Augusta Capital Ltd’s board announced the proposed sale of the NZX-listed property investment company last week to ASX-listed Centuria Capital Group for $2/share, valuing it at $180 million.
Augusta managing director Mark Francis & executive director Bryce Barnett would stay with the business on 3-year contracts to Centuria, which already has strong New Zealand connections.
The announcement came in a bid implementation agreement – no action from shareholders necessary at the moment.
Adding Augusta’s 2 executive directors’ 23.3% combined stake to holders of another 12.9% of Augusta who’ve indicated they’d sell, the proposal already has over 36% support.
The share price, 91c a year ago, had been rising through January, opening at $1.50, adding 7c on 7 January and another 10c over the next 3 weeks. When the sale proposal was announced last Wednesday, the price shot up to $1.975, slipping back to $1.97 on Friday.
Centuria, a specialist property investment management company with $A7.3 billion of assets under management, is headed by Centuria joint chief executives John McBain & Jason Huljich.
Mr McBain has a diploma in urban valuation from Auckland University and headed Wellington-based syndication specialist Waltus Investments Ltd’s entry into Australia in 1995, and also Hanover Group Ltd’s entry into Australia.
Jason Huljich’s father, Chris, and Chris’s 2 brothers, Paul & Michael, founded the Best Corp Ltd smallgoods business in Auckland in the 1980s, selling out in the 1990s as they turned their attention to property investment, especially in Sydney.
Centuria’s market capitalisation exceeds $A1 billion and it has $A7.3 billion of assets under management. The group was formed in 2007, when the Over Fifty Group joined Century Funds Management, which Mr McBain & Mr Huljich founded.
The group specialises in listed & unlisted real estate funds & investment bonds. It incorporated a local company, Centuria NZ Investment Holdings Ltd, on 24 January.
Augusta’s independent directors, headed by chair Paul Duffy, said in their announcement the expected offer wouldn’t adversely affect the funds Augusta manages or the proposed issue of securities in the Augusta Property & Tourism funds.
- Centuria will make its offer through a bid implementation agreement.
- Augusta’s target company statement should be issued in the next 10 weeks
- Augusta’s interim dividend for the December quarter, due to be paid this month, won’t affect the offer.
- Augusta shareholders will have the option of taking cash or shares in Centuria. At $A2.40/Centuria share, that makes every Augusta share worth 0.807 of a Centuria share
- Centuria intends to raise $A80 million for the buyout
- The offer will be conditional on receipt of Overseas Investment Office approval and is subject to Centuria receiving 90% shareholder approval.
Attribution: Augusta release, Centuria website.