Trading in Stride Property Group’s 2 new shares opened yesterday with its stapled securities priced at $1.98 and shares in the new Investore Property Ltd hit $1.63, a 9.4% premium to the bookbuild price of $1.49, which was at the top of the range for the initial public offering.
Stride has thus converted itself from a property company with in-house management into 3 entities (2 tied to each other), with a fourth to come.
The management unit, Stride Investment Management Ltd, is one half of the stapled security. The other half is office, retail & industrial portfolio owner Stride Property Ltd, which will retain its PIE (portfolio investment entity) status.
The management company will also manage the breakout business listed yesterday, Investore Property, set up to take over a small portfolio of supermarkets from Stride and to increase its investment in the large-format retail sector. It also has PIE status. Investore will own a portfolio of 39 properties with an independent valuation of $641.4 million at 31 March 2016.
The fourth entity is an Australian wholesale fund, Diversified NZ Property Fund Ltd, which is in the process of restructuring to become Diversified NZ Property Trust.
Investore had reserved $15 million for allocation to the Stride shareholder offer as part of its $185 million IPO, but this was cut to $12 million so Stride could maintain its intended 19.9% stake.
Investore received applications under the shareholder offer in excess of $45 million, which were scaled back. All applications were fully allocated up to 3000 shares. Beyond that, a scaling rate of 21.7% was applied, subject to a maximum allocation of 10,000 shares. Stride said a significant portion of the IPO was allocated to Stride shareholders through the institutional offer and indirectly to clients of NZX firms who participated in the broker firm offer. In addition to any participation in the IPO, all Stride shareholders received one share in Investore for every 4 shares held in the old Stride.
Holders of the stapled securities will receive returns from the property ownership activities (taxed as a PIE dividend on distribution) & real estate investment management activities (taxed as an ordinary dividend).
Image above: Investore chair Mike Allen & Stride chief executive Peter Alexander ring the stock exchange bell for Investore’s listing.
13 June 2016: Stride unveils stapled structure & Investore IPO
Attribution: Company releases.