The managers of the NZX-listed Vital Healthcare Property Trust fell short today in their bid for approval of a restructure to enable an ASX foreign exempt listing.
Northwest Healthcare Properties Management Ltd, owned by NorthWest Healthscope Properties REIT of Toronto, which also holds 24.9% of Vital’s units, proposed separating Vital’s New Zealand & Australian properties into separate but stapled trusts, “primarily to remove inefficiencies for investors outside New Zealand. Removing these inefficiencies is required to facilitate a foreign exempt listing on the ASX.”
The first meeting of unitholders, called for this vote on Tuesday, was adjourned for 2 days as several stakeholders requested more time to prepare to participate. Both meetings were virtual – fully online.
The resolution required 75% approval by unitholders entitled to vote and who voted. NorthWest was unable to vote its stake.
The outcome was: 115,369,345 (66.2%) in favour, 58,991,364 (33.8%) against, 116,774,941 abstained.
Votes were exercised for 38.5% of all units – 25.4% for the proposal, 11.8% against, 1.3% discretionary.
The management company outlined its view in a letter to unitholders on 28 February. Its board said it believed that, as a result of these changes, the trust would gain:
- an increase in distributions for all unitholders, including adopting a distribution policy with a target payout ratio of 95-100% of adjusted funds from operations. As an example, a New Zealand unitholder with a 30% marginal tax rate is expected to receive a 10% increase in distributions after tax
- an expected increase in the value & liquidity of Vital’s units over time, further aided by the potential for index inclusion in the ASX300 index
- access to a broader range of capital sources at an efficient cost, and
- a more competitive position for acquisitions & development projects for future earnings growth.
In an independent advisor’s report, Grant Samuel concluded that the proposal was “in the best interests of all unitholders when it is analysed in combination with the capital management initiatives & potential value uplift from an increase in the unit price”.
31 March 2020: Vital trust’s meeting on ASX listing adjourned to Thursday
30 March 2020: Fully online meeting tomorrow to decide on Vital ASX listing
18 December 2019: Vital Healthcare works towards ASX listing vote by March
Attribution: Vital release.