Retail and property entrepreneur Brett Blundy will have a second attempt at listing the Aventus Retail Property Fund with a new offer trying to salve concerns over management fees and other issues.
In an offer to be lodged with the Australian Securities & Investments Commission tomorrow, the group will look to raise a lower target of $278 million at the end of a bookbuild beginning in mid-October.
Mr Blundy will inject an additional $25m into the bulky goods business, lifting his stake held with chief executive Darren Holland to 34 per cent.
The move comes a little more than two weeks after the first attempt to float the $900m bulky goods portfolio ran into stumbling blocks at the 11th hour.
Despite the support of Asian-based cornerstone investors, other groups and retail investors baulked at management fees, sharp pricing and a poison pill.
The revised agreement has attempted to address the sticking points by trimming management fees to a 0.6 per cent base fee, from an earlier level of 0.7 per cent. Meanwhile, a poison pill to kick into gear if shareholders replace management, initially estimated to be as high as $20m, has been wound back to 12 months of fees, from three years.
Other moves include a 1 per cent lift in gearing to help facilitate a 25 basis-point bump in returns to 7.25 per cent in year one and 7.5 per cent in year two.
“It sounds like they’re moving in the right direction, but whether it’s enough is hard to say,” said Phoenix Portfolios director Stuart Cartledge, a critic of the first offer. “Lowering fees is a good move, but the starting point was ridiculous. If anything, it’s a move from ridiculous to expensive.”
Other fund managers are not so sure, noting that the management fee — while expensive — is broadly in line with market averages, while other proposed floats, including Australian Unity, include poison pill provisions that are broadly similar.
“This could be the magic number that wins the retail investors over,” one fund manager said, noting that support for the asset class remains high. “It’s been a hard sell considering there are other stocks priced at a discount (to NTA) at the moment, but this could be the thing this one needs.”