Abacus Property Group and Charter Hall have taken a 19.9 per cent stake in ASX-listed Australian Unity Office Fund.
The pair said they had outlaid $95.6 million for the stake at a price of $2.95 per unit, a 6.1 per cent premium to the company’s last closing share price of $2.78.
Buying up the shares in the target on behalf of the consortium by Charter Hall's broker JPMorgan.
Led by former Charter Hall executive Steven Sewell, Abacus, is shifting into longer term institutional real estate opportunities as it looks to grow its of $2.3 billion market capitalisation while Charter Hall manages $28.4 billion of long leased property across the office, retail, industrial and social infrastructure sectors.
The Australian Unity-managed fund, which holds a $641 million-plus portfolio of office properties located across Australian metropolitan and CBD markets, will also be subject to a takeover bid.
The substantial unit-holder position will now enable a framework agreement under which Abacus and Charter Hall would co-operate for the purposes of pursuing a takeover transaction.
The consortium said it would “seek to initiate” discussions with Australian Unity regarding a potential transaction.
Australian Unity Office Fund, which holds a market value of $600 million-plus, invests in a diversified portfolio of nine office properties located across Australia, owning office buildings in South Australia, NSW, Queensland, Victoria and the ACT.
Abacus and Charter Hall said they were “very familiar” with the Australian Unity property portfolio, and the sub-markets in which the properties sit, consistent with the pairs “investment objectives”.
Charter Hall’s last takeover of a listed company was Folkestone, a small Sydney-based property fund manager, in August last year.
Charter Hall Group paid $205 million cash in a seamless merger and acquisition deal that was done via a scheme of arrangement at a 25 per cent premium to the last close with the help of law firm Allens.
The move comes only six months after it rejected a $480 million bid from US investment house Starwood, which valued the company at $2.87 a share. AOF gave US-listed Starwood a look at its books, before rejecting its final offer.