Not content to abandon last years plans to take over the AOF Office Fund, Starwood have lodged a new all cash offer of $2.98 per unit for 100% of the units in the fund.
The Offer Price represents a premium of:
- 8% to AOF's net tangible assets (NTA) as at 30 June 2019 of $179 per unit
- 4.6% to AOF's proforma NTA of $2.85 after adjusted for the estimated revaluations
- 3.6% to the volume weighted average price (VWAP) of AOF unlts since the date of the Charter Hall / Abacus Scheme .
Jeffrey Dishner, Senior Managing Director and Global Head of Real Estate Acquisitions at the Starwood Capital Group said: "Starwood's offer to acquire AOF for $2.98 per unit provides unitholders with an opportunity to obtain liquidity at a certain price. The Offer Price also represents a premium to the current trading levels and NTA. We look forward to engaging with all stakeholders regarding the Offer as we work to successfully complete the transaction."
The Offer will be subject to certain conditions, including FIRB approval and a 90% minimum acceptance condition. Full details of the conditions to the Offer are set out in the schedule to this announcement. The Offer is not subject to due diligence.
Starwood has entered into pre-bid agreements with certain institutional investors pursuant to which, subject to certain conditions, they have collectively agreed to accept, or procure the acceptance of, 16.7% of AOF units, in aggregate, into the Offer and granted a call option to Starwood over these units.
Starwood intends to finance the Offer from committed funds managed by Starwood Capital Group. SOF XI Legs Holdings Limited is a subsidiary of Starwood Global Opportunity Fund XI, a discretionary fund with total committed capital of approximately US$7.55bn and sufficient undrawn capital to fund the Offer.
The latest offer from Starwood at $2.98 is below the final offer from Charter Hall & Abacus of $3.04. That higher offer was abandoned after Hume Partners increased their interest to 9.5% causing Charter Hall and Abacus to offload their 19.9% interest and proceed with the takeover offer without a direct interest. ASIC disputed the divestment process and the Takeovers Panel was called in to examine the arrangement, which they agreed to do if the vote succeeded. The vote did not succeed opening back up AOF to fresh offers.
In 2019, the AOF boards' independent Board Committee appointed Deloittes who determined that the Charter Hall & Abacus Scheme is fair and reasonable and is in the best interests of AOF unitholders at $3.04 and as such the Independent Directors unanimously recommend that AOF unitholders vote in favour of the Scheme, in the absence of a 'superior proposal'.
It is likely that Starwoods proposal will need to be sweetened to $3.04 in order to gain the Board's approval once again. Starwood may well succeed on this attempt.
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