Centuria launches $174 million takeover bid for New Zealand real estate fund manager

Centuria launches $174 million takeover bid for New Zealand real estate fund manager

Investment manager Centuria Capital Group (ASX: CNI) has launched a bid to take over one of New Zealand's leading real estate funds management platforms Augusta Capital Limited for $174 million.

If the takeover is successful Centuria would integrate Augusta into its own platform and grow assets under management (AUM) by $1.9 billion to $9.1 billion, representing a 26 per cent increase.

Centuria says the transaction would deliver immediate scale for the Australian listed company across the New Zealand market, with a concentration towards Auckland.

The takeover will be funded with existing cash reserves plus the net proceeds of a $60 million equity raising at $2.34 per Centuria security.

The offer price of NZ$2.00 per share represents a 19.8 per cent premium to the closing price of Augusta shares of NZ$1.67 on 28 January.

Founders of New Zealand-based Augusta, Mark Francis (who holds 17.2 per cent) and Bryce Barnett (who holds 6.1 per cent), have both entered into pre-bid lock-up deals agreeing to accept Centuria's offer for all of their Augusta shares.

If the deal goes ahead Francis and Barnett will continue to lead the Augusta funds management platform as key executives of Centuria.

Other Augusta shareholders holding a further 12.9 per cent of the company have also entered into lock-up agreements and have agreed to accept Centuria's offer.

This means holders of 36.4 per cent of Augusta's shares are already committed to the transaction. 

Augusta's independent directors committee have also already agreed to unanimously recommend the takeover offer to shareholders, in the absence of any superior proposal and subject to the offer price being within or above the independent adviser's value range.

"The Centuria board has been considering a New Zealand platform acquisition for some time," says Centuria chairman Garry Charny.

"The Centuria board unanimously supports the Takeover and is convinced of the strong compatibility between the two platforms."

Centuria has also announced its 1H20 highlights, demonstrating AUM growth of $1.2 billion during the six months to 31 December, with a strong transaction pipeline in 2H20 to come.

"We are pleased with Centuria's performance in 1H20 and with further assets currently under due diligence, we are confident of the prospects for continued organic growth in 2020," says Centuria joint CEO Jason Huljich.

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