- Proposed deal equals $600 million
- Will result in $15.5 billion worth of assets managed by the merged group
- Will make the merged group one of the largest listed Australian real estate fund managers
Perth-based Primewest (ASX: PWG) has been offered to merge with Centuria Capital (ASX: CNI) under a $600 million deal.
The deal will result in $15.5 billion worth of assets managed by the merged group which will make it among the largest real estate fund managers listed on the ASX.
Primewest has been performing particularly well recently, with fund management revenue increasing 9% year-on-year.
Primewest’s board unanimously recommended the merger. A minimum acceptance rate of 90% across all of Primewest’s securities will now be needed to approve the merger.
Under the current terms, the consideration per PrimeWest security will be $1.51, $0.20 in cash and the rest in 0.473 of Centuria securities. This equals $1.31 based on Centuria’s closing price as of Friday, 16 April.
As part of the proposed transaction, Centuria stated its attention to retaining Primewest’s existing employees, given their strong expertise are complementary to that of Centuria.
John Bond, David Schwart and Jim Litis, Primewest’s founders and directors, have confirmed they intend to accept the merger. Together, they own 53% of Primewest’s stock. Additionally, under the current terms, all three will enter into two-year employment contracts within Centuria as senior executives.
Centuria Chairman Gary Charny said that the proposed merger is consistent with Centuria’s strategy of acquiring assets and corporate mergers that correlate with the company’s business model.
“Primewest is a high quality, well-established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria’s position as a leading Australasian property fund manager.”
Gary Charny, Centuria Chairman
Centuria Joint CEO, John McBain, added that he is looking forward to continued growth with the newly merged entity – if approved – in the healthcare and agricultural sectors, along with real estate.
“The merger represents an exciting opportunity to combine two highly complementary real estate platforms that share similar philosophies and strong track records.
“Primewest has a strong distribution platform and expertise across a range of sectors and geographies which are complementary to Centuria.”
John McBain, Centuria Joint CEO
The offer period opens in mid-May.