Starwood in Australian Unity Office Fund Takeover Bid


US funds giant Starwood Capital Group commenced an off-market takeover of the Australian Unity Office Fund on Wednesday.

The US investment house made a conditional $485 million offer on all outstanding units in ASX-listed Australian Unity Office Fund.

Trade on the targeted fund paused at 11am on Thursday as Starwood Capital Group announced the all-cash, off-market takeover.

Starwood associates then purchased 18,270,457 securities, becoming a substantial holder with a voting power of 11.22 per cent from 162,831,952 units.

Following the sale, stocks jumped to $3.00 close to their year high of $3.04 on 24 October 2019.

During pre-bid agreements investors representing 16.7 per cent of AOF units indicated their support for the offer by entering into pre-bid agreements with Starwood.

Starwood offered $2.98 for per unit which was worth $2.91 at close of business the previous day.

The offer price represented a premium of 6.8 per cent to AOF’s NTA as at 30 June 2019 of $2.79 per unit.

Related: Australian Unity Raises $291m for Healthcare Property

▲ Australian Unity Office Fund owns 241 Adelaide Street, Brisbane and eight other office buildings.
▲ Australian Unity Office Fund owns 241 Adelaide Street, Brisbane and eight other office buildings.

This was not the first time Starwood tried to buy the Australian Unity Office Fund. In 2018 they made four attempts including a $480 million unsolicited bid at $2.95 per unit.

Six months later Abacus Property Group and Charter Hall took 19.9 per cent stake in ASX-listed Australian Unity Office Fund—paying $95.6 million for the stake at a price of $2.95 per unit—they also made two failed take over attempts at $2.95 and $3.04 per share.

Starwood senior managing director and global head of real estate acquisitions Jeffrey Dishner said they believed their offer represented an attractive opportunity for all unit holders to realise liquidity at a certain cash value.

“The offer price also represents a premium to the current trading levels and NTA,” he said.

“We look forward to engaging with all stakeholders regarding the offer as we work to successfully complete the transaction.”

Starwood Global Opportunity Fund XI is a discretionary fund with a total committed capital of approximately US$7.55bn and sufficient undrawn capital to fund the offer.

The Australian Office Fund REIT owns had a property portfolio across Australia with nine offices valued at $668.4 million as of 30 June 2019.

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