SEA can bypass meeting, Trans Tasman may need one
Trans Tasman Properties Ltd’s Australian subsidiary, Australian Growth Properties Ltd, has signed conditionally to sell 80% of its portfolio to German fund manager Deka Immobolien Investment GmbH.
Deka is Germany’s biggest open-ended real estate fund manager with more than $20 billion under management. It’s part of DekaBank, a central institution of Germany’s savings banks created through a merger in 1999. The investment fund has 290 properties worth â‚¬16.6 billion ($NZ33.3 billion).
The net price of the sale is $A300,000 above book value â€“- an aggregate $A397 million less $A11.3 million of guaranteed income support & related costs, for a net $A385.7 million.
AGP announced a month ago that due diligence was being undertaken on the 3 buildings involved, at 363 & 345 George St, Sydney.
Completion of the deal will be the later of 1 July or 7 days after the last condition is satisfied.
The assets being sold represent about 80% of AGP’s assets and 46% of Trans Tasman’s. Trans Tasman owns 50.1% of AGP. In turn, SEA Holdings Ltd of Hong Kong owns 55.6% of Trans Tasman, and a closely allied group beneficially controls 51.6% of SEA.
“Based on the prevailing market condition & the net realisable proceeds, the company’s board considers that the consideration is fair & reasonable,” AGP said.
The company said its board was still considering how to use the proceeds.
“The company’s board is obtaining strategic investment advice as to the commercial options available which it will consider before informing shareholders.
“Subject to consideration of the advice, the current view of the company’s board is & remains that the company should be a listed Australian entity pursuing its stated strategy since listing, which is to create shareholder wealth through active management of property & property-related investments and through undertaking development opportunities where value can be added.”
AGP said that, as the net profit attributable to the property in 2001 & 2002 on a consolidated accounting basis represented more than 50% of the net profit of the SEA group, its disposal constituted a major transaction of SEA under Hong Kong listing rules.
Accordingly, the disposal required SEA shareholder approval. But as SEA’s controlling group held 51.6% of that company and proposed to give the sale their written approval, no meting would be held.
Trans Tasman shareholder approval might be needed as the sale represented the disposal of assets whose gross value exceeded 50% of Trans Tasman’s average market capitalisation.
Trans Tasman’s shares closed up 1c at 30c yesterday, and AGP’s at A90c.