Australian Unity Office Fund has confirmed that it received a non-binding, indicative proposal from Aliro Group, backed by AOF’s largest unitholder, to acquire all the issued units in AOF for c$372m ($2.45 per unit).
The deal being made on behalf of the Aliro Group Office Value Fund would see the AOF funds 7 remaining assets worth $575m move to Aliro.
AOF finished trading on Friday at 2.13 per unit, resulting in the offer being at a 15% premium to the close date.
The AOF Fund has suffered a series of challenges including several take over attempts in 2018 which failed to gain the support of investors and more recently with the vacating of a major tenant in their flagship Valentine Ave asset in Parramatta.
In March, Australian Unity appointed Colliers and Knight Frank to commence an asset sale of the whole portfolio which would have crystalised capital gains tax issues for investors (one of the major impediments to previous M&A deals).
The appointment of agents to the portfolio was sufficient for Aliro to obtain the support from AOF’s largest unitholder, Hume Partners Pty Ltd (Hume). Hume has confirmed that it intends to vote its 19.97% holding in AOF in favour of the Proposal, in the absence of a superior proposal.
The Aliro offer would be reduced by the amount of distributions announced or paid from June onwards and remains subject to the following conditions:
- Completion of confirmatory due diligence to the satisfaction of Aliro (request for an exclusive diligence period, subject to a customary fiduciary out, including associated cost reimbursement arrangements);
- Approval of final terms by Aliro and AGOVF;
- Execution of a scheme implementation agreement containing customary conditions including certain deal protection terms (no shop, no talk, no due diligence and a break fee);
- Foreign Investment Review Board approval; and
- The unanimous recommendation by AUIREL as responsible entity of AOF.
An independent board committee (IBC) will be established by AUIREL to consider the Proposal. AOF unitholders do not currently need to take any action in relation to the Proposal.
AUIREL is being advised by Highbury Partnership as financial adviser and King & Wood Mallesons as legal adviser.
Related Articles
