Centuria Seeks Full Control of NZ’s Augusta Capital

14 June 2020

Centuria Capital has returned to its pre-covid strategy of taking control of New Zealand's Augusta Capital with a full takeover offer launched this week.

 

Centuira first offered to acquire the group in January 2020 for $174m or NZ$2.00 per share however following COVID19, Centuria now looks set to acquire the Group for $142M, a -18% discount.

 

Centuira currently holds 23.3% of the ordinary shares of Augusta Capital via a capital raising process by Augusta in May at NZ$0.55 per share. This weeks takeover proposal is for the remaining 76% of the shares in a $122m cash and script offer equal to NZ$1.00 per share.

 

For Centuria, the transaction is part of a long term strategy and complements its existing expertise in the Office and Industrial markets with approximately 72% of Augusta’s assets under management (AUM) invested in these two sectors as well as diversifying Centuria's funds management revenues through an exposure to the New Zealand office and industrial sectors. If the Offer is successful, Centuria would reinforce its position as one of the leading funds management platforms in the Australasian region.

 

The Offer is supported by Augusta’s founding shareholders (Managing Director Mark Francis and fellow founder Bryce Barnett) and other Augusta shareholders who, together with Centuria’s shareholding, represent 42.2% of Augusta’s total shares on issue.

 

Augusta shareholders will receive NZ$0.20 in cash and 0.392 of a Centuria Stapled Security (Scrip Consideration) in exchange for each of their shares in Augusta. Based on the five day VWAP for Centuria Stapled Securities as at 12 June 2020 of $1.914 per stapled security and an assumed exchange rate of AU$1.00:NZ$1.067, the implied offer price is NZ$1.00 per Augusta share.

 

The implied offer price of NZ$1.00 per security represents a 46.0% premium to the closing price of Augusta shares of NZ$0.69 on 12 June 2020 (being the last trading day before this announcement was made).

 

Centuria believes the Implied Offer Price represents an attractive premium to Augusta’s recent trading price and key metrics. The offer price will be reduced by any future dividends or distributions declared by Augusta in respect of the period commencing after 15 June 2020.

 

Centuria’s Joint CEO John McBain said “An acquisition of the remaining interest in Augusta is consistent with our strategy and the two groups are extremely compatible. This strategy is based on a positive post COVID-19 outlook and Centuria will benefit greatly from a 24% increase in AUM as well as a broad Australasian footprint. 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.”