Curious Move by Charter Hall and Abacus to dispose AOF Units but proceed with proposal

31 October 2019

In a curious move ahead of meeting on the 7th November, joint venture partners Charter Hall and Abacus sold the units they had acquired in AOF back (19.9% of the Trust) to the market for a total consideration of $95.6 million, equivalent to $2.95 per AOF unit.


It would appear that the Hume Partners, who increased their stake in the trust from 6.65% to 7.88% last week may be seeking to block the proposal.


Given that Charter Hall and AOF would be prohibited from voting on the scheme of arrangement (Section 611 of the Corporations Act), their decision to sell their stake would free up those units to more voters who they hope would vote in favour of the Scheme.


The resolution requires a majority of voters to approve the scheme in order to succeed. A risky move no doubt, but JP Morgan who are handling the sale are likely to find a sympathetic buyer.