Centro is a step closer to sealing the acquisition Heritage Property Investment Trust, after shareholders approved Centro’s $4.3 billion takeover offer.
Yesterday, approximately 99.6% of the shareholders voted for the takeover. Those shareholders represented approximately 71.7% of the total number of shares of Heritage common stock entitled to vote at the special meeting.
Under the agreement, Heritage shareholders will receive cash in an amount equal to $36.675.
Heritage is currently a United States listed retail property real estate investment trust holding a portfolio of 157 largely supermarket anchored, neighbourhood and community shopping centres across 27 states with a value of $4.3 billion at an average acquisition yield of 7.41%.
Centro’s chairman Brian Healey said this transaction increases Centro’s total funds under management by 37.4% to $15.8 billion and establishes Centro Watt as the ninth largest owner/manager of retail property in the United States.
“Centro’s US managed property portfolio is significantly enhanced by the geographic spread and asset diversity, and 49% by value of Centro managed shopping centres will now be in the US,” he added.
The properties acquired in the Heritage portfolio will be acquired by new Centro managed funds including two or more Centro MCS syndicates and a Centro international wholesale fund.
Centro’s chief executive Andrew Scott said the group has received strong investor interest and support for the establishment of these new international property funds.
“Following the success of Centro MCS 36 and launch of Centro MCS 38, the Heritage assets replenish Centro’s pipeline of international direct property products offered through its well established and diversified distribution channels throughout 2006 and 2007.
“The Heritage acquisition leaves Centro well positioned to achieve its ongoing distribution per security growth forecast of 7%+,” he added.
Centro’s US joint venture, Centro Watt, will undertake management of the new Heritage properties as well as the integration of staff into a new Centro Watt office in Boston. Tom Lorenzen, one of Centro’s seconded senior Australian executives in the US, will relocate to Boston to manage the office and oversee the integration process.
The takeover/merger is expected to be completed on or about October 5, 2006.
By Kathryn O’Meara
