amp building perth st georges terrace 140
Above: AMP Building Perth. Image – Canva.
  • ADPF unitholder meeting yesterday voted in favour of merger
  • Dexus will provide circa $400 million in upfront liquidity to ADPF
  • DWPF will also provide circa $50 million towards transaction costs

In mid-March, The Property Tribune reported on the proposed merger, which would see part of the Dexus (ASX: DXS) business, Dexus Wholesale Property Fund (DWPF), take over circa $5.4 billion from AMP Capital Diversified Property Fund (ADPF).

The deal would see a strong portfolio leave AMP Capital. ADPF was ranked best performing fund in the MSCI/Mercer index over the two-year period to 31 March 2021.

The portfolio is composed of several high quality and high profile assets including Quay Quarter Tower in Sydney, Westfield Booragoon in Perth, Westfield Warringah Mall in Sydney, among other commercial properties.

Also included are the “minority investments in two other AMP Capital managed wholesale funds, the AMP Capital Wholesale Office Fund (AWOF) and the AMP Capital Shopping Centre Fund (ASCF).”

AMP Capital, the responsible entity, received the offer last year. It then took six months of discussions before an agreement was reached, with the unitholder meeting to approve the deal being held yesterday.

A majority of unitholders voted in favour of the move to see ADPF join Dexus, and whilst it was a closed meeting and no further details were made public, the Australian Financial Review reported that “93% of the vote… backed the proposal to merge”, and the Sydney Morning Herald reported, “AMP investors voted overwhelming in favour of the merger…”.

The company said in a statement that they had put up an alternative proposal to unitholders to consider as well:

“While AMP Capital submitted a compelling alternate proposal with significant capital support, we respect our investors’ decision to seek the scale that the merged fund will provide.”  

Kylie O’Connor, AMP Capital Head of Real Estate

Dexus said to support the merger, it “has agreed to contribute funding to facilitate liquidity for ADPF investors and protect DWPF from value dilution resulting from transaction costs.”

This includes some $400 million of upfront liquidity to redeeming ADPF unitholders, as well as circa $50 million of transaction costs for both ADPF and DWPF.

As of today, the responsible entity for ADPF is no longer AMP Capital but DWPF. Dexus said the next steps of the process include combining DWPF and ADPF via stapling in 18 months time, among other things.

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