06/11/2018 - 15:28

WA govt in $190m PEXA windfall

06/11/2018 - 15:28

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The state government is set to receive nearly $190 million by selling its stake in online settlements company Property Exchange Australia.

Landgate holds an 11.83 per cent stake in PEXA.

The state government is set to receive nearly $190 million by selling its stake in online settlements company Property Exchange Australia.

Commonwealth Bank, Morgan Stanley Infrastructure and ASX-listed Link Group have agreed to buy PEXA in a deal that values the online property settlements company at about $1.6 billion.

At that valuation, the state government's 11.83 per cent stake, which it holds through Landgate, is worth about $189 million. 

The consortium has already increased its shareholding past 50 per cent and PEXA's planned IPO has been cancelled.

Macquarie Group, the big four consumer banks, Link, Little Group and the Victorian, NSW, Queensland and WA governments were the stakeholders in PEXA, which helps lawyers, conveyancers and financial institutions lodge documents with land registries and to complete electronic settlements.

A spokesman for Treasurer Ben Wyatt said the government had opted to sell its stake in PEXA.

“Completion remains subject to a range of conditions precedent which are expected to take several weeks to complete with the transaction expected to close before the end of the year,” he said.

The final details will determine the final return to the WA government.

“The price agreed with the consortium represents an implied enterprise value for PEXA of at least $1.5 billion, which would see a significant return on the states 11.83 per cent shareholding.”

CBA, which will pay $50 million to increase its holding from 13.1 per cent to 16 per cent, says the move is part of a strategy to focus on its core banking businesses.

“Having been a key stakeholder in PEXA since its inception in 2011, today’s announcement represents our continued commitment to support the property industry as it transitions towards an innovative, fully digital, settlements process that aims to provide improved experiences for customers," CBA chief executive Matt Comyn said.

Link said it would raise its stake from 19.8 per cent to between 27 and 44 per cent, depending on the number of acceptances.

The record-keeping and IT firm will fund the move through cash and existing debt facilities.

The previously planned IPO of PEXA had been valued at about $2 billion, which would have given the state government a $235 million windfall. 

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