Australian Unity have announced the preliminary results of the further valuations it was undertaking in defence of the proposal from Charter Hall and Abacus to acquire all of the units in the Fund. When aggregated with the valuation announcement previously made on 13 June 2019, AOF’s entire portfolio is expected to increase in value by approximately $23 million, or approximately 14 cents per unit, over the preceding book value immediately prior to the valuation of those properties. As a result of these valuations as at 30 June 2019, the weighted average capitalisation rate across the portfolio is anticipated to tighten approximately 31 bps to approximately 6.21%. AOF are also claiming embedded value in the interest rate swaps supporting the current hedging strategy. Given the interest rate swap curve has moved down significantly over the last six months, the estimated value of AOF’s interest rate swap contracts as at 24 June 2019 is approximately $6.749 million. This reflects an increase in liabilities of approximately $5.3 million from 31 December 2018, or approximately 3 cents per unit reduction in net assets. AOF’s estimated its net tangible assets per unit to increase from $2.67 as at 31 December 2018 to $2.78 as at 30 June 2019, taking into account the combined impact of revaluing AOF’s entire portfolio and the interest rate swap contract liabilities mentioned above. This compares to the Offer price from Charter Hall and Abacus of $2.95 per unit, a premium now of just 6.1%. Following receipt of final valuations as at June 2019 for AOF’s entire portfolio, the IBC will finalise its evaluation of the Charter Hall and Abacus proposal, including engaging with the parties to clarify aspects of the proposal. #AOF
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