Primewest in $600m takeover

Perth-based Primewest has received an off-market takeover bid from fellow property fund manager Centuria Capital, with the combined group to have $15.5 billion in assets.

Sydney’s Centuria, which currently has $10.5 billion in funds under management, has offered to pay $1.51 for every Primewest share, comprising 20 cents in cash and 0.473 Centuria securities.

The Primewest board has unanimously endorsed the deal, which is valued at $600 million and would place the combined group amongst Australia’s largest real estate fund managers on the ASX.

It would have a market capitalisation of about $2.2 billion.

The deal remains subject to an independent expert declaring the merger fair and reasonable to Primewest shareholders.

The company’s directors, who represent 53 per cent of Primewest’s securities, have confirmed they intend to accept the offer. It requires minimum acceptance from 90 per cent of Primewest’s shareholders.

As part of the deal, Primewest founders John Bond, David Schwartz and Jim Litis will join Centuria as senior executives under two-year contracts.

Centuria chairman Garry Charny said the proposed merger was consistent with the company’s dual strategy of asset acquisitions and corporate M&A.

“Primewest is a high-quality, well-established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria’s position as a leading Australasian property fund manager,” he said.

Centuria joint chief executive John McBain believes the merged group is poised for further growth in the healthcare and agricultural sectors, as well as the traditional real estate space.

Shares in Centuria were up 0.4 per cent to trade at $2.78 at 12:07pm AEST while Primewest was trading 4.4 per cent higher to $1.53.