ESR Seek to Increase Stake in Centuria

11 March 2020

In a battle for control of Propertylink in 2018, Warburg Princess backed ESR acquired a 16.6% stake in Centuria who had previously made a play on Propertylink. The fire power of ESR was sufficient to see Centuria pull out of the race for Propertylink and enable ESR to take control of the Propertylink business to expand their own industrial and logistics footprint in Australia.


ESR have now taken the opportunity to increase their stake in Centuria to 19.9% by seeking a further 3.3% at $2.55 per share, which is a 5% premium to their previous closing price, but an 18% premium to the recent low of $2.15 on the 10th March.


If successful, ESR will sit with a suitable blocking stake in Centuria and with a position to launch a further bid for the group, or parts of it, should the opportunity arise.


Whilst ESR have indicated that they are in support of the board and are not seeking to advance their holding beyond 19.9%, their increased presence will be the source of speculation for months to come.


Last week, ARA asset Management took control of Industrial & Logistics group LOGOS in a friendly move which will enable ARA to expand its footprint in the region and compete directly with ESR, Goodman and Charter Hall.


Shareholders in Centuria will be pleased with the move as it firms up support for the group during the current market turbulence.


Centuria have been one of the better performers in the previous 12 months with their recent results indicating growth in earnings per security of 25% and growth in FUM of 21%. Centuria now manage $7.3bn in assets across their platform of listed and unlisted real estate and delivered total securityholder return of 86%.


At the time, John McBain, Joint CEO, said “HY20 was a transformational period for Centuria. The business continues to focus on a dual strategy of organic and inorganic expansion and HY20 was a record period with $1.2bn of organic real estate acquisitions across our listed and unlisted divisions.”


Centruia are yet to release any further response to the ESR proposal, however any response will likely confirm that it is business as usual for CNI with a focus on earnings and returns for all shareholders.