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Property investment company Centuria Capital Group (ASX: CNI) is back in the arena with a fresh attempt to buy New Zealand real estate fund manager Augusta Capital (NZX: AUG).
In late January the group made a $174 million offer aiming to diversify into New Zealand and its lift assets under management (AUM).
Back then Centuria was prepared to offer Augusta shareholders NZ$2 in cash per AUG share, 0.807 CNI shares for every AUG share held, or a combination of the two.
But the outbreak of COVID-19 soon put Centuria's acquisition aspirations on ice by late March, although management highlighted a long-term view of the attractiveness of the New Zealand market with plans to "enter this market as soon as conditions stabilise".
With New Zealand at the forefront of developed nations that have largely contained the virus, allowing it to lift the vast majority of restrictions recently, it looks like that day has come.
After participating in a capital raising at Augusta in May that saw it secure a 23.3 per cent holding in the company, Centuria has today announced a new offer with the blessing of Augusta's managing director Mark Francis and fellow founder Bryce Barnett.
Centuria has offered to buy all remaining shares in Augusta for NZ$130 million (AUD$122 million), with a cash-and-scrip offer worth around NZ$1 per AUG share.
As Centuria only had around $120 million in cash reserves after making its initial investment in the New Zealand company, the cash component of the new offer represents a low percentage at NZ$0.20 per AUG share.
The offer still needs to be voted on by the New Zealand entity's shareholders, but including Centuria's stake there are currently shareholders with a 42.2 per cent stake who are committed to the deal going ahead.
"An acquisition of the remaining interest in Augusta is consistent with our strategy and the two groups are extremely compatible," says Centuria's joint CEO John McBain.
"This strategy is based on a positive post COVID-19 outlook and Centuria will benefit greatly from a 24 per cent increase in AUM as well as a broad Australasian footprint," he says of the agreement, which would take Centuria's AUM to AUD$8.9 billion.
"Recently, the Augusta Board and management team took decisive action to minimise the impact of COVID-19 by significantly reducing corporate debt and releasing surplus cash to aid growth in the core businesses. Accordingly, its NZ platform is now well placed to take advantage of opportunities as COVID-19 unwinds."
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