- Merger implementation deed announced 4 October 2021
- Some of AOF's largest shareholders did not support the merger
- Based on proxies, the merger was expected not to pass
Announced in October last year, Australian Unity Office Fund (ASX: AOF) announced that it entered into a merger implementation deed with Australian Unity Diversified Property Fund (DPF) to create Australian Unity Property Fund (AUOPF).
Under the terms of Merger, AOF would have acquired all the units in DPF and issue new AOF units to DPF holders at the ratio of 0.455 AOF unit per 1 DPF unit held.
On 15 November 2021, in a release to the market, DPF RE Directors unanimously recommended unitholders to vote in favour of the merger, with an independent expert concluding that the proposal was in the best interests of DPF unitholders.
In early December, AOF announced it had received feedback from some of the company’s largest unitholders; the unitholders were not supportive of the merger.
AOF noted, however, that the merger proposal received support from the majority of unitholders who voted.
“… AUIREL* determined that further engagement with relevant stakeholders was required to understand if there were opportunities to make refinements to obtain the support required to proceed with the Merger Proposal. To facilitate this engagement, the AOF and DPF unitholder meetings were adjourned,” said AOF, in a statement.
AUIREL subsequently concluded the engagement and determined that it was not possible to make sufficient refinements to the merger proposal in an appropriate time frame, to obtain the support necessary from the small number of AOF’s largest unitholders.
Additionally, AOF said that based on proxies received to date, regarding the resolutions set out in the notice of meeting and explanatory memorandum, the resolutions would not pass.
The latest
AOF and DPF agreed to mutually terminate the merger implementation deed, announced Monday this week.
AOF also announced that preliminary independent valuations were received for all seven assets held by AOF as at 31 December 2021. The company expects a valuations uplift of approximately $10 million above prior independent valuations and approximately $4 million above the immediately preceding book value.
The preliminary December total portfolio value is $586.5 million, reflecting a WACR of 5.74%.
It was also announced that AUIREL has been advised by Australian Unity Limited that it has commenced discussions with Keppel Capital regarding the future of the joint venture between Australian Unity Limited and Keppel.
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*AUIREL is the responsible entity for AOF.
