

The securities will qualify as tier 1 capital for Australian Prudential Regulatory Authority purposes. The offer opens on 30 September and closes on 18 October. Full details are in the prospectus, which will be available at www.ampgroup.com/rps but isn’t there yet.

Application forms will be available when the offer opens, which is expected to be Monday 30 September. AMP shareholders who live in Australia or New Zealand may request a personalised application form, which will ensure they receive a preferential allocation over general applicants if there is excess demand.

2 successful bids would carve off $A3.4 billion of assets

AMP Ltd issued a statement on Wednesday about the 2 takeover bids for its shopping centre and diversified property trusts, saying: “If these offers succeed, the impact on AMP is not material.”

When your empire is being decimated, lopping off a few more arms & legs might seem immaterial, but according to the figures provided by AMP chief executive Andrew Mohl, the Westfield Trust/Centro Property Group takeover of the AMP Shopping Centre Trust and the Stockland Trust Group takeover of the AMP Diversified Property Trust would take $A3.4 billion of assets out of AMP management, still leaving AMP with $A10 billion of property to manage.

That’s a 25% reduction of assets under management.

Mr Mohl said AMP Henderson Global Investors Ltd would retain management of about 60% of the shopping centre trust. “The annualised net profit after tax impact on AMP Henderson will be a reduction of around $A7.3 million.”

At AMP Diversified, AMP Henderson would lose management of $A1.8 billion of assets. Under the takeover arrangements, Stockland will pay AMP Henderson $A39.3 million, representing 2.1% of assets under management, for rights which are on the books at $A67 million.

Mr Mohl said the annualised net aftertax impact of losing AMP Diversified would be a reduction of about $A4.2 million.

More than his statement that the impact wouldn’t be material, Mr Mohl’s statement implied relief that the AMP property business should remain in some form.

He said AMP Henderson wasn’t immune to the consolidation occurring in the listed property trust sector. Given this shakeup, “the AMP Group has achieved a number of favourable outcomes for shareholders. These include a payment for Stockland as well as the ongoing management of a number of key assets in the shopping centre trust portfolio.

“Most importantly for AMP, AMP Henderson remains 1 of the largest property asset managers in Australia. AMP continues to manage around $A10 billion of Australian property assets.

“AMP Henderson has a diversified suite of property assets across the listed, unlisted & pooled sectors. Two-thirds of its business is in the direct unlisted property sector.”

Westfield does the deals to carve up AMP Shopping Centre Trust

Stockland launches full bid for AMP Diversified

Westfield joins Centro on 19.9%

Westfield Trust increased its stake in AMP Shopping Centre Trust from 16.92% to 19.9% today.

The AMP trust then dropped a bombshell for the initial takeover bidder, Centro Property Group, saying a successful Centro bid, including replacement of the trust manager, was likely to breach 5 co-ownership agreements (with 2 other AMP entities) if those co-owners didn’t agree to the bid.

The AMP trust said if the breach wasn’t rectified, the co-owner could require the trust to sell the co-owned property to the co-owner at market value. The trust said $A1 billion of its portfolio was tied up in this way.

It also said a summary of these agreements was contained in its initial offer prospectus in 1997, and that these pre-emptive & default rights “are consistent with industry practice.”

Centro said the prospectus didn’t disclose the fact that a change a change of control could trigger such rights, and said the suggestion they are consistent with market practice “is wrong & misleading.”

Westfield takes chunk of AMP Shopping Centre Trust

Purchase follows Centro takeover offer

Westfield Trust has set up a battle for the AMP Shopping Centre Trust, buying 16.9% of it from institutions at a 13.9% premium to the average price Centro Property Group paid for its 19.9% last week.

Institutions started positioning their holdings in the listed AMP trust in February. AMP Ltd, which held 24.62% but made a major loss on its British investments in 2002, sold down to 21.55% in February, just after the shopping centre trust had strengthened its holdings in the Pacific Fair mall on the Gold Coast (by 4% to 44%) and the Macquarie Centre in North Ryde, Sydney (by 5% to 55%).

The shopping centre trust increased those holdings by taking up a 10% stake in a new unlisted fund which bought 40% of Pacific Fair for $A230 million and 50% of Macquarie for $A239.5 million.

At the start of the year the AMP trust’s unit price was around $A1.35-1.40. The Westfield purchase from institutions took it to $A1.80.

Centro lodged a full takeover bid for the AMP trust on 20 March.

The AMP Shopping Centre Trust owns all or part of 9 regional shopping centres round Australia, worth $A1.4 billion.

The unlisted AMP NZ Property Fund (now called the AMP Property Portfolio) owns 50% of the Botany town centre, Lynmall & Manukau Supa Centa. It sold the other 50% to the Australian listed AMP Diversified Property Trust last August for $NZ188.125 million.

Websites: Shopping Centres portfolio